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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-03153
Russell Investment Company
(Exact name of registrant as specified in charter)
1301 2nd Avenue 18th Floor, Seattle Washington 98101
(Address of principal executive offices) (Zip code)
Mary Beth R. Albaneze, Secretary and Chief Legal Officer
1301 2nd Avenue
18th Floor
Seattle, Washington 98101
206-505-4846
______________________________________________
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-787-7354
Date of fiscal year end: October 31
Date of reporting period: November 1, 2014 to October 31, 2015
Item 1. Reports to Stockholders
2015 ANNUAL REPORT
Russell Funds
OCTOBER 31, 2015
Russell Investment
Company
Russell Investment Company is a
series investment company with
41 different investment portfolios
referred to as Funds. These
financial statements report on 27
of these Funds.
Russell Investment Company
Russell Funds
Annual Report
October 31, 2015
Table of Contents
Page | |
To Our Shareholders | 3 |
Market Summary | 4 |
Russell U.S. Core Equity Fund | 10 |
Russell U.S. Defensive Equity Fund | 30 |
Russell U.S. Dynamic Equity Fund | 52 |
Russell U.S. Strategic Equity Fund | 74 |
Russell U.S. Large Cap Equity Fund | 96 |
Russell U.S. Mid Cap Equity Fund | 114 |
Russell U.S. Small Cap Equity Fund | 134 |
Russell International Developed Markets Fund | 162 |
Russell Global Equity Fund | 190 |
Russell Emerging Markets Fund | 216 |
Russell Tax-Managed U.S. Large Cap Fund | 246 |
Russell Tax-Managed U.S. Mid & Small Cap Fund | 266 |
Russell Tax-Managed International Equity Fund | 290 |
Russell Global Opportunistic Credit Fund | 316 |
Russell Strategic Bond Fund | 352 |
Russell Investment Grade Bond Fund | 400 |
Russell Short Duration Bond Fund | 438 |
Russell Tax Exempt High Yield Bond Fund | 468 |
Russell Tax Exempt Bond Fund | 490 |
Russell Commodity Strategies Fund | 518 |
Russell Global Infrastructure Fund | 536 |
Russell Global Real Estate Securities Fund | 560 |
Russell Multi-Strategy Alternative Fund | 584 |
Russell Multi-Strategy Income Fund | 658 |
Russell Strategic Call Overwriting Fund | 692 |
Select U.S. Equity Fund | 710 |
Select International Equity Fund | 736 |
Notes to Schedules of Investments | 766 |
Notes to Financial Highlights | 768 |
Notes to Financial Statements | 769 |
Report of Independent Registered Public Accounting Firm | 805 |
Tax Information | 506 |
Affiliated Brokerage Transactions | 808 |
Basis for Approval of Investment Advisory Contracts | 809 |
Shareholder Requests for Additional Information | 812 |
Disclosure of Information about Fund Trustees and Officers | 813 |
Adviser, Money Managers and Service Providers | 820 |
Russell Investment Company – Russell Funds.
Copyright © Russell Investments 2015. All rights reserved.
Russell Investments is a trade name and registered trademark of Frank Russell Company, a Washington USA
corporation, which operates through subsidiaries worldwide and is part of London Stock Exchange Group.
Fund objectives, risks, charges and expenses should be carefully considered before in-
vesting. A prospectus containing this and other important information must precede or
accompany this material. Please read the prospectus carefully before investing.
Securities distributed through Russell Financial Services, Inc., member FINRA and part of Russell
Investments.
Indices and benchmarks are unmanaged and cannot be invested in directly. Returns represent past performance,
are not a guarantee of future performance, and are not indicative of any specific investment. Index return
information is provided by vendors and although deemed reliable, is not guaranteed by Russell Investments or its
affiliates.
Russell Investments is the owner of the trademarks, service marks, and copyrights related to its respective indexes.
Performance quoted represents past performance and does not guarantee future results. The investment return and
principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their
original cost. Current performance may be lower or higher than the performance data quoted. Current to the most
recent month-end performance data may be obtained by visiting www.russell.com/us/fundperformance.
To Our Shareholders
Fellow Shareholder,
The redeeming aspect of this year’s market volatility is its underscoring the importance of shareholders having solid, long-
term financial plans, realistic goals, and regular check-ins with personal financial advisors to collaborate on how best to
achieve the outcomes that matter most to shareholders. Understanding these outcomes and the tools we need to reach them
remains a central focus at Russell Investments.
Staying steady in stormy markets is vital – we see more volatility ahead.
After strong U.S. equity performance in 2014, markets experienced muted returns in 2015. The broad-based Russell 3000®
Index was up 2.02% year-to-date as of October 31, 2015, and its one-year total return as of October 31, 2015 was 4.49%.
Markets collectively sought guidance from a cautious U.S. Federal Reserve (the “Fed”) regarding the timing of the initial
interest rate increase. It’s hard to believe the last time the Fed increased the Fed Funds rate was June 2006 – more than
nine years ago. Trying to anticipate the initial rate increase and related market impacts was a primary driver of both equity
and fixed income returns, not only in the U.S., but globally as well.
The ‘abundance of caution’ evidenced by the Fed mirrored central bank sentiment worldwide to protect the fragility of the
hard fought, lengthy, and mainly tepid recovery from the global financial crisis.
The European Central Bank expanded their Quantitative Easing (QE) Program throughout the year as they maintained
their contribution to positive economic growth. This stimulus coupled with the anticipation of increasing interest rates in
the U.S. contributed to the strengthening U.S. dollar. Additionally in August, China made an unexpected devaluation of its
currency to project recalibrated and more modest growth expectations.
U.S. unemployment decreased throughout the fiscal year, from 5.7% in October 2014 to 5.0% at the end of October 2015
and the annual inflation rate was 0.2% as of October 2015. As of this writing, U.S. unemployment claims are at the lowest
point in 40 years. The U.S. economy has led the world out of the recession. As it approaches a more mature stage in its
economic cycle, our belief in the primacy of global diversification deepens.
The following pages provide additional insights on the markets and the performance of Russell Investments mutual funds
for the fiscal year ending October 31, 2015.
Thank you for your continued trust. All of us at Russell Investments appreciate our duties to help you achieve financial
security.
Best regards,
Sandra Cavanaugh
CEO, U.S. Private Client Services
To Our Shareholders 3
Russell Investment Company
Market Summary as of October 31, 2015 (Unaudited)
U.S. Equity Markets
Broadly measured by the Russell 3000® Index, U.S. stocks returned 4.49% for the one year period which is the seventh
straight fiscal year ending October 31st that the Russell 3000® Index has finished with a positive absolute return. The
Russell 3000® Index finished with a positive absolute return in seven of the fiscal year’s twelve months.
Within U.S. large capitalization stocks, the Russell 1000® Growth Index outperformed the Russell 1000® Value Index by
8.65% over the fiscal year, as stocks with lower valuations (lower price-to-book, price-to-earnings and price-to-cash flow
ratios) lagged significantly. In addition, high dividend yield stocks trailed the broader market. Factors that were rewarded
during the fiscal year included lower earnings variability and high forecasted growth. From a sector perspective, consumer
discretionary outperformed the Russell 1000® Index by over 11% and energy trailed the Russell 1000® Index by over 25%.
Similarly, within U.S. small capitalization stocks, the Russell 2000® Growth Index outperformed the Russell 2000® Value
Index. The fiscal year was led by larger capitalization stocks as the Russell Top 200® Index returned 5.75% compared with
the Russell Midcap® Index and the Russell 2000® Index, which returned 2.77% and 0.34%, respectively. Defensive stocks
outperformed dynamic stocks across all market capitalization tiers.
Toward the end of calendar year 2014, the U.S. equity market performed well as the Russell 3000® Index returned 2.42%
in November and was approximately flat in December. Declining oil prices briefly threatened the rally in early December
as investors were concerned over the potential ripple effects of excess supply and associated falling prices. Given the Fed
ended its quantitative easing program in October, the Fed’s December policy statement was at the forefront of investors’
minds. In December, the central bank stated that it would be “patient” in judging when to start raising interest rates, rather
than keeping them low for a “considerable time” as had been previously reported. Investors interpreted this change of
language as a sign of central bank confidence in the strength of the U.S. economy, but it also was clear that multiple months
without rate increases were still ahead.
In January 2015, U.S. equities got off to a rocky start with broadly disappointing corporate earnings, mixed economic
data and volatile oil prices weighing on investor sentiment. One of the more disappointing pieces of macro-economic
data was fourth-quarter gross domestic product (“GDP”) growth coming in at an annualized rate of 2.2%, which marked
both a big drop from the third-quarter figure (5.0%) and was a shortfall on consensus forecasts. Considering all data
inputs, investors sought areas of the market with more perceived safety and yield, causing interest rate sensitive stocks,
specifically real estate investment trusts (“REITs”) and utilities to be significantly bid up in January. In February, there
was an unwinding of some of those same interest rate sensitive valuations in the market, most notably within electric
utilities. The information about January non-farm payroll growth, which was released in early February, helped to spur a
risk-on equity rally as the Russell 3000® Index finished up 5.79% in February. While the word “patient” with regard to the
normalization of U.S. monetary policy was removed from Fed chair Yellen’s statement in March, Yellen declared that this
did not mean that the central bank was becoming “impatient.” The central bank chair emphasized that any interest-rate
decision remained dependent on “further improvement in the labor market” and on the committee becoming “reasonably
confident” of increases in inflation toward its 2.0% target.
The Russell 3000® Index edged up 0.14% from April through June, with a sell-off at the end of the period reversing most
of April and May’s gains. Severe winter weather and labor disruptions at major ports had caused a pause in U.S. economic
activity in the early part of 2015, however the contraction was less severe than originally reported with the final first-
quarter GDP estimate upwardly revised to -0.2% annualized from -0.7% annualized due to better personal consumption
figures. The period ended with uncertainty over another potential Greek bailout dominating the headlines which in part,
contributed to the selloff in equities in June.
During the third quarter, the Russell 3000® Index declined 7.25%. The severe selloff in U.S. and global equity markets
was driven in part by China’s currency devaluation and concerns over slowing global economic growth. Heightened levels
4 Market Summary
Russell Investment Company
Market Summary as of October 31, 2015, continued — (Unaudited)
of market volatility led defensive stocks to outperform dynamic stocks at all market capitalization levels. In the Fed’s
September meeting, a decision was made to keep interest rates unchanged. Chair Yellen stated that, despite recent
international developments, domestically “the economy has been performing well, and we expect it to continue to do
so.” At the time, second-quarter GDP growth had been revised upwards to 3.7%, and was later revised higher to 3.9%.
Unemployment declined to 5.1% for August, its lowest level in seven years, assisted by a decline in the participation rate.
However, non-farm payroll growth missed expectations at 173,000 in August, following upwardly revised readings for June
245,000 and July 223,000.
In October, there was a large equity rally that followed the selloffs in both August and September as the Russell 3000®
Index returned 7.90%. Larger capitalization was rewarded during the month as the Russell Top 50 Index returned 9.77%
compared with the Russell 1000® Index, Russell Midcap® Index and the Russell 2000® Index, which returned 8.09%,
6.20% and 5.63%, respectively. Within all market capitalization tiers, dynamic stocks led defensive stocks. More dynamic
cyclical sectors led the way in October as both materials & processing and energy outperformed the Russell 1000® Index
by 4.20% and 3.35%, respectively. On the other hand, the utilities sector underperformed the Russell 1000® Index by
4.32%, which was in contrast to strong performance in August and September.
Non-U.S. Developed Equity Markets
For the fiscal year ended October 31, 2015, the non-U.S. equity market, as measured by the Russell Developed ex-U.S.
Large Cap Index (the “Index”), was down 1.36%.
After a strong first half of the period, which saw the Index return 6.25%, the second half the period experienced a large sell-
off during which the Index dropped by 7.0%. The major market drivers for non-U.S. markets during the fiscal year were a
sell-off in China and uncertainty around the possibility of a Fed interest rate hike. In August 2015, the Chinese government
and the People’s Bank of China attempted to stem equity market losses and shore up confidence in the economy by
devaluing the Renminbi. This action could not contain the market turmoil, which in turn drove major emerging markets
and currencies lower. In the U.S., despite uncertainty around the timing of a Fed rate hike, investors remained positive on
the economy due to relative recovery in macro-economic trends.
Japan was the stand out market over the period, while Europe also outperformed though more modestly. Both benefited from
accommodative policies and cheaper valuations. Slightly better than expected earnings results in Europe, coupled with the
European Central Bank’s willingness to continue with quantitative easing and the renewed bailout deal with Greece during
the second part of the fiscal year, brought a degree of harmony in Europe. High levels of central bank liquidity leading
to ultra-low returns on bonds pushed investors towards equities in Japan. Broadly, performance in commodity heavy
economies like Canada and Australia lagged significantly due to a demand slowdown, particularly from China.
Commodity driven sectors, particularly energy and materials, were the worst hit in the fiscal year ended October 31, 2015
as oil prices tumbled to the lowest levels since 2009 and a demand slowdown in emerging markets caused commodity prices
to plunge significantly. Defensive sectors, led by consumer staples, held up well as uncertainty about global economic
growth prevailed for most of the fiscal year.
In terms of factor returns, growth significantly outperformed value and small/mid-capitalization stocks modestly
outperformed large capitalization stocks during the fiscal year. Stocks with lower leverage held up well amid the market
volatility. Return spreads in other factors were not significant during the period.
Emerging Markets
The Russell Emerging Markets Index, as measured in U.S. dollar terms (the “Index”) lost 13.6% over the fiscal year ended
October 31, 2015. In what was a difficult year for the emerging markets asset class, macroeconomic events continued to
impact emerging market equities against a backdrop of interest rate uncertainty and geopolitical headwinds.
Market Summary 5
Russell Investment Company
Market Summary as of October 31, 2015, continued — (Unaudited)
In November and December of 2014, the Index declined 5.8%. The bulk of this sell-off came in December. Russia
underperformed due to factors such as decreased oil prices and Western sanctions. The fall in the price of oil was also
negative for emerging markets such as Brazil and Malaysia. In contrast, it was beneficial for emerging countries such as
Turkey. In addition, Greece was a significant laggard over the period driven by the rise in popularity of the far-left, anti-
austerity Syriza party. More positively, Chinese markets gained, driven by financials. The country’s stock market continued
to rise significantly after investors became convinced that the Chinese government would implement even more aggressive
stimulus measures.
In the first quarter of 2015, emerging markets made a positive start to the year, with the Index returning 2.1%. The
prospect of sustained loose central bank policy outside the U.S. was a tailwind to emerging markets. In addition, the
Fed’s increased flexibility regarding the timing of an interest rate rise helped sustain a lower rate outlook in the U.S.
which, in turn, helped to increase investor appetite for riskier emerging markets investments. In contrast, dollar strength
negatively impacted several countries’ returns, with considerable disparity between them. Asia was the best-performing
region. Chinese markets had another strong quarter, ending 5.6% higher as measured by the Index. India was up 5.3%
for the quarter despite slipping in March. Buoyed by the country’s improving prospects, including cheaper oil improving
the country’s balance of payments, India’s central bank twice unexpectedly cut interest rates. Rate-cutting also helped
South Korea’s market outperform (5.0%), while Taiwan (4.0%), Thailand (2.1%) and Indonesia (1.3%) also ended in
positive territory. Meanwhile, Russia went from being the Index’s worst-performer in the fourth quarter of 2014 to the best-
performing country. The market climbed 20.6%, predominantly driven by a rebound in the rouble, while less volatility in
oil prices and a ceasefire agreement in Ukraine also aided market sentiment. In contrast, Greece slumped 21.5% over a
volatile quarter. Debt repayment negotiations between the newly-elected Syriza government and “troika” of the European
Union, the European Central Bank and the International Monetary Fund wildly fluctuated. Brazil maintained its slide with
a further 15.2% fall as the real continued to plummet. Within the Index, the health care sector recorded the highest gains.
The energy sector rebounded, while utilities ended behind its sector counterparts.
In the second quarter of 2015, the Index returned 1.7%. A weakening of the U.S. dollar and the sustained equity rally in
China drove a significantly strong start. However, the Chinese equity surge sharply reversed towards the end of the quarter
which weighed on the broader Index. Additionally, positive U.S. economic data and Fed statements strengthened the
case for at least one U.S. interest rate rise later this year, which dampened investor appetite for riskier emerging markets
investments. China (8.1%) remained one of the strongest performing regions over the quarter despite experiencing erratic
movements in the latter part of the period. The increase was a contrast to the country’s disappointing economic data.
Notably, urban investment, retail sales and industrial output data was weak while consumer price inflation moved further
away from the central bank’s target. Russia (8.0%), Brazil (6.3%), Greece (6.0%) and Colombia (3.6%) were other notable
countries that outperformed despite also experiencing sharp sell-offs during the quarter. The rouble, real and euro all
appreciated against the U.S. dollar. Select Asian markets were the worst performers over the quarter, with Indonesia being
the worst performing country within the Index (-14.1%) despite gaining ground in June. In Indonesia, exports continued
to disappoint while first-quarter gross domestic product (“GDP”) also missed estimates. Malaysia slipped 7.2% as exports
contracted more steeply than expected. Thailand declined 3.4% as the country remained in deflation. Meanwhile in India
(-3.1%), the central bank cut its lending rate as expected to 7.25% in an effort to increase investment. South Korea
marginally underperformed the Index return (-0.3%) as trade numbers remained negative. Taiwan finished flat with the
benchmark (0.1%). Within the Index, the energy and health care sectors outperformed. Technology was the only sector to
decline over the quarter.
In the third quarter of 2015, the Index slumped 18.1% in the worst quarter for emerging markets equities in four years.
China’s growth slowdown caused significant volatility, while the strong U.S. dollar and instability in commodity markets
weighed on investor sentiment. The market sell-off slowed in September, however, as emerging markets edged slightly
higher following the Fed’s decision to keep interest rates steady. China (-23.9%) dragged down the Index return despite
attempts by the government and central bank to stem the sliding bear market. The PBoC twice unexpectedly lowered its
6 Market Summary
Russell Investment Company
Market Summary as of October 31, 2015, continued — (Unaudited)
currency fix against the U.S. dollar, which caused nearly all emerging markets currencies to depreciate. Investors remained
concerned about a “hard landing” for the economy. Industrial production, urban investments, house prices and retail sales
figures confirmed that the domestic economy continued to slow. In addition, Brazil was the weakest-performing country
over the quarter, slumping 33.6% with the real falling 21.5%, as a result of factors such as the commodity sell-off, a
struggling economy and political corruption. Investors were increasingly concerned about Brazil’s economic ties to China.
Elsewhere in Latin America, oil exporter Colombia slipped 22.5% and metal exporter Peru declined 26.4%. Countries with
large current account deficits sold-off over the quarter, including Turkey (-19.5%), South Africa (-18.3%) and, to a lesser
extent, Indonesia (-24.8%). Mexico ended 10.9% lower. Russia (-13.2%) outperformed the broader Index return despite a
15.7% depreciation of the ruble over the period. In South Korea (-11.8%), second-quarter GDP slowed over the previous
quarter. In Thailand (-15.9%), inflation continued to decline. In Taiwan (-16.5%), a growth slowdown and weak price
pressures forced the central bank to unexpectedly cut interest rates to 1.75%. Malaysia decreased 17.5% as the ringgit
depreciated 14.6% against the U.S. dollar. Eastern Europe was the best-performing region, including the Czech Republic
(-2.7%), Hungary (-3.6%) and Poland (-9.4%). All sectors declined in absolute terms. On a relative basis, financials and
energy lagged behind, while safer haven sectors including consumer staples outperformed.
October of 2015 proved to be beneficial with the Index up 7.9%. The sell-off in the third quarter, driven by China concerns,
reversed course. China’s economy reported an expansion as services grew and GDP was slightly higher than expected. In
addition, a number of companies posted positive earnings surprises bringing up the asset class. Net inflows into emerging
markets also turned positive with a large number of investors returning. In addition, steady U.S. interest rates added an
element of much-needed stability to the investment environment.
U.S./Global Fixed Income Markets
The fiscal year ended October 31, 2015 was characterized by slowing global growth and commodity price weakness.
Overall, this was modestly positive for fixed income assets, as yields fell, particularly among sovereign bonds. On the
other hand, credit sectors, primarily within the U.S., were challenged in this environment. Corporate bonds saw the largest
drawdowns as sharply reduced commodity prices (oil in particular), weakening earnings growth and elevated new issuance
weighed on returns. A key indicator of global fixed income performance, the Barclays Global Aggregate Index, returned
3.07% for the fiscal year, in U.S. dollar -hedged terms, as yields fell modestly and spreads widened during a fiscal year
where growth fell somewhat short of expectations.
Regionally, Europe outperformed the U.S., bolstered by the launch of a relatively aggressive quantitative easing program
and generally lower exposure to commodity-related sectors, particularly energy. The Barclays Pan-European Aggregate
Index returned 5.56% during the period (in U.S. dollar -hedged terms), led by Swiss and northern European sovereigns,
reflecting more accommodative central bank policy, pervasive low inflation/deflation in the region and the economies’ “safe
haven” status. The U.S., in comparison, returned 1.96% during the fiscal year as measured by the Barclays Aggregate
Index as U.S. Treasury yields fell less sharply and U.S. corporate credit underperformed European corporate credit, largely
due to greater exposure to falling commodity prices. Australian and New Zealand bonds generally outperformed other
developed markets, as both central banks eased monetary policy amid a slowdown in China and falling commodity prices.
In the U.S., economic data remained broadly positive, with solid nonfarm payroll gains and a steady decline in the
unemployment rate to just above 5.00% by fiscal year-end, near long-term lows. Gross domestic product growth slowed
modestly from earlier in the recovery, but held in around the 1.50%-2.50% range, on average, during the fiscal year. On the
other hand, inflation and wage growth came in weak, driven partially by sharply lower commodity prices (including a 58%
drop in oil prices during the first quarter of the fiscal year). Combined with global growth headwinds, these were significant
contributors to the Fed’s decisions, in successive meetings, not to raise interest rates. This pushing out of rate hike timing
expectations drove yields lower during the period, bolstering U.S. Treasury returns.
Market Summary 7
Russell Investment Company
Market Summary as of October 31, 2015, continued — (Unaudited)
In Europe, uncertainty over the future of Greece’s debt position and potential bailout captured headline risk and drove
market volatility during the first half of the fiscal year. This, combined with the European Central Bank’s launch of an
unexpectedly aggressive quantitative easing program, saw yields among “core” European sovereign bonds fall markedly.
Peripheral spreads also tightened later on as a Greek bailout agreement was eventually reached. As European growth and
inflation turned more positive (albeit still weak) in the second half of the fiscal year, yields came back slightly, but remained
well below their levels at the beginning of the fiscal year.
Emerging markets experienced a meaningful, and relatively broad-based, slowdown in growth during the fiscal year,
contributing to the sharp decline in commodity prices. China and Brazil were most notable. A slowdown in China’s
manufacturing and trade sectors rattled markets despite successive moves to ease monetary policy and credit conditions.
In Brazil, growth continued to disappoint, as it has for the past few years, contracting by 2.60% in the second calendar
quarter of 2015, and with a quickly deteriorating fiscal position and accelerating inflation.
Strong new issuance volumes characterized most credit sectors, particularly in the U.S., over the fiscal year, in both
corporate and securitized markets. Overall, corporate credit detracted globally (the Barclays Global Aggregate Corporate
Index returned 1.75% below equivalent-duration U.S. Treasuries), particularly among industrials, and namely commodity-
related industries, primarily within the U.S. Securitized assets also underperformed U.S. Treasuries in aggregate (the
Barclays Global Aggregate Securitized Index returned 0.32% below equivalent-duration U.S. Treasuries), as mortgage-
backed securities were held back by lackluster housing data and slowing institutional demand.
High yield corporate credit was among the worst-performing segments of the market (the Barclays Global High Yield Index
returned 1.97% below equivalent-duration Treasuries), due in large part to the strong sell-off among U.S. energy companies
as the price of oil fell sharply and stayed low, significantly raising the likelihood of defaults across the sector. Emerging
market (EM) debt underperformed developed markets (the Barclays EM Hard Currency Aggregate Index underperformed
equivalent-duration U.S. Treasuries by 2.74%) as growth disappointed, particularly in key markets China and Brazil. Local
currency EM bonds (those issued in the issuing country’s own currency) saw much larger declines (the Barclays EM Local
Currency Government Index returned -12.42%) as currencies were hit by both the slowdown in emerging market growth
and the broader U.S. Dollar rally that occurred during the fiscal year.
8 Market Summary
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Russell Investment Company
Russell U.S. Core Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell U.S. Core Equity Fund - Class A‡ | Russell U.S. Core Equity Fund - Class I | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.81 | )% | 1 Year | 4.48 | % | ||
5 Years | 11.01 | %§ | 5 Years | 12.71 | %§ | ||
10 Years | 5.84 | %§ | 10 Years | 6.79 | %§ | ||
Russell U.S. Core Equity Fund - Class C‡‡ | Russell U.S. Core Equity Fund - Class S‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 3.39 | % | 1 Year | 4.39 | % | ||
5 Years | 11.49 | %§ | 5 Years | 12.61 | %§ | ||
10 Years | 5.88 | %§ | 10 Years | 6.72 | %§ | ||
Russell U.S. Core Equity Fund - Class E | Russell 1000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 4.14 | % | 1 Year | 4.86 | % | ||
5 Years | 12.36 | %§ | 5 Years | 14.32 | %§ | ||
10 Years | 6.49 | %§ | 10 Years | 7.98 | %§ |
10 Russell U.S. Core Equity Fund
Russell Investment Company
Russell U.S. Core Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell U.S. Core Equity Fund (the “Fund”) employs a | How did the investment strategies and techniques employed |
multi-manager approach whereby portions of the Fund are | by the Fund and its money managers affect its benchmark- |
allocated to different money manager strategies. Fund assets not | relative performance? |
allocated to money managers are managed by Russell Investment | Stock selection effects within the producer durables sector (an |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | overweight to Raytheon) were favorable but within the consumer |
may change the allocation of the Fund’s assets among money | discretionary sector (an overweight to Viacom, Inc.) detracted |
managers at any time. An exemptive order from the Securities | from the Fund’s benchmark-relative performance for the fiscal |
and Exchange Commission (“SEC”) permits RIMCo to engage | year. Factor exposures were mixed, as an overweight to stocks |
or terminate a money manager at any time, subject to approval | with the lowest valuation ratios detracted, while an underweight |
by the Fund’s Board, without a shareholder vote. Pursuant to the | to midcap stocks was rewarded. From a sector perspective, an |
terms of the exemptive order, the Fund is required to notify its | overweight to consumer discretionary and health care stocks and |
shareholders within 90 days of when a money manager begins | an underweight to energy stocks contributed positively to relative |
providing services. As of October 31, 2015, the Fund had six | returns. |
money managers. | The Fund employs discretionary and non-discretionary money |
What is the Fund’s investment objective? | managers. The Fund’s discretionary money managers select |
The Fund seeks to provide long term capital growth. | the individual portfolio securities for the assets assigned to |
them. The Fund’s non-discretionary money managers provide | |
How did the Fund perform relative to its benchmark for the | a model portfolio to RIMCo representing their investment |
fiscal year ended October 31, 2015? | recommendations, based upon which RIMCo purchases and sells |
For the fiscal year ended October 31, 2015, the Fund’s Class | securities for the Fund. Fund assets not allocated to discretionary |
A, Class C, Class E, Class I and Class S Shares gained 4.17%, | money managers include assets managed by RIMCo based upon |
3.39%, 4.14%, 4.48% and 4.39%, respectively. This is compared | model portfolios provided by non-discretionary money managers, |
to the Fund’s benchmark, the Russell 1000® Index, which gained | the Fund’s liquidity reserves and assets which may be managed |
4.86% during the same period. The Fund’s performance includes | directly by RIMCo to effect the Fund’s investment strategies and/ |
operating expenses, whereas index returns are unmanaged and do | or to actively manage the Fund’s overall exposures by investing in |
not include expenses of any kind. | securities or other instruments that RIMCo believes will achieve |
For the fiscal year ended October 31, 2015, the Morningstar® | the desired risk/return profile for the Fund. |
Large Blend, a group of funds that Morningstar considers to have | With respect to certain of the Fund’s money managers, Columbus |
investment strategies similar to those of the Fund, gained 2.79%. | Circle Investors (“Columbus Circle”) was the worst performing |
This result serves as a peer comparison and is expressed net of | manager for the period and underperformed the Russell 1000® |
operating expenses. | Growth Index. Stock selection within the health care sector (an |
RIMCo may assign a money manager a specific style or | overweight to McKesson Corporation and to Gilead Sciences) |
capitalization benchmark other than the Fund’s index. However, | and within the materials & processing sector (an overweight to |
the Fund’s primary index remains the benchmark for the Fund | United States Steel Corporation) held back benchmark-relative |
and is representative of the aggregate of each money manager’s | performance. Factor exposures were mixed, and specifically a tilt |
benchmark index. | toward high earnings variability detracted, although a tilt toward |
stocks with high forecasted growth was beneficial. An overweight | |
How did the market conditions described in the Market | to the consumer discretionary sector and an underweight to the |
Summary report affect the Fund’s performance? | energy sector contributed positively to relative returns. |
During the fiscal year, the U.S. large capitalization equity market | Sustainable Growth Advisers, LP (“Sustainable”) was the best |
produced positive returns. Relevant Fund exposures included | performing manager for the period and outperformed the Russell |
tilts toward stocks with the lowest valuation ratios (lowest price- | 1000® Growth Index. Stock selection was the primary source |
to-book and price-to-cash flow ratios) and consumer discretionary | of positive benchmark-relative return. Selection within the |
and health care stocks, and away from midcap stocks, growth | consumer discretionary sector (an overweight to Amazon, Inc., |
stocks and energy stocks. Growth stocks significantly outperformed | Starbucks Corporation, and to Lowes Companies) was beneficial. |
value stocks within the Russell 1000® Index, detracting from the | Sustainable’s tilt toward stocks with high forecasted growth and |
Fund’s benchmark-relative performance. However, the Fund’s | away from stocks with high earnings variability was rewarded. An |
tilts away from midcap stocks and energy stocks and toward | overweight to the energy sector held back further outperformance |
consumer discretionary and health care stocks were beneficial. | as energy underperformed during the fiscal year. |
Russell U.S. Core Equity Fund 11
Russell Investment Company
Russell U.S. Core Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Over the period, RIMCo managed a positioning strategy to seek to | During the third quarter of 2015, RIMCo terminated Institutional | |
achieve the desired risk/return profile for the Fund. During the | Capital LLC and Schneider as discretionary money managers for | |
third quarter of 2015, the positioning strategy was changed from | the Fund and hired Brandywine Global Investment Management, | |
a Russell Top 200® Defensive™ Index replication strategy to a | LLC as a non-discretionary money manager. The objective of this | |
positioning strategy that utilizes the output from a quantitative | change was to improve the value stock selection component of the | |
model to seek to position the portfolio to meet RIMCo’s overall | Fund’s excess return potential. | |
preferred positioning toward lower valuation stocks while also | ||
providing defensive exposure. This strategy was implemented in | Money Managers as of October 31, | |
order to replace exposure that the Fund had previously received | 2015 | Styles |
from Schneider Capital Management Corporation’s (“Schneider”) | Barrow, Hanley, Mewhinney & Strauss, LLC | Value |
portfolio, which RIMCo removed from the Fund during the third | Brandywine Global Investment Management, | |
LLC | Value | |
quarter of 2015 due to concerns about Schneider’s organizational | Columbus Circle Investors | Growth |
stability. During the fiscal year, the Fund’s positioning strategy | Jacobs Levy Equity Management, Inc. | Defensive Value |
provided the expected exposure to value stocks and performed | Suffolk Capital Management, LLC | Market-Oriented |
as expected given its combination of deep value exposure and | Sustainable Growth Advisers, LP | Growth |
defensive exposure. Its performance over the period was between | The views expressed in this report reflect those of the portfolio | |
that of the Russell 1000® Value Index and the Russell Top 200® | managers only through the end of the period covered by | |
Defensive™ Index. | the report. These views do not necessarily represent the | |
views of RIMCo, or any other person in RIMCo or any other | ||
During the period, RIMCo used index futures contracts to equitize | affiliated organization. These views are subject to change | |
the Fund’s cash. The decision to equitize the Fund’s cash was | at any time based upon market conditions or other events, | |
beneficial to Fund performance for the fiscal year as the market | and RIMCo disclaims any responsibility to update the views | |
had a positive absolute return. | contained herein. These views should not be relied on as | |
Describe any changes to the Fund’s structure or the money | investment advice and, because investment decisions for | |
manager line-up. | a Russell Investment Company (“RIC”) Fund are based on | |
numerous factors, should not be relied on as an indication | ||
of investment decisions of any RIC Fund. |
* Assumes initial investment on November 1, 2005.
** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
‡ The Fund first issued Class A Shares on September 2, 2008. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
‡‡ The Fund first issued Class C Shares on September 2, 2008. The returns shown for Class C Shares prior to that date are the returns of the Fund’s Class E Shares
and do not reflect deduction of Rule 12b-1 distribution fees that apply to Class C Shares. Had they done so, the returns shown for those periods would have been
lower. Annual returns for each Class will differ only to the extent that the Class C Shares do not have the same expenses as the Class E Shares.
‡‡‡ The Fund first issued Class S Shares on September 2, 2008. The returns shown for Class S Shares prior to that date are the returns of the Fund’s Class I
Shares. Class S Shares will have substantially similar annual returns as the Class I Shares because the Shares of each Class are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class S Shares do not have the same expenses as the Class I Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
12 Russell U.S. Core Equity Fund
Russell Investment Company
Russell U.S. Core Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 996.30 | $ | 1,019.71 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 5.48 | $ | 5.55 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.09% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). | |||||
and actual expenses. You may use the information in this column, | ||||||
together with the amount you invested, to estimate the expenses | Hypothetical | |||||
Performance (5% | ||||||
that you paid over the period. Simply divide your account value by | Actual | return before | ||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Class C | Performance | expenses) | |||
= 8.6), then multiply the result by the number in the first column | Beginning Account Value | |||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
the expenses you paid on your account during this period. | October 31, 2015 | $ | 992.70 | $ | 1,015.93 | |
Expenses Paid During Period* | $ | 9.24 | $ | 9.35 | ||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | * Expenses are equal to the Fund's annualized expense ratio of 1.84% | |||||
Performance (5% return before expenses)” provides information | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
about hypothetical account values and hypothetical expenses | year period). | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | Hypothetical | |||||
actual return. The hypothetical account values and expenses | Performance (5% | |||||
Actual | return before | |||||
may not be used to estimate the actual ending account balance or | Class E | Performance | expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
to compare the ongoing costs of investing in the Fund and other | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
funds. To do so, compare this 5% hypothetical example with the | Ending Account Value | |||||
October 31, 2015 | $ | 996.20 | $ | 1,019.71 | ||
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 5.48 | $ | 5.55 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 1.09% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
Russell U.S. Core Equity Fund 13
Russell Investment Company
Russell U.S. Core Equity Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class I | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 997.80 | $ | 1,021.37 | |
Expenses Paid During Period* | $ | 3.83 | $ | 3.87 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.76% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 997.40 | $ | 1,020.97 | |
Expenses Paid During Period* | $ | 4.23 | $ | 4.28 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.84% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
14 Russell U.S. Core Equity Fund
Russell Investment Company
Russell U.S. Core Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Common Stocks - 95.8% | Wal-Mart Stores, Inc. | 146,886 | 8,408 | ||||
Consumer Discretionary - 14.4% | Walt Disney Co. (The) | 84,662 | 9,629 | ||||
Alibaba Group Holding, Ltd. - ADR(Æ) | 20,398 | 1,710 | Whirlpool Corp. | 18,888 | 3,025 | ||
Amazon.com, Inc.(Æ) | 15,443 | 9,666 | Yum! Brands, Inc. | 3,282 | 233 | ||
AutoZone, Inc.(Æ) | 1,710 | 1,341 | 137,240 | ||||
Best Buy Co., Inc. | 1,972 | 69 | |||||
Cablevision Systems Corp. Class A | 2,230 | 73 | Consumer Staples - 5.9% | ||||
Carnival Corp. | 23,899 | 1,292 | Altria Group, Inc. | 150,232 | 9,085 | ||
CBS Corp. Class B | 39,850 | 1,854 | Archer-Daniels-Midland Co. | 14,400 | 657 | ||
Comcast Corp. Class A(Æ) | 46,786 | 2,930 | Bunge, Ltd. | 6,800 | 496 | ||
Costco Wholesale Corp. | 13,071 | 2,067 | Casey's General Stores, Inc. | 2,040 | 217 | ||
Darden Restaurants, Inc. | 19,000 | 1,176 | Clorox Co. (The) | 2,420 | 295 | ||
Delphi Automotive PLC | 7,595 | 632 | Coca-Cola Co. (The) | 135,886 | 5,755 | ||
Dick's Sporting Goods, Inc. | 3,200 | 143 | Colgate-Palmolive Co. | 49,771 | 3,302 | ||
Dillard's, Inc. Class A | 5,575 | 499 | Constellation Brands, Inc. Class A | 12,678 | 1,709 | ||
DISH Network Corp. Class A(Æ) | 3,900 | 246 | CVS Health Corp. | 6,633 | 655 | ||
DSW, Inc. Class A | 24,297 | 606 | General Mills, Inc. | 2,223 | 129 | ||
Ford Motor Co. | 68,000 | 1,007 | Hershey Co. (The) | 26,842 | 2,381 | ||
Fortune Brands Home & Security, Inc. | 1,860 | 97 | Kimberly-Clark Corp. | 1,426 | 171 | ||
Gap, Inc. (The) | 87,300 | 2,376 | Kraft Heinz Co. (The) | 988 | 77 | ||
General Motors Co. | 153,953 | 5,375 | Kroger Co. (The) | 40,000 | 1,512 | ||
Goodyear Tire & Rubber Co. (The) | 41,367 | 1,359 | Mondelez International, Inc. Class A | 160,205 | 7,395 | ||
Hilton Worldwide Holdings, Inc. | 56,719 | 1,417 | PepsiCo, Inc. | 45,621 | 4,662 | ||
Home Depot, Inc. | 7,970 | 985 | Philip Morris International, Inc. | 67,542 | 5,971 | ||
Jarden Corp.(Æ) | 43,398 | 1,944 | Procter & Gamble Co. (The) | 85,602 | 6,538 | ||
Johnson Controls, Inc. | 10,866 | 491 | Reynolds American, Inc. | 2,033 | 98 | ||
Kohl's Corp. | 1,560 | 72 | Sysco Corp. | 38,813 | 1,601 | ||
L Brands, Inc.(Æ) | 18,848 | 1,809 | Tyson Foods, Inc. Class A | 13,823 | 613 | ||
Lennar Corp. Class A | 80,549 | 4,033 | Walgreens Boots Alliance, Inc. | 1,752 | 148 | ||
Liberty Interactive Corp. QVC Group Class | Whole Foods Market, Inc. | 77,260 | 2,315 | ||||
A(Æ) | 2,540 | 70 | 55,782 | ||||
Lowe's Cos., Inc. | 48,090 | 3,550 | |||||
Marriott International, Inc. Class A | 5,898 | 453 | Energy - 6.9% | ||||
McDonald's Corp. | 6,398 | 718 | Anadarko Petroleum Corp. | 16,413 | 1,098 | ||
Michael Kors Holdings, Ltd.(Æ) | 74,100 | 2,863 | Antero Resources Corp.(Æ) | 8,980 | 212 | ||
Netflix, Inc.(Æ) | 10,269 | 1,113 | Apache Corp. | 27,100 | 1,277 | ||
News Corp. Class A | 24,000 | 370 | BP PLC - ADR | 178,757 | 6,382 | ||
Nike, Inc. Class B | 56,949 | 7,462 | Cameron International Corp.(Æ) | 1,871 | 127 | ||
Norwegian Cruise Line Holdings, Ltd.(Æ) | 15,115 | 962 | Chesapeake Energy Corp. | 23,908 | 170 | ||
NVR, Inc.(Æ) | 500 | 819 | Chevron Corp. | 27,850 | 2,531 | ||
Office Depot, Inc.(Æ) | 57,378 | 437 | Cimarex Energy Co. | 18,506 | 2,185 | ||
O'Reilly Automotive, Inc.(Æ) | 3,310 | 914 | Columbia Pipeline Group, Inc. | 9,713 | 202 | ||
Polaris Industries, Inc. | 526 | 59 | ConocoPhillips | 75,913 | 4,050 | ||
Priceline Group, Inc. (The)(Æ) | 4,026 | 5,855 | Continental Resources, Inc.(Æ) | 72,447 | 2,457 | ||
PulteGroup, Inc. | 24,458 | 448 | Core Laboratories NV | 14,141 | 1,645 | ||
PVH Corp. | 21,879 | 1,990 | Devon Energy Corp. | 35,477 | 1,488 | ||
Ralph Lauren Corp. Class A | 742 | 82 | EOG Resources, Inc. | 30,502 | 2,619 | ||
Ross Stores, Inc. | 31,200 | 1,578 | EQT Corp. | 1,800 | 119 | ||
Royal Caribbean Cruises, Ltd. | 31,177 | 3,066 | Exxon Mobil Corp. | 124,268 | 10,282 | ||
Service Corp. International | 2,539 | 72 | FMC Technologies, Inc.(Æ) | 7,800 | 264 | ||
Starbucks Corp. | 135,565 | 8,482 | Frank's International NV | 3,900 | 67 | ||
Target Corp. | 139,252 | 10,747 | Hess Corp. | 19,992 | 1,124 | ||
Time Warner, Inc. | 60,579 | 4,564 | HollyFrontier Corp. | 6,500 | 318 | ||
TJX Cos., Inc. | 55,305 | 4,048 | Magna International, Inc. Class A(Æ) | 22,974 | 1,211 | ||
Toll Brothers, Inc.(Æ) | 10,871 | 391 | Marathon Oil Corp. | 13,725 | 252 | ||
Toyota Motor Corp. - ADR | 23,512 | 2,883 | Marathon Petroleum Corp. | 25,702 | 1,331 | ||
Tribune Media Co. Class A | 30,983 | 1,250 | National Oilwell Varco, Inc. | 2,707 | 102 | ||
Tupperware Brands Corp. | 17,400 | 1,024 | Newfield Exploration Co.(Æ) | 57,615 | 2,315 | ||
Ulta Salon Cosmetics & Fragrance, Inc.(Æ) | 14,166 | 2,464 | Occidental Petroleum Corp. | 84,379 | 6,290 | ||
Under Armour, Inc. Class A(Æ) | 18,338 | 1,744 | ONEOK, Inc. | 7,497 | 254 | ||
Viacom, Inc. Class B | 4,014 | 198 | PBF Energy, Inc. Class A | 5,200 | 177 | ||
See accompanying notes which are an integral part of the financial statements. |
Russell U.S. Core Equity Fund 15
Russell Investment Company
Russell U.S. Core Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Phillips 66(Æ) | 59,589 | 5,306 | Marsh & McLennan Cos., Inc. | 6,261 | 349 | ||
Pioneer Natural Resources Co. | 2,788 | 382 | MasterCard, Inc. Class A | 87,964 | 8,708 | ||
Schlumberger, Ltd. | 76,083 | 5,947 | McGraw Hill Financial, Inc. | 15,207 | 1,409 | ||
Spectra Energy Corp. | 10,325 | 295 | MetLife, Inc. | 148,639 | 7,488 | ||
Tesoro Corp. | 6,556 | 701 | Mid-America Apartment Communities, Inc. | ||||
Valero Energy Corp. | 28,400 | 1,872 | (ö) | 2,542 | 217 | ||
World Fuel Services Corp. | 6,400 | 284 | Morgan Stanley | 6,862 | 226 | ||
65,336 | Morningstar, Inc. | 1,800 | 148 | ||||
Navient Corp. | 13,160 | 174 | |||||
Financial Services - 21.3% | New York Community Bancorp, Inc. | 12,122 | 200 | ||||
ACE, Ltd. | 3,857 | 438 | Nomura Holdings, Inc. - ADR | 304,400 | 1,915 | ||
Aflac, Inc. | 5,452 | 348 | Northern Trust Corp. | 34,964 | 2,461 | ||
Allstate Corp. (The) | 27,429 | 1,697 | NorthStar Realty Finance Corp.(ö) | 10,488 | 126 | ||
Ally Financial, Inc.(Æ) | 14,000 | 279 | PacWest Bancorp | 4,262 | 192 | ||
American Capital Agency Corp.(ö) | 11,504 | 205 | PayPal Holdings, Inc.(Æ) | 24,900 | 897 | ||
American Express Co. | 113,800 | 8,337 | PNC Financial Services Group, Inc. (The) | 70,508 | 6,364 | ||
American International Group, Inc. | 9,715 | 613 | Principal Financial Group, Inc. | 12,800 | 642 | ||
Ameriprise Financial, Inc. | 20,184 | 2,328 | Progressive Corp. (The) | 27,000 | 894 | ||
Aon PLC | 45,880 | 4,281 | Prudential Financial, Inc. | 39,784 | 3,282 | ||
Arch Capital Group, Ltd.(Æ) | 9,400 | 704 | Public Storage(ö) | 1,632 | 374 | ||
AvalonBay Communities, Inc.(ö) | 3,740 | 654 | Regions Financial Corp. | 282,936 | 2,645 | ||
Bank of America Corp. | 1,051,483 | 17,644 | Santander Consumer USA Holdings, Inc.(Æ) | 115,341 | 2,077 | ||
Bank of New York Mellon Corp. (The) | 24,100 | 1,004 | Signature Bank(Æ) | 1,730 | 258 | ||
Barclays PLC - ADR | 21,820 | 310 | Simon Property Group, Inc.(ö) | 2,128 | 429 | ||
BB&T Corp. | 7,742 | 288 | State Street Corp. | 135,535 | 9,352 | ||
Berkshire Hathaway, Inc. Class B(Æ) | 44,816 | 6,096 | SunTrust Banks, Inc. | 26,805 | 1,113 | ||
BlackRock, Inc. Class A | 867 | 305 | Synchrony Financial(Æ) | 81,462 | 2,506 | ||
Blackstone Group, LP (The)(Æ) | 43,600 | 1,441 | TFS Financial Corp. | 20,401 | 358 | ||
Boston Properties, Inc.(ö) | 2,800 | 352 | Thomson Reuters Corp. | 4,413 | 181 | ||
Capital One Financial Corp. | 60,246 | 4,753 | Travelers Cos., Inc. (The) | 3,793 | 428 | ||
CBOE Holdings, Inc. | 4,800 | 322 | Two Harbors Investment Corp.(ö) | 124,800 | 1,056 | ||
Chubb Corp. (The) | 2,978 | 385 | US Bancorp | 92,071 | 3,884 | ||
Citigroup, Inc. | 201,086 | 10,692 | Visa, Inc. Class A | 152,550 | 11,835 | ||
Citizens Financial Group, Inc. | 76,700 | 1,864 | Voya Financial, Inc. | 50,398 | 2,045 | ||
CME Group, Inc. Class A | 2,356 | 223 | Wells Fargo & Co. | 376,280 | 20,372 | ||
Comerica, Inc. | 14,500 | 629 | 202,194 | ||||
Cullen/Frost Bankers, Inc. | 3,058 | 209 | |||||
Discover Financial Services | 76,802 | 4,318 | Health Care - 13.7% | ||||
Equifax, Inc. | 6,930 | 739 | Abbott Laboratories | 89,184 | 3,995 | ||
Equinix, Inc.(ö) | 8,005 | 2,375 | AbbVie, Inc. | 28,300 | 1,685 | ||
Equity Residential(ö) | 3,191 | 247 | Aetna, Inc. | 16,199 | 1,859 | ||
FactSet Research Systems, Inc. | 8,240 | 1,443 | Alexion Pharmaceuticals, Inc.(Æ) | 4,999 | 880 | ||
Fidelity National Information Services, Inc. | 12,500 | 911 | Allergan PLC(Æ) | 9,123 | 2,814 | ||
Fifth Third Bancorp | 25,900 | 493 | AmerisourceBergen Corp. Class A | 23,943 | 2,311 | ||
First American Financial Corp. | 10,117 | 386 | Amgen, Inc. | 44,464 | 7,033 | ||
FleetCor Technologies, Inc.(Æ) | 25,485 | 3,692 | Anthem, Inc. | 14,580 | 2,029 | ||
Forest City Enterprises, Inc. Class A(Æ) | 17,102 | 378 | Baxalta, Inc. | 5,490 | 189 | ||
Franklin Resources, Inc. | 17,333 | 706 | Baxter International, Inc. | 5,105 | 191 | ||
Global Payments, Inc. | 3,270 | 446 | Becton Dickinson and Co. | 1,577 | 225 | ||
Hartford Financial Services Group, Inc. | 51,215 | 2,369 | Biogen, Inc.(Æ) | 863 | 251 | ||
Hatteras Financial Corp.(ö) | 73,300 | 1,049 | Bristol-Myers Squibb Co. | 47,846 | 3,155 | ||
HCP, Inc.(ö) | 6,716 | 250 | Cardinal Health, Inc. | 70,500 | 5,795 | ||
Howard Hughes Corp. (The)(Æ) | 1,099 | 136 | Celgene Corp.(Æ) | 12,119 | 1,487 | ||
Intercontinental Exchange, Inc. | 985 | 249 | Cerner Corp.(Æ) | 45,680 | 3,028 | ||
JPMorgan Chase & Co. | 177,573 | 11,409 | Cigna Corp. | 13,111 | 1,757 | ||
KeyCorp | 41,900 | 520 | CR Bard, Inc. | 3,520 | 656 | ||
KKR & Co., LP | 165,095 | 2,831 | DexCom, Inc.(Æ) | 7,531 | 628 | ||
Leucadia National Corp. | 8,701 | 174 | Edwards Lifesciences Corp.(Æ) | 11,071 | 1,740 | ||
Lincoln National Corp. | 25,500 | 1,364 | Eli Lilly & Co. | 54,239 | 4,424 | ||
Loews Corp. | 129,000 | 4,703 | Endo International PLC(Æ) | 13,533 | 812 |
See accompanying notes which are an integral part of the financial statements.
16 Russell U.S. Core Equity Fund
Russell Investment Company
Russell U.S. Core Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Express Scripts Holding Co.(Æ) | 3,891 | 336 | Chicago Bridge & Iron Co. | 32,500 | 1,458 | ||
Gilead Sciences, Inc. | 49,986 | 5,405 | Cintas Corp. | 10,600 | 987 | ||
Horizon Pharma PLC(Æ) | 43,438 | 683 | CSX Corp. | 83,577 | 2,256 | ||
Intuitive Surgical, Inc.(Æ) | 2,057 | 1,022 | Cummins, Inc. | 1,373 | 142 | ||
Jazz Pharmaceuticals PLC(Æ) | 5,814 | 798 | Danaher Corp. | 4,833 | 451 | ||
Johnson & Johnson | 160,349 | 16,200 | Deere & Co. | 1,821 | 142 | ||
Mallinckrodt PLC(Æ) | 14,411 | 946 | Delta Air Lines, Inc. | 110,097 | 5,597 | ||
McKesson Corp. | 19,488 | 3,485 | Eaton Corp. PLC | 21,501 | 1,202 | ||
Medtronic PLC | 108,409 | 8,014 | Emerson Electric Co. | 6,536 | 309 | ||
Merck & Co., Inc. | 244,117 | 13,343 | Expeditors International of Washington, Inc. | 11,100 | 553 | ||
Mylan NV(Æ) | 65,872 | 2,904 | FedEx Corp. | 29,629 | 4,624 | ||
Pfizer, Inc. | 443,962 | 15,015 | Fluor Corp. | 1,890 | 90 | ||
PTC Therapeutics, Inc.(Æ) | 21,000 | 522 | General Dynamics Corp. | 22,282 | 3,311 | ||
Qiagen NV(Æ) | 21,000 | 508 | General Electric Co. | 106,532 | 3,081 | ||
Regeneron Pharmaceuticals, Inc.(Æ) | 3,774 | 2,104 | Honeywell International, Inc. | 71,394 | 7,374 | ||
St. Jude Medical, Inc. | 6,100 | 389 | Illinois Tool Works, Inc. | 3,076 | 283 | ||
Stryker Corp. | 23,210 | 2,219 | JetBlue Airways Corp.(Æ) | 7,462 | 185 | ||
Thermo Fisher Scientific, Inc. | 20,990 | 2,745 | KBR, Inc. | 14,700 | 271 | ||
UnitedHealth Group, Inc. | 39,454 | 4,647 | Lockheed Martin Corp. | 16,098 | 3,539 | ||
Zimmer Biomet Holdings, Inc. | 18,674 | 1,953 | Norfolk Southern Corp. | 32,294 | 2,584 | ||
ZS Pharma, Inc.(Æ) | 6,200 | 403 | Northrop Grumman Corp. | 19,299 | 3,623 | ||
130,585 | Oshkosh Corp. | 34,500 | 1,418 | ||||
Paychex, Inc. | 36,300 | 1,872 | |||||
Materials and Processing - 3.4% | Raytheon Co. | 93,124 | 10,933 | ||||
Air Products & Chemicals, Inc. | 1,344 | 187 | Ryder System, Inc. | 1,022 | 73 | ||
CRH PLC - ADR | 176,900 | 4,840 | Southwest Airlines Co. | 105,100 | 4,865 | ||
Dow Chemical Co. (The) | 48,759 | 2,519 | Stanley Black & Decker, Inc. | 50,678 | 5,371 | ||
Eastman Chemical Co. | 26,000 | 1,876 | Terex Corp. | 51,500 | 1,033 | ||
Ecolab, Inc. | 31,950 | 3,845 | Textron, Inc. | 15,032 | 634 | ||
EI du Pont de Nemours & Co. | 2,552 | 162 | Tyco International PLC | 2,893 | 105 | ||
Hexcel Corp. | 30,540 | 1,415 | Union Pacific Corp. | 41,069 | 3,670 | ||
International Paper Co. | 41,265 | 1,762 | United Continental Holdings, Inc.(Æ) | 35,424 | 2,136 | ||
Louisiana-Pacific Corp.(Æ) | 76,400 | 1,349 | United Parcel Service, Inc. Class B | 31,276 | 3,222 | ||
LyondellBasell Industries NV Class A | 1,959 | 182 | United Technologies Corp. | 25,386 | 2,498 | ||
Masco Corp. | 41,400 | 1,201 | Verisk Analytics, Inc. Class A(Æ) | 36,540 | 2,617 | ||
Monsanto Co. | 24,425 | 2,277 | Waste Management, Inc. | 4,440 | 239 | ||
Olin Corp. | 5,278 | 101 | Waters Corp.(Æ) | 460 | 59 | ||
PPG Industries, Inc. | 49,892 | 5,202 | WW Grainger, Inc. | 395 | 83 | ||
Praxair, Inc. | 2,633 | 292 | Xylem, Inc. | 57,892 | 2,108 | ||
Precision Castparts Corp. | 1,350 | 312 | 103,667 | ||||
Reliance Steel & Aluminum Co. | 35,200 | 2,110 | |||||
Rio Tinto PLC - ADR | 39,500 | 1,442 | Technology - 14.1% | ||||
Scotts Miracle-Gro Co. (The) Class A | 1,000 | 66 | Activision Blizzard, Inc. | 33,600 | 1,168 | ||
Sherwin-Williams Co. (The) | 4,160 | 1,110 | Adobe Systems, Inc.(Æ) | 27,721 | 2,458 | ||
Southern Copper Corp. | 3,275 | 91 | Alphabet, Inc. Class A(Æ) | 6,371 | 4,698 | ||
WestRock Co. | 1,705 | 92 | Alphabet, Inc. Class C(Æ) | 14,690 | 10,442 | ||
32,433 | Apple, Inc. | 152,754 | 18,254 | ||||
Applied Materials, Inc. | 71,200 | 1,194 | |||||
Producer Durables - 10.9% | ARM Holdings PLC - ADR | 67,541 | 3,204 | ||||
3M Co. | 4,341 | 682 | ARRIS Group, Inc.(Æ) | 40,300 | 1,139 | ||
Accenture PLC Class A | 27,480 | 2,946 | Arrow Electronics, Inc.(Æ) | 1,400 | 77 | ||
AECOM(Æ) | 39,600 | 1,167 | Avago Technologies, Ltd. Class A | 20,284 | 2,498 | ||
Allison Transmission Holdings, Inc. Class A | 3,030 | 87 | Avnet, Inc. | 3,414 | 155 | ||
American Airlines Group, Inc. | 73,700 | 3,406 | CDK Global, Inc. | 1,663 | 83 | ||
Ametek, Inc. | 1,947 | 107 | China Mobile, Ltd. - ADR | 47,800 | 2,883 | ||
Automatic Data Processing, Inc. | 72,180 | 6,279 | Cisco Systems, Inc. | 305,874 | 8,825 | ||
Boeing Co. (The) | 12,358 | 1,830 | Cognizant Technology Solutions Corp. Class | ||||
Carlisle Cos., Inc. | 845 | 73 | A(Æ) | 3,317 | 226 | ||
Caterpillar, Inc. | 23,626 | 1,724 | Cypress Semiconductor Corp. | 2,000 | 21 | ||
CH Robinson Worldwide, Inc. | 5,300 | 368 | EMC Corp. | 11,227 | 294 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Core Equity Fund 17
Russell Investment Company
Russell U.S. Core Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Facebook, Inc. Class A(Æ) | 83,989 | 8,564 | (identified cost $792,979) | 947,204 | |||
Gartner, Inc.(Æ) | 6,300 | 571 | |||||
HP Inc.(Æ) | 79,488 | 2,143 | Other Assets and Liabilities, Net | ||||
Intel Corp. | 335,895 | 11,373 | - 0.3% | 3,008 | |||
International Business Machines Corp. | 29,616 | 4,149 | Net Assets - 100.0% | 950,212 | |||
Juniper Networks, Inc. | 21,800 | 684 | |||||
Lam Research Corp. | 36,806 | 2,819 | |||||
LinkedIn Corp. Class A(Æ) | 4,445 | 1,071 | |||||
Marvell Technology Group, Ltd. | 38,500 | 316 | |||||
Micron Technology, Inc.(Æ) | 190,400 | 3,153 | |||||
Microsoft Corp. | 257,804 | 13,571 | |||||
NetApp, Inc. | 15,600 | 530 | |||||
NXP Semiconductors NV(Æ) | 49,692 | 3,893 | |||||
Oracle Corp. | 135,662 | 5,269 | |||||
Palo Alto Networks, Inc.(Æ) | 6,830 | 1,100 | |||||
QUALCOMM, Inc. | 9,776 | 581 | |||||
Red Hat, Inc.(Æ) | 35,245 | 2,788 | |||||
Salesforce.com, Inc.(Æ) | 23,176 | 1,801 | |||||
SAP SE - ADR | 38,310 | 3,015 | |||||
ServiceNow, Inc.(Æ) | 17,804 | 1,454 | |||||
Splunk, Inc.(Æ) | 15,834 | 889 | |||||
Symantec Corp. | 89,899 | 1,852 | |||||
Synopsys, Inc.(Æ) | 40,200 | 2,009 | |||||
Tableau Software, Inc. Class A(Æ) | 12,309 | 1,033 | |||||
Texas Instruments, Inc. | 6,656 | 378 | |||||
VMware, Inc. Class A(Æ) | 6,600 | 397 | |||||
Western Digital Corp. | 7,500 | 501 | |||||
Zynga, Inc. Class A(Æ) | 120,600 | 286 | |||||
133,809 | |||||||
Utilities - 5.2% | |||||||
American Electric Power Co., Inc. | 34,502 | 1,955 | |||||
AT&T, Inc. | 423,307 | 14,185 | |||||
Canadian Natural Resources, Ltd. | 111,400 | 2,587 | |||||
Consolidated Edison, Inc. | 2,000 | 131 | |||||
Dominion Resources, Inc. | 5,164 | 369 | |||||
Duke Energy Corp. | 27,461 | 1,963 | |||||
Edison International | 10,600 | 641 | |||||
Entergy Corp. | 72,600 | 4,948 | |||||
Exelon Corp. | 31,954 | 892 | |||||
FirstEnergy Corp. | 6,821 | 213 | |||||
NextEra Energy, Inc. | 30,840 | 3,166 | |||||
PG&E Corp. | 14,611 | 780 | |||||
Sempra Energy | 17,700 | 1,813 | |||||
Southern Co. (The) | 48,201 | 2,174 | |||||
Verizon Communications, Inc. | 282,619 | 13,249 | |||||
49,066 | |||||||
Total Common Stocks | |||||||
(cost $755,887) | 910,112 | ||||||
Short-Term Investments - 3.9% | |||||||
Russell U.S. Cash Management Fund | 34,093,053 | (8) | 34,093 | ||||
United States Treasury Bills | |||||||
Zero coupon due 02/04/16 | 2,000 | 2,000 | |||||
Zero coupon due 04/07/16 | 1,000 | 999 | |||||
Total Short-Term Investments | |||||||
(cost $37,092) | 37,092 | ||||||
Total Investments 99.7% |
See accompanying notes which are an integral part of the financial statements.
18 Russell U.S. Core Equity Fund
Russell Investment Company
Russell U.S. Core Equity Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||||||
Amounts in thousands (except contract amounts) | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||||
Contracts | Amount | Date | $ | ||||||||
Long Positions | |||||||||||
S&P 500 E-Mini Index Futures | 322 | USD | 33,387 | 12/15 | 1,868 | ||||||
S&P Technology Index Futures | 138 | USD | 6,032 | 12/15 | 486 | ||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 2,354 | ||||||||||
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Common Stocks | |||||||||||
Consumer Discretionary | $ | 137,240 | $ | — | $ | — | $ | 137,240 | 14.4 | ||
Consumer Staples | 55,782 | — | — | 55,782 | 5.9 | ||||||
Energy | 65,336 | — | — | 65,336 | 6.9 | ||||||
Financial Services | 202,194 | — | — | 202,194 | 21.3 | ||||||
Health Care | 130,585 | — | — | 130,585 | 13.7 | ||||||
Materials and Processing | 32,433 | — | — | 32,433 | 3.4 | ||||||
Producer Durables | 103,667 | — | — | 103,667 | 10.9 | ||||||
Technology | 133,809 | — | — | 133,809 | 14.1 | ||||||
Utilities | 49,066 | — | — | 49,066 | 5.2 | ||||||
Short-Term Investments | — | 37,092 | — | 37,092 | 3.9 | ||||||
Total Investments | 910,112 | 37,092 | — | 947,204 | 99.7 | ||||||
Other Assets and Liabilities, Net | 0.3 | ||||||||||
100.0 | |||||||||||
Other Financial Instruments | |||||||||||
Futures Contracts | 2,354 | — | — | 2,354 | 0.2 | ||||||
Total Other Financial Instruments* | $ | 2,354 | $ | — | $ | — | $ | 2,354 |
* Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Core Equity Fund 19
Russell Investment Company
Russell U.S. Core Equity Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Equity | ||
Derivatives not accounted for as hedging instruments | Contracts | |
Location: Statement of Assets and Liabilities - Assets | ||
Variation margin on futures contracts* | $ | 2,354 |
Equity | ||
Derivatives not accounted for as hedging instruments | Contracts | |
Location: Statement of Operations - Net realized gain (loss) | ||
Futures contracts | $ | 4,809 |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||
Futures contracts | $ | 1,025 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
20 Russell U.S. Core Equity Fund
Russell Investment Company
Russell U.S. Core Equity Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 180 | $ | — $ | 180 | |||
Total Financial and Derivative Liabilities | 180 | — | 180 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (180) | — | (180 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | — | $ | — $ | — |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Core Equity Fund 21
Russell Investment Company
Russell U.S.Core Equity Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 792,979 |
Investments, at fair value(>) | 947,204 | |
Receivables: | ||
Dividends and interest | 1,308 | |
Dividends from affiliated Russell funds | 4 | |
Investments sold | 13,072 | |
Fund shares sold | 146 | |
Total assets | 961,734 | |
Liabilities | ||
Payables: | ||
Investments purchased | 9,864 | |
Fund shares redeemed | 684 | |
Accrued fees to affiliates | 659 | |
Other accrued expenses | 135 | |
Variation margin on futures contracts | 180 | |
Total liabilities | 11,522 | |
Net Assets | $ | 950,212 |
See accompanying notes which are an integral part of the financial statements.
22 Russell U.S.Core Equity Fund
Russell Investment Company
Russell U.S.Core Equity Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | ||
Net Assets Consist of: | ||
Undistributed (overdistributed) net investment income | $ | 522 |
Accumulated net realized gain (loss) | 158,474 | |
Unrealized appreciation (depreciation) on: | ||
Investments | 154,225 | |
Futures contracts | 2,354 | |
Shares of beneficial interest | 247 | |
Additional paid-in capital | 634,390 | |
Net Assets | $ | 950,212 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class A(#) | $ | 38.50 |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 40.85 |
Class A — Net assets | $ | 34,473,872 |
Class A — Shares outstanding ($.01 par value) | 895,491 | |
Net asset value per share: Class C(#) | $ | 37.90 |
Class C — Net assets | $ | 50,046,338 |
Class C — Shares outstanding ($.01 par value) | 1,320,524 | |
Net asset value per share: Class E(#) | $ | 38.53 |
Class E — Net assets | $ | 7,751,735 |
Class E — Shares outstanding ($.01 par value) | 201,168 | |
Net asset value per share: Class I(#) | $ | 38.42 |
Class I — Net assets | $ | 496,057,302 |
Class I — Shares outstanding ($.01 par value) | 12,910,302 | |
Net asset value per share: Class S(#) | $ | 38.45 |
Class S — Net assets | $ | 361,882,716 |
Class S — Shares outstanding ($.01 par value) | 9,412,898 | |
Amounts in thousands | ||
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 34,093 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Russell U.S.Core Equity Fund 23
Russell Investment Company
Russell U.S.Core Equity Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 23,954 | |
Dividends from affiliated Russell funds | 50 | ||
Interest | 2 | ||
Total investment income | 24,006 | ||
Expenses | |||
Advisory fees | 6,973 | ||
Administrative fees | 604 | ||
Custodian fees | 237 | ||
Distribution fees - Class A | 89 | ||
Distribution fees - Class C | 400 | ||
Transfer agent fees - Class A | 71 | ||
Transfer agent fees - Class C | 107 | ||
Transfer agent fees - Class E | 20 | ||
Transfer agent fees - Class I | 633 | ||
Transfer agent fees - Class S | 799 | ||
Transfer agent fees - Class Y | 11 | ||
Professional fees | 79 | ||
Registration fees | 109 | ||
Shareholder servicing fees - Class C | 133 | ||
Shareholder servicing fees - Class E | 25 | ||
Trustees’ fees | 35 | ||
Printing fees | 40 | ||
Miscellaneous | 44 | ||
Total expenses | 10,409 | ||
Net investment income (loss) | 13,597 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 267,152 | ||
Futures contracts | 4,809 | ||
Net realized gain (loss) | 271,961 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (199,076 | ) | |
Futures contracts | 1,025 | ||
Net change in unrealized appreciation (depreciation) | (198,051 | ) | |
Net realized and unrealized gain (loss) | 73,910 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 87,507 |
See accompanying notes which are an integral part of the financial statements.
24 Russell U.S.Core Equity Fund
Russell Investment Company
Russell U.S.Core Equity Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 13,597 | $ | 25,106 | ||
Net realized gain (loss) | 271,961 | 283,715 | ||||
Net change in unrealized appreciation (depreciation) | (198,051 | ) | (34,287 | ) | ||
Net increase (decrease) in net assets from operations | 87,507 | 274,534 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (404 | ) | (320 | ) | ||
Class C | (300 | ) | (211 | ) | ||
Class E | (108 | ) | (153 | ) | ||
Class I | (7,732 | ) | (7,259 | ) | ||
Class S | (5,525 | ) | (5,100 | ) | ||
Class Y | (1,675 | ) | (10,752 | ) | ||
From net realized gain | ||||||
Class A | (5,083 | ) | — | |||
Class C | (7,688 | ) | — | |||
Class E | (1,465 | ) | — | |||
Class I | (78,180 | ) | — | |||
Class S | (59,594 | ) | — | |||
Class Y | (95,647 | ) | — | |||
Net decrease in net assets from distributions | (263,401 | ) | (23,795 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (684,853 | ) | (567,295 | ) | ||
Total Net Increase (Decrease) in Net Assets | (860,747 | ) | (316,556 | ) | ||
Net Assets | ||||||
Beginning of period | 1,810,959 | 2,127,515 | ||||
End of period | $ | 950,212 | $ | 1,810,959 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 522 | $ | 2,285 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S.Core Equity Fund 25
Russell Investment Company
Russell U.S.Core Equity Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 100 | $ | 3,876 | 87 | $ | 3,527 | ||||||
Proceeds from reinvestment of distributions | 142 | 5,454 | 8 | 317 | ||||||||
Payments for shares redeemed | (185 | ) | (7,192 | ) | (133 | ) | (5,377 | ) | ||||
Net increase (decrease) | 57 | 2,138 | (38 | ) | (1,533 | ) | ||||||
Class C | ||||||||||||
Proceeds from shares sold | 69 | 2,655 | 80 | 3,165 | ||||||||
Proceeds from reinvestment of distributions | 209 | 7,944 | 5 | 209 | ||||||||
Payments for shares redeemed | (232 | ) | (8,925 | ) | (269 | ) | (10,831 | ) | ||||
Net increase (decrease) | 46 | 1,674 | (184 | ) | (7,457 | ) | ||||||
Class E | ||||||||||||
Proceeds from shares sold | 13 | 525 | 23 | 920 | ||||||||
Proceeds from reinvestment of distributions | 41 | 1,562 | 3 | 152 | ||||||||
Payments for shares redeemed | (117 | ) | (4,525 | ) | (277 | ) | (11,483 | ) | ||||
Net increase (decrease) | (63 | ) | (2,438 | ) | (251 | ) | (10,411 | ) | ||||
Class I | ||||||||||||
Proceeds from shares sold | 804 | 30,527 | 1,230 | 50,569 | ||||||||
Proceeds from reinvestment of distributions | 2,215 | 85,273 | 173 | 7,189 | ||||||||
Payments for shares redeemed | (3,340 | ) | (130,628 | ) | (3,380 | ) | (139,008 | ) | ||||
Net increase (decrease) | (321 | ) | (14,828 | ) | (1,977 | ) | (81,250 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 829 | 32,394 | 1,103 | 44,906 | ||||||||
Proceeds from reinvestment of distributions | 1,658 | 63,868 | 121 | 5,010 | ||||||||
Payments for shares redeemed | (2,991 | ) | (116,150 | ) | (3,119 | ) | (127,204 | ) | ||||
Net increase (decrease) | (504 | ) | (19,888 | ) | (1,895 | ) | (77,288 | ) | ||||
Class Y | ||||||||||||
Proceeds from shares sold | 158 | 6,425 | 722 | 29,244 | ||||||||
Proceeds from reinvestment of distributions | 2,529 | 97,322 | 260 | 10,752 | ||||||||
Payments for shares redeemed | (19,070 | ) | (755,258 | ) | (10,596 | ) | (429,352 | ) | ||||
Net increase (decrease) | (16,383 | ) | (651,511 | ) | (9,614 | ) | (389,356 | ) | ||||
Total increase (decrease) | (17,168 | ) | $ | (684,853 | ) | (13,959 | ) | $ | (567,295 | ) |
See accompanying notes which are an integral part of the financial statements.
26 Russell U.S.Core Equity Fund
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Russell Investment Company
Russell U.S. Core Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class A | ||||||||||||||||
October 31, 2015 | 43.30 | .31 | 1.44 | 1.75 | (.44 | ) | (6.11 | ) | ||||||||
October 31, 2014 | 38.17 | .39 | 5.12 | 5.51 | (.38 | ) | — | |||||||||
October 31, 2013 | 30.29 | .31 | 7.88 | 8.19 | (.31 | ) | — | |||||||||
October 31, 2012 | 27.08 | .21 | 3.23 | 3.44 | (.23 | ) | — | |||||||||
October 31, 2011 | 26.05 | .17 | 1.03 | 1.20 | (.17 | ) | — | |||||||||
Class C | ||||||||||||||||
October 31, 2015 | 42.78 | .02 | 1.42 | 1.44 | (.21 | ) | (6.11 | ) | ||||||||
October 31, 2014 | 37.78 | .08 | 5.07 | 5.15 | (.15 | ) | — | |||||||||
October 31, 2013 | 30.01 | .05 | 7.80 | 7.85 | (.08 | ) | — | |||||||||
October 31, 2012 | 26.89 | (.01 | ) | 3.20 | 3.19 | (.07 | ) | — | ||||||||
October 31, 2011 | 25.91 | (.03 | ) | 1.03 | 1.00 | (.02 | ) | — | ||||||||
Class E | ||||||||||||||||
October 31, 2015 | 43.33 | .31 | 1.43 | 1.74 | (.43 | ) | (6.11 | ) | ||||||||
October 31, 2014 | 38.17 | .40 | 5.13 | 5.53 | (.37 | ) | — | |||||||||
October 31, 2013 | 30.29 | .32 | 7.87 | 8.19 | (.31 | ) | — | |||||||||
October 31, 2012 | 27.06 | .23 | 3.21 | 3.44 | (.21 | ) | — | |||||||||
October 31, 2011 | 26.02 | .20 | 1.03 | 1.23 | (.19 | ) | — | |||||||||
Class I | ||||||||||||||||
October 31, 2015 | 43.24 | .44 | 1.43 | 1.87 | (.58 | ) | (6.11 | ) | ||||||||
October 31, 2014 | 38.10 | .52 | 5.13 | 5.65 | (.51 | ) | — | |||||||||
October 31, 2013 | 30.24 | .42 | 7.86 | 8.28 | (.42 | ) | — | |||||||||
October 31, 2012 | 27.04 | .31 | 3.22 | 3.53 | (.33 | ) | — | |||||||||
October 31, 2011 | 26.01 | .27 | 1.02 | 1.29 | (.26 | ) | — | |||||||||
Class S | ||||||||||||||||
October 31, 2015 | 43.26 | .41 | 1.43 | 1.84 | (.54 | ) | (6.11 | ) | ||||||||
October 31, 2014 | 38.12 | .49 | 5.13 | 5.62 | (.48 | ) | — | |||||||||
October 31, 2013 | 30.26 | .39 | 7.86 | 8.25 | (.39 | ) | — | |||||||||
October 31, 2012 | 27.04 | .28 | 3.23 | 3.51 | (.29 | ) | — | |||||||||
October 31, 2011 | 26.01 | .24 | 1.03 | 1.27 | (.24 | ) | — | |||||||||
See accompanying notes which are an integral part of the financial statements.
28 Russell U.S. Core Equity Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||||
(6.55 | ) | 38.50 | 4.17 | 34,474 | 1.09 | 1.09 | .79 | 103 | |||||||||
(.38 | ) | 43.30 | 14.49 | 36,334 | 1.08 | 1.08 | .95 | 73 | |||||||||
(.31 | ) | 38.17 | 27.19 | 33,491 | 1.07 | 1.07 | .90 | 97 | |||||||||
(.23 | ) | 30.29 | 12.73 | 29,349 | 1.07 | 1.07 | .72 | 117 | |||||||||
(.17 | ) | 27.08 | 4.60 | 29,238 | 1.07 | 1.07 | .62 | 90 | |||||||||
(6.32 | ) | 37.90 | 3.39 | 50,046 | 1.84 | 1.84 | .04 | 103 | |||||||||
(.15 | ) | 42.78 | 13.66 | 54,530 | 1.83 | 1.83 | .21 | 73 | |||||||||
(.08 | ) | 37.78 | 26.23 | 55,105 | 1.82 | 1.82 | .16 | 97 | |||||||||
(.07 | ) | 30.01 | 11.89 | 53,222 | 1.82 | 1.82 | (.02 | ) | 117 | ||||||||
(.02 | ) | 26.89 | 3.81 | 61,417 | 1.82 | 1.82 | (.13 | ) | 90 | ||||||||
(6.54 | ) | 38.53 | 4.14 | 7,752 | 1.09 | 1.09 | .80 | 103 | |||||||||
(.37 | ) | 43.33 | 14.52 | 11,449 | 1.08 | 1.08 | .97 | 73 | |||||||||
(.31 | ) | 38.17 | 27.18 | 19,657 | 1.07 | 1.06 | .95 | 97 | |||||||||
(.21 | ) | 30.29 | 12.78 | 25,075 | 1.07 | 1.02 | .81 | 117 | |||||||||
(.19 | ) | 27.06 | 4.67 | 67,675 | 1.07 | .99 | .71 | 90 | |||||||||
(6.69 | ) | 38.42 | 4.48 | 496,057 | .76 | .76 | 1.12 | 103 | |||||||||
(.51 | ) | 43.24 | 14.90 | 572,064 | .75 | .75 | 1.28 | 73 | |||||||||
(.42 | ) | 38.10 | 27.59 | 579,477 | .74 | .74 | 1.23 | 97 | |||||||||
(.33 | ) | 30.24 | 13.13 | 597,630 | .74 | .74 | 1.07 | 117 | |||||||||
(.26 | ) | 27.04 | 4.95 | 887,294 | .74 | .74 | .96 | 90 | |||||||||
(6.65 | ) | 38.45 | 4.42 | 361,883 | .84 | .84 | 1.04 | 103 | |||||||||
(.48 | ) | 43.26 | 14.80 | 428,952 | .83 | .83 | 1.20 | 73 | |||||||||
(.39 | ) | 38.12 | 27.51 | 450,265 | .82 | .82 | 1.15 | 97 | |||||||||
(.29 | ) | 30.26 | 13.01 | 440,333 | .82 | .82 | .99 | 117 | |||||||||
(.24 | ) | 27.04 | 4.87 | 1,509,859 | .82 | .82 | .87 | 90 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Core Equity Fund 29
Russell Investment Company
Russell U.S. Defensive Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell U.S. Defensive Equity Fund - Class A‡ | Russell U.S. Defensive Equity Fund - Class S‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.18 | )% | 1 Year | 5.14 | % | ||
5 Years | 11.89 | %§ | 5 Years | 13.50 | %§ | ||
10 Years | 5.59 | %§ | 10 Years | 6.47 | %§ | ||
Russell U.S. Defensive Equity Fund - Class C‡‡ | Russell U.S. Defensive Equity Fund - Class Y | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 4.09 | % | 1 Year | 5.34 | % | ||
5 Years | 12.38 | %§ | 5 Years | 13.72 | %§ | ||
10 Years | 5.63 | %§ | 10 Years | 6.63 | %§ | ||
Russell U.S. Defensive Equity Fund - Class E | Russell 1000® Defensive IndexTM** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 4.87 | % | 1 Year | 5.81 | % | ||
5 Years | 13.25 | %§ | 5 Years | 14.56 | %§ | ||
10 Years | 6.24 | %§ | 10 Years | 8.06 | %§ | ||
Russell U.S. Defensive Equity Fund - Class I | U.S. Defensive Equity Linked Benchmark*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 5.21 | % | 1 Year | 5.81 | % | ||
5 Years | 13.60 | %§ | 5 Years | 13.67 | %§ | ||
10 Years | 6.54 | %§ | 10 Years | 7.67 | %§ |
30 Russell U.S. Defensive Equity Fund
Russell Investment Company
Russell U.S. Defensive Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell U.S. Defensive Equity Fund (the “Fund”) employs | the technology sector, while being relatively neutral to most other | |||
a multi-manager approach whereby portions of the Fund are | sectors. The Fund was consistently underweight the largest stocks | |||
allocated to different money manager strategies. Fund assets not | by market capitalization and the highest dividend yielding stocks | |||
allocated to money managers are managed by Russell Investment | while it was overweight stocks with higher price momentum | |||
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | and faster long-term growth, but with attractive valuations. The | |||
may change the allocation of the Fund’s assets among money | market environment was mixed relative to these factors. | |||
managers at any time. An exemptive order from the Securities | ||||
and Exchange Commission (“SEC”) permits RIMCo to engage | How did the investment strategies and techniques employed | |||
or terminate a money manager at any time, subject to approval | by the Fund and its money managers affect its benchmark- | |||
by the Fund’s Board, without a shareholder vote. Pursuant to the | relative performance? | |||
terms of the exemptive order, the Fund is required to notify its | The Fund employs discretionary money managers. The Fund’s | |||
shareholders within 90 days of when a money manager begins | discretionary money managers select the individual portfolio | |||
providing services. As of October 31, 2015, the Fund had four | securities for the assets assigned to them. Fund assets not | |||
money managers. | allocated to discretionary money managers include the Fund’s | |||
liquidity reserves and assets which may be managed directly | ||||
What is the Fund’s investment objective? | by RIMCo to effect the Fund’s investment strategies and/or to | |||
The Fund seeks to provide long term capital growth. | actively manage the Fund’s overall exposures by investing in | |||
How did the Fund perform relative to its benchmark for the | securities or other instruments that RIMCo believes will achieve | |||
fiscal year ended October 31, 2015? | the desired risk/return profile for the Fund. | |||
For the fiscal year ended October 31, 2015, the Fund’s Class A, | At the Fund level, sector selection detracted while stock selection | |||
Class C, Class E, Class I, Class S and Class Y Shares gained | was positive overall. An underweight to the technology sector | |||
4.86%, 4.09%, 4.87%, 5.21%, 5.14% and 5.34%, respectively. | detracted while an overweight to the utilities sector contributed | |||
This is compared to the Fund’s benchmark, the Russell 1000® | positively. Stock selection within the technology sector (Avago | |||
Defensive™ Index, which gained 5.81% during the same period. | Technologies Limited, International Business Machines | |||
The Fund’s performance includes operating expenses, whereas | Corporation, and Facebook, Inc. Class A) contributed most | |||
index returns are unmanaged and do not include expenses of any | positively while stock selection within the utilities sector (Entergy | |||
kind. | Corporation) detracted. | |||
For the fiscal year ended October 31, 2015, the Morningstar® | With respect to certain of the Fund’s money managers that were | |||
Large Blend, a group of funds that Morningstar considers to have | managers for the entire fiscal year, J.P. Morgan Investment | |||
investment strategies similar to those of the Fund, gained 2.79%. | Management, Inc. (“JPMorgan”) was the worst performing | |||
This result serves as a peer comparison and is expressed net of | manager and outperformed the Russell 1000® Defensive™ Index. | |||
operating expenses. | JPMorgan’s exposure to growth and value contributed positively | |||
while exposure to volatility and leverage detracted. JPMorgan’s | ||||
RIMCo may assign a money manager a specific style or | allocation to sectors detracted while stock selection contributed | |||
capitalization benchmark other than the Fund’s index. However, | positively to excess returns. An overweight to the consumer | |||
the Fund’s primary index remains the benchmark for the Fund | discretionary sector contributed positively while an underweight | |||
and is representative of the aggregate of each money manager’s | to the technology sector detracted. Stock selection within the | |||
benchmark index. | technology (Avago Technologies Limited and International | |||
How did the market conditions described in the Market | Business Machines Corporation) sector contributed positively | |||
Summary report affect the Fund’s performance? | while stock selection within the producer durables (Union | |||
The fiscal year saw relatively strong performance for U.S. large | Pacific Corporation and United Technologies Corporation) sector | |||
capitalization and defensive equity securities. Energy stocks | detracted. | |||
declined the most during the year while materials & processing, | Jacobs Levy Equity Management, Inc. (“Jacobs Levy”) was the | |||
utilities, and producer durables generated modest returns. | best performing manager for the one-year period and outperformed | |||
Consumer discretionary stocks were the standout performers, | the Russell 1000® Defensive™ Index. Jacobs Levy’s exposure | |||
while consumer staples, financial services, and technology stocks | to growth, medium-term momentum, and earnings revisions, | |||
also generated above market returns. | contributed positively while exposure to market capitalization, | |||
Relative to its benchmark, the Russell 1000® Defensive™ Index, | earnings-to-price, and earnings-per-share variability detracted. | |||
the Fund was overweight the healthcare sector and underweight | Sector selection contributed positively while stock selection |
Russell U.S. Defensive Equity Fund 31
Russell Investment Company
Russell U.S. Defensive Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
detracted during the year. An overweight to the consumer | from premiums received on their sale. RIMCo’s strategy of not | |
discretionary sector contributed strongly while an overweight | equitizing all of the Fund’s cash had mixed results given market | |
to the healthcare sector detracted. Security selection within | volatility. | |
the energy (Schlumberger NV) sector contributed positively | ||
while stock selection within the consumer staples (Mondelez | Describe any changes to the Fund’s structure or the money | |
International, Inc. Class A, Philip Morris International Inc.) | manager line-up. | |
sector detracted. | In September 2015, RIMCo hired Coho Partners, Ltd. and | |
terminated INTECH Investment Management LLC. In connection | ||
Until September 2015, RIMCo pursued a positioning strategy for | with these changes, RIMCo also changed JP Morgan Investment | |
the Fund that was a replication of a blended index that included | Management Inc.’s mandate to be a split between a defensive | |
the Russell Top 200® Defensive™ Index, which consists of the | strategy and a managed volatility strategy. The Fund’s target | |
largest stocks within the Russell 1000® Defensive™ Index, and | allocations to RIMCo and the money managers were also adjusted. | |
the Russell 1000® Defensive™ Energy Index, which consists of | ||
the energy stocks within the Russell 1000® Defensive™ Index. | Money Managers as of October 31, | |
This strategy was designed to reduce the Fund’s underweight to | 2015 | Styles |
market capitalization and to the energy sector. For part of 2015, | Coho Partners, Ltd. | Defensive |
the Russell Top 200® Defensive™ Index excluded biotechnology | J.P. Morgan Investment Management, Inc. | Defensive |
and REIT stocks. Although the RIMCo positioning strategy | Jacobs Levy Equity Management Inc. | Defensive |
achieved its hedging objective, when viewed as a stand-alone | PanAgora Asset Management Inc. | Defensive |
strategy, it underperformed the Fund’s index. In September 2015, | The views expressed in this report reflect those of the portfolio | |
RIMCo changed the strategy to replicate the Russell 1000® | managers only through the end of the period covered by | |
Investment Concept Defensive™ Index, which provides exposure | the report. These views do not necessarily represent the | |
to defensive factors and is based on the Russell 1000® Index. | views of RIMCo or any other person in RIMCo or any other | |
During the period when the strategy was managed to the Russell | affiliated organization. These views are subject to change | |
1000® Investment Concept Defensive™ Index, the strategy | at any time based upon market conditions or other events, | |
underperformed the Fund’s benchmark. | and RIMCo disclaims any responsibility to update the views | |
contained herein. These views should not be relied on as | ||
During the period, RIMCo used a combination of index futures | investment advice and, because investment decisions for | |
contracts to equitize a portion of the Fund’s cash and sold equity | a Russell Investment Company (“RIC”) Fund are based on | |
index put options with respect to the portion of the Fund’s cash | numerous factors, should not be relied on as an indication | |
that RIMCo determined not to equitize in order to seek gains | of investment decisions of any RIC Fund. |
32 Russell U.S. Defensive Equity Fund
Russell Investment Company
Russell U.S. Defensive Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* Assumes initial investment on November 1, 2005.
** Russell 1000® Defensive IndexTM measures the performance of the large-cap defensive segment of the U.S. equity universe. It includes those Russell 1000®
Index companies with relatively stable business conditions which are less sensitive to economic cycles, credit cycles, and market volatility based on their
stability variables. Stability is measured in terms of volatility (price and earnings), leverage, and return on assets.
*** The U.S. Defensive Equity Linked Benchmark provides a means to compare the Fund’s average annual returns to a secondary benchmark that takes into account
historical changes in the Fund’s primary benchmark. The U.S. Defensive Equity Linked Benchmark represents the returns of the Russell 1000® Index through
August 14, 2012 and the returns of the Russell 1000® Defensive Index thereafter.
‡ The Fund first issued Class A Shares on September 2, 2008. The returns shown for Class A Shares prior to that date are the returns of the Fund’s Class E
Shares. The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%. Annual returns for each Class will
differ only to the extent that the Class A Shares do not have the same expenses as the Class E Shares.
‡‡ The Fund first issued Class C Shares on September 2, 2008. The returns shown for Class C Shares prior to that date are the returns of the Fund’s Class E Shares
and do not reflect deduction of Rule 12b-1 distribution fees that apply to Class C Shares. Had they done so, the returns shown for those periods would have been
lower. Annual returns for each Class will differ only to the extent that the Class C Shares do not have the same expenses as the Class E Shares.
‡‡‡ The Fund first issued Class S Shares on September 2, 2008. The returns shown for Class S Shares prior to that date are the returns of the Fund’s Class I
Shares. Class S Shares will have substantially similar annual returns as the Class I Shares because the Shares of each Class are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class S Shares do not have the same expenses as the Class I Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Russell U.S. Defensive Equity Fund 33
Russell Investment Company
Russell U.S. Defensive Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | (5% return | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | before expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 1,019.50 | $ | 1,019.86 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 5.40 | $ | 5.40 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.06% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). | |||||
and actual expenses. You may use the information in this column, | ||||||
together with the amount you invested, to estimate the expenses | Hypothetical | |||||
Performance | ||||||
that you paid over the period. Simply divide your account value by | Actual | (5% return | ||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Class C | Performance | before expenses) | |||
= 8.6), then multiply the result by the number in the first column | Beginning Account Value | |||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
the expenses you paid on your account during this period. | October 31, 2015 | $ | 1,015.70 | $ | 1,016.08 | |
Expenses Paid During Period* | $ | 9.20 | $ | 9.20 | ||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | * Expenses are equal to the Fund's annualized expense ratio of 1.81% | |||||
Performance (5% return before expenses)” provides information | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
about hypothetical account values and hypothetical expenses | year period). | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | Hypothetical | |||||
actual return. The hypothetical account values and expenses | Performance | |||||
Actual | (5% return | |||||
may not be used to estimate the actual ending account balance or | Class E | Performance | before expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
to compare the ongoing costs of investing in the Fund and other | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
funds. To do so, compare this 5% hypothetical example with the | Ending Account Value | |||||
October 31, 2015 | $ | 1,019.50 | $ | 1,019.86 | ||
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 5.40 | $ | 5.40 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 1.06% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
34 Russell U.S. Defensive Equity Fund
Russell Investment Company
Russell U.S. Defensive Equity Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance | |||||
Actual | (5% return | ||||
Class I | Performance | before expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 1,021.30 | $ | 1,021.53 | |
Expenses Paid During Period* | $ | 3.72 | $ | 3.72 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.73% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance | |||||
Actual | (5% return | ||||
Class S | Performance | before expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 1,020.90 | $ | 1,021.12 | |
Expenses Paid During Period* | $ | 4.13 | $ | 4.13 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.81% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance | |||||
Actual | (5% return | ||||
Class Y | Performance | before expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 1,021.80 | $ | 1,022.08 | |
Expenses Paid During Period* | $ | 3.16 | $ | 3.16 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.62% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
Russell U.S. Defensive Equity Fund 35
Russell Investment Company
Russell U.S. Defensive Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Common Stocks - 91.5% | Consumer Staples - 12.7% | ||||||
Consumer Discretionary - 12.5% | Altria Group, Inc. | 127,969 | 7,738 | ||||
Advance Auto Parts, Inc. | 610 | 121 | Archer-Daniels-Midland Co. | 14,774 | 675 | ||
Amazon.com, Inc.(Æ) | 223 | 140 | Brown-Forman Corp. Class B - ADR(Æ) | 1,655 | 176 | ||
AutoZone, Inc.(Æ) | 5,727 | 4,492 | Bunge, Ltd. | 529 | 39 | ||
Bed Bath & Beyond, Inc.(Æ) | 1,181 | 70 | Campbell Soup Co. | 11,448 | 581 | ||
Brinker International, Inc. | 8,215 | 374 | Casey's General Stores, Inc. | 2,100 | 223 | ||
Choice Hotels International, Inc. | 11,677 | 611 | Church & Dwight Co., Inc. | 1,246 | 107 | ||
Comcast Corp. Class A(Æ) | 113,268 | 7,093 | Clorox Co. (The) | 10,030 | 1,223 | ||
Costco Wholesale Corp. | 37,176 | 5,878 | Coca-Cola Co. (The) | 342,419 | 14,501 | ||
Darden Restaurants, Inc. | 18,200 | 1,126 | Coca-Cola Enterprises, Inc. | 53,579 | 2,751 | ||
Delphi Automotive PLC | 3,806 | 317 | Colgate-Palmolive Co. | 8,847 | 587 | ||
Dick's Sporting Goods, Inc. | 10,608 | 473 | Constellation Brands, Inc. Class A | 8,130 | 1,096 | ||
Dollar General Corp. | 123,470 | 8,368 | CVS Health Corp. | 105,407 | 10,412 | ||
Dollar Tree, Inc.(Æ) | 2,280 | 149 | Dr Pepper Snapple Group, Inc. | 57,201 | 5,112 | ||
Domino's Pizza, Inc. | 15,153 | 1,616 | Flowers Foods, Inc. | 2,072 | 56 | ||
Dunkin' Brands Group, Inc. | 26,002 | 1,077 | General Mills, Inc. | 3,489 | 203 | ||
eBay, Inc.(Æ) | 2,983 | 83 | Hershey Co. (The) | 21,800 | 1,933 | ||
Estee Lauder Cos., Inc. (The) Class A | 9,793 | 788 | Hormel Foods Corp. | 2,591 | 175 | ||
Foot Locker, Inc. | 17,541 | 1,188 | Ingredion, Inc. | 943 | 90 | ||
Gap, Inc. (The) | 23,351 | 636 | JM Smucker Co. (The) | 32,400 | 3,803 | ||
Garmin, Ltd. | 1,033 | 37 | Kimberly-Clark Corp. | 20,707 | 2,479 | ||
Genuine Parts Co. | 1,611 | 146 | Kroger Co. (The) | 85,565 | 3,234 | ||
Home Depot, Inc. | 95,231 | 11,774 | McCormick & Co., Inc. | 1,735 | 146 | ||
Hyatt Hotels Corp. Class A(Æ) | 450 | 23 | Mead Johnson Nutrition Co. Class A | 773 | 63 | ||
J Alexander's Holdings, Inc.(Æ) | 5,956 | 57 | Molson Coors Brewing Co. Class B | 38,060 | 3,353 | ||
John Wiley & Sons, Inc. Class A(Æ) | 491 | 26 | Mondelez International, Inc. Class A | 127,670 | 5,893 | ||
Leggett & Platt, Inc. | 1,747 | 79 | PepsiCo, Inc. | 144,526 | 14,769 | ||
LKQ Corp.(Æ) | 2,447 | 72 | Philip Morris International, Inc. | 170,911 | 15,109 | ||
Lowe's Cos., Inc. | 125,031 | 9,231 | Pinnacle Foods, Inc. | 721 | 32 | ||
Madison Square Garden Co. (The) Class A(Æ) | 198 | 35 | Procter & Gamble Co. (The) | 289,469 | 22,110 | ||
Marriott International, Inc. Class A | 38,317 | 2,942 | Reynolds American, Inc. | 135,305 | 6,538 | ||
McDonald's Corp. | 47,389 | 5,319 | Sysco Corp. | 42,213 | 1,741 | ||
MSG Networks, Inc.(Æ) | 596 | 12 | 126,948 | ||||
Murphy USA, Inc.(Æ) | 447 | 27 | |||||
Nike, Inc. Class B | 48,726 | 6,385 | Energy - 4.7% | ||||
Nordstrom, Inc. | 1,098 | 72 | Chevron Corp. | 98,464 | 8,948 | ||
NVR, Inc.(Æ) | 1,468 | 2,404 | Columbia Pipeline Group, Inc. | 55,327 | 1,149 | ||
Omnicom Group, Inc. | 54,077 | 4,051 | ConocoPhillips | 3,073 | 164 | ||
O'Reilly Automotive, Inc.(Æ) | 8,007 | 2,212 | EQT Corp. | 1,389 | 92 | ||
Panera Bread Co. Class A(Æ) | 281 | 50 | Exxon Mobil Corp. | 250,726 | 20,745 | ||
Polaris Industries, Inc. | 334 | 38 | FMC Technologies, Inc.(Æ) | 9,583 | 324 | ||
Ralph Lauren Corp. Class A | 3,782 | 419 | Marathon Petroleum Corp. | 8,700 | 451 | ||
Ross Stores, Inc. | 68,625 | 3,471 | Occidental Petroleum Corp. | 90,786 | 6,767 | ||
Sally Beauty Holdings, Inc.(Æ) | 1,135 | 27 | Phillips 66(Æ) | 9,720 | 865 | ||
Scripps Networks Interactive, Inc. Class A | 1,100 | 66 | Royal Dutch Shell PLC Class A - ADR(Æ) | 95,900 | 5,031 | ||
Starbucks Corp. | 70,820 | 4,431 | Schlumberger, Ltd. | 1,573 | 123 | ||
Target Corp. | 27,190 | 2,099 | TransCanada Corp. | 19,906 | 669 | ||
TE Connectivity, Ltd. | 3,412 | 220 | Valero Energy Corp. | 22,900 | 1,510 | ||
Thor Industries, Inc. | 471 | 26 | World Fuel Services Corp. | 8,200 | 365 | ||
Time Warner, Inc. | 60,390 | 4,550 | 47,203 | ||||
TJX Cos., Inc. | 96,744 | 7,081 | |||||
Twenty-First Century Fox, Inc. Class A | 38,852 | 1,192 | Financial Services - 16.1% | ||||
VF Corp. | 32,868 | 2,219 | ACE, Ltd. | 35,163 | 3,992 | ||
Viacom, Inc. Class B | 1,742 | 86 | Affiliated Managers Group, Inc.(Æ) | 2,856 | 515 | ||
Wal-Mart Stores, Inc. | 91,759 | 5,252 | Aflac, Inc. | 88,906 | 5,668 | ||
Walt Disney Co. (The) | 115,020 | 13,082 | Alleghany Corp.(Æ) | 63 | 31 | ||
Yum! Brands, Inc. | 2,366 | 168 | Allied World Assurance Co. Holdings AG | 1,925 | 70 | ||
123,981 | Allstate Corp. (The) | 17,336 | 1,073 | ||||
American Campus Communities, Inc.(ö) | 666 | 27 | |||||
American Express Co. | 40,124 | 2,939 |
See accompanying notes which are an integral part of the financial statements.
36 Russell U.S. Defensive Equity Fund
Russell Investment Company
Russell U.S. Defensive Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
American Financial Group, Inc. | 13,884 | 1,002 | Intercontinental Exchange, Inc. | 4,971 | 1,255 | ||
American Homes 4 Rent Class A(ö) | 1,784 | 29 | Invesco, Ltd. | 23,963 | 795 | ||
American International Group, Inc. | 4,793 | 302 | Jack Henry & Associates, Inc. | 25,377 | 1,963 | ||
American National Insurance Co. | 251 | 26 | Jones Lang LaSalle, Inc. | 4,554 | 759 | ||
American Tower Corp.(ö) | 8,450 | 864 | JPMorgan Chase & Co. | 6,042 | 388 | ||
AmTrust Financial Services, Inc. | 6,787 | 463 | Kilroy Realty Corp.(ö) | 6,467 | 426 | ||
Aon PLC | 33,341 | 3,111 | Liberty Property Trust(ö) | 13,767 | 468 | ||
Arch Capital Group, Ltd.(Æ) | 1,427 | 107 | Loews Corp. | 952 | 35 | ||
Arthur J Gallagher & Co. | 40,862 | 1,787 | M&T Bank Corp. | 2,221 | 266 | ||
Aspen Insurance Holdings, Ltd. | 1,003 | 49 | Markel Corp.(Æ) | 62 | 54 | ||
Assurant, Inc. | 889 | 72 | Marsh & McLennan Cos., Inc. | 112,112 | 6,249 | ||
AvalonBay Communities, Inc.(ö) | 12,378 | 2,164 | MasterCard, Inc. Class A | 74,683 | 7,393 | ||
Axis Capital Holdings, Ltd. | 974 | 53 | Mercury General Corp. | 524 | 28 | ||
Bank of America Corp. | 8,784 | 147 | MetLife, Inc. | 14,256 | 718 | ||
Bank of Hawaii Corp. | 452 | 30 | MFA Financial, Inc.(ö) | 4,632 | 32 | ||
Bank of New York Mellon Corp. (The) | 834 | 35 | Moody's Corp. | 683 | 66 | ||
BB&T Corp. | 39,554 | 1,469 | Morningstar, Inc. | 7,099 | 583 | ||
Berkshire Hathaway, Inc. Class B(Æ) | 67,573 | 9,191 | MSCI, Inc. Class A | 1,523 | 102 | ||
BlackRock, Inc. Class A | 2,724 | 959 | Nasdaq, Inc. | 1,457 | 84 | ||
BOK Financial Corp. | 438 | 29 | National Retail Properties, Inc.(ö) | 1,596 | 61 | ||
Boston Properties, Inc.(ö) | 5,726 | 721 | New York Community Bancorp, Inc. | 2,010 | 33 | ||
Broadridge Financial Solutions, Inc. | 1,831 | 109 | Northern Trust Corp. | 31,754 | 2,235 | ||
Brown & Brown, Inc. | 1,075 | 35 | NorthStar Asset Management Group, Inc. | 2,213 | 32 | ||
Camden Property Trust(ö) | 705 | 52 | PartnerRe, Ltd. | 655 | 91 | ||
Capital One Financial Corp. | 1,854 | 146 | PayPal Holdings, Inc.(Æ) | 2,951 | 106 | ||
Care Capital Properties, Inc.(Æ)(ö) | 362 | 12 | People's United Financial, Inc. | 2,098 | 33 | ||
CBOE Holdings, Inc. | 8,351 | 560 | Plum Creek Timber Co., Inc.(ö) | 1,056 | 43 | ||
Chubb Corp. (The) | 1,512 | 196 | PNC Financial Services Group, Inc. (The) | 47,735 | 4,309 | ||
Cincinnati Financial Corp. | 843 | 51 | Post Properties, Inc.(ö) | 14,630 | 874 | ||
Citigroup, Inc. | 2,404 | 128 | Principal Financial Group, Inc. | 36,580 | 1,835 | ||
Citizens Financial Group, Inc. | 75,900 | 1,844 | ProAssurance Corp. | 864 | 46 | ||
CME Group, Inc. Class A | 755 | 71 | Progressive Corp. (The) | 3,988 | 132 | ||
CNA Financial Corp. | 702 | 26 | Public Storage(ö) | 1,695 | 389 | ||
Comerica, Inc. | 13,598 | 590 | Raymond James Financial, Inc. | 811 | 45 | ||
Commerce Bancshares, Inc. | 1,231 | 56 | Realty Income Corp.(ö) | 1,811 | 90 | ||
Communications Sales & Leasing, Inc.(ö) | 1,394 | 28 | Regency Centers Corp.(ö) | 12,992 | 883 | ||
Corrections Corp. of America(ö) | 1,410 | 40 | Reinsurance Group of America, Inc. Class A | 12,541 | 1,132 | ||
Cullen/Frost Bankers, Inc. | 39,261 | 2,687 | RenaissanceRe Holdings, Ltd. | 743 | 81 | ||
Discover Financial Services | 36,269 | 2,039 | SEI Investments Co. | 1,336 | 69 | ||
Dun & Bradstreet Corp. (The) | 391 | 45 | Senior Housing Properties Trust(ö) | 1,413 | 21 | ||
East West Bancorp, Inc. | 11,129 | 450 | Simon Property Group, Inc.(ö) | 26,106 | 5,259 | ||
Endurance Specialty Holdings, Ltd. | 632 | 40 | SLM Corp.(Æ) | 4,905 | 35 | ||
Equifax, Inc. | 18,134 | 1,933 | Starwood Property Trust, Inc.(ö) | 2,724 | 55 | ||
Equity LifeStyle Properties, Inc. Class A(ö) | 14,845 | 898 | State Street Corp. | 89,500 | 6,175 | ||
Erie Indemnity Co. Class A | 837 | 73 | Synchrony Financial(Æ) | 27,329 | 841 | ||
Essex Property Trust, Inc.(ö) | 184 | 41 | T Rowe Price Group, Inc. | 1,088 | 82 | ||
Everest Re Group, Ltd. | 12,890 | 2,294 | Taubman Centers, Inc.(ö) | 353 | 27 | ||
Extra Space Storage, Inc.(ö) | 1,207 | 96 | TD Ameritrade Holding Corp. | 6,224 | 215 | ||
FactSet Research Systems, Inc. | 14,125 | 2,474 | Thomson Reuters Corp. | 1,074 | 44 | ||
Federal Realty Investment Trust(ö) | 439 | 63 | Torchmark Corp. | 676 | 39 | ||
Federated Investors, Inc. Class B | 788 | 24 | Total System Services, Inc. | 972 | 51 | ||
Fidelity National Information Services, Inc. | 42,019 | 3,064 | Travelers Cos., Inc. (The) | 31,877 | 3,599 | ||
Fiserv, Inc.(Æ) | 36,807 | 3,552 | US Bancorp | 176,472 | 7,444 | ||
FNF Group | 2,776 | 98 | Validus Holdings, Ltd. | 642 | 28 | ||
FNFV Group(Æ) | 26,822 | 301 | Ventas, Inc.(ö) | 1,483 | 80 | ||
Franklin Resources, Inc. | 2,761 | 113 | Visa, Inc. Class A | 160,868 | 12,480 | ||
Global Payments, Inc. | 8,916 | 1,216 | Voya Financial, Inc. | 45,235 | 1,835 | ||
Hanover Insurance Group, Inc. (The) | 16,540 | 1,393 | Weingarten Realty Investors(ö) | 1,463 | 52 | ||
HCP, Inc.(ö) | 2,651 | 99 | Wells Fargo & Co. | 359,345 | 19,455 | ||
Huntington Bancshares, Inc. | 6,303 | 69 | Welltower, Inc.(Æ)(ö) | 831 | 54 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Defensive Equity Fund 37
Russell Investment Company
Russell U.S. Defensive Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
White Mountains Insurance Group, Ltd. | 40 | 32 | Bemis Co., Inc. | 1,810 | 83 | ||
WR Berkley Corp. | 28,398 | 1,585 | Compass Minerals International, Inc. | 312 | 25 | ||
XL Group PLC Class A | 61,695 | 2,349 | Crown Holdings, Inc.(Æ) | 43,961 | 2,332 | ||
159,951 | Ecolab, Inc. | 1,662 | 200 | ||||
EI du Pont de Nemours & Co. | 18,661 | 1,183 | |||||
Health Care - 16.8% | Fastenal Co. | 1,647 | 65 | ||||
Abbott Laboratories | 269,355 | 12,067 | Hexcel Corp. | 1,121 | 52 | ||
Aetna, Inc. | 40,764 | 4,679 | International Flavors & Fragrances, Inc. | 983 | 114 | ||
Agilent Technologies, Inc. | 9,315 | 352 | LyondellBasell Industries NV Class A | 4,760 | 442 | ||
Alexion Pharmaceuticals, Inc.(Æ) | 1,164 | 205 | Mosaic Co. (The) | 5,824 | 197 | ||
Allergan PLC(Æ) | 1,944 | 600 | NewMarket Corp. | 105 | 41 | ||
AmerisourceBergen Corp. Class A | 97,189 | 9,380 | Nucor Corp. | 769 | 33 | ||
Amgen, Inc. | 73,590 | 11,641 | PPG Industries, Inc. | 23,777 | 2,479 | ||
Anthem, Inc. | 16,297 | 2,268 | Praxair, Inc. | 22,311 | 2,479 | ||
Baxalta, Inc. | 65,413 | 2,254 | Precision Castparts Corp. | 3,055 | 705 | ||
Baxter International, Inc. | 143,611 | 5,370 | RPM International, Inc. | 658 | 30 | ||
Becton Dickinson and Co. | 29,911 | 4,263 | Scotts Miracle-Gro Co. (The) Class A | 800 | 53 | ||
Biogen, Inc.(Æ) | 2,855 | 829 | Sherwin-Williams Co. (The) | 9,543 | 2,546 | ||
Bio-Rad Laboratories, Inc. Class A(Æ) | 219 | 31 | Sigma-Aldrich Corp. | 1,110 | 155 | ||
Bio-Techne Corp. | 389 | 34 | Silgan Holdings, Inc. | 598 | 30 | ||
Boston Scientific Corp.(Æ) | 17,791 | 325 | Sonoco Products Co. | 1,372 | 59 | ||
Bristol-Myers Squibb Co. | 61,977 | 4,087 | Valmont Industries, Inc. | 211 | 23 | ||
Cardinal Health, Inc. | 75,786 | 6,230 | Valspar Corp. | 660 | 53 | ||
Celgene Corp.(Æ) | 2,329 | 286 | Watsco, Inc. | 312 | 38 | ||
Cerner Corp.(Æ) | 1,725 | 114 | Westlake Chemical Corp. | 9,793 | 590 | ||
Cigna Corp. | 805 | 108 | 15,121 | ||||
Cooper Cos., Inc. (The) | 284 | 43 | |||||
CR Bard, Inc. | 18,587 | 3,464 | Producer Durables - 11.0% | ||||
Dentsply International, Inc. | 1,350 | 82 | 3M Co. | 48,758 | 7,665 | ||
Eli Lilly & Co. | 93,576 | 7,633 | Accenture PLC Class A | 122,029 | 13,082 | ||
Express Scripts Holding Co.(Æ) | 5,070 | 438 | Ametek, Inc. | 2,133 | 117 | ||
Gilead Sciences, Inc. | 72,087 | 7,795 | AO Smith Corp. | 975 | 75 | ||
Henry Schein, Inc.(Æ) | 840 | 127 | Automatic Data Processing, Inc. | 114,073 | 9,923 | ||
Humana, Inc. | 5,200 | 929 | Avery Dennison Corp. | 1,148 | 75 | ||
Johnson & Johnson | 226,930 | 22,927 | Boeing Co. (The) | 40,680 | 6,023 | ||
Laboratory Corp. of America Holdings(Æ) | 960 | 118 | Canadian Pacific Railway, Ltd. | 1,978 | 278 | ||
McKesson Corp. | 28,720 | 5,135 | Carlisle Cos., Inc. | 478 | 42 | ||
MEDNAX, Inc.(Æ) | 899 | 63 | CH Robinson Worldwide, Inc. | 1,114 | 77 | ||
Medtronic PLC | 3,561 | 263 | Cintas Corp. | 35,502 | 3,305 | ||
Merck & Co., Inc. | 179,207 | 9,795 | Copart, Inc.(Æ) | 1,390 | 50 | ||
Patterson Cos., Inc. | 827 | 39 | CSX Corp. | 3,096 | 84 | ||
Pfizer, Inc. | 559,998 | 18,939 | Cummins, Inc. | 7,589 | 786 | ||
Quest Diagnostics, Inc. | 1,089 | 74 | Danaher Corp. | 2,666 | 249 | ||
ResMed, Inc. | 1,576 | 91 | Deere & Co. | 1,022 | 80 | ||
Sirona Dental Systems, Inc.(Æ) | 618 | 67 | Donaldson Co., Inc. | 1,705 | 51 | ||
St. Jude Medical, Inc. | 21,735 | 1,387 | Dover Corp. | 1,081 | 70 | ||
Stryker Corp. | 36,422 | 3,483 | Emerson Electric Co. | 8,562 | 404 | ||
Teleflex, Inc. | 321 | 43 | Expeditors International of Washington, Inc. | 17,461 | 869 | ||
Thermo Fisher Scientific, Inc. | 4,963 | 649 | FedEx Corp. | 20,851 | 3,254 | ||
UnitedHealth Group, Inc. | 152,746 | 17,990 | Flir Systems, Inc. | 1,701 | 45 | ||
Varian Medical Systems, Inc.(Æ) | 946 | 74 | Fluor Corp. | 4,457 | 213 | ||
Zimmer Biomet Holdings, Inc. | 955 | 100 | General Dynamics Corp. | 32,298 | 4,799 | ||
166,871 | General Electric Co. | 17,083 | 494 | ||||
Genpact, Ltd.(Æ) | 1,888 | 47 | |||||
Materials and Processing - 1.5% | Graco, Inc. | 593 | 44 | ||||
Acuity Brands, Inc. | 3,373 | 737 | Honeywell International, Inc. | 78,234 | 8,080 | ||
Air Products & Chemicals, Inc. | 1,097 | 153 | Hubbell, Inc. Class B(Æ) | 1,142 | 111 | ||
Airgas, Inc. | 676 | 65 | IDEX Corp. | 836 | 64 | ||
AptarGroup, Inc. | 717 | 53 | Illinois Tool Works, Inc. | 75,676 | 6,958 | ||
Ball Corp. | 1,545 | 106 | JB Hunt Transport Services, Inc. | 982 | 75 |
See accompanying notes which are an integral part of the financial statements.
38 Russell U.S. Defensive Equity Fund
Russell Investment Company
Russell U.S. Defensive Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Keysight Technologies, Inc.(Æ) | 843 | 28 | F5 Networks, Inc.(Æ) | 15,335 | 1,690 | ||
Kirby Corp.(Æ) | 643 | 42 | Facebook, Inc. Class A(Æ) | 45,704 | 4,660 | ||
L-3 Communications Holdings, Inc. Class 3 | 6,174 | 780 | Gartner, Inc.(Æ) | 12,035 | 1,091 | ||
Landstar System, Inc. | 393 | 25 | Intel Corp. | 244,532 | 8,280 | ||
Lincoln Electric Holdings, Inc. | 15,363 | 919 | International Business Machines Corp. | 13,463 | 1,886 | ||
Lockheed Martin Corp. | 19,278 | 4,238 | Intuit, Inc. | 16,222 | 1,581 | ||
Mettler-Toledo International, Inc.(Æ) | 262 | 81 | Linear Technology Corp. | 1,625 | 72 | ||
MSC Industrial Direct Co., Inc. Class A | 521 | 33 | Microchip Technology, Inc. | 80,300 | 3,878 | ||
National Instruments Corp. | 888 | 27 | Microsoft Corp. | 310,306 | 16,335 | ||
Nordson Corp. | 725 | 52 | Oracle Corp. | 28,976 | 1,125 | ||
Norfolk Southern Corp. | 1,055 | 84 | QUALCOMM, Inc. | 29,170 | 1,733 | ||
Northrop Grumman Corp. | 41,021 | 7,702 | Symantec Corp. | 78,864 | 1,625 | ||
Old Dominion Freight Line, Inc.(Æ) | 807 | 50 | Synopsys, Inc.(Æ) | 56,204 | 2,809 | ||
PACCAR, Inc. | 4,272 | 225 | Texas Instruments, Inc. | 63,370 | 3,594 | ||
Parker-Hannifin Corp. | 5,372 | 562 | VMware, Inc. Class A(Æ) | 11,450 | 689 | ||
Paychex, Inc. | 45,332 | 2,338 | Western Digital Corp. | 2,800 | 187 | ||
Quanta Services, Inc.(Æ) | 983 | 20 | Zynga, Inc. Class A(Æ) | 59,100 | 140 | ||
Raytheon Co. | 31,202 | 3,663 | 110,432 | ||||
Republic Services, Inc. Class A | 41,663 | 1,822 | |||||
Robert Half International, Inc. | 1,468 | 77 | Utilities - 5.1% | ||||
Rockwell Automation, Inc. | 328 | 36 | Alliant Energy Corp. | 546 | 32 | ||
Rockwell Collins, Inc. | 1,195 | 104 | American Electric Power Co., Inc. | 28,488 | 1,614 | ||
Rollins, Inc. | 1,273 | 34 | American Water Works Co., Inc. | 31,861 | 1,828 | ||
Roper Technologies, Inc. | 849 | 158 | Aqua America, Inc. | 1,790 | 51 | ||
Snap-on, Inc. | 18,964 | 3,146 | AT&T, Inc. | 200,566 | 6,721 | ||
Stericycle, Inc.(Æ) | 817 | 99 | Atmos Energy Corp. | 673 | 42 | ||
Toro Co. (The) | 750 | 56 | CMS Energy Corp. | 30,134 | 1,087 | ||
Towers Watson & Co. Class A | 383 | 47 | Consolidated Edison, Inc. | 1,683 | 111 | ||
TransDigm Group, Inc.(Æ) | 142 | 31 | Dominion Resources, Inc. | 9,200 | 657 | ||
Tyco International PLC | 2,669 | 97 | DTE Energy Co. | 610 | 50 | ||
Union Pacific Corp. | 31,752 | 2,837 | Duke Energy Corp. | 28,825 | 2,060 | ||
United Parcel Service, Inc. Class B | 1,872 | 193 | Edison International | 33,574 | 2,032 | ||
United Technologies Corp. | 54,930 | 5,406 | Entergy Corp. | 34,744 | 2,368 | ||
Verisk Analytics, Inc. Class A(Æ) | 21,635 | 1,549 | Eversource Energy | 1,491 | 76 | ||
Wabtec Corp. | 479 | 40 | Exelon Corp. | 50,249 | 1,403 | ||
Waste Connections, Inc. | 1,482 | 81 | Hawaiian Electric Industries, Inc. | 962 | 28 | ||
Waste Management, Inc. | 1,140 | 61 | ITC Holdings Corp. | 1,083 | 35 | ||
Waters Corp.(Æ) | 3,480 | 445 | NextEra Energy, Inc. | 85,511 | 8,779 | ||
WW Grainger, Inc. | 21,826 | 4,583 | NiSource, Inc. | 17,040 | 327 | ||
Xylem, Inc. | 2,267 | 83 | OGE Energy Corp. | 1,059 | 30 | ||
109,343 | ONE Gas, Inc. | 21,648 | 1,057 | ||||
PG&E Corp. | 16,389 | 875 | |||||
Technology - 11.1% | PPL Corp. | 59,864 | 2,059 | ||||
Adobe Systems, Inc.(Æ) | 7,303 | 647 | Public Service Enterprise Group, Inc. | 33,297 | 1,375 | ||
Alphabet, Inc. Class A(Æ) | 9,724 | 7,170 | Questar Corp. | 21,184 | 437 | ||
Alphabet, Inc. Class C(Æ) | 15,991 | 11,367 | SCANA Corp. | 1,573 | 93 | ||
Amdocs, Ltd. | 961 | 57 | Sempra Energy | 15,174 | 1,554 | ||
Amphenol Corp. Class A | 8,567 | 465 | Southern Co. (The) | 3,121 | 141 | ||
Analog Devices, Inc. | 1,372 | 82 | Talen Energy Corp.(Æ) | 4,639 | 40 | ||
Ansys, Inc.(Æ) | 499 | 48 | TECO Energy, Inc. | 1,428 | 39 | ||
Apple, Inc. | 256,415 | 30,642 | Vectren Corp. | 743 | 34 | ||
Avago Technologies, Ltd. Class A | 6,795 | 837 | Verizon Communications, Inc. | 222,209 | 10,417 | ||
Avnet, Inc. | 8,940 | 406 | WEC Energy Group, Inc. | 2,593 | 134 | ||
CA, Inc. | 1,719 | 48 | Westar Energy, Inc. Class A | 736 | 29 | ||
Cisco Systems, Inc. | 180,515 | 5,208 | Xcel Energy, Inc. | 79,128 | 2,819 | ||
Cognizant Technology Solutions Corp. Class | 50,434 | ||||||
A(Æ) | 11,650 | 793 | |||||
Dolby Laboratories, Inc. Class A | 633 | 22 | Total Common Stocks | ||||
DST Systems, Inc. | 9,344 | 1,141 | (cost $822,163) | 910,284 | |||
EMC Corp. | 4,731 | 124 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Defensive Equity Fund 39
Russell Investment Company
Russell U.S. Defensive Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts)
Principal | Fair | ||||
Amount ($) or | Value | ||||
Shares | $ | ||||
Short-Term Investments - 8.2% | |||||
Russell U.S. Cash Management Fund | 66,228,688 | (8) | 66,229 | ||
United States Treasury Bills | |||||
0.230% due 03/03/16(ç)(~)(§) | 15,450 | 15,444 | |||
Total Short-Term Investments | |||||
(cost $81,666) | 81,673 | ||||
Total Investments 99.7% | |||||
(identified cost $903,829) | 991,957 | ||||
Other Assets and Liabilities, Net | |||||
- 0.3% | 3,440 | ||||
Net Assets - 100.0% | 995,397 |
See accompanying notes which are an integral part of the financial statements.
40 Russell U.S. Defensive Equity Fund
Russell Investment Company
Russell U.S. Defensive Equity Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||||||||||||
Amounts in thousands (except contract amounts) | |||||||||||||||||
Unrealized | |||||||||||||||||
Appreciation | |||||||||||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||||||||||
Contracts | Amount | Date | $ | ||||||||||||||
Long Positions | |||||||||||||||||
S&P 500 E-Mini Index Futures | 162 | USD | 16,797 | 12/15 | 242 | ||||||||||||
S&P Technology Index Futures | 255 | USD | 11,146 | 12/15 | 511 | ||||||||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 753 | ||||||||||||||||
Options Written | |||||||||||||||||
Amounts in thousands (except contract amounts) | |||||||||||||||||
Number of | Strike | Notional | Expiration | Fair Value | |||||||||||||
Call/Put | Contracts | Price | Amount | Date | $ | ||||||||||||
S&P 500 Index | Put | 52 | 1,905.00 | USD | 9,906 | 11/06/15 | (1 | ) | |||||||||
S&P 500 Index | Put | 52 | 1,925.00 | USD | 10,010 | 11/13/15 | (6 | ) | |||||||||
S&P 500 Index | Put | 51 | 1,980.00 | USD | 10,098 | 11/20/15 | (30 | ) | |||||||||
S&P 500 Index | Put | 52 | 1,975.00 | USD | 10,270 | 11/27/15 | (39 | ) | |||||||||
Total Liability for Options Written (premiums received $162) | (76 | ) | |||||||||||||||
Transactions in options written contracts for the period ended October 31, 2015 were as follows: | |||||||||||||||||
Number of | Premiums | ||||||||||||||||
Contracts | Received | ||||||||||||||||
Outstanding October 31, 2014 | 167 | $ | 147 | ||||||||||||||
Opened | 3,376 | 3,014 | |||||||||||||||
Closed | (3,336 | ) | (2,999 | ) | |||||||||||||
Outstanding October 31, 2015 | 207 | $ | 162 | ||||||||||||||
Presentation of Portfolio Holdings | |||||||||||||||||
Amounts in thousands | |||||||||||||||||
Fair Value | |||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||||||
Common Stocks | |||||||||||||||||
Consumer Discretionary | $ | 123,981 | $ | — | $ | — | $ | 123,981 | 12.5 | ||||||||
Consumer Staples | 126,948 | — | — | 126,948 | 12.7 | ||||||||||||
Energy | 47,203 | — | — | 47,203 | 4.7 | ||||||||||||
Financial Services | 159,951 | — | — | 159,951 | 16.1 | ||||||||||||
Health Care | 166,871 | — | — | 166,871 | 16.8 | ||||||||||||
Materials and Processing | 15,121 | — | — | 15,121 | 1.5 | ||||||||||||
Producer Durables | 109,343 | — | — | 109,343 | 11.0 | ||||||||||||
Technology | 110,432 | — | — | 110,432 | 11.1 | ||||||||||||
Utilities | 50,434 | — | — | 50,434 | 5.1 | ||||||||||||
Short-Term Investments | — | 81,673 | — | 81,673 | 8.2 | ||||||||||||
Total Investments | 910,284 | 81,673 | — | 991,957 | 99.7 | ||||||||||||
Other Assets and Liabilities, Net | 0.3 | ||||||||||||||||
100.0 | |||||||||||||||||
Other Financial Instruments | |||||||||||||||||
Futures Contracts | 753 | — | — | 753 | 0.1 | ||||||||||||
Options Written | (76 | ) | — | — | (76 | ) | (—)* | ||||||||||
Total Other Financial Instruments** | $ | 677 | $ | — | $ | — | $ | 677 | |||||||||
* Less than .05% of net assets. | |||||||||||||||||
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments. | |||||||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | |||||||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | |||||||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Defensive Equity Fund 41
Russell Investment Company
Russell U.S. Defensive Equity Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Assets and Liabilities - Assets | |||
Variation margin on futures contracts* | $ | 753 | |
Location: Statement of Assets and Liabilities - Liabilities | |||
Options written, at fair value | $ | 76 | |
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Operations - Net realized gain (loss) | |||
Futures contracts | $ | 1,752 | |
Options written | 2,175 | ||
Total | $ | 3,927 | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||
Futures contracts | $ | 22 | |
Options written | (32 | ) | |
Total | $ | (10 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the | |||
Statement of Assets and Liabilities. |
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
42 Russell U.S. Defensive Equity Fund
Russell Investment Company
Russell U.S. Defensive Equity Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 135 | $ | — $ | 135 | |||
Options Written Contracts | Options written, at fair value | 76 | — | 76 | |||||
Total Financial and Derivative Liabilities | 211 | — | 211 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (211) | — | (211 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | — | $ | — $ | — |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Defensive Equity Fund 43
Russell Investment Company
Russell U.S. Defensive Equity Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 903,829 |
Investments, at fair value(>) | 991,957 | |
Cash (restricted)(a)(b) | 4,687 | |
Receivables: | ||
Dividends and interest | 981 | |
Dividends from affiliated Russell funds | 9 | |
Investments sold | 3,886 | |
Fund shares sold | 349 | |
Prepaid expenses | 1 | |
Total assets | 1,001,870 | |
Liabilities | ||
Payables: | ||
Investments purchased | 4,111 | |
Fund shares redeemed | 1,442 | |
Accrued fees to affiliates | 616 | |
Other accrued expenses | 93 | |
Variation margin on futures contracts | 135 | |
Options written, at fair value(x) | 76 | |
Total liabilities | 6,473 | |
Net Assets | $ | 995,397 |
See accompanying notes which are an integral part of the financial statements.
44 Russell U.S. Defensive Equity Fund
Russell Investment Company
Russell U.S. Defensive Equity Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 349 | |
Accumulated net realized gain (loss) | (28,392 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | 88,128 | ||
Futures contracts | 753 | ||
Options written | 86 | ||
Shares of beneficial interest | 208 | ||
Additional paid-in capital | 934,265 | ||
Net Assets | $ | 995,397 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 47.76 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 50.67 | |
Class A — Net assets | $ | 21,589,808 | |
Class A — Shares outstanding ($.01 par value) | 452,048 | ||
Net asset value per share: Class C(#) | $ | 47.52 | |
Class C — Net assets | $ | 46,205,991 | |
Class C — Shares outstanding ($.01 par value) | 972,352 | ||
Net asset value per share: Class E(#) | $ | 47.82 | |
Class E — Net assets | $ | 6,261,852 | |
Class E — Shares outstanding ($.01 par value) | 130,943 | ||
Net asset value per share: Class I(#) | $ | 47.75 | |
Class I — Net assets | $ | 194,202,266 | |
Class I — Shares outstanding ($.01 par value) | 4,067,033 | ||
Net asset value per share: Class S(#) | $ | 47.82 | |
Class S — Net assets | $ | 200,121,543 | |
Class S — Shares outstanding ($.01 par value) | 4,184,986 | ||
Net asset value per share: Class Y(#) | $ | 47.75 | |
Class Y — Net assets | $ | 527,015,318 | |
Class Y — Shares outstanding ($.01 par value) | 11,036,936 | ||
Amounts in thousands | |||
(x) Premiums received on options written | $ | 162 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 66,229 | |
(a) Cash Collateral for Futures | $ | 1,983 | |
(b) Cash Collateral for Options | $ | 2,704 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Defensive Equity Fund 45
Russell Investment Company
Russell U.S. Defensive Equity Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 23,961 | �� |
Dividends from affiliated Russell funds | 60 | ||
Interest | 6 | ||
Total investment income | 24,027 | ||
Expenses | |||
Advisory fees | 6,123 | ||
Administrative fees | 530 | ||
Custodian fees | 184 | ||
Distribution fees - Class A | 63 | ||
Distribution fees - Class C | 369 | ||
Transfer agent fees - Class A | 50 | ||
Transfer agent fees - Class C | 98 | ||
Transfer agent fees - Class E | 17 | ||
Transfer agent fees - Class I | 271 | ||
Transfer agent fees - Class S | 469 | ||
Transfer agent fees - Class Y | 25 | ||
Professional fees | 73 | ||
Registration fees | 93 | ||
Shareholder servicing fees - Class C | 123 | ||
Shareholder servicing fees - Class E | 21 | ||
Trustees’ fees | 28 | ||
Printing fees | 22 | ||
Miscellaneous | 35 | ||
Total expenses | 8,594 | ||
Net investment income (loss) | 15,433 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 116,244 | ||
Futures contracts | 1,752 | ||
Options written | 2,175 | ||
Net realized gain (loss) | 120,171 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (79,125 | ) | |
Futures contracts | 22 | ||
Options written | (32 | ) | |
Net change in unrealized appreciation (depreciation) | (79,135 | ) | |
Net realized and unrealized gain (loss) | 41,036 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 56,469 |
See accompanying notes which are an integral part of the financial statements.
46 Russell U.S. Defensive Equity Fund
Russell Investment Company
Russell U.S. Defensive Equity Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 15,433 | $ | 16,727 | ||
Net realized gain (loss) | 120,171 | 200,827 | ||||
Net change in unrealized appreciation (depreciation) | (79,135 | ) | (15,658 | ) | ||
Net increase (decrease) in net assets from operations | 56,469 | 201,896 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (267 | ) | (256 | ) | ||
Class C | (159 | ) | (120 | ) | ||
Class E | (85 | ) | (133 | ) | ||
Class I | (3,169 | ) | (3,611 | ) | ||
Class S | (3,071 | ) | (3,314 | ) | ||
Class Y | (8,698 | ) | (9,491 | ) | ||
Net decrease in net assets from distributions | (15,449 | ) | (16,925 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (254,561 | ) | (205,576 | ) | ||
Total Net Increase (Decrease) in Net Assets | (213,541 | ) | (20,605 | ) | ||
Net Assets | ||||||
Beginning of period | 1,208,938 | 1,229,543 | ||||
End of period | $ | 995,397 | $ | 1,208,938 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 349 | $ | 365 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Defensive Equity Fund 47
Russell Investment Company
Russell U.S. Defensive Equity Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 68 | $ | 3,155 | 59 | $ | 2,498 | ||||||
Proceeds from reinvestment of distributions | 5 | 254 | 6 | 229 | ||||||||
Payments for shares redeemed | (169 | ) | (7,998 | ) | (166 | ) | (7,108 | ) | ||||
Net increase (decrease) | (96 | ) | (4,589 | ) | (101 | ) | (4,381 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 49 | 2,310 | 97 | 4,047 | ||||||||
Proceeds from reinvestment of distributions | 3 | 156 | 3 | 118 | ||||||||
Payments for shares redeemed | (190 | ) | (8,911 | ) | (200 | ) | (8,493 | ) | ||||
Net increase (decrease) | (138 | ) | (6,445 | ) | (100 | ) | (4,328 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 10 | 460 | 15 | 621 | ||||||||
Proceeds from reinvestment of distributions | 2 | 84 | 3 | 132 | ||||||||
Payments for shares redeemed | (89 | ) | (4,097 | ) | (237 | ) | (10,348 | ) | ||||
Net increase (decrease) | (77 | ) | (3,553 | ) | (219 | ) | (9,595 | ) | ||||
Class I | ||||||||||||
Proceeds from shares sold | 449 | 20,928 | 552 | 23,342 | ||||||||
Proceeds from reinvestment of distributions | 66 | 3,092 | 82 | 3,546 | ||||||||
Payments for shares redeemed | (2,101 | ) | (98,960 | ) | (1,880 | ) | (81,670 | ) | ||||
Net increase (decrease) | (1,586 | ) | (74,940 | ) | (1,246 | ) | (54,782 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 548 | 25,821 | 1,081 | 46,369 | ||||||||
Proceeds from reinvestment of distributions | 63 | 2,956 | 74 | 3,216 | ||||||||
Payments for shares redeemed | (2,201 | ) | (103,997 | ) | (2,240 | ) | (96,464 | ) | ||||
Net increase (decrease) | (1,590 | ) | (75,220 | ) | (1,085 | ) | (46,879 | ) | ||||
Class Y | ||||||||||||
Proceeds from shares sold | 1,119 | 53,548 | 6,317 | 261,430 | ||||||||
Proceeds from reinvestment of distributions | 186 | 8,698 | 219 | 9,491 | ||||||||
Payments for shares redeemed | (3,234 | ) | (152,060 | ) | (8,214 | ) | (356,532 | ) | ||||
Net increase (decrease) | (1,929 | ) | (89,814 | ) | (1,678 | ) | (85,611 | ) | ||||
Total increase (decrease) | (5,416 | ) | $ | (254,561 | ) | (4,429 | ) | $ | (205,576 | ) |
See accompanying notes which are an integral part of the financial statements.
48 Russell U.S. Defensive Equity Fund
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Russell Investment Company
Russell U.S. Defensive Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | ||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | ||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | $ | |||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Total Distributions | |||||||||
Class A | ||||||||||||||
October 31, 2015 | 46.04 | .50 | 1.72 | 2.22 | (.50 | ) | (.50 | ) | ||||||
October 31, 2014 | 40.06 | .40 | 6.00 | 6.40 | (.42 | ) | (.42 | ) | ||||||
October 31, 2013 | 32.65 | .43 | 7.42 | 7.85 | (.44 | ) | (.44 | ) | ||||||
October 31, 2012 | 29.57 | .27 | 3.11 | 3.38 | (.30 | ) | (.30 | ) | ||||||
October 31, 2011 | 26.98 | .23 | 2.59 | 2.82 | (.23 | ) | (.23 | ) | ||||||
Class C | ||||||||||||||
October 31, 2015 | 45.80 | .15 | 1.72 | 1.87 | (.15 | ) | (.15 | ) | ||||||
October 31, 2014 | 39.87 | .08 | 5.95 | 6.03 | (.10 | ) | (.10 | ) | ||||||
October 31, 2013 | 32.50 | .16 | 7.38 | 7.54 | (.17 | ) | (.17 | ) | ||||||
October 31, 2012 | 29.45 | .03 | 3.10 | 3.13 | (.08 | ) | (.08 | ) | ||||||
October 31, 2011 | 26.91 | .01 | 2.58 | 2.59 | (.05 | ) | (.05 | ) | ||||||
Class E | ||||||||||||||
October 31, 2015 | 46.08 | .52 | 1.71 | 2.23 | (.49 | ) | (.49 | ) | ||||||
October 31, 2014 | 40.08 | .42 | 5.98 | 6.40 | (.40 | ) | (.40 | ) | ||||||
October 31, 2013 | 32.66 | .44 | 7.41 | 7.85 | (.43 | ) | (.43 | ) | ||||||
October 31, 2012 | 29.54 | .30 | 3.09 | 3.39 | (.27 | ) | (.27 | ) | ||||||
October 31, 2011 | 26.96 | .26 | 2.57 | 2.83 | (.25 | ) | (.25 | ) | ||||||
Class I | ||||||||||||||
October 31, 2015 | 46.03 | .66 | 1.72 | 2.38 | (.66 | ) | (.66 | ) | ||||||
October 31, 2014 | 40.06 | .55 | 5.99 | 6.54 | (.57 | ) | (.57 | ) | ||||||
October 31, 2013 | 32.65 | .55 | 7.42 | 7.97 | (.56 | ) | (.56 | ) | ||||||
October 31, 2012 | 29.57 | .38 | 3.11 | 3.49 | (.41 | ) | (.41 | ) | ||||||
October 31, 2011 | 26.98 | .33 | 2.58 | 2.91 | (.32 | ) | (.32 | ) | ||||||
Class S | ||||||||||||||
October 31, 2015 | 46.09 | .63 | 1.72 | 2.35 | (.62 | ) | (.62 | ) | ||||||
October 31, 2014 | 40.11 | .51 | 6.00 | 6.51 | (.53 | ) | (.53 | ) | ||||||
October 31, 2013 | 32.69 | .53 | 7.42 | 7.95 | (.53 | ) | (.53 | ) | ||||||
October 31, 2012 | 29.59 | .35 | 3.10 | 3.45 | (.35 | ) | (.35 | ) | ||||||
October 31, 2011 | 27.00 | .30 | 2.59 | 2.89 | (.30 | ) | (.30 | ) | ||||||
Class Y | ||||||||||||||
October 31, 2015 | 46.03 | .71 | 1.73 | 2.44 | (.72 | ) | (.72 | ) | ||||||
October 31, 2014 | 40.06 | .60 | 5.99 | 6.59 | (.62 | ) | (.62 | ) | ||||||
October 31, 2013 | 32.65 | .59 | 7.42 | 8.01 | (.60 | ) | (.60 | ) | ||||||
October 31, 2012 | 29.58 | .42 | 3.10 | 3.52 | (.45 | ) | (.45 | ) | ||||||
October 31, 2011 | 26.99 | .36 | 2.58 | 2.94 | (.35 | ) | (.35 | ) | ||||||
See accompanying notes which are an integral part of the financial statements.
50 Russell U.S. Defensive Equity Fund
% | % | % | ||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||
End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||
Period | Return(c) | (000 | ) | Gross | Net(d)(g) | Net Assets(d) | Turnover Rate | |||||||
47.76 | 4.86 | 21,590 | 1.09 | 1.09 | 1.07 | 97 | ||||||||
46.04 | 16.05 | 25,233 | 1.09 | 1.09 | .94 | 105 | ||||||||
40.06 | 24.18 | 26,019 | 1.10 | 1.10 | 1.17 | 105 | ||||||||
32.65 | 11.47 | 21,977 | 1.28 | 1.28 | .85 | 150 | ||||||||
29.57 | 10.47 | 18,284 | 1.26 | 1.26 | .77 | 142 | ||||||||
47.52 | 4.09 | 46,206 | 1.84 | 1.84 | .32 | 97 | ||||||||
45.80 | 15.15 | 50,833 | 1.84 | 1.84 | .19 | 105 | ||||||||
39.87 | 23.30 | 48,222 | 1.85 | 1.85 | .44 | 105 | ||||||||
32.50 | 10.64 | 45,352 | 2.03 | 2.03 | .10 | 150 | ||||||||
29.45 | 9.63 | 48,096 | 2.01 | 2.01 | .04 | 142 | ||||||||
47.82 | 4.87 | 6,262 | 1.09 | 1.09 | 1.10 | 97 | ||||||||
46.08 | 16.03 | 9,598 | 1.09 | 1.09 | .97 | 105 | ||||||||
40.08 | 24.23 | 17,140 | 1.10 | 1.09 | 1.21 | 105 | ||||||||
32.66 | 11.47 | 18,709 | 1.28 | 1.23 | .93 | 150 | ||||||||
29.54 | 10.55 | 51,877 | 1.27 | 1.19 | .89 | 142 | ||||||||
47.75 | 5.21 | 194,202 | .76 | .76 | 1.41 | 97 | ||||||||
46.03 | 16.41 | 260,235 | .76 | .76 | 1.28 | 105 | ||||||||
40.06 | 24.63 | 276,370 | .77 | .77 | 1.52 | 105 | ||||||||
32.65 | 11.83 | 280,933 | .95 | .95 | 1.19 | 150 | ||||||||
29.57 | 10.83 | 374,489 | .93 | .93 | 1.13 | 142 | ||||||||
47.82 | 5.14 | 200,122 | .84 | .84 | 1.34 | 97 | ||||||||
46.09 | 16.32 | 266,202 | .84 | .84 | 1.20 | 105 | ||||||||
40.11 | 24.53 | 275,158 | .85 | .85 | 1.45 | 105 | ||||||||
32.69 | 11.70 | 289,196 | 1.03 | 1.03 | 1.10 | 150 | ||||||||
29.59 | 10.74 | 1,209,861 | 1.01 | 1.01 | 1.02 | 142 | ||||||||
47.75 | 5.34 | 527,015 | .64 | .64 | 1.51 | 97 | ||||||||
46.03 | 16.54 | 596,837 | .64 | .64 | 1.39 | 105 | ||||||||
40.06 | 24.78 | 586,634 | .65 | .65 | 1.64 | 105 | ||||||||
32.65 | 11.93 | 568,935 | .85 | .85 | 1.31 | 150 | ||||||||
29.58 | 10.94 | 1,149,049 | .83 | .83 | 1.21 | 142 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Defensive Equity Fund 51
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell U.S. Dynamic Equity Fund - Class A‡ | Russell U.S. Dynamic Equity Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.36 | )% | 1 Year | 4.88 | % | ||
5 Years | 12.35 | %§ | 5 Years | 13.94 | %§ | ||
10 Years | 6.24 | %§ | 10 Years | 7.10 | %§ | ||
Russell U.S. Dynamic Equity Fund - Class C | Russell U.S. Dynamic Equity Fund - Class Y‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 3.81 | % | 1 Year | 5.06 | % | ||
5 Years | 12.83 | %§ | 5 Years | 14.17 | %§ | ||
10 Years | 6.02 | %§ | 10 Years | 7.30 | %§ | ||
Russell U.S. Dynamic Equity Fund - Class E | Russell 1000® Dynamic IndexTM** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 4.62 | % | 1 Year | 3.93 | % | ||
5 Years | 13.67 | %§ | 5 Years | 13.93 | %§ | ||
10 Years | 6.86 | %§ | 10 Years | 7.61 | %§ | ||
Russell U.S. Dynamic Equity Fund - Class I | U.S. Dynamic Equity Linked Benchmark*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 4.90 | % | 1 Year | 3.93 | % | ||
5 Years | 14.08 | %§ | 5 Years | 15.30 | %§ | ||
10 Years | 7.26 | %§ | 10 Years | 9.09 | %§ |
52 Russell U.S. Dynamic Equity Fund
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell U.S. Dynamic Equity Fund (the “Fund”) employs | How did the investment strategies and techniques employed |
a multi-manager approach whereby portions of the Fund are | by the Fund and its money managers affect its benchmark- |
allocated to different money manager strategies. Fund assets not | relative performance? |
allocated to money managers are managed by Russell Investment | Stock selection within the energy sector (an overweight to Tesoro |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | Corporation), health care sector (an overweight to Clovis Oncology |
may change the allocation of the Fund’s assets among money | Inc.) and technology sector (an overweight to Cisco Systems, Inc.) |
managers at any time. An exemptive order from the Securities | contributed positively to benchmark-relative performance. From |
and Exchange Commission (“SEC”) permits RIMCo to engage | a sector perspective, an overweight to consumer discretionary and |
or terminate a money manager at any time, subject to approval | health care stocks and underweight to energy and utilities stocks |
by the Fund’s Board, without a shareholder vote. Pursuant to the | were beneficial. Factor exposures were mixed, as an overweight |
terms of the exemptive order, the Fund is required to notify its | to stocks with the lowest valuation ratios detracted, while an |
shareholders within 90 days of when a money manager begins | underweight to high dividend yield stocks was rewarded. |
providing services. As of October 31, 2015, the Fund had five | |
money managers. | The Fund employs discretionary money managers. The Fund’s |
discretionary money managers select the individual portfolio | |
What is the Fund’s investment objective? | securities for the assets assigned to them. Fund assets not |
The Fund seeks to provide long term capital growth. | allocated to discretionary money managers include the Fund’s |
liquidity reserves and assets which may be managed directly | |
How did the Fund perform relative to its benchmark for the | by RIMCo to effect the Fund’s investment strategies and/or to |
fiscal year ended October 31, 2015? | actively manage the Fund’s overall exposures by investing in |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | securities or other instruments that RIMCo believes will achieve |
Class C, Class E, Class I, Class S and Class Y Shares gained | the desired risk/return profile for the Fund. |
4.67%, 3.81%, 4.62%, 4.90%, 4.88% and 5.06%, respectively. | |
This is compared to the Fund’s benchmark, the Russell 1000® | With respect to certain of the Fund’s money managers, |
Dynamic Index, which gained 3.93% during the same period. The | Cornerstone Capital Management, LLC (“Cornerstone”) was the |
Fund’s performance includes operating expenses, whereas index | worst performing manager for the period and underperformed the |
returns are unmanaged and do not include expenses of any kind. | Russell 1000® Growth Index. Stock selection within the technology |
sector (an overweight to Stratasys Ltd., Yelp, Inc., and Micron | |
For the fiscal year ended October 31, 2015, the Morningstar® | Technology) detracted from benchmark-relative performance. |
Large Blend, a group of funds that Morningstar considers to have | Factor exposures were mixed, specifically an overweight to stocks |
investment strategies similar to those of the Fund, gained 2.79%. | with high forecasted growth was rewarded while an overweight |
This result serves as a peer comparison and is expressed net of | to mid cap stocks detracted. Cornerstone’s overweight to the |
operating expenses. | consumer discretionary sector and underweight to the producer |
RIMCo may assign a money manager a specific style or | durables sector contributed positively to benchmark-relative |
capitalization benchmark other that the Fund’s index. However, | performance. |
the Fund’s primary index remains the benchmark for the Fund | Suffolk Capital Management, LLC (“Suffolk”) was the best |
and is representative of the aggregate of each money manager’s | performing manager for the period and outperformed the Russell |
benchmark index. | 1000® Dynamic™ Index. Stock selection within the health care |
How did the market conditions described in the Market | sector (an overweight to Valeant Pharmaceuticals International, |
Summary report affect the Fund’s performance? | Clovis Oncology, Inc., and Receptors, Inc.) was a significant |
driver of positive benchmark-relative performance. Suffolk’s | |
During the fiscal year, the U.S. large capitalization equity market | factor tilt away from mid cap stocks was additive to benchmark- |
produced positive returns. Benchmark-relative Fund exposures | relative returns. An overweight to the technology sector and an |
included tilts toward stocks with the lowest valuation ratios (lowest | underweight to the energy sector were also rewarded. |
price-to-book and price-to-cash flow ratios), as well as technology, | |
consumer discretionary and health care stocks. Additionally, | RIMCo manages a 7% strategic allocation to a positioning strategy |
the Fund was tilted away from high dividend yield stocks and | to seek to achieve the desired risk/return profile for the Fund. |
energy stocks. Stocks with low valuation ratios underperformed | During the third quarter of 2015, the positioning strategy was |
during the year, detracting from the Fund’s benchmark-relative | changed from a Russell Top 200® Index full replication strategy to |
performance. However, the Fund’s sector tilts were beneficial, as | a positioning strategy that utilizes the output from a quantitative |
was the tilt away from high dividend yield stocks. | model to seek to position the portfolio to meet RIMCo’s overall |
Russell U.S. Dynamic Equity Fund 53
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
preferred positioning. This strategy was implemented in order | Money Managers as of October 31, | |
to replace exposure that the Fund had previously received from | 2015 | Styles |
Schneider Capital Management Corporation’s (“Schneider”) | ||
AJO, LP | Dynamic | |
portfolio, which RIMCo removed from the Fund during third | Cornerstone Capital Management, Inc. | Growth |
quarter of 2015 due to concerns about organizational stability. | Jacobs Levy Equity Management, Inc. | Dynamic |
During the fiscal year, the positioning strategy performed as | Pzena Investment Management, LLC | Value |
expected given its combination of deep value exposure and larger | Suffolk Capital Management, LLC | Dynamic |
capitalization exposure. Its performance was between that of the | The views expressed in this report reflect those of the portfolio | |
Russell 1000® Value Index and the Russell Top 200® Index. | managers only through the end of the period covered by | |
the report. These views do not necessarily represent the | ||
During the period, RIMCo used index futures contracts to equitize | views of RIMCo, or any other person in RIMCo or any other | |
the Fund’s cash. The decision to equitize the Fund’s cash was | affiliated organization. These views are subject to change | |
beneficial to Fund performance for the fiscal year as the market | at any time based upon market conditions or other events, | |
had a positive absolute return. | and RIMCo disclaims any responsibility to update the views | |
Describe any changes to the Fund’s structure or the money | contained herein. These views should not be relied on as | |
manager line-up. | investment advice and, because investment decisions for | |
During the third quarter of 2015, RIMCo terminated Schneider | a Russell Investment Company (“RIC”) Fund are based on | |
and hired Pzena Investment Management, LLC. The objective of | numerous factors, should not be relied on as an indication | |
this change was to improve the stock selection component of the | of investment decisions of any RIC Fund. | |
Fund’s excess return potential. |
* Assumes initial investment on November 1, 2005.
** The Russell 1000® Dynamic IndexTM measures the performance of the large-cap dynamic segment of the U.S. equity universe. It includes the Russell 1000 Index
companies with relatively less stable business conditions which are more sensitive to economic cycle, credit cycle and market volatility based on their stability
variables. Stability is measured in terms of volatility (price and earnings), leverage, and return on assets.
*** The U.S. Dynamic Equity Linked Benchmark provides a means to compare the Fund’s average annual returns to a secondary benchmark that takes into account
historical changes in the Fund’s primary benchmark. The U.S. Dynamic Equity Linked Benchmark represents the returns of the Russell 1000® Growth Index
through August 14, 2012 and the returns of the Russell 1000® Dynamic IndexTM thereafter.
‡ The Fund first issued Class A Shares on August 15, 2012. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
‡‡ The Fund first issued Class Y Shares on August 15, 2012. The returns shown for Class Y Shares prior to that date are the returns of the Fund’s Class I Shares.
Class Y Shares will have substantially similar annual returns as the Class I Shares because the Shares of each Class are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class Y Shares do not have the same expenses as the Class I Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
54 Russell U.S. Dynamic Equity Fund
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 987.40 | $ | 1,017.59 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 7.56 | $ | 7.68 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.51% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). | |||||
and actual expenses. You may use the information in this column, | ||||||
together with the amount you invested, to estimate the expenses | Hypothetical | |||||
Performance (5% | ||||||
that you paid over the period. Simply divide your account value by | Actual | return before | ||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Class C | Performance | expenses) | |||
= 8.6), then multiply the result by the number in the first column | Beginning Account Value | |||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
the expenses you paid on your account during this period. | October 31, 2015 | $ | 982.90 | $ | 1,013.81 | |
Expenses Paid During Period* | $ | 11.30 | $ | 11.47 | ||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | * Expenses are equal to the Fund's annualized expense ratio of 2.26% | |||||
Performance (5% return before expenses)” provides information | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
about hypothetical account values and hypothetical expenses | year period). | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | Hypothetical | |||||
actual return. The hypothetical account values and expenses | Performance (5% | |||||
Actual | return before | |||||
may not be used to estimate the actual ending account balance or | Class E | Performance | expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
to compare the ongoing costs of investing in the Fund and other | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
funds. To do so, compare this 5% hypothetical example with the | Ending Account Value | |||||
October 31, 2015 | $ | 987.20 | $ | 1,017.59 | ||
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 7.56 | $ | 7.68 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 1.51% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
Russell U.S. Dynamic Equity Fund 55
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class I | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 988.80 | $ | 1,019.26 | |
Expenses Paid During Period* | $ | 5.92 | $ | 6.01 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.18% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 988.10 | $ | 1,018.80 | |
Expenses Paid During Period* | $ | 6.36 | $ | 6.46 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.27% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class Y | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 989.30 | $ | 1,019.86 | |
Expenses Paid During Period* | $ | 5.31 | $ | 5.40 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.06% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
56 Russell U.S. Dynamic Equity Fund
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Common Stocks - 100.6% | Target Corp. | 7,198 | 556 | ||||
Consumer Discretionary - 18.2% | Tenneco, Inc.(Æ) | 24,877 | 1,408 | ||||
Aaron's, Inc. Class A(Û) | 56,914 | 1,404 | Time Warner Cable, Inc. | 226 | 43 | ||
Alibaba Group Holding, Ltd. - ADR(Æ)(Ñ) | 29,312 | 2,457 | Time Warner, Inc. | 57,631 | 4,342 | ||
Amazon.com, Inc.(Æ) | 19,695 | 12,327 | Time, Inc.(Æ) | 14,700 | 273 | ||
AMC Networks, Inc. Class A(Æ) | 13,625 | 1,007 | TJX Cos., Inc. | 568 | 42 | ||
Bed Bath & Beyond, Inc.(Æ) | 32,225 | 1,922 | Toll Brothers, Inc.(Æ) | 6,825 | 245 | ||
Best Buy Co., Inc. | 19,662 | 689 | Twenty-First Century Fox, Inc. Class A | 1,423 | 44 | ||
Big Lots, Inc. | 26,644 | 1,228 | Viacom, Inc. Class B | 20,400 | 1,006 | ||
Brinker International, Inc. | 16,617 | 756 | WABCO Holdings, Inc.(Æ) | 5,321 | 597 | ||
Carnival Corp. | 36,886 | 1,995 | Wal-Mart Stores, Inc. | 27,042 | 1,548 | ||
Carter's, Inc. | 4,084 | 371 | Walt Disney Co. (The) | 28,868 | 3,283 | ||
CBS Corp. Class B | 57,797 | 2,689 | Whirlpool Corp. | 13,556 | 2,171 | ||
Comcast Corp. Class A(Æ) | 25,364 | 1,588 | Yum! Brands, Inc. | 349 | 25 | ||
Cooper Tire & Rubber Co. | 45,300 | 1,893 | 107,192 | ||||
Costco Wholesale Corp. | 354 | 56 | |||||
Dana Holding Corp. | 109,295 | 1,836 | Consumer Staples - 2.7% | ||||
Darden Restaurants, Inc.(Û) | 41,873 | 2,591 | Altria Group, Inc. | 1,605 | 97 | ||
Deckers Outdoor Corp.(Æ) | 8,770 | 488 | Archer-Daniels-Midland Co. | 26,800 | 1,224 | ||
Delphi Automotive PLC | 19,824 | 1,649 | Cal-Maine Foods, Inc. | 8,733 | 467 | ||
Dick's Sporting Goods, Inc. | 15,492 | 690 | Coca-Cola Co. (The) | 62,801 | 2,659 | ||
Dillard's, Inc. Class A | 15,581 | 1,394 | Colgate-Palmolive Co. | 737 | 49 | ||
DISH Network Corp. Class A(Æ) | 13,410 | 844 | CVS Health Corp. | 735 | 72 | ||
eBay, Inc.(Æ) | 145,057 | 4,047 | Herbalife, Ltd.(Æ) | 14,599 | 818 | ||
Ford Motor Co. | 208,837 | 3,093 | Ingredion, Inc. | 12,400 | 1,179 | ||
General Motors Co.(Û) | 135,913 | 4,745 | Kimberly-Clark Corp. | 298 | 36 | ||
Goodyear Tire & Rubber Co. (The) | 64,075 | 2,104 | Kroger Co. (The)(Û) | 93,436 | 3,532 | ||
Graham Holdings Co. Class B | 39 | 22 | Mondelez International, Inc. Class A | 62,346 | 2,878 | ||
Hilton Worldwide Holdings, Inc. | 41,100 | 1,027 | Philip Morris International, Inc. | 1,874 | 165 | ||
Home Depot, Inc. | 24,416 | 3,019 | Procter & Gamble Co. (The) | 4,289 | 327 | ||
Interpublic Group of Cos., Inc. (The) | 27,075 | 621 | Sysco Corp. | 4,142 | 171 | ||
Jarden Corp.(Æ) | 78,032 | 3,496 | Tyson Foods, Inc. Class A | 44,447 | 1,972 | ||
Johnson Controls, Inc. | 1,546 | 70 | Walgreens Boots Alliance, Inc. | 765 | 65 | ||
Kohl's Corp. | 1,105 | 51 | 15,711 | ||||
Lear Corp.(Û) | 18,933 | 2,368 | |||||
Lennar Corp. Class A | 1,841 | 92 | Energy - 8.6% | ||||
Lowe's Cos., Inc. | 15,174 | 1,120 | Anadarko Petroleum Corp. | 69,556 | 4,652 | ||
Macy's, Inc.(Û) | 11,878 | 606 | Apache Corp. | 1,368 | 64 | ||
Marriott International, Inc. Class A | 17,761 | 1,364 | Baker Hughes, Inc. | 11,797 | 621 | ||
McDonald's Corp. | 659 | 74 | BP PLC - ADR | 43,075 | 1,538 | ||
Meritage Homes Corp.(Æ) | 2,675 | 94 | California Resources Corp. | 16,209 | 65 | ||
Michael Kors Holdings, Ltd.(Æ) | 36,634 | 1,415 | Chesapeake Energy Corp.(Ñ) | 68,013 | 485 | ||
Netflix, Inc.(Æ) | 4,446 | 482 | Chevron Corp. | 4,417 | 401 | ||
News Corp. Class A | 183,265 | 2,822 | ConocoPhillips | 2,011 | 107 | ||
Nike, Inc. Class B | 10,981 | 1,439 | Devon Energy Corp. | 19,451 | 816 | ||
Norwegian Cruise Line Holdings, Ltd.(Æ) | 23,792 | 1,514 | Dril-Quip, Inc.(Æ) | 5,843 | 360 | ||
Nu Skin Enterprises, Inc. Class A | 3,755 | 143 | Ensco PLC Class A | 127,177 | 2,115 | ||
NVR, Inc.(Æ) | 1,231 | 2,016 | EOG Resources, Inc. | 55,555 | 4,769 | ||
Office Depot, Inc.(Æ) | 17,702 | 135 | Exxon Mobil Corp. | 40,826 | 3,378 | ||
Omnicom Group, Inc. | 21,875 | 1,639 | FMC Technologies, Inc.(Æ) | 15,900 | 538 | ||
Pandora Media, Inc.(Æ) | 44,054 | 507 | Frank's International NV(Ñ) | 22,700 | 390 | ||
Polaris Industries, Inc. | 10,179 | 1,143 | Halliburton Co. | 951 | 37 | ||
Priceline Group, Inc. (The)(Æ) | 41 | 60 | Hess Corp. | 4,219 | 237 | ||
PulteGroup, Inc. | 126,205 | 2,313 | HollyFrontier Corp. | 12,400 | 607 | ||
PVH Corp. | 37,928 | 3,450 | Kinder Morgan, Inc. | 2,526 | 69 | ||
Ross Stores, Inc. | 34,731 | 1,757 | Marathon Oil Corp. | 52,410 | 963 | ||
Royal Caribbean Cruises, Ltd. | 8,760 | 862 | Marathon Petroleum Corp. | 76,546 | 3,965 | ||
Sinclair Broadcast Group, Inc. Class A(Æ) | 26,468 | 794 | Murphy Oil Corp. | 26,600 | 756 | ||
Sirius XM Holdings, Inc.(Æ) | 16,200 | 66 | Nabors Industries, Ltd. | 69,398 | 697 | ||
Staples, Inc. | 84,916 | 1,103 | National Oilwell Varco, Inc. | 9,518 | 358 | ||
Starbucks Corp. | 993 | 62 | Newfield Exploration Co.(Æ) | 83,807 | 3,368 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Dynamic Equity Fund 57
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Noble Corp. PLC | 162,590 | 2,190 | First Republic Bank | 19,907 | 1,300 | ||
Occidental Petroleum Corp. | 1,882 | 140 | Forest City Enterprises, Inc. Class A(Æ) | 8,523 | 188 | ||
Oil States International, Inc.(Æ) | 36,078 | 1,083 | Franklin Resources, Inc. | 46,650 | 1,901 | ||
PBF Energy, Inc. Class A | 20,988 | 714 | Genworth Financial, Inc. Class A(Æ) | 96,937 | 454 | ||
Phillips 66(Æ) | 19,131 | 1,704 | Global Payments, Inc. | 9,400 | 1,282 | ||
Pioneer Natural Resources Co. | 504 | 69 | Goldman Sachs Group, Inc. (The) | 14,618 | 2,741 | ||
Rowan Cos. PLC Class A | 65,616 | 1,291 | Hartford Financial Services Group, Inc. | 84,801 | 3,923 | ||
Royal Dutch Shell PLC Class A - ADR(Æ) | 42,125 | 2,210 | HCP, Inc.(ö) | 897 | 33 | ||
Schlumberger, Ltd. | 714 | 56 | Hospitality Properties Trust(ö) | 25,392 | 682 | ||
Seadrill, Ltd.(Æ)(Ñ) | 4,123 | 27 | Invesco, Ltd. | 28,500 | 945 | ||
SM Energy Co. | 15,416 | 514 | Jones Lang LaSalle, Inc.(Û) | 12,055 | 2,010 | ||
Spectra Energy Corp. | 2,195 | 63 | JPMorgan Chase & Co.(Û) | 186,433 | 11,978 | ||
Tesoro Corp. | 29,205 | 3,123 | KeyCorp | 69,000 | 857 | ||
Valero Energy Corp. | 66,908 | 4,411 | Lincoln National Corp. | 43,800 | 2,344 | ||
Weatherford International PLC(Æ) | 19,500 | 200 | MasterCard, Inc. Class A | 805 | 80 | ||
Western Refining, Inc. | 10,160 | 423 | McGraw Hill Financial, Inc. | 13,020 | 1,206 | ||
Williams Cos., Inc. (The) | 1,504 | 59 | MetLife, Inc. | 45,401 | 2,287 | ||
World Fuel Services Corp. | 10,985 | 488 | Moody's Corp. | 11,160 | 1,073 | ||
WPX Energy, Inc.(Æ) | 62,673 | 430 | Morgan Stanley | 40,835 | 1,346 | ||
50,551 | NorthStar Realty Finance Corp.(ö) | 5,468 | 66 | ||||
PartnerRe, Ltd. | 384 | 53 | |||||
Financial Services - 21.7% | PayPal Holdings, Inc.(Æ) | 1,025 | 37 | ||||
ACE, Ltd. | 1,785 | 203 | Piedmont Office Realty Trust, Inc. Class A(ö) | 5,451 | 106 | ||
Affiliated Managers Group, Inc.(Æ) | 5,013 | 904 | PNC Financial Services Group, Inc. (The) | 12,006 | 1,084 | ||
Aflac, Inc. | 2,123 | 135 | Principal Financial Group, Inc. | 20,960 | 1,051 | ||
Allied World Assurance Co. Holdings AG | 1,249 | 45 | ProAssurance Corp. | 537 | 28 | ||
Allstate Corp. (The)(Û) | 18,286 | 1,132 | Progressive Corp. (The) | 1,771 | 59 | ||
Ally Financial, Inc.(Æ) | 65,158 | 1,298 | Prudential Financial, Inc. | 66,914 | 5,520 | ||
American Capital Agency Corp.(ö) | 1,395 | 25 | Regions Financial Corp. | 598,797 | 5,599 | ||
American Express Co. | 16,129 | 1,182 | Reinsurance Group of America, Inc. Class A | 21,293 | 1,921 | ||
American International Group, Inc.(Û) | 72,480 | 4,571 | Santander Consumer USA Holdings, Inc.(Æ) | 18,900 | 340 | ||
Ameriprise Financial, Inc. | 8,670 | 1,000 | Signature Bank(Æ) | 5,490 | 818 | ||
Annaly Capital Management, Inc.(ö) | 2,477 | 25 | Simon Property Group, Inc.(ö) | 3,116 | 628 | ||
Arch Capital Group, Ltd.(Æ) | 1,170 | 88 | Starwood Property Trust, Inc.(ö) | 1,319 | 27 | ||
Arthur J Gallagher & Co. | 3,953 | 173 | State Street Corp. | 42,849 | 2,957 | ||
Aspen Insurance Holdings, Ltd. | 39,472 | 1,919 | SunTrust Banks, Inc. | 71,890 | 2,985 | ||
Assurant, Inc.(Û) | 14,587 | 1,189 | Synchrony Financial(Æ)(Ñ) | 29,900 | 920 | ||
Assured Guaranty, Ltd. | 94,181 | 2,584 | Torchmark Corp. | 411 | 24 | ||
Axis Capital Holdings, Ltd. | 18,673 | 1,008 | Travelers Cos., Inc. (The) | 1,954 | 221 | ||
Bank of America Corp.(Û) | 629,168 | 10,557 | UBS Group AG(Æ) | 78,500 | 1,572 | ||
Bank of New York Mellon Corp. (The) | 40,670 | 1,694 | US Bancorp | 1,074 | 45 | ||
Barclays PLC - ADR | 11,332 | 161 | Validus Holdings, Ltd. | 41,223 | 1,826 | ||
BB&T Corp. | 568 | 21 | Visa, Inc. Class A | 18,537 | 1,438 | ||
Berkshire Hathaway, Inc. Class B(Æ) | 4,514 | 614 | Voya Financial, Inc.(Û) | 103,929 | 4,216 | ||
BlackRock, Inc. Class A | 101 | 36 | Wells Fargo & Co. | 3,477 | 188 | ||
Capital One Financial Corp. | 2,662 | 210 | White Mountains Insurance Group, Ltd. | 54 | 43 | ||
CBL & Associates Properties, Inc.(ö)(Û) | 91,557 | 1,335 | Willis Group Holdings PLC | 13,525 | 603 | ||
CBRE Group, Inc. Class A(Æ)(Û) | 60,344 | 2,250 | XL Group PLC Class A | 1,727 | 66 | ||
Charles Schwab Corp. (The) | 55,758 | 1,702 | 127,462 | ||||
Chubb Corp. (The) | 807 | 104 | |||||
Citigroup, Inc. | 236,775 | 12,589 | Health Care - 13.1% | ||||
Citizens Financial Group, Inc. | 42,600 | 1,035 | Abbott Laboratories | 25,940 | 1,162 | ||
CME Group, Inc. Class A | 1,005 | 95 | AbbVie, Inc. | 39,752 | 2,367 | ||
Comerica, Inc. | 23,000 | 998 | Aetna, Inc. | 1,225 | 141 | ||
Discover Financial Services | 71,115 | 3,998 | Agilent Technologies, Inc. | 2,000 | 76 | ||
E*Trade Financial Corp.(Æ) | 2,800 | 80 | Alexion Pharmaceuticals, Inc.(Æ) | 10,194 | 1,794 | ||
Equity Commonwealth(Æ)(ö) | 2,105 | 60 | Allergan PLC(Æ) | 9,656 | 2,979 | ||
Everest Re Group, Ltd. | 2,578 | 459 | AmerisourceBergen Corp. Class A | 11,060 | 1,067 | ||
First American Financial Corp. | 5,030 | 192 | Amgen, Inc. | 30,630 | 4,845 | ||
First Niagara Financial Group, Inc. | 69,553 | 720 | Anthem, Inc. | 9,821 | 1,367 |
See accompanying notes which are an integral part of the financial statements.
58 Russell U.S. Dynamic Equity Fund
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Baxter International, Inc. | 28,366 | 1,061 | Freeport-McMoRan, Inc. | 8,559 | 101 | ||
Becton Dickinson and Co. | 1,482 | 211 | Hexcel Corp. | 50,424 | 2,336 | ||
Biogen, Inc.(Æ)(Û) | 9,222 | 2,679 | International Paper Co. | 30,903 | 1,319 | ||
Bristol-Myers Squibb Co. | 1,124 | 74 | LyondellBasell Industries NV Class A(Û) | 21,112 | 1,961 | ||
Cardinal Health, Inc.(Û) | 24,126 | 1,983 | Masco Corp. | 6,800 | 197 | ||
Celgene Corp.(Æ) | 37,582 | 4,612 | Monsanto Co. | 1,050 | 98 | ||
Centene Corp.(Æ) | 10,100 | 601 | Mosaic Co. (The) | 24,447 | 826 | ||
Charles River Laboratories International, | Newmont Mining Corp. | 7,579 | 147 | ||||
Inc.(Æ) | 7,500 | 489 | Nucor Corp. | 9,451 | 400 | ||
Cigna Corp. | 37,772 | 5,063 | Owens Corning | 6,139 | 280 | ||
CR Bard, Inc. | 3,970 | 740 | PPG Industries, Inc. | 12,194 | 1,271 | ||
Edwards Lifesciences Corp.(Æ) | 5,117 | 804 | Praxair, Inc. | 770 | 86 | ||
Eli Lilly & Co. | 638 | 52 | Precision Castparts Corp. | 162 | 37 | ||
Envision Healthcare Holdings, Inc.(Æ) | 55,192 | 1,556 | Reliance Steel & Aluminum Co. | 8,000 | 480 | ||
Express Scripts Holding Co.(Æ) | 748 | 65 | Sonoco Products Co. | 2,261 | 96 | ||
Gilead Sciences, Inc.(Û) | 84,002 | 9,083 | United States Steel Corp.(Ñ) | 2,477 | 29 | ||
HCA Holdings, Inc.(Æ) | 1,243 | 86 | WestRock Co. | 1,289 | 69 | ||
Hill-Rom Holdings, Inc.(Û) | 35,878 | 1,890 | 16,829 | ||||
HMS Holdings Corp.(Æ) | 85,830 | 904 | |||||
Humana, Inc. | 3,511 | 627 | Producer Durables - 10.0% | ||||
Jazz Pharmaceuticals PLC(Æ) | 4,946 | 679 | 3M Co. | 608 | 96 | ||
Johnson & Johnson | 24,024 | 2,427 | Accenture PLC Class A | 509 | 55 | ||
Laboratory Corp. of America Holdings(Æ) | 693 | 85 | AerCap Holdings NV(Æ) | 46,184 | 1,917 | ||
McKesson Corp.(Û) | 14,333 | 2,563 | Alaska Air Group, Inc.(Û) | 36,233 | 2,763 | ||
Medtronic PLC | 1,147 | 85 | American Airlines Group, Inc.(Û) | 30,462 | 1,408 | ||
Merck & Co., Inc. | 34,551 | 1,889 | Automatic Data Processing, Inc. | 382 | 33 | ||
Mylan NV(Æ) | 64,949 | 2,864 | Babcock & Wilcox Enterprises, Inc.(Æ) | 3,850 | 65 | ||
Myriad Genetics, Inc.(Æ) | 11,018 | 445 | Boeing Co. (The) | 14,657 | 2,170 | ||
Perrigo Co. PLC | 9,468 | 1,493 | Bombardier, Inc. Class B | 140,264 | 151 | ||
Pfizer, Inc. | 67,006 | 2,266 | Caterpillar, Inc. | 1,185 | 87 | ||
Puma Biotechnology, Inc.(Æ)(Ñ) | 11,418 | 941 | CoStar Group, Inc.(Æ) | 3,265 | 663 | ||
Qiagen NV(Æ) | 42,800 | 1,034 | CSX Corp. | 45,222 | 1,221 | ||
Quest Diagnostics, Inc. | 7,687 | 522 | Cummins, Inc. | 976 | 101 | ||
Regeneron Pharmaceuticals, Inc.(Æ) | 63 | 35 | Danaher Corp. | 621 | 58 | ||
St. Jude Medical, Inc. | 11,300 | 721 | Deere & Co. | 1,284 | 100 | ||
Stryker Corp. | 266 | 25 | Delta Air Lines, Inc.(Û) | 83,963 | 4,269 | ||
Taro Pharmaceutical Industries, Ltd.(Æ) | 1,135 | 165 | Dover Corp. | 12,600 | 812 | ||
Thermo Fisher Scientific, Inc. | 27,121 | 3,547 | Eaton Corp. PLC | 1,259 | 70 | ||
United Therapeutics Corp.(Æ)(Û) | 15,617 | 2,290 | EMCOR Group, Inc. | 6,485 | 313 | ||
UnitedHealth Group, Inc. | 1,854 | 218 | Emerson Electric Co. | 804 | 38 | ||
Vertex Pharmaceuticals, Inc.(Æ) | 13,322 | 1,662 | FedEx Corp. | 25,309 | 3,950 | ||
Zimmer Biomet Holdings, Inc. | 25,343 | 2,650 | General Dynamics Corp. | 323 | 48 | ||
76,984 | General Electric Co. | 119,897 | 3,467 | ||||
HD Supply Holdings, Inc.(Æ) | 50,055 | 1,491 | |||||
Materials and Processing - 2.9% | Honeywell International, Inc. | 16,115 | 1,664 | ||||
Air Products & Chemicals, Inc. | 584 | 81 | Huntington Ingalls Industries, Inc.(Û) | 23,589 | 2,829 | ||
Albemarle Corp. | 693 | 37 | Illinois Tool Works, Inc. | 386 | 36 | ||
Allegheny Technologies, Inc. | 1,871 | 27 | JB Hunt Transport Services, Inc. | 19,041 | 1,454 | ||
Ashland, Inc. | 5,200 | 571 | JetBlue Airways Corp.(Æ) | 57,222 | 1,421 | ||
Bemis Co., Inc. | 1,812 | 83 | L-3 Communications Holdings, Inc. | 325 | 41 | ||
Cabot Corp. | 799 | 29 | Lexmark International, Inc. Class A | 6,800 | 221 | ||
CF Industries Holdings, Inc.(Û) | 34,401 | 1,747 | Lockheed Martin Corp. | 271 | 60 | ||
Chemours Co. (The) | 3,175 | 22 | ManpowerGroup, Inc. | 4,612 | 423 | ||
Chemtura Corp.(Æ) | 800 | 26 | MSC Industrial Direct Co., Inc. Class A | 496 | 31 | ||
Crown Holdings, Inc.(Æ) | 3,800 | 202 | Norfolk Southern Corp. | 2,412 | 193 | ||
Domtar Corp. | 44,640 | 1,841 | Northrop Grumman Corp. | 225 | 42 | ||
Dow Chemical Co. (The) | 35,009 | 1,809 | PACCAR, Inc. | 464 | 24 | ||
Eastman Chemical Co. | 326 | 23 | Parker-Hannifin Corp. | 15,225 | 1,594 | ||
Ecolab, Inc. | 4,275 | 514 | Raytheon Co. | 31,281 | 3,672 | ||
EI du Pont de Nemours & Co. | 1,319 | 84 | Republic Services, Inc. Class A | 1,981 | 87 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Dynamic Equity Fund 59
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) or | Value | Amount ($) or | Value | |||||
Shares | $ | Shares | $ | |||||
Southwest Airlines Co.(Û) | 47,896 | 2,217 | Texas Instruments, Inc. | 869 | 49 | |||
Spirit AeroSystems Holdings, Inc. Class | VeriSign, Inc.(Æ)(Û) | 28,106 | 2,265 | |||||
A(Æ)(Û) | 37,078 | 1,956 | VMware, Inc. Class A(Æ)(Ñ) | 9,100 | 547 | |||
Stanley Black & Decker, Inc. | 32,850 | 3,481 | Western Digital Corp. | 13,803 | 922 | |||
Terex Corp. | 20,249 | 406 | Workday, Inc. Class A(Æ) | 10,600 | 837 | |||
Textron, Inc. | 53,150 | 2,241 | Yahoo!, Inc.(Æ) | 754 | 27 | |||
Trinity Industries, Inc. | 34,114 | 923 | Zynga, Inc. Class A(Æ) | 180,960 | 429 | |||
Union Pacific Corp. | 21,416 | 1,914 | 117,451 | |||||
United Continental Holdings, Inc.(Æ)(Û) | 53,106 | 3,203 | ||||||
United Parcel Service, Inc. Class B | 562 | 58 | Utilities - 3.4% | |||||
United Technologies Corp. | 1,623 | 160 | AES Corp.(Û) | 192,874 | 2,112 | |||
Waste Management, Inc. | 590 | 32 | AGL Resources, Inc.(Æ) | 401 | 25 | |||
Xylem, Inc. | 84,142 | 3,064 | Alliant Energy Corp. | 351 | 21 | |||
58,793 | Ameren Corp. | 593 | 26 | |||||
American Electric Power Co., Inc. | 11,808 | 669 | ||||||
Technology - 20.0% | American Water Works Co., Inc. | 661 | 38 | |||||
Adobe Systems, Inc.(Æ) | 40,482 | 3,589 | AT&T, Inc. | 47,997 | 1,608 | |||
Alphabet, Inc. Class A(Æ) | 4,967 | 3,663 | Atmos Energy Corp. | 567 | 36 | |||
Alphabet, Inc. Class C(Æ) | 5,822 | 4,138 | CenterPoint Energy, Inc. | 1,733 | 32 | |||
Amdocs, Ltd. | 1,448 | 86 | CenturyLink, Inc. | 3,319 | 94 | |||
Apple, Inc.(Û) | 137,666 | 16,451 | CMS Energy Corp. | 959 | 35 | |||
Aspen Technology, Inc.(Æ) | 45,427 | 1,880 | Consolidated Edison, Inc. | 927 | 61 | |||
Avago Technologies, Ltd. Class A | 24,827 | 3,057 | Dominion Resources, Inc. | 16,793 | 1,199 | |||
Avnet, Inc.(Û) | 48,013 | 2,181 | DTE Energy Co. | 844 | 69 | |||
Brocade Communications Systems, Inc. | 131,195 | 1,367 | Duke Energy Corp. | 9,273 | 663 | |||
Cadence Design Systems, Inc.(Æ) | 70,416 | 1,565 | Edison International | 1,400 | 85 | |||
Cisco Systems, Inc. | 142,369 | 4,107 | Entergy Corp. | 484 | 33 | |||
Citrix Systems, Inc.(Æ)(Û) | 27,595 | 2,266 | Eversource Energy | 812 | 41 | |||
Cognizant Technology Solutions Corp. Class | Exelon Corp. | 56,435 | 1,576 | |||||
A(Æ) | 19,882 | 1,354 | FirstEnergy Corp. | 1,656 | 52 | |||
Corning, Inc. | 64,447 | 1,199 | National Fuel Gas Co. | 475 | 25 | |||
Electronic Arts, Inc.(Æ)(Û) | 31,067 | 2,239 | NextEra Energy, Inc. | 7,210 | 740 | |||
EMC Corp. | 6,575 | 172 | NRG Energy, Inc. | 30,513 | 393 | |||
Facebook, Inc. Class A(Æ) | 54,127 | 5,519 | OGE Energy Corp. | 1,205 | 34 | |||
Groupon, Inc. Class A(Æ) | 115,558 | 429 | Pepco Holdings, Inc. | 1,113 | 30 | |||
HP Inc.(Æ) | 237,119 | 6,393 | PG&E Corp. | 1,610 | 86 | |||
IAC/InterActiveCorp | 28,159 | 1,887 | Pinnacle West Capital Corp. | 475 | 30 | |||
Imperva, Inc.(Æ) | 12,361 | 873 | PPL Corp. | 1,881 | 65 | |||
Intel Corp. | 163,087 | 5,522 | Public Service Enterprise Group, Inc. | 1,550 | 64 | |||
International Business Machines Corp. | 1,096 | 154 | SCANA Corp. | 402 | 24 | |||
Jabil Circuit, Inc. | 91,123 | 2,094 | Sempra Energy | 6,639 | 680 | |||
JDS Uniphase Corp. Class W(Æ) | 37,800 | 225 | Southern Co. (The) | 2,016 | 91 | |||
Juniper Networks, Inc. | 99,162 | 3,113 | TECO Energy, Inc. | 1,168 | 31 | |||
Leidos Holdings, Inc. | 9,700 | 510 | Telephone & Data Systems, Inc. | 72,784 | 2,084 | |||
Marvell Technology Group, Ltd. | 79,779 | 655 | T-Mobile US, Inc.(Æ) | 1,877 | 71 | |||
Micron Technology, Inc.(Æ) | 43,956 | 728 | UGI Corp. | 1,002 | 37 | |||
Microsoft Corp. | 190,655 | 10,036 | Verizon Communications, Inc.(Û) | 136,409 | 6,395 | |||
NetApp, Inc. | 28,715 | 976 | WEC Energy Group, Inc. | 1,051 | 54 | |||
NXP Semiconductors NV(Æ) | 47,233 | 3,701 | Westar Energy, Inc. Class A | 589 | 23 | |||
ON Semiconductor Corp.(Æ) | 131,660 | 1,448 | Xcel Energy, Inc. | 10,370 | 369 | |||
Oracle Corp. | 145,529 | 5,652 | 19,801 | |||||
Palo Alto Networks, Inc.(Æ) | 12,889 | 2,075 | ||||||
QUALCOMM, Inc. | 1,648 | 98 | Total Common Stocks | |||||
Red Hat, Inc.(Æ) | 11,400 | 902 | (cost $536,179) | 590,774 | ||||
Salesforce.com, Inc.(Æ) | 24,268 | 1,886 | ||||||
SanDisk Corp. | 446 | 34 | Short-Term Investments - 3.7% | |||||
Symantec Corp.(Û) | 170,535 | 3,513 | Russell U.S. Cash Management Fund | 22,035,226 | (8) | 22,035 | ||
Synopsys, Inc.(Æ) | 24,851 | 1,242 | Total Short-Term Investments | |||||
Tableau Software, Inc. Class A(Æ) | 8,643 | 726 | (cost $22,035) | 22,035 | ||||
Take-Two Interactive Software, Inc.(Æ) | 62,518 | 2,076 | ||||||
Tech Data Corp.(Æ) | 8,157 | 594 |
See accompanying notes which are an integral part of the financial statements.
60 Russell U.S. Dynamic Equity Fund
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||||
Principal | Fair | Principal | Fair | ||||||||||
Amount ($) or | Value | Amount ($) or | Value | ||||||||||
Shares | $ | Shares | $ | ||||||||||
Other Securities - 0.7% | Twitter, Inc.(Æ) | (25,975 | ) | (739 | ) | ||||||||
Russell U.S. Cash Collateral Fund(×) | 4,138,640 | (8) | 4,139 | ||||||||||
Total Other Securities | Utilities - (0.2)% | (6,907 | ) | ||||||||||
(cost $4,139) | 4,139 | Frontier Communications Corp. | (124,190 | ) | (638 | ) | |||||||
Zayo Group Holdings, Inc.(Æ) | (26,597 | ) | (706 | ) | |||||||||
Total Investments 105.0% | (1,344 | ) | |||||||||||
(identified cost $562,353) | 616,948 | ||||||||||||
Securities Sold Short - (4.0)% | Total Securities Sold Short | ||||||||||||
Consumer Discretionary - (0.6)% | (proceeds $27,967) | (23,762 | ) | ||||||||||
Amaya, Inc.(Æ) | (37,410 | ) | (835 | ) | |||||||||
Charter Communications, Inc. Class A(Æ) | (3,454 | ) | (660 | ) | |||||||||
DreamWorks Animation SKG, Inc. Class | Other Assets and Liabilities, Net | ||||||||||||
A(Æ) | (34,578 | ) | (700 | ) | - | (1.0%) | (5,759 | ) | |||||
GoPro, Inc. Class A(Æ) | (19,294 | ) | (482 | ) | Net Assets - 100.0% | 587,427 | |||||||
Mobileye NV(Æ) | (3,432 | ) | (156 | ) | |||||||||
Tesla Motors, Inc.(Æ) | (2,676 | ) | (554 | ) | |||||||||
(3,387 | ) | ||||||||||||
Energy - (0.7)% | |||||||||||||
Cheniere Energy, Inc.(Æ) | (15,457 | ) | (765 | ) | |||||||||
Enbridge, Inc. | (12,702 | ) | (542 | ) | |||||||||
Golar LNG, Ltd. | (17,260 | ) | (501 | ) | |||||||||
Kinder Morgan, Inc. | (26,256 | ) | (718 | ) | |||||||||
Pembina Pipeline Corp. | (29,296 | ) | (736 | ) | |||||||||
SolarCity Corp.(Æ) | (17,860 | ) | (530 | ) | |||||||||
SunPower Corp. Class A(Æ) | (24,640 | ) | (661 | ) | |||||||||
(4,453 | ) | ||||||||||||
Financial Services - (0.7)% | |||||||||||||
Bank of the Ozarks, Inc. | (16,160 | ) | (808 | ) | |||||||||
Kennedy-Wilson Holdings, Inc. | (27,458 | ) | (673 | ) | |||||||||
LendingClub Corp.(Æ) | (54,376 | ) | (771 | ) | |||||||||
Mercury General Corp. | (5,145 | ) | (278 | ) | |||||||||
TFS Financial Corp. | (41,202 | ) | (724 | ) | |||||||||
United Bankshares, Inc. | (17,708 | ) | (700 | ) | |||||||||
Zillow Group, Inc. Class A(Æ) | (9,892 | ) | (305 | ) | |||||||||
(4,259 | ) | ||||||||||||
Health Care - (0.1)% | |||||||||||||
Acadia Healthcare Co., Inc.(Æ) | (11,902 | ) | (731 | ) | |||||||||
Materials and Processing - (0.1)% | |||||||||||||
Platform Specialty Products Corp.(Æ) | (35,201 | ) | (367 | ) | |||||||||
Producer Durables - (0.4)% | |||||||||||||
Colfax Corp.(Æ) | (9,717 | ) | (262 | ) | |||||||||
Macquarie Infrastructure Corp. | (8,841 | ) | (703 | ) | |||||||||
Stericycle, Inc.(Æ) | (4,479 | ) | (544 | ) | |||||||||
XPO Logistics, Inc.(Æ) | (28,995 | ) | (805 | ) | |||||||||
(2,314 | ) | ||||||||||||
Technology - (1.2)% | |||||||||||||
Ambarella, Inc.(Æ) | (3,946 | ) | (195 | ) | |||||||||
Arista Networks, Inc.(Æ) | (10,948 | ) | (706 | ) | |||||||||
Cavium, Inc.(Æ) | (7,418 | ) | (526 | ) | |||||||||
Cypress Semiconductor Corp.(Æ) | (68,234 | ) | (719 | ) | |||||||||
FireEye, Inc.(Æ) | (14,373 | ) | (376 | ) | |||||||||
GrubHub, Inc.(Æ) | (19,453 | ) | (467 | ) | |||||||||
LinkedIn Corp. Class A(Æ) | (3,148 | ) | (758 | ) | |||||||||
NetSuite, Inc.(Æ) | (8,487 | ) | (722 | ) | |||||||||
Palo Alto Networks, Inc.(Æ) | (2,421 | ) | (390 | ) | |||||||||
Stratasys, Ltd.(Æ) | (22,956 | ) | (586 | ) | |||||||||
SunEdison, Inc.(Æ) | (99,000 | ) | (723 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Dynamic Equity Fund 61
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Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||||
Unrealized | ||||||||||||||
Appreciation | ||||||||||||||
Number of | Notional | Expiration | (Depreciation) | |||||||||||
Contracts | Amount | Date | $ | |||||||||||
Long Positions | ||||||||||||||
S&P 500 E-Mini Index Futures | 163 | USD | 16,901 | 12/15 | 514 | |||||||||
S&P E-Mini Energy Select Sector Index Futures | 51 | USD | 3,462 | 12/15 | 130 | |||||||||
S&P Materials Index Futures | 47 | USD | 2,251 | 12/15 | 185 | |||||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 829 | |||||||||||||
Presentation of Portfolio Holdings | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fair Value | ||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||||
Common Stocks | ||||||||||||||
Consumer Discretionary | $ | 107,192 | $ | — | $ | — | $ | 107,192 | 18.2 | |||||
Consumer Staples | 15,711 | — | — | 15,711 | 2.7 | |||||||||
Energy | 50,551 | — | — | 50,551 | 8.6 | |||||||||
Financial Services | 127,462 | — | — | 127,462 | 21.7 | |||||||||
Health Care | 76,984 | — | — | 76,984 | 13.1 | |||||||||
Materials and Processing | 16,829 | — | — | 16,829 | 2.9 | |||||||||
Producer Durables | 58,793 | — | — | 58,793 | 10.0 | |||||||||
Technology | 117,451 | — | — | 117,451 | 20.0 | |||||||||
Utilities | 19,801 | — | — | 19,801 | 3.4 | |||||||||
Short-Term Investments | — | 22,035 | — | 22,035 | 3.7 | |||||||||
Other Securities | — | 4,139 | — | 4,139 | 0.7 | |||||||||
Total Investments | 590,774 | 26,174 | — | 616,948 | 105.0 | |||||||||
Securities Sold Short** | (23,762 | ) | — | — | (23,762 | ) | (4.0 | ) | ||||||
Other Assets and Liabilities, Net | (1.0 | ) | ||||||||||||
100.0 | ||||||||||||||
Other Financial Instruments | ||||||||||||||
Futures Contracts | 829 | — | — | 829 | 0.1 | |||||||||
Total Other Financial Instruments* | $ | 829 | $ | — | $ | — | $ | 829 |
* Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
** Refer to Schedule of Investments for detailed sector breakout.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
62 Russell U.S. Dynamic Equity Fund
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Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Equity | ||
Derivatives not accounted for as hedging instruments | Contracts | |
Location: Statement of Assets and Liabilities - Assets | ||
Variation margin on futures contracts* | $ | 829 |
Equity | ||
Derivatives not accounted for as hedging instruments | Contracts | |
Location: Statement of Operations - Net realized gain (loss) | ||
Futures contracts | $ | 1,915 |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||
Futures contracts | $ | 245 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Dynamic Equity Fund 63
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Assets | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||||
Securities on Loan* | Investments, at fair value | $ | 3,559 | $ | — | $ | 3,559 | ||||||
Futures Contracts | Variation margin on futures contracts | 44 | — | 44 | |||||||||
Total Financial and Derivative Assets | 3,603 | — | 3,603 | ||||||||||
Financial and Derivative Assets not subject to a netting agreement | (44) | — | (44 | ) | |||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 3,559 | $ | — | $ | 3,559 | |||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Assets | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||||
Barclays | $ | 148 | $ | — | $ | 148 | $ | — | |||||
Citigroup | 1,847 | — | 1,847 | — | |||||||||
Credit Suisse | 121 | — | 121 | — | |||||||||
Deutsche Bank | 105 | — | 105 | — | |||||||||
Fidelity | 62 | — | 62 | — | |||||||||
ING | 26 | — | 26 | — | |||||||||
JPMorgan Chase | 1,250 | — | 1,250 | — | |||||||||
Total | $ | 3,559 | $ | — | $ | 3,559 | $ | — |
See accompanying notes which are an integral part of the financial statements.
64 Russell U.S. Dynamic Equity Fund
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Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | ||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Liabilities | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | ||||||||
Futures Contracts | Variation margin on futures contracts | $ | 78 | $ | — | $ | 78 | |||||
Short Sales | Securities sold short, at market value | 23,762 | — | 23,762 | ||||||||
Total Financial and Derivative Liabilities | 23,840 | — | 23,840 | |||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (78) | — | (78 | ) | ||||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 23,762 | $ | — | $ | 23,762 | ||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Liabilities | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | ||||||||
JPMorgan Chase | $ | 23,762 | $ | — | $ | 23,762 | $ | — | ||||
Total | $ | 23,762 | $ | — | $ | 23,762 | $ | — |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Dynamic Equity Fund 65
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Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 562,353 |
Investments, at fair value(*)(>) | 616,948 | |
Cash (restricted)(a) | 1,505 | |
Receivables: | ||
Dividends and interest | 433 | |
Dividends from affiliated Russell funds | 2 | |
Investments sold | 16,643 | |
Fund shares sold | 21 | |
Variation margin on futures contracts | 44 | |
Total assets | 635,596 | |
Liabilities | ||
Payables: | ||
Investments purchased | 18,279 | |
Fund shares redeemed | 1,334 | |
Accrued fees to affiliates | 439 | |
Other accrued expenses | 138 | |
Variation margin on futures contracts | 78 | |
Securities sold short, at fair value(‡) | 23,762 | |
Payable upon return of securities loaned | 4,139 | |
Total liabilities | 48,169 | |
Net Assets | $ | 587,427 |
See accompanying notes which are an integral part of the financial statements.
66 Russell U.S. Dynamic Equity Fund
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Russell U.S. Dynamic Equity Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | ||
Net Assets Consist of: | ||
Undistributed (overdistributed) net investment income | $ | 327 |
Accumulated net realized gain (loss) | 65,285 | |
Unrealized appreciation (depreciation) on: | ||
Investments | 54,595 | |
Futures contracts | 829 | |
Securities sold short | 4,205 | |
Shares of beneficial interest | 520 | |
Additional paid-in capital | 461,666 | |
Net Assets | $ | 587,427 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class A(#) | $ | 10.76 |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 11.42 |
Class A — Net assets | $ | 2,348,685 |
Class A — Shares outstanding ($.01 par value) | 218,328 | |
Net asset value per share: Class C(#) | $ | 9.21 |
Class C — Net assets | $ | 10,862,425 |
Class C — Shares outstanding ($.01 par value) | 1,179,266 | |
Net asset value per share: Class E(#) | $ | 10.78 |
Class E — Net assets | $ | 321,308 |
Class E — Shares outstanding ($.01 par value) | 29,798 | |
Net asset value per share: Class I(#) | $ | 11.40 |
Class I — Net assets | $ | 20,454,543 |
Class I — Shares outstanding ($.01 par value) | 1,794,158 | |
Net asset value per share: Class S(#) | $ | 11.22 |
Class S — Net assets | $ | 32,113,637 |
Class S — Shares outstanding ($.01 par value) | 2,862,129 | |
Net asset value per share: Class Y(#) | $ | 11.36 |
Class Y — Net assets | $ | 521,326,497 |
Class Y — Shares outstanding ($.01 par value) | 45,895,200 | |
Amounts in thousands | ||
(*) Securities on loan included in investments | $ | 3,559 |
(‡) Proceeds on securities sold short | $ | 27,967 |
(>) Investments in affiliates, Russell U.S. Cash Management Fund and Russell U.S. Cash Collateral Fund | $ | 26,174 |
(a) Cash Collateral for Futures | $ | 1,505 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Dynamic Equity Fund 67
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 9,427 | |
Dividends from affiliated Russell funds | 22 | ||
Securities lending income | 77 | ||
Total investment income | 9,526 | ||
Expenses | |||
Advisory fees | 5,220 | ||
Administrative fees | 311 | ||
Custodian fees | 149 | ||
Distribution fees - Class A | 6 | ||
Distribution fees - Class C | 85 | ||
Transfer agent fees - Class A | 5 | ||
Transfer agent fees - Class C | 23 | ||
Transfer agent fees - Class E | 3 | ||
Transfer agent fees - Class I | 26 | ||
Transfer agent fees - Class S | 80 | ||
Transfer agent fees - Class Y | 25 | ||
Professional fees | 66 | ||
Registration fees | 91 | ||
Shareholder servicing fees - Class C | 28 | ||
Shareholder servicing fees - Class E | 4 | ||
Trustees’ fees | 17 | ||
Printing fees | 18 | ||
Dividends from securities sold short | 327 | ||
Interest expense paid on securities sold short | 569 | ||
Miscellaneous | 53 | ||
Total expenses | 7,106 | ||
Net investment income (loss) | 2,420 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 64,337 | ||
Futures contracts | 1,915 | ||
Securities sold short | 4,846 | ||
Net realized gain (loss) | 71,098 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (41,297 | ) | |
Futures contracts | 245 | ||
Securities sold short | 3,394 | ||
Net change in unrealized appreciation (depreciation) | (37,658 | ) | |
Net realized and unrealized gain (loss) | 33,440 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 35,860 |
See accompanying notes which are an integral part of the financial statements.
68 Russell U.S. Dynamic Equity Fund
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 2,420 | $ | 1,383 | ||
Net realized gain (loss) | 71,098 | 103,670 | ||||
Net change in unrealized appreciation (depreciation) | (37,658 | ) | (11,145 | ) | ||
Net increase (decrease) in net assets from operations | 35,860 | 93,908 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (1 | ) | (—)** | |||
Class C | — | — | ||||
Class E | — | — | ||||
Class I | (68 | ) | (49 | ) | ||
Class S | (93 | ) | (68 | ) | ||
Class Y | (2,357 | ) | (1,381 | ) | ||
From net realized gain | ||||||
Class A | (318 | ) | (134 | ) | ||
Class C | (2,036 | ) | (1,271 | ) | ||
Class E | (294 | ) | (332 | ) | ||
Class I | (3,608 | ) | (3,204 | ) | ||
Class S | (7,441 | ) | (8,405 | ) | ||
Class Y | (89,356 | ) | (65,604 | ) | ||
Net decrease in net assets from distributions | (105,572 | ) | (80,448 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (66,738 | ) | 8,793 | |||
Total Net Increase (Decrease) in Net Assets | (136,450 | ) | 22,253 | |||
Net Assets | ||||||
Beginning of period | 723,877 | 701,624 | ||||
End of period | $ | 587,427 | $ | 723,877 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 327 | $ | (10 | ) | |
** Less than $500. |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Dynamic Equity Fund 69
Russell Investment Company
Russell U.S. Dynamic Equity Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 47 | $ | 516 | 69 | $ | 787 | ||||||
Proceeds from reinvestment of distributions | 29 | 312 | 12 | 134 | ||||||||
Payments for shares redeemed | (22 | ) | (242 | ) | (7 | ) | (82 | ) | ||||
Net increase (decrease) | 54 | 586 | 74 | 839 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 103 | 960 | 248 | 2,498 | ||||||||
Proceeds from reinvestment of distributions | 218 | 1,999 | 124 | 1,232 | ||||||||
Payments for shares redeemed | (230 | ) | (2,158 | ) | (144 | ) | (1,499 | ) | ||||
Net increase (decrease) | 91 | 801 | 228 | 2,231 | ||||||||
Class E | ||||||||||||
Proceeds from shares sold | 13 | 139 | 12 | 142 | ||||||||
Proceeds from reinvestment of distributions | 28 | 294 | 30 | 331 | ||||||||
Payments for shares redeemed | (167 | ) | (1,703 | ) | (130 | ) | (1,551 | ) | ||||
Net increase (decrease) | (126 | ) | (1,270 | ) | (88 | ) | (1,078 | ) | ||||
Class I | ||||||||||||
Proceeds from shares sold | 481 | 5,388 | 513 | 6,188 | ||||||||
Proceeds from reinvestment of distributions | 312 | 3,513 | 268 | 3,135 | ||||||||
Payments for shares redeemed | (1,211 | ) | (14,220 | ) | (812 | ) | (10,027 | ) | ||||
Net increase (decrease) | (418 | ) | (5,319 | ) | (31 | ) | (704 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 1,131 | 12,836 | 2,721 | 32,116 | ||||||||
Proceeds from reinvestment of distributions | 664 | 7,346 | 525 | 6,066 | ||||||||
Payments for shares redeemed | (2,987 | ) | (33,807 | ) | (5,002 | ) | (60,177 | ) | ||||
Net increase (decrease) | (1,192 | ) | (13,625 | ) | (1,756 | ) | (21,995 | ) | ||||
Class Y | ||||||||||||
Proceeds from shares sold | 1,306 | 14,923 | 10,707 | 129,603 | ||||||||
Proceeds from reinvestment of distributions | 8,189 | 91,712 | 5,742 | 66,985 | ||||||||
Payments for shares redeemed | (13,195 | ) | (154,546 | ) | (13,632 | ) | (167,088 | ) | ||||
Net increase (decrease) | (3,700 | ) | (47,911 | ) | 2,817 | 29,500 | ||||||
Total increase (decrease) | (5,291 | ) | $ | (66,738 | ) | 1,244 | $ | 8,793 |
See accompanying notes which are an integral part of the financial statements.
70 Russell U.S. Dynamic Equity Fund
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Russell Investment Company
Russell U.S. Dynamic Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | ||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||||
Class A | |||||||||||||||||
October 31, 2015 | 12.12 | —(f) | .53 | .53 | —(f) | (1.89 | ) | ||||||||||
October 31, 2014 | 12.08 | (.03 | ) | 1.53 | 1.50 | —(f) | (1.46 | ) | |||||||||
October 31, 2013 | 9.40 | —(f) | 2.71 | 2.71 | (.03 | ) | — | ||||||||||
October 31, 2012(3) | 9.20 | .01 | .20 | .21 | (.01 | ) | — | ||||||||||
Class C | |||||||||||||||||
October 31, 2015 | 10.70 | (.07 | ) | .47 | .40 | — | (1.89 | ) | |||||||||
October 31, 2014 | 10.90 | (.10 | ) | 1.36 | 1.26 | — | (1.46 | ) | |||||||||
October 31, 2013 | 8.53 | (.07 | ) | 2.44 | 2.37 | — | — | ||||||||||
October 31, 2012 | 7.56 | (.06 | ) | 1.03 | .97 | — | — | ||||||||||
October 31, 2011 | 6.97 | (.07 | ) | .66 | .59 | — | — | ||||||||||
Class E | |||||||||||||||||
October 31, 2015 | 12.14 | —(f) | .53 | .53 | —(f) | (1.89 | ) | ||||||||||
October 31, 2014 | 12.10 | (.02 | ) | 1.52 | 1.50 | — | (1.46 | ) | |||||||||
October 31, 2013 | 9.41 | .01 | 2.69 | 2.70 | (.01 | ) | — | ||||||||||
October 31, 2012 | 8.27 | —(f) | 1.14 | 1.14 | — | — | |||||||||||
October 31, 2011 | 7.58 | (.02 | ) | .71 | .69 | — | — | ||||||||||
Class I | |||||||||||||||||
October 31, 2015 | 12.73 | .03 | .56 | .59 | (.03 | ) | (1.89 | ) | |||||||||
October 31, 2014 | 12.60 | .02 | 1.60 | 1.62 | (.03 | ) | (1.46 | ) | |||||||||
October 31, 2013 | 9.79 | .05 | 2.81 | 2.86 | (.05 | ) | — | ||||||||||
October 31, 2012 | 8.56 | .03 | 1.21 | 1.24 | (.01 | ) | — | ||||||||||
October 31, 2011 | 7.83 | .01 | .72 | .73 | — | — | |||||||||||
Class S | |||||||||||||||||
October 31, 2015 | 12.55 | .02 | .56 | .58 | (.02 | ) | (1.89 | ) | |||||||||
October 31, 2014 | 12.45 | .01 | 1.57 | 1.58 | (.02 | ) | (1.46 | ) | |||||||||
October 31, 2013 | 9.68 | .04 | 2.76 | 2.80 | (.03 | ) | — | ||||||||||
October 31, 2012 | 8.48 | .03 | 1.17 | 1.20 | —(f) | — | |||||||||||
October 31, 2011 | 7.76 | —(f) | .72 | .72 | — | — | |||||||||||
Class Y | |||||||||||||||||
October 31, 2015 | 12.69 | .05 | .56 | .61 | (.05 | ) | (1.89 | ) | |||||||||
October 31, 2014 | 12.56 | .03 | 1.59 | 1.62 | (.03 | ) | (1.46 | ) | |||||||||
October 31, 2013 | 9.77 | .06 | 2.80 | 2.86 | (.07 | ) | — | ||||||||||
October 31, 2012(3) | 9.56 | .02 | .21 | .23 | (.02 | ) | — | ||||||||||
See accompanying notes which are an integral part of the financial statements.
72 Russell U.S. Dynamic Equity Fund
% | % | % | |||||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||||
Total Distributions | Period | Return(b)(c) | (000 | ) | Gross(e) | Net(d)(e)(g) | Net Assets(d)(e) | Turnover Rate(b) | |||||||||||
(1.89 | ) | 10.76 | 4.58 | 2,349 | 1.50 | 1.50 | (.04 | ) | 150 | ||||||||||
(1.46 | ) | 12.12 | 13.40 | 1,994 | 1.52 | 1.52 | (.22 | ) | 146 | ||||||||||
(.03 | ) | 12.08 | 28.84 | 1,089 | 1.51 | 1.51 | — (i) | 142 | |||||||||||
(.01 | ) | 9.40 | 2.30 | 206 | 1.36 | 1.35 | .31 | 120 | |||||||||||
(1.89 | ) | 9.21 | 3.81 | 10,862 | 2.25 | 2.25 | (.79 | ) | 150 | ||||||||||
(1.46 | ) | 10.70 | 12.66 | 11,644 | 2.27 | 2.27 | (.96 | ) | 146 | ||||||||||
— | 10.90 | 27.90 | 9,380 | 2.26 | 2.26 | (.68 | ) | 142 | |||||||||||
— | 8.53 | 12.83 | 5,386 | 2.28 | 2.07 | (.72 | ) | 120 | |||||||||||
— | 7.56 | 8.18 | 5,335 | 2.29 | 2.05 | (.97 | ) | 142 | |||||||||||
(1.89 | ) | 10.78 | 4.52 | 321 | 1.50 | 1.50 | (.02 | ) | 150 | ||||||||||
(1.46 | ) | 12.14 | 13.46 | 1,893 | 1.52 | 1.52 | (.19 | ) | 146 | ||||||||||
(.01 | ) | 12.10 | 28.75 | 2,959 | 1.51 | 1.51 | .10 | 142 | |||||||||||
— | 9.41 | 13.78 | 2,443 | 1.55 | 1.32 | (.01 | ) | 120 | |||||||||||
— | 8.27 | 8.97 | 3,906 | 1.54 | 1.30 | (.22 | ) | 142 | |||||||||||
(1.92 | ) | 11.40 | 4.90 | 20,455 | 1.17 | 1.17 | .30 | 150 | |||||||||||
(1.49 | ) | 12.73 | 13.86 | 28,158 | 1.19 | 1.18 | .14 | 146 | |||||||||||
(.05 | ) | 12.60 | 29.28 | 28,265 | 1.18 | 1.13 | .41 | 142 | |||||||||||
(.01 | ) | 9.79 | 14.34 | 18,586 | 1.21 | .94 | .38 | 120 | |||||||||||
— | 8.56 | 9.45 | 26,748 | 1.19 | .92 | .10 | 142 | ||||||||||||
(1.91 | ) | 11.22 | 4.88 | 32,114 | 1.25 | 1.25 | .21 | 150 | |||||||||||
(1.48 | ) | 12.55 | 13.68 | 50,903 | 1.27 | 1.27 | .05 | 146 | |||||||||||
(.03 | ) | 12.45 | 29.04 | 72,332 | 1.26 | 1.26 | .35 | 142 | |||||||||||
— (f) | 9.68 | 14.20 | 52,928 | 1.26 | 1.07 | .29 | 120 | ||||||||||||
— | 8.48 | 9.28 | 27,847 | 1.29 | 1.05 | .02 | 142 | ||||||||||||
(1.94 | ) | 11.36 | 5.06 | 521,326 | 1.05 | 1.05 | .41 | 150 | |||||||||||
(1.49 | ) | 12.69 | 13.99 | 629,285 | 1.07 | 1.07 | .23 | 146 | |||||||||||
(.07 | ) | 12.56 | 29.34 | 587,599 | 1.06 | 1.06 | .56 | 142 | |||||||||||
(.02 | ) | 9.77 | 2.36 | 563,827 | .91 | .91 | .80 | 120 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Dynamic Equity Fund 73
Russell Investment Company
Russell U.S. Strategic Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell U.S. Strategic Equity Fund - Class A‡ | Russell U.S. Strategic Equity Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (2.53 | )% | 1 Year | 3.66 | % | ||
Inception* | 11.99 | %§ | Inception* | 14.34 | %§ | ||
Russell U.S. Strategic Equity Fund - Class C | Russell 1000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 2.66 | % | 1 Year | 4.86 | % | ||
Inception* | 13.23 | %§ | Inception* | 15.77 | %§ | ||
Russell U.S. Strategic Equity Fund - Class E | |||||||
Total | |||||||
Return | |||||||
1 Year | 3.40 | % | |||||
Inception* | 14.08 | %§ |
74 Russell U.S. Strategic Equity Fund
Russell Investment Company
Russell U.S. Strategic Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell U.S. Strategic Equity Fund (the “Fund”) employs | and energy stocks and toward consumer discretionary and health |
a multi-manager approach whereby portions of the Fund are | care stocks were beneficial. |
allocated to different money manager strategies. Fund assets not | |
allocated to money managers are managed by Russell Investment | How did the investment strategies and techniques employed |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | by the Fund and its money managers affect its benchmark- |
may change the allocation of the Fund’s assets among money | relative performance? |
managers at any time. An exemptive order from the Securities | Stock selection effects within the consumer discretionary sector |
and Exchange Commission (“SEC”) permits RIMCo to engage | (an overweight to Viacom, Inc. and underweight to Amazon, Inc.) |
or terminate a money manager at any time, subject to approval | detracted from the Fund’s benchmark-relative performance for |
by the Fund’s Board, without a shareholder vote. Pursuant to the | the fiscal year. Factor exposures were mixed, as an overweight |
terms of the exemptive order, the Fund is required to notify its | to stocks with the lowest valuation ratios detracted, while an |
shareholders within 90 days of when a money manager begins | underweight to high dividend yield stocks was rewarded. From |
providing services. As of October 31, 2015, the Fund had eight | a sector perspective, an overweight to consumer discretionary |
money managers. | and health care stocks and an underweight to energy stocks |
contributed positively to relative returns. | |
What is the Fund’s investment objective? | |
The Fund seeks to provide long term capital growth. | The Fund employs discretionary and non-discretionary money |
managers. The Fund’s discretionary money managers select | |
How did the Fund perform relative to its benchmark for the | the individual portfolio securities for the assets assigned to |
fiscal year ended October 31, 2015? | them. The Fund’s non-discretionary money managers provide |
For the fiscal year ended October 31, 2015, the Fund’s Class | a model portfolio to RIMCo representing their investment |
A, Class C, Class E and Class S Shares gained 3.42%, 2.66%, | recommendations, based upon which RIMCo purchases and sells |
3.40% and 3.66%, respectively. This is compared to the Fund’s | securities for the Fund. Fund assets not allocated to discretionary |
benchmark, the Russell 1000® Index, which gained 4.86% during | money managers include assets managed by RIMCo based upon |
the same period. The Fund’s performance includes operating | model portfolios provided by non-discretionary money managers, |
expenses, whereas index returns are unmanaged and do not | the Fund’s liquidity reserves and assets which may be managed |
include expenses of any kind. | directly by RIMCo to effect the Fund’s investment strategies and/ |
or to actively manage the Fund’s overall exposures by investing in | |
For the fiscal year ended October 31, 2015, the Morningstar® | securities or other instruments that RIMCo believes will achieve |
Large Blend, a group of funds that Morningstar considers to have | the desired risk/return profile for the Fund. |
investment strategies similar to those of the Fund, gained 2.79%. | |
This result serves as a peer comparison and is expressed net of | With respect to certain of the Fund’s money managers, |
operating expenses. | Cornerstone Capital Management, LLC (“Cornerstone”) was the |
worst performing manager for the period and underperformed the | |
RIMCo may assign a money manager a specific style or | Russell 1000® Growth Index. Stock selection within the technology |
capitalization benchmark other than the Fund’s index. However, | sector (an overweight to Stratasys Ltd., Yelp, Inc., and Micron |
the Fund’s primary index remains the benchmark for the Fund | Technology) detracted from benchmark-relative performance. |
and is representative of the aggregate of each money manager’s | Factor exposures were mixed, specifically an overweight to high |
benchmark index. | forecasted growth was rewarded while an overweight to mid |
How did the market conditions described in the Market | cap stocks detracted. Cornerstone’s overweight to the consumer |
Summary report affect the Fund’s performance? | discretionary sector and underweight to the producer durables |
During the fiscal year, the U.S. large capitalization equity market | sector contributed positively to relative performance. |
produced positive returns. Relevant Fund exposures included | Suffolk Capital Management, LLC (“Suffolk”) was the best |
tilts toward stocks with the lowest valuation ratios (lowest price- | performing manager for the period and outperformed the Russell |
to-book and price-to-cash flow ratios) and consumer discretionary | 1000® Dynamic™ Index. Stock selection within the health care |
and health care stocks, and away from high dividend yield stocks, | sector (an overweight to Valeant Pharmaceuticals International, |
growth stocks, and energy stocks. Growth stocks significantly | Clovis Oncology, Inc., and Receptors, Inc.) was a significant |
outperformed value stocks within the Russell 1000® Index, | driver of positive benchmark-relative performance. Suffolk’s |
detracting from the Fund’s benchmark-relative performance. | factor tilt away from mid cap stocks was additive to benchmark- |
However, the Fund’s tilts away from high dividend yield stocks | relative returns. An overweight to the technology sector and an |
underweight to the energy sector were rewarded. |
Russell U.S. Strategic Equity Fund 75
Russell Investment Company
Russell U.S. Strategic Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
RIMCo manages a 6% strategic allocation to a positioning | LLC as a non-discretionary money manager. The objective of | |
strategy to seek to achieve the desired risk/return profile for the | this change was to improve the stock selection component of the | |
Fund. During the third quarter of 2015 the positioning strategy | Fund’s excess return potential. | |
was changed from a Russell Top 200® Value Index full replication | ||
strategy to a positioning strategy that utilizes the output from a | Money Managers as of October 31, | |
quantitative model to seek to position the portfolio to meet RIMCo’s | 2015 | Styles |
overall preferred positioning. This strategy was implemented to | AJO, LP | Dynamic |
replace exposure that the Fund had previously received from | Barrow, Hanley, Mewhinney & Strauss, LLC Value | |
Brandywine Global Investment Management, | ||
Schneider Capital Management Corporation’s (“Schneider”) | LLC | Value |
portfolio which RIMCo removed from the Fund during the third | Columbus Circle Investors | Growth |
quarter of 2015 due to concerns about organizational stability. | Cornerstone Capital Management, Inc. | Growth |
During the fiscal year, the positioning strategy performed as | Jacobs Levy Equity Management | Defensive |
PanAgora Asset Management, Inc. | Defensive | |
expected given its combination of deep value exposure and larger | Suffolk Capital Management LLC | Dynamic |
capitalization value exposure. Its performance was close to that | The views expressed in this report reflect those of the portfolio | |
of the Russell 1000® Value Index and the Russell Top 200® Value | managers only through the end of the period covered by | |
Index. | the report. These views do not necessarily represent the | |
During the period, RIMCo used index futures contracts to equitize | views of RIMCo, or any other person in RIMCo or any other | |
the Fund’s cash. The decision to equitize the Fund’s cash was | affiliated organization. These views are subject to change | |
beneficial to Fund performance for the fiscal year as the market | at any time based upon market conditions or other events, | |
had a positive absolute return. | and RIMCo disclaims any responsibility to update the views | |
contained herein. These views should not be relied on as | ||
Describe any changes to the Fund’s structure or the money | investment advice and, because investment decisions for | |
manager line-up. | a Russell Investment Company (“RIC”) Fund are based on | |
During the third quarter of 2015, RIMCo terminated Institutional | numerous factors, should not be relied on as an indication | |
Capital LLC and Schneider as discretionary money managers for | of investment decisions of any RIC Fund. | |
the Fund and hired Brandywine Global Investment Management, |
* Assumes initial investment on August 6, 2012.
** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
76 Russell U.S. Strategic Equity Fund
Russell Investment Company
Russell U.S. Strategic Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 996.20 | $ | 1,019.86 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 5.33 | $ | 5.40 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.06% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 993.10 | $ | 1,016.08 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 9.09 | $ | 9.20 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.81% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 996.90 | $ | 1,019.86 | |
Expenses Paid During Period* | $ | 5.34 | $ | 5.40 | ||
* Expenses are equal to the Fund's annualized expense ratio of 1.06% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell U.S. Strategic Equity Fund 77
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Russell U.S. Strategic Equity Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 997.40 | $ | 1,021.12 | ||
Expenses Paid During Period* | $ | 4.08 | $ | 4.13 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.81% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
78 Russell U.S. Strategic Equity Fund
Russell Investment Company
Russell U.S. Strategic Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Common Stocks - 96.8% | Ross Stores, Inc. | 318,872 | 16,129 | ||||
Consumer Discretionary - 15.1% | Royal Caribbean Cruises, Ltd. | 94,183 | 9,263 | ||||
Aaron's, Inc. Class A(Û) | 86,996 | 2,146 | Sinclair Broadcast Group, Inc. Class A(Æ) | 39,132 | 1,174 | ||
Alibaba Group Holding, Ltd. - ADR(Æ) | 57,667 | 4,834 | Staples, Inc. | 23,880 | 310 | ||
Amazon.com, Inc.(Æ) | 61,126 | 38,259 | Starbucks Corp. | 366,828 | 22,952 | ||
AMC Networks, Inc. Class A(Æ) | 21,510 | 1,589 | Target Corp. | 463,172 | 35,748 | ||
American Eagle Outfitters, Inc. | 8,800 | 134 | Tenneco, Inc.(Æ) | 23,951 | 1,355 | ||
AutoZone, Inc.(Æ) | 6,495 | 5,095 | Time Warner, Inc. | 158,667 | 11,954 | ||
Bed Bath & Beyond, Inc.(Æ) | 48,848 | 2,913 | TJX Cos., Inc. | 220,740 | 16,156 | ||
Best Buy Co., Inc. | 35,545 | 1,245 | Toll Brothers, Inc.(Æ) | 33,038 | 1,188 | ||
Big Lots, Inc. | 39,886 | 1,839 | Toyota Motor Corp. - ADR | 77,606 | 9,516 | ||
Brinker International, Inc. | 49,133 | 2,236 | Tribune Media Co. Class A | 102,265 | 4,124 | ||
Carnival Corp. | 35,988 | 1,946 | Tupperware Brands Corp. | 57,400 | 3,379 | ||
Carter's, Inc. | 10,890 | 990 | Twenty-First Century Fox, Inc. Class A | 7,685 | 236 | ||
CBS Corp. Class B | 111,786 | 5,200 | Ulta Salon Cosmetics & Fragrance, Inc.(Æ) | 55,484 | 9,652 | ||
Choice Hotels International, Inc. | 33,253 | 1,740 | Under Armour, Inc. Class A(Æ) | 71,512 | 6,799 | ||
Comcast Corp. Class A(Æ) | 137,935 | 8,638 | WABCO Holdings, Inc.(Æ) | 27,598 | 3,097 | ||
Cooper Tire & Rubber Co. | 69,282 | 2,895 | Wal-Mart Stores, Inc. | 512,218 | 29,319 | ||
Costco Wholesale Corp. | 49,500 | 7,827 | Walt Disney Co. (The) | 399,698 | 45,462 | ||
Dana Holding Corp. | 167,082 | 2,807 | Whirlpool Corp. | 64,669 | 10,356 | ||
Darden Restaurants, Inc.(Û) | 88,330 | 5,467 | 604,491 | ||||
Deckers Outdoor Corp.(Æ) | 11,970 | 666 | |||||
Delphi Automotive PLC | 50,565 | 4,207 | Consumer Staples - 6.3% | ||||
Dick's Sporting Goods, Inc. | 54,270 | 2,418 | Altria Group, Inc. | 468,469 | 28,328 | ||
Dillard's, Inc. Class A | 41,831 | 3,743 | Archer-Daniels-Midland Co. | 9,291 | 424 | ||
Discovery Communications, Inc. Class A(Æ) | 10,025 | 295 | Cal-Maine Foods, Inc. | 13,886 | 743 | ||
Domino's Pizza, Inc. | 47,168 | 5,031 | Casey's General Stores, Inc. | 6,200 | 659 | ||
DSW, Inc. Class A | 80,197 | 2,000 | Clorox Co. (The) | 25,530 | 3,113 | ||
eBay, Inc.(Æ)(Û) | 145,260 | 4,053 | Coca-Cola Co. (The) | 834,330 | 35,334 | ||
Expedia, Inc. | 1,990 | 271 | Coca-Cola Enterprises, Inc. | 159,739 | 8,201 | ||
Foot Locker, Inc. | 54,028 | 3,660 | Colgate-Palmolive Co. | 30,792 | 2,043 | ||
Ford Motor Co. | 63,890 | 946 | Constellation Brands, Inc. Class A | 49,001 | 6,605 | ||
Gap, Inc. (The) | 372,317 | 10,135 | CVS Health Corp. | 99,202 | 9,799 | ||
General Motors Co.(Û) | 553,669 | 19,329 | Dr Pepper Snapple Group, Inc. | 185,097 | 16,542 | ||
Goodyear Tire & Rubber Co. (The) | 236,022 | 7,751 | Herbalife, Ltd.(Æ) | 23,950 | 1,342 | ||
Hilton Worldwide Holdings, Inc. | 220,657 | 5,514 | Ingredion, Inc. | 17,200 | 1,635 | ||
Home Depot, Inc. | 344,731 | 42,623 | Kimberly-Clark Corp. | 1,086 | 130 | ||
J Alexander's Holdings, Inc.(Æ) | 17,147 | 165 | Kroger Co. (The)(Û) | 293,420 | 11,091 | ||
Jarden Corp.(Æ) | 153,385 | 6,872 | Molson Coors Brewing Co. Class B | 56,711 | 4,996 | ||
Johnson Controls, Inc. | 8,037 | 363 | Mondelez International, Inc. Class A | 383,215 | 17,689 | ||
Kohl's Corp. | 6,007 | 277 | PepsiCo, Inc. | 268,790 | 27,468 | ||
L Brands, Inc.(Æ) | 75,124 | 7,210 | Philip Morris International, Inc. | 357,143 | 31,572 | ||
Lear Corp.(Û) | 28,262 | 3,534 | Procter & Gamble Co. (The) | 460,210 | 35,151 | ||
Lennar Corp. Class A | 239,841 | 12,009 | Sysco Corp. | 107,600 | 4,439 | ||
Lowe's Cos., Inc. | 107,089 | 7,906 | Tyson Foods, Inc. Class A | 84,471 | 3,747 | ||
Macy's, Inc.(Û) | 16,650 | 849 | Walgreens Boots Alliance, Inc. | 3,907 | 331 | ||
Marriott International, Inc. Class A | 129,264 | 9,925 | 251,382 | ||||
McDonald's Corp. | 35,044 | 3,934 | |||||
Michael Kors Holdings, Ltd.(Æ) | 298,561 | 11,536 | Energy - 6.4% | ||||
Netflix, Inc.(Æ) | 47,588 | 5,158 | Anadarko Petroleum Corp. | 223,585 | 14,953 | ||
Nike, Inc. Class B | 291,442 | 38,188 | Antero Resources Corp.(Æ) | 5,437 | 128 | ||
Norwegian Cruise Line Holdings, Ltd.(Æ) | 22,479 | 1,430 | Apache Corp. | 104,431 | 4,922 | ||
Nu Skin Enterprises, Inc. Class A | 6,239 | 238 | Baker Hughes, Inc. | 16,797 | 885 | ||
NVR, Inc.(Æ)(Û) | 3,892 | 6,374 | BP PLC - ADR | 730,461 | 26,077 | ||
Office Depot, Inc.(Æ) | 121,856 | 929 | Cameron International Corp.(Æ) | 7,072 | 481 | ||
O'Reilly Automotive, Inc.(Æ) | 19,060 | 5,266 | Chesapeake Energy Corp. | 107,991 | 770 | ||
Pandora Media, Inc.(Æ) | 228,475 | 2,630 | Chevron Corp. | 194,957 | 17,718 | ||
Polaris Industries, Inc. | 52,796 | 5,931 | Cimarex Energy Co. | 51,100 | 6,033 | ||
Priceline Group, Inc. (The)(Æ) | 5,732 | 8,336 | Columbia Pipeline Group, Inc. | 54,366 | 1,129 | ||
PulteGroup, Inc. | 551,649 | 10,112 | ConocoPhillips | 263,219 | 14,043 | ||
PVH Corp. | 73,757 | 6,708 | CONSOL Energy, Inc. | 12,692 | 85 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Strategic Equity Fund 79
Russell Investment Company
Russell U.S. Strategic Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Continental Resources, Inc.(Æ) | 239,127 | 8,109 | American Capital Agency Corp.(ö) | 9,350 | 167 | ||
CVR Energy, Inc. | 4,102 | 182 | American Express Co. | 294,100 | 21,546 | ||
Devon Energy Corp. | 115,323 | 4,835 | American Financial Group, Inc. | 44,375 | 3,203 | ||
Diamond Offshore Drilling, Inc. | 6,807 | 135 | American International Group, Inc.(Û) | 94,560 | 5,963 | ||
Dril-Quip, Inc.(Æ) | 9,185 | 565 | Ameriprise Financial, Inc. | 100,829 | 11,632 | ||
Energen Corp. | 2,888 | 168 | AmTrust Financial Services, Inc. | 26,255 | 1,791 | ||
Ensco PLC Class A | 203,981 | 3,392 | Annaly Capital Management, Inc.(ö) | 16,705 | 166 | ||
EOG Resources, Inc. | 118,532 | 10,176 | Aon PLC | 72,500 | 6,765 | ||
Exxon Mobil Corp. | 516,129 | 42,704 | Arch Capital Group, Ltd.(Æ) | 5,637 | 422 | ||
First Solar, Inc.(Æ) | 5,871 | 335 | Arthur J Gallagher & Co. | 4,545 | 199 | ||
FMC Technologies, Inc.(Æ) | 34,413 | 1,164 | Aspen Insurance Holdings, Ltd.(Û) | 64,030 | 3,112 | ||
Frank's International NV | 9,537 | 164 | Assurant, Inc.(Û) | 21,519 | 1,754 | ||
Gulfport Energy Corp.(Æ) | 4,137 | 126 | Assured Guaranty, Ltd. | 151,991 | 4,171 | ||
Halliburton Co. | 29,973 | 1,150 | Axis Capital Holdings, Ltd. | 5,603 | 303 | ||
Helmerich & Payne, Inc. | 3,606 | 203 | Bank of America Corp.(Û) | 4,075,626 | 68,389 | ||
Hess Corp. | 61,666 | 3,466 | Bank of New York Mellon Corp. (The) | 18,739 | 780 | ||
HollyFrontier Corp. | 7,828 | 383 | Barclays PLC - ADR | 60,091 | 855 | ||
Kinder Morgan, Inc. | 35,536 | 972 | BB&T Corp. | 11,861 | 441 | ||
Laredo Petroleum, Inc.(Æ) | 13,069 | 150 | Berkshire Hathaway, Inc. Class B(Æ) | 228,181 | 31,037 | ||
Magna International, Inc. Class A(Æ) | 75,831 | 3,999 | BlackRock, Inc. Class A | 1,301 | 458 | ||
Marathon Oil Corp. | 169,391 | 3,113 | Blackstone Group, LP (The)(Æ) | 144,000 | 4,761 | ||
Marathon Petroleum Corp. | 114,889 | 5,951 | Broadridge Financial Solutions, Inc. | 4,268 | 254 | ||
Murphy Oil Corp. | 6,814 | 194 | Capital One Financial Corp. | 144,789 | 11,424 | ||
Nabors Industries, Ltd. | 130,138 | 1,307 | CBL & Associates Properties, Inc.(ö) | 149,130 | 2,174 | ||
National Oilwell Varco, Inc. | 23,832 | 897 | CBOE Holdings, Inc. | 21,838 | 1,464 | ||
Newfield Exploration Co.(Æ) | 167,203 | 6,720 | CBRE Group, Inc. Class A(Æ)(Û) | 92,327 | 3,442 | ||
Noble Corp. PLC(Û) | 259,358 | 3,494 | Charles Schwab Corp. (The) | 251,828 | 7,686 | ||
Noble Energy, Inc. | 9,316 | 334 | Chubb Corp. (The) | 3,806 | 492 | ||
Occidental Petroleum Corp. | 223,254 | 16,641 | Cincinnati Financial Corp. | 2,253 | 136 | ||
Oceaneering International, Inc. | 4,115 | 173 | Citigroup, Inc.(Û) | 722,923 | 38,438 | ||
Oil States International, Inc.(Æ) | 59,770 | 1,794 | Citizens Financial Group, Inc. | 223,191 | 5,424 | ||
Patterson-UTI Energy, Inc. | 10,849 | 162 | CME Group, Inc. Class A | 7,635 | 721 | ||
PBF Energy, Inc. Class A | 22,766 | 774 | CNA Financial Corp. | 4,752 | 174 | ||
Phillips 66(Æ) | 168,609 | 15,015 | Comerica, Inc. | 43,351 | 1,881 | ||
QEP Resources, Inc. | 12,137 | 188 | Discover Financial Services | 213,098 | 11,980 | ||
Rice Energy, Inc.(Æ) | 8,035 | 123 | East West Bancorp, Inc. | 38,086 | 1,538 | ||
Rowan Cos. PLC Class A | 107,593 | 2,117 | Equity Commonwealth(Æ)(ö) | 11,717 | 336 | ||
RPC, Inc. | 13,522 | 149 | Equity LifeStyle Properties, Inc. Class A(ö) | 45,796 | 2,770 | ||
Schlumberger, Ltd. | 94,776 | 7,408 | Equity Residential(ö) | 4,567 | 353 | ||
Seadrill, Ltd.(Æ) | 21,093 | 136 | Everest Re Group, Ltd. | 40,717 | 7,246 | ||
SM Energy Co. | 29,685 | 990 | FactSet Research Systems, Inc. | 37,736 | 6,608 | ||
Southwestern Energy Co.(Æ) | 14,020 | 155 | Fidelity National Information Services, Inc. | 3,789 | 276 | ||
Spectra Energy Corp. | 13,894 | 397 | First American Financial Corp. | 27,530 | 1,050 | ||
SunPower Corp. Class A(Æ) | 9,363 | 251 | First Niagara Financial Group, Inc. | 116,777 | 1,209 | ||
Superior Energy Services, Inc. | 9,432 | 134 | First Republic Bank | 103,247 | 6,743 | ||
Tesoro Corp. | 37,911 | 4,054 | Fiserv, Inc.(Æ) | 85,571 | 8,258 | ||
Valero Energy Corp. | 154,222 | 10,166 | FleetCor Technologies, Inc.(Æ) | 28,184 | 4,083 | ||
Weatherford International PLC(Æ) | 118,966 | 1,218 | FNF Group | 4,117 | 145 | ||
Western Refining, Inc. | 15,346 | 639 | FNFV Group(Æ) | 99,279 | 1,116 | ||
Whiting Petroleum Corp.(Æ) | 7,964 | 137 | Forest City Enterprises, Inc. Class A(Æ) | 44,933 | 993 | ||
World Fuel Services Corp. | 29,599 | 1,316 | Genworth Financial, Inc. Class A(Æ) | 267,334 | 1,251 | ||
255,749 | Global Payments, Inc. | 29,474 | 4,021 | ||||
Goldman Sachs Group, Inc. (The) | 7,364 | 1,381 | |||||
Financial Services - 18.8% | Hanover Insurance Group, Inc. (The) | 48,155 | 4,057 | ||||
ACE, Ltd. | 6,130 | 696 | Hartford Financial Services Group, Inc. | 165,105 | 7,638 | ||
Affiliated Managers Group, Inc.(Æ) | 34,793 | 6,272 | Hatteras Financial Corp.(ö) | 241,700 | 3,459 | ||
Aflac, Inc. | 7,497 | 478 | HCP, Inc.(ö) | 3,429 | 128 | ||
Allied World Assurance Co. Holdings AG | 6,456 | 235 | Hospitality Properties Trust(ö) | 25,942 | 696 | ||
Allstate Corp. (The)(Û) | 99,407 | 6,151 | Invesco, Ltd. | 37,275 | 1,236 | ||
Ally Financial, Inc.(Æ) | 47,437 | 945 | Jack Henry & Associates, Inc. | 3,317 | 257 |
See accompanying notes which are an integral part of the financial statements.
80 Russell U.S. Strategic Equity Fund
Russell Investment Company
Russell U.S. Strategic Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Jones Lang LaSalle, Inc.(Û) | 33,015 | 5,504 | Baxalta, Inc. | 129,985 | 4,479 | ||
JPMorgan Chase & Co.(Û) | 785,268 | 50,453 | Becton Dickinson and Co. | 2,783 | 397 | ||
KKR & Co., LP | 544,932 | 9,346 | Biogen, Inc.(Æ)(Û) | 5,444 | 1,582 | ||
Lincoln National Corp. | 51,100 | 2,734 | Bio-Rad Laboratories, Inc. Class A(Æ) | 3,910 | 545 | ||
Loews Corp. | 433,800 | 15,816 | Bristol-Myers Squibb Co. | 259,611 | 17,121 | ||
Markel Corp.(Æ) | 358 | 311 | Cardinal Health, Inc.(Û) | 415,411 | 34,147 | ||
Marsh & McLennan Cos., Inc. | 83,985 | 4,681 | Celgene Corp.(Æ) | 34,363 | 4,217 | ||
MasterCard, Inc. Class A | 302,224 | 29,917 | Cerner Corp.(Æ) | 6,365 | 422 | ||
McGraw Hill Financial, Inc. | 59,151 | 5,480 | Cigna Corp. | 89,891 | 12,049 | ||
Mercury General Corp. | 3,573 | 193 | CR Bard, Inc. | 51,909 | 9,673 | ||
MetLife, Inc. | 293,665 | 14,795 | DexCom, Inc.(Æ) | 29,441 | 2,453 | ||
Morgan Stanley | 25,224 | 832 | Edwards Lifesciences Corp.(Æ) | 43,110 | 6,775 | ||
Morningstar, Inc. | 6,917 | 568 | Eli Lilly & Co. | 219,054 | 17,868 | ||
New York Community Bancorp, Inc. | 15,448 | 255 | Endo International PLC(Æ) | 44,667 | 2,680 | ||
Nomura Holdings, Inc. - ADR | 1,004,500 | 6,318 | Envision Healthcare Holdings, Inc.(Æ) | 286,248 | 8,072 | ||
Northern Trust Corp. | 86,700 | 6,103 | Express Scripts Holding Co.(Æ) | 6,269 | 541 | ||
PartnerRe, Ltd. | 2,264 | 315 | Gilead Sciences, Inc.(Û) | 349,814 | 37,825 | ||
PayPal Holdings, Inc.(Æ) | 97,000 | 3,493 | HCA Holdings, Inc.(Æ) | 7,973 | 548 | ||
Piedmont Office Realty Trust, Inc. Class A(ö) | 50,563 | 980 | Hill-Rom Holdings, Inc.(Û) | 54,848 | 2,890 | ||
PNC Financial Services Group, Inc. (The) | 188,543 | 17,018 | HMS Holdings Corp.(Æ) | 445,843 | 4,695 | ||
Post Properties, Inc.(ö) | 44,501 | 2,658 | Horizon Pharma PLC(Æ) | 143,377 | 2,254 | ||
Principal Financial Group, Inc. | 111,336 | 5,585 | Humana, Inc. | 16,607 | 2,966 | ||
ProAssurance Corp. | 4,513 | 239 | Intuitive Surgical, Inc.(Æ) | 8,010 | 3,978 | ||
Progressive Corp. (The) | 16,109 | 534 | Jazz Pharmaceuticals PLC(Æ) | 27,588 | 3,787 | ||
Prudential Financial, Inc. | 102,884 | 8,488 | Johnson & Johnson | 666,040 | 67,290 | ||
Regency Centers Corp.(ö) | 41,417 | 2,815 | Laboratory Corp. of America Holdings(Æ) | 6,150 | 755 | ||
Regions Financial Corp. | 692,483 | 6,475 | Mallinckrodt PLC(Æ) | 47,567 | 3,124 | ||
Reinsurance Group of America, Inc. Class | McKesson Corp.(Û) | 95,937 | 17,153 | ||||
A(Û) | 68,347 | 6,168 | Medtronic PLC | 376,038 | 27,797 | ||
Santander Consumer USA Holdings, Inc.(Æ) | 309,500 | 5,574 | Merck & Co., Inc. | 981,798 | 53,665 | ||
Simon Property Group, Inc.(ö) | 59,455 | 11,978 | Mylan NV(Æ) | 213,240 | 9,402 | ||
Starwood Property Trust, Inc.(ö) | 7,541 | 151 | Myriad Genetics, Inc.(Æ) | 11,558 | 467 | ||
State Street Corp. | 341,305 | 23,550 | Perrigo Co. PLC | 49,108 | 7,746 | ||
SunTrust Banks, Inc. | 79,244 | 3,290 | Pfizer, Inc. | 2,009,730 | 67,969 | ||
Synchrony Financial(Æ) | 141,403 | 4,350 | PTC Therapeutics, Inc.(Æ) | 69,200 | 1,721 | ||
Thomson Reuters Corp. | 5,866 | 241 | Puma Biotechnology, Inc.(Æ) | 59,314 | 4,889 | ||
Torchmark Corp. | 6,741 | 391 | Quest Diagnostics, Inc. | 19,600 | 1,332 | ||
Total System Services, Inc. | 5,257 | 276 | St. Jude Medical, Inc. | 64,890 | 4,141 | ||
Travelers Cos., Inc. (The) | 9,209 | 1,040 | Stryker Corp. | 62,467 | 5,973 | ||
Two Harbors Investment Corp.(ö) | 412,000 | 3,485 | Taro Pharmaceutical Industries, Ltd.(Æ) | 1,438 | 209 | ||
US Bancorp | 323,365 | 13,639 | Thermo Fisher Scientific, Inc. | 57,982 | 7,583 | ||
Validus Holdings, Ltd.(Û) | 61,087 | 2,706 | United Therapeutics Corp.(Æ)(Û) | 23,875 | 3,501 | ||
Visa, Inc. Class A | 563,443 | 43,712 | UnitedHealth Group, Inc. | 183,097 | 21,565 | ||
Voya Financial, Inc. | 207,329 | 8,411 | Vertex Pharmaceuticals, Inc.(Æ) | 69,093 | 8,619 | ||
Wells Fargo & Co. | 1,503,276 | 81,387 | Zimmer Biomet Holdings, Inc. | 49,244 | 5,149 | ||
White Mountains Insurance Group, Ltd. | 348 | 275 | ZS Pharma, Inc.(Æ) | 20,400 | 1,326 | ||
WR Berkley Corp. | 92,050 | 5,139 | 592,684 | ||||
XL Group PLC Class A | 8,810 | 335 | |||||
753,234 | Materials and Processing - 2.9% | ||||||
Acuity Brands, Inc. | 10,900 | 2,383 | |||||
Health Care - 14.8% | Air Products & Chemicals, Inc. | 3,504 | 487 | ||||
Abbott Laboratories | 278,346 | 12,470 | Albemarle Corp. | 3,847 | 206 | ||
AbbVie, Inc. | 93,600 | 5,574 | Alcoa, Inc. | 30,291 | 271 | ||
Aetna, Inc. | 81,063 | 9,304 | Ashland, Inc. | 2,890 | 317 | ||
Agilent Technologies, Inc. | 25,398 | 959 | Bemis Co., Inc. | 3,195 | 146 | ||
Alexion Pharmaceuticals, Inc.(Æ) | 71,547 | 12,592 | Bombardier, Inc. Class B | 704,184 | 760 | ||
Allergan PLC(Æ) | 40,776 | 12,578 | CF Industries Holdings, Inc.(Û) | 52,780 | 2,680 | ||
AmerisourceBergen Corp. Class A | 133,475 | 12,882 | CRH PLC - ADR | 581,700 | 15,915 | ||
Amgen, Inc. | 100,112 | 15,836 | Crown Holdings, Inc.(Æ) | 64,514 | 3,422 | ||
Anthem, Inc. | 51,376 | 7,149 | Domtar Corp. | 73,764 | 3,042 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Strategic Equity Fund 81
Russell Investment Company
Russell U.S. Strategic Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Dow Chemical Co. (The) | 125,058 | 6,462 | ManpowerGroup, Inc. | 6,660 | 611 | ||
Eastman Chemical Co. | 88,670 | 6,399 | National Instruments Corp. | 7,927 | 242 | ||
Ecolab, Inc. | 22,222 | 2,674 | Norfolk Southern Corp. | 169,028 | 13,527 | ||
EI du Pont de Nemours & Co. | 7,123 | 452 | Northrop Grumman Corp. | 104,514 | 19,623 | ||
Freeport-McMoRan, Inc. | 24,472 | 288 | Oshkosh Corp. | 114,000 | 4,684 | ||
Hexcel Corp. | 105,275 | 4,876 | Paychex, Inc. | 102,203 | 5,272 | ||
International Paper Co. | 162,400 | 6,933 | Raytheon Co. | 296,851 | 34,850 | ||
Louisiana-Pacific Corp.(Æ) | 252,000 | 4,450 | Republic Services, Inc. Class A | 8,142 | 356 | ||
LyondellBasell Industries NV Class A(Û) | 47,398 | 4,404 | Rockwell Collins, Inc. | 11,687 | 1,014 | ||
Masco Corp. | 169,146 | 4,905 | Snap-on, Inc. | 52,660 | 8,736 | ||
Mosaic Co. (The) | 60,467 | 2,043 | Southwest Airlines Co.(Û) | 434,637 | 20,119 | ||
Newmont Mining Corp. | 14,998 | 292 | Spirit AeroSystems Holdings, Inc. Class | ||||
Nucor Corp. | 8,228 | 348 | A(Æ)(Û) | 56,890 | 3,000 | ||
Owens Corning | 8,022 | 365 | Stanley Black & Decker, Inc. | 158,413 | 16,789 | ||
PPG Industries, Inc. | 187,310 | 19,529 | Terex Corp. | 218,384 | 4,381 | ||
Praxair, Inc. | 8,249 | 916 | Textron, Inc. | 136,960 | 5,776 | ||
Reliance Steel & Aluminum Co. | 118,635 | 7,113 | Trinity Industries, Inc. | 69,939 | 1,893 | ||
Rio Tinto PLC - ADR | 105,000 | 3,834 | Union Pacific Corp. | 107,278 | 9,585 | ||
Scotts Miracle-Gro Co. (The) Class A | 2,432 | 161 | United Continental Holdings, Inc.(Æ)(Û) | 195,388 | 11,784 | ||
Sherwin-Williams Co. (The) | 27,537 | 7,348 | United Parcel Service, Inc. Class B | 23,861 | 2,458 | ||
Sonoco Products Co. | 3,509 | 150 | United Technologies Corp. | 151,662 | 14,925 | ||
Steel Dynamics, Inc. | 8,436 | 156 | Wabtec Corp. | 37,180 | 3,081 | ||
Westlake Chemical Corp. | 30,712 | 1,851 | Waste Management, Inc. | 6,891 | 370 | ||
WestRock Co. | 4,187 | 225 | Waters Corp.(Æ) | 6,974 | 891 | ||
115,803 | Xerox Corp. | 48,564 | 456 | ||||
Xylem, Inc. | 163,122 | 5,939 | |||||
Producer Durables - 10.9% | 435,427 | ||||||
3M Co. | 20,482 | 3,220 | |||||
Accenture PLC Class A | 124,578 | 13,355 | Technology - 16.2% | ||||
AECOM(Æ) | 130,700 | 3,852 | Activision Blizzard, Inc. | 131,000 | 4,554 | ||
AerCap Holdings NV(Æ) | 73,560 | 3,053 | Adobe Systems, Inc.(Æ) | 77,781 | 6,896 | ||
Alaska Air Group, Inc. | 58,526 | 4,463 | Akamai Technologies, Inc.(Æ) | 3,131 | 190 | ||
American Airlines Group, Inc.(Û) | 275,300 | 12,724 | Alphabet, Inc. Class A(Æ) | 51,920 | 38,285 | ||
Automatic Data Processing, Inc. | 105,492 | 9,177 | Alphabet, Inc. Class C(Æ) | 49,739 | 35,355 | ||
Boeing Co. (The) | 113,427 | 16,795 | Amdocs, Ltd. | 8,047 | 479 | ||
Caterpillar, Inc. | 86,102 | 6,285 | Amphenol Corp. Class A | 4,457 | 242 | ||
CH Robinson Worldwide, Inc. | 23,152 | 1,606 | Analog Devices, Inc. | 3,929 | 236 | ||
Chicago Bridge & Iron Co. | 107,300 | 4,815 | Ansys, Inc.(Æ) | 2,493 | 238 | ||
Cintas Corp. | 102,320 | 9,525 | Apple, Inc.(Û) | 1,116,633 | 133,438 | ||
CoStar Group, Inc.(Æ) | 16,936 | 3,439 | Applied Materials, Inc. | 235,100 | 3,943 | ||
CSX Corp. | 227,101 | 6,129 | Arista Networks, Inc.(Æ) | 2,711 | 175 | ||
Danaher Corp. | 7,673 | 716 | ARRIS Group, Inc.(Æ) | 133,000 | 3,759 | ||
Deere & Co. | 4,409 | 344 | Arrow Electronics, Inc.(Æ) | 7,372 | 405 | ||
Delta Air Lines, Inc. | 477,785 | 24,291 | Aspen Technology, Inc.(Æ)(Û) | 69,530 | 2,878 | ||
Eaton Corp. PLC | 78,837 | 4,408 | Avago Technologies, Ltd. Class A | 67,869 | 8,357 | ||
EMCOR Group, Inc. | 15,250 | 736 | Avnet, Inc.(Û) | 107,027 | 4,862 | ||
Emerson Electric Co. | 2,931 | 138 | Black Knight Financial Services, Inc. Class | ||||
Expeditors International of Washington, Inc. | 47,052 | 2,343 | A(Æ) | 8,823 | 318 | ||
FedEx Corp. | 112,188 | 17,507 | Broadcom Corp. Class A | 9,638 | 495 | ||
Flir Systems, Inc. | 7,380 | 197 | Brocade Communications Systems, Inc.(Û) | 195,410 | 2,036 | ||
General Dynamics Corp. | 168,244 | 24,998 | CA, Inc. | 12,200 | 338 | ||
General Electric Co. | 421,993 | 12,204 | Cadence Design Systems, Inc.(Æ) | 124,118 | 2,758 | ||
Genpact, Ltd.(Æ) | 10,254 | 254 | China Mobile, Ltd. - ADR | 157,800 | 9,517 | ||
HD Supply Holdings, Inc.(Æ) | 176,619 | 5,261 | Cisco Systems, Inc. | 1,699,321 | 49,025 | ||
Honeywell International, Inc. | 262,759 | 27,138 | Citrix Systems, Inc.(Æ)(Û) | 42,250 | 3,469 | ||
Huntington Ingalls Industries, Inc. | 22,830 | 2,738 | Cognizant Technology Solutions Corp. Class | ||||
JB Hunt Transport Services, Inc. | 98,775 | 7,543 | A(Æ) | 3,975 | 271 | ||
JetBlue Airways Corp.(Æ) | 85,830 | 2,132 | Computer Sciences Corp. | 8,213 | 547 | ||
Lincoln Electric Holdings, Inc. | 47,703 | 2,853 | Corning, Inc. | 50,760 | 944 | ||
Lockheed Martin Corp. | 49,246 | 10,826 | Cree, Inc.(Æ) | 10,532 | 265 | ||
DST Systems, Inc. | 30,274 | 3,698 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) or | Value | Amount ($) or | Value | ||||||
Shares | $ | Shares | $ | ||||||
Electronic Arts, Inc.(Æ)(Û) | 47,170 | 3,400 | CMS Energy Corp. | 4,825 | 174 | ||||
EMC Corp. | 42,806 | 1,122 | Consolidated Edison, Inc. | 34,006 | 2,236 | ||||
F5 Networks, Inc.(Æ) | 48,137 | 5,305 | Dominion Resources, Inc. | 22,449 | 1,604 | ||||
Facebook, Inc. Class A(Æ) | 419,034 | 42,729 | DTE Energy Co. | 57,962 | 4,729 | ||||
Gartner, Inc.(Æ) | 27,817 | 2,522 | Duke Energy Corp. | 92,277 | 6,595 | ||||
Groupon, Inc. Class A(Æ) | 185,630 | 689 | Edison International | 5,767 | 349 | ||||
HP Inc.(Æ) | 286,835 | 7,733 | Entergy Corp. | 355,952 | 24,262 | ||||
IAC/InterActiveCorp | 39,212 | 2,628 | Eversource Energy | 6,482 | 330 | ||||
Imperva, Inc.(Æ) | 64,110 | 4,527 | Exelon Corp. | 65,020 | 1,815 | ||||
Ingram Micro, Inc. Class A | 10,593 | 315 | NextEra Energy, Inc. | 205,440 | 21,091 | ||||
Intel Corp. | 1,358,539 | 46,000 | NiSource, Inc. | 54,366 | 1,042 | ||||
International Business Machines Corp. | 106,667 | 14,942 | NRG Energy, Inc. | 53,469 | 689 | ||||
Intuit, Inc. | 37,207 | 3,625 | ONE Gas, Inc. | 69,456 | 3,392 | ||||
IPG Photonics Corp.(Æ) | 2,646 | 219 | Pepco Holdings, Inc. | 25,194 | 671 | ||||
Jabil Circuit, Inc. | 153,382 | 3,525 | PG&E Corp. | 15,061 | 804 | ||||
Juniper Networks, Inc. | 82,910 | 2,603 | Pinnacle West Capital Corp. | 3,226 | 205 | ||||
King Digital Entertainment PLC | 13,921 | 208 | PPL Corp. | 114,345 | 3,933 | ||||
Lam Research Corp. | 132,043 | 10,113 | Public Service Enterprise Group, Inc. | 10,328 | 426 | ||||
Linear Technology Corp. | 5,392 | 239 | SCANA Corp. | 3,066 | 182 | ||||
Marvell Technology Group, Ltd. | 27,832 | 228 | Sempra Energy | 72,900 | 7,466 | ||||
Micron Technology, Inc.(Æ)(Û) | 743,129 | 12,306 | Southern Co. (The) | 128,940 | 5,815 | ||||
Microsoft Corp. | 1,205,357 | 63,450 | Sprint Corp.(Æ) | 35,252 | 167 | ||||
NCR Corp.(Æ) | 10,693 | 284 | Talen Energy Corp.(Æ) | 14,282 | 124 | ||||
NetApp, Inc. | 106,975 | 3,637 | TECO Energy, Inc. | 5,095 | 138 | ||||
NXP Semiconductors NV(Æ) | 182,494 | 14,298 | Telephone & Data Systems, Inc. | 111,244 | 3,186 | ||||
ON Semiconductor Corp.(Æ) | 120,760 | 1,328 | T-Mobile US, Inc.(Æ) | 4,383 | 166 | ||||
Oracle Corp. | 353,801 | 13,742 | Verizon Communications, Inc.(Û) | 1,246,184 | 58,421 | ||||
Palo Alto Networks, Inc.(Æ) | 61,380 | 9,882 | WEC Energy Group, Inc. | 7,121 | 367 | ||||
QUALCOMM, Inc. | 21,739 | 1,292 | Xcel Energy, Inc. | 135,764 | 4,837 | ||||
Rackspace Hosting, Inc.(Æ) | 6,155 | 159 | 214,065 | ||||||
Salesforce.com, Inc.(Æ) | 123,299 | 9,582 | |||||||
SanDisk Corp. | 8,204 | 632 | Total Common Stocks | ||||||
ServiceNow, Inc.(Æ) | 69,614 | 5,684 | (cost $3,462,775) | 3,870,617 | |||||
SolarWinds, Inc.(Æ) | 4,769 | 277 | |||||||
Splunk, Inc.(Æ) | 61,758 | 3,468 | Short-Term Investments - 3.9% | ||||||
Symantec Corp. | 411,006 | 8,467 | Russell U.S. Cash Management Fund | 149,148,812(8) | 149,149 | ||||
Synopsys, Inc.(Æ) | 165,878 | 8,291 | United States Treasury Bills | ||||||
Tableau Software, Inc. Class A(Æ) | 88,325 | 7,416 | 0.018% due 02/04/16 (§) | 5,000 | 4,999 | ||||
Take-Two Interactive Software, Inc.(Æ) | 95,539 | 3,172 | |||||||
Tech Data Corp.(Æ) | 13,820 | 1,006 | Zero coupon due 04/07/16 (§) | 3,500 | 3,497 | ||||
Teradata Corp.(Æ) | 6,234 | 175 | Total Short-Term Investments | ||||||
Teradyne, Inc. | 14,819 | 289 | (cost $157,645) | 157,645 | |||||
Texas Instruments, Inc. | 5,982 | 339 | |||||||
VeriSign, Inc.(Æ)(Û) | 42,961 | 3,463 | Total Investments 100.7% | ||||||
VMware, Inc. Class A(Æ) | 29,206 | 1,757 | (identified cost $3,620,420) | 4,028,262 | |||||
Western Digital Corp. | 15,322 | 1,024 | Securities Sold Short - (0.9)% | ||||||
Xilinx, Inc. | 5,303 | 253 | Consumer Discretionary - (0.1)% | ||||||
Yahoo!, Inc.(Æ) | 21,204 | 755 | Amaya, Inc.(Æ) | (57,228 | ) | (1,277 | ) | ||
Zynga, Inc. Class A(Æ) | 299,330 | 709 | Charter Communications, Inc. Class A(Æ) | (5,520 | ) | (1,054 | ) | ||
647,782 | DreamWorks Animation SKG, Inc. Class | ||||||||
A(Æ) | (51,040 | ) | (1,033 | ) | |||||
Utilities - 5.4% | GoPro, Inc. Class A(Æ) | (33,749 | ) | (844 | ) | ||||
AES Corp.(Û) | 292,494 | 3,203 | Mobileye NV(Æ) | (3,000 | ) | (137 | ) | ||
Alliant Energy Corp. | 2,726 | 161 | Tesla Motors, Inc.(Æ) | (4,100 | ) | (848 | ) | ||
Ameren Corp. | 5,380 | 235 | (5,193 | ) | |||||
American Electric Power Co., Inc. | 132,430 | 7,502 | Energy - (0.1)% | ||||||
American Water Works Co., Inc. | 2,789 | 160 | Cheniere Energy, Inc.(Æ) | (24,298 | ) | (1,203 | ) | ||
AT&T, Inc. | 1,157,937 | 38,802 | Enbridge, Inc. | (20,220 | ) | (863 | ) | ||
Canadian Natural Resources, Ltd. | 367,600 | 8,536 | Golar LNG, Ltd. | (26,470 | ) | (768 | ) | ||
CenturyLink, Inc. | 8,878 | 250 | Kinder Morgan, Inc. | (40,134 | ) | (1,098 | ) |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts)
Principal | Fair | |||||
Amount ($) or | Value | |||||
Shares | $ | |||||
SolarCity Corp.(Æ) | (27,324 | ) | (810 | ) | ||
SunPower Corp. Class A(Æ) | (38,578 | ) | (1,036 | ) | ||
(5,778 | ) | |||||
Financial Services - (0.2)% | ||||||
Bank of the Ozarks, Inc. | (24,730 | ) | (1,237 | ) | ||
Kennedy-Wilson Holdings, Inc. | (38,640 | ) | (947 | ) | ||
LendingClub Corp.(Æ) | (74,220 | ) | (1,052 | ) | ||
Mercury General Corp. | (5,850 | ) | (316 | ) | ||
TFS Financial Corp. | (63,070 | ) | (1,108 | ) | ||
United Bankshares, Inc. | (27,120 | ) | (1,073 | ) | ||
Zillow Group, Inc. Class A(Æ) | (15,120 | ) | (466 | ) | ||
(6,199 | ) | |||||
Health Care – (0.0)% | ||||||
Acadia Healthcare Co., Inc.(Æ) | (18,193 | ) | (1,117 | ) | ||
Materials and Processing – (0.0)% | ||||||
Platform Specialty Products Corp.(Æ) | (26,775 | ) | (280 | ) | ||
Producer Durables - (0.1)% | ||||||
Colfax Corp.(Æ) | (19,950 | ) | (538 | ) | ||
Macquarie Infrastructure Corp. | (14,530 | ) | (1,156 | ) | ||
Stericycle, Inc.(Æ) | (8,105 | ) | (984 | ) | ||
XPO Logistics, Inc.(Æ) | (44,315 | ) | (1,230 | ) | ||
(3,908 | ) | |||||
Technology - (0.3)% | ||||||
Ambarella, Inc.(Æ) | (5,980 | ) | (296 | ) | ||
Arista Networks, Inc.(Æ) | (16,739 | ) | (1,080 | ) | ||
Cavium, Inc.(Æ) | (8,840 | ) | (627 | ) | ||
Cypress Semiconductor Corp.(Æ) | (104,490 | ) | (1,101 | ) | ||
FireEye, Inc.(Æ) | (24,026 | ) | (628 | ) | ||
GrubHub, Inc.(Æ) | (26,745 | ) | (641 | ) | ||
LinkedIn Corp. Class A(Æ) | (5,400 | ) | (1,301 | ) | ||
NetSuite, Inc.(Æ) | (12,972 | ) | (1,103 | ) | ||
Palo Alto Networks, Inc.(Æ) | (6,100 | ) | (982 | ) | ||
Stratasys, Ltd.(Æ) | (35,140 | ) | (896 | ) | ||
SunEdison, Inc.(Æ) | (151,311 | ) | (1,105 | ) | ||
Twitter, Inc.(Æ) | (39,800 | ) | (1,133 | ) | ||
(10,893 | ) | |||||
Utilities - (0.1)% | ||||||
Frontier Communications Corp. | (199,798 | ) | (1,027 | ) | ||
Pembina Pipeline Corp. | (44,779 | ) | (1,125 | ) | ||
Zayo Group Holdings, Inc.(Æ) | (40,651 | ) | (1,077 | ) | ||
(3,229 | ) | |||||
Total Securities Sold Short | ||||||
(proceeds $42,278) | (36,597 | ) | ||||
Other Assets and Liabilities, Net | ||||||
- 0.2% | 6,384 | |||||
Net Assets - 100.0% | 3,998,049 |
See accompanying notes which are an integral part of the financial statements.
84 Russell U.S. Strategic Equity Fund
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Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||||
Unrealized | ||||||||||||||
Appreciation | ||||||||||||||
Number of | Notional | Expiration | (Depreciation) | |||||||||||
Contracts | Amount | Date | $ | |||||||||||
Long Positions | ||||||||||||||
S&P 500 E-Mini Index Futures | 1,066 | USD | 110,528 | 12/15 | 5,908 | |||||||||
S&P E-Mini Energy Select Sector Index Futures | 245 | USD | 16,633 | 12/15 | 1,023 | |||||||||
S&P Financial Index Futures | 527 | USD | 31,574 | 12/15 | 1,071 | |||||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 8,002 | |||||||||||||
Presentation of Portfolio Holdings | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fair Value | ||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||||
Common Stocks | ||||||||||||||
Consumer Discretionary | $ | 604,491 | $ | — | $ | — | $ | 604,491 | 15.1 | |||||
Consumer Staples | 251,382 | — | — | 251,382 | 6.3 | |||||||||
Energy | 255,749 | — | — | 255,749 | 6.4 | |||||||||
Financial Services | 753,234 | — | — | 753,234 | 18.8 | |||||||||
Health Care | 592,684 | — | — | 592,684 | 14.8 | |||||||||
Materials and Processing | 115,803 | — | — | 115,803 | 2.9 | |||||||||
Producer Durables | 435,427 | — | — | 435,427 | 10.9 | |||||||||
Technology | 647,782 | — | — | 647,782 | 16.2 | |||||||||
Utilities | 214,065 | — | — | 214,065 | 5.4 | |||||||||
Short-Term Investments | — | 157,645 | — | 157,645 | 3.9 | |||||||||
Total Investments | 3,870,617 | 157,645 | — | 4,028,262 | 100.7 | |||||||||
Securities Sold Short** | (36,597 | ) | — | — | (36,597 | ) | (0.9 | ) | ||||||
Other Assets and Liabilities, Net | 0.2 | |||||||||||||
100.0 | ||||||||||||||
Other Financial Instruments | ||||||||||||||
Futures Contracts | 8,002 | — | — | 8,002 | 0.2 | |||||||||
Total Other Financial Instruments* | $ | 8,002 | $ | — | $ | — | $ | 8,002 |
* Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
** Refer to Schedule of Investments for detailed sector breakout.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
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Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Assets and Liabilities - Assets | |||
Variation margin on futures contracts* | $ | 8,002 | |
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Operations - Net realized gain (loss) | |||
Futures contracts | $ | (3,483 | ) |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||
Futures contracts | $ | 5,000 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Assets | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||||
Futures Contracts | Variation margin on futures contracts | $ | 142 | $ | — | $ | 142 | ||||||
Total Financial and Derivative Assets | 142 | — | 142 | ||||||||||
Financial and Derivative Assets not subject to a netting agreement | (142) | — | (142 | ) | |||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | — | $ | — | $ | — | |||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Liabilities | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||||||
Futures Contracts | Variation margin on futures contracts | $ | 937 | $ | — | $ | 937 | ||||||
Short Sales | Securities sold short, at market value | 36,597 | — | 36,597 | |||||||||
Total Financial and Derivative Liabilities | 37,534 | — | 37,534 | ||||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (937) | — | (937 | ) | |||||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 36,597 | $ | — | $ | 36,597 | |||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Liabilities | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||||
JPMorgan Chase | $ | 36,597 | $ | — | $ | 36,597 | $ | — | |||||
Total | $ | 36,597 | $ | — | $ | 36,597 | $ | — |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
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Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 3,620,420 |
Investments, at fair value(>) | 4,028,262 | |
Receivables: | ||
Dividends and interest | 4,283 | |
Dividends from affiliated Russell funds | 15 | |
Investments sold | 66,037 | |
Fund shares sold | 5,296 | |
Variation margin on futures contracts | 142 | |
Total assets | 4,104,035 | |
Liabilities | ||
Payables: | ||
Due to custodian | 2,664 | |
Investments purchased | 59,188 | |
Fund shares redeemed | 3,847 | |
Accrued fees to affiliates | 2,440 | |
Other accrued expenses | 313 | |
Variation margin on futures contracts | 937 | |
Securities sold short, at fair value(‡) | 36,597 | |
Total liabilities | 105,986 | |
Net Assets | $ | 3,998,049 |
See accompanying notes which are an integral part of the financial statements.
88 Russell U.S. Strategic Equity Fund
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Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | ||
Net Assets Consist of: | ||
Undistributed (overdistributed) net investment income | $ | 1,959 |
Accumulated net realized gain (loss) | 153,964 | |
Unrealized appreciation (depreciation) on: | ||
Investments | 407,842 | |
Futures contracts | 8,002 | |
Securities sold short | 5,681 | |
Shares of beneficial interest | 3,171 | |
Additional paid-in capital | 3,417,430 | |
Net Assets | $ | 3,998,049 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class A(#) | $ | 12.59 |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 13.36 |
Class A — Net assets | $ | 6,699,861 |
Class A — Shares outstanding ($.01 par value) | 532,273 | |
Net asset value per share: Class C(#) | $ | 12.56 |
Class C — Net assets | $ | 22,287,658 |
Class C — Shares outstanding ($.01 par value) | 1,775,070 | |
Net asset value per share: Class E(#) | $ | 12.61 |
Class E — Net assets | $ | 104,763,474 |
Class E — Shares outstanding ($.01 par value) | 8,310,102 | |
Net asset value per share: Class S(#) | $ | 12.61 |
Class S — Net assets | $ 3,864,298,419 | |
Class S — Shares outstanding ($.01 par value) | 306,477,939 | |
Amounts in thousands | ||
(‡) Proceeds on securities sold short | $ | 42,278 |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 149,149 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
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Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 72,532 | |
Dividends from affiliated Russell funds | 164 | ||
Interest | 3 | ||
Total investment income | 72,699 | ||
Expenses | |||
Advisory fees | 29,744 | ||
Administrative fees | 1,889 | ||
Custodian fees | 542 | ||
Distribution fees - Class A | 16 | ||
Distribution fees - Class C | 157 | ||
Transfer agent fees - Class A | 12 | ||
Transfer agent fees - Class C | 42 | ||
Transfer agent fees - Class E | 210 | ||
Transfer agent fees - Class S | 7,668 | ||
Professional fees | 108 | ||
Registration fees | 169 | ||
Shareholder servicing fees - Class C | 52 | ||
Shareholder servicing fees - Class E | 262 | ||
Trustees’ fees | 97 | ||
Printing fees | 265 | ||
Dividends from securities sold short | 421 | ||
Interest expense paid on securities sold short | 909 | ||
Miscellaneous | 121 | ||
Expenses before reductions | 42,684 | ||
Expense reductions | (10,330 | ) | |
Net expenses | 32,354 | ||
Net investment income (loss) | 40,345 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 174,654 | ||
Futures contracts | (3,483 | ) | |
Securities sold short | 5,445 | ||
Foreign currency-related transactions | (1 | ) | |
Net realized gain (loss) | 176,615 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (107,826 | ) | |
Futures contracts | 5,000 | ||
Securities sold short | 5,052 | ||
Net change in unrealized appreciation (depreciation) | (97,774 | ) | |
Net realized and unrealized gain (loss) | 78,841 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 119,186 |
See accompanying notes which are an integral part of the financial statements.
90 Russell U.S. Strategic Equity Fund
Russell Investment Company
Russell U.S. Strategic Equity Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 40,345 | $ | 37,803 | ||
Net realized gain (loss) | 176,615 | 321,203 | ||||
Net change in unrealized appreciation (depreciation) | (97,774 | ) | 112,602 | |||
Net increase (decrease) in net assets from operations | 119,186 | 471,608 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (50 | ) | (38 | ) | ||
Class C | (8 | ) | (30 | ) | ||
Class E | (802 | ) | (855 | ) | ||
Class S | (38,937 | ) | (36,992 | ) | ||
From net realized gain | ||||||
Class A | (466 | ) | (255 | ) | ||
Class C | (1,512 | ) | (786 | ) | ||
Class E | (8,563 | ) | (6,859 | ) | ||
Class S | (312,099 | ) | (224,840 | ) | ||
Net decrease in net assets from distributions | (362,437 | ) | (270,655 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 556,021 | 404,716 | ||||
Total Net Increase (Decrease) in Net Assets | 312,770 | 605,669 | ||||
Net Assets | ||||||
Beginning of period | 3,685,279 | 3,079,610 | ||||
End of period | $ | 3,998,049 | $ | 3,685,279 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 1,959 | $ | 1,199 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Strategic Equity Fund 91
Russell Investment Company
Russell U.S. Strategic Equity Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 220 | $ | 2,835 | 181 | $ | 2,297 | ||||||
Proceeds from reinvestment of distributions | 41 | 515 | 24 | 291 | ||||||||
Payments for shares redeemed | (88 | ) | (1,099 | ) | (107 | ) | (1,365 | ) | ||||
Net increase (decrease) | 173 | 2,251 | 98 | 1,223 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 649 | 8,135 | 563 | 7,081 | ||||||||
Proceeds from reinvestment of distributions | 121 | 1,519 | 67 | 815 | ||||||||
Payments for shares redeemed | (248 | ) | (3,128 | ) | (159 | ) | (2,023 | ) | ||||
Net increase (decrease) | 522 | 6,526 | 471 | 5,873 | ||||||||
Class E | ||||||||||||
Proceeds from shares sold | 1,552 | 19,739 | 1,343 | 16,957 | ||||||||
Proceeds from reinvestment of distributions | 715 | 9,028 | 602 | 7,419 | ||||||||
Payments for shares redeemed | (1,220 | ) | (15,428 | ) | (1,811 | ) | (23,446 | ) | ||||
Net increase (decrease) | 1,047 | 13,339 | 134 | 930 | ||||||||
Class S | ||||||||||||
Proceeds from shares sold | 89,487 | 1,147,306 | 68,530 | 872,109 | ||||||||
Proceeds from reinvestment of distributions | 27,685 | 349,336 | 21,116 | 260,569 | ||||||||
Payments for shares redeemed | (75,973 | ) | (962,737 | ) | (57,926 | ) | (735,988 | ) | ||||
Net increase (decrease) | 41,199 | 533,905 | 31,720 | 396,690 | ||||||||
Total increase (decrease) | 42,941 | $ | 556,021 | 32,423 | $ | 404,716 |
See accompanying notes which are an integral part of the financial statements.
92 Russell U.S. Strategic Equity Fund
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Russell Investment Company
Russell U.S. Strategic Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | ||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | ||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||
Class A | |||||||||||||||
October 31, 2015 | 13.42 | .10 | .35 | .45 | (.10 | ) | (1.18 | ) | |||||||
October 31, 2014 | 12.73 | .11 | 1.66 | 1.77 | (.12 | ) | (.96 | ) | |||||||
October 31, 2013 | 10.13 | .08 | 2.65 | 2.73 | (.10 | ) | (.03 | ) | |||||||
October 31, 2012(2) | 10.00 | .01 | .13 | .14 | (.01 | ) | — | ||||||||
Class C | |||||||||||||||
October 31, 2015 | 13.39 | —(f) | .36 | .36 | (.01 | ) | (1.18 | ) | |||||||
October 31, 2014 | 12.71 | .02 | 1.65 | 1.67 | (.03 | ) | (.96 | ) | |||||||
October 31, 2013 | 10.12 | —(f) | 2.65 | 2.65 | (.03 | ) | (.03 | ) | |||||||
October 31, 2012(2) | 10.00 | —(f) | .13 | .13 | (.01 | ) | — | ||||||||
Class E | |||||||||||||||
October 31, 2015 | 13.44 | .10 | .35 | .45 | (.10 | ) | (1.18 | ) | |||||||
October 31, 2014 | 12.74 | .11 | 1.66 | 1.77 | (.11 | ) | (.96 | ) | |||||||
October 31, 2013 | 10.13 | .10 | 2.63 | 2.73 | (.09 | ) | (.03 | ) | |||||||
October 31, 2012(2) | 10.00 | .01 | .14 | .15 | (.02 | ) | — | ||||||||
Class S | |||||||||||||||
October 31, 2015 | 13.44 | .13 | .35 | .48 | (.13 | ) | (1.18 | ) | |||||||
October 31, 2014 | 12.74 | .14 | 1.67 | 1.81 | (.15 | ) | (.96 | ) | |||||||
October 31, 2013 | 10.13 | .13 | 2.63 | 2.76 | (.12 | ) | (.03 | ) | |||||||
October 31, 2012(2) | 10.00 | .02 | .13 | .15 | (.02 | ) | — | ||||||||
See accompanying notes which are an integral part of the financial statements.
94 Russell U.S. Strategic Equity Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(b)(c) | (000 | ) | Gross(e) | Net(d)(e)(g) | Net Assets(d)(e) | Turnover Rate(b) | |||||||||
(1.28 | ) | 12.59 | 3.42 | 6,700 | 1.32 | 1.05 | .78 | 117 | |||||||||
(1.08 | ) | 13.42 | 14.72 | 4,826 | 1.32 | 1.07 | .86 | 85 | |||||||||
(.13 | ) | 12.73 | 27.15 | 3,327 | 1.31 | 1.13 | .73 | 125 | |||||||||
(.01 | ) | 10.13 | 1.44 | 633 | 1.36 | 1.12 | .57 | 15 | |||||||||
(1.19 | ) | 12.56 | 2.66 | 22,288 | 2.07 | 1.80 | .03 | 117 | |||||||||
(.99 | ) | 13.39 | 13.86 | 16,787 | 2.07 | 1.82 | .12 | 85 | |||||||||
(.06 | ) | 12.71 | 26.27 | 9,948 | 2.07 | 1.88 | .03 | 125 | |||||||||
(.01 | ) | 10.12 | 1.28 | 3,479 | 2.12 | 1.87 | (.19 | ) | 15 | ||||||||
(1.28 | ) | 12.61 | 3.40 | 104,763 | 1.31 | 1.05 | .78 | 117 | |||||||||
(1.07 | ) | 13.44 | 14.76 | 97,618 | 1.32 | 1.07 | .90 | 85 | |||||||||
(.12 | ) | 12.74 | 27.19 | 90,808 | 1.31 | 1.13 | .86 | 125 | |||||||||
(.02 | ) | 10.13 | 1.46 | 69,066 | 1.37 | 1.12 | .41 | 15 | |||||||||
(1.31 | ) | 12.61 | 3.66 | 3,864,298 | 1.06 | .80 | 1.03 | 117 | |||||||||
(1.11 | ) | 13.44 | 15.05 | 3,566,048 | 1.07 | .82 | 1.13 | 85 | |||||||||
(.15 | ) | 12.74 | 27.51 | 2,975,527 | 1.06 | .88 | 1.10 | 125 | |||||||||
(.02 | ) | 10.13 | 1.46 | 2,072,403 | 1.11 | .87 | .96 | 15 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Strategic Equity Fund 95
Russell Investment Company
Russell U.S. Large Cap Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell U.S. Large Cap Equity Fund - Class A‡ | Russell U.S. Large Cap Equity Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.52 | )% | 1 Year | 4.70 | % | ||
Inception* | 11.80 | %§ | Inception* | 13.87 | %§ | ||
Russell U.S. Large Cap Equity Fund - Class C | S&P 500® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 3.61 | % | 1 Year | 5.20 | % | ||
Inception* | 12.73 | %§ | Inception* | 14.81 | %§ |
96 Russell U.S. Large Cap Equity Fund
Russell Investment Company
Russell U.S. Large Cap Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell U.S. Large Cap Equity Fund (the “Fund”) employs | consumer discretionary sector and this was beneficial as the U.S. |
a multi-manager approach whereby portions of the Fund are | economy stayed on track and consumer spending was sufficient |
allocated to different money manager strategies. Fund assets not | to keep many consumer discretionary stocks performing well. |
allocated to money managers are managed by Russell Investment | However, an underweight to the stocks with the most expensive |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | price-to-book ratios detracted as these stocks outperformed |
may change the allocation of the Fund’s assets among money | during the period and an overweight to the financial services |
managers at any time. An exemptive order from the Securities | sector also detracted. |
and Exchange Commission (“SEC”) permits RIMCo to engage | |
or terminate a money manager at any time, subject to approval | How did the investment strategies and techniques employed |
by the Fund’s Board, without a shareholder vote. Pursuant to the | by the Fund and its money managers affect its benchmark- |
terms of the exemptive order, the Fund is required to notify its | relative performance? |
shareholders within 90 days of when a money manager begins | Stock selection effects were favorable within the producer |
providing services. As of October 31, 2015, the Fund had five | durables sector (an overweight to Delta Air Lines, Inc. and |
money managers. | Boeing Company). However, stock selection detracted within |
the consumer discretionary sector (an overweight to Viacom, Inc. | |
What is the Fund’s investment objective? | and Whirlpool Corporation). Factor exposures were mixed, as an |
The Fund seeks to provide long term capital growth. | underweight to the largest capitalization tier within the S&P 500® |
How did the Fund perform relative to its benchmark for the | Index held back relative returns, while an overweight to stocks |
fiscal year ended October 31, 2015? | with above average betas and below average dividend yield was |
beneficial. Overweights to consumer discretionary and health care | |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | were beneficial but an overweight to financial services detracted. |
Class C and Class S Shares gained 4.47%, 3.61% and 4.70%, | An underweight to the consumer staples sector detracted while |
respectively. This is compared to the Fund’s benchmark, the S&P | underweights to the energy and utilities sectors contributed |
500® Index, which gained 5.20% during the same period. The | positively to benchmark-relative performance. |
Fund’s performance includes operating expenses, whereas index | |
returns are unmanaged and do not include expenses of any kind. | The Fund employs discretionary money managers. The Fund’s |
discretionary money managers select the individual portfolio | |
For the fiscal year ended October 31, 2015, the Morningstar® | securities for the assets assigned to them. Fund assets not |
Large Blend, a group of funds that Morningstar considers to have | allocated to discretionary money managers include the Fund’s |
investment strategies similar to those of the Fund, gained 2.79%. | liquidity reserves and assets which may be managed directly |
This result serves as a peer comparison and is expressed net of | by RIMCo to effect the Fund’s investment strategies and/or to |
operating expenses. | actively manage the Fund’s overall exposures by investing in |
RIMCo may assign a money manager a specific style or | securities or other instruments that RIMCo believes will achieve |
capitalization benchmark other than the Fund’s index. However, | the desired risk/return profile for the Fund. |
the Fund’s primary index remains the benchmark for the Fund | Columbus Circle Investors (“Columbus Circle”) was the worst |
and is representative of the aggregate of each money manager’s | performing manager for the period and underperformed the |
benchmark index. | Russell 1000® Growth Index. Stock selection within the health |
How did the market conditions described in the Market | care sector (an overweight to McKesson Corporation and to |
Summary report affect the Fund’s performance? | Gilead Sciences) and within the materials & processing sector |
During the fiscal year, the U.S. large capitalization equity market | (an overweight to United States Steel Corporation) held back |
produced positive returns. Relevant Fund exposures included a | benchmark-relative performance. Factor exposures were mixed |
tilt toward higher beta stocks (beta is a measure of a portfolio’s | and specifically a tilt toward high earnings variability detracted, |
volatility and its sensitivity to the direction of the market), and | although a tilt toward stocks with high forecasted growth was |
this was beneficial as the market rose. As the year progressed, | beneficial. An overweight to the consumer discretionary sector |
positive U.S. gross domestic product growth led the market to | and an underweight to the energy sector contributed positively to |
believe that interest rates would rise near the end of 2015 or in | benchmark-relative returns. |
early 2016. As a result, an underweight to high dividend yield | Sustainable Growth Advisers, LP (“Sustainable”) was the best |
stocks was beneficial as these stocks became less attractive to | performing manager for the period and outperformed the Russell |
investors anticipating improved opportunity for income from the | 1000® Growth Index. Stock selection was the primary source |
bond market. Sector allocations included an overweight to the | of positive benchmark-relative return. Selection within the |
Russell U.S. Large Cap Equity Fund 97
Russell Investment Company
Russell U.S. Large Cap Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
consumer discretionary sector (an overweight to Amazon, Inc., | Money Managers as of October 31, | |
Starbucks Corporation, and Lowes Companies) was beneficial. | 2015 | Styles |
Sustainable’s tilt toward stocks with high forecasted growth and | ||
Ceredex Value Advisors LLC | Value | |
away from stocks with high earnings variability was rewarded. An | Columbus Circle Investors | Growth |
overweight to the energy sector held back further outperformance | Institutional Capital Management LLC | Value |
as energy underperformed during the fiscal year. | Jacobs Levy Equity Management | Market Oriented |
Sustainable Growth Advisers, LP | Growth | |
During the period, RIMCo used index futures contracts to equitize | The views expressed in this report reflect those of the portfolio | |
the Fund’s cash. The decision to equitize the Fund’s cash was | managers only through the end of the period covered by | |
beneficial to Fund performance for the fiscal year as the market | the report. These views do not necessarily represent the | |
had a positive absolute return. | views of RIMCo, or any other person in RIMCo or any other | |
Describe any changes to the Fund’s structure or the money | affiliated organization. These views are subject to change | |
manager line-up. | at any time based upon market conditions or other events, | |
There were no changes to the Fund’s structure or money manager | and RIMCo disclaims any responsibility to update the views | |
line up during the fiscal year. | contained herein. These views should not be relied on as | |
investment advice and, because investment decisions for | ||
a Russell Investment Company (“RIC”) Fund are based on | ||
numerous factors, should not be relied on as an indication | ||
of investment decisions of any RIC Fund. |
* Assumes initial investment on February 6, 2012.
** The Standard & Poor’s 500® Index is composed of 500 common stocks which are chosen by Standard & Poor’s Corporation to best capture the price performance
of a large cross-section of the U.S. publicly traded stock market. The index is structured to approximate the general distribution of industries in the U.S.
economy.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
98 Russell U.S. Large Cap Equity Fund
Russell Investment Company
Russell U.S. Large Cap Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 1,000.70 | $ | 1,019.56 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 5.65 | $ | 5.70 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.12% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 996.50 | $ | 1,015.78 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 9.41 | $ | 9.50 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.87% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class S | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 1,001.90 | $ | 1,020.82 | |
Expenses Paid During Period* | $ | 4.39 | $ | 4.43 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.87% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell U.S. Large Cap Equity Fund 99
Russell Investment Company
Russell U.S. Large Cap Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Common Stocks - 96.3% | Whole Foods Market, Inc. | 40,125 | 1,202 | ||||
Consumer Discretionary - 14.9% | 18,861 | ||||||
Amazon.com, Inc.(Æ) | 8,930 | 5,590 | |||||
AMC Networks, Inc. Class A(Æ) | 1,000 | 74 | Energy - 7.6% | ||||
AutoZone, Inc.(Æ) | 800 | 628 | Chevron Corp. | 64,210 | 5,836 | ||
Carnival Corp. | 15,700 | 849 | ConocoPhillips | 55,226 | 2,946 | ||
CBS Corp. Class B | 4,235 | 197 | Core Laboratories NV | 7,936 | 923 | ||
Comcast Corp. Class A(Æ) | 89,890 | 5,628 | EOG Resources, Inc. | 33,921 | 2,912 | ||
Costco Wholesale Corp. | 2,220 | 351 | Exxon Mobil Corp. | 58,901 | 4,874 | ||
Darden Restaurants, Inc. | 5,370 | 332 | Hess Corp. | 41,064 | 2,308 | ||
DISH Network Corp. Class A(Æ) | 1,600 | 101 | HollyFrontier Corp. | 1,600 | 78 | ||
Ford Motor Co. | 48,400 | 717 | Marathon Petroleum Corp. | 10,100 | 523 | ||
General Motors Co. | 25,700 | 897 | Noble Energy, Inc. | 48,696 | 1,745 | ||
Grupo Televisa SAB - ADR | 40,470 | 1,179 | Occidental Petroleum Corp. | 31,680 | 2,361 | ||
Hilton Worldwide Holdings, Inc. | 31,918 | 798 | PBF Energy, Inc. Class A | 1,700 | 58 | ||
Home Depot, Inc. | 500 | 62 | Phillips 66(Æ) | 10,400 | 926 | ||
Johnson Controls, Inc. | 71,510 | 3,231 | Schlumberger, Ltd. | 57,677 | 4,508 | ||
L Brands, Inc.(Æ) | 10,590 | 1,016 | Tesoro Corp. | 1,250 | 134 | ||
Las Vegas Sands Corp. | 46,990 | 2,326 | Valero Energy Corp. | 17,500 | 1,154 | ||
Liberty Media Corp.(Æ) | 35,350 | 1,384 | World Fuel Services Corp. | 1,100 | 49 | ||
Lowe's Cos., Inc. | 24,780 | 1,830 | 31,335 | ||||
Netflix, Inc.(Æ) | 5,936 | 643 | |||||
News Corp. Class A | 20,200 | 311 | Financial Services - 21.4% | ||||
Nike, Inc. Class B | 20,297 | 2,660 | ACE, Ltd. | 15,290 | 1,736 | ||
NVR, Inc.(Æ) | 68 | 111 | Aflac, Inc. | 3,900 | 249 | ||
Omnicom Group, Inc. | 39,530 | 2,962 | Allstate Corp. (The) | 27,440 | 1,698 | ||
O'Reilly Automotive, Inc.(Æ) | 900 | 249 | Ally Financial, Inc.(Æ) | 128,330 | 2,557 | ||
Priceline Group, Inc. (The)(Æ) | 2,145 | 3,119 | American Express Co. | 71,415 | 5,232 | ||
PulteGroup, Inc. | 41,515 | 761 | American Tower Corp.(ö) | 25,125 | 2,568 | ||
Ralph Lauren Corp. Class A | 10,951 | 1,213 | Ameriprise Financial, Inc. | 18,552 | 2,140 | ||
Ross Stores, Inc. | 10,780 | 545 | Aon PLC | 51,524 | 4,808 | ||
Royal Caribbean Cruises, Ltd. | 16,032 | 1,577 | Bank of America Corp. | 4,100 | 69 | ||
Sirius XM Holdings, Inc.(Æ) | 17,800 | 73 | Bank of New York Mellon Corp. (The) | 14,300 | 596 | ||
Starbucks Corp. | 64,172 | 4,015 | Berkshire Hathaway, Inc. Class B(Æ) | 2,220 | 302 | ||
Target Corp. | 23,601 | 1,821 | BlackRock, Inc. Class A | 7,585 | 2,669 | ||
Time Warner, Inc. | 16,500 | 1,243 | Capital One Financial Corp. | 18,323 | 1,446 | ||
TJX Cos., Inc. | 22,910 | 1,677 | CBOE Holdings, Inc. | 1,100 | 74 | ||
Twenty-First Century Fox, Inc. Class A | 4,300 | 132 | Citigroup, Inc. | 94,310 | 5,015 | ||
Ulta Salon Cosmetics & Fragrance, Inc.(Æ) | 8,028 | 1,397 | Citizens Financial Group, Inc. | 31,200 | 758 | ||
Under Armour, Inc. Class A(Æ) | 10,348 | 984 | Comerica, Inc. | 5,300 | 230 | ||
Wal-Mart Stores, Inc. | 38,902 | 2,226 | Crown Castle International Corp. | 37,935 | 3,242 | ||
Walt Disney Co. (The) | 30,905 | 3,515 | Discover Financial Services | 18,400 | 1,034 | ||
Whirlpool Corp. | 20,530 | 3,288 | Equinix, Inc.(ö) | 4,173 | 1,238 | ||
61,712 | FactSet Research Systems, Inc. | 3,110 | 545 | ||||
Fidelity National Information Services, Inc. | 2,600 | 190 | |||||
Consumer Staples - 4.6% | FleetCor Technologies, Inc.(Æ) | 14,170 | 2,053 | ||||
Altria Group, Inc. | 23,400 | 1,415 | Franklin Resources, Inc. | 47,430 | 1,933 | ||
Casey's General Stores, Inc. | 1,530 | 163 | Global Payments, Inc. | 3,300 | 450 | ||
Clorox Co. (The) | 1,120 | 137 | Goldman Sachs Group, Inc. (The) | 12,720 | 2,385 | ||
Coca-Cola Co. (The) | 35,200 | 1,491 | Intercontinental Exchange, Inc. | 10,250 | 2,587 | ||
Colgate-Palmolive Co. | 23,560 | 1,563 | JPMorgan Chase & Co. | 43,752 | 2,811 | ||
Constellation Brands, Inc. Class A | 7,081 | 955 | KeyCorp | 2,100 | 26 | ||
Hershey Co. (The) | 14,228 | 1,262 | Lincoln National Corp. | 3,200 | 171 | ||
Kroger Co. (The) | 30,600 | 1,157 | Marsh & McLennan Cos., Inc. | 3,900 | 217 | ||
Mondelez International, Inc. Class A | 52,174 | 2,409 | MasterCard, Inc. Class A | 33,734 | 3,340 | ||
PepsiCo, Inc. | 18,000 | 1,839 | McGraw Hill Financial, Inc. | 11,736 | 1,087 | ||
Philip Morris International, Inc. | 500 | 44 | MetLife, Inc. | 35,270 | 1,777 | ||
Procter & Gamble Co. (The) | 55,570 | 4,243 | Moody's Corp. | 3,260 | 313 | ||
Sysco Corp. | 23,785 | 981 | Morgan Stanley | 78,537 | 2,589 | ||
Northern Trust Corp. | 61,329 | 4,316 | |||||
PayPal Holdings, Inc.(Æ) | 14,000 | 504 |
See accompanying notes which are an integral part of the financial statements.
100 Russell U.S. Large Cap Equity Fund
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
PNC Financial Services Group, Inc. (The) | 15,160 | 1,368 | Reliance Steel & Aluminum Co. | 1,900 | 114 | ||
Progressive Corp. (The) | 2,100 | 70 | Sherwin-Williams Co. (The) | 2,840 | 758 | ||
Prudential Financial, Inc. | 11,090 | 915 | WestRock Co. | 22,007 | 1,183 | ||
Signature Bank(Æ) | 1,150 | 171 | 14,823 | ||||
State Street Corp. | 22,990 | 1,586 | |||||
SunTrust Banks, Inc. | 8,400 | 349 | Producer Durables - 9.1% | ||||
Synchrony Financial(Æ) | 20,290 | 624 | Accenture PLC Class A | 11,910 | 1,277 | ||
Travelers Cos., Inc. (The) | 6,490 | 733 | Alaska Air Group, Inc. | 1,100 | 84 | ||
US Bancorp | 93,335 | 3,937 | Automatic Data Processing, Inc. | 31,435 | 2,735 | ||
Visa, Inc. Class A | 74,198 | 5,757 | Boeing Co. (The) | 29,480 | 4,365 | ||
Voya Financial, Inc. | 22,500 | 913 | CH Robinson Worldwide, Inc. | 1,000 | 69 | ||
Wells Fargo & Co. | 126,640 | 6,855 | Cintas Corp. | 2,300 | 214 | ||
88,233 | CSX Corp. | 61,770 | 1,667 | ||||
Delta Air Lines, Inc. | 61,238 | 3,113 | |||||
Health Care - 16.7% | Expeditors International of Washington, Inc. | 1,900 | 95 | ||||
Abbott Laboratories | 10,900 | 488 | FedEx Corp. | 16,685 | 2,604 | ||
AbbVie, Inc. | 13,500 | 804 | General Electric Co. | 222,758 | 6,443 | ||
Agilent Technologies, Inc. | 59,194 | 2,235 | HD Supply Holdings, Inc.(Æ) | 2,600 | 77 | ||
Alexion Pharmaceuticals, Inc.(Æ) | 2,801 | 493 | Honeywell International, Inc. | 35,230 | 3,639 | ||
Allergan PLC(Æ) | 20,018 | 6,175 | Lockheed Martin Corp. | 5,440 | 1,196 | ||
AmerisourceBergen Corp. Class A | 14,184 | 1,369 | ManpowerGroup, Inc. | 600 | 55 | ||
Amgen, Inc. | 20,850 | 3,298 | Northrop Grumman Corp. | 6,660 | 1,250 | ||
Anthem, Inc. | 6,150 | 856 | Paychex, Inc. | 4,100 | 211 | ||
Baxalta, Inc. | 41,303 | 1,423 | Pentair PLC | 41,250 | 2,307 | ||
Biogen, Inc.(Æ) | 1,610 | 468 | Raytheon Co. | 9,870 | 1,159 | ||
Bristol-Myers Squibb Co. | 39,572 | 2,609 | Southwest Airlines Co. | 10,400 | 481 | ||
Cardinal Health, Inc. | 13,700 | 1,126 | Textron, Inc. | 5,900 | 249 | ||
Celgene Corp.(Æ) | 500 | 61 | Union Pacific Corp. | 5,800 | 518 | ||
Cerner Corp.(Æ) | 28,360 | 1,880 | United Continental Holdings, Inc.(Æ) | 20,967 | 1,264 | ||
Charles River Laboratories International, | United Parcel Service, Inc. Class B | 11,975 | 1,234 | ||||
Inc.(Æ) | 1,300 | 85 | Verisk Analytics, Inc. Class A(Æ) | 14,340 | 1,027 | ||
Cigna Corp. | 21,772 | 2,918 | Wabtec Corp. | 1,800 | 149 | ||
CR Bard, Inc. | 2,140 | 399 | Waters Corp.(Æ) | 880 | 112 | ||
DexCom, Inc.(Æ) | 4,212 | 351 | 37,594 | ||||
Edwards Lifesciences Corp.(Æ) | 7,687 | 1,208 | |||||
Eli Lilly & Co. | 24,970 | 2,037 | Technology - 15.6% | ||||
Express Scripts Holding Co.(Æ) | 35,730 | 3,086 | Activision Blizzard, Inc. | 18,900 | 657 | ||
Gilead Sciences, Inc. | 34,846 | 3,768 | Alphabet, Inc. Class A(Æ) | 2,328 | 1,717 | ||
Intuitive Surgical, Inc.(Æ) | 1,157 | 575 | Alphabet, Inc. Class C(Æ) | 7,210 | 5,125 | ||
Johnson & Johnson | 64,677 | 6,535 | Apple, Inc. | 92,002 | 10,993 | ||
Mallinckrodt PLC(Æ) | 21,100 | 1,386 | Applied Materials, Inc. | 65,360 | 1,096 | ||
McKesson Corp. | 24,738 | 4,423 | ARM Holdings PLC - ADR | 38,997 | 1,850 | ||
Medtronic PLC | 51,654 | 3,818 | Arrow Electronics, Inc.(Æ) | 1,720 | 95 | ||
Merck & Co., Inc. | 56,010 | 3,062 | Aspen Technology, Inc.(Æ) | 3,500 | 145 | ||
Novartis AG - ADR | 34,670 | 3,135 | Avago Technologies, Ltd. Class A | 2,846 | 350 | ||
Pfizer, Inc. | 147,312 | 4,982 | Avnet, Inc. | 3,600 | 164 | ||
Regeneron Pharmaceuticals, Inc.(Æ) | 2,304 | 1,284 | Cisco Systems, Inc. | 92,480 | 2,668 | ||
St. Jude Medical, Inc. | 3,300 | 211 | Cognizant Technology Solutions Corp. Class | ||||
Stryker Corp. | 7,790 | 745 | A(Æ) | 7,700 | 524 | ||
UnitedHealth Group, Inc. | 15,200 | 1,790 | EMC Corp. | 59,136 | 1,551 | ||
69,083 | Facebook, Inc. Class A(Æ) | 36,340 | 3,706 | ||||
Gartner, Inc.(Æ) | 2,910 | 264 | |||||
Materials and Processing - 3.6% | Intel Corp. | 108,407 | 3,670 | ||||
Dow Chemical Co. (The) | 29,545 | 1,526 | Juniper Networks, Inc. | 40,095 | 1,258 | ||
Ecolab, Inc. | 15,180 | 1,827 | Lam Research Corp. | 10,017 | 767 | ||
Masco Corp. | 23,300 | 676 | LinkedIn Corp. Class A(Æ) | 2,311 | 557 | ||
Monsanto Co. | 42,320 | 3,945 | Maxim Integrated Products, Inc. | 24,989 | 1,024 | ||
Mosaic Co. (The) | 57,730 | 1,951 | Microsoft Corp. | 97,173 | 5,114 | ||
Nucor Corp. | 1,500 | 63 | NetApp, Inc. | 10,500 | 357 | ||
PPG Industries, Inc. | 26,666 | 2,780 | NXP Semiconductors NV(Æ) | 12,949 | 1,015 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | |||||||
Principal | Fair | ||||||
Amount ($) or | Value | ||||||
Shares | $ | ||||||
Oracle Corp. | 189,671 | 7,366 | |||||
Palo Alto Networks, Inc.(Æ) | 3,824 | 616 | |||||
Red Hat, Inc.(Æ) | 19,265 | 1,524 | |||||
Salesforce.com, Inc.(Æ) | 11,590 | 901 | |||||
SAP SE- ADR | 18,215 | 1,434 | |||||
ServiceNow, Inc.(Æ) | 10,057 | 821 | |||||
Splunk, Inc.(Æ) | 8,915 | 501 | |||||
Symantec Corp. | 36,300 | 748 | |||||
Synopsys, Inc.(Æ) | 15,990 | 799 | |||||
Tableau Software, Inc. Class A(Æ) | 6,285 | 528 | |||||
Texas Instruments, Inc. | 32,652 | 1,852 | |||||
VMware, Inc. Class A(Æ) | 3,800 | 229 | |||||
Vodafone Group PLC - ADR | 71,343 | 2,352 | |||||
Western Digital Corp. | 3,600 | 241 | |||||
Zynga, Inc. Class A(Æ) | 28,500 | 68 | |||||
64,647 | |||||||
Utilities - 2.8% | |||||||
American Electric Power Co., Inc. | 7,800 | 442 | |||||
AT&T, Inc. | 62,710 | 2,101 | |||||
Dominion Resources, Inc. | 600 | 43 | |||||
Duke Energy Corp. | 3,300 | 236 | |||||
Exelon Corp. | 29,754 | 831 | |||||
NextEra Energy, Inc. | 28,549 | 2,930 | |||||
PG&E Corp. | 3,700 | 198 | |||||
Sempra Energy | 4,950 | 507 | |||||
Southern Co. (The) | 3,400 | 153 | |||||
Verizon Communications, Inc. | 85,055 | 3,988 | |||||
11,429 | |||||||
Total Common Stocks | |||||||
(cost $346,166) | 397,717 | ||||||
Short | -Term Investments - 5.0% | ||||||
Russell U.S. Cash Management Fund | 20,690,904 | (8) | 20,691 | ||||
Total Short-Term Investments | |||||||
(cost $20,691) | 20,691 | ||||||
Total Investments 101.3% | |||||||
(identified cost $366,857) | 418,408 | ||||||
Other Assets and Liabilities, Net | |||||||
- | (1.3%) | (5,396 | ) | ||||
Net Assets - 100.0% | 413,012 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Number of | Notional | Expiration | (Depreciation) | |||||||||
Contracts | Amount | Date | $ | |||||||||
Long Positions | ||||||||||||
S&P 500 E-Mini Index Futures | 177 | USD | 18,352 | 12/15 | 927 | |||||||
S&P E-Mini Consumer Staples Select Sector Index Futures | 45 | USD | 2,249 | 12/15 | 102 | |||||||
S&P E-Mini Industrial Index Futures | 42 | USD | 2,273 | 12/15 | 108 | |||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 1,137 | |||||||||||
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Common Stocks | ||||||||||||
Consumer Discretionary | $ | 61,712 | $ | — | $ | — | $ | 61,712 | 14.9 | |||
Consumer Staples | 18,861 | — | — | 18,861 | 4.6 | |||||||
Energy | 31,335 | — | — | 31,335 | 7.6 | |||||||
Financial Services | 88,233 | — | — | 88,233 | 21.4 | |||||||
Health Care | 69,083 | — | — | 69,083 | 16.7 | |||||||
Materials and Processing | 14,823 | — | — | 14,823 | 3.6 | |||||||
Producer Durables | 37,594 | — | — | 37,594 | 9.1 | |||||||
Technology | 64,647 | — | — | 64,647 | 15.6 | |||||||
Utilities | 11,429 | — | — | 11,429 | 2.8 | |||||||
Short-Term Investments | — | 20,691 | — | 20,691 | 5.0 | |||||||
Total Investments | 397,717 | 20,691 | — | 418,408 | 101.3 | |||||||
Other Assets and Liabilities, Net | (1.3 | ) | ||||||||||
100.0 | ||||||||||||
Other Financial Instruments | ||||||||||||
Futures Contracts | 1,137 | — | — | 1,137 | 0.3 | |||||||
Total Other Financial Instruments* | $ | 1,137 | $ | — | $ | — | $ | 1,137 |
* Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
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Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Assets and Liabilities - Assets | |||
Variation margin on futures contracts* | $ | 1,137 | |
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Operations - Net realized gain (loss) | |||
Futures contracts | $ | (324 | ) |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||
Futures contracts | $ | 454 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
104 Russell U.S. Large Cap Equity Fund
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 109 | $ | — $ | 109 | |||
Total Financial and Derivative Liabilities | 109 | — | 109 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (109) | — | (109 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | — | $ | — $ | — |
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
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Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 366,857 |
Investments, at fair value(>) | 418,408 | |
Cash | 13 | |
Cash (restricted)(a) | 1,319 | |
Receivables: | ||
Dividends and interest | 429 | |
Dividends from affiliated Russell funds | 2 | |
Investments sold | 7,189 | |
Fund shares sold | 436 | |
Total assets | 427,796 | |
Liabilities | ||
Payables: | ||
Investments purchased | 5,891 | |
Fund shares redeemed | 8,436 | |
Accrued fees to affiliates | 287 | |
Other accrued expenses | 61 | |
Variation margin on futures contracts | 109 | |
Total liabilities | 14,784 | |
Net Assets | $ | 413,012 |
See accompanying notes which are an integral part of the financial statements.
106 Russell U.S. Large Cap Equity Fund
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Russell U.S. Large Cap Equity Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | ||
Net Assets Consist of: | ||
Undistributed (overdistributed) net investment income | $ | 207 |
Accumulated net realized gain (loss) | 28,522 | |
Unrealized appreciation (depreciation) on: | ||
Investments | 51,551 | |
Futures contracts | 1,137 | |
Shares of beneficial interest | 311 | |
Additional paid-in capital | 331,284 | |
Net Assets | $ | 413,012 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class A(#) | $ | 13.25 |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 14.06 |
Class A — Net assets | $ | 9,232,964 |
Class A — Shares outstanding ($.01 par value) | 697,017 | |
Net asset value per share: Class C(#) | $ | 13.20 |
Class C — Net assets | $ | 1,431,565 |
Class C — Shares outstanding ($.01 par value) | 108,427 | |
Net asset value per share: Class S(#) | $ | 13.28 |
Class S — Net assets | $ | 402,347,048 |
Class S — Shares outstanding ($.01 par value) | 30,298,204 | |
Amounts in thousands | ||
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 20,691 |
(a) Cash Collateral for Futures | $ | 1,319 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
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Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 7,977 | |
Dividends from affiliated Russell funds | 26 | ||
Total investment income | 8,003 | ||
Expenses | |||
Advisory fees | 3,086 | ||
Administrative fees | 210 | ||
Custodian fees | 102 | ||
Distribution fees - Class A | 20 | ||
Distribution fees - Class C | 12 | ||
Transfer agent fees - Class A | 16 | ||
Transfer agent fees - Class C | 3 | ||
Transfer agent fees - Class S | 863 | ||
Professional fees | 51 | ||
Registration fees | 51 | ||
Shareholder servicing fees - Class C | 4 | ||
Trustees’ fees | 11 | ||
Printing fees | 23 | ||
Miscellaneous | 18 | ||
Expenses before reductions | 4,470 | ||
Expense reductions | (599 | ) | |
Net expenses | 3,871 | ||
Net investment income (loss) | 4,132 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 31,364 | ||
Futures contracts | (324 | ) | |
Net realized gain (loss) | 31,040 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (15,828 | ) | |
Futures contracts | 454 | ||
Net change in unrealized appreciation (depreciation) | (15,374 | ) | |
Net realized and unrealized gain (loss) | 15,666 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 19,798 |
See accompanying notes which are an integral part of the financial statements.
108 Russell U.S. Large Cap Equity Fund
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Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 4,132 | $ | 4,685 | ||
Net realized gain (loss) | 31,040 | 38,469 | ||||
Net change in unrealized appreciation (depreciation) | (15,374 | ) | 8,608 | |||
Net increase (decrease) in net assets from operations | 19,798 | 51,762 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (57 | ) | (57 | ) | ||
Class C | (1 | ) | (4 | ) | ||
Class S | (4,041 | ) | (4,623 | ) | ||
From net realized gain | ||||||
Class A | (667 | ) | (313 | ) | ||
Class C | (127 | ) | (69 | ) | ||
Class S | (38,071 | ) | (23,479 | ) | ||
Net decrease in net assets from distributions | (42,964 | ) | (28,545 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 1,606 | 62,467 | ||||
Total Net Increase (Decrease) in Net Assets | (21,560 | ) | 85,684 | |||
Net Assets | ||||||
Beginning of period | 434,572 | 348,888 | ||||
End of period | $ | 413,012 | $ | 434,572 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 207 | $ | 176 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Large Cap Equity Fund 109
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Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 216 | $ | 2,862 | 223 | $ | 2,968 | ||||||
Proceeds from reinvestment of distributions | 55 | 724 | 28 | 370 | ||||||||
Payments for shares redeemed | (86 | ) | (1,155 | ) | (79 | ) | (1,062 | ) | ||||
Net increase (decrease) | 185 | 2,431 | 172 | 2,276 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 56 | 739 | 53 | 701 | ||||||||
Proceeds from reinvestment of distributions | 10 | 128 | 6 | 73 | ||||||||
Payments for shares redeemed | (57 | ) | (743 | ) | (22 | ) | (295 | ) | ||||
Net increase (decrease) | 9 | 124 | 37 | 479 | ||||||||
Class S | ||||||||||||
Proceeds from shares sold | 4,498 | 59,846 | 6,466 | 86,261 | ||||||||
Proceeds from reinvestment of distributions | 3,187 | 42,107 | 2,165 | 28,099 | ||||||||
Payments for shares redeemed | (7,770 | ) | (102,902 | ) | (4,092 | ) | (54,648 | ) | ||||
Net increase (decrease) | (85 | ) | (949 | ) | 4,539 | 59,712 | ||||||
Total increase (decrease) | 109 | $ | 1,606 | 4,748 | $ | 62,467 |
See accompanying notes which are an integral part of the financial statements.
110 Russell U.S. Large Cap Equity Fund
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Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | ||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||||
Class A | |||||||||||||||||
October 31, 2015 | 13.99 | .09 | .52 | .61 | (.09 | ) | (1.26 | ) | |||||||||
October 31, 2014 | 13.27 | .12 | 1.63 | 1.75 | (.13 | ) | (.90 | ) | |||||||||
October 31, 2013 | 10.52 | .06 | 2.85 | 2.91 | (.11 | ) | (.05 | ) | |||||||||
October 31, 2012(1) | 10.00 | .05 | .53 | .58 | (.06 | ) | — | ||||||||||
Class C | |||||||||||||||||
October 31, 2015 | 13.96 | (.01 | ) | .51 | .50 | —(f) | (1.26 | ) | |||||||||
October 31, 2014 | 13.25 | .02 | 1.63 | 1.65 | (.04 | ) | (.90 | ) | |||||||||
October 31, 2013 | 10.51 | —(f) | 2.82 | 2.82 | (.03 | ) | (.05 | ) | |||||||||
October 31, 2012(1) | 10.00 | —(f) | .52 | .52 | (.01 | ) | — | ||||||||||
Class S | |||||||||||||||||
October 31, 2015 | 14.02 | .13 | .51 | .64 | (.12 | ) | (1.26 | ) | |||||||||
October 31, 2014 | 13.29 | .16 | 1.63 | 1.79 | (.16 | ) | (.90 | ) | |||||||||
October 31, 2013 | 10.52 | .13 | 2.82 | 2.95 | (.13 | ) | (.05 | ) | |||||||||
October 31, 2012(1) | 10.00 | .07 | .52 | .59 | (.07 | ) | — | ||||||||||
See accompanying notes which are an integral part of the financial statements.
112 Russell U.S. Large Cap Equity Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(b)(c) | (000 | ) | Gross(e) | Net(d)(e) | Net Assets(d)(e) | Turnover Rate(b) | |||||||||
(1.35 | ) | 13.25 | 4.47 | 9,233 | 1.26 | 1.12 | .69 | 84 | |||||||||
(1.03 | ) | 13.99 | 13.85 | 7,166 | 1.26 | 1.12 | .93 | 81 | |||||||||
(.16 | ) | 13.27 | 27.93 | 4,509 | 1.28 | 1.12 | .48 | 84 | |||||||||
(.06 | ) | 10.52 | 5.76 | 1,037 | 1.28 | 1.11 | .64 | 55 | |||||||||
(1.26 | ) | 13.20 | 3.61 | 1,432 | 2.01 | 1.87 | (.06 | ) | 84 | ||||||||
(.94 | ) | 13.96 | 13.06 | 1,394 | 2.01 | 1.87 | .18 | 81 | |||||||||
(.08 | ) | 13.25 | 26.99 | 838 | 2.03 | 1.87 | .02 | 84 | |||||||||
(.01 | ) | 10.51 | 5.17 | 367 | 2.11 | 1.86 | (.01 | ) | 55 | ||||||||
(1.38 | ) | 13.28 | 4.70 | 402,347 | 1.01 | .87 | .95 | 84 | |||||||||
(1.06 | ) | 14.02 | 14.17 | 426,012 | 1.01 | .87 | 1.20 | 81 | |||||||||
(.18 | ) | 13.29 | 28.35 | 343,541 | 1.03 | .87 | 1.06 | 84 | |||||||||
(.07 | ) | 10.52 | 5.85 | 240,454 | 1.11 | .86 | .96 | 55 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Large Cap Equity Fund 113
Russell Investment Company
Russell U.S. Mid Cap Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell U.S. Mid Cap Equity Fund - Class A‡ | Russell U.S. Mid Cap Equity Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (3.59 | )% | 1 Year | 2.53 | % | ||
Inception* | 10.29 | %§ | Inception* | 12.34 | %§ | ||
Russell U.S. Mid Cap Equity Fund - Class C | Russell Midcap® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 1.52 | % | 1 Year | 2.77 | % | ||
Inception* | 11.23 | %§ | Inception* | 14.10 | %§ |
114 Russell U.S. Mid Cap Equity Fund
Russell Investment Company
Russell U.S. Mid Cap Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell U.S. Mid Cap Equity Fund (the “Fund”) employs | higher returns-on-equity. Within the U.S. mid cap market, larger |
a multi-manager approach whereby portions of the Fund are | cap growth stocks significantly outperformed smaller cap value |
allocated to different money manager strategies. Fund assets not | stocks which negatively impacted Fund performance. However, |
allocated to money managers are managed by Russell Investment | the Fund’s quality positioning was a positive contributor as |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | companies with high financial leverage lagged. |
may change the allocation of the Fund’s assets among money | From a sector standpoint, the expectation for a continued domestic |
managers at any time. An exemptive order from the Securities | economic recovery led to the Fund’s overweight in several sectors |
and Exchange Commission (“SEC”) permits RIMCo to engage | such as technology, financial services and energy as well as |
or terminate a money manager at any time, subject to approval | an avoidance of sectors that are traditionally considered to be |
by the Fund’s Board, without a shareholder vote. Pursuant to the | interest rate sensitive such as real estate investment trusts and |
terms of the exemptive order, the Fund is required to notify its | utilities. The energy overweight was a key detractor, as energy |
shareholders within 90 days of when a money manager begins | was the largest underperforming sector during the 2015 fiscal |
providing services. As of October 31, 2015, the Fund had three | year. However, the Fund’s technology overweight and utilities |
money managers. | underweight and strong stock selection within the health care and |
What is the Fund’s investment objective? | producer durables sectors were beneficial. |
The Fund seeks to provide long term capital growth. | How did the investment strategies and techniques employed |
How did the Fund perform relative to its benchmark for the | by the Fund and its money managers affect its benchmark- |
fiscal year ended October 31, 2015? | relative performance? |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | The Fund employs discretionary money managers. The Fund’s |
Class C and Class S Shares gained 2.29%, 1.52% and 2.53%, | discretionary money managers select the individual portfolio |
respectively. This is compared to the Fund’s benchmark, the | securities for the assets assigned to them. RIMCo manages the |
Russell Midcap® Index, which gained 2.77% during the same | portion of the Fund’s assets that RIMCo determines not to allocate |
period. The Fund’s performance includes operating expenses, | to the money managers. Assets not allocated to managers include |
whereas index returns are unmanaged and do not include | the Fund’s liquidity reserves and assets which may be managed |
expenses of any kind. | directly by RIMCo to effect the Fund’s investment strategies and/ |
or to actively manage the Fund’s overall portfolio characteristics | |
For the fiscal year ended October 31, 2015, the Morningstar® | to seek to achieve the desired risk/return profile for the Fund. |
Mid-Cap Blend, a group of funds that Morningstar considers to | |
have investment strategies similar to those of the Fund, gained | With respect to certain of the Fund’s money managers, Jacobs |
0.45%. This result serves as a peer comparison and is expressed | Levy Equity Management, Inc. (“Jacobs Levy”) was the best |
net of operating expenses. | performing money manager for the fiscal year and outperformed |
its blended benchmark which consists of 50% the Russell | |
RIMCo may assign a money manager a specific style or | Midcap® Index and 50% the Russell Midcap® Value Index. Jacobs |
capitalization benchmark other than the Fund’s index. However, | Levy’s quantitative investment approach added value within the |
the Fund’s primary index remains the benchmark for the Fund | energy and consumer discretionary sectors. An emphasis on |
and is representative of the aggregate of each money manager’s | companies with lower financial leverage and higher profitability |
benchmark index. | characteristics was also beneficial. |
How did the market conditions described in the Market | Ceredex Value Advisors LLC (“Ceredex”) faced the strongest |
Summary report affect the Fund’s performance? | headwinds over the fiscal year and underperformed the Russell |
The fiscal year ended October 31, 2015 saw the Fund underperform | Midcap® Value Index. Ceredex’s stock selection within the |
the Russell Midcap® Index. Through the end of 2014, the U.S. | consumer discretionary and information technology sectors was |
mid cap market produced modest positive returns, while the | the largest negative impact to performance over the period. A |
beginning of 2015, although initially negative, introduced a pick- | preference for stocks exhibiting above average beta characteristics |
up in performance which eventually reversed towards the end of | (beta is a measure of a portfolio’s volatility and its sensitivity to |
the 2015 fiscal year. | the direction of the market) was also a headwind. |
Over the period, the Fund maintained exposure to securities | During the period, RIMCo utilized a positioning strategy to control |
towards the bottom end of the capitalization opportunity set that | Fund-level exposures and risks through the purchase of a stock |
were trading at discounted valuations, as well as companies with | portfolio. Using the output from a quantitative model, the strategy |
higher quality characteristics such as lower financial leverage and | seeks to position the portfolio to meet RIMCo’s overall preferred |
Russell U.S. Mid Cap Equity Fund 115
Russell Investment Company
Russell U.S. Mid Cap Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
positioning with respect to Fund exposures, while optimizing the | In September 2015, RIMCo replaced growth manager Arbor | |
portfolio to minimize tracking error relative to the Fund’s money | Capital Management, LLC (“Arbor”) with growth manager Elk | |
manager portfolios. Over the period, the positioning strategy was | Creek Partners, LLC (“Elk Creek”). Elk Creek’s growth strategy | |
designed to provide lower capitalization and higher value and | is similar to Arbor’s but RIMCo has higher confidence in the | |
quality exposure relative to the Fund’s benchmark in order to | excess return potential of Elk Creek. | |
seek to manage Fund-level risk. | ||
Money Managers as of October 31, | ||
The positioning strategy underperformed the Russell Midcap® | 2015 | Styles |
Index for the fiscal year. An overweight to the utilities sector | Ceredex Value Advisors, LLC | Mid Cap Value |
was penalized as was an overweight to securities towards the | Elk Creek Partners, LLC | Mid Cap Growth |
bottom end of the benchmark capitalization, as small cap stocks | Jacobs Levy Equity Management, Inc. | Mid Cap Core/Value |
underperformed mid cap stocks. A preference for stocks with | The views expressed in this report reflect those of the portfolio | |
lower price volatility offset further losses. | managers only through the end of the period covered by | |
During the period, RIMCo equitized the Fund’s cash using index | the report. These views do not necessarily represent the | |
futures contracts to provide the Fund with full market exposure. | views of RIMCo, or any other person in RIMCo or any other | |
This had a positive impact on the Fund’s performance. | affiliated organization. These views are subject to change | |
at any time based upon market conditions or other events, | ||
Describe any changes to the Fund’s structure or the money | and RIMCo disclaims any responsibility to update the views | |
manager line-up. | contained herein. These views should not be relied on as | |
In April 2015, RIMCo changed Jacobs Levy’s mandate from being | investment advice and, because investment decisions for | |
optimized to the Russell Midcap® Index to a blended mandate | a Russell Investment Company (“RIC”) Fund are based on | |
that is approximately 50% optimized to the Russell Midcap® | numerous factors, should not be relied on as an indication | |
Index and 50% optimized to the Russell Midcap® Value Index. | of investment decisions of any RIC Fund. | |
This change was implemented in order to improve the Fund’s | ||
value exposure in line with RIMCo’s strategic beliefs. |
* Assumes initial investment on February 6, 2012.
** Russell Midcap® Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell Midcap is a subset of the Russell 1000®
Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap
represents approximately 31% of the total market capitalization of the Russell 1000 companies.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
116 Russell U.S. Mid Cap Equity Fund
Russell Investment Company
Russell U.S. Mid Cap Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 969.80 | $ | 1,019.06 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 6.06 | $ | 6.21 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.22% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 966.00 | $ | 1,015.22 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 9.81 | $ | 10.06 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.98% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class S | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 970.40 | $ | 1,020.32 | |
Expenses Paid During Period* | $ | 4.82 | $ | 4.94 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.97% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell U.S. Mid Cap Equity Fund 117
Russell Investment Company
Russell U.S. Mid Cap Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) or | Value | Amount ($) or | Value | |||||
Shares | $ | Shares | $ | |||||
Common Stocks - 95.8% | Mobileye NV(Æ) | 7,500 | 341 | |||||
Consumer Discretionary - 13.5% | Mohawk Industries, Inc.(Æ) | 72 | 14 | |||||
Aaron's, Inc. Class A | 4,211 | 104 | News Corp. Class A | 55,700 | 858 | |||
Advance Auto Parts, Inc. | 2,337 | 464 | Nielsen Holdings PLC(Æ) | 2,748 | 131 | |||
AMC Networks, Inc. Class A(Æ) | 2,100 | 155 | Norwegian Cruise Line Holdings, Ltd.(Æ) | 13,577 | 864 | |||
Aramark | 191 | 6 | Nu Skin Enterprises, Inc. Class A | 315 | 12 | |||
AutoZone, Inc.(Æ) | 777 | 609 | NVR, Inc.(Æ) | 134 | 219 | |||
Avis Budget Group, Inc.(Æ) | 6,400 | 320 | O'Reilly Automotive, Inc.(Æ) | 1,471 | 406 | |||
BorgWarner, Inc. | 197 | 8 | Pandora Media, Inc.(Æ) | 22,553 | 260 | |||
Brunswick Corp. | 135 | 7 | Party City Holdco, Inc.(Æ) | 14,100 | 223 | |||
Cable One, Inc.(Æ) | 259 | 112 | Penske Automotive Group, Inc. | 92 | 5 | |||
CarMax, Inc.(Æ) | 807 | 48 | Polaris Industries, Inc. | 5,200 | 584 | |||
Carter's, Inc. | 1,470 | 134 | PVH Corp. | 4,306 | 392 | |||
Children's Place, Inc. (The) | 556 | 30 | Ralph Lauren Corp. Class A | 13,900 | 1,540 | |||
Chipotle Mexican Grill, Inc. Class A(Æ) | 74 | 47 | Restoration Hardware Holdings, Inc.(Æ) | 3,600 | 371 | |||
Choice Hotels International, Inc. | 5,000 | 262 | Ross Stores, Inc. | 12,470 | 631 | |||
Churchill Downs, Inc. | 2,884 | 423 | Royal Caribbean Cruises, Ltd. | 8,066 | 793 | |||
Cinemark Holdings, Inc. | 9,463 | 335 | Service Corp. International | 970 | 27 | |||
ClubCorp Holdings, Inc. | 21,428 | 438 | ServiceMaster Global Holdings, Inc.(Æ) | 5,441 | 194 | |||
Coach, Inc. | 1,261 | 39 | Signet Jewelers, Ltd. | 4,979 | 752 | |||
Coty, Inc. Class A(Æ) | 267 | 8 | Sirius XM Holdings, Inc.(Æ) | 146,446 | 598 | |||
Darden Restaurants, Inc. | 13,590 | 841 | Six Flags Entertainment Corp. | 89 | 5 | |||
Dick's Sporting Goods, Inc. | 14,887 | 663 | Skechers U.S.A., Inc. Class A(Æ) | 5,550 | 173 | |||
Discovery Communications, Inc. Class A(Æ) | 312 | 9 | Staples, Inc. | 17,993 | 234 | |||
Discovery Communications, Inc. Class C(Æ) | 333 | 9 | Starwood Hotels & Resorts Worldwide, Inc. | 115 | 9 | |||
DISH Network Corp. Class A(Æ) | 7,945 | 500 | Starz Class A(Æ) | 846 | 28 | |||
Dollar Tree, Inc.(Æ) | 3,135 | 205 | Tenneco, Inc.(Æ) | 6,600 | 374 | |||
Domino's Pizza, Inc. | 3,530 | 377 | Texas Roadhouse, Inc. Class A | 1,620 | 56 | |||
DR Horton, Inc. | 7,868 | 232 | Thor Industries, Inc. | 363 | 20 | |||
Dunkin' Brands Group, Inc. | 7,101 | 294 | Time, Inc.(Æ) | 6,100 | 113 | |||
Expedia, Inc. | 305 | 42 | Toll Brothers, Inc.(Æ) | 6,502 | 234 | |||
Express, Inc.(Æ) | 2,732 | 53 | Tractor Supply Co. | 56 | 5 | |||
Foot Locker, Inc. | 3,353 | 227 | TripAdvisor, Inc.(Æ) | 2,119 | 178 | |||
Gannett Co., Inc. | 14,882 | 235 | Under Armour, Inc. Class A(Æ) | 68 | 6 | |||
Gap, Inc. (The) | 471 | 13 | Vail Resorts, Inc. | 2,963 | 338 | |||
Goodyear Tire & Rubber Co. (The) | 7,823 | 257 | Viacom, Inc. Class B | 214 | 11 | |||
GoPro, Inc. Class A(Æ)(Ñ) | 457 | 11 | WebMD Health Corp. Class A(Æ) | 18,000 | 732 | |||
Graham Holdings Co. Class B | 364 | 201 | Wendy's Co. (The) | 2,167 | 20 | |||
H&R Block, Inc. | 385 | 14 | Whirlpool Corp. | 6,863 | 1,099 | |||
Hanesbrands, Inc. | 1,492 | 48 | Wyndham Worldwide Corp. | 1,013 | 82 | |||
Harley-Davidson, Inc. | 160 | 8 | 27,517 | |||||
Harman International Industries, Inc. | 4,661 | 513 | ||||||
Hilton Worldwide Holdings, Inc. | 12,700 | 317 | Consumer Staples - 2.9% | |||||
HomeAway, Inc.(Æ) | 21,782 | 687 | Bunge, Ltd. | 11,870 | 866 | |||
Hyatt Hotels Corp. Class A(Æ) | 4,375 | 221 | Campbell Soup Co. | 408 | 21 | |||
International Game Technology PLC | 264 | 4 | Casey's General Stores, Inc. | 1,414 | 150 | |||
Interpublic Group of Cos., Inc. (The) | 17,800 | 408 | Church & Dwight Co., Inc. | 2,934 | 253 | |||
Jarden Corp.(Æ) | 199 | 9 | Clorox Co. (The) | 2,250 | 274 | |||
John Wiley & Sons, Inc. Class A(Æ) | 9,200 | 481 | Coca-Cola Enterprises, Inc. | 157 | 8 | |||
L Brands, Inc.(Æ) | 4,000 | 384 | ConAgra Foods, Inc. | 6,807 | 276 | |||
La Quinta Holdings, Inc.(Æ) | 15,900 | 241 | Constellation Brands, Inc. Class A | 262 | 35 | |||
Lear Corp. | 4,780 | 598 | Dr Pepper Snapple Group, Inc. | 3,235 | 289 | |||
Liberty Media Corp. Class A(Æ) | 17,900 | 730 | Energizer Holdings, Inc. | 62 | 5 | |||
Liberty Ventures Class A(Æ) | 5,611 | 244 | Flowers Foods, Inc. | 786 | 21 | |||
Lions Gate Entertainment Corp. | 420 | 16 | GNC Holdings, Inc. Class A | 112 | 3 | |||
Live Nation Entertainment, Inc.(Æ) | 6,071 | 166 | Herbalife, Ltd.(Æ) | 215 | 12 | |||
LKQ Corp.(Æ) | 25,184 | 746 | Hershey Co. (The) | 56 | 5 | |||
lululemon athletica, Inc.(Æ) | 145 | 7 | Hormel Foods Corp. | 386 | 26 | |||
Marriott International, Inc. Class A | 5,900 | 453 | Ingredion, Inc. | 258 | 25 | |||
MGM Resorts International(Æ) | 20,100 | 466 | Keurig Green Mountain, Inc. | 193 | 10 | |||
Michael Kors Holdings, Ltd.(Æ) | 2,756 | 106 | Kroger Co. (The) | 15,658 | 592 |
See accompanying notes which are an integral part of the financial statements.
118 Russell U.S. Mid Cap Equity Fund
Russell Investment Company
Russell U.S. Mid Cap Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
McCormick & Co., Inc. | 2,508 | 211 | Brandywine Realty Trust(ö) | 14,900 | 201 | ||
Mead Johnson Nutrition Co. Class A | 97 | 8 | Brixmor Property Group, Inc.(ö) | 46,290 | 1,186 | ||
Molson Coors Brewing Co. Class B | 296 | 26 | CBOE Holdings, Inc. | 4,433 | 297 | ||
Monster Beverage Corp.(Æ) | 1,621 | 221 | CBRE Group, Inc. Class A(Æ) | 9,657 | 360 | ||
Pilgrim's Pride Corp.(Ñ) | 1,565 | 30 | Chimera Investment Corp.(ö) | 534 | 7 | ||
Pinnacle Foods, Inc. | 9,440 | 416 | Citizens Financial Group, Inc. | 32,000 | 778 | ||
Rite Aid Corp.(Æ) | 37,346 | 294 | CNA Financial Corp. | 510 | 19 | ||
Sprouts Farmers Market, Inc.(Æ) | 3,269 | 67 | Columbia Property Trust, Inc.(ö) | 24,700 | 614 | ||
Sysco Corp. | 31,707 | 1,308 | Comerica, Inc. | 29,200 | 1,267 | ||
Tyson Foods, Inc. Class A | 250 | 11 | CoreLogic, Inc.(Æ) | 1,500 | 58 | ||
United Natural Foods, Inc.(Æ) | 6,622 | 334 | Corporate Office Properties Trust(ö) | 38,000 | 874 | ||
WhiteWave Foods Co. (The) Class A(Æ) | 576 | 24 | Crown Castle International Corp. | 19,800 | 1,691 | ||
Whole Foods Market, Inc. | 238 | 7 | Cullen/Frost Bankers, Inc. | 6,300 | 431 | ||
5,828 | Discover Financial Services | 9,100 | 512 | ||||
Douglas Emmett, Inc.(ö) | 16,300 | 498 | |||||
Energy - 6.4% | Dun & Bradstreet Corp. (The) | 5,390 | 614 | ||||
Cabot Oil & Gas Corp. | 53,500 | 1,161 | E*Trade Financial Corp.(Æ) | 22,300 | 636 | ||
EQT Corp. | 5,700 | 377 | East West Bancorp, Inc. | 9,200 | 372 | ||
FMC Technologies, Inc.(Æ) | 5,900 | 200 | Endurance Specialty Holdings, Ltd. | 3,717 | 235 | ||
Frank's International NV | 13,800 | 237 | Equifax, Inc. | 3,620 | 386 | ||
Hess Corp. | 31,300 | 1,759 | Equinix, Inc.(ö) | 770 | 228 | ||
HollyFrontier Corp. | 18,400 | 901 | Everest Re Group, Ltd. | 5,824 | 1,036 | ||
Marathon Petroleum Corp. | 2,400 | 124 | FactSet Research Systems, Inc. | 2,380 | 417 | ||
NextEra Energy Partners, LP(Ñ) | 32,600 | 856 | Fidelity National Information Services, Inc. | 6,600 | 481 | ||
Noble Energy, Inc. | 60,800 | 2,179 | First Republic Bank | 2,400 | 157 | ||
Patterson-UTI Energy, Inc. | 71,400 | 1,063 | Franklin Resources, Inc. | 3,400 | 139 | ||
PBF Energy, Inc. Class A | 12,200 | 415 | Gaming and Leisure Properties, Inc.(ö) | 4,900 | 143 | ||
Phillips 66(Æ) | 3,000 | 267 | General Growth Properties, Inc.(ö) | 33,200 | 961 | ||
Pioneer Natural Resources Co. | 12,900 | 1,769 | Global Payments, Inc. | 2,740 | 374 | ||
Range Resources Corp. | 5,900 | 180 | Hanover Insurance Group, Inc. (The) | 286 | 24 | ||
Tesoro Corp. | 6,190 | 662 | Hartford Financial Services Group, Inc. | 25,000 | 1,156 | ||
Valero Energy Corp. | 4,500 | 297 | HCP, Inc.(ö) | 6,661 | 248 | ||
Whiting Petroleum Corp.(Æ) | 10,200 | 176 | Host Hotels & Resorts, Inc.(ö) | 10,200 | 177 | ||
World Fuel Services Corp. | 8,830 | 392 | Intercontinental Exchange, Inc. | 810 | 204 | ||
13,015 | Invesco, Ltd. | 68,800 | 2,282 | ||||
KeyCorp | 34,700 | 431 | |||||
Financial Services - 25.7% | Kilroy Realty Corp.(ö) | 5,800 | 382 | ||||
Alliance Data Systems Corp.(Æ) | 2,500 | 743 | Kimco Realty Corp.(ö) | 19,400 | 519 | ||
Allied World Assurance Co. Holdings AG | 5,082 | 185 | Lazard, Ltd. Class A | 31,400 | 1,454 | ||
Allstate Corp. (The) | 25,200 | 1,559 | Legg Mason, Inc. | 5,800 | 260 | ||
Ally Financial, Inc.(Æ) | 31,000 | 617 | Lincoln National Corp. | 16,500 | 883 | ||
American Equity Investment Life Holding | M&T Bank Corp. | 4,947 | 593 | ||||
Co. | 1,800 | 46 | Markel Corp.(Æ) | 298 | 259 | ||
American Homes 4 Rent Class A(ö) | 13,367 | 221 | MB Financial, Inc. | 21,500 | 693 | ||
American National Insurance Co. | 945 | 98 | McGraw Hill Financial, Inc. | 4,935 | 457 | ||
Ameriprise Financial, Inc. | 12,200 | 1,407 | Moody's Corp. | 4,170 | 401 | ||
AmTrust Financial Services, Inc. | 8,400 | 573 | Morningstar, Inc. | 1,400 | 115 | ||
Aon PLC | 5,200 | 485 | New York Community Bancorp, Inc.(Ñ) | 11,827 | 195 | ||
Apartment Investment & Management Co. | Northern Trust Corp. | 13,700 | 964 | ||||
Class A(ö) | 9,700 | 380 | NorthStar Asset Management Group, Inc. | 10,448 | 153 | ||
Arch Capital Group, Ltd.(Æ) | 9,600 | 719 | PartnerRe, Ltd. | 1,707 | 237 | ||
Arthur J Gallagher & Co. | 4,500 | 197 | Piedmont Office Realty Trust, Inc. Class A(ö) | 17,900 | 347 | ||
Aspen Insurance Holdings, Ltd. | 4,747 | 231 | Post Properties, Inc.(ö) | 5,000 | 299 | ||
Assurant, Inc. | 807 | 66 | PRA Group, Inc.(Æ) | 6,600 | 362 | ||
Assured Guaranty, Ltd. | 4,522 | 124 | Principal Financial Group, Inc. | 18,900 | 948 | ||
AvalonBay Communities, Inc.(ö) | 3,370 | 589 | Progressive Corp. (The) | 34,800 | 1,153 | ||
Axis Capital Holdings, Ltd. | 7,344 | 397 | Prologis, Inc.(ö) | 28,800 | 1,231 | ||
BankUnited, Inc. | 16,500 | 613 | Prudential Financial, Inc. | 1,100 | 91 | ||
Blackhawk Network Holdings, Inc. Class | Raymond James Financial, Inc. | 8,700 | 479 | ||||
A(Æ) | 5,868 | 250 | Regions Financial Corp. | 12,600 | 118 | ||
Boston Properties, Inc.(ö) | 7,360 | 926 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Reinsurance Group of America, Inc. Class A | 239 | 22 | St. Jude Medical, Inc. | 6,200 | 396 | ||
RenaissanceRe Holdings, Ltd. | 3,709 | 407 | STERIS Corp.(Ñ) | 15,800 | 1,184 | ||
Santander Consumer USA Holdings, Inc.(Æ) | 14,500 | 261 | Stryker Corp. | 5,800 | 555 | ||
Signature Bank(Æ) | 4,990 | 743 | Teleflex, Inc. | 1,295 | 172 | ||
State Street Corp. | 1,000 | 69 | United Therapeutics Corp.(Æ) | 1,380 | 202 | ||
SunTrust Banks, Inc. | 16,400 | 681 | Vertex Pharmaceuticals, Inc.(Æ) | 5,200 | 649 | ||
Synchrony Financial(Æ)(Ñ) | 22,200 | 683 | Zimmer Biomet Holdings, Inc. | 6,160 | 644 | ||
Taubman Centers, Inc.(ö) | 4,100 | 316 | Zoetis, Inc. Class A | 8,000 | 344 | ||
TCF Financial Corp. | 13,621 | 210 | 22,099 | ||||
TFS Financial Corp. | 2,280 | 40 | |||||
Two Harbors Investment Corp.(ö) | 20,094 | 170 | Materials and Processing - 3.7% | ||||
Umpqua Holdings Corp. | 76,400 | 1,276 | Ball Corp. | 357 | 24 | ||
Unum Group | 21,800 | 755 | Bemis Co., Inc. | 2,635 | 121 | ||
Validus Holdings, Ltd. | 5,235 | 232 | Caesarstone Sdot-Yam, Ltd. | 11,530 | 409 | ||
Vantiv, Inc. Class A(Æ) | 6,103 | 306 | Domtar Corp. | 3,031 | 125 | ||
Voya Financial, Inc. | 20,000 | 811 | Eastman Chemical Co. | 3,500 | 253 | ||
Webster Financial Corp. | 7,300 | 271 | Hexcel Corp. | 6,400 | 296 | ||
Welltower, Inc.(Æ)(ö) | 1,957 | 127 | Ingersoll-Rand PLC | 17,100 | 1,013 | ||
Western Union Co. (The) | 13,218 | 254 | International Flavors & Fragrances, Inc. | 3,030 | 352 | ||
WEX, Inc.(Æ) | 4,253 | 382 | International Paper Co. | 9,600 | 410 | ||
White Mountains Insurance Group, Ltd. | 260 | 205 | Nucor Corp. | 11,400 | 482 | ||
Willis Group Holdings PLC | 11,000 | 491 | PPG Industries, Inc. | 2,670 | 278 | ||
XL Group PLC Class A | 33,000 | 1,257 | Reliance Steel & Aluminum Co. | 9,600 | 576 | ||
52,482 | Scotts Miracle-Gro Co. (The) Class A | 2,380 | 157 | ||||
Sherwin-Williams Co. (The) | 1,860 | 496 | |||||
Health Care - 10.8% | Sigma-Aldrich Corp. | 1,923 | 269 | ||||
Agilent Technologies, Inc. | 47,400 | 1,790 | Silgan Holdings, Inc. | 268 | 14 | ||
AmerisourceBergen Corp. Class A | 7,369 | 711 | Sonoco Products Co. | 1,187 | 51 | ||
Anthem, Inc. | 2,811 | 391 | Tahoe Resources, Inc. | 2,159 | 18 | ||
Baxalta, Inc. | 38,100 | 1,313 | Valmont Industries, Inc. | 134 | 14 | ||
BioMarin Pharmaceutical, Inc.(Æ) | 6,180 | 723 | Valspar Corp. | 9,300 | 753 | ||
Boston Scientific Corp.(Æ) | 2,915 | 53 | Vulcan Materials Co. | 115 | 11 | ||
Cardinal Health, Inc. | 10,682 | 878 | WestRock Co. | 27,300 | 1,468 | ||
Centene Corp.(Æ) | 9,855 | 586 | 7,590 | ||||
Charles River Laboratories International, | |||||||
Inc.(Æ) | 3,500 | 228 | Producer Durables - 14.0% | ||||
Cigna Corp. | 14,400 | 1,930 | AGCO Corp. | 4,777 | 231 | ||
CR Bard, Inc. | 2,242 | 418 | Alaska Air Group, Inc. | 4,982 | 380 | ||
Dentsply International, Inc. | 3,843 | 234 | Allegiant Travel Co. Class A | 1,014 | 200 | ||
DexCom, Inc.(Æ) | 3,015 | 251 | AO Smith Corp. | 8,300 | 638 | ||
Edwards Lifesciences Corp.(Æ) | 3,240 | 509 | Automatic Data Processing, Inc. | 7,700 | 670 | ||
Endo International PLC(Æ) | 6,200 | 372 | Avery Dennison Corp. | 884 | 57 | ||
Envision Healthcare Holdings, Inc.(Æ) | 10,747 | 303 | Babcock & Wilcox Enterprises, Inc.(Æ) | 3,350 | 57 | ||
ExamWorks Group, Inc.(Æ) | 19,095 | 539 | Booz Allen Hamilton Holding Corp. Class A | 8,193 | 241 | ||
Henry Schein, Inc.(Æ) | 1,496 | 227 | BWX Technologies, Inc. Class W | 6,900 | 195 | ||
Hill-Rom Holdings, Inc. | 17,750 | 935 | Carlisle Cos., Inc. | 3,600 | 313 | ||
HMS Holdings Corp.(Æ) | 18,700 | 197 | CEB, Inc. | 5,900 | 441 | ||
Horizon Pharma PLC(Æ)(Ñ) | 25,180 | 396 | CH Robinson Worldwide, Inc. | 4,600 | 319 | ||
Laboratory Corp. of America Holdings(Æ) | 2,251 | 276 | Cintas Corp. | 332 | 31 | ||
LivaNova PLC(Æ) | 8,302 | 550 | Colfax Corp.(Æ) | 5,520 | 149 | ||
Mallinckrodt PLC(Æ) | 5,300 | 348 | CoStar Group, Inc.(Æ) | 2,300 | 467 | ||
McKesson Corp. | 1,170 | 209 | CSX Corp. | 19,200 | 518 | ||
Medicines Co. (The)(Æ) | 8,400 | 288 | Curtiss-Wright Corp. | 1,449 | 101 | ||
Pacira Pharmaceuticals, Inc.(Æ) | 10,135 | 506 | Delta Air Lines, Inc. | 12,300 | 625 | ||
Patterson Cos., Inc. | 8,415 | 399 | Expeditors International of Washington, Inc. | 8,400 | 418 | ||
PerkinElmer, Inc. | 6,400 | 331 | Fluor Corp. | 9,400 | 449 | ||
Qiagen NV(Æ) | 31,180 | 754 | Genesee & Wyoming, Inc. Class A(Æ) | 3,262 | 219 | ||
Quest Diagnostics, Inc. | 1,408 | 96 | Genpact, Ltd.(Æ) | 12,700 | 315 | ||
Quintiles Transnational Holdings, Inc.(Æ) | 9,800 | 624 | HD Supply Holdings, Inc.(Æ) | 11,600 | 346 | ||
Sirona Dental Systems, Inc.(Æ) | 5,383 | 588 | Hubbell, Inc. Class B(Æ) | 9,200 | 891 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) or | Value | Amount ($) or | Value | |||||
Shares | $ | Shares | $ | |||||
Huntington Ingalls Industries, Inc. | 2,790 | 335 | Freescale Semiconductor, Ltd.(Æ) | 5,985 | 200 | |||
ITT Corp. | 25,853 | 1,023 | Gartner, Inc.(Æ) | 4,500 | 408 | |||
JB Hunt Transport Services, Inc. | 5,100 | 389 | Gogo, Inc.(Æ) | 51,593 | 729 | |||
JetBlue Airways Corp.(Æ) | 22,782 | 566 | Groupon, Inc. Class A(Æ) | 48,849 | 181 | |||
KBR, Inc. | 23,600 | 435 | Harris Corp. | 22,000 | 1,741 | |||
Kirby Corp.(Æ) | 4,438 | 290 | IMS Health Holdings, Inc.(Æ) | 9,783 | 266 | |||
L-3 Communications Holdings, Inc. | 5,912 | 747 | Intersil Corp. Class A | 111,500 | 1,511 | |||
Lexmark International, Inc. Class A | 7,900 | 257 | InterXion Holding NV(Æ) | 16,489 | 484 | |||
Macquarie Infrastructure Corp. | 10,549 | 839 | Jabil Circuit, Inc. | 14,900 | 342 | |||
ManpowerGroup, Inc. | 7,400 | 679 | JDS Uniphase Corp. Class W(Æ) | 21,300 | 127 | |||
MAXIMUS, Inc. | 9,600 | 655 | Juniper Networks, Inc. | 81,950 | 2,572 | |||
Mobile Mini, Inc. | 16,400 | 562 | Leidos Holdings, Inc. | 13,100 | 689 | |||
MSC Industrial Direct Co., Inc. Class A | 3,526 | 221 | Marvell Technology Group, Ltd. | 61,500 | 505 | |||
Northrop Grumman Corp. | 1,740 | 327 | Maxim Integrated Products, Inc. | 27,400 | 1,123 | |||
On Assignment, Inc.(Æ) | 12,823 | 578 | Mentor Graphics Corp. | 21,160 | 576 | |||
Orbital ATK, Inc. | 11,889 | 1,018 | Motorola Solutions, Inc. | 264 | 18 | |||
Oshkosh Corp. | 20,700 | 851 | NetApp, Inc. | 19,419 | 660 | |||
Paychex, Inc. | 14,000 | 722 | Nuance Communications, Inc.(Æ) | 26,000 | 441 | |||
Pentair PLC | 4,392 | 246 | ON Semiconductor Corp.(Æ) | 20,100 | 221 | |||
Regal Beloit Corp. | 4,300 | 274 | Palo Alto Networks, Inc.(Æ) | 1,174 | 189 | |||
Republic Services, Inc. Class A | 12,312 | 539 | Polycom, Inc.(Æ) | 32,900 | 453 | |||
Rockwell Automation, Inc. | 5,700 | 622 | Progress Software Corp.(Æ) | 4,600 | 112 | |||
Rockwell Collins, Inc. | 4,400 | 382 | Qorvo, Inc.(Æ) | 4,891 | 215 | |||
Ryder System, Inc. | 5,415 | 389 | Sabre Corp. | 7,364 | 216 | |||
Snap-on, Inc. | 2,900 | 481 | SBA Communications Corp. Class A(Æ) | 8,200 | 976 | |||
Southwest Airlines Co. | 10,800 | 500 | Skyworks Solutions, Inc. | 9,119 | 704 | |||
Spirit AeroSystems Holdings, Inc. Class A(Æ) | 1,100 | 58 | Symantec Corp. | 44,700 | 921 | |||
SPX Corp. | 9,000 | 110 | Synchronoss Technologies, Inc.(Æ) | 27,487 | 967 | |||
Stericycle, Inc.(Æ) | 1,776 | 216 | Synopsys, Inc.(Æ) | 16,800 | 840 | |||
Textron, Inc. | 19,200 | 810 | Syntel, Inc.(Æ) | 1,300 | 61 | |||
Towers Watson & Co. Class A | 9,500 | 1,174 | VMware, Inc. Class A(Æ)(Ñ) | 1,200 | 72 | |||
Trimble Navigation, Ltd.(Æ) | 9,666 | 220 | Western Digital Corp. | 20,750 | 1,387 | |||
Triumph Group, Inc. | 4,800 | 224 | Workday, Inc. Class A(Æ) | 4,600 | 363 | |||
Tyco International PLC | 33,000 | 1,202 | Zynga, Inc. Class A(Æ) | 127,000 | 301 | |||
United Continental Holdings, Inc.(Æ) | 8,200 | 495 | 27,345 | |||||
United Rentals, Inc.(Æ) | 4,529 | 339 | ||||||
Verisk Analytics, Inc. Class A(Æ) | 3,600 | 258 | Utilities - 5.4% | |||||
Wabtec Corp. | 4,240 | 351 | Ameren Corp. | 17,700 | 773 | |||
WageWorks, Inc.(Æ) | 15,900 | 763 | American Electric Power Co., Inc. | 3,200 | 181 | |||
Waste Connections, Inc. | 107 | 6 | American Water Works Co., Inc. | 6,800 | 390 | |||
XPO Logistics, Inc.(Æ) | 6,857 | 190 | CMS Energy Corp. | 32,200 | 1,161 | |||
28,614 | Consolidated Edison, Inc. | 7,000 | 460 | |||||
Dominion Resources, Inc. | 1,000 | 71 | ||||||
Technology - 13.4% | DTE Energy Co. | 6,600 | 539 | |||||
Amdocs, Ltd. | 9,411 | 561 | Edison International | 22,900 | 1,386 | |||
Applied Materials, Inc. | 46,200 | 775 | Exelon Corp. | 42,000 | 1,173 | |||
ARRIS Group, Inc.(Æ) | 4,527 | 128 | FirstEnergy Corp. | 15,600 | 487 | |||
Arrow Electronics, Inc.(Æ) | 8,900 | 489 | Pinnacle West Capital Corp. | 6,200 | 394 | |||
Aspen Technology, Inc.(Æ) | 2,500 | 104 | Public Service Enterprise Group, Inc. | 8,100 | 334 | |||
Avnet, Inc. | 8,069 | 367 | Sempra Energy | 28,630 | 2,932 | |||
Black Knight Financial Services, Inc. Class | West Corp. | 1,400 | 33 | |||||
A(Æ) | 8,600 | 310 | Xcel Energy, Inc. | 16,600 | 592 | |||
Brocade Communications Systems, Inc. | 63,220 | 659 | 10,906 | |||||
Cadence Design Systems, Inc.(Æ) | 16,360 | 364 | ||||||
Cypress Semiconductor Corp.(Æ) | 172,900 | 1,822 | Total Common Stocks | |||||
DigitalGlobe, Inc.(Æ) | 22,800 | 340 | (cost $187,891) | 195,396 | ||||
Dolby Laboratories, Inc. Class A | 1,700 | 59 | ||||||
DST Systems, Inc. | 2,112 | 258 | Short-Term Investments - 3.7% | |||||
EchoStar Corp. Class A(Æ) | 4,871 | 218 | Russell U.S. Cash Management Fund | 7,617,558 | (8) | 7,618 | ||
F5 Networks, Inc.(Æ) | 2,900 | 320 | Total Short-Term Investments |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | |||||
Principal | Fair | ||||
Amount ($) or | Value | ||||
Shares | $ | ||||
(cost $7,618) | 7,618 | ||||
Other Securities - 1.6% | |||||
Russell U.S. Cash Collateral Fund(×) | 3,173,945(8) | 3,174 | |||
Total Other Securities | |||||
(cost $3,174) | 3,174 | ||||
Total Investments 101.1% | |||||
(identified cost $198,683) | 206,188 | ||||
Other Assets and Liabilities, Net | |||||
- | (1.1%) | (2,323 | ) | ||
Net Assets - 100.0% | 203,865 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||||||
Amounts in thousands (except contract amounts) | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||||
Contracts | Amount | Date | $ | ||||||||
Long Positions | |||||||||||
S&P Mid 400 E-Mini Index Futures | 58 | USD | 8,360 | 12/15 | 168 | ||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 168 | ||||||||||
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Common Stocks | |||||||||||
Consumer Discretionary | $ | 27,517 | $ | — | $ | — | $ | 27,517 | 13.5 | ||
Consumer Staples | 5,828 | — | — | 5,828 | 2.9 | ||||||
Energy | 13,015 | — | — | 13,015 | 6.4 | ||||||
Financial Services | 52,482 | — | — | 52,482 | 25.7 | ||||||
Health Care | 22,099 | — | — | 22,099 | 10.8 | ||||||
Materials and Processing | 7,590 | — | — | 7,590 | 3.7 | ||||||
Producer Durables | 28,614 | — | — | 28,614 | 14.0 | ||||||
Technology | 27,345 | — | — | 27,345 | 13.4 | ||||||
Utilities | 10,906 | — | — | 10,906 | 5.4 | ||||||
Short-Term Investments | — | 7,618 | — | 7,618 | 3.7 | ||||||
Other Securities | — | 3,174 | — | 3,174 | 1.6 | ||||||
Total Investments | 195,396 | 10,792 | — | 206,188 | 101.1 | ||||||
Other Assets and Liabilities, Net | (1.1 | ) | |||||||||
100.0 | |||||||||||
Other Financial Instruments | |||||||||||
Futures Contracts | 168 | — | — | 168 | 0.1 | ||||||
Total Other Financial Instruments* | $ | 168 | $ | — | $ | — | $ | 168 | |||
* Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments. | |||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | |||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | |||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
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Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Assets and Liabilities - Assets | |||
Variation margin on futures contracts* | $ | 168 | |
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Operations - Net realized gain (loss) | |||
Futures contracts | $ | 317 | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||
Futures contracts | $ | (33 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the | |||
Statement of Assets and Liabilities. | |||
For further disclosure on derivatives see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Assets | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||||
Securities on Loan* | Investments, at fair value | $ | 3,176 | $ | — | $ | 3,176 | ||||||
Futures Contracts | Variation margin on futures contracts | 2 | — | 2 | |||||||||
Total Financial and Derivative Assets | 3,178 | — | 3,178 | ||||||||||
Financial and Derivative Assets not subject to a netting agreement | (2) | — | (2 | ) | |||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 3,176 | $ | — | $ | 3,176 | |||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Assets | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||||
Barclays | $ | 52 | $ | — | $ | 52 | $ | — | |||||
Citigroup | 464 | — | 464 | — | |||||||||
Fidelity | 1,841 | — | 1,841 | — | |||||||||
Goldman Sachs | 126 | — | 126 | — | |||||||||
JPMorgan Chase | 683 | — | 683 | — | |||||||||
Morgan Stanley | 10 | — | 10 | — | |||||||||
Total | $ | 3,176 | $ | — | $ | 3,176 | $ | — |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
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Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 198,683 |
Investments, at fair value(*)(>) | 206,188 | |
Cash (restricted)(a) | 842 | |
Receivables: | ||
Dividends and interest | 113 | |
Dividends from affiliated Russell funds | 1 | |
Investments sold | 1,990 | |
Fund shares sold | 227 | |
Variation margin on futures contracts | 2 | |
Total assets | 209,363 | |
Liabilities | ||
Payables: | ||
Investments purchased | 1,960 | |
Fund shares redeemed | 151 | |
Accrued fees to affiliates | 154 | |
Other accrued expenses | 59 | |
Payable upon return of securities loaned | 3,174 | |
Total liabilities | 5,498 | |
Net Assets | $ | 203,865 |
See accompanying notes which are an integral part of the financial statements.
126 Russell U.S. Mid Cap Equity Fund
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Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | ||
Net Assets Consist of: | ||
Undistributed (overdistributed) net investment income | $ | 61 |
Accumulated net realized gain (loss) | 25,215 | |
Unrealized appreciation (depreciation) on: | ||
Investments | 7,505 | |
Futures contracts | 168 | |
Shares of beneficial interest | 163 | |
Additional paid-in capital | 170,753 | |
Net Assets | $ | 203,865 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class A(#) | $ | 12.47 |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 13.23 |
Class A — Net assets | $ | 5,259,458 |
Class A — Shares outstanding ($.01 par value) | 421,871 | |
Net asset value per share: Class C(#) | $ | 12.22 |
Class C — Net assets | $ | 2,882,293 |
Class C — Shares outstanding ($.01 par value) | 235,909 | |
Net asset value per share: Class S(#) | $ | 12.50 |
Class S — Net assets | $ | 195,723,650 |
Class S — Shares outstanding ($.01 par value) | 15,657,151 | |
Amounts in thousands | ||
(*) Securities on loan included in investments | $ | 3,176 |
(>) Investments in affiliates, Russell U.S. Cash Management Fund and Russell U.S. Cash Collateral Fund | $ | 10,792 |
(a) Cash Collateral for Futures | $ | 842 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
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Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 3,099 | |
Dividends from affiliated Russell funds | 9 | ||
Securities lending income | 34 | ||
Total investment income | 3,142 | ||
Expenses | |||
Advisory fees | 1,697 | ||
Administrative fees | 101 | ||
Custodian fees | 56 | ||
Distribution fees - Class A | 13 | ||
Distribution fees - Class C | 18 | ||
Transfer agent fees - Class A | 10 | ||
Transfer agent fees - Class C | 5 | ||
Transfer agent fees - Class S | 409 | ||
Professional fees | 56 | ||
Registration fees | 50 | ||
Shareholder servicing fees - Class C | 6 | ||
Trustees’ fees | 5 | ||
Printing fees | 24 | ||
Miscellaneous | 22 | ||
Expenses before reductions | 2,472 | ||
Expense reductions | (373 | ) | |
Net expenses | 2,099 | ||
Net investment income (loss) | 1,043 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 25,566 | ||
Futures contracts | 317 | ||
Net realized gain (loss) | 25,883 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (22,024 | ) | |
Futures contracts | (33 | ) | |
Net change in unrealized appreciation (depreciation) | (22,057 | ) | |
Net realized and unrealized gain (loss) | 3,826 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 4,869 |
See accompanying notes which are an integral part of the financial statements.
128 Russell U.S. Mid Cap Equity Fund
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Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 1,043 | $ | 589 | ||
Net realized gain (loss) | 25,883 | 16,835 | ||||
Net change in unrealized appreciation (depreciation) | (22,057 | ) | 4,086 | |||
Net increase (decrease) in net assets from operations | 4,869 | 21,510 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (16 | ) | (7 | ) | ||
Class C | — | — | ||||
Class S | (1,116 | ) | (758 | ) | ||
From net realized gain | ||||||
Class A | (379 | ) | (315 | ) | ||
Class C | (176 | ) | (108 | ) | ||
Class S | (15,907 | ) | (17,800 | ) | ||
Net decrease in net assets from distributions | (17,594 | ) | (18,988 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 12,708 | 34,425 | ||||
Total Net Increase (Decrease) in Net Assets | (17 | ) | 36,947 | |||
Net Assets | ||||||
Beginning of period | 203,882 | 166,935 | ||||
End of period | $ | 203,865 | $ | 203,882 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 61 | $ | 27 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Mid Cap Equity Fund 129
Russell Investment Company
Russell U.S. Mid Cap Equity Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 105 | $ | 1,329 | 149 | $ | 1,881 | ||||||
Proceeds from reinvestment of distributions | 31 | 395 | 26 | 317 | ||||||||
Payments for shares redeemed | (58 | ) | (729 | ) | (49 | ) | (639 | ) | ||||
Net increase (decrease) | 78 | 995 | 126 | 1,559 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 124 | 1,544 | 117 | 1,480 | ||||||||
Proceeds from reinvestment of distributions | 14 | 175 | 9 | 108 | ||||||||
Payments for shares redeemed | (52 | ) | (646 | ) | (27 | ) | (338 | ) | ||||
Net increase (decrease) | 86 | 1,073 | 99 | 1,250 | ||||||||
Class S | ||||||||||||
Proceeds from shares sold | 2,716 | 34,689 | 3,116 | 39,588 | ||||||||
Proceeds from reinvestment of distributions | 1,154 | 14,631 | 1,260 | 15,435 | ||||||||
Payments for shares redeemed | (3,048 | ) | (38,680 | ) | (1,834 | ) | (23,407 | ) | ||||
Net increase (decrease) | 822 | 10,640 | 2,542 | 31,616 | ||||||||
Total increase (decrease) | 986 | $ | 12,708 | 2,767 | $ | 34,425 |
See accompanying notes which are an integral part of the financial statements.
130 Russell U.S. Mid Cap Equity Fund
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Russell Investment Company
Russell U.S. Mid Cap Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | ||||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | ||||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||||||
Class A | |||||||||||||||||||
October 31, 2015 | 13.27 | .03 | .29 | .32 | (.04 | ) | (1.08 | ) | |||||||||||
October 31, 2014 | 13.26 | .01 | 1.46 | 1.47 | (.03 | ) | (1.43 | ) | |||||||||||
October 31, 2013 | 9.89 | .01 | 3.40 | 3.41 | (.04 | ) | — | ||||||||||||
October 31, 2012(1) | 10.00 | —(f) | (.08 | ) | (.08 | ) | (.03 | ) | — | ||||||||||
Class C | |||||||||||||||||||
October 31, 2015 | 13.08 | (.06 | ) | .28 | .22 | — | (1.08 | ) | |||||||||||
October 31, 2014 | 13.16 | (.09 | ) | 1.44 | 1.35 | — | (1.43 | ) | |||||||||||
October 31, 2013 | 9.86 | (.07 | ) | 3.39 | 3.32 | (.02 | ) | — | |||||||||||
October 31, 2012(1) | 10.00 | (.05 | ) | (.09 | ) | (.14 | ) | —(f) | — | ||||||||||
Class S | |||||||||||||||||||
October 31, 2015 | 13.30 | .07 | .28 | .35 | (.07 | ) | (1.08 | ) | |||||||||||
October 31, 2014 | 13.29 | .04 | 1.45 | 1.49 | (.05 | ) | (1.43 | ) | |||||||||||
October 31, 2013 | 9.90 | .06 | 3.39 | 3.45 | (.06 | ) | — | ||||||||||||
October 31, 2012(1) | 10.00 | .03 | (.10 | ) | (.07 | ) | (.03 | ) | — | ||||||||||
See accompanying notes which are an integral part of the financial statements.
132 Russell U.S. Mid Cap Equity Fund
% | % | % | |||||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||||
Total Distributions | Period | Return(b)(c) | (000 | ) | Gross(e) | Net(d)(e) | Net Assets(d)(e) | Turnover Rate(b) | |||||||||||
(1.12 | ) | 12.47 | 2.29 | 5,259 | 1.40 | 1.22 | .26 | 120 | |||||||||||
(1.46 | ) | 13.27 | 12.05 | 4,560 | 1.42 | 1.22 | .07 | 96 | |||||||||||
(.04 | ) | 13.26 | 34.59 | 2,896 | 1.44 | 1.22 | .11 | 122 | |||||||||||
(.03 | ) | 9.89 | (.85 | ) | 897 | 1.44 | 1.21 | .06 | 96 | ||||||||||
(1.08 | ) | 12.22 | 1.52 | 2,882 | 2.15 | 1.97 | (.49 | ) | 120 | ||||||||||
(1.43 | ) | 13.08 | 11.18 | 1,968 | 2.17 | 1.97 | (.70 | ) | 96 | ||||||||||
(.02 | ) | 13.16 | 33.67 | 672 | 2.19 | 1.97 | (.63 | ) | 122 | ||||||||||
— (f) | 9.86 | (1.36 | ) | 197 | 2.24 | 1.96 | (.64 | ) | 96 | ||||||||||
(1.15 | ) | 12.50 | 2.53 | 195,724 | 1.15 | .97 | .51 | 120 | |||||||||||
(1.48 | ) | 13.30 | 12.28 | 197,354 | 1.17 | .97 | .33 | 96 | |||||||||||
(.06 | ) | 13.29 | 34.87 | 163,367 | 1.19 | .97 | .47 | 122 | |||||||||||
(.03 | ) | 9.90 | (.66 | ) | 121,714 | 1.25 | .96 | .40 | 96 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Mid Cap Equity Fund 133
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell U.S. Small Cap Equity Fund - Class A‡ | Russell U.S. Small Cap Equity Fund - Class S‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (7.32 | )% | 1 Year | (1.46 | )% | ||
5 Years | 10.29 | %§ | 5 Years | 11.87 | %§ | ||
10 Years | 5.69 | %§ | 10 Years | 6.55 | %§ | ||
Russell U.S. Small Cap Equity Fund - Class C‡‡ | Russell U.S. Small Cap Equity Fund - Class Y | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (2.42 | )% | 1 Year | (1.23 | )% | ||
5 Years | 10.76 | %§ | 5 Years | 12.08 | %§ | ||
10 Years | 5.73 | %§ | 10 Years | 6.72 | %§ | ||
Russell U.S. Small Cap Equity Fund - Class E | Russell 2000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.68 | )% | 1 Year | 0.34 | % | ||
5 Years | 11.61 | %§ | 5 Years | 12.06 | %§ | ||
10 Years | 6.34 | %§ | 10 Years | 7.47 | %§ | ||
Russell U.S. Small Cap Equity Fund - Class I | U.S. Small Cap Equity Linked Benchmark*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.35 | )% | 1 Year | 0.34 | % | ||
5 Years | 11.95 | %§ | 5 Years | 12.23 | %§ | ||
10 Years | 6.62 | %§ | 10 Years | 7.93 | %§ |
134 Russell U.S. Small Cap Equity Fund
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell U.S. Small Cap Equity Fund (the “Fund”) employs | the U.S. small cap market, larger cap growth stocks significantly |
a multi-manager approach whereby portions of the Fund are | outperformed smaller cap value stocks which negatively impacted |
allocated to different money manager strategies. Fund assets not | Fund performance. However, the Fund’s quality positioning was |
allocated to money managers are managed by Russell Investment | a positive contributor as companies with high financial leverage |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | lagged. |
may change the allocation of the Fund’s assets among money | From a sector standpoint, the expectation for a continued domestic |
managers at any time. An exemptive order from the Securities | economic recovery led to the Fund’s overweight in several sectors |
and Exchange Commission (“SEC”) permits RIMCo to engage | such as consumer discretionary, producer durables, and energy. |
or terminate a money manager at any time, subject to approval | The Fund remained underweight the highly volatile biotechnology |
by the Fund’s Board, without a shareholder vote. Pursuant to the | industry as well as sectors that are traditionally considered to be |
terms of the exemptive order, the Fund is required to notify its | interest rate sensitive such as real estate investment trusts and |
shareholders within 90 days of when a money manager begins | utilities. The energy overweight was a key detractor, as energy |
providing services. As of October 31, 2015, the Fund had eleven | was the largest underperforming sector during the 2015 fiscal |
money managers. | year. However, the Fund’s technology overweight and utilities |
What is the Fund’s investment objective? | underweight and strong stock selection within the health care and |
The Fund seeks to provide long term capital growth. | producer durables sectors were beneficial. |
How did the Fund perform relative to its benchmark for the | How did the investment strategies and techniques employed |
fiscal year ended October 31, 2015? | by the Fund and its money managers affect its benchmark- |
For the fiscal year ended October 31, 2015, the Fund’s Class | relative performance? |
A, Class C, Class E, Class I, Class S and Class Y Shares lost | The Fund employs discretionary money managers. The Fund’s |
1.65%, 2.42%, 1.68%, 1.35%, 1.46% and 1.23%, respectively. | discretionary money managers select the individual portfolio |
This is compared to the Fund’s benchmark, the Russell 2000® | securities for the assets assigned to them. RIMCo manages the |
Index, which gained 0.34% during the same period. The Fund’s | portion of the Fund’s assets that RIMCo determines not to allocate |
performance includes operating expenses, whereas index returns | to the money managers. Assets not allocated to managers include |
are unmanaged and do not include expenses of any kind. | the Fund’s liquidity reserves and assets which may be managed |
directly by RIMCo to effect the Fund’s investment strategies and/ | |
For the fiscal year ended October 31, 2015, the Morningstar® | or to actively manage the Fund’s overall portfolio characteristics |
Small Blend, a group of funds that Morningstar considers to have | to seek to achieve the desired risk/return profile for the Fund. |
investment strategies similar to those of the Fund, lost 0.45%. | |
This result serves as a peer comparison and is expressed net of | With respect to certain of the Fund’s money managers, Copeland |
operating expenses. | Capital Management, LLC was the best performing money |
manager for the fiscal year and outperformed the Russell 2000™ | |
RIMCo may assign a money manager a specific style or | Index. Stock selection within the financial services and producer |
capitalization benchmark other than the Fund’s index. However, | durables sectors was a positive contributor. The dividend growth |
the Fund’s primary index remains the benchmark for the Fund | manager’s preference for holdings with below average levels of |
and is representative of the aggregate of each money manager’s | financial leverage and higher profitability also added value. |
benchmark index. | |
DePrince, Race & Zollo, Inc. faced the strongest headwinds | |
How did the market conditions described in the Market | over the fiscal year and underperformed the Russell 2000™ |
Summary report affect the Fund’s performance? | Value Index. The manager’s sector allocations were the leading |
The fiscal year ended October 31, 2015 saw the Fund underperform | detractors to performance with overweights in cyclical sectors |
the Russell 2000® Index. Through the end of 2014, the U.S. | such as energy, materials, and producer durables. Additionally, |
small cap market produced modest positive returns, while the | stock selection within the materials and technology sectors also |
beginning of 2015, although initially negative, introduced a pick- | detracted. |
up in performance which eventually reversed towards the end of | During the period, RIMCo utilized a positioning strategy to control |
the 2015 fiscal year. | Fund-level exposures and risks through the purchase of a stock |
Over the period, the Fund maintained exposure to small and | portfolio. Using the output from a quantitative model, the strategy |
micro capitalization stocks trading at discounted valuations as | seeks to position the portfolio to meet RIMCo’s overall preferred |
well as companies with higher quality characteristics such as | positioning with respect to Fund exposures, while optimizing the |
lower financial leverage and higher returns-on-equity. Within | portfolio to minimize tracking error relative to the Fund’s money |
Russell U.S. Small Cap Equity Fund 135
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
manager portfolios. Over the period, the positioning strategy was | Money Managers as of October 31, | |
designed to provide lower capitalization and higher value and | 2015 | Styles |
quality exposure relative to the Fund’s benchmark in order to | ||
Ancora Advisors, LLC | Small Cap Core | |
seek to manage Fund-level risk. | Cardinal Capital Management L.L.C. | Microcap Value/Small |
The positioning strategy underperformed the Russell 2000® Index | Cap Value | |
for the fiscal year. An underweight to the biotechnology industry | Copeland Capital Management LLC | Small Cap Dividend |
was penalized as was an overweight to securities towards the | Growth | |
DePrince, Race & Zollo, Inc. | Small Cap Value | |
bottom end of the benchmark capitalization, as microcap stocks | EAM Investors, LLC | Micro Cap Growth |
underperformed small cap stocks. An overweight to stocks with | Falcon Point Capital, LLC | Small Cap Growth |
higher quality metrics (i.e., lower financial leverage and higher | Jacobs Levy Equity Management, Inc. | Small Cap Value/ |
returns-on-equity) offset further losses. | Defensive | |
Netols Asset Management, Inc. | Small Cap Core | |
During the period, RIMCo equitized the Fund’s cash using index | Next Century Growth Investors, LLC | Small Cap Growth |
futures contracts to provide the Fund with full market exposure. | PENN Capital Management Company, Inc. | Micro Cap/Small Cap |
This had a marginally positive impact on the Fund’s performance. | Core | |
Robeco Investment Management, Inc. | Small Cap Value | |
Describe any changes to the Fund’s structure or the money | The views expressed in this report reflect those of the portfolio | |
manager line-up. | managers only through the end of the period covered by | |
During the period, RIMCo replaced Signia Capital Management, | the report. These views do not necessarily represent the | |
LLC (“Signia”) with Robeco Investment Management, | views of RIMCo, or any other person in RIMCo or any other | |
Inc. (“Robeco”), and Chartwell Investment Partners, LLC | affiliated organization. These views are subject to change | |
(“Chartwell”) with Ancora Advisors LLC (“Ancora”). RIMCo has | at any time based upon market conditions or other events, | |
higher confidence in the excess return potential of Robeco’s value | and RIMCo disclaims any responsibility to update the views | |
investment strategy and Ancora’s special situation investment | contained herein. These views should not be relied on as | |
approach. | investment advice and, because investment decisions for | |
a Russell Investment Company (“RIC”) Fund are based on | ||
numerous factors, should not be relied on as an indication | ||
of investment decisions of any RIC Fund. |
136 Russell U.S. Small Cap Equity Fund
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* Assumes initial investment on November 1, 2005.
** Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 is a subset of the Russell 3000® Index
representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination
of their market cap and current index membership. The Russell 2000 Index is constructed to provide a comprehensive and unbiased small-cap opportunity
barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity
set.
*** The U.S. Small Cap Equity Linked Benchmark provides a means to compare the Fund’s average annual returns to a secondary benchmark that takes into
account historical changes in the Fund’s primary benchmark. The U.S. Small Cap Equity Linked Benchmark represents the returns of the Russell 2500TM Index
through December 31, 2011 and the returns of the Russell 2000® Index thereafter.
‡ The Fund first issued Class A Shares on September 2, 2008. The returns shown for Class A Shares prior to that date are the returns of the Fund’s Class E
Shares. The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%. Annual returns for each Class will
differ only to the extent that the Class A Shares do not have the same expenses as the Class E Shares.
‡‡ The Fund first issued Class C Shares on September 2, 2008. The returns shown for Class C Shares prior to that date are the returns of the Fund’s Class E Shares
and do not reflect deduction of Rule 12b-1 distribution fees that apply to Class C Shares. Had they done so, the returns shown for those periods would have been
lower. Annual returns for each Class will differ only to the extent that the Class C Shares do not have the same expenses as the Class E Shares.
‡‡‡ The Fund first issued Class S Shares on September 2, 2008. The returns shown for Class S Shares prior to that date are the returns of the Fund’s Class I
Shares. Class S Shares will have substantially similar annual returns as the Class I Shares because the Shares of each Class are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class S Shares do not have the same expenses as the Class I Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Russell U.S. Small Cap Equity Fund 137
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 941.50 | $ | 1,018.85 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 6.17 | $ | 6.41 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.26% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). | |||||
and actual expenses. You may use the information in this column, | ||||||
together with the amount you invested, to estimate the expenses | Hypothetical | |||||
Performance (5% | ||||||
that you paid over the period. Simply divide your account value by | Actual | return before | ||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Class C | Performance | expenses) | |||
= 8.6), then multiply the result by the number in the first column | Beginning Account Value | |||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
the expenses you paid on your account during this period. | October 31, 2015 | $ | 937.80 | $ | 1,015.07 | |
Expenses Paid During Period* | $ | 9.82 | $ | 10.21 | ||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | * Expenses are equal to the Fund's annualized expense ratio of 2.01% | |||||
Performance (5% return before expenses)” provides information | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
about hypothetical account values and hypothetical expenses | year period). | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | Hypothetical | |||||
actual return. The hypothetical account values and expenses | Performance (5% | |||||
Actual | return before | |||||
may not be used to estimate the actual ending account balance or | Class E | Performance | expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
to compare the ongoing costs of investing in the Fund and other | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
funds. To do so, compare this 5% hypothetical example with the | Ending Account Value | |||||
October 31, 2015 | $ | 941.40 | $ | 1,018.85 | ||
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 6.17 | $ | 6.41 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 1.26% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
138 Russell U.S. Small Cap Equity Fund
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class I | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 943.20 | $ | 1,020.52 | |
Expenses Paid During Period* | $ | 4.56 | $ | 4.74 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.93% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 942.60 | $ | 1,020.11 | |
Expenses Paid During Period* | $ | 4.95 | $ | 5.14 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.01% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class Y | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 943.70 | $ | 1,021.07 | |
Expenses Paid During Period* | $ | 4.02 | $ | 4.18 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.82% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
Russell U.S. Small Cap Equity Fund 139
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | ||||||
Principal | Fair | Amount ($) or | Value | ||||
Amount ($) or | Value | Shares | $ | ||||
Shares | $ | ||||||
Common Stocks - 96.0% | FTD Cos., Inc.(Æ) | 215,030 | 6,090 | ||||
Consumer Discretionary - 15.4% | Fuel Systems Solutions, Inc.(Æ) | 17,290 | 108 | ||||
2U, Inc.(Æ)(Ñ) | 75,161 | 1,577 | Full House Resorts, Inc.(Æ) | 545,098 | 769 | ||
Aaron's, Inc. Class A | 15,000 | 370 | Genesco, Inc.(Æ) | 4,700 | 294 | ||
Abercrombie & Fitch Co. Class A(Ñ) | 168,331 | 3,567 | Gentex Corp. | 39,974 | 655 | ||
AMC Entertainment Holdings, Inc. Class A | 133,478 | 3,653 | Gentherm, Inc.(Æ) | 75,125 | 3,693 | ||
American Eagle Outfitters, Inc. | 13,291 | 203 | G-III Apparel Group, Ltd.(Æ) | 80,027 | 4,409 | ||
American Woodmark Corp.(Æ) | 23,787 | 1,729 | Graham Holdings Co. Class B | 500 | 276 | ||
Autobytel, Inc.(Æ) | 173,241 | 3,226 | Grand Canyon Education, Inc.(Æ) | 5,490 | 228 | ||
Barnes & Noble Education, Inc.(Æ) | 131,383 | 1,938 | Gray Television, Inc.(Æ) | 193,141 | 3,069 | ||
Barnes & Noble, Inc. | 38,540 | 501 | Group 1 Automotive, Inc. | 7,000 | 609 | ||
Bassett Furniture Industries, Inc. | 44,709 | 1,429 | Guess?, Inc. | 7,800 | 164 | ||
Beazer Homes USA, Inc.(Æ) | 86,960 | 1,238 | Habit Restaurants, Inc. (The) Class A(Æ)(Ñ) | 33,606 | 803 | ||
Belmond, Ltd. Class A(Æ) | 139,440 | 1,498 | Harte-Hanks, Inc. | 159,461 | 678 | ||
Bob Evans Farms, Inc. | 65,602 | 2,839 | Helen of Troy, Ltd.(Æ) | 1,300 | 129 | ||
Boyd Gaming Corp.(Æ) | 57,930 | 1,158 | Hemisphere Media Group, Inc. Class A(Æ) | ||||
Bravo Brio Restaurant Group, Inc.(Æ) | 99,073 | 1,163 | (Ñ) | 27,019 | 366 | ||
Brinker International, Inc. | 71,264 | 3,243 | HomeAway, Inc.(Æ) | 120,221 | 3,794 | ||
Buckle, Inc. (The)(Ñ) | 83,082 | 2,944 | Horizon Global Corp.(Æ) | 368,039 | 3,235 | ||
Burlington Stores, Inc.(Æ) | 22,475 | 1,081 | HSN, Inc. | 3,500 | 216 | ||
Cabela's, Inc.(Æ) | 71,607 | 2,805 | IMAX Corp.(Æ)(Ñ) | 30,294 | 1,163 | ||
Caleres, Inc. | 50,195 | 1,534 | Interval Leisure Group, Inc. | 58,730 | 1,037 | ||
Callaway Golf Co. | 76,400 | 760 | Intrawest Resorts Holdings, Inc.(Æ) | 24,144 | 216 | ||
Capella Education Co. | 4,699 | 212 | Isle of Capri Casinos, Inc.(Æ) | 115,696 | 2,213 | ||
Carmike Cinemas, Inc.(Æ) | 291,315 | 7,461 | J Alexander's Holdings, Inc.(Æ) | 236,556 | 2,280 | ||
Carrols Restaurant Group, Inc.(Æ) | 106,135 | 1,248 | Jack in the Box, Inc. | 64,140 | 4,780 | ||
Carter's, Inc. | 35,633 | 3,238 | JAKKS Pacific, Inc.(Æ)(Ñ) | 80,769 | 640 | ||
Century Communities, Inc.(Æ) | 86,867 | 1,657 | John Wiley & Sons, Inc. Class A(Æ) | 26,401 | 1,382 | ||
Cheesecake Factory, Inc. (The) | 127,591 | 6,150 | Johnson Outdoors, Inc. Class A | 3,401 | 73 | ||
Cherokee, Inc.(Æ) | 72,038 | 1,307 | K12, Inc.(Æ) | 29,400 | 285 | ||
Chico's FAS, Inc. | 285,026 | 3,939 | KAR Auction Services, Inc. | 63,400 | 2,435 | ||
Children's Place, Inc. (The) | 37,453 | 2,010 | Krispy Kreme Doughnuts, Inc.(Æ) | 188,031 | 2,574 | ||
Christopher & Banks Corp.(Æ) | 200,592 | 293 | Lands' End, Inc.(Æ)(Ñ) | 72,940 | 1,800 | ||
Churchill Downs, Inc. | 33,583 | 4,931 | Lear Corp. | 3,150 | 394 | ||
Chuy's Holdings, Inc.(Æ) | 124,486 | 3,387 | Lee Enterprises, Inc.(Æ)(Ñ) | 233,206 | 464 | ||
Cinemark Holdings, Inc. | 17,000 | 602 | LGI Homes, Inc.(Æ)(Ñ) | 38,007 | 1,065 | ||
Citi Trends, Inc. | 109,107 | 2,899 | Libbey, Inc. | 56,600 | 1,904 | ||
Columbia Sportswear Co. | 11,160 | 612 | Liberty TripAdvisor Holdings, Inc. Class | ||||
Cooper-Standard Holding, Inc.(Æ) | 6,207 | 404 | A(Æ) | 80,323 | 2,505 | ||
Cracker Barrel Old Country Store, Inc.(Ñ) | 9,390 | 1,291 | Liberty Ventures Class A(Æ) | 184,270 | 8,029 | ||
Crocs, Inc.(Æ) | 54,300 | 586 | Lindblad Expeditions Holdings, Inc.(Æ)(Ñ) | 102,218 | 1,084 | ||
Crown Media Holdings, Inc. Class A(Æ) | 291,108 | 1,686 | Lithia Motors, Inc. Class A | 42,904 | 5,036 | ||
Del Frisco's Restaurant Group, Inc.(Æ) | 164,481 | 2,216 | Lumber Liquidators Holdings, Inc.(Æ)(Ñ) | 169,990 | 2,349 | ||
Del Taco Restaurants, Inc.(Æ)(Ñ) | 173,456 | 2,035 | Malibu Boats, Inc. Class A(Æ) | 89,352 | 1,270 | ||
Delta Apparel, Inc.(Æ) | 34,571 | 568 | Marchex, Inc. Class B | 70,833 | 306 | ||
Denny's Corp.(Æ) | 177,900 | 1,950 | Marcus Corp. | 14,025 | 290 | ||
Destination XL Group, Inc.(Æ) | 60,100 | 351 | MarineMax, Inc.(Æ) | 62,688 | 990 | ||
Dick's Sporting Goods, Inc. | 8,000 | 356 | Marriott Vacations Worldwide Corp. | 12,700 | 818 | ||
Domino's Pizza, Inc. | 30,138 | 3,215 | Matthews International Corp. Class A | 37,800 | 2,182 | ||
Eldorado Resorts, Inc.(Æ) | 103,674 | 1,026 | MDC Holdings, Inc. | 21,214 | 551 | ||
Entercom Communications Corp. Class A(Æ) | 67,514 | 745 | MDC Partners, Inc. Class A | 574,968 | 11,948 | ||
Entravision Communications Corp. Class A | 192,017 | 1,682 | Media General, Inc.(Æ)(Ñ) | 123,271 | 1,832 | ||
Eros International PLC(Æ)(Ñ) | 44,560 | 498 | Men's Wearhouse, Inc. (The) | 164,820 | 6,590 | ||
Ethan Allen Interiors, Inc. | 124,641 | 3,391 | Meredith Corp. | 41,282 | 1,941 | ||
EW Scripps Co. (The) Class A | 321,057 | 7,083 | Meritage Homes Corp.(Æ) | 63,581 | 2,242 | ||
Express, Inc.(Æ) | 132,771 | 2,562 | Meritor, Inc.(Æ) | 13,794 | 150 | ||
Federal-Mogul Holdings Corp.(Æ) | 36,933 | 286 | Monarch Casino & Resort, Inc.(Æ) | 92,369 | 2,027 | ||
Fiesta Restaurant Group, Inc.(Æ) | 61,927 | 2,190 | Motorcar Parts of America, Inc.(Æ) | 83,350 | 2,806 | ||
Finish Line, Inc. (The) Class A | 241,447 | 4,498 | Movado Group, Inc. | 73,045 | 1,880 | ||
Fossil Group, Inc.(Æ) | 40,540 | 2,206 | National CineMedia, Inc. | 70,391 | 1,000 | ||
Fox Factory Holding Corp.(Æ) | 47,233 | 838 | New York Times Co. (The) Class A | 85,890 | 1,141 |
See accompanying notes which are an integral part of the financial statements.
140 Russell U.S. Small Cap Equity Fund
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Nexstar Broadcasting Group, Inc. Class A | 31,859 | 1,696 | Core-Mark Holding Co., Inc. | 98,289 | 7,990 | ||
Papa John's International, Inc. | 11,200 | 786 | Diplomat Pharmacy, Inc.(Æ)(Ñ) | 109,576 | 3,080 | ||
Party City Holdco, Inc.(Æ) | 30,001 | 475 | Farmer Bros Co.(Æ) | 26,733 | 759 | ||
Peak Resorts, Inc.(Å)(Æ)(Ñ) | 217,050 | 1,558 | Flowers Foods, Inc. | 9,600 | 259 | ||
Penn National Gaming, Inc.(Æ) | 170,643 | 3,048 | Inventure Foods, Inc.(Æ)(Ñ) | 111,948 | 969 | ||
Performance Sports Group, Ltd.(Æ) | 275,735 | 3,165 | J&J Snack Foods Corp. | 40,796 | 5,009 | ||
Perry Ellis International, Inc.(Æ) | 19,602 | 421 | John B Sanfilippo & Son, Inc. | 13,696 | 886 | ||
Pier 1 Imports, Inc.(Ñ) | 88,580 | 657 | Lancaster Colony Corp. | 11,050 | 1,257 | ||
Pinnacle Entertainment, Inc.(Æ) | 33,050 | 1,157 | Liberator Medical Holdings, Inc. | 312,670 | 757 | ||
Pool Corp. | 77,383 | 6,310 | Limoneira Co.(Ñ) | 95,600 | 1,516 | ||
QuinStreet, Inc.(Æ) | 27,800 | 154 | MGP Ingredients, Inc. | 15,011 | 260 | ||
Radio One, Inc. Class D(Æ)(Ñ) | 408,900 | 879 | National Beverage Corp.(Æ) | 5,411 | 204 | ||
Reading International, Inc. Class A(Æ) | 33,488 | 519 | Natural Health Trends Corp.(Ñ) | 36,856 | 1,816 | ||
Rentrak Corp.(Æ)(Ñ) | 19,930 | 1,100 | Nature's Sunshine Products, Inc. | 3,876 | 46 | ||
Restoration Hardware Holdings, Inc.(Æ) | 31,954 | 3,294 | Omega Protein Corp.(Æ) | 42,971 | 782 | ||
Scholastic Corp. | 49,703 | 2,031 | Post Holdings, Inc.(Æ) | 79,400 | 5,103 | ||
Scientific Games Corp. Class A(Æ)(Ñ) | 165,489 | 1,835 | Roundy's, Inc.(Æ) | 5,824 | 13 | ||
SeaWorld Entertainment, Inc. | 30,158 | 601 | Sanderson Farms, Inc.(Ñ) | 36,656 | 2,548 | ||
Select Comfort Corp.(Æ) | 47,259 | 1,002 | SpartanNash Co. | 230,536 | 6,432 | ||
Sequential Brands Group, Inc.(Æ)(Ñ) | 48,111 | 602 | SunOpta, Inc.(Æ) | 395,778 | 2,129 | ||
Shoe Carnival, Inc. | 12,300 | 276 | SUPERVALU, Inc.(Æ) | 408,825 | 2,686 | ||
Six Flags Entertainment Corp. | 39,600 | 2,061 | Synutra International, Inc.(Æ) | 8,821 | 50 | ||
Sizmek, Inc.(Æ) | 165,561 | 982 | Universal Corp. | 63,979 | 3,455 | ||
Skechers U.S.A., Inc. Class A(Æ) | 65,018 | 2,029 | USANA Health Sciences, Inc.(Æ) | 18,003 | 2,315 | ||
Skullcandy, Inc.(Æ) | 39,900 | 223 | 73,170 | ||||
Smith & Wesson Holding Corp.(Æ) | 73,724 | 1,317 | |||||
Sonic Corp. | 48,800 | 1,393 | Energy - 3.1% | ||||
Sportsman's Warehouse Holdings, Inc.(Æ) | 60,584 | 652 | Alliance Resource Partners, LP(Ñ) | 5,999 | 129 | ||
Stamps.com, Inc.(Æ) | 18,387 | 1,390 | Approach Resources, Inc.(Æ)(Ñ) | 459,900 | 1,085 | ||
Standard Motor Products, Inc. | 91,678 | 4,057 | Atwood Oceanics, Inc.(Ñ) | 53,898 | 892 | ||
Starz Class A(Æ) | 30,892 | 1,035 | Basic Energy Services, Inc.(Æ)(Ñ) | 130,621 | 485 | ||
Stein Mart, Inc. | 20,200 | 179 | Bill Barrett Corp.(Æ)(Ñ) | 735,424 | 3,582 | ||
Superior Uniform Group, Inc. | 151,735 | 2,586 | Bonanza Creek Energy, Inc.(Æ) | 169,349 | 964 | ||
Tenneco, Inc.(Æ) | 79,736 | 4,512 | Callon Petroleum Co.(Æ) | 72,290 | 628 | ||
Texas Roadhouse, Inc. Class A | 36,040 | 1,238 | CARBO Ceramics, Inc.(Ñ) | 240,087 | 4,206 | ||
Thor Industries, Inc. | 59,569 | 3,221 | Carrizo Oil & Gas, Inc.(Æ) | 62,366 | 2,347 | ||
Tilly's, Inc. Class A(Æ) | 93,996 | 685 | Cloud Peak Energy, Inc.(Æ)(Ñ) | 261,595 | 777 | ||
Time, Inc.(Æ) | 400,669 | 7,444 | Delek US Holdings, Inc. | 40,400 | 1,099 | ||
TiVo, Inc.(Æ) | 76,000 | 690 | Diamondback Energy, Inc.(Æ) | 11,200 | 827 | ||
Townsquare Media, Inc. Class A(Æ) | 262,314 | 2,875 | Flotek Industries, Inc.(Æ)(Ñ) | 39,450 | 714 | ||
TravelCenters of America LLC(Æ) | 220,566 | 2,541 | Goodrich Petroleum Corp.(Æ)(Ñ) | 306,150 | 184 | ||
TRI Pointe Group, Inc.(Æ) | 159,983 | 2,077 | Green Plains, Inc. | 195,323 | 4,006 | ||
Tribune Publishing Co. | 59,100 | 558 | Gulf Island Fabrication, Inc. | 27,086 | 274 | ||
Universal Electronics, Inc.(Æ) | 1,979 | 94 | Gulfport Energy Corp.(Æ) | 38,800 | 1,182 | ||
Vail Resorts, Inc. | 13,030 | 1,488 | Independence Contract Drilling, Inc.(Æ)(Ñ) | 97,062 | 682 | ||
Vista Outdoor, Inc.(Æ) | 45,768 | 2,047 | Matrix Service Co.(Æ) | 70,224 | 1,594 | ||
Vitamin Shoppe, Inc.(Æ) | 15,380 | 441 | McDermott International, Inc.(Æ)(Ñ) | 767,628 | 3,539 | ||
VOXX International Corp. Class A(Æ) | 35,686 | 184 | Memorial Resource Development Corp.(Æ) | 47,282 | 836 | ||
WCI Communities, Inc.(Æ) | 36,524 | 873 | Oasis Petroleum, Inc.(Æ)(Ñ) | 23,040 | 268 | ||
West Marine, Inc.(Æ) | 70,409 | 717 | Pacific Ethanol, Inc.(Æ)(Ñ) | 181,200 | 1,089 | ||
William Lyon Homes Class A(Æ) | 158,016 | 3,372 | Patterson-UTI Energy, Inc. | 460,113 | 6,851 | ||
317,849 | PBF Energy, Inc. Class A | 4,800 | 163 | ||||
PetroQuest Energy, Inc.(Æ) | 567,565 | 636 | |||||
Consumer Staples - 3.5% | Phillips 66 Partners, LP(Ñ) | 50,903 | 3,087 | ||||
Andersons, Inc. (The) | 113,923 | 4,033 | PowerSecure International, Inc.(Æ) | 123,406 | 1,538 | ||
Boston Beer Co., Inc. Class A(Æ) | 2,299 | 505 | Precision Drilling Corp.(Ñ) | 641,541 | 2,534 | ||
Boulder Brands, Inc.(Æ)(Ñ) | 98,300 | 871 | Rex Energy Corp.(Æ)(Ñ) | 278,574 | 630 | ||
Cadiz, Inc.(Æ)(Ñ) | 66,900 | 229 | Rice Energy, Inc.(Æ) | 35,797 | 546 | ||
Cal-Maine Foods, Inc.(Ñ) | 111,420 | 5,957 | RSP Permian, Inc.(Æ) | 47,971 | 1,315 | ||
Casey's General Stores, Inc. | 105,947 | 11,254 | Sanchez Energy Corp.(Æ)(Ñ) | 148,483 | 883 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Small Cap Equity Fund 141
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
SemGroup Corp. Class A | 49,489 | 2,254 | Chemical Financial Corp. | 138,355 | 4,694 | ||
Seventy Seven Energy, Inc.(Æ)(Ñ) | 306,404 | 349 | City Holding Co.(Ñ) | 13,962 | 668 | ||
Superior Energy Services, Inc. | 241,626 | 3,421 | City Office REIT, Inc.(Æ)(ö) | 107,700 | 1,237 | ||
Synergy Resources Corp.(Æ) | 28,062 | 314 | CNO Financial Group, Inc. | 95,500 | 1,835 | ||
Targa Resources Corp. | 31,282 | 1,788 | CoBiz Financial, Inc. | 143,474 | 1,788 | ||
TETRA Technologies, Inc.(Æ) | 203,116 | 1,369 | Columbia Banking System, Inc. | 156,165 | 5,203 | ||
Trecora Resources(Æ) | 65,870 | 938 | Columbia Property Trust, Inc.(ö) | 26,186 | 650 | ||
US Antimony Corp.(Å)(Æ)(Ñ) | 1,089,297 | 327 | Comerica, Inc. | 12,700 | 551 | ||
Westmoreland Coal Co.(Æ)(Ñ) | 130,500 | 934 | Community Bank System, Inc. | 68,319 | 2,785 | ||
Willbros Group, Inc.(Æ) | 397,154 | 794 | Community Trust Bancorp, Inc. | 16,548 | 570 | ||
World Fuel Services Corp. | 48,600 | 2,161 | CommunityOne Bancorp(Æ) | 4,565 | 59 | ||
64,221 | Consolidated-Tomoka Land Co. | 45,858 | 2,350 | ||||
Corporate Office Properties Trust(ö) | 7,800 | 179 | |||||
Financial Services - 26.7% | Cowen Group, Inc. Class A(Æ)(Ñ) | 508,529 | 2,141 | ||||
AG Mortgage Investment Trust, Inc.(ö) | 8,635 | 131 | CubeSmart(ö) | 50,908 | 1,416 | ||
Alexander & Baldwin, Inc. | 43,879 | 1,656 | Cullen/Frost Bankers, Inc. | 15,219 | 1,042 | ||
Ambac Financial Group, Inc.(Æ) | 60,958 | 984 | Customers Bancorp, Inc.(Æ) | 100,677 | 2,769 | ||
American Equity Investment Life Holding | CVB Financial Corp. | 8,932 | 156 | ||||
Co. | 90,743 | 2,330 | CyrusOne, Inc.(ö) | 193,900 | 6,841 | ||
Ameris Bancorp | 25,318 | 798 | CYS Investments, Inc.(ö) | 275,336 | 2,126 | ||
AMERISAFE, Inc. | 31,844 | 1,743 | Diamond Hill Investment Group, Inc. | 17,994 | 3,600 | ||
Anchor BanCorp Wisconsin, Inc.(Æ) | 8,400 | 345 | DiamondRock Hospitality Co.(ö) | 180,400 | 2,107 | ||
Apollo Residential Mortgage, Inc.(ö) | 42,222 | 543 | Donegal Group, Inc. Class A | 2,966 | 42 | ||
Arbor Realty Trust, Inc.(ö) | 54,129 | 338 | Duke Realty Corp.(ö) | 20,000 | 414 | ||
Ares Commercial Real Estate Corp.(Æ)(ö) | 138,700 | 1,712 | DuPont Fabros Technology, Inc.(ö) | 108,351 | 3,477 | ||
Argo Group International Holdings, Ltd. | 39,766 | 2,486 | E*Trade Financial Corp.(Æ) | 4,800 | 137 | ||
Armada Hoffler Properties, Inc.(ö) | 13,400 | 144 | Eagle Bancorp, Inc.(Æ) | 28,756 | 1,369 | ||
Ashford Hospitality Prime, Inc.(ö) | 49,789 | 732 | East West Bancorp, Inc. | 24,100 | 973 | ||
Ashford, Inc.(Æ) | 15,884 | 1,021 | Easterly Government Properties, Inc.(Æ)(ö) | 23,410 | 409 | ||
Assurant, Inc. | 22,187 | 1,809 | EastGroup Properties, Inc.(ö) | 22,000 | 1,236 | ||
Astoria Financial Corp. | 16,714 | 267 | Education Realty Trust, Inc.(ö) | 84,576 | 3,037 | ||
Baldwin & Lyons, Inc. Class B | 2,241 | 52 | EMC Insurance Group, Inc. | 11,240 | 281 | ||
BancFirst Corp. | 16,818 | 1,036 | Employers Holdings, Inc. | 76,800 | 2,033 | ||
Bancorp, Inc. (The)(Æ) | 54,877 | 395 | Endurance Specialty Holdings, Ltd. | 94,104 | 5,941 | ||
BancorpSouth, Inc. | 150,374 | 3,749 | Enstar Group, Ltd.(Æ) | 3,622 | 572 | ||
Bank of Marin Bancorp | 800 | 43 | Enterprise Financial Services Corp. | 26,276 | 745 | ||
Bank of the Ozarks, Inc. | 188,561 | 9,432 | EPR Properties(ö) | 44,430 | 2,524 | ||
Banner Corp. | 20,755 | 1,018 | Equity Commonwealth(Æ)(ö) | 78,500 | 2,254 | ||
Bar Harbor Bankshares | 1,594 | 56 | Equity One, Inc.(ö) | 54,000 | 1,435 | ||
BGC Partners, Inc. Class A | 194,100 | 1,679 | Essent Group, Ltd.(Æ) | 142,036 | 3,423 | ||
Bluerock Residential Growth REIT, Inc. | EverBank Financial Corp. | 42,074 | 726 | ||||
Class A(Ñ)(ö) | 150,800 | 1,767 | Evercore Partners, Inc. Class A | 67,123 | 3,625 | ||
BNC Bancorp | 18,148 | 407 | Ezcorp, Inc. Class A(Æ) | 21,163 | 141 | ||
Boston Private Financial Holdings, Inc. | 113,406 | 1,300 | Fair Isaac Corp. | 45,591 | 4,211 | ||
Brookline Bancorp, Inc. | 300,827 | 3,414 | FBR & Co. | 75,796 | 1,499 | ||
Bryn Mawr Bank Corp. | 3,600 | 105 | FCB Financial Holdings, Inc. Class A(Æ) | 33,300 | 1,184 | ||
Capital Bank Financial Corp. Class A(Æ) | 58,402 | 1,886 | Federated National Holding Co. | 26,344 | 811 | ||
Capital City Bank Group, Inc. | 2,432 | 38 | FelCor Lodging Trust, Inc.(ö) | 578,431 | 4,656 | ||
Capital Southwest Corp.(Æ) | 166,687 | 2,492 | Fidelity & Guaranty Life | 124,042 | 3,312 | ||
Capstead Mortgage Corp.(ö) | 109,000 | 1,052 | Fidelity Southern Corp. | 56,525 | 1,184 | ||
Cardinal Financial Corp. | 140,780 | 3,200 | First American Financial Corp. | 30,000 | 1,144 | ||
Cardtronics, Inc.(Æ) | 46,917 | 1,619 | First BanCorp(Æ) | 395,707 | 1,500 | ||
Cascade Bancorp(Æ) | 14,206 | 80 | First Busey Corp.(Æ) | 35,432 | 739 | ||
Cash America International, Inc. | 254,761 | 8,797 | First Business Financial Services, Inc. | 7,360 | 181 | ||
CatchMark Timber Trust, Inc. Class A(ö) | 171,000 | 1,872 | First Defiance Financial Corp. | 20,800 | 797 | ||
Cathay General Bancorp | 14,186 | 444 | First Financial Bancorp | 130,835 | 2,523 | ||
CBOE Holdings, Inc. | 4,400 | 295 | First Financial Corp. | 8,900 | 305 | ||
Cedar Realty Trust, Inc.(ö) | 257,700 | 1,801 | First Foundation, Inc.(Æ) | 22,500 | 534 | ||
CenterState Banks, Inc. | 292,804 | 4,269 | First Industrial Realty Trust, Inc.(ö) | 137,139 | 2,973 | ||
Central Pacific Financial Corp. | 93,217 | 2,084 | First Interstate BancSystem, Inc. Class A | 57,119 | 1,620 | ||
Charter Financial Corp. | 155,248 | 2,034 |
See accompanying notes which are an integral part of the financial statements.
142 Russell U.S. Small Cap Equity Fund
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
First Merchants Corp. | 79,679 | 2,090 | Kennedy-Wilson Holdings, Inc. | 82,000 | 2,011 | ||
First Midwest Bancorp, Inc. | 260,849 | 4,648 | Lakeland Bancorp, Inc. | 9,000 | 105 | ||
First NBC Bank Holding Co.(Æ) | 103,390 | 3,845 | Lakeland Financial Corp. | 4,400 | 198 | ||
FirstMerit Corp. | 29,898 | 562 | LaSalle Hotel Properties(ö) | 125,098 | 3,679 | ||
Flagstar Bancorp, Inc.(Æ) | 4,000 | 89 | LCNB Corp. | 3,565 | 57 | ||
FNB Corp. | 689,603 | 9,289 | LCNB Corp.(Å) | 90,028 | 1,438 | ||
FNFV Group(Æ) | 657,395 | 7,389 | LendingTree, Inc.(Æ) | 7,656 | 929 | ||
Franklin Financial Network, Inc.(Æ) | 30,160 | 809 | Mack-Cali Realty Corp.(ö) | 94,848 | 2,064 | ||
Franklin Street Properties Corp.(ö) | 35,904 | 374 | Maiden Holdings, Ltd. | 290,874 | 4,523 | ||
FRP Holdings, Inc.(Æ) | 14,800 | 488 | Marcus & Millichap, Inc.(Æ) | 35,078 | 1,528 | ||
FRP Holdings, Inc.(Å)(Æ) | 58,231 | 1,922 | MarketAxess Holdings, Inc. | 51,536 | 5,221 | ||
Fulton Financial Corp. | 206,707 | 2,774 | MB Financial, Inc. | 110,509 | 3,563 | ||
GAIN Capital Holdings, Inc. | 205,156 | 1,528 | Medical Properties Trust, Inc.(ö) | 130,000 | 1,469 | ||
GEO Group, Inc. (The)(ö) | 113,500 | 3,663 | Meridian Bancorp, Inc. | 221,832 | 3,115 | ||
German American Bancorp, Inc. | 7,481 | 234 | Meta Financial Group, Inc. | 7,010 | 302 | ||
Getty Realty Corp.(ö) | 27,300 | 461 | MGIC Investment Corp.(Æ) | 445,717 | 4,190 | ||
Glacier Bancorp, Inc. | 115,954 | 3,173 | Moelis & Co. Class A | 32,100 | 946 | ||
Global Indemnity PLC Class A(Æ) | 8,033 | 228 | Morningstar, Inc. | 7,890 | 648 | ||
Global Payments, Inc. | 9,100 | 1,241 | National Bank Holdings Corp. Class A | 227,482 | 5,018 | ||
Golub Capital BDC, Inc.(Ñ) | 39,600 | 648 | National Health Investors, Inc.(ö) | 33,036 | 1,941 | ||
Gramercy Property Trust, Inc.(ö) | 70,400 | 1,597 | National Penn Bancshares, Inc. | 32,650 | 393 | ||
Great Southern Bancorp, Inc. | 24,559 | 1,187 | National Storage Affiliates Trust(Æ)(ö) | 70,600 | 1,062 | ||
Great Western Bancorp, Inc. | 30,013 | 848 | National Western Life Group, Inc. Class A(Æ) | 2,893 | 746 | ||
Green Dot Corp. Class A(Æ) | 83,643 | 1,551 | Navigators Group, Inc. (The)(Æ) | 35,825 | 3,058 | ||
Greenhill & Co., Inc. | 97,043 | 2,506 | Nelnet, Inc. Class A | 32,400 | 1,159 | ||
Greenlight Capital Re, Ltd. Class A(Æ) | 19,149 | 421 | New Residential Investment Corp.(ö) | 558,438 | 6,774 | ||
Hallmark Financial Services, Inc.(Æ) | 9,479 | 123 | New Senior Investment Group, Inc.(ö) | 266,554 | 2,671 | ||
Hancock Holding Co. | 181,338 | 5,005 | Newcastle Investment Corp.(ö) | 227,678 | 1,120 | ||
Hanmi Financial Corp. | 94,274 | 2,404 | Northfield Bancorp, Inc. | 219,181 | 3,358 | ||
Hanover Insurance Group, Inc. (The) | 77,467 | 6,527 | Northwest Bancshares, Inc. | 242,788 | 3,268 | ||
Hatteras Financial Corp.(ö) | 110,032 | 1,575 | OceanFirst Financial Corp. | 20,284 | 374 | ||
Healthcare Realty Trust, Inc.(ö) | 36,100 | 952 | OFG Bancorp(Ñ) | 71,335 | 657 | ||
Heartland Financial USA, Inc. | 38,270 | 1,410 | Old National Bancorp | 716,643 | 10,033 | ||
Heartland Payment Systems, Inc. | 91,474 | 6,769 | OneBeacon Insurance Group, Ltd. Class A | 52,048 | 749 | ||
Hercules Technology Growth Capital, Inc. | Opus Bank | 40,171 | 1,496 | ||||
(Æ)(Ñ) | 143,385 | 1,600 | Pacific Continental Corp. | 22,346 | 320 | ||
Heritage Financial Corp. | 148,827 | 2,741 | Pacific Premier Bancorp, Inc.(Æ) | 51,394 | 1,097 | ||
Heritage Insurance Holdings, Inc.(Æ) | 49,430 | 1,093 | PacWest Bancorp | 106,617 | 4,802 | ||
Heritage Oaks Bancorp | 5,635 | 50 | Park Sterling Corp. | 22,846 | 166 | ||
Hersha Hospitality Trust Class A(ö) | 52,950 | 1,271 | PennyMac Financial Services, Inc. Class | ||||
HFF, Inc. Class A | 178,373 | 6,157 | A(Æ) | 24,901 | 412 | ||
Highwoods Properties, Inc.(ö) | 16,500 | 717 | People's Utah Bancorp(Æ) | 48,550 | 799 | ||
Home BancShares, Inc. | 120,969 | 5,192 | Physicians Realty Trust(ö) | 113,200 | 1,809 | ||
HomeTrust Bancshares, Inc.(Æ) | 23,010 | 436 | Pinnacle Financial Partners, Inc. | 6,879 | 362 | ||
Horizon Bancorp | 4,100 | 107 | Piper Jaffray Cos.(Æ) | 20,800 | 740 | ||
Howard Hughes Corp. (The)(Æ) | 15,700 | 1,940 | Planet Payment, Inc.(Æ) | 209,619 | 629 | ||
Hudson Pacific Properties, Inc.(ö) | 40,000 | 1,143 | Popular, Inc.(Æ) | 109,139 | 3,227 | ||
Huntington Bancshares, Inc. | 32,100 | 352 | Post Properties, Inc.(ö) | 5,700 | 341 | ||
Iberiabank Corp. | 72,951 | 4,423 | Potlatch Corp.(ö) | 102,614 | 3,206 | ||
Independent Bank Corp. | 164,960 | 2,389 | PRA Group, Inc.(Æ)(Ñ) | 85,857 | 4,705 | ||
Independent Bank Group, Inc. | 35,055 | 1,365 | Preferred Bank | 4,900 | 162 | ||
Infinity Property & Casualty Corp. | 27,399 | 2,206 | PrivateBancorp, Inc. Class A | 65,158 | 2,726 | ||
Invesco Mortgage Capital, Inc.(ö) | 70,500 | 850 | ProAssurance Corp. | 68,712 | 3,639 | ||
Investment Technology Group, Inc. | 50,408 | 807 | Prosperity Bancshares, Inc. | 188,683 | 9,695 | ||
Investors Bancorp, Inc. | 165,300 | 2,068 | Provident Financial Services, Inc. | 232,319 | 4,721 | ||
Jack Henry & Associates, Inc. | 68,885 | 5,328 | QTS Realty Trust, Inc. Class A(ö) | 20,913 | 899 | ||
JMP Group LLC(Ñ) | 107,109 | 660 | Radian Group, Inc. | 156,262 | 2,261 | ||
Kansas City Life Insurance Co. | 6,886 | 338 | Raymond James Financial, Inc. | 5,800 | 320 | ||
KCG Holdings, Inc. Class A(Æ) | 75,429 | 942 | RE/MAX Holdings, Inc. Class A | 6,500 | 245 | ||
Kemper Corp. | 58,800 | 2,100 | Reinsurance Group of America, Inc. Class A | 9,971 | 900 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Small Cap Equity Fund 143
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Renasant Corp. | 1,960 | 68 | Yadkin Financial Corp. | 60,400 | 1,422 | ||
Retail Opportunity Investments Corp.(ö) | 298,303 | 5,408 | 552,446 | ||||
RLI Corp. | 8,859 | 539 | |||||
RLJ Lodging Trust(ö) | 34,500 | 866 | Health Care - 10.8% | ||||
Rouse Properties, Inc.(Ñ)(ö) | 325,970 | 5,734 | Abiomed, Inc.(Æ) | 104,275 | 7,681 | ||
Ryman Hospitality Properties, Inc.(ö) | 19,545 | 1,028 | Acadia Healthcare Co., Inc.(Æ) | 96,705 | 5,939 | ||
Sabra Health Care REIT, Inc.(ö) | 106,897 | 2,424 | Accuray, Inc.(Æ)(Ñ) | 470,100 | 3,150 | ||
Safety Insurance Group, Inc. | 1,221 | 71 | Acorda Therapeutics, Inc.(Æ) | 40,356 | 1,454 | ||
Sandy Spring Bancorp, Inc. | 6,500 | 179 | Adeptus Health, Inc. Class A(Æ)(Ñ) | 50,081 | 3,250 | ||
Selective Insurance Group, Inc. | 192,846 | 7,037 | Affymetrix, Inc.(Æ) | 97,256 | 895 | ||
Seritage Growth Properties(Æ)(Ñ)(ö) | 30,700 | 1,293 | Akorn, Inc.(Æ) | 110,116 | 2,944 | ||
ServisFirst Bancshares, Inc. | 26,492 | 1,123 | Albany Molecular Research, Inc.(Æ)(Ñ) | 158,935 | 2,867 | ||
Signature Bank(Æ) | 2,870 | 427 | Alere, Inc.(Æ) | 11,800 | 544 | ||
Silver Bay Realty Trust Corp.(ö) | 79,348 | 1,285 | Allscripts Healthcare Solutions, Inc.(Æ) | 246,990 | 3,473 | ||
Simmons First National Corp. Class A | 2,529 | 130 | AMAG Pharmaceuticals, Inc.(Æ) | 41,619 | 1,665 | ||
South State Corp. | 58,047 | 4,499 | Amedisys, Inc.(Æ) | 16,162 | 640 | ||
Southwest Bancorp, Inc. | 136,979 | 2,316 | AMN Healthcare Services, Inc.(Æ) | 114,185 | 3,239 | ||
Sovran Self Storage, Inc.(ö) | 15,000 | 1,498 | Anacor Pharmaceuticals, Inc.(Æ) | 31,794 | 3,574 | ||
Starwood Property Trust, Inc.(ö) | 75,512 | 1,517 | Analogic Corp. | 34,939 | 3,061 | ||
Starwood Waypoint Residential Trust(ö) | 101,780 | 2,504 | ANI Pharmaceuticals, Inc.(Æ)(Ñ) | 24,588 | 1,029 | ||
State Bank Financial Corp. | 440,787 | 9,433 | Atrion Corp. | 1,492 | 551 | ||
Sterling Bancorp | 308,192 | 4,743 | BioDelivery Sciences International, Inc.(Æ) | ||||
Stewart Information Services Corp. | 18,283 | 734 | (Ñ) | 475,587 | 2,559 | ||
Stifel Financial Corp.(Æ) | 63,808 | 2,835 | Bio-Techne Corp. | 13,932 | 1,229 | ||
Stock Yards Bancorp, Inc. | 8,302 | 313 | BioTelemetry, Inc.(Æ) | 65,044 | 847 | ||
Stonegate Bank | 49,996 | 1,560 | Cambrex Corp.(Æ) | 53,862 | 2,476 | ||
STORE Capital Corp.(ö) | 23,300 | 528 | Capital Senior Living Corp.(Æ) | 132,145 | 2,989 | ||
Sun Communities, Inc.(ö) | 64,145 | 4,299 | Cara Therapeutics, Inc.(Æ) | 50,600 | 717 | ||
Sunstone Hotel Investors, Inc.(ö) | 92,600 | 1,339 | Chemed Corp.(Ñ) | 51,182 | 8,050 | ||
SVB Financial Group(Æ) | 1,210 | 148 | Collegium Pharmaceutical, Inc.(Æ) | 34,922 | 642 | ||
Symetra Financial Corp. | 20,302 | 644 | Computer Programs & Systems, Inc.(Ñ) | 33,173 | 1,261 | ||
Talmer Bancorp, Inc. Class A | 171,424 | 2,883 | Concert Pharmaceuticals, Inc.(Æ) | 40,867 | 928 | ||
Taubman Centers, Inc.(ö) | 1,400 | 108 | CONMED Corp. | 64,351 | 2,610 | ||
Territorial Bancorp, Inc. | 16,541 | 461 | CorVel Corp.(Æ) | 57,856 | 1,921 | ||
THL Credit, Inc. | 46,200 | 529 | Cross Country Healthcare, Inc.(Æ) | 50,483 | 682 | ||
Towne Bank | 47,071 | 1,010 | Cynosure, Inc. Class A(Æ) | 74,430 | 2,802 | ||
TriCo Bancshares | 18,114 | 477 | Depomed, Inc.(Æ) | 114,972 | 2,012 | ||
TriState Capital Holdings, Inc.(Æ) | 94,201 | 1,177 | Dermira, Inc.(Æ) | 27,200 | 734 | ||
TrustCo Bank Corp. | 129,933 | 809 | DexCom, Inc.(Æ) | 9,444 | 787 | ||
Trustmark Corp. | 2,048 | 49 | Dynavax Technologies Corp.(Æ) | 42,821 | 972 | ||
Two Harbors Investment Corp.(ö) | 183,900 | 1,556 | Eagle Pharmaceuticals, Inc.(Æ)(Ñ) | 7,458 | 475 | ||
UMB Financial Corp. | 70,790 | 3,474 | Emergent BioSolutions, Inc.(Æ) | 34,500 | 1,109 | ||
Union Bankshares Corp. | 109,955 | 2,754 | Ensign Group, Inc. (The) | 87,638 | 3,695 | ||
United Community Banks, Inc. | 78,600 | 1,585 | Exactech, Inc.(Æ) | 29,405 | 501 | ||
United Financial Bancorp, Inc. | 276,585 | 3,590 | Exelixis, Inc.(Æ) | 223,820 | 1,347 | ||
Universal Insurance Holdings, Inc. | 101,729 | 3,210 | Five Prime Therapeutics, Inc.(Æ) | 34,292 | 1,102 | ||
Virtus Investment Partners, Inc. | 22,598 | 2,645 | Five Star Quality Care, Inc.(Æ) | 59,355 | 194 | ||
Walker & Dunlop, Inc.(Æ) | 52,089 | 1,511 | Flamel Technologies SA - ADR(Æ) | 277,309 | 4,542 | ||
Washington Federal, Inc. | 179,309 | 4,472 | Genesis Healthcare, Inc. Class A(Æ) | 385,197 | 1,911 | ||
Webster Financial Corp. | 127,377 | 4,726 | Globus Medical, Inc. Class A(Æ) | 149,723 | 3,346 | ||
Weight Watchers International, Inc.(Æ)(Ñ) | 54,816 | 843 | Greatbatch, Inc.(Æ) | 44,211 | 2,363 | ||
WesBanco, Inc. | 74,153 | 2,421 | Haemonetics Corp.(Æ) | 42,248 | 1,427 | ||
Westamerica Bancorporation(Ñ) | 106,711 | 4,718 | Halyard Health, Inc.(Æ) | 91,077 | 2,703 | ||
Western Alliance Bancorp(Æ) | 17,747 | 634 | HealthEquity, Inc.(Æ) | 124,025 | 4,057 | ||
Wilshire Bancorp, Inc. | 6,087 | 65 | HealthSouth Corp. | 79,784 | 2,779 | ||
Winthrop Realty Trust(Æ)(ö) | 91,120 | 1,320 | Heron Therapeutics, Inc.(Æ)(Ñ) | 33,245 | 912 | ||
Wintrust Financial Corp. | 7,500 | 379 | Heska Corp.(Æ) | 28,805 | 886 | ||
WisdomTree Investments, Inc.(Ñ) | 30,881 | 594 | ICON PLC(Æ) | 21,262 | 1,358 | ||
WSFS Financial Corp. | 52,323 | 1,662 | ICU Medical, Inc.(Æ) | 13,600 | 1,496 | ||
Impax Laboratories, Inc.(Æ) | 45,009 | 1,559 |
See accompanying notes which are an integral part of the financial statements
144 Russell U.S. Small Cap Equity Fund
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Inogen, Inc.(Æ) | 80,717 | 3,450 | VCA, Inc.(Æ) | 74,133 | 4,060 | ||
Insys Therapeutics, Inc.(Æ)(Ñ) | 97,564 | 2,513 | Vical, Inc.(Æ) | 43,900 | 18 | ||
Integra LifeSciences Holdings Corp.(Æ) | 74,840 | 4,458 | WellCare Health Plans, Inc.(Æ) | 14,890 | 1,319 | ||
Intra-Cellular Therapies, Inc.(Æ) | 23,987 | 1,148 | Zeltiq Aesthetics, Inc.(Æ) | 94,206 | 3,178 | ||
Invacare Corp. | 195,587 | 3,380 | 224,087 | ||||
Kindred Healthcare, Inc. | 143,145 | 1,918 | |||||
La Jolla Pharmaceutical Co.(Æ) | 30,703 | 767 | Materials and Processing - 5.0% | ||||
Landauer, Inc. | 11,300 | 446 | A Schulman, Inc. | 2,497 | 90 | ||
LDR Holding Corp.(Æ) | 116,822 | 2,956 | Aceto Corp. | 44,471 | 1,341 | ||
LeMaitre Vascular, Inc. | 67,804 | 903 | Acuity Brands, Inc. | 21,813 | 4,768 | ||
LHC Group, Inc.(Æ) | 34,158 | 1,539 | Allegheny Technologies, Inc. | 46,300 | 681 | ||
LifePoint Health, Inc.(Æ) | 26,074 | 1,796 | Apogee Enterprises, Inc. | 112,346 | 5,564 | ||
Ligand Pharmaceuticals, Inc. Class B(Æ) | 77,103 | 6,966 | AptarGroup, Inc. | 6,600 | 485 | ||
Lipocine, Inc.(Æ) | 60,160 | 720 | Aspen Aerogels, Inc.(Æ) | 14,844 | 124 | ||
LivaNova PLC(Æ) | 12,883 | 854 | Axiall Corp. | 142,875 | 2,893 | ||
Loxo Oncology, Inc.(Æ) | 35,995 | 842 | Beacon Roofing Supply, Inc.(Æ) | 30,343 | 1,074 | ||
Luminex Corp.(Æ) | 83,600 | 1,522 | Belden, Inc. | 933 | 60 | ||
Magellan Health, Inc.(Æ) | 37,088 | 1,980 | Berry Plastics Group, Inc.(Æ) | 68,525 | 2,296 | ||
Masimo Corp.(Æ) | 10,980 | 436 | Boise Cascade Co.(Æ) | 58,810 | 1,760 | ||
Meridian Bioscience, Inc. | 2,406 | 46 | Cabot Corp. | 214,212 | 7,699 | ||
Mirati Therapeutics, Inc.(Æ) | 24,343 | 861 | Caesarstone Sdot-Yam, Ltd.(Ñ) | 26,535 | 942 | ||
Molina Healthcare, Inc.(Æ) | 122,670 | 7,606 | Carpenter Technology Corp. | 78,006 | 2,598 | ||
National HealthCare Corp. | 3,388 | 221 | Chemtura Corp.(Æ) | 73,607 | 2,351 | ||
Natus Medical, Inc.(Æ) | 69,835 | 3,180 | Comfort Systems USA, Inc. | 61,090 | 1,951 | ||
NeoGenomics, Inc.(Æ) | 419,999 | 2,961 | Commercial Metals Co. | 87,100 | 1,252 | ||
Nevro Corp.(Æ)(Ñ) | 20,516 | 836 | Compass Minerals International, Inc. | 113,895 | 9,253 | ||
NuVasive, Inc.(Æ) | 20,710 | 977 | Continental Building Products, Inc.(Æ) | 28,086 | 493 | ||
Omnicell, Inc.(Æ) | 4,534 | 123 | CSW Industrials, Inc.(Æ) | 13,785 | 496 | ||
OraSure Technologies, Inc.(Æ) | 10,773 | 56 | Culp, Inc. | 29,744 | 893 | ||
Owens & Minor, Inc. | 55,259 | 1,981 | Ferro Corp.(Æ) | 48,500 | 606 | ||
Pacific Biosciences of California, Inc.(Æ)(Ñ) | 115,361 | 819 | Gibraltar Industries, Inc.(Æ) | 54,884 | 1,390 | ||
Patterson Cos., Inc. | 33,100 | 1,569 | Global Brass & Copper Holdings, Inc. | 47,027 | 1,058 | ||
PDL BioPharma, Inc.(Ñ) | 177,856 | 815 | Greif, Inc. Class A | 56,622 | 1,856 | ||
Pfenex, Inc.(Æ) | 46,498 | 841 | Haynes International, Inc. | 64,773 | 2,555 | ||
Prestige Brands Holdings, Inc.(Æ) | 53,998 | 2,646 | Innophos Holdings, Inc. | 55,184 | 2,345 | ||
Prothena Corp. PLC(Æ)(Ñ) | 14,535 | 749 | Innospec, Inc. | 4,960 | 274 | ||
Providence Service Corp. (The)(Æ) | 22,000 | 1,136 | Installed Building Products, Inc.(Æ) | 25,753 | 570 | ||
Quality Systems, Inc. | 51,500 | 724 | Insteel Industries, Inc. | 3,858 | 83 | ||
Revance Therapeutics, Inc.(Æ) | 27,292 | 1,069 | KapStone Paper and Packaging Corp.(Æ) | 21,030 | 457 | ||
Rigel Pharmaceuticals, Inc.(Æ) | 160,708 | 408 | Kraton Performance Polymers, Inc.(Æ) | 38,749 | 790 | ||
RTI Surgical, Inc.(Æ) | 175,312 | 737 | Kronos Worldwide, Inc.(Ñ) | 315,558 | 2,493 | ||
Sagent Pharmaceuticals, Inc.(Æ) | 51,213 | 861 | Landec Corp.(Æ) | 147,162 | 1,810 | ||
Spectranetics Corp. (The)(Æ)(Ñ) | 30,000 | 367 | LSB Industries, Inc.(Æ) | 3,800 | 59 | ||
STERIS Corp.(Ñ) | 117,359 | 8,796 | Materion Corp. | 24,122 | 727 | ||
Sucampo Pharmaceuticals, Inc. Class A(Æ) | 35,401 | 685 | Neenah Paper, Inc. | 879 | 59 | ||
Supernus Pharmaceuticals, Inc.(Æ) | 166,405 | 2,746 | NewMarket Corp. | 9,583 | 3,773 | ||
SurModics, Inc.(Æ) | 77,896 | 1,662 | Novagold Resources, Inc.(Æ)(Ñ) | 175,800 | 636 | ||
Symmetry Surgical, Inc.(Æ) | 19,300 | 164 | Olympic Steel, Inc. | 18,900 | 181 | ||
Synergy Pharmaceuticals, Inc.(Æ)(Ñ) | 156,014 | 1,000 | Patrick Industries, Inc.(Æ) | 18,202 | 739 | ||
Tandem Diabetes Care, Inc.(Æ)(Ñ) | 130,533 | 1,184 | PGT, Inc.(Æ) | 354,147 | 4,271 | ||
Team Health Holdings, Inc.(Æ) | 18,724 | 1,117 | PolyOne Corp. | 25,487 | 852 | ||
TherapeuticsMD, Inc.(Æ)(Ñ) | 99,738 | 585 | Quaker Chemical Corp. | 55,930 | 4,440 | ||
Trevena, Inc.(Æ) | 85,596 | 823 | Reliance Steel & Aluminum Co. | 11,600 | 696 | ||
Trinity Biotech PLC - ADR(Ñ) | 229,864 | 2,581 | Scotts Miracle-Gro Co. (The) Class A | 5,200 | 344 | ||
Triple-S Management Corp. Class B(Æ) | 35,718 | 735 | Sensient Technologies Corp. | 38,573 | 2,518 | ||
United Therapeutics Corp.(Æ) | 1,630 | 239 | Silgan Holdings, Inc. | 35,100 | 1,786 | ||
Universal American Corp.(Æ) | 16,639 | 124 | Simpson Manufacturing Co., Inc. | 6,812 | 259 | ||
US Physical Therapy, Inc. | 71,634 | 3,514 | Stepan Co. | 31,613 | 1,673 | ||
Utah Medical Products, Inc. | 12,046 | 710 | Stock Building Supply Holdings, Inc.(Æ) | 54,781 | 947 | ||
Vascular Solutions, Inc.(Æ) | 22,660 | 728 | TimkenSteel Corp. | 319,152 | 3,396 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Small Cap Equity Fund 145
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Trex Co., Inc.(Æ) | 33,390 | 1,305 | Greenbrier Cos., Inc.(Ñ) | 6,643 | 253 | ||
Unifi, Inc.(Æ) | 122,013 | 3,732 | Hackett Group, Inc. (The) | 60,937 | 907 | ||
Universal Forest Products, Inc. | 3,826 | 278 | Hardinge, Inc. | 7,800 | 74 | ||
US Concrete, Inc.(Æ) | 20,015 | 1,110 | Hawaiian Holdings, Inc.(Æ) | 22,708 | 788 | ||
US Silica Holdings, Inc.(Ñ) | 214,242 | 3,869 | Healthcare Services Group, Inc. | 144,811 | 5,396 | ||
Valspar Corp. | 7,900 | 639 | HEICO Corp. | 86,543 | 4,365 | ||
103,640 | Herman Miller, Inc. | 130,945 | 4,155 | ||||
Houston Wire & Cable Co. | 43,700 | 271 | |||||
Producer Durables - 13.3% | Huron Consulting Group, Inc.(Æ) | 57,163 | 2,761 | ||||
ABM Industries, Inc. | 56,035 | 1,591 | Hyster-Yale Materials Handling, Inc. | 28,431 | 1,664 | ||
ACCO Brands Corp.(Æ) | 148,488 | 1,198 | ICF International, Inc.(Æ) | 42,120 | 1,292 | ||
Accuride Corp.(Æ) | 338,354 | 954 | Information Services Group, Inc. | 445,936 | 1,637 | ||
Aerovironment, Inc.(Æ) | 21,333 | 492 | Insperity, Inc. | 16,461 | 765 | ||
Air Transport Services Group, Inc.(Æ) | 67,100 | 657 | Itron, Inc.(Æ) | 29,550 | 1,085 | ||
Allegiant Travel Co. Class A | 6,044 | 1,193 | JetBlue Airways Corp.(Æ) | 31,900 | 792 | ||
Allied Motion Technologies, Inc. | 87,212 | 1,682 | Kadant, Inc. | 1,698 | 70 | ||
Altra Industrial Motion Corp. | 90,171 | 2,386 | Kaman Corp. Class A | 42,200 | 1,641 | ||
AO Smith Corp. | 1,200 | 92 | KBR, Inc. | 451,749 | 8,330 | ||
ArcBest Corp. | 9,046 | 234 | Kforce, Inc. | 35,186 | 989 | ||
Ardmore Shipping Corp. | 75,000 | 1,076 | Kimball International, Inc. Class B | 279,290 | 3,050 | ||
Argan, Inc.(Æ) | 26,229 | 969 | Knight Transportation, Inc. | 252,696 | 6,424 | ||
Astec Industries, Inc. | 130,030 | 4,226 | Knoll, Inc. | 20,408 | 474 | ||
Babcock & Wilcox Co. (The) Class W | 235,730 | 6,671 | Landstar System, Inc. | 1,800 | 113 | ||
Babcock & Wilcox Enterprises, Inc.(Æ) | 244,203 | 4,147 | Layne Christensen Co.(Æ)(Ñ) | 237,240 | 1,504 | ||
Barnes Group, Inc. | 9,000 | 338 | Lexmark International, Inc. Class A | 5,600 | 182 | ||
Brady Corp. Class A | 124,247 | 2,827 | Lindsay Corp.(Ñ) | 2,279 | 154 | ||
Briggs & Stratton Corp. | 190,136 | 3,379 | Littelfuse, Inc. | 38,385 | 3,836 | ||
Brink's Co. (The) | 81,410 | 2,522 | Lydall, Inc.(Æ) | 3,572 | 122 | ||
CAI International, Inc.(Æ) | 22,021 | 256 | Manitowoc Co., Inc. (The)(Ñ) | 53,090 | 812 | ||
CBIZ, Inc.(Æ) | 360,428 | 3,875 | ManpowerGroup, Inc. | 1,500 | 138 | ||
CDI Corp. | 21,600 | 173 | Matson, Inc. | 29,777 | 1,365 | ||
CEB, Inc. | 84,782 | 6,338 | MAXIMUS, Inc. | 92,698 | 6,322 | ||
Celadon Group, Inc. | 24,400 | 353 | McGrath RentCorp | 85,423 | 2,567 | ||
Commercial Vehicle Group, Inc.(Æ) | 249,611 | 1,038 | Modine Manufacturing Co.(Æ) | 82,561 | 691 | ||
Control4 Corp.(Æ)(Ñ) | 72,147 | 472 | Moog, Inc. Class A(Æ) | 31,493 | 1,945 | ||
Convergys Corp. | 54,583 | 1,401 | MSA Safety, Inc. | 98,041 | 4,263 | ||
CoStar Group, Inc.(Æ) | 18,265 | 3,709 | MYR Group, Inc.(Æ) | 37,286 | 839 | ||
Covanta Holding Corp. | 44,200 | 741 | Navigant Consulting, Inc.(Æ) | 50,918 | 876 | ||
CPI Aerostructures, Inc.(Æ) | 81,967 | 697 | Navigator Holdings, Ltd.(Æ) | 62,700 | 899 | ||
Crane Co. | 92,770 | 4,883 | Navios Maritime Acquisition Corp. | 157,210 | 563 | ||
Cubic Corp. | 13,900 | 623 | Old Dominion Freight Line, Inc.(Æ) | 79,371 | 4,916 | ||
Curtiss-Wright Corp. | 46,609 | 3,242 | On Assignment, Inc.(Æ) | 121,798 | 5,494 | ||
Deluxe Corp. | 27,116 | 1,615 | Orion Marine Group, Inc.(Æ) | 242,000 | 946 | ||
DHI Group, Inc.(Æ) | 28,410 | 257 | Paylocity Holding Corp.(Æ) | 125,129 | 4,201 | ||
Echo Global Logistics, Inc.(Æ) | 35,800 | 852 | PFSweb, Inc.(Æ) | 56,689 | 908 | ||
Electro Rent Corp. | 5,757 | 60 | Pitney Bowes, Inc. | 63,700 | 1,315 | ||
Electronics For Imaging, Inc.(Æ) | 20,967 | 974 | Powell Industries, Inc. | 29,724 | 990 | ||
EMCOR Group, Inc. | 73,229 | 3,536 | PRGX Global, Inc.(Æ) | 9,300 | 35 | ||
Energy Focus, Inc.(Æ)(Ñ) | 30,369 | 492 | Primoris Services Corp. | 206,936 | 4,122 | ||
Engility Holdings, Inc. | 23,100 | 744 | Proto Labs, Inc.(Æ)(Ñ) | 2,455 | 159 | ||
Ennis, Inc. | 43,547 | 872 | Quad/Graphics, Inc. | 62,700 | 809 | ||
ExlService Holdings, Inc.(Æ) | 3,600 | 159 | Radiant Logistics, Inc.(Æ) | 66,000 | 262 | ||
Exponent, Inc. | 97,810 | 5,028 | Rand Logistics, Inc.(Æ) | 96,700 | 205 | ||
Forward Air Corp. | 24,414 | 1,107 | Regal Beloit Corp. | 86,558 | 5,522 | ||
FreightCar America, Inc. | 117,390 | 2,134 | Resources Connection, Inc. | 18,471 | 332 | ||
G&K Services, Inc. Class A | 50,903 | 3,350 | Ritchie Bros Auctioneers, Inc.(Ñ) | 162,468 | 4,219 | ||
Generac Holdings, Inc.(Æ)(Ñ) | 29,800 | 941 | Roadrunner Transportation Systems, Inc.(Æ) | 188,142 | 2,002 | ||
Genesee & Wyoming, Inc. Class A(Æ) | 21,427 | 1,438 | RPX Corp. Class A(Æ) | 32,400 | 461 | ||
Granite Construction, Inc. | 189,848 | 6,235 | Scorpio Bulkers, Inc.(Æ) | 404,500 | 566 | ||
Great Lakes Dredge & Dock Corp.(Æ) | 611,800 | 2,447 | Scorpio Tankers, Inc. | 302,700 | 2,761 |
See accompanying notes which are an integral part of the financial statements.
146 Russell U.S. Small Cap Equity Fund
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
ServiceSource International, Inc.(Æ) | 166,898 | 713 | Checkpoint Systems, Inc. | 273,568 | 2,046 | ||
Sharps Compliance Corp.(Æ) | 83,849 | 635 | Ciber, Inc.(Æ) | 318,267 | 1,136 | ||
SkyWest, Inc. | 423,579 | 8,065 | Cirrus Logic, Inc.(Æ) | 11,200 | 345 | ||
Spartan Motors, Inc. | 36,577 | 151 | Cohu, Inc. | 271,843 | 3,423 | ||
Spirit Airlines, Inc.(Æ) | 26,400 | 980 | Computer Task Group, Inc. | 49,143 | 354 | ||
Standex International Corp. | 18,312 | 1,643 | comScore, Inc.(Æ) | 81,791 | 3,499 | ||
StealthGas, Inc.(Æ)(Ñ) | 142,930 | 603 | Comtech Telecommunications Corp. | 2,541 | 61 | ||
Steelcase, Inc. Class A | 231,516 | 4,494 | Cornerstone OnDemand, Inc.(Æ) | 94,821 | 2,987 | ||
SuperCom, Ltd.(Æ) | 80,200 | 634 | CSG Systems International, Inc. | 32,434 | 1,087 | ||
Swift Transportation Co. Class A(Æ) | 244,433 | 3,820 | CTS Corp.(Æ) | 162,200 | 2,949 | ||
Sykes Enterprises, Inc.(Æ) | 75,548 | 2,191 | CyberArk Software, Ltd.(Æ) | 32,752 | 1,626 | ||
TASER International, Inc.(Æ)(Ñ) | 69,954 | 1,638 | Cypress Semiconductor Corp.(Æ) | 428,001 | 4,511 | ||
Teekay Tankers, Ltd. Class A | 102,723 | 785 | Daktronics, Inc. | 6,855 | 67 | ||
Teledyne Technologies, Inc.(Æ) | 49,840 | 4,447 | Datalink Corp.(Æ) | 59,035 | 431 | ||
TeleTech Holdings, Inc. | 29,883 | 870 | Demand Media, Inc.(Æ) | 22,595 | 98 | ||
Tennant Co. | 5,169 | 299 | Diebold, Inc. | 213,136 | 7,858 | ||
Tetra Tech, Inc. | 181,538 | 4,883 | Digi International, Inc.(Æ) | 146,556 | 1,891 | ||
Thermon Group Holdings, Inc.(Æ) | 117,249 | 2,358 | Digimarc Corp.(Æ)(Ñ) | 44,269 | 994 | ||
Titan Machinery, Inc.(Æ) | 35,200 | 431 | Dolby Laboratories, Inc. Class A | 70,389 | 2,440 | ||
TopBuild Corp.(Æ) | 33,020 | 929 | EarthLink Holdings Corp. | 168,557 | 1,441 | ||
Toro Co. (The) | 7,100 | 534 | Electro Scientific Industries, Inc. | 189,125 | 883 | ||
TriMas Corp.(Æ) | 192,699 | 3,856 | Ellie Mae, Inc.(Æ) | 94,124 | 6,869 | ||
Tutor Perini Corp.(Æ) | 158,658 | 2,662 | EMCORE Corp.(Æ) | 170,976 | 1,170 | ||
Twin Disc, Inc. | 5,100 | 60 | Entegris, Inc.(Æ) | 204,392 | 2,622 | ||
United Rentals, Inc.(Æ) | 32,912 | 2,464 | Envestnet, Inc.(Æ) | 4,596 | 137 | ||
Vectrus, Inc.(Æ) | 114,080 | 2,837 | EPAM Systems, Inc.(Æ) | 69,001 | 5,337 | ||
Vishay Precision Group, Inc.(Æ) | 15,843 | 186 | ePlus, Inc.(Æ) | 4,109 | 347 | ||
Wabtec Corp. | 44,727 | 3,707 | Exar Corp.(Æ) | 438,300 | 2,494 | ||
WageWorks, Inc.(Æ) | 83,271 | 3,999 | Extreme Networks, Inc.(Æ) | 388,284 | 1,394 | ||
Watts Water Technologies, Inc. Class A | 7,500 | 408 | FEI Co. | 47,994 | 3,465 | ||
Werner Enterprises, Inc. | 118,017 | 3,123 | Finisar Corp.(Æ) | 37,700 | 429 | ||
275,680 | FormFactor, Inc.(Æ) | 554,965 | 4,573 | ||||
Fortinet, Inc.(Æ) | 58,986 | 2,027 | |||||
Technology - 14.9% | GigOptix, Inc.(Æ)(Ñ) | 435,183 | 1,079 | ||||
Acacia Research Corp.(Ñ) | 404,225 | 2,692 | Globant SA(Æ)(Ñ) | 36,946 | 1,277 | ||
ACI Worldwide, Inc.(Æ) | 76,500 | 1,832 | GrubHub, Inc.(Æ)(Ñ) | 77,752 | 1,865 | ||
Acxiom Corp.(Æ) | 115,970 | 2,565 | GTT Communications, Inc.(Æ) | 38,208 | 715 | ||
ADTRAN, Inc. | 383,316 | 5,953 | Guidewire Software, Inc.(Æ) | 64,599 | 3,762 | ||
Alpha & Omega Semiconductor, Ltd.(Æ) | 6,610 | 59 | Harmonic, Inc.(Æ) | 174,908 | 1,007 | ||
Ambarella, Inc.(Æ)(Ñ) | 43,857 | 2,168 | HubSpot, Inc.(Æ) | 44,431 | 2,305 | ||
Anixter International, Inc.(Æ) | 12,199 | 837 | IAC/InterActiveCorp | 17,507 | 1,173 | ||
Applied Micro Circuits Corp.(Æ) | 125,900 | 816 | Imation Corp.(Æ)(Ñ) | 31,162 | 63 | ||
Applied Optoelectronics, Inc.(Æ)(Ñ) | 94,410 | 1,947 | Immersion Corp.(Æ) | 240,262 | 3,119 | ||
ARC Document Solutions, Inc.(Æ) | 156,800 | 975 | Imperva, Inc.(Æ) | 31,795 | 2,245 | ||
Aspen Technology, Inc.(Æ) | 41,702 | 1,726 | Infinera Corp.(Æ) | 92,606 | 1,830 | ||
Aviat Networks, Inc.(Æ) | 37,832 | 39 | Infoblox, Inc.(Æ) | 207,617 | 3,386 | ||
Avid Technology, Inc.(Æ) | 24,100 | 204 | Inphi Corp.(Æ) | 46,214 | 1,376 | ||
Axcelis Technologies, Inc.(Æ) | 216,887 | 607 | Insight Enterprises, Inc.(Æ) | 47,330 | 1,202 | ||
Bel Fuse, Inc. Class B | 14,274 | 257 | InterDigital, Inc. | 16,810 | 853 | ||
Benchmark Electronics, Inc.(Æ) | 226,161 | 4,473 | Intevac, Inc.(Æ) | 3,694 | 18 | ||
Black Box Corp. | 24,322 | 297 | Kemet Corp.(Æ) | 56,616 | 157 | ||
Bottomline Technologies de, Inc.(Æ) | 108,393 | 3,000 | KEYW Holding Corp. (The)(Æ)(Ñ) | 88,700 | 632 | ||
BSQUARE Corp.(Æ) | 51,040 | 555 | Kimball Electronics, Inc.(Æ) | 133,950 | 1,526 | ||
CACI International, Inc. Class A(Æ) | 96,154 | 9,331 | Knowles Corp.(Æ)(Ñ) | 46,800 | 780 | ||
CalAmp Corp.(Æ) | 269,042 | 5,101 | Leidos Holdings, Inc. | 73,530 | 3,866 | ||
Calix, Inc.(Æ) | 117,766 | 823 | Limelight Networks, Inc.(Æ) | 22,835 | 47 | ||
Callidus Software, Inc.(Æ) | 393,150 | 6,829 | Lionbridge Technologies, Inc.(Æ) | 467,773 | 2,521 | ||
Carbonite, Inc.(Æ) | 8,900 | 90 | Luxoft Holding, Inc. Class A(Æ) | 29,082 | 1,938 | ||
Cavium, Inc.(Æ) | 8,473 | 601 | Manhattan Associates, Inc.(Æ) | 92,202 | 6,717 | ||
CEVA, Inc.(Æ) | 38,671 | 904 | ManTech International Corp. Class A | 242,773 | 7,016 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Marketo, Inc.(Æ) | 114,417 | 3,367 | Ultratech, Inc.(Æ) | 71,300 | 1,114 | ||
MaxLinear, Inc. Class A(Æ) | 72,552 | 943 | United Online, Inc.(Æ) | 475,313 | 5,552 | ||
Mentor Graphics Corp. | 83,132 | 2,261 | VeriFone Systems, Inc.(Æ) | 161,856 | 4,878 | ||
Mercury Systems, Inc.(Æ) | 85,520 | 1,468 | Workiva, Inc.(Æ)(Ñ) | 46,469 | 770 | ||
Methode Electronics, Inc. | 57,124 | 1,904 | Xcerra Corp.(Æ) | 426,917 | 2,963 | ||
MicroStrategy, Inc. Class A(Æ) | 5,280 | 909 | Xura, Inc.(Æ) | 37,505 | 971 | ||
Mindbody Inc. Class A(Æ)(Ñ) | 46,898 | 734 | Zynga, Inc. Class A(Æ) | 354,200 | 839 | ||
Model N, Inc.(Æ) | 88,235 | 891 | 307,781 | ||||
Monolithic Power Systems, Inc. | 16,500 | 1,030 | |||||
Monotype Imaging Holdings, Inc. | 239,941 | 6,560 | Utilities - 3.3% | ||||
NeoPhotonics Corp.(Æ) | 21,100 | 175 | 8x8, Inc.(Æ) | 200,077 | 2,133 | ||
NETGEAR, Inc.(Æ) | 73,690 | 3,051 | ALLETE, Inc. | 12,700 | 638 | ||
NeuStar, Inc. Class A(Æ)(Ñ) | 16,314 | 444 | American States Water Co. | 118,376 | 4,824 | ||
NVE Corp. | 3,067 | 182 | Artesian Resources Corp. Class A | 8,265 | 201 | ||
Oclaro, Inc.(Æ)(Ñ) | 391,609 | 1,147 | Avista Corp. | 30,813 | 1,043 | ||
OmniVision Technologies, Inc.(Æ) | 78,950 | 2,279 | Black Hills Corp. | 15,100 | 691 | ||
Paycom Software, Inc.(Æ) | 22,708 | 863 | Boingo Wireless, Inc.(Æ) | 224,400 | 1,735 | ||
PC Connection, Inc. | 49,869 | 1,159 | California Water Service Group | 8,191 | 183 | ||
PC-Telephone, Inc. | 7,800 | 45 | Chesapeake Utilities Corp. | 38,076 | 1,988 | ||
PDF Solutions, Inc.(Æ) | 497,520 | 5,254 | Cincinnati Bell, Inc.(Æ) | 40,910 | 154 | ||
Perficient, Inc.(Æ) | 199,257 | 3,332 | Cleco Corp. | 18,870 | 1,000 | ||
Photronics, Inc.(Æ) | 261,149 | 2,504 | Consolidated Water Co., Ltd.(Ñ) | 82,663 | 915 | ||
Plantronics, Inc. | 17,900 | 960 | Empire District Electric Co. (The) | 57,932 | 1,306 | ||
Plexus Corp.(Æ) | 105,646 | 3,657 | FairPoint Communications, Inc.(Æ)(Ñ) | 85,035 | 1,364 | ||
PMC-Sierra, Inc.(Æ) | 11,187 | 133 | inContact, Inc.(Æ) | 127,144 | 1,132 | ||
Polycom, Inc.(Æ) | 246,012 | 3,390 | Inteliquent, Inc. | 47,594 | 986 | ||
Power Integrations, Inc. | 57,910 | 2,931 | Iridium Communications, Inc.(Æ)(Ñ) | 159,576 | 1,310 | ||
Progress Software Corp.(Æ) | 234,214 | 5,687 | j2 Global, Inc. | 109,185 | 8,467 | ||
Proofpoint, Inc.(Æ) | 110,725 | 7,799 | Laclede Group, Inc. (The) | 3,338 | 195 | ||
PROS Holdings, Inc.(Æ) | 70,694 | 1,698 | magicJack VocalTec, Ltd.(Æ)(Ñ) | 67,794 | 780 | ||
Q2 Holdings, Inc.(Æ) | 115,241 | 2,841 | MGE Energy, Inc. | 1,254 | 52 | ||
QAD, Inc. Class A | 40,300 | 1,029 | New Jersey Resources Corp. | 94,770 | 3,002 | ||
QLogic Corp.(Æ) | 8,823 | 109 | Northwest Natural Gas Co. | 29,265 | 1,398 | ||
Qualys, Inc.(Æ) | 63,478 | 2,242 | NorthWestern Corp. | 49,194 | 2,666 | ||
Quotient Technology, Inc.(Æ)(Ñ) | 13,263 | 74 | NRG Yield, Inc. Class A(Ñ) | 168,708 | 2,316 | ||
Radware, Ltd.(Æ) | 5,637 | 84 | Piedmont Natural Gas Co., Inc.(Ñ) | 15,474 | 887 | ||
Rambus, Inc.(Æ) | 111,550 | 1,151 | PNM Resources, Inc. | 88,015 | 2,475 | ||
Richardson Electronics, Ltd.(Æ) | 10,790 | 65 | Portland General Electric Co. | 109,585 | 4,063 | ||
Rofin-Sinar Technologies, Inc.(Æ) | 18,765 | 543 | Pure Cycle Corp.(Æ)(Ñ) | 20,840 | 106 | ||
Rudolph Technologies, Inc.(Æ) | 63,075 | 807 | Pure Cycle Corp.(Å)(Æ)(Ñ) | 272,422 | 1,390 | ||
Sanmina Corp.(Æ) | 2,590 | 54 | Shenandoah Telecommunications Co. | 30,598 | 1,432 | ||
Sapiens International Corp. NV | 71,461 | 844 | South Jersey Industries, Inc. | 340,083 | 9,016 | ||
ScanSource, Inc.(Æ) | 56,512 | 1,950 | Southwest Gas Corp. | 40,312 | 2,478 | ||
Science Applications International Corp. | 109,702 | 5,031 | Spark Energy, Inc. Class A | 5,672 | 96 | ||
ShoreTel, Inc.(Æ) | 180,802 | 1,707 | Talen Energy Corp.(Æ) | 238,078 | 2,067 | ||
Sigma Designs, Inc.(Æ) | 82,986 | 731 | UIL Holdings Corp. | 1,748 | 89 | ||
Silver Spring Networks, Inc.(Æ)(Ñ) | 77,603 | 1,017 | Unitil Corp. | 13,382 | 475 | ||
Sonus Networks, Inc.(Æ) | 41,800 | 276 | Vonage Holdings Corp.(Æ) | 168,353 | 1,022 | ||
SPS Commerce, Inc.(Æ) | 86,450 | 6,209 | WGL Holdings, Inc. | 29,944 | 1,863 | ||
Super Micro Computer, Inc.(Æ)(Ñ) | 3,318 | 94 | 67,938 | ||||
SYNNEX Corp. | 30,872 | 2,730 | |||||
Synopsys, Inc.(Æ) | 42,600 | 2,129 | Total Common Stocks | ||||
Syntel, Inc.(Æ) | 13,938 | 656 | (cost $1,892,839) | 1,986,812 | |||
TechTarget, Inc.(Æ) | 269,059 | 2,510 | |||||
TeleNav, Inc.(Æ) | 61,776 | 445 | Warrants & Rights - 0.0% | ||||
Tessera Technologies, Inc. | 29,612 | 1,036 | Magnum Hunter Resources Corp. | ||||
Tremor Video, Inc.(Æ)(Ñ) | 37,050 | 67 | 2016 Warrants(Æ) | 22,534 | — | ||
Tyler Technologies, Inc.(Æ) | 27,898 | 4,753 | 2016 Warrants (Å)(Æ) | 4,312 | — | ||
Ultimate Software Group, Inc.(Æ) | 21,631 | 4,420 | Total Warrants & Rights | ||||
Ultra Clean Holdings(Æ) | 38,100 | 186 | (cost $—) | — |
See accompanying notes which are an integral part of the financial statements.
148 Russell U.S. Small Cap Equity Fund
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | |||||||
Principal | Fair | ||||||
Amount ($) or | Value | ||||||
Shares | $ | ||||||
Short | -Term Investments - 4.2% | ||||||
Russell U.S. Cash Management Fund | 82,019,036 | (8) | 82,019 | ||||
United States Treasury Bills | |||||||
0.0110% due 04/07/16 (§) | 5,500 | 5,496 | |||||
Total Short-Term Investments | |||||||
(cost $87,516) | 87,515 | ||||||
Other Securities - 7.3% | |||||||
Russell U.S. Cash Collateral Fund(×) | 151,976,049(8) | 151,976 | |||||
Total Other Securities | |||||||
(cost $151,976) | 151,976 | ||||||
Total Investments 107.5% | |||||||
(identified cost $2,132,331) | 2,226,303 | ||||||
Other Assets and Liabilities, Net | |||||||
- | (7.5%) | (156,051 | ) | ||||
Net Assets - 100.0% | 2,070,252 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
0.3% | ||||||||||||
FRP Holdings, Inc. | 11/13/14 | 58,231 | 30.79 | 1,793 | 1,922 | |||||||
LCNB Corp. | 10/31/13 | 90,028 | 17.21 | 1,550 | 1,438 | |||||||
Magnum Hunter Resources Corp. | 09/12/13 | 4,312 | — | — | — | |||||||
Peak Resorts, Inc. | 11/20/14 | 217,050 | 8.68 | 1,883 | 1,558 | |||||||
Pure Cycle Corp. | 09/10/13 | 272,422 | 5.28 | 1,439 | 1,390 | |||||||
US Antimony Corp. | 09/10/13 | 1,089,297 | 1.61 | 1,756 | 327 | |||||||
6,635 | ||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Number of | Notional | Expiration | (Depreciation) | |||||||||
Contracts | Amount | Date | $ | |||||||||
Long Positions | ||||||||||||
Russell 2000 Mini Index Futures | 735 | USD | 85,135 | 12/15 | 565 | |||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 565 | |||||||||||
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Common Stocks | ||||||||||||
Consumer Discretionary | $ | 317,849 | $ | — | $ | — | $ | 317,849 | 15.4 | |||
Consumer Staples | 73,170 | — | — | 73,170 | 3.5 | |||||||
Energy | 64,221 | — | — | 64,221 | 3.1 | |||||||
Financial Services | 552,446 | — | — | 552,446 | 26.7 | |||||||
Health Care | 224,087 | — | — | 224,087 | 10.8 | |||||||
Materials and Processing | 103,640 | — | — | 103,640 | 5.0 | |||||||
Producer Durables | 275,680 | — | — | 275,680 | 13.3 | |||||||
Technology | 307,781 | — | — | 307,781 | 14.9 | |||||||
Utilities | 67,938 | — | — | 67,938 | 3.3 | |||||||
Warrants & Rights | — | — | — | — | — | |||||||
Short-Term Investments | — | 87,515 | — | 87,515 | 4.2 | |||||||
Other Securities | — | 151,976 | — | 151,976 | 7.3 | |||||||
Total Investments | 1,986,812 | 239,491 | — | 2,226,303 | 107.5 | |||||||
Other Assets and Liabilities, Net | (7.5 | ) | ||||||||||
100.0 | ||||||||||||
Other Financial Instruments | ||||||||||||
Futures Contracts | 565 | — | — | 565 | —* | |||||||
Total Other Financial Instruments** | $ | 565 | $ | — | $ | — | $ | 565 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
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Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Assets and Liabilities - Assets | |||
Variation margin on futures contracts* | $ | 565 | |
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Operations - Net realized gain (loss) | |||
Futures contracts | $ | 4,009 | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||
Futures contracts | $ | (548 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
152 Russell U.S. Small Cap Equity Fund
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||||
Offsetting of Financial Assets and Derivative Assets | ||||||||
Gross | Net Amounts | |||||||
Amounts | of Assets | |||||||
Gross | Offset in the | Presented in | ||||||
Amounts of | Statement of | the Statement | ||||||
Recognized | Assets and | of Assets and | ||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||
Securities on Loan* | Investments, at fair value | $ | 146,552 | $ | — $ | 146,552 | ||
Total Financial and Derivative Assets | 146,552 | — | 146,552 | |||||
Financial and Derivative Assets not subject to a netting agreement | — | — | — | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 146,552 | $ | — $ | 146,552 | |||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||
Gross Amounts Not Offset in | ||||||||
the Statement of Assets and | ||||||||
Liabilities | ||||||||
Net Amounts | ||||||||
of Assets | ||||||||
Presented in | ||||||||
the Statement | Financial and | |||||||
of Assets and | Derivative | Collateral | ||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount |
Barclays | $ | 11,061 | $ | — | $ | 11,061 | $ | — | |||||
Citigroup | 9,586 | — | 9,586 | — | |||||||||
Credit Suisse | 4,506 | — | 4,506 | — | |||||||||
Deutsche Bank | 11,272 | — | 11,272 | — | |||||||||
Fidelity | 31,706 | — | 31,706 | — | |||||||||
Goldman Sachs | 16,109 | — | 16,109 | — | |||||||||
ING | 149 | — | 149 | — | |||||||||
JPMorgan Chase | 23,396 | — | 23,396 | — | |||||||||
Merrill Lynch | 2,412 | — | 2,412 | — | |||||||||
Morgan Stanley | 29,280 | — | 29,280 | — | |||||||||
UBS | 7,075 | — | 7,075 | — | |||||||||
Total | $ | 146,552 | $ | — | $ | 146,552 | $ | — | |||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Liabilities | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||||||
Futures Contracts | Variation margin on futures contracts | $ | 191 | $ | — | $ | 191 | ||||||
Total Financial and Derivative Liabilities | 191 | — | 191 | ||||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (191) | — | (191 | ) | |||||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | — | $ | — | $ | — |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
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Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands
Assets | ||
Investments, at identified cost | $ | 2,132,331 |
Investments, at fair value(*)(>) | 2,226,303 | |
Cash | 16 | |
Cash (restricted)(a) | 20 | |
Foreign currency holdings(^) | 853 | |
Receivables: | ||
Dividends and interest | 746 | |
Dividends from affiliated Russell funds | 9 | |
Investments sold | 17,308 | |
Fund shares sold | 1,395 | |
Total assets | 2,246,650 | |
Liabilities | ||
Payables: | ||
Investments purchased | 21,032 | |
Fund shares redeemed | 1,373 | |
Accrued fees to affiliates | 1,609 | |
Other accrued expenses | 208 | |
Variation margin on futures contracts | 191 | |
Capital gain distribution payable | 9 | |
Payable upon return of securities loaned | 151,976 | |
Total liabilities | 176,398 | |
Net Assets | $ | 2,070,252 |
See accompanying notes which are an integral part of the financial statements.
154 Russell U.S. Small Cap Equity Fund
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Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 8,448 | |
Accumulated net realized gain (loss) | 102,165 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | 93,972 | ||
Futures contracts | 565 | ||
Foreign currency-related transactions | (281 | ) | |
Shares of beneficial interest | 724 | ||
Additional paid-in capital | 1,864,659 | ||
Net Assets | $ | 2,070,252 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 28.33 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 30.06 | |
Class A — Net assets | $ | 23,410,408 | |
Class A — Shares outstanding ($.01 par value) | 826,210 | ||
Net asset value per share: Class C(#) | $ | 27.13 | |
Class C — Net assets | $ | 27,794,331 | |
Class C — Shares outstanding ($.01 par value) | 1,024,442 | ||
Net asset value per share: Class E(#) | $ | 28.45 | |
Class E — Net assets | $ | 32,486,120 | |
Class E — Shares outstanding ($.01 par value) | 1,141,927 | ||
Net asset value per share: Class I(#) | $ | 28.74 | |
Class I — Net assets | $ | 174,111,998 | |
Class I — Shares outstanding ($.01 par value) | 6,058,792 | ||
Net asset value per share: Class S(#) | $ | 28.59 | |
Class S — Net assets | $ 1,335,635,450 | ||
Class S — Shares outstanding ($.01 par value) | 46,714,749 | ||
Net asset value per share: Class Y(#) | $ | 28.64 | |
Class Y — Net assets | $ | 476,813,777 | |
Class Y — Shares outstanding ($.01 par value) | 16,649,635 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 1,134 | |
(*) Securities on loan included in investments | $ | 146,552 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund and Russell U.S. Cash Collateral Fund | $ | 233,995 | |
(a) Cash Collateral for Futures | $ | 20 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
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Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands
Investment Income | |||
Dividends | $ | 30,454 | |
Dividends from affiliated Russell funds | 95 | ||
Interest | 3 | ||
Securities lending income | 2,990 | ||
Total investment income | 33,542 | ||
Expenses | |||
Advisory fees | 16,199 | ||
Administrative fees | 1,102 | ||
Custodian fees | 418 | ||
Distribution fees - Class A | 64 | ||
Distribution fees - Class C | 237 | ||
Transfer agent fees - Class A | 51 | ||
Transfer agent fees - Class C | 63 | ||
Transfer agent fees - Class E | 78 | ||
Transfer agent fees - Class I | 228 | ||
Transfer agent fees - Class S | 2,950 | ||
Transfer agent fees - Class Y | 24 | ||
Professional fees | 156 | ||
Registration fees | 148 | ||
Shareholder servicing fees - Class C | 79 | ||
Shareholder servicing fees - Class E | 98 | ||
Trustees’ fees | 61 | ||
Printing fees | 364 | ||
Miscellaneous | 67 | ||
Total expenses | 22,387 | ||
Net investment income (loss) | 11,155 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 127,762 | ||
Futures contracts | 4,009 | ||
Foreign currency-related transactions | (2 | ) | |
Net realized gain (loss) | 131,769 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (158,596 | ) | |
Futures contracts | (548 | ) | |
Foreign currency-related transactions | (137 | ) | |
Net change in unrealized appreciation (depreciation) | (159,281 | ) | |
Net realized and unrealized gain (loss) | (27,512 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (16,357 | ) |
See accompanying notes which are an integral part of the financial statements.
156 Russell U.S. Small Cap Equity Fund
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 11,155 | $ | 7,573 | ||
Net realized gain (loss) | 131,769 | 183,792 | ||||
Net change in unrealized appreciation (depreciation) | (159,281 | ) | (61,725 | ) | ||
Net increase (decrease) in net assets from operations | (16,357 | ) | 129,640 | |||
Distributions | ||||||
From net investment income | ||||||
Class A | (17 | ) | (36 | ) | ||
Class C | (—)** | (—)** | ||||
Class E | (14 | ) | (26 | ) | ||
Class I | (698 | ) | (679 | ) | ||
Class S | (4,629 | ) | (3,294 | ) | ||
Class Y | (2,904 | ) | (1,500 | ) | ||
From net realized gain | ||||||
Class A | (1,756 | ) | (3,239 | ) | ||
Class C | (2,322 | ) | (4,461 | ) | ||
Class E | (2,888 | ) | (4,312 | ) | ||
Class I | (12,775 | ) | (23,779 | ) | ||
Class S | (103,194 | ) | (138,845 | ) | ||
Class Y | (41,652 | ) | (41,975 | ) | ||
Net decrease in net assets from distributions | (172,849 | ) | (222,146 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (184,494 | ) | 905,797 | |||
Total Net Increase (Decrease) in Net Assets | (373,700 | ) | 813,291 | |||
Net Assets | ||||||
Beginning of period | 2,443,952 | 1,630,661 | ||||
End of period | $ | 2,070,252 | $ | 2,443,952 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 8,448 | $ | 5,529 | ||
** Less than $500. |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Small Cap Equity Fund 157
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 91 | $ | 2,716 | 142 | $ | 4,349 | ||||||
Proceeds from reinvestment of distributions | 60 | 1,765 | 106 | 3,244 | ||||||||
Payments for shares redeemed | (146 | ) | (4,310 | ) | (137 | ) | (4,240 | ) | ||||
Net increase (decrease) | 5 | 171 | 111 | 3,353 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 90 | 2,610 | 173 | 5,204 | ||||||||
Proceeds from reinvestment of distributions | 81 | 2,316 | 150 | 4,435 | ||||||||
Payments for shares redeemed | (251 | ) | (7,205 | ) | (212 | ) | (6,369 | ) | ||||
Net increase (decrease) | (80 | ) | (2,279 | ) | 111 | 3,270 | ||||||
Class E | ||||||||||||
Proceeds from shares sold | 102 | 3,078 | 652 | 19,874 | ||||||||
Proceeds from reinvestment of distributions | 94 | 2,782 | 135 | 4,141 | ||||||||
Payments for shares redeemed | (427 | ) | (12,697 | ) | (377 | ) | (11,569 | ) | ||||
Net increase (decrease) | (231 | ) | (6,837 | ) | 410 | 12,446 | ||||||
Class I | ||||||||||||
Proceeds from shares sold | 1,036 | 31,023 | 1,507 | 46,321 | ||||||||
Proceeds from reinvestment of distributions | 445 | 13,302 | 786 | 24,194 | ||||||||
Payments for shares redeemed | (1,554 | ) | (46,892 | ) | (1,525 | ) | (47,272 | ) | ||||
Net increase (decrease) | (73 | ) | (2,567 | ) | 768 | 23,243 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 8,794 | 265,900 | 21,885 | 671,640 | ||||||||
Proceeds from reinvestment of distributions | 3,598 | 107,104 | 4,573 | 140,224 | ||||||||
Payments for shares redeemed | (14,161 | ) | (427,728 | ) | (8,811 | ) | (271,709 | ) | ||||
Net increase (decrease) | (1,769 | ) | (54,724 | ) | 17,647 | 540,155 | ||||||
Class Y | ||||||||||||
Proceeds from shares sold | 699 | 21,210 | 12,502 | 381,826 | ||||||||
Proceeds from reinvestment of distributions | 1,497 | 44,556 | 1,418 | 43,474 | ||||||||
Payments for shares redeemed | (5,997 | ) | (184,024 | ) | (3,237 | ) | (101,970 | ) | ||||
Net increase (decrease) | (3,801 | ) | (118,258 | ) | 10,683 | 323,330 | ||||||
Total increase (decrease) | (5,949 | ) | $ | (184,494 | ) | 29,730 | $ | 905,797 |
See accompanying notes which are an integral part of the financial statements.
158 Russell U.S. Small Cap Equity Fund
(This page intentionally left blank)
Russell Investment Company
Russell U.S. Small Cap Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | |||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||||
Class A | ||||||||||||||||||
October 31, 2015 | 30.93 | .06 | (.50 | ) | (.44 | ) | (.02 | ) | (2.14 | ) | ||||||||
October 31, 2014 | 33.31 | .04 | 2.13 | 2.17 | (.05 | ) | (4.50 | ) | ||||||||||
October 31, 2013 | 23.77 | .16 | 9.55 | 9.71 | (.17 | ) | — | |||||||||||
October 31, 2012 | 21.67 | .05 | 2.06 | 2.11 | (.01 | ) | — | |||||||||||
October 31, 2011 | 20.39 | .02 | 1.32 | 1.34 | (.06 | ) | — | |||||||||||
Class C | ||||||||||||||||||
October 31, 2015 | 29.89 | (.16 | ) | (.46 | ) | (.62 | ) | — | (2.14 | ) | ||||||||
October 31, 2014 | 32.51 | (.20 | ) | 2.08 | 1.88 | — | (4.50 | ) | ||||||||||
October 31, 2013 | 23.22 | (.04 | ) | 9.33 | 9.29 | — | — | |||||||||||
October 31, 2012 | 21.32 | (.12 | ) | 2.02 | 1.90 | — | — | |||||||||||
October 31, 2011 | 20.16 | (.15 | ) | 1.31 | 1.16 | — | — | |||||||||||
Class E | ||||||||||||||||||
October 31, 2015 | 31.03 | .06 | (.49 | ) | (.43 | ) | (.01 | ) | (2.14 | ) | ||||||||
October 31, 2014 | 33.39 | .04 | 2.13 | 2.17 | (.03 | ) | (4.50 | ) | ||||||||||
October 31, 2013 | 23.84 | .17 | 9.56 | 9.73 | (.18 | ) | — | |||||||||||
October 31, 2012 | 21.74 | .06 | 2.06 | 2.12 | (.02 | ) | — | |||||||||||
October 31, 2011 | 20.45 | .04 | 1.30 | 1.35 | (.06 | ) | — | |||||||||||
Class I | ||||||||||||||||||
October 31, 2015 | 31.33 | .16 | (.49 | ) | (.33 | ) | (.12 | ) | (2.14 | ) | ||||||||
October 31, 2014 | 33.66 | .14 | 2.16 | 2.30 | (.13 | ) | (4.50 | ) | ||||||||||
October 31, 2013 | 24.03 | .27 | 9.61 | 9.88 | (.25 | ) | — | |||||||||||
October 31, 2012 | 21.91 | .12 | 2.08 | 2.20 | (.08 | ) | — | |||||||||||
October 31, 2011 | 20.60 | .10 | 1.32 | 1.42 | (.11 | ) | — | |||||||||||
Class S | ||||||||||||||||||
October 31, 2015 | 31.19 | .14 | (.51 | ) | (.37 | ) | (.09 | ) | (2.14 | ) | ||||||||
October 31, 2014 | 33.53 | .10 | 2.17 | 2.27 | (.11 | ) | (4.50 | ) | ||||||||||
October 31, 2013 | 23.94 | .23 | 9.59 | 9.82 | (.23 | ) | — | |||||||||||
October 31, 2012 | 21.83 | .11 | 2.07 | 2.18 | (.07 | ) | — | |||||||||||
October 31, 2011 | 20.53 | .08 | 1.32 | 1.40 | (.10 | ) | — | |||||||||||
Class Y | ||||||||||||||||||
October 31, 2015 | 31.24 | .20 | (.51 | ) | (.31 | ) | (.15 | ) | (2.14 | ) | ||||||||
October 31, 2014 | 33.58 | .17 | 2.16 | 2.33 | (.17 | ) | (4.50 | ) | ||||||||||
October 31, 2013 | 23.97 | .32 | 9.57 | 9.89 | (.28 | ) | — | |||||||||||
October 31, 2012 | 21.85 | .15 | 2.07 | 2.22 | (.10 | ) | — | |||||||||||
October 31, 2011 | 20.55 | .12 | 1.32 | 1.44 | (.14 | ) | — | |||||||||||
See accompanying notes which are an integral part of the financial statements.
160 Russell U.S. Small Cap Equity Fund
% | % | % | ||||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | ||||||||||
(2.16 | ) | 28.33 | (1.72 | ) | 23,410 | 1.25 | 1.25 | .20 | 99 | |||||||||
(4.55 | ) | 30.93 | 6.70 | 25,406 | 1.25 | 1.25 | .09 | 86 | ||||||||||
(.17 | ) | 33.31 | 41.08 | 23,677 | 1.25 | 1.25 | .58 | 111 | ||||||||||
(.01 | ) | 23.77 | 9.73 | 15,232 | 1.25 | 1.25 | .21 | 129 | ||||||||||
(.06 | ) | 21.67 | 6.55 | 15,392 | 1.25 | 1.25 | .09 | 111 | ||||||||||
(2.14 | ) | 27.13 | (2.42 | ) | 27,794 | 2.00 | 2.00 | (.55 | ) | 99 | ||||||||
(4.50 | ) | 29.89 | 5.91 | 33,003 | 2.00 | 2.00 | (.66 | ) | 86 | |||||||||
— | 32.51 | 40.01 | 32,285 | 2.00 | 2.00 | (.15 | ) | 111 | ||||||||||
— | 23.22 | 8.91 | 25,597 | 2.00 | 2.00 | (.54 | ) | 129 | ||||||||||
— | 21.32 | 5.75 | 28,910 | 2.00 | 2.00 | (.66 | ) | 111 | ||||||||||
(2.15 | ) | 28.45 | (1.68 | ) | 32,486 | 1.25 | 1.25 | .20 | 99 | |||||||||
(4.53 | ) | 31.03 | 6.71 | 42,588 | 1.25 | 1.25 | .09 | 86 | ||||||||||
(.18 | ) | 33.39 | 41.10 | 32,126 | 1.24 | 1.23 | .60 | 111 | ||||||||||
(.02 | ) | 23.84 | 9.78 | 24,995 | 1.25 | 1.20 | .26 | 129 | ||||||||||
(.06 | ) | 21.74 | 6.58 | 26,404 | 1.24 | 1.16 | .18 | 111 | ||||||||||
(2.26 | ) | 28.74 | (1.35 | ) | 174,112 | .92 | .92 | .53 | 99 | |||||||||
(4.63 | ) | 31.33 | 7.06 | 192,131 | .92 | .92 | .42 | 86 | ||||||||||
(.25 | ) | 33.66 | 41.53 | 180,599 | .92 | .92 | .95 | 111 | ||||||||||
(.08 | ) | 24.03 | 10.08 | 153,233 | .92 | .92 | .54 | 129 | ||||||||||
(.11 | ) | 21.91 | 6.89 | 177,437 | .92 | .92 | .42 | 111 | ||||||||||
(2.23 | ) | 28.59 | (1.46 | ) | 1,335,636 | 1.00 | 1.00 | .45 | 99 | |||||||||
(4.61 | ) | 31.19 | 7.01 | 1,512,046 | 1.00 | 1.00 | .33 | 86 | ||||||||||
(.23 | ) | 33.53 | 41.38 | 1,034,016 | 1.00 | 1.00 | .81 | 111 | ||||||||||
(.07 | ) | 23.94 | 10.02 | 733,436 | 1.00 | 1.00 | .46 | 129 | ||||||||||
(.10 | ) | 21.83 | 6.80 | 704,781 | 1.00 | 1.00 | .34 | 111 | ||||||||||
(2.29 | ) | 28.64 | (1.26 | ) | 476,814 | .80 | .80 | .65 | 99 | |||||||||
(4.67 | ) | 31.24 | 7.17 | 638,778 | .80 | .80 | .51 | 86 | ||||||||||
(.28 | ) | 33.58 | 41.67 | 327,958 | .80 | .80 | 1.13 | 111 | ||||||||||
(.10 | ) | 23.97 | 10.22 | 407,634 | .82 | .82 | .65 | 129 | ||||||||||
(.14 | ) | 21.85 | 7.01 | 490,804 | .82 | .82 | .52 | 111 |
See accompanying notes which are an integral part of the financial statements.
Russell U.S. Small Cap Equity Fund 161
Russell Investment Company
Russell International Developed Markets Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell International Developed Markets Fund - Class A‡ | Russell International Developed Markets Fund - Class S‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (6.41 | )% | 1 Year | (0.48 | )% | ||
5 Years | 2.76 | %§ | 5 Years | 4.26 | %§ | ||
10 Year | 2.72 | %§ | 10 Years | 3.60 | %§ | ||
Russell International Developed Markets Fund - Class C‡‡ | Russell International Developed Markets Fund - Class Y | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.46 | )% | 1 Year | (0.25 | )% | ||
5 Years | 3.23 | %§ | 5 Years | 4.42 | %§ | ||
10 Year | 2.79 | %§ | 10 Years | 3.73 | %§ | ||
Russell International Developed Markets Fund - Class E | Russell Developed ex-U.S. Large Cap® Index Net** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.72 | )% | 1 Year | (1.36 | )% | ||
5 Years | 4.02 | %§ | 5 Years | 4.48 | %§ | ||
10 Years | 3.37 | %§ | 10 Years | 4.32 | %§ | ||
Russell International Developed Markets Fund - Class I | International Developed Markets Linked Benchmark*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.41 | )% | 1 Year | (1.36 | )% | ||
5 Years | 4.34 | %§ | 5 Years | 4.36 | %§ | ||
10 Years | 3.66 | %§ | 10 Years | 3.83 | %§ |
162 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell International Developed Markets Fund (the “Fund”) | With the exception of the Fund’s Class C Shares, the Fund |
employs a multi-manager approach whereby portions of the Fund | outperformed its benchmark during the one year period ending |
are allocated to different money managers strategies. Fund | October 31, 2015. The Fund’s underweights to Asia Pacific ex- |
assets not allocated to money managers are managed by Russell | Japan and Canada were favorable. In addition, underweights to |
Investment Management Company (“RIMCo”), the Fund’s | materials and energy were beneficial as these sectors were the |
advisor. RIMCo may change the allocation of the Fund’s assets | worst hit in the period. The Fund’s moderate overweight to smaller |
among money managers at any time. An exemptive order from the | cap securities was also favorable. |
Securities and Exchange Commission (“SEC”) permits RIMCo | The Fund employs discretionary money managers. The Fund’s |
to engage or terminate a money manager at any time, subject | discretionary money managers select the individual portfolio |
to approval by the Fund’s Board, without a shareholder vote. | securities for the assets assigned to them. Fund assets not |
Pursuant to the terms of the exemptive order, the Fund is required | allocated to discretionary money managers include the Fund’s |
to notify its shareholders within 90 days of when a money manager | liquidity reserves and assets which may be managed directly |
begins providing services. As of October 31, 2015, the Fund had | by RIMCo to effect the Fund’s investment strategies and/or to |
five money managers. | actively manage the Fund’s overall exposures by investing in |
What is the Fund’s investment objective? | securities or other instruments that RIMCo believes will achieve |
The Fund seeks to provide long-term capital growth. | the desired risk/return profile for the Fund. |
Numeric Investors LLC was the best performing money manager | |
How did the Fund perform relative to its benchmark for the | for the period and outperformed the Fund’s benchmark. The |
fiscal year ended October 31, 2015? | manager’s smaller cap tilt versus the benchmark was favorable, |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | as was the manager’s exposure to higher momentum stocks. |
Class C, Class E, Class I, Class S and Class Y Shares lost 0.71%, | |
1.46%, 0.72%, 0.41%, 0.48% and 0.25%, respectively. This is | Barrow, Hanley, Mewhinney & Strauss, LLC was the worst |
compared to the Fund’s benchmark, the Russell Developed ex- | performing money manager for the period and underperformed |
U.S. Large Cap® Index (Net), which lost 1.36% during the same | the Fund’s benchmark. The manager’s underweight to Japan and |
period. The Fund’s performance includes operating expenses, | to consumer discretionary stocks and overweight to value stocks |
whereas index returns are unmanaged and do not include | were the key detractors. This was partially offset by a favorable |
expenses of any kind. | underweight to Asia Pacific ex-Japan. |
For the fiscal year ended October 31, 2015, the Morningstar® | During the period, RIMCo utilized a positioning strategy to control |
Foreign Large Blend, a group of funds that Morningstar considers | Fund-level exposures and risks through the purchase of a stock |
to have investment strategies similar to those of the Fund, lost | portfolio. Using the output from a quantitative model, the strategy |
1.58%. This result serves as a peer comparison and is expressed | seeks to position the portfolio to meet RIMCo’s overall preferred |
net of operating expenses. | positioning with respect to Fund exposures, while optimizing |
the portfolio to minimize tracking error relative to the Fund’s | |
How did the market conditions described in the Market | money manager portfolios. Over the first three quarters of the |
Summary report affect the Fund’s performance? | period, the strategy was designed to increase the Fund’s exposure |
The Russell Developed ex-U.S. Large Cap® Index (Net) returned | to value stocks. In the last quarter of the fiscal year, RIMCo |
-1.36% for the fiscal year ended October 31, 2015. Commodity | increased the Fund’s allocation to the strategy and introduced |
heavy economies like Canada and Australia lagged significantly | a multi-factor approach designed to express RIMCo’s preferred |
due to a demand slowdown, particularly from China. Energy and | Fund positioning across multiple factors and sectors, specifically |
materials were the worst hit sectors as oil prices tumbled to the | increasing the Fund’s value exposure while moderating the Fund’s |
lowest levels since 2009 and a demand slowdown in emerging | volatility exposure. The positioning strategy’s benchmark-relative |
markets caused commodity prices to plunge significantly. | performance was negative for the period, driven by the strategy’s |
Defensive sectors held up well amid the volatility. Value | value focus during a period where growth stocks outperformed. |
underperformed growth, small and mid-cap stocks broadly | In addition, RIMCo utilized equity futures and currency forward |
outperformed large cap stocks and higher momentum stocks held | contracts in order to position the portfolio to meet RIMCo’s |
up well in the period. | overall preferred positioning with respect to country and currency |
How did the investment strategies and techniques employed | exposures. This strategy generated positive performance during |
by the Fund and its money managers affect its benchmark- | the fiscal year ended October 31, 2015. |
relative performance? |
Russell International Developed Markets Fund 163
Russell Investment Company
Russell International Developed Markets Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
During the period, RIMCo equitized the Fund’s cash using index | Money Managers as of October 31, | |
futures contracts to provide the Fund with full market exposure. | 2015 | Styles |
This did not have a material impact on the Fund’s performance | ||
Barrow, Hanley, Mewhinney & Strauss, LLC Value | ||
for the period. | MFS Institutional Advisors Inc. | Market Oriented |
Fair value pricing adjustments on the last business day of | Numeric Investors LLC | Market Oriented |
the period detracted from the Fund’s benchmark-relative | Pzena Investment Management LLC | Value |
Wellington Capital Management | Growth | |
performance because the Fund’s index does not use fair value | The views expressed in this report reflect those of the portfolio | |
pricing adjustments. | managers only through the end of the period covered by | |
Describe any changes to the Fund’s structure or the money | the report. These views do not necessarily represent the | |
manager line-up. | views of RIMCo or any other person in RIMCo or any other | |
In September 2015, RIMCo terminated AQR Capital | affiliated organization. These views are subject to change | |
Management, LLC and William Blair & Company LLC. At the | at any time based upon market conditions or other events, | |
same time, RIMCo implemented the changes to the positioning | and RIMCo disclaims any responsibility to update the views | |
strategy described above. | contained herein. These views should not be relied on as | |
investment advice and, because investment decisions for | ||
a Russell Investment Company (“RIC”) Fund are based on | ||
numerous factors, should not be relied on as an indication | ||
of investment decisions of any RIC Fund. |
* Assumes initial investment on November 1, 2005.
** Russell Developed ex-U.S. Large Cap® Index Net is an index which offers investors access to the large-cap segment of the global equity market, excluding
companies assigned to the United States. It is constructed to provide a comprehensive and unbiased barometer for the large-cap segment and is completely
reconstituted annually to accurately reflect the changes in the market over time.
*** The International Developed Markets Linked Benchmark provides a means to compare the Fund’s average annual returns to a secondary benchmark that takes
into account historical changes in the Fund’s primary benchmark. The International Developed Markets Linked Benchmark represents the returns of the
MSCI EAFE Index (net of tax on dividends from foreign holdings) through December 31, 2010 and the returns of the Russell Developed ex-U.S. Large Cap
Index (net of tax on dividends from foreign holdings) thereafter.
‡ The Fund first issued Class A Shares on September 2, 2008. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
‡‡ The Fund first issued Class C Shares on September 2, 2008. The returns shown for Class C Shares prior to that date are the returns of the Fund’s Class E Shares
and do not reflect deduction of Rule 12b-1 distribution fees that apply to Class C Shares. Had they done so, the returns shown for those periods would have been
lower. Annual returns for each Class will differ only to the extent that the Class C Shares do not have the same expenses as the Class E Shares.
‡‡‡ The Fund first issued Class S Shares on September 2, 2008. The returns shown for Class S Shares prior to that date are the returns of the Fund’s Class I
Shares. Class S Shares will have substantially similar annual returns as the Class I Shares because the Shares of each Class are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class S Shares do not have the same expenses as the Class I Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
164 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 939.80 | $ | 1,018.80 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 6.21 | $ | 6.46 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.27% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). | |||||
and actual expenses. You may use the information in this column, | ||||||
together with the amount you invested, to estimate the expenses | Hypothetical | |||||
Performance (5% | ||||||
that you paid over the period. Simply divide your account value by | Actual | return before | ||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Class C | Performance | expenses) | |||
= 8.6), then multiply the result by the number in the first column | Beginning Account Value | |||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
the expenses you paid on your account during this period. | October 31, 2015 | $ | 936.10 | $ | 1,015.02 | |
Expenses Paid During Period* | $ | 9.86 | $ | 10.26 | ||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | * Expenses are equal to the Fund's annualized expense ratio of 2.02% | |||||
Performance (5% return before expenses)” provides information | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
about hypothetical account values and hypothetical expenses | year period). | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | Hypothetical | |||||
actual return. The hypothetical account values and expenses | Performance (5% | |||||
Actual | return before | |||||
may not be used to estimate the actual ending account balance or | Class E | Performance | expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
to compare the ongoing costs of investing in the Fund and other | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
funds. To do so, compare this 5% hypothetical example with the | Ending Account Value | |||||
October 31, 2015 | $ | 939.90 | $ | 1,018.80 | ||
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 6.21 | $ | 6.46 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 1.27% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
Russell International Developed Markets Fund 165
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Russell International Developed Markets Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class I | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 941.30 | $ | 1,020.47 | |
Expenses Paid During Period* | $ | 4.60 | $ | 4.79 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.94% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 940.90 | $ | 1,020.06 | |
Expenses Paid During Period* | $ | 4.99 | $ | 5.19 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.02% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class Y | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 942.00 | $ | 1,021.07 | |
Expenses Paid During Period* | $ | 4.01 | $ | 4.18 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.82% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
166 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Common Stocks - 95.0% | Van de Velde NV(Æ) | 6,610 | 431 | ||||||||
Australia - 2.0% | 39,122 | ||||||||||
Abacus Property Group (Æ)(ö) | 38,300 | 89 | |||||||||
AGL Energy, Ltd. | 62,826 | 750 | Bermuda - 0.5% | ||||||||
Amalgamated Holdings, Ltd. | 89,393 | 893 | BW LPG, Ltd.(Þ) | 312,131 | 2,115 | ||||||
Austal, Ltd. | 945,400 | 1,530 | CGN Meiya Power Holdings Co., Ltd.(Æ) | 2,276,000 | 547 | ||||||
Australia & New Zealand Banking | Cheung Kong Infrastructure Holdings, | ||||||||||
Group, Ltd. - ADR | 247,074 | 4,754 | Ltd. | 165,000 | 1,532 | ||||||
Australian Pharmaceutical Industries, | Chinese Estates Holdings, Ltd. | 21,500 | 50 | ||||||||
Ltd. Class A | 533,400 | 753 | Emperor Entertainment Hotel, Ltd. | 540,000 | 107 | ||||||
Bendigo & Adelaide Bank, Ltd. | 101,299 | 773 | Emperor International Holdings, Ltd. | 6,762,000 | 1,305 | ||||||
BGP Holdings PLC(Å)(Æ) | 559,805 | — | Global Brands Group Holding, Ltd.(Æ) | 8,321,164 | 1,717 | ||||||
BHP Billiton, Ltd. - ADR | 255,076 | 4,190 | Guoco Group, Ltd. | 7,000 | 80 | ||||||
Caltex Australia, Ltd. | 81,900 | 1,828 | Hongkong Land Holdings, Ltd. | 376,000 | 2,815 | ||||||
CIMIC Group, Ltd. | 79,196 | 1,566 | Kerry Properties, Ltd. | 435,000 | 1,286 | ||||||
Commonwealth Bank of Australia - ADR | 88,215 | 4,830 | Li & Fung, Ltd. | 3,293,164 | 2,659 | ||||||
CSR, Ltd. | 279,449 | 547 | SmarTone Telecommunications Holdings, | ||||||||
Downer EDI, Ltd. | 482,870 | 1,223 | Ltd. | 500,500 | 885 | ||||||
Echo Entertainment Group, Ltd. | 1,215,115 | 4,429 | TAI Cheung Holdings, Ltd. | 98,000 | 79 | ||||||
Evolution Mining, Ltd. | 2,634,588 | 2,615 | 15,177 | ||||||||
GDI Property Group (Æ)(ö) | 213,200 | 137 | |||||||||
Genworth Mortgage Insurance Australia, | Brazil - 0.4% | ||||||||||
Ltd.(Æ) | 41,600 | 80 | Embraer SA - ADR | 302,900 | 8,896 | ||||||
GPT Group (The)(ö) | 330,034 | 1,117 | Itau Unibanco Holding SA - ADR | 201,049 | 1,377 | ||||||
iSentia Group, Ltd.(Æ) | 450,600 | 1,327 | 10,273 | ||||||||
JB Hi-Fi, Ltd. | 206,386 | 2,644 | |||||||||
National Australia Bank, Ltd. - ADR | 149,568 | 3,187 | Canada - 4.2% | ||||||||
Northern Star Resources, Ltd. | 655,794 | 1,283 | Alimentation Couche-Tard, Inc. Class B | 7,100 | 306 | ||||||
Orica, Ltd. | 133,772 | 1,573 | Bank of Montreal(Ñ) | 95,200 | 5,536 | ||||||
OZ Minerals, Ltd. | 267,812 | 833 | Bank of Nova Scotia (The) | 46,100 | 2,168 | ||||||
Qantas Airways, Ltd.(Æ) | 1,835,539 | 5,172 | Bankers Petroleum, Ltd.(Æ) | 565,200 | 951 | ||||||
Regis Healthcare, Ltd.(Æ) | 236,800 | 988 | Baytex Energy Corp. | 153,600 | 625 | ||||||
Rio Tinto, Ltd. - ADR | 61,359 | 2,195 | BCE, Inc. | 29,400 | 1,271 | ||||||
Sandfire Resources NL | 272,579 | 1,233 | Boardwalk Real Estate Investment Trust | ||||||||
SG Fleet Group, Ltd.(Æ) | 88,700 | 177 | (Ñ)(ö) | 75,900 | 3,118 | ||||||
Sirtex Medical, Ltd.(Æ) | 21,300 | 578 | Brookfield Asset Management, Inc. | ||||||||
Telstra Corp., Ltd. | 165,485 | 638 | Class A | 136,400 | 4,768 | ||||||
Wesfarmers, Ltd. | 28,104 | 786 | Canadian Imperial Bank of Commerce | 75,900 | 5,821 | ||||||
Westpac Banking Corp. | 69,233 | 1,548 | Canadian National Railway Co. | 105,430 | 6,441 | ||||||
Woodside Petroleum, Ltd. | 43,612 | 917 | Canadian Natural Resources, Ltd. | 195,600 | 4,536 | ||||||
57,183 | Canadian Tire Corp., Ltd. Class A | 10,800 | 950 | ||||||||
Canfor Pulp Products, Inc. | 68,640 | 715 | |||||||||
Austria - 0.4% | Cascades, Inc. | 226,630 | 1,615 | ||||||||
CA Immobilien Anlagen AG(Æ) | 28,490 | 558 | CCL Industries, Inc. Class B | 17,600 | 2,494 | ||||||
Erste Group Bank AG(Æ) | 358,731 | 10,505 | CGI Group, Inc. Class A(Æ) | 45,800 | 1,701 | ||||||
Kapsch TrafficCom AG(Æ) | 7,112 | 257 | Cogeco, Inc. | 14,850 | 629 | ||||||
11,320 | Dollarama, Inc. | 28,100 | 1,898 | ||||||||
Dominion Diamond Corp. | 139,200 | 1,472 | |||||||||
Belgium - 1.4% | Dominion Diamond Corp.(Æ) | 25,400 | 268 | ||||||||
Ageas | 17,005 | 750 | Dream Global Real Estate Investment | ||||||||
AGFA-Gevaert NV(Æ) | 399,458 | 1,704 | Trust (Ñ)(ö) | 57,600 | 400 | ||||||
Anheuser-Busch InBev SA | 135,837 | 16,200 | Dream Office Real Estate Investment | ||||||||
Barco NV | 24,819 | 1,630 | Trust (ö) | 35,200 | 565 | ||||||
bpost SA | 27,995 | 700 | Element Financial Corp. (Æ) | 158,620 | 2,051 | ||||||
Delhaize Group | 5,507 | 510 | Empire Co., Ltd. Class A | 71,100 | 1,489 | ||||||
Groupe Bruxelles Lambert SA | 14,356 | 1,165 | Fairfax Financial Holdings, Ltd. | 6,900 | 3,398 | ||||||
KBC Ancora | 26,140 | 1,037 | Fortis, Inc. | 14,100 | 408 | ||||||
KBC Groep NV | 100,663 | 6,118 | George Weston, Ltd. | 47,300 | 3,983 | ||||||
Ontex Group NV | 27,321 | 839 | Granite Real Estate Investment Trust (ö) | 18,700 | 545 | ||||||
Proximus SADP | 32,279 | 1,117 | H&R Real Estate Investment Trust (ö) | 181,500 | 2,912 | ||||||
Solvay SA | 2,935 | 331 | Imperial Oil, Ltd. | 14,800 | 493 | ||||||
UCB SA | 76,286 | 6,590 | Intact Financial Corp. | 72,400 | 5,171 |
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 167
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Just Energy Group, Inc.(Ñ) | 221,238 | 1,626 | Vestas Wind Systems A/S | 36,373 | 2,113 | ||||
Lake Shore Gold Corp.(Æ)(Þ) | 151,200 | 134 | 35,574 | ||||||
Loblaw Cos., Ltd. | 42,437 | 2,236 | |||||||
Magellan Aerospace Corp. | 35,300 | 469 | Finland - 0.5% | ||||||
Magna International, Inc. Class A | 91,000 | 4,799 | Fortum OYJ | 164,502 | 2,464 | ||||
Manulife Financial Corp. | 24,500 | 406 | Kone OYJ Class B(Ñ) | 90,990 | 3,877 | ||||
Medical Facilities Corp.(Ñ) | 117,200 | 1,512 | Neste OYJ | 19,930 | 485 | ||||
Metro, Inc. Class A | 9,500 | 272 | Sampo OYJ Class A | 48,754 | 2,379 | ||||
Milestone Apartments Real Estate | Sponda OYJ | 382,161 | 1,622 | ||||||
Investment Trust (ö) | 7,000 | 82 | Tieto OYJ | 61,300 | 1,568 | ||||
Morguard Corp. | 11,000 | 1,211 | UPM-Kymmene OYJ | 20,176 | 377 | ||||
Morguard North American Residential | 12,772 | ||||||||
Real Estate Investment Trust (Ñ)(ö) | 51,700 | 416 | |||||||
Morguard Real Estate Investment Trust | France - 9.5% | ||||||||
(Ñ)(ö) | 39,100 | 432 | Air Liquide SA Class A | 60,572 | 7,836 | ||||
National Bank of Canada | 7,400 | 245 | Alstom SA(Æ) | 10,817 | 352 | ||||
North West Co., Inc. (The) | 33,600 | 745 | Altamir | 66,091 | 744 | ||||
Potash Corp. of Saskatchewan, Inc. | 48,700 | 986 | Atos SE | 67,847 | 5,406 | ||||
Power Corp. of Canada | 49,700 | 1,117 | AXA SA | 143,938 | 3,843 | ||||
Ritchie Bros Auctioneers, Inc.(Ñ) | 159,700 | 4,147 | BNP Paribas SA | 198,201 | 12,022 | ||||
Rogers Communications, Inc. Class B | 5,200 | 207 | Boiron SA | 3,422 | 302 | ||||
RONA, Inc. | 134,450 | 1,404 | Bouygues SA - ADR | 311,404 | 11,781 | ||||
Royal Bank of Canada - GDR(Ñ) | 103,500 | 5,918 | Bureau Veritas SA | 83,877 | 1,895 | ||||
Silver Standard Resources, Inc.(Æ) | 207,274 | 1,430 | Caisse Regionale de Credit Agricole | ||||||
Smart Real Estate Investment Trust (ö) | 128,900 | 3,062 | Mutuel Nord de France | 22,025 | 395 | ||||
Sun Life Financial, Inc. | 20,900 | 705 | Capital Gemini SA | 50,781 | 4,516 | ||||
Suncor Energy, Inc. | 275,208 | 8,189 | Carrefour SA | 16,952 | 552 | ||||
Superior Plus Corp.(Ñ) | 38,300 | 313 | Casino Guichard Perrachon SA | 96,977 | 5,571 | ||||
Toronto Dominion Bank | 37,300 | 1,531 | Cegid Group SA | 10,544 | 496 | ||||
Transcontinental, Inc. Class A - ADR | 99,900 | 1,540 | Christian Dior SE | 14,784 | 2,906 | ||||
Uni-Select, Inc. | 22,900 | 1,135 | Cie de Saint-Gobain | 14,990 | 628 | ||||
Valeant Pharmaceuticals International, | Cie des Alpes | 2,060 | 38 | ||||||
Inc.(Æ) | 19,316 | 1,811 | Credit Agricole SA | 544,441 | 6,886 | ||||
116,778 | Danone SA | 114,735 | 7,988 | ||||||
Dassault Systemes SA | 41,770 | 3,296 | |||||||
Cayman Islands - 0.7% | Electricite de France SA | 32,051 | 596 | ||||||
Alibaba Group Holding, Ltd. - ADR(Æ) | 20,915 | 1,753 | Engie SA | 342,252 | 5,995 | ||||
Hutchison Telecommunications Hong | Essilor International SA | 4,322 | 567 | ||||||
Kong Holdings, Ltd. | 3,606,000 | 1,332 | Etablissements Maurel et Prom(Æ) | 56,994 | 205 | ||||
Sands China, Ltd. | 1,771,200 | 6,358 | Euler Hermes Group | 5,941 | 557 | ||||
SUNeVision Holdings, Ltd.(Ñ) | 487,000 | 164 | Faurecia | 204,236 | 8,070 | ||||
Tencent Holdings, Ltd. | 303,000 | 5,686 | FFP | 17,612 | 1,288 | ||||
Vipshop Holdings, Ltd. - ADR(Æ)(Ñ) | 246,841 | 5,065 | GDF Suez(Å)(Æ) | 55,671 | — | ||||
20,358 | Guerbet | 9,001 | 610 | ||||||
Hermes International | 7,186 | 2,765 | |||||||
Czech Republic - 0.2% | Ipsen SA | 56,366 | 3,556 | ||||||
CEZ AS | 320,775 | 6,412 | Legrand SA - ADR | 49,144 | 2,694 | ||||
L'Oreal SA | 44,225 | 8,058 | |||||||
Denmark - 1.3% | LVMH Moet Hennessy Louis Vuitton | ||||||||
AP Moeller - Maersk A/S Class B | 388 | 571 | SE - ADR | 33,960 | 6,318 | ||||
Bavarian Nordic A/S(Æ) | 32,088 | 1,284 | Natixis SA | 460,496 | 2,819 | ||||
Carlsberg A/S Class B | 23,698 | 1,939 | Orange SA - ADR | 55,852 | 983 | ||||
Danske Bank A/S | 696,112 | 19,098 | Pernod Ricard SA | 64,213 | 7,558 | ||||
DSV A/S | 28,757 | 1,164 | Peugeot SA(Æ) | 229,819 | 4,041 | ||||
Novo Nordisk A/S Class B | 19,526 | 1,034 | Publicis Groupe SA - ADR | 135,977 | 8,821 | ||||
Pandora A/S | 2,594 | 299 | Rallye SA(Ñ) | 53,363 | 986 | ||||
PER Aarsleff A/S Class B | 4,194 | 1,410 | Renault SA | 2,221 | 209 | ||||
Schouw & Co. | 27,625 | 1,444 | Safran SA | 70,993 | 5,388 | ||||
TDC A/S | 997,795 | 5,218 | Sanofi - ADR | 404,817 | 40,814 | ||||
Schneider Electric SE | 348,581 | 21,077 | |||||||
SCOR SE - ADR | 66,740 | 2,482 |
See accompanying notes which are an integral part of the financial statements.
168 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Societe BIC SA | 7,311 | 1,165 | Zalando SE(Æ)(Þ) | 134,427 | 4,707 | ||||||
Societe Generale SA | 124,386 | 5,775 | 181,251 | ||||||||
Synergie SA(Æ) | 19,293 | 516 | |||||||||
Technip SA | 108,166 | 5,642 | Guernsey - 0.0% | ||||||||
Thales SA | 22,240 | 1,610 | Burford Capital, Ltd. | 322,961 | 933 | ||||||
Total SA | 416,283 | 20,173 | |||||||||
Trigano SA | 9,670 | 465 | Hong Kong - 1.8% | ||||||||
Unibail-Rodamco SE(ö) | 6,402 | 1,784 | AIA Group, Ltd. | 2,414,769 | 14,101 | ||||||
Vallourec SA(Ñ) | 407,731 | 4,522 | Champion REIT(Æ)(ö) | 3,011,000 | 1,560 | ||||||
Veolia Environnement SA | 17,695 | 411 | China Mobile, Ltd. | 556,000 | 6,614 | ||||||
Vinci SA | 76,297 | 5,142 | CLP Holdings, Ltd. | 646,500 | 5,623 | ||||||
Vivendi SA - ADR | 202,109 | 4,864 | CSI Properties, Ltd.(Æ) | 1,880,000 | 63 | ||||||
Wendel SA | 10,587 | 1,269 | Guangdong Investment, Ltd. | 3,316,700 | 4,662 | ||||||
267,248 | Hongkong & Shanghai Hotels, Ltd. (The) | 7,500 | 8 | ||||||||
Hua Hong Semiconductor, Ltd.(Æ)(Þ) | 227,000 | 229 | |||||||||
Germany - 6.5% | Hysan Development Co., Ltd. | 324,000 | 1,434 | ||||||||
ADVA Optical Networking SE(Æ) | 110,140 | 1,192 | Lai Sun Development Co., Ltd. | 41,424,000 | 755 | ||||||
Allianz SE | 31,525 | 5,520 | Link REIT (The)(ö) | 270,000 | 1,604 | ||||||
Aurubis AG | 11,050 | 739 | MTR Corp., Ltd. | 131,500 | 595 | ||||||
Bayer AG | 111,239 | 14,848 | New World Development Co., Ltd. | 939,000 | 1,001 | ||||||
Bayerische Motoren Werke AG | 44,218 | 4,539 | Pico Far East Holdings, Ltd.(Ñ) | 2,460,000 | 653 | ||||||
Beiersdorf AG | 71,270 | 6,771 | Power Assets Holdings, Ltd. | 230,000 | 2,287 | ||||||
Commerzbank AG(Æ) | 36,755 | 405 | Regal Real Estate Investment Trust (Ñ) | ||||||||
Continental AG | 43,224 | 10,392 | (ö) | 2,048,000 | 519 | ||||||
Daimler AG | 96,746 | 8,395 | Sino Land Co., Ltd. | 270,000 | 416 | ||||||
Deutsche Bank AG | 5,055 | 142 | Sun Hung Kai Properties, Ltd. | 340,000 | 4,537 | ||||||
Deutsche Beteiligungs AG | 10,265 | 292 | Swire Properties, Ltd. | 711,400 | 2,131 | ||||||
Deutsche Boerse AG | 286,727 | 26,392 | Wharf Holdings, Ltd. (The) | 161,000 | 956 | ||||||
Deutsche Pfandbriefbank AG(Å)(Æ) | 97,735 | 1,202 | Wheelock & Co., Ltd. | 296,000 | 1,376 | ||||||
Deutsche Telekom AG | 375,675 | 7,024 | 51,124 | ||||||||
E.ON SE | 46,059 | 486 | |||||||||
Evonik Industries AG | 111,213 | 4,042 | Hungary - 0.2% | ||||||||
Fresenius Medical Care AG & Co. KGaA | 26,480 | 2,385 | OTP Bank PLC | 304,350 | 5,894 | ||||||
Fresenius SE & Co. KGaA | 27,324 | 2,005 | India - 0.3% | ||||||||
Gerresheimer AG - GDR | 51,576 | 4,024 | Housing Development Finance Corp., | ||||||||
Hannover Rueck SE | 15,316 | 1,773 | Ltd. | 196,165 | 3,762 | ||||||
HeidelbergCement AG | 53,043 | 3,952 | ICICI Bank, Ltd. - ADR | 477,101 | 4,113 | ||||||
Henkel AG & Co. KGaA | 5,027 | 464 | Tata Consultancy Services, Ltd. | 43,769 | 1,669 | ||||||
Hochtief AG | 2,640 | 246 | 9,544 | ||||||||
Infineon Technologies AG - ADR | 348,540 | 4,290 | |||||||||
KION Group AG(Æ) | 27,310 | 1,231 | Indonesia - 0.1% | ||||||||
Lanxess AG | 59,759 | 3,210 | Telekomunikasi Indonesia Persero Tbk | ||||||||
Linde AG | 34,881 | 6,050 | PT | 8,748,100 | 1,731 | ||||||
Merck KGaA | 76,538 | 7,466 | |||||||||
Metro AG | 139,393 | 4,296 | Ireland - 1.6% | ||||||||
MTU Aero Engines AG | 21,262 | 1,968 | Bank of Ireland(Æ) | 11,980,255 | 4,457 | ||||||
Muenchener Rueckversicherungs- | CRH PLC | 496,489 | 13,588 | ||||||||
Gesellschaft AG in Muenchen | 34,671 | 6,920 | Hibernia REIT PLC (ö) | 334,681 | 495 | ||||||
Nordex SE(Æ) | 14,942 | 489 | Hibernia REIT PLC (Æ)(ö) | 65,600 | 98 | ||||||
OSRAM Licht AG | 23,781 | 1,399 | Horizon Pharma PLC(Æ)(Ñ) | 84,400 | 1,327 | ||||||
ProSiebenSat.1 Media SE | 55,167 | 2,986 | James Hardie Industries PLC | 280,725 | 3,665 | ||||||
Rheinmetall AG | 4,900 | 308 | Ryanair Holdings PLC - ADR(Æ) | 49,823 | 3,895 | ||||||
Rhoen Klinikum AG | 40,701 | 1,213 | Smurfit Kappa Group PLC | 49,506 | 1,410 | ||||||
RWE AG | 81,060 | 1,128 | Total Produce PLC | 73,387 | 112 | ||||||
Salzgitter AG | 44,176 | 1,276 | Willis Group Holdings PLC | 202,925 | 9,052 | ||||||
SAP SE - ADR | 105,182 | 8,315 | XL Group PLC Class A | 160,925 | 6,128 | ||||||
Siemens AG | 136,212 | 13,699 | 44,227 | ||||||||
Software AG | 9,685 | 282 | |||||||||
Talanx AG | 50,087 | 1,605 | Isle of Man - 0.1% | ||||||||
Wuestenrot & Wuerttembergische AG | 67,475 | 1,183 | Manx Telecom PLC(Æ)(Ñ) | 455,034 | 1,427 |
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 169
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Israel - 0.9% | CONEXIO Corp. | 31,400 | 315 | ||||||
Bank Hapoalim BM | 584,964 | 3,043 | Daicel Chemical Industries, Ltd. | 155,100 | 2,041 | ||||
Bank Leumi Le-Israel BM(Æ) | 356,228 | 1,350 | Daihatsu Motor Co., Ltd. | 741,400 | 9,043 | ||||
Check Point Software Technologies, Ltd. | Dai-ichi Life Insurance Co., Ltd. (The) | 273,925 | 4,736 | ||||||
(Æ)(Ñ) | 29,906 | 2,540 | Daikin Industries, Ltd. | 59,600 | 3,816 | ||||
Israel Discount Bank, Ltd. Class A(Æ) | 1,599,058 | 2,914 | Daio Paper Corp.(Æ) | 9,000 | 89 | ||||
Orbotech, Ltd.(Æ) | 30,231 | 500 | Daiwabo Holdings Co., Ltd. | 674,000 | 1,323 | ||||
Teva Pharmaceutical Industries, Ltd. | Denso Corp. | 155,400 | 7,195 | ||||||
- ADR | 221,300 | 13,099 | DTS Corp. | 65,900 | 1,554 | ||||
Teva Pharmaceutical Industries, Ltd. | 30,402 | 1,806 | East Japan Railway Co. | 16,000 | 1,519 | ||||
25,252 | Eisai Co., Ltd. | 113,200 | 7,043 | ||||||
FANUC Corp. | 38,800 | 6,828 | |||||||
Italy - 3.1% | Fuji Electric Co., Ltd. | 2,665,000 | 11,845 | ||||||
A2A SpA | 182,850 | 251 | Fuji Heavy Industries, Ltd. | 158,000 | 6,101 | ||||
ACEA SpA | 103,774 | 1,492 | FUJIFILM Holdings Corp. | 73,500 | 2,922 | ||||
Assicurazioni Generali SpA | 34,745 | 659 | Fujishoji Co., Ltd. | 48,700 | 496 | ||||
Astaldi SpA(Æ) | 45,182 | 364 | Fujitsu, Ltd. | 2,490,000 | 11,716 | ||||
ASTM SpA | 71,102 | 954 | Fukuda Denshi Co., Ltd. | 1,600 | 78 | ||||
Atlantia SpA | 33,627 | 932 | Geo Holdings Corp. | 49,300 | 736 | ||||
Buzzi Unicem SpA | 109,189 | 1,101 | GMO internet, Inc. | 25,100 | 353 | ||||
Danieli & C Officine Meccaniche SpA | 23,570 | 357 | Hachijuni Bank, Ltd. (The) | 75,000 | 508 | ||||
Davide Campari-Milano SpA | 566,629 | 4,844 | Haseko Corp. | 105,600 | 1,075 | ||||
DiaSorin SpA | 35,790 | 1,602 | Heiwado Co., Ltd. | 68,900 | 1,546 | ||||
Enel SpA | 3,897,857 | 17,996 | Hikari Tsushin, Inc. | 5,300 | 403 | ||||
Engineering SpA | 23,795 | 1,451 | Hitachi Capital Corp. | 9,400 | 269 | ||||
ENI SpA - ADR | 1,762,615 | 28,757 | Hitachi, Ltd. | 1,684,000 | 9,674 | ||||
ERG SpA | 107,839 | 1,531 | Hokkaido Electric Power Co., Inc.(Æ) | 49,800 | 529 | ||||
Intesa Sanpaolo SpA | 1,000,950 | 3,489 | Honda Motor Co., Ltd. | 761,270 | 25,274 | ||||
Iren SpA - ADR(Æ) | 585,300 | 965 | Hoya Corp. | 327,800 | 13,473 | ||||
Maire Tecnimont SpA(Æ)(Ñ) | 247,371 | 715 | IHI Corp. | 1,953,000 | 5,504 | ||||
Parmalat SpA | 222,939 | 580 | Iida Group Holdings Co., Ltd. | 417,100 | 7,790 | ||||
Prysmian SpA | 182,768 | 3,952 | Information Services International- | ||||||
Reply SpA(Æ) | 610 | 78 | Dentsu, Ltd. | 83,300 | 1,295 | ||||
Salini Impregilo SpA(Æ) | 225,900 | 937 | Inpex Corp. | 381,600 | 3,637 | ||||
Saras SpA(Æ) | 626,200 | 1,237 | IT Holdings Corp.(Æ) | 30,900 | 763 | ||||
Telecom Italia SpA(Æ) | 6,623,341 | 9,225 | ITOCHU Corp. | 1,011,100 | 12,594 | ||||
UniCredit SpA | 57,846 | 374 | Jaccs Co., Ltd.(Æ) | 337,000 | 1,402 | ||||
Unione di Banche Italiane SpA | 578,894 | 4,321 | Jafco Co., Ltd. | 38,800 | 1,475 | ||||
88,164 | Japan Airlines Co., Ltd. | 46,000 | 1,730 | ||||||
Japan Tobacco, Inc. | 134,000 | 4,629 | |||||||
Japan - 16.8% | Jeol, Ltd. | 91,000 | 549 | ||||||
Aeon Co., Ltd. | 25,800 | 381 | JSR Corp. | 21,400 | 337 | ||||
Aichi Bank, Ltd. (The) | 2,000 | 110 | Kaga Electronics Co., Ltd. | 7,200 | 100 | ||||
Ajinomoto Co., Inc. | 43,000 | 954 | Kaken Pharmaceutical Co., Ltd. | 63,700 | 4,385 | ||||
Amada Holdings Co., Ltd. | 525,800 | 4,660 | Kamei Corp. | 126,000 | 1,249 | ||||
Aoyama Trading Co., Ltd. | 75,100 | 2,729 | Kanto Tsukuba Bank, Ltd. (The) | 67,900 | 237 | ||||
Astellas Pharma, Inc. | 467,700 | 6,761 | Kao Corp. | 83,100 | 4,244 | ||||
Bandai Namco Holdings, Inc. | 64,600 | 1,582 | Kasai Kogyo Co., Ltd. | 76,700 | 952 | ||||
Bank of Yokohama, Ltd. (The) | 87,000 | 541 | Kato Sangyo Co., Ltd. | 48,400 | 1,174 | ||||
Belluna Co., Ltd. | 16,500 | 93 | KDDI Corp. | 328,500 | 7,935 | ||||
Calsonic Kansei Corp. | 242,000 | 1,918 | Keyence Corp. | 8,700 | 4,516 | ||||
Canon Marketing Japan, Inc. | 44,800 | 679 | Kinden Corp. | 5,000 | 65 | ||||
Canon, Inc. | 362,100 | 10,816 | Kiyo Bank, Ltd. (The) | 42,900 | 651 | ||||
Cawachi, Ltd. | 66,300 | 1,146 | Kohnan Shoji Co., Ltd. | 109,500 | 1,593 | ||||
Central Glass Co., Ltd.(Æ) | 42,000 | 207 | Kokuyo Co., Ltd. | 64,700 | 718 | ||||
Central Japan Railway Co. | 22,000 | 3,995 | Konica Minolta, Inc. | 131,200 | 1,347 | ||||
Chiba Bank, Ltd. (The) | 49,000 | 356 | Konoike Transport Co., Ltd. | 59,300 | 733 | ||||
Chiyoda Integre Co., Ltd.(Æ) | 6,300 | 151 | Kuraray Co., Ltd. | 65,400 | 804 | ||||
Chugoku Bank, Ltd. (The) | 20,600 | 290 | Kyocera Corp. | 74,300 | 3,349 | ||||
Citizen Holdings Co., Ltd. | 38,100 | 288 | Lion Corp. | 8,000 | 77 | ||||
Coca-Cola West Co., Ltd. | 168,800 | 3,402 |
See accompanying notes which are an integral part of the financial statements.
170 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Mabuchi Motor Co., Ltd. | 47,400 | 2,325 | Sumitomo Mitsui Trust Holdings, Inc. | 645,000 | 2,468 | |||||
Maeda Road Construction Co., Ltd. | 61,000 | 1,111 | Sumitomo Osaka Cement Co., Ltd. | 735,000 | 2,835 | |||||
Medipal Holdings Corp. | 115,900 | 2,017 | Sumitomo Riko Co., Ltd.(Æ) | 8,100 | 65 | |||||
Meitec Corp. | 41,500 | 1,501 | Suzuken Co., Ltd. | 42,400 | 1,620 | |||||
Mirait Holdings Corp. | 169,500 | 1,467 | Takara Leben Co., Ltd. | 210,100 | 1,087 | |||||
Mitsubishi Corp. | 28,000 | 507 | Takeda Pharmaceutical Co., Ltd. | 17,500 | 851 | |||||
Mitsubishi Electric Corp. | 61,000 | 633 | Takuma Co., Ltd. | 197,000 | 1,556 | |||||
Mitsubishi Shokuhin Co., Ltd. | 9,100 | 231 | Terumo Corp. | 176,100 | 5,200 | |||||
Mitsubishi Tanabe Pharma Corp. | 17,200 | 290 | T-Gaia Corp. | 81,000 | 1,226 | |||||
Mitsubishi UFJ Financial Group, Inc. | 3,341,300 | 21,606 | Toho Bank, Ltd. (The)(Æ) | 53,000 | 193 | |||||
Mitsuboshi Belting, Ltd. | 22,000 | 182 | Toho Holdings Co., Ltd. | 30,900 | 683 | |||||
Mitsui & Co., Ltd. | 36,100 | 456 | Token Corp.(Ñ) | 16,000 | 1,264 | |||||
Mizuho Financial Group, Inc. | 1,515,900 | 3,100 | Tokio Marine Holdings, Inc. | 16,500 | 632 | |||||
MS&AD Insurance Group Holdings, Inc. | 141,600 | 4,156 | Tokyo Electric Power Co., Inc.(Æ) | 368,800 | 2,508 | |||||
Nexon Co., Ltd. | 206,800 | 2,853 | Tokyo Gas Co., Ltd. | 155,000 | 765 | |||||
NHK Spring Co., Ltd. | 39,100 | 397 | Tokyo Steel Manufacturing Co., Ltd. | 184,200 | 1,225 | |||||
Nichi-iko Pharmaceutical Co., Ltd. | 31,100 | 861 | Toppan Forms Co., Ltd. | 45,400 | 583 | |||||
Nidec Corp. | 54,500 | 4,095 | Toppan Printing Co., Ltd. | 317,000 | 2,834 | |||||
Nintendo Co., Ltd. | 25,600 | 4,087 | Toshiba Corp. | 150,000 | 422 | |||||
Nippo Corp.(Æ) | 23,000 | 402 | Toyota Motor Corp. | 146,500 | 8,970 | |||||
Nippon Steel & Sumitomo Metal Corp. | 16,600 | 336 | Trend Micro, Inc. | 157,300 | 6,109 | |||||
Nippon Suisan Kaisha, Ltd. | 414,700 | 1,384 | Ube Industries, Ltd. | 150,000 | 314 | |||||
Nippon Telegraph & Telephone Corp. | 186,500 | 6,849 | Valor Holdings Co., Ltd. | 66,300 | 1,548 | |||||
Nissan Motor Co., Ltd. | 33,900 | 352 | Wakita & Co., Ltd. | 140,000 | 1,100 | |||||
Nisshinbo Holdings, Inc. | 267,100 | 3,610 | West Japan Railway Co. | 81,200 | 5,681 | |||||
Nitori Holdings Co., Ltd. | 34,900 | 2,716 | Yamaguchi Financial Group, Inc. | 9,000 | 110 | |||||
Nittetsu Mining Co., Ltd. | 276,000 | 1,211 | Yamazen Corp. | 158,400 | 1,407 | |||||
Noevir Holdings Co., Ltd.(Æ) | 3,700 | 93 | Yokogawa Electric Corp. | 15,100 | 168 | |||||
NOK Corp. | 35,100 | 823 | Yuasa Trading Co., Ltd. | 67,500 | 1,566 | |||||
NSD Co., Ltd.(Æ) | 72,200 | 1,001 | Yurtec Corp. | 38,000 | 365 | |||||
NTT DOCOMO, Inc. | 522,525 | 10,257 | 473,192 | |||||||
Okasan Securities Group, Inc. | 239,000 | 1,397 | ||||||||
Okinawa Cellular Telephone Co. | 16,200 | 453 | Jersey - 1.4% | |||||||
Ono Pharmaceutical Co., Ltd. | 102,600 | 13,980 | Delphi Automotive PLC | 35,861 | 2,983 | |||||
Open House Co., Ltd.(Æ) | 27,800 | 506 | Genel Energy PLC(Æ) | 390,417 | 1,534 | |||||
ORIX Corp. | 359,700 | 5,259 | Glencore PLC(Æ) | 648,496 | 1,117 | |||||
Osaka Gas Co., Ltd. | 615,000 | 2,416 | Henderson Group PLC | 900,392 | 3,975 | |||||
Otsuka Holdings Co., Ltd. | 27,200 | 900 | Regus PLC | 102,100 | 526 | |||||
Oyo Corp.(Æ) | 32,000 | 410 | Wolseley PLC - ADR | 11,536 | 677 | |||||
Raito Kogyo Co., Ltd. | 33,000 | 315 | WPP PLC | 1,306,801 | 29,289 | |||||
Resona Holdings, Inc. | 358,600 | 1,891 | 40,101 | |||||||
Ryobi, Ltd. | 25,000 | 92 | ||||||||
Sankyo Co., Ltd. | 9,600 | 369 | Liechtenstein - 0.0% | |||||||
Sanyo Denki Co., Ltd.(Æ) | 45,000 | 272 | VP Bank AG | 4,922 | 396 | |||||
Sanyo Shokai, Ltd. | 473,000 | 1,373 | Luxembourg - 0.2% | |||||||
Secom Co., Ltd. | 8,200 | 545 | ArcelorMittal | 130,837 | 727 | |||||
Seiko Holdings Corp.(Æ) | 197,000 | 1,280 | Samsonite International SA | 1,208,700 | 3,558 | |||||
Seven & i Holdings Co., Ltd. | 147,300 | 6,656 | Subsea 7 SA(Æ) | 103,200 | 810 | |||||
Shimamura Co., Ltd. | 13,800 | 1,545 | 5,095 | |||||||
Shimano, Inc. | 17,800 | 2,797 | ||||||||
Shin-Etsu Chemical Co., Ltd. | 30,000 | 1,776 | Mexico - 0.2% | |||||||
Shinmaywa Industries, Ltd. | 51,000 | 556 | Fomento Economico Mexicano SAB de | |||||||
Skylark Co., Ltd. | 33,200 | 430 | CV - ADR | 45,641 | 4,523 | |||||
SMC Corp. | 20,200 | 5,178 | ||||||||
Sompo Japan Nipponkoa Holdings, Inc. | 181,700 | 5,664 | Netherlands - 5.9% | |||||||
Sony Corp. | 235,500 | 6,679 | Aegon NV | 1,652,961 | 10,152 | |||||
Sumitomo Corp. | 800,000 | 8,766 | Airbus Group SE | 189,138 | 13,142 | |||||
Sumitomo Dainippon Pharma Co., Ltd. | 52,400 | 578 | Akzo Nobel NV | 81,802 | 5,780 | |||||
Sumitomo Electric Industries, Ltd. | 25,600 | 348 | ASML Holding NV | 7,030 | 652 | |||||
Sumitomo Mitsui Financial Group, Inc. | 379,900 | 15,104 | BinckBank NV | 40,000 | 352 |
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 171
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Boskalis Westminster | 54,619 | 2,652 | Hankook Tire Co., Ltd. | 132,534 | 5,065 | ||||||
CNH Industrial NV | 1,200,603 | 8,106 | Samsung Electronics Co., Ltd. | 10,700 | 12,817 | ||||||
CNH Industrial NV(Ñ) | 295,400 | 2,006 | Shinhan Financial Group Co., Ltd. | 233,637 | 8,893 | ||||||
Delta Lloyd NV | 626,968 | 4,932 | 32,222 | ||||||||
Fiat Chrysler Automobiles NV | 30,940 | 455 | |||||||||
Heineken Holding NV | 15,228 | 1,218 | Spain - 2.0% | ||||||||
Heineken NV | 72,718 | 6,630 | Acciona SA | 4,341 | 365 | ||||||
ING Groep NV | 2,302,275 | 33,389 | ACS Actividades de Construccion y | ||||||||
Koninklijke Ahold NV | 300,858 | 6,111 | Servicios SA | 51,009 | 1,734 | ||||||
Koninklijke KPN NV | 3,622,778 | 13,267 | Amadeus IT Holding SA Class A | 149,558 | 6,364 | ||||||
Koninklijke Philips NV | 374,844 | 10,111 | Banco Bilbao Vizcaya Argentaria SA | ||||||||
Mobileye NV(Æ)(Ñ) | 101,880 | 4,638 | - ADR | 509,012 | 4,376 | ||||||
NN Group NV | 424,381 | 13,308 | Banco Bilbao Vizcaya Argentaria SA(Æ) | 5,281 | 45 | ||||||
NXP Semiconductors NV(Æ) | 53,094 | 4,160 | Banco de Sabadell SA - ADR | 3,112,611 | 6,013 | ||||||
Randstad Holding NV | 78,904 | 4,699 | Banco Santander SA - ADR | 2,147,470 | 12,026 | ||||||
STMicroelectronics NV | 1,016,427 | 7,026 | Corp. Financiera Alba SA | 33,199 | 1,465 | ||||||
Unilever NV(Ñ) | 270,822 | 12,207 | Endesa SA - ADR | 112,417 | 2,502 | ||||||
Wolters Kluwer NV | 45,665 | 1,542 | Euskaltel SA(Å)(Æ) | 65,328 | 731 | ||||||
166,535 | Faes Farma SA(Æ) | 66,604 | 179 | ||||||||
Ferrovial SA | 39,431 | 995 | |||||||||
New Zealand - 0.1% | Gamesa Corp. Tecnologica SA | 209,292 | 3,305 | ||||||||
Air New Zealand, Ltd. | 789,800 | 1,554 | Gas Natural SDG SA | 16,762 | 363 | ||||||
Nuplex Industries, Ltd.(Æ) | 374,142 | 1,077 | Iberdrola SA | 834,506 | 5,957 | ||||||
2,631 | Indra Sistemas SA(Æ)(Ñ) | 297,500 | 3,187 | ||||||||
Industria de Diseno Textil SA | 73,690 | 2,760 | |||||||||
Norway - 0.6% | Mediaset Espana Comunicacion SA | 207,271 | 2,517 | ||||||||
Austevoll Seafood ASA | 238,482 | 1,466 | Repsol SA - ADR | 32,993 | 416 | ||||||
Bakkafrost P/F | 12,725 | 408 | Telefonica SA - ADR | 34,768 | 459 | ||||||
DNB ASA | 13,427 | 170 | 55,759 | ||||||||
Orkla ASA | 1,006,548 | 8,553 | |||||||||
Salmar ASA Class A(Æ) | 19,835 | 324 | Sweden - 1.6% | ||||||||
Telenor ASA(Ñ) | 224,455 | 4,225 | Assa Abloy AB Class B | 353,442 | 7,010 | ||||||
Yara International ASA | 10,211 | 463 | Atlas Copco AB Class A(Ñ) | 242,314 | 6,302 | ||||||
15,609 | Atlas Copco AB Class B(Ñ) | 32,449 | 783 | ||||||||
Axfood AB | 72,040 | 1,299 | |||||||||
Portugal - 0.2% | Bilia AB Class A | 73,499 | 1,539 | ||||||||
Altri SGPS SA(Æ) | 78,103 | 369 | BillerudKorsnas AB | 40,401 | 729 | ||||||
Energias de Portugal SA | 138,724 | 513 | Boliden AB | 41,310 | 790 | ||||||
Galp Energia SGPS SA Class B | 546,672 | 5,895 | Byggmax Group AB(Æ) | 20,866 | 169 | ||||||
6,777 | Dios Fastigheter AB | 25,300 | 186 | ||||||||
Electrolux AB | 164,123 | 4,824 | |||||||||
Russia - 0.3% | Fastighets AB Balder Class B(Æ) | 33,430 | 673 | ||||||||
Gazprom PAO - ADR | 2,002,587 | 8,428 | Hennes & Mauritz AB Class B | 120,214 | 4,663 | ||||||
Singapore - 1.2% | Hexagon AB Class B | 49,199 | 1,703 | ||||||||
DBS Group Holdings, Ltd. | 401,596 | 4,945 | Hexpol AB | 41,707 | 404 | ||||||
Frasers Centrepoint, Ltd. | 50,500 | 59 | Industrial & Financial Systems Class B | 3,130 | 121 | ||||||
Ho Bee Land, Ltd. | 141,400 | 198 | Inwido AB(Æ) | 73,151 | 796 | ||||||
Jardine Cycle & Carriage, Ltd. | 411,000 | 9,514 | Medivir AB Class B(Æ) | 51,563 | 458 | ||||||
Lian Beng Group, Ltd. | 956,800 | 362 | Mycronic AB | 50,000 | 357 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 88,300 | 567 | Nordea Bank AB | 428,661 | 4,727 | ||||||
Singapore Telecommunications, Ltd. | 561,154 | 1,588 | SAS AB(Æ)(Ñ) | 174,600 | 337 | ||||||
United Industrial Corp., Ltd. | 24,700 | 54 | Skandinaviska Enskilda Banken AB | ||||||||
United Overseas Bank, Ltd. | 758,600 | 10,996 | Class A | 194,973 | 2,039 | ||||||
Wilmar International, Ltd. | 849,800 | 1,890 | Skanska AB Class B | 77,242 | 1,500 | ||||||
Wing Tai Holdings, Ltd. | 66,300 | 82 | SkiStar AB | 3,510 | 51 | ||||||
Yangzijiang Shipbuilding Holdings, Ltd. | 2,667,400 | 2,370 | Svenska Cellulosa AB SCA Class B | 59,696 | 1,760 | ||||||
Yanlord Land Group, Ltd. | 1,986,600 | 1,477 | Tethys Oil AB(Æ) | 145,722 | 896 | ||||||
34,102 | 44,116 | ||||||||||
South Korea - 1.1% | Switzerland - 8.9% | ||||||||||
Hana Financial Group, Inc. | 224,375 | 5,447 | ABB, Ltd.(Æ) | 911,666 | 17,171 |
See accompanying notes which are an integral part of the financial statements.
172 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
ABB, Ltd. - ADR(Æ) | 152,900 | 2,887 | BG Group PLC | 178,692 | 2,815 | |||||
ACE, Ltd. | 55,925 | 6,350 | BHP Billiton PLC | 42,582 | 681 | |||||
Actelion, Ltd.(Æ) | 41,333 | 5,733 | Bovis Homes Group PLC | 41,840 | 660 | |||||
Adecco SA(Æ) | 71,867 | 5,337 | BP PLC | 3,723,686 | 22,103 | |||||
Ascom Holding AG | 82,131 | 1,557 | BP PLC - ADR | 84,200 | 3,006 | |||||
Banque Cantonale Vaudoise | 2,751 | 1,693 | British American Tobacco PLC | 167,454 | 9,939 | |||||
Bell AG(Æ) | 225 | 618 | British Land Co. PLC (The)(ö) | 108,393 | 1,452 | |||||
Bobst Group SA | 21,884 | 926 | BT Group PLC | 190,890 | 1,365 | |||||
Cembra Money Bank AG | 14,330 | 855 | Burberry Group PLC | 145,843 | 2,982 | |||||
Cie Financiere Richemont SA(Æ) | 56,948 | 4,871 | Carnival PLC | 41,715 | 2,319 | |||||
Credit Suisse Group AG(Æ) | 838,353 | 20,876 | Coats Group PLC(Æ) | 617,579 | 280 | |||||
GAM Holding AG(Æ) | 150,071 | 2,743 | Compass Group PLC | 675,323 | 11,633 | |||||
Helvetia Holding AG(Ñ) | 9,749 | 5,100 | Computacenter PLC(Æ) | 38,549 | 449 | |||||
Julius Baer Group, Ltd.(Æ) | 66,881 | 3,314 | Dairy Crest Group PLC(Ñ) | 1,027,949 | 10,193 | |||||
Kuehne & Nagel International AG | 10,614 | 1,470 | Dart Group PLC | 213,478 | 1,553 | |||||
LafargeHolcim, Ltd.(Æ) | 5,638 | 317 | Debenhams PLC | 790,900 | 1,088 | |||||
Lonza Group AG(Æ) | 36,139 | 5,297 | Derwent London PLC(ö) | 40,275 | 2,405 | |||||
Metall Zug AG | 392 | 999 | Diageo PLC | 184,566 | 5,334 | |||||
Nestle SA | 364,686 | 27,841 | Dialog Semiconductor PLC(Æ) | 38,414 | 1,419 | |||||
Novartis AG | 330,840 | 29,996 | Direct Line Insurance Group PLC | 342,125 | 2,077 | |||||
OC Oerlikon Corp. AG(Æ) | 558,230 | 5,351 | DS Smith PLC Class F | 3,355,451 | 19,984 | |||||
Roche Holding AG | 124,989 | 33,855 | DX Group PLC(Æ) | 77,481 | 104 | |||||
Sonova Holding AG | 18,178 | 2,478 | Evraz PLC(Æ) | 378,467 | 494 | |||||
Swiss Life Holding AG(Æ) | 38,848 | 9,260 | GlaxoSmithKline PLC - ADR | 882,263 | 19,002 | |||||
Swiss Re AG(Æ) | 63,366 | 5,879 | Go-Ahead Group PLC | 16,739 | 625 | |||||
Syngenta AG | 5,255 | 1,765 | Great Portland Estates PLC(ö) | 168,081 | 2,302 | |||||
UBS Group AG | 1,474,651 | 29,431 | Greggs PLC | 93,146 | 1,702 | |||||
Vaudoise Assurances Holding SA Class | Hammerson PLC(ö) | 243,584 | 2,386 | |||||||
B | 1,119 | 580 | Headlam Group PLC(Æ) | 8,040 | 67 | |||||
Vetropack Holding AG | 210 | 323 | HSBC Holdings PLC | 3,086,975 | 24,112 | |||||
Vontobel Holding AG | 29,430 | 1,450 | Imperial Tobacco Group PLC | 762,937 | 41,097 | |||||
Zurich Insurance Group AG(Æ) | 52,683 | 13,896 | Inchcape PLC | 309,562 | 3,805 | |||||
250,219 | Indivior PLC | 859,025 | 2,717 | |||||||
Intermediate Capital Group PLC | 69,487 | 605 | ||||||||
Taiwan - 0.8% | JD Sports Fashion PLC - ADR | 104,494 | 1,554 | |||||||
Compal Electronics, Inc. | 9,012,000 | 5,591 | John Laing Group PLC(Þ) | 287,432 | 845 | |||||
Hon Hai Precision Industry Co., Ltd.(Æ) | 1,578,464 | 4,186 | Jupiter Fund Management PLC | 51,538 | 357 | |||||
Taiwan Semiconductor Manufacturing | Kingfisher PLC | 3,176,100 | 17,262 | |||||||
Co., Ltd. - ADR | 347,310 | 7,627 | Land Securities Group PLC(ö) | 231,110 | 4,763 | |||||
Teco Electric and Machinery Co., Ltd. | 5,536,100 | 4,820 | Legal & General Group PLC | 183,671 | 739 | |||||
22,224 | Liberty Global PLC Class A(Æ) | 13,600 | 605 | |||||||
Liberty Global PLC Class C(Æ) | 10,700 | 456 | ||||||||
Thailand - 0.3% | Lloyds Banking Group PLC | 666,867 | 757 | |||||||
Bangkok Bank PCL | 341,600 | 1,605 | Mondi PLC | 212,191 | 4,904 | |||||
Charoen Pokphand Foods PCL | 12,089,200 | 7,022 | Moneysupermarket.com Group PLC | 503,623 | 2,591 | |||||
8,627 | National Grid PLC | 949,777 | 13,518 | |||||||
United Kingdom - 16.8% | Novae Group PLC | 65,515 | 877 | |||||||
3i Group PLC | 577,078 | 4,449 | Old Mutual PLC | 216,470 | 707 | |||||
Acacia Mining PLC | 103,520 | 308 | Pendragon PLC | 1,621,265 | 1,118 | |||||
Amec Foster Wheeler PLC - GDR | 232,374 | 2,539 | Persimmon PLC Class A(Æ) | 84,543 | 2,593 | |||||
Anglo American PLC | 39,312 | 329 | Polypipe Group PLC | 272,212 | 1,320 | |||||
ARM Holdings PLC | 285,319 | 4,510 | Premier Oil PLC(Æ) | 1,007,788 | 1,058 | |||||
Associated British Foods PLC | 3,747 | 199 | Prudential PLC | 409,230 | 9,552 | |||||
AstraZeneca PLC | 99,606 | 6,358 | QinetiQ Group PLC | 576,200 | 1,987 | |||||
Auto Trader Group PLC(Æ)(Þ) | 310,615 | 1,857 | Rank Group PLC(Æ) | 57,721 | 247 | |||||
Aviva PLC | 1,023,757 | 7,657 | Reckitt Benckiser Group PLC | 220,304 | 21,495 | |||||
Avon Rubber PLC Class A(Æ) | 18,709 | 328 | Redcentric PLC(Æ) | 26,000 | 79 | |||||
Barclays PLC | 3,195,588 | 11,373 | Redrow PLC | 97,400 | 696 | |||||
Berendsen PLC | 48,916 | 772 | Rentokil Initial PLC | 82,700 | 197 | |||||
Berkeley Group Holdings PLC | 164,640 | 8,402 | Rio Tinto PLC | 252,846 | 9,170 |
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 173
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||||||
Principal | Fair | Principal | Fair | |||||||||||
Amount ($) | Value | Amount ($) | Value | |||||||||||
or Shares | $ | or Shares | $ | |||||||||||
Rolls-Royce Holdings PLC(Æ) | 100,328,150 | 11,481 | ||||||||||||
Royal Bank of Scotland Group PLC(Æ) | 2,460,957 | 12,028 | Short | -Term Investments - 3.2% | ||||||||||
Royal Dutch Shell PLC Class A | 757,991 | 19,809 | United States - 3.2% | |||||||||||
Royal Dutch Shell PLC Class B | 165,240 | 4,316 | Russell U.S. Cash Management Fund | 72,146,439 | (8) | 72,146 | ||||||||
Royal Mail PLC | 265,108 | 1,818 | United States Treasury Bills | |||||||||||
RSA Insurance Group PLC | 1,024,798 | 6,640 | 0.230% due 03/03/16 | 18,200 | 18,194 | |||||||||
Segro PLC(ö) | 67,770 | 469 | Total Short-Term Investments | |||||||||||
Shaftesbury PLC (ö) | 48,759 | 706 | (cost $90,332) | 90,340 | ||||||||||
Sky PLC | 720,547 | 12,150 | ||||||||||||
Smiths Group PLC | 209,919 | 3,109 | Other Securities - 2.5% | |||||||||||
ST Modwen Properties PLC | 181,033 | 1,226 | Russell U.S. Cash Collateral Fund(×) | 69,122,927 | (8) | 69,123 | ||||||||
Standard Chartered PLC | 426,439 | 4,733 | Total Other Securities | |||||||||||
SVG Capital PLC(Æ) | 51,725 | 378 | (cost $69,123) | 69,123 | ||||||||||
Taylor Wimpey PLC | 825,793 | 2,515 | ||||||||||||
Tesco PLC(Æ) | 256,159 | 722 | Total Investments 101.2% | |||||||||||
Travis Perkins PLC | 436,077 | 12,852 | (identified cost $2,825,684) | 2,842,311 | ||||||||||
Trinity Mirror PLC | 417,924 | 1,095 | ||||||||||||
Unilever PLC | 58,690 | 2,606 | ||||||||||||
Vertu Motors PLC(Æ) | 96,003 | 110 | Other Assets and Liabilities, Net | |||||||||||
Vodafone Group PLC | 5,365,207 | 17,687 | - | (1.2%) | (33,784 | ) | ||||||||
Wm Morrison Supermarkets PLC | 400,721 | 1,038 | Net Assets - 100.0% | 2,808,527 | ||||||||||
WS Atkins PLC | 86,040 | 1,824 | ||||||||||||
470,595 | ||||||||||||||
United States - 0.9% | ||||||||||||||
Joy Global, Inc. | 56,600 | 972 | ||||||||||||
News Corp. Class A | 848,625 | 13,069 | ||||||||||||
Philip Morris International, Inc. | 59,100 | 5,225 | ||||||||||||
Yum! Brands, Inc. | 81,940 | 5,810 | ||||||||||||
25,076 | ||||||||||||||
Total Common Stocks | ||||||||||||||
(cost $2,638,413) | 2,667,991 | |||||||||||||
Preferred Stocks - 0.5% | ||||||||||||||
Brazil - 0.0% | ||||||||||||||
Usinas Siderurgicas de Minas Gerais SA | 1,828,800 | 1,318 | ||||||||||||
Germany - 0.5% | ||||||||||||||
Henkel AG & Co. KGaA | 26,159 | 2,839 | ||||||||||||
Porsche Automobil Holding SE | 45,260 | 2,121 | ||||||||||||
Volkswagen AG | 69,249 | 8,312 | ||||||||||||
13,272 | ||||||||||||||
Japan - 0.0% | ||||||||||||||
Shinkin Central Bank Class A | 87 | 161 | ||||||||||||
Total Preferred Stocks | ||||||||||||||
(cost $27,718) | 14,751 | |||||||||||||
Warrants & Rights - 0.0% | ||||||||||||||
Australia - 0.0% | ||||||||||||||
Westpac Banking Corp.(Æ) | ||||||||||||||
2015 Rights | 3,010 | 11 | ||||||||||||
Spain - 0.0% | ||||||||||||||
Banco Santander SA(Æ) | ||||||||||||||
2016 Rights | 1,732,253 | 95 | ||||||||||||
Total Warrants & Rights | ||||||||||||||
(cost $98) | 106 |
See accompanying notes which are an integral part of the financial statements.
174 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||||
Securities | Date | or shares | $ | $ | $ | |||||||||
0.1% | ||||||||||||||
BGP Holdings PLC | 08/06/09 | EUR | 559,805 | — | — | — | ||||||||
Deutsche Pfandbriefbank AG | 10/05/15 | EUR | 97,735 | 12.12 | 1,185 | 1,202 | ||||||||
Euskaltel SA | 10/13/15 | EUR | 65,328 | 11.73 | 766 | 731 | ||||||||
GDF Suez | 11/07/05 | EUR | 55,671 | 0.01 | — | — | ||||||||
1,933 | ||||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. | ||||||||||||||
Futures Contracts | ||||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||||
Unrealized | ||||||||||||||
Appreciation | ||||||||||||||
Number of | Notional | Expiration | (Depreciation) | |||||||||||
Contracts | Amount | Date | $ | |||||||||||
Long Positions | ||||||||||||||
CAC40 10 EURO Index Futures | 253 | EUR | 12,386 | 11/15 | 786 | |||||||||
DAX Index Futures | 40 | EUR | 10,820 | 12/15 | 949 | |||||||||
Euro STOXX Index 50 Futures | 640 | EUR | 21,779 | 12/15 | 1,657 | |||||||||
FTSE 100 Index Futures | 191 | GBP | 12,071 | 12/15 | 755 | |||||||||
Hang Seng Index Futures | 25 | HKD | 28,355 | 11/15 | (68 | ) | ||||||||
S&P/TSX 50 Index Futures | 478 | CAD | 75,754 | 12/15 | 366 | |||||||||
SPI 200 Index Futures | 506 | AUD | 66,235 | 12/15 | 1,600 | |||||||||
TOPIX Index Futures | 850 | JPY | 13,247,250 | 12/15 | 6,749 | |||||||||
Short Positions | ||||||||||||||
Euro STOXX Index 50 Futures | 746 | EUR | 25,386 | 12/15 | (1,815 | ) | ||||||||
FTSE 100 Index Futures | 287 | GBP | 18,138 | 12/15 | (958 | ) | ||||||||
Hang Seng Index Futures | 208 | HKD | 235,914 | 11/15 | 483 | |||||||||
MSCI Emerging Markets Mini Index Futures | 1,459 | USD | 61,548 | 12/15 | (3,257 | ) | ||||||||
S&P 500 E-Mini Index Futures | 297 | USD | 30,795 | 12/15 | (2,032 | ) | ||||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 5,215 | |||||||||||||
Foreign Currency Exchange Contracts | ||||||||||||||
Amounts in thousands | ||||||||||||||
Unrealized | ||||||||||||||
Appreciation | ||||||||||||||
Amount | Amount | (Depreciation) | ||||||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||||||
Bank of America | USD | 763 | GBP | 500 | 12/16/15 | 8 | ||||||||
Bank of America | USD | 387 | HKD | 3,000 | 12/16/15 | — | ||||||||
Bank of America | USD | 444 | JPY | 53,588 | 11/05/15 | — | ||||||||
Bank of America | USD | 1,584 | JPY | 191,150 | 11/05/15 | — | ||||||||
Bank of America | AUD | 60 | USD | 42 | 12/16/15 | (1 | ) | |||||||
Bank of America | AUD | 120 | USD | 84 | 12/16/15 | (2 | ) | |||||||
Bank of America | AUD | 300 | USD | 212 | 12/16/15 | (2 | ) | |||||||
Bank of America | AUD | 500 | USD | 355 | 12/16/15 | (1 | ) | |||||||
Bank of America | AUD | 1,000 | USD | 698 | 12/16/15 | (14 | ) | |||||||
Bank of America | AUD | 3,000 | USD | 2,130 | 12/16/15 | (4 | ) | |||||||
Bank of America | CAD | 60 | USD | 45 | 12/16/15 | (1 | ) | |||||||
Bank of America | CAD | 100 | USD | 77 | 12/16/15 | 1 | ||||||||
Bank of America | CAD | 120 | USD | 90 | 12/16/15 | (2 | ) | |||||||
Bank of America | CAD | 150 | USD | 116 | 12/16/15 | 1 | ||||||||
Bank of America | CAD | 200 | USD | 151 | 12/16/15 | (2 | ) | |||||||
Bank of America | CAD | 300 | USD | 229 | 12/16/15 | — | ||||||||
Bank of America | CAD | 400 | USD | 303 | 12/16/15 | (3 | ) | |||||||
Bank of America | CAD | 500 | USD | 377 | 12/16/15 | (5 | ) | |||||||
Bank of America | CHF | 471 | USD | 477 | 11/03/15 | 1 | ||||||||
Bank of America | DKK | 6,365 | USD | 935 | 11/02/15 | (4 | ) | |||||||
Bank of America | EUR | 926 | USD | 1,015 | 11/02/15 | (4 | ) | |||||||
Bank of America | EUR | 350 | USD | 398 | 12/16/15 | 12 | ||||||||
Bank of America | EUR | 400 | USD | 446 | 12/16/15 | 6 | �� | |||||||
Bank of America | EUR | 500 | USD | 569 | 12/16/15 | 18 |
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 175
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Bank of America | EUR | 500 | USD | 561 | 12/16/15 | 11 | |
Bank of America | EUR | 600 | USD | 675 | 12/16/15 | 14 | |
Bank of America | EUR | 1,300 | USD | 1,455 | 12/16/15 | 26 | |
Bank of America | EUR | 2,000 | USD | 2,204 | 12/16/15 | 3 | |
Bank of America | EUR | 4,000 | USD | 4,483 | 12/16/15 | 83 | |
Bank of America | GBP | 672 | USD | 1,028 | 11/02/15 | (8 | ) |
Bank of America | GBP | 60 | USD | 91 | 12/16/15 | (1 | ) |
Bank of America | GBP | 130 | USD | 197 | 12/16/15 | (3 | ) |
Bank of America | GBP | 150 | USD | 230 | 12/16/15 | (2 | ) |
Bank of America | GBP | 350 | USD | 536 | 12/16/15 | (4 | ) |
Bank of America | GBP | 350 | USD | 530 | 12/16/15 | (9 | ) |
Bank of America | GBP | 500 | USD | 775 | 12/16/15 | 4 | |
Bank of America | HKD | 1,000 | USD | 129 | 12/16/15 | — | |
Bank of America | HKD | 1,500 | USD | 194 | 12/16/15 | — | |
Bank of America | HKD | 1,800 | USD | 232 | 12/16/15 | — | |
Bank of America | HKD | 2,000 | USD | 258 | 12/16/15 | — | |
Bank of America | JPY | 20,000 | USD | 167 | 12/16/15 | 1 | |
Bank of America | JPY | 30,000 | USD | 250 | 12/16/15 | 1 | |
Bank of America | JPY | 30,000 | USD | 249 | 12/16/15 | — | |
Bank of America | JPY | 80,000 | USD | 665 | 12/16/15 | 1 | |
Bank of America | JPY | 100,000 | USD | 824 | 12/16/15 | (5 | ) |
Bank of America | JPY | 100,000 | USD | 832 | 12/16/15 | 3 | |
Bank of America | JPY | 230,000 | USD | 1,912 | 12/16/15 | 5 | |
Bank of America | JPY | 250,000 | USD | 2,088 | 12/16/15 | 15 | |
Bank of Montreal | USD | 2,154 | AUD | 3,082 | 12/16/15 | 39 | |
Bank of Montreal | USD | 2,977 | AUD | 4,260 | 12/16/15 | 54 | |
Bank of Montreal | USD | 2,936 | CAD | 3,882 | 12/16/15 | 33 | |
Bank of Montreal | USD | 3,204 | CAD | 4,237 | 12/16/15 | 36 | |
Bank of Montreal | USD | 6,164 | EUR | 5,519 | 12/16/15 | (91 | ) |
Bank of Montreal | USD | 17,436 | EUR | 15,612 | 12/16/15 | (257 | ) |
Bank of Montreal | USD | 6,351 | GBP | 4,136 | 12/16/15 | 23 | |
Bank of Montreal | USD | 1,204 | HKD | 9,330 | 12/16/15 | — | |
Bank of Montreal | USD | 6,837 | JPY | 826,944 | 12/16/15 | 21 | |
Bank of Montreal | USD | 11,372 | JPY | 1,375,500 | 12/16/15 | 35 | |
Bank of Montreal | AUD | 250 | USD | 180 | 12/16/15 | 2 | |
Bank of Montreal | CAD | 250 | USD | 190 | 12/16/15 | (1 | ) |
Bank of Montreal | EUR | 1,000 | USD | 1,135 | 12/16/15 | 35 | |
Bank of Montreal | GBP | 400 | USD | 617 | 12/16/15 | — | |
Bank of Montreal | JPY | 50,000 | USD | 417 | 12/16/15 | 2 | |
Bank of New York | USD | 208 | CZK | 5,126 | 11/03/15 | — | |
BNP Paribas | USD | 2,153 | AUD | 3,082 | 12/16/15 | 40 | |
BNP Paribas | USD | 2,975 | AUD | 4,260 | 12/16/15 | 56 | |
BNP Paribas | USD | 2,933 | CAD | 3,882 | 12/16/15 | 35 | |
BNP Paribas | USD | 3,202 | CAD | 4,237 | 12/16/15 | 38 | |
BNP Paribas | USD | 6,171 | EUR | 5,519 | 12/16/15 | (97 | ) |
BNP Paribas | USD | 17,455 | EUR | 15,612 | 12/16/15 | (275 | ) |
BNP Paribas | USD | 6,350 | GBP | 4,136 | 12/16/15 | 24 | |
BNP Paribas | USD | 1,204 | HKD | 9,330 | 12/16/15 | — | |
BNP Paribas | USD | 6,845 | JPY | 826,944 | 12/16/15 | 13 | |
BNP Paribas | USD | 11,385 | JPY | 1,375,500 | 12/16/15 | 21 | |
Brown Brothers Harriman | AUD | 800 | USD | 564 | 12/16/15 | (5 | ) |
Brown Brothers Harriman | CAD | 800 | USD | 603 | 12/16/15 | (8 | ) |
Brown Brothers Harriman | EUR | 2,500 | USD | 2,839 | 12/16/15 | 88 | |
Citigroup | USD | 2,092 | JPY | 250,000 | 12/16/15 | (19 | ) |
Citigroup | AUD | 300 | USD | 209 | 12/16/15 | (5 | ) |
Citigroup | CAD | 3,000 | USD | 2,247 | 12/16/15 | (45 | ) |
Citigroup | CHF | 610 | USD | 617 | 11/02/15 | (1 | ) |
Citigroup | GBP | 981 | USD | 1,502 | 11/02/15 | (10 | ) |
Citigroup | JPY | 400,000 | USD | 3,330 | 12/16/15 | 13 | |
Commonwealth Bank of Australia | USD | 143 | AUD | 200 | 12/16/15 | — | |
Commonwealth Bank of Australia | USD | 230 | CAD | 300 | 12/16/15 | (1 | ) |
Commonwealth Bank of Australia | USD | 1,128 | EUR | 1,000 | 12/16/15 | (28 | ) |
Commonwealth Bank of Australia | USD | 2,830 | EUR | 2,500 | 12/16/15 | (79 | ) |
See accompanying notes which are an integral part of the financial statements.
176 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Commonwealth Bank of Australia | USD | 305 | GBP | 200 | 12/16/15 | 4 | |
Commonwealth Bank of Australia | USD | 129 | HKD | 1,000 | 12/16/15 | — | |
Commonwealth Bank of Australia | USD | 668 | JPY | 80,000 | 12/16/15 | (5 | ) |
Commonwealth Bank of Australia | USD | 832 | JPY | 100,000 | 12/16/15 | (3 | ) |
Credit Suisse | AUD | 2,200 | USD | 1,560 | 12/16/15 | (5 | ) |
Credit Suisse | CAD | 3,200 | USD | 2,415 | 12/16/15 | (31 | ) |
Credit Suisse | EUR | 12,000 | USD | 13,555 | 12/16/15 | 350 | |
Credit Suisse | GBP | 3,500 | USD | 5,364 | 12/16/15 | (31 | ) |
Credit Suisse | HKD | 8,000 | USD | 1,032 | 12/16/15 | — | |
Credit Suisse | JPY | 650,000 | USD | 5,405 | 12/16/15 | 15 | |
Goldman Sachs | EUR | 50,000 | USD | 56,760 | 12/16/15 | 1,739 | |
Goldman Sachs | GBP | 18,500 | USD | 28,519 | 12/16/15 | 5 | |
HSBC | USD | 2,153 | AUD | 3,082 | 12/16/15 | 40 | |
HSBC | USD | 2,976 | AUD | 4,260 | 12/16/15 | 55 | |
HSBC | USD | 2,934 | CAD | 3,882 | 12/16/15 | 34 | |
HSBC | USD | 3,203 | CAD | 4,237 | 12/16/15 | 37 | |
HSBC | USD | 6,164 | EUR | 5,519 | 12/16/15 | (91 | ) |
HSBC | USD | 17,437 | EUR | 15,612 | 12/16/15 | (259 | ) |
HSBC | USD | 6,350 | GBP | 4,136 | 12/16/15 | 25 | |
HSBC | USD | 1,204 | HKD | 9,330 | 12/16/15 | — | |
HSBC | USD | 6,839 | JPY | 826,944 | 12/16/15 | 18 | |
HSBC | USD | 11,376 | JPY | 1,375,500 | 12/16/15 | 30 | |
HSBC | USD | 33,233 | JPY | 4,000,000 | 12/16/15 | (63 | ) |
HSBC | HKD | 235,000 | USD | 30,318 | 12/16/15 | (6 | ) |
Morgan Stanley | USD | 984 | AUD | 1,400 | 12/16/15 | 12 | |
Morgan Stanley | USD | 1,368 | CAD | 1,800 | 12/16/15 | 8 | |
Morgan Stanley | USD | 7,861 | EUR | 7,000 | 12/16/15 | (158 | ) |
Morgan Stanley | USD | 3,186 | GBP | 2,100 | 12/16/15 | 51 | |
Morgan Stanley | USD | 581 | HKD | 4,500 | 12/16/15 | — | |
Morgan Stanley | USD | 3,754 | JPY | 450,000 | 12/16/15 | (23 | ) |
Morgan Stanley | AUD | 900 | USD | 630 | 12/16/15 | (10 | ) |
Morgan Stanley | CAD | 1,200 | USD | 905 | 12/16/15 | (13 | ) |
Morgan Stanley | EUR | 4,500 | USD | 5,037 | 12/16/15 | 85 | |
Morgan Stanley | GBP | 1,200 | USD | 1,815 | 12/16/15 | (35 | ) |
Morgan Stanley | HKD | 3,000 | USD | 387 | 12/16/15 | — | |
Morgan Stanley | JPY | 300,000 | USD | 2,503 | 12/16/15 | 16 | |
Royal Bank of Canada | USD | 216 | AUD | 300 | 12/16/15 | (2 | ) |
Royal Bank of Canada | USD | 2,153 | AUD | 3,082 | 12/16/15 | 41 | |
Royal Bank of Canada | USD | 2,975 | AUD | 4,260 | 12/16/15 | 56 | |
Royal Bank of Canada | USD | 306 | CAD | 400 | 12/16/15 | — | |
Royal Bank of Canada | USD | 2,934 | CAD | 3,882 | 12/16/15 | 35 | |
Royal Bank of Canada | USD | 3,202 | CAD | 4,237 | 12/16/15 | 38 | |
Royal Bank of Canada | USD | 1,126 | EUR | 1,000 | 12/16/15 | (25 | ) |
Royal Bank of Canada | USD | 6,167 | EUR | 5,519 | 12/16/15 | (94 | ) |
Royal Bank of Canada | USD | 17,444 | EUR | 15,612 | 12/16/15 | (266 | ) |
Royal Bank of Canada | USD | 459 | GBP | 300 | 12/16/15 | 3 | |
Royal Bank of Canada | USD | 6,350 | GBP | 4,136 | 12/16/15 | 25 | |
Royal Bank of Canada | USD | 129 | HKD | 1,000 | 12/16/15 | — | |
Royal Bank of Canada | USD | 1,204 | HKD | 9,330 | 12/16/15 | — | |
Royal Bank of Canada | USD | 834 | JPY | 100,000 | 12/16/15 | (5 | ) |
Royal Bank of Canada | USD | 6,841 | JPY | 826,944 | 12/16/15 | 16 | |
Royal Bank of Canada | USD | 11,379 | JPY | 1,375,500 | 12/16/15 | 27 | |
Royal Bank of Canada | AUD | 600 | USD | 433 | 12/16/15 | 7 | |
Royal Bank of Canada | AUD | 650 | USD | 454 | 12/16/15 | (8 | ) |
Royal Bank of Canada | CAD | 950 | USD | 712 | 12/16/15 | (15 | ) |
Royal Bank of Canada | EUR | 2,000 | USD | 2,211 | 12/16/15 | 11 | |
Royal Bank of Canada | EUR | 3,000 | USD | 3,356 | 12/16/15 | 55 | |
Royal Bank of Canada | GBP | 1,200 | USD | 1,815 | 12/16/15 | (35 | ) |
Royal Bank of Canada | HKD | 1,000 | USD | 129 | 12/16/15 | — | |
Royal Bank of Canada | JPY | 200,000 | USD | 1,669 | 12/16/15 | 10 | |
State Street | USD | 47 | AUD | 66 | 11/02/15 | — | |
State Street | USD | 28,558 | AUD | 40,500 | 12/16/15 | 260 | |
State Street | USD | 157 | CAD | 208 | 11/02/15 | 2 |
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 177
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||||||
Amounts in thousands | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Amount | Amount | (Depreciation) | |||||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||||
State Street | USD | 458 | CAD | 600 | 12/16/15 | 1 | |||||
State Street | USD | 36,586 | CAD | 48,500 | 12/16/15 | 494 | |||||
State Street | USD | 205 | EUR | 186 | 11/02/15 | — | |||||
State Street | USD | 480 | EUR | 438 | 11/02/15 | 1 | |||||
State Street | USD | 1,125 | EUR | 1,000 | 12/16/15 | (25 | ) | ||||
State Street | USD | 455 | GBP | 300 | 12/16/15 | 7 | |||||
State Street | USD | 1,290 | HKD | 10,000 | 12/16/15 | — | |||||
State Street | USD | 1,935 | HKD | 15,000 | 12/16/15 | — | |||||
State Street | USD | 252 | JPY | 30,428 | 11/04/15 | — | |||||
State Street | USD | 70 | SEK | 597 | 11/02/15 | — | |||||
State Street | AUD | 200 | USD | 139 | 12/16/15 | (3 | ) | ||||
State Street | CAD | 200 | USD | 149 | 12/16/15 | (4 | ) | ||||
State Street | CHF | 123 | USD | 124 | 11/02/15 | — | |||||
State Street | EUR | 653 | USD | 719 | 11/02/15 | 1 | |||||
State Street | EUR | 1,000 | USD | 1,126 | 12/16/15 | 26 | |||||
State Street | EUR | 2,500 | USD | 2,745 | 12/16/15 | (6 | ) | ||||
State Street | GBP | 200 | USD | 303 | 12/16/15 | (5 | ) | ||||
State Street | GBP | 1,200 | USD | 1,837 | 12/16/15 | (12 | ) | ||||
State Street | HKD | 322 | USD | 41 | 11/02/15 | — | |||||
State Street | HKD | 1,000 | USD | 129 | 12/16/15 | — | |||||
State Street | HKD | 2,000 | USD | 258 | 12/16/15 | — | |||||
State Street | HKD | 10,000 | USD | 1,290 | 12/16/15 | — | |||||
State Street | JPY | 80,000 | USD | 668 | 12/16/15 | 5 | |||||
State Street | JPY | 250,000 | USD | 2,065 | 12/16/15 | (8 | ) | ||||
UBS | USD | 2,155 | AUD | 3,082 | 12/16/15 | 38 | |||||
UBS | USD | 2,979 | AUD | 4,260 | 12/16/15 | 53 | |||||
UBS | USD | 2,935 | CAD | 3,882 | 12/16/15 | 33 | |||||
UBS | USD | 3,204 | CAD | 4,237 | 12/16/15 | 36 | |||||
UBS | USD | 6,167 | EUR | 5,519 | 12/16/15 | (94 | ) | ||||
UBS | USD | 17,446 | EUR | 15,612 | 12/16/15 | (267 | ) | ||||
UBS | USD | 6,350 | GBP | 4,136 | 12/16/15 | 25 | |||||
UBS | USD | 1,204 | HKD | 9,330 | 12/16/15 | — | |||||
UBS | USD | 6,840 | JPY | 826,944 | 12/16/15 | 18 | |||||
UBS | USD | 11,377 | JPY | 1,375,500 | 12/16/15 | 30 | |||||
UBS | HKD | 8,500 | USD | 1,097 | 12/16/15 | — | |||||
UBS | JPY | 150,000 | USD | 1,257 | 12/16/15 | 13 | |||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 2,107 | ||||||||||
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Common Stocks | |||||||||||
Australia | $ | 5,172 | $ | 52,011 | $ | — | $ | 57,183 | 2.0 | ||
Austria | — | 11,320 | — | 11,320 | 0.4 | ||||||
Belgium | — | 39,122 | — | 39,122 | 1.4 | ||||||
Bermuda | — | 15,177 | — | 15,177 | 0.5 | ||||||
Brazil | 10,273 | — | — | 10,273 | 0.4 | ||||||
Canada | 116,778 | — | — | 116,778 | 4.2 | ||||||
Cayman Islands | 6,818 | 13,540 | — | 20,358 | 0.7 | ||||||
Czech Republic | — | 6,412 | — | 6,412 | 0.2 | ||||||
Denmark | — | 35,574 | — | 35,574 | 1.3 | ||||||
Finland | — | 12,772 | — | 12,772 | 0.5 | ||||||
France | 36 | 267,212 | — | 267,248 | 9.5 | ||||||
Germany | — | 181,251 | — | 181,251 | 6.5 | ||||||
Guernsey | — | 933 | — | 933 | —* | ||||||
Hong Kong | — | 51,124 | — | 51,124 | 1.8 | ||||||
Hungary | — | 5,894 | — | 5,894 | 0.2 | ||||||
India | 4,113 | 5,431 | — | 9,544 | 0.3 |
See accompanying notes which are an integral part of the financial statements.
178 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | |||||||||||||
Amounts in thousands | |||||||||||||
Fair Value | |||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||
Indonesia | — | 1,731 | — | 1,731 | 0.1 | ||||||||
Ireland | 20,402 | 23,825 | — | 44,227 | 1.6 | ||||||||
Isle of Man | — | 1,427 | — | 1,427 | 0.1 | ||||||||
Israel | 16,139 | 9,113 | — | 25,252 | 0.9 | ||||||||
Italy | — | 88,164 | — | 88,164 | 3.1 | ||||||||
Japan | — | 473,192 | — | 473,192 | 16.8 | ||||||||
Jersey | 2,983 | 37,118 | — | 40,101 | 1.4 | ||||||||
Liechtenstein | — | 396 | — | 396 | —* | ||||||||
Luxembourg | — | 5,095 | — | 5,095 | 0.2 | ||||||||
Mexico | 4,523 | — | — | 4,523 | 0.2 | ||||||||
Netherlands | 10,804 | 155,731 | — | 166,535 | 5.9 | ||||||||
New Zealand | — | 2,631 | — | 2,631 | 0.1 | ||||||||
Norway | — | 15,609 | — | 15,609 | 0.6 | ||||||||
Portugal | — | 6,777 | — | 6,777 | 0.2 | ||||||||
Russia | 1,272 | 7,156 | — | 8,428 | 0.3 | ||||||||
Singapore | — | 34,102 | — | 34,102 | 1.2 | ||||||||
South Korea | — | 32,222 | — | 32,222 | 1.1 | ||||||||
Spain | — | 55,714 | 45 | 55,759 | 2.0 | ||||||||
Sweden | — | 44,116 | — | 44,116 | 1.6 | ||||||||
Switzerland | 9,237 | 240,982 | — | 250,219 | 8.9 | ||||||||
Taiwan | 7,627 | 14,597 | — | 22,224 | 0.8 | ||||||||
Thailand | — | 8,627 | — | 8,627 | 0.3 | ||||||||
United Kingdom | 4,067 | 466,375 | 153 | 470,595 | 16.8 | ||||||||
United States | 25,076 | — | — | 25,076 | 0.9 | ||||||||
Preferred Stocks | 1,318 | 13,433 | — | 14,751 | 0.5 | ||||||||
Warrants & Rights | 106 | — | — | 106 | —* | ||||||||
Short-Term Investments | — | 90,340 | — | 90,340 | 3.2 | ||||||||
Other Securities | — | 69,123 | — | 69,123 | 2.5 | ||||||||
Total Investments | 246,744 | 2,595,369 | 198 | 2,842,311 | 101.2 | ||||||||
Other Assets and Liabilities, Net | (1.2 | ) | |||||||||||
100.0 | |||||||||||||
Other Financial Instruments | |||||||||||||
Futures Contracts | 5,215 | — | — | 5,215 | 0.2 | ||||||||
Foreign Currency Exchange Contracts | (23 | ) | 2,130 | — | 2,107 | 0.1 | |||||||
Total Other Financial Instruments** | $ | 5,192 | $ | 2,130 | $ | — | $ | 7,322 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation/depreciation on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended October
31, 2015 were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 179
Russell Investment Company
Russell International Developed Markets Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 4,713 | ||
Variation margin on futures contracts* | 13,345 | — | ||||
Total | $ | 13,345 | $ | 4,713 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | 8,130 | $ | — | ||
Unrealized depreciation on foreign currency exchange contracts | — | 2,606 | ||||
Total | $ | 8,130 | $ | 2,606 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Futures contracts | $ | 63,386 | $ | — | ||
Foreign currency-related transactions** | — | (48,627 | ) | |||
Total | $ | 63,386 | $ | (48,627 | ) | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | (4,934 | ) | $ | — | |
Foreign currency-related transactions*** | — | 17,189 | ||||
Total | $ | (4,934 | ) | $ | 17,189 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
*** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
180 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Assets | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||||
Securities on Loan* | Investments, at fair value | $ | 65,894 | $ | — | $ | 65,894 | ||||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 4,713 | — | 4,713 | |||||||||
Futures Contracts | Variation margin on futures contracts | 1,313 | — | 1,313 | |||||||||
Total Financial and Derivative Assets | 71,920 | — | 71,920 | ||||||||||
Financial and Derivative Assets not subject to a netting agreement | (1,318) | — | (1,318 | ) | |||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 70,602 | $ | — | $ | 70,602 | |||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Assets | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||||
Bank of America | $ | 213 | $ | 60 | $ | — | $ | 153 | |||||
Bank of Montreal | 279 | 279 | — | — | |||||||||
Barclays | 6,143 | — | 6,143 | — | |||||||||
BNP Paribas | 228 | 228 | — | — | |||||||||
Brown Brothers Harriman | 88 | 14 | — | 74 | |||||||||
Citigroup | 12,954 | 13 | 12,941 | — | |||||||||
Commonwealth Bank of Australia | 4 | 4 | — | — | |||||||||
Credit Suisse | 746 | 67 | 381 | 298 | |||||||||
Deutsche Bank | 4,289 | — | 4,289 | — | |||||||||
Fidelity | 1,626 | — | 1,626 | — | |||||||||
Goldman Sachs | 5,209 | — | 3,465 | 1,744 | |||||||||
HSBC | 239 | 239 | — | — | |||||||||
JPMorgan Chase | 4,665 | — | 4,665 | — | |||||||||
Merrill Lynch | 1,416 | — | 1,416 | — | |||||||||
Morgan Stanley | 5,354 | 172 | 5,182 | — | |||||||||
Royal Bank of Canada | 323 | 323 | — | — | |||||||||
State Street | 795 | 64 | — | 731 | |||||||||
UBS | 26,031 | 245 | 25,786 | — | |||||||||
Total | $ | 70,602 | $ | 1,708 | $ | 65,894 | $ | 3,000 |
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 181
Russell Investment Company
Russell International Developed Markets Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Liabilities | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||||||
Futures Contracts | Variation margin on futures contracts | $ | 1,764 | $ | — $ | 1,764 | |||||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 2,606 | — | 2,606 | |||||||||
Total Financial and Derivative Liabilities | 4,370 | — | 4,370 | ||||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (1,791) | — | (1,791 | ) | |||||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 2,579 | $ | — $ | 2,579 | ||||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Liabilities | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||||
Bank of America | $ | 60 | $ | 60 | $ | — $ | — | ||||||
Bank of Montreal | 348 | 279 | — | 69 | |||||||||
BNP Paribas | 373 | 228 | — | 145 | |||||||||
Brown Brothers Harriman | 14 | 14 | — | — | |||||||||
Citigroup | 70 | 13 | — | 57 | |||||||||
Commonwealth Bank of Australia | 115 | 4 | — | 111 | |||||||||
Credit Suisse | 67 | 67 | — | — | |||||||||
HSBC | 420 | 239 | — | 181 | |||||||||
Morgan Stanley | 239 | 172 | — | 67 | |||||||||
Royal Bank of Canada | 449 | 323 | — | 126 | |||||||||
State Street | 64 | 64 | — | — | |||||||||
UBS | 360 | 245 | — | 115 | |||||||||
Total | $ | 2,579 | $ | 1,708 | $ | — $ | 871 |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
182 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 2,825,684 |
Investments, at fair value(*)(>) | 2,842,311 | |
Cash | 5,022 | |
Cash (restricted)(a) | 11,900 | |
Foreign currency holdings(^) | 5,611 | |
Unrealized appreciation on foreign currency exchange contracts | 4,713 | |
Receivables: | ||
Dividends and interest | 6,540 | |
Dividends from affiliated Russell funds | 7 | |
Investments sold | 15,172 | |
Fund shares sold | 2,520 | |
Foreign capital gains taxes recoverable | 1,610 | |
Variation margin on futures contracts | 1,313 | |
Total assets | 2,896,719 | |
Liabilities | ||
Payables: | ||
Investments purchased | 10,126 | |
Fund shares redeemed | 1,872 | |
Accrued fees to affiliates | 2,261 | |
Other accrued expenses | 440 | |
Variation margin on futures contracts | 1,764 | |
Unrealized depreciation on foreign currency exchange contracts | 2,606 | |
Payable upon return of securities loaned | 69,123 | |
Total liabilities | 88,192 | |
Net Assets | $ | 2,808,527 |
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 183
Russell Investment Company
Russell International Developed Markets Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 20,255 | |
Accumulated net realized gain (loss) | (204,598 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | 16,627 | ||
Futures contracts | 5,215 | ||
Foreign currency-related transactions | 2,010 | ||
Shares of beneficial interest | 801 | ||
Additional paid-in capital | 2,968,217 | ||
Net Assets | $ | 2,808,527 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 34.96 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 37.09 | |
Class A — Net assets | $ | 29,384,912 | |
Class A — Shares outstanding ($.01 par value) | 840,629 | ||
Net asset value per share: Class C(#) | $ | 34.86 | |
Class C — Net assets | $ | 32,495,286 | |
Class C — Shares outstanding ($.01 par value) | 932,161 | ||
Net asset value per share: Class E(#) | $ | 35.01 | |
Class E — Net assets | $ | 51,938,563 | |
Class E — Shares outstanding ($.01 par value) | 1,483,391 | ||
Net asset value per share: Class I(#) | $ | 35.10 | |
Class I — Net assets | $ | 577,646,026 | |
Class I — Shares outstanding ($.01 par value) | 16,457,758 | ||
Net asset value per share: Class S(#) | $ | 35.04 | |
Class S — Net assets | $ 2,102,633,882 | ||
Class S — Shares outstanding ($.01 par value) | 60,007,284 | ||
Net asset value per share: Class Y(#) | $ | 35.08 | |
Class Y — Net assets | $ | 14,428,347 | |
Class Y — Shares outstanding ($.01 par value) | 411,270 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 5,614 | |
(*) Securities on loan included in investments | $ | 65,894 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund and Russell U.S. Cash Collateral Fund | $ | 141,269 | |
(a) Cash Collateral for Futures | $ | 11,900 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
184 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 98,144 | |
Dividends from affiliated Russell funds | 186 | ||
Interest | 1 | ||
Securities lending income | 2,092 | ||
Less foreign taxes withheld | (8,330 | ) | |
Total investment income | 92,093 | ||
Expenses | |||
Advisory fees | 24,179 | ||
Administrative fees | 1,645 | ||
Custodian fees | 1,418 | ||
Distribution fees - Class A | 76 | ||
Distribution fees - Class C | 267 | ||
Transfer agent fees - Class A | 61 | ||
Transfer agent fees - Class C | 71 | ||
Transfer agent fees - Class E | 157 | ||
Transfer agent fees - Class I | 777 | ||
Transfer agent fees - Class S | 4,678 | ||
Transfer agent fees - Class Y | 14 | ||
Professional fees | 254 | ||
Registration fees | 174 | ||
Shareholder servicing fees - Class C | 89 | ||
Shareholder servicing fees - Class E | 196 | ||
Trustees’ fees | 89 | ||
Printing fees | 268 | ||
Miscellaneous | 90 | ||
Total expenses | 34,503 | ||
Net investment income (loss) | 57,590 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | 231,512 | ||
Futures contracts | 63,386 | ||
Foreign currency-related transactions | (50,961 | ) | |
Net realized gain (loss) | 243,937 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | (284,463 | ) | |
Futures contracts | (4,934 | ) | |
Foreign currency-related transactions | 17,677 | ||
Net change in unrealized appreciation (depreciation) | (271,720 | ) | |
Net realized and unrealized gain (loss) | (27,783 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | 29,807 |
See accompanying notes which are an integral part of the financial statements
Russell International Developed Markets Fund 185
Russell Investment Company
Russell International Developed Markets Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 57,590 | $ | 88,685 | ||
Net realized gain (loss) | 243,937 | 393,918 | ||||
Net change in unrealized appreciation (depreciation) | (271,720 | ) | (417,989 | ) | ||
Net increase (decrease) in net assets from operations | 29,807 | 64,614 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (461 | ) | (546 | ) | ||
Class C | (247 | ) | (495 | ) | ||
Class E | (1,185 | ) | (2,131 | ) | ||
Class I | (12,149 | ) | (16,544 | ) | ||
Class S | (42,375 | ) | (59,262 | ) | ||
Class Y | (18,425 | ) | (33,976 | ) | ||
Net decrease in net assets from distributions | (74,842 | ) | (112,954 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (1,248,949 | ) | (1,018,548 | ) | ||
Total Net Increase (Decrease) in Net Assets | (1,293,984 | ) | (1,066,888 | ) | ||
Net Assets | ||||||
Beginning of period | 4,102,511 | 5,169,399 | ||||
End of period | $ | 2,808,527 | $ | 4,102,511 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 20,255 | $ | 74,005 |
See accompanying notes which are an integral part of the financial statements.
186 Russell International Developed Markets Fund
Russell Investment Company
Russell International Developed Markets Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 194 | $ | 6,914 | 172 | $ | 6,367 | ||||||
Proceeds from reinvestment of distributions | 13 | 460 | 15 | 543 | ||||||||
Payments for shares redeemed | (194 | ) | (6,958 | ) | (160 | ) | (5,912 | ) | ||||
Net increase (decrease) | 13 | 416 | 27 | 998 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 91 | 3,266 | 129 | 4,758 | ||||||||
Proceeds from reinvestment of distributions | 7 | 245 | 13 | 490 | ||||||||
Payments for shares redeemed | (216 | ) | (7,701 | ) | (285 | ) | (10,522 | ) | ||||
Net increase (decrease) | (118 | ) | (4,190 | ) | (143 | ) | (5,274 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 302 | 10,784 | 444 | 16,402 | ||||||||
Proceeds from reinvestment of distributions | 33 | 1,153 | 57 | 2,061 | ||||||||
Payments for shares redeemed | (1,085 | ) | (37,470 | ) | (1,336 | ) | (49,218 | ) | ||||
Net increase (decrease) | (750 | ) | (25,533 | ) | (835 | ) | (30,755 | ) | ||||
Class I | ||||||||||||
Proceeds from shares sold | 3,345 | 119,368 | 3,295 | 121,484 | ||||||||
Proceeds from reinvestment of distributions | 344 | 11,937 | 449 | 16,280 | ||||||||
Payments for shares redeemed | (6,002 | ) | (215,933 | ) | (5,652 | ) | (207,600 | ) | ||||
Net increase (decrease) | (2,313 | ) | (84,628 | ) | (1,908 | ) | (69,836 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 16,491 | 590,727 | 18,954 | 697,497 | ||||||||
Proceeds from reinvestment of distributions | 1,213 | 42,041 | 1,626 | 58,870 | ||||||||
Payments for shares redeemed | (23,155 | ) | (837,195 | ) | (30,461 | ) | (1,116,369 | ) | ||||
Net increase (decrease) | (5,451 | ) | (204,427 | ) | (9,881 | ) | (360,002 | ) | ||||
Class Y | ||||||||||||
Proceeds from shares sold | 100 | 3,466 | 492 | 18,057 | ||||||||
Proceeds from reinvestment of distributions | 532 | 18,425 | 939 | 33,976 | ||||||||
Payments for shares redeemed | (26,240 | ) | (952,478 | ) | (16,375 | ) | (605,712 | ) | ||||
Net increase (decrease) | (25,608 | ) | (930,587 | ) | (14,944 | ) | (553,679 | ) | ||||
Total increase (decrease) | (34,227 | ) | $ | (1,248,949 | ) | (27,684 | ) | $ | (1,018,548 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 187
Russell Investment Company
Russell International Developed Markets Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | |||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | |||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | $ | ||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Total Distributions | ||||||||||||
Class A | |||||||||||||||||
October 31, 2015 | 35.77 | .53 | (.79 | ) | (.26 | ) | (.55 | ) | (.55 | ) | |||||||
October 31, 2014 | 36.30 | .64 | (.48 | ) | .16 | (.69 | ) | (.69 | ) | ||||||||
October 31, 2013 | 29.68 | .49 | 6.67 | 7.16 | (.54 | ) | (.54 | ) | |||||||||
October 31, 2012 | 28.67 | .52 | .89 | 1.41 | (.40 | ) | (.40 | ) | |||||||||
October 31, 2011 | 31.14 | .47 | (2.55 | ) | (2.08 | ) | (.39 | ) | (.39 | ) | |||||||
Class C | |||||||||||||||||
October 31, 2015 | 35.62 | .26 | (.78 | ) | (.52 | ) | (.24 | ) | (.24 | ) | |||||||
October 31, 2014 | 36.15 | .37 | (.48 | ) | (.11 | ) | (.42 | ) | (.42 | ) | |||||||
October 31, 2013 | 29.52 | .24 | 6.67 | 6.91 | (.28 | ) | (.28 | ) | |||||||||
October 31, 2012 | 28.46 | .30 | .90 | 1.20 | (.14 | ) | (.14 | ) | |||||||||
October 31, 2011 | 30.85 | .22 | (2.49 | ) | (2.27 | ) | (.13 | ) | (.13 | ) | |||||||
Class E | |||||||||||||||||
October 31, 2015 | 35.81 | .54 | (.81 | ) | (.27 | ) | (.53 | ) | (.53 | ) | |||||||
October 31, 2014 | 36.33 | .62 | (.45 | ) | .17 | (.69 | ) | (.69 | ) | ||||||||
October 31, 2013 | 29.72 | .49 | 6.68 | 7.17 | (.56 | ) | (.56 | ) | |||||||||
October 31, 2012 | 28.72 | .53 | .90 | 1.43 | (.43 | ) | (.43 | ) | |||||||||
October 31, 2011 | 31.19 | .49 | (2.55 | ) | (2.06 | ) | (.41 | ) | (.41 | ) | |||||||
Class I | |||||||||||||||||
October 31, 2015 | 35.91 | .66 | (.80 | ) | (.14 | ) | (.67 | ) | (.67 | ) | |||||||
October 31, 2014 | 36.43 | .76 | (.48 | ) | .28 | (.80 | ) | (.80 | ) | ||||||||
October 31, 2013 | 29.77 | .60 | 6.70 | 7.30 | (.64 | ) | (.64 | ) | |||||||||
October 31, 2012 | 28.78 | .61 | .89 | 1.50 | (.51 | ) | (.51 | ) | |||||||||
October 31, 2011 | 31.23 | .57 | (2.54 | ) | (1.97 | ) | (.48 | ) | (.48 | ) | |||||||
Class S | |||||||||||||||||
October 31, 2015 | 35.86 | .63 | (.81 | ) | (.18 | ) | (.64 | ) | (.64 | ) | |||||||
October 31, 2014 | 36.38 | .71 | (.45 | ) | .26 | (.78 | ) | (.78 | ) | ||||||||
October 31, 2013 | 29.74 | .57 | 6.69 | 7.26 | (.62 | ) | (.62 | ) | |||||||||
October 31, 2012 | 28.75 | .59 | .89 | 1.48 | (.49 | ) | (.49 | ) | |||||||||
October 31, 2011 | 31.19 | .55 | (2.53 | ) | (1.98 | ) | (.46 | ) | (.46 | ) | |||||||
Class Y | |||||||||||||||||
October 31, 2015 | 35.90 | .25 | (.36 | ) | (.11 | ) | (.71 | ) | (.71 | ) | |||||||
October 31, 2014 | 36.41 | .79 | (.46 | ) | .33 | (.84 | ) | (.84 | ) | ||||||||
October 31, 2013 | 29.76 | .63 | 6.69 | 7.32 | (.67 | ) | (.67 | ) | |||||||||
October 31, 2012 | 28.77 | .65 | .88 | 1.53 | (.54 | ) | (.54 | ) | |||||||||
October 31, 2011 | 31.26 | .60 | (2.58 | ) | (1.98 | ) | (.51 | ) | (.51 | ) | |||||||
See accompanying notes which are an integral part of the financial statements.
188 Russell International Developed Markets Fund
% | % | % | ||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||
End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||
Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||
34.96 | (.71 | ) | 29,385 | 1.27 | 1.27 | 1.49 | 102 | |||||||
35.77 | .43 | 29,619 | 1.25 | 1.25 | 1.74 | 74 | ||||||||
36.30 | 24.47 | 29,088 | 1.24 | 1.24 | 1.51 | 89 | ||||||||
29.68 | 5.04 | 22,905 | 1.24 | 1.24 | 1.83 | 65 | ||||||||
28.67 | (6.76 | ) | 22,963 | 1.24 | 1.24 | 1.51 | 74 | |||||||
34.86 | (1.46 | ) | 32,495 | 2.02 | 2.02 | .72 | 102 | |||||||
35.62 | (.33 | ) | 37,426 | 2.00 | 2.00 | 1.00 | 74 | |||||||
36.15 | 23.53 | 43,136 | 1.99 | 1.99 | .75 | 89 | ||||||||
29.52 | 4.26 | 40,958 | 1.99 | 1.99 | 1.07 | 65 | ||||||||
28.46 | (7.34 | ) | 52,552 | 1.99 | 1.99 | .72 | 74 | |||||||
35.01 | (.74 | ) | 51,939 | 1.27 | 1.27 | 1.51 | 102 | |||||||
35.81 | .46 | 79,957 | 1.25 | 1.25 | 1.69 | 74 | ||||||||
36.33 | 24.48 | 111,467 | 1.24 | 1.23 | 1.51 | 89 | ||||||||
29.72 | 5.11 | 89,772 | 1.24 | 1.19 | 1.87 | 65 | ||||||||
28.72 | (6.66 | ) | 89,952 | 1.24 | 1.16 | 1.58 | 74 | |||||||
35.10 | (.41 | ) | 577,646 | .94 | .94 | 1.84 | 102 | |||||||
35.91 | .76 | 674,127 | .92 | .92 | 2.05 | 74 | ||||||||
36.43 | 24.87 | 753,290 | .91 | .91 | 1.84 | 89 | ||||||||
29.77 | 5.40 | 672,661 | .91 | .91 | 2.16 | 65 | ||||||||
28.78 | (6.39 | ) | 820,995 | .91 | .91 | 1.81 | 74 | |||||||
35.04 | (.48 | ) | 2,102,634 | 1.02 | 1.02 | 1.77 | 102 | |||||||
35.86 | .69 | 2,347,214 | 1.00 | 1.00 | 1.92 | 74 | ||||||||
36.38 | 24.76 | 2,740,707 | .99 | .99 | 1.76 | 89 | ||||||||
29.74 | 5.33 | 2,074,313 | .99 | .99 | 2.10 | 65 | ||||||||
28.75 | (6.43 | ) | 1,905,604 | .99 | .99 | 1.77 | 74 | |||||||
35.08 | (.28 | ) | 14,428 | .81 | .81 | .72 | 102 | |||||||
35.90 | .90 | 934,168 | .80 | .80 | 2.15 | 74 | ||||||||
36.41 | 24.99 | 1,491,711 | .79 | .79 | 1.93 | 89 | ||||||||
29.76 | 5.52 | 1,277,390 | .80 | .80 | 2.30 | 65 | ||||||||
28.77 | (6.46 | ) | 1,722,957 | .81 | .81 | 1.92 | 74 |
See accompanying notes which are an integral part of the financial statements.
Russell International Developed Markets Fund 189
Russell Investment Company
Russell Global Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Global Equity Fund - Class A‡ | Russell Global Equity Fund - Class Y‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (2.44 | )% | 1 Year | 4.09 | % | ||
5 Years | 7.18 | %§ | 5 Years | 8.91 | %§ | ||
Inception* | 2.66 | %§ | Inception* | 3.77 | %§ | ||
Russell Global Equity Fund - Class C | Russell Developed Large Cap® Index Net** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 2.87 | % | 1 Year | 1.89 | % | ||
5 Years | 7.64 | %§ | 5 Years | 9.38 | %§ | ||
Inception* | 2.58 | %§ | Inception* | 3.99 | %§ | ||
Russell Global Equity Fund - Class E | Global Equity Linked Benchmark*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 3.59 | % | 1 Year | 1.89 | % | ||
5 Years | 8.44 | %§ | 5 Years | 9.34 | %§ | ||
Inception* | 3.34 | %§ | Inception* | 3.86 | %§ | ||
Russell Global Equity Fund - Class S | |||||||
Total | |||||||
Return | |||||||
1 Year | 3.80 | % | |||||
5 Years | 8.70 | %§ | |||||
Inception* | 3.61 | %§ |
190 Russell Global Equity Fund
Russell Investment Company
Russell Global Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Global Equity Fund (the “Fund”) employs a multi- | The Fund outperformed its benchmark for the one year period | |
manager approach whereby portions of the Fund are allocated to | ending October 31, 2015. An underweight to energy and an | |
different money manager strategies. Fund assets not allocated | overweight to consumer discretionary was favorable during the | |
to money managers are managed by Russell Investment | period. | |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | The Fund employs discretionary money managers. The Fund’s | |
may change the allocation of the Fund’s assets among money | discretionary money managers select the individual portfolio | |
managers at any time. An exemptive order from the Securities | securities for the assets assigned to them. Fund assets not | |
and Exchange Commission (“SEC”) permits RIMCo to engage | allocated to discretionary money managers include the Fund’s | |
or terminate a money manager at any time, subject to approval | liquidity reserves and assets which may be managed directly | |
by the Fund’s Board, without a shareholder vote. Pursuant to the | by RIMCo to effect the Fund’s investment strategies and/or to | |
terms of the exemptive order, the Fund is required to notify its | actively manage the Fund’s overall exposures by investing in | |
shareholders within 90 days of when a money manager begins | securities or other instruments that RIMCo believes will achieve | |
providing services. As of October 31, 2015, the Fund had five | the desired risk/return profile for the Fund. | |
money managers. | ||
MFS Institutional Advisors, Inc. (“MFS”) was the best performing | ||
What is the Fund’s investment objective? | manager for the period and outperformed the Fund’s benchmark. | |
The Fund seeks to provide long-term capital growth. | Strong stock selection in the North America and Europe were the | |
key drivers of outperformance, coupled with an underweight to | ||
How did the Fund perform relative to its benchmark for the | the energy sector. An underweight to value and an overweight to | |
fiscal year ended October 31, 2015? | momentum stocks were also favorable. | |
For the fiscal year ended October 31, 2015, the Fund’s Class | ||
A, Class C, Class E, Class S and Class Y Shares gained 3.56%, | Polaris Capital Management, LLC (“Polaris”) was the worst | |
2.87%, 3.59%, 3.80% and 4.09%, respectively. This is compared | performing manager for the period, though outperformed the | |
to the Fund’s benchmark, the Russell Developed Large Cap | Fund’s benchmark. The manager’s underweight to consumer | |
Index® (Net), which gained 1.89% during the same period. The | staples was unfavorable as defensive sectors generally held up | |
Fund’s performance includes operating expenses, whereas index | well during the period. The manager’s value orientation also | |
returns are unmanaged and do not include expenses of any kind. | detracted, but was partially offset by a favorable underweight to | |
Asia Pacific ex-Japan. | ||
For the fiscal year ended October 31, 2015, the Morningstar® | ||
World Stock, a group of funds that Morningstar considers to have | During the period, RIMCo utilized a positioning strategy to control | |
investment strategies similar to those of the Fund, gained 0.34%. | Fund-level exposures and risks through the purchase of a stock | |
This result serves as a peer comparison and is expressed net of | portfolio. Using the output from a quantitative model, the strategy | |
operating expenses. | seeks to position the portfolio to meet RIMCo’s overall preferred | |
positioning with respect to Fund exposures, while optimizing | ||
How did the market conditions described in the Market | the portfolio to minimize tracking error relative to the Fund’s | |
Summary report affect the Fund’s performance? | money manager portfolios. Over the first three quarters of the | |
The Russell Developed Large Cap Index® (Net) returned 1.89% | period, the strategy was designed to increase the Fund’s exposure | |
for the fiscal year ended October 31, 2015. Commodity heavy | to value stocks. In the last quarter of the fiscal year, RIMCo | |
economies like Canada and Australia lagged significantly due | increased the Fund’s allocation to the strategy and introduced | |
to a demand slowdown, particularly from China. Asia Pacific | a multi-factor approach designed to express RIMCo’s preferred | |
ex-Japan also underperformed significantly while the U.S. | Fund positioning across multiple factors and sectors, specifically | |
outperformed. Energy and materials were the worst hit sectors as | increasing the Fund’s value exposure while moderating the Fund’s | |
oil prices tumbled to the lowest levels since 2009 and a demand | volatility exposure. The positioning strategy’s benchmark-relative | |
slowdown in emerging markets caused commodity prices to | performance was negative for the period, driven by the strategy’s | |
plunge. Defensive sectors held up well amid the volatility. Value | value focus during a period where growth stocks outperformed. | |
stocks underperformed growth and higher momentum stocks held | In addition, RIMCo utilized equity futures and currency forward | |
up well. | contracts in order to position the portfolio to meet RIMCo’s | |
How did the investment strategies and techniques employed | overall preferred positioning with respect to country and currency | |
by the Fund and its money managers affect its benchmark- | exposures. This strategy generated positive benchmark-relative | |
relative performance? | performance during the fiscal year ended October 31, 2015. |
Russell Global Equity Fund 191
Russell Investment Company
Russell Global Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
During the period, RIMCo equitized the Fund’s cash using index | Money Managers as of October 31, | |
futures contracts to provide the Fund with full market exposure. | 2015 | Styles |
This did not have a material impact on the Fund’s performance | ||
Harris Associates LP | Value | |
for the period. | MFS Institutional Advisors, Inc. | Market Oriented |
Fair value pricing adjustments on the last business day of | Polaris Capital Management, LLC | Value |
the period detracted from the Fund’s benchmark-relative | Sanders Capital, LLC | Value |
Wellington Management Company, LLP | Growth | |
performance because the Fund’s index does not use fair value | The views expressed in this report reflect those of the portfolio | |
pricing adjustments. | managers only through the end of the period covered by | |
Describe any changes to the Fund’s structure or the money | the report. These views do not necessarily represent the | |
manager line-up. | views of RIMCo or any other person in RIMCo or any other | |
In September 2015, RIMCo implemented the changes to the | affiliated organization. These views are subject to change | |
positioning strategy described above. | at any time based upon market conditions or other events, | |
and RIMCo disclaims any responsibility to update the views | ||
contained herein. These views should not be relied on as | ||
investment advice and, because investment decisions for | ||
a Russell Investment Company (“RIC”) Fund are based on | ||
numerous factors, should not be relied on as an indication | ||
of investment decisions of any RIC Fund. |
* Assumes initial investment on February 28, 2007.
** Russell Developed Large Cap® Index Net is an index which offers investors access to the large-cap segment of the developed equity universe. It is constructed
to provide a comprehensive and unbiased barometer for the large-cap segment of this market and is completely reconstituted annually to accurately reflect the
changes in the market over time.
*** The Global Equity Linked Benchmark provides a means to compare the Fund’s average annual returns to a secondary benchmark that takes into account
historical changes in the Fund’s primary benchmark. The Global Equity Linked Benchmark represents the returns of the MSCI World Index (net of tax
on dividends from foreign holdings) through December 31, 2010 and the returns of the Russell Developed Large Cap Index (net of tax on dividends from foreign
holdings) thereafter.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
‡‡ The Fund first issued Class Y Shares on September 29, 2008. The returns shown for Class Y Shares prior to that date are the returns of the Fund’s Class S
Shares. Class Y Shares will have substantially similar returns as the Class S Shares because the Shares of each Class are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class Y Shares do not have the same expenses as the Class S Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
192 Russell Global Equity Fund
Russell Investment Company
Russell Global Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 964.50 | $ | 1,017.64 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 7.43 | $ | 7.63 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.50% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). | |||||
and actual expenses. You may use the information in this column, | ||||||
together with the amount you invested, to estimate the expenses | Hypothetical | |||||
Performance (5% | ||||||
that you paid over the period. Simply divide your account value by | Actual | return before | ||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Class C | Performance | expenses) | |||
= 8.6), then multiply the result by the number in the first column | Beginning Account Value | |||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
the expenses you paid on your account during this period. | October 31, 2015 | $ | 960.70 | $ | 1,013.86 | |
Expenses Paid During Period* | $ | 11.12 | $ | 11.42 | ||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | * Expenses are equal to the Fund's annualized expense ratio of 2.25% | |||||
Performance (5% return before expenses)” provides information | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
about hypothetical account values and hypothetical expenses | year period). | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | Hypothetical | |||||
actual return. The hypothetical account values and expenses | Performance (5% | |||||
Actual | return before | |||||
may not be used to estimate the actual ending account balance or | Class E | Performance | expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
to compare the ongoing costs of investing in the Fund and other | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
funds. To do so, compare this 5% hypothetical example with the | Ending Account Value | |||||
October 31, 2015 | $ | 963.70 | $ | 1,017.64 | ||
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 7.42 | $ | 7.63 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 1.50% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
Russell Global Equity Fund 193
Russell Investment Company
Russell Global Equity Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 965.40 | $ | 1,018.90 | |
Expenses Paid During Period* | $ | 6.19 | $ | 6.36 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.25% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class Y | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 966.30 | $ | 1,019.96 | |
Expenses Paid During Period* | $ | 5.15 | $ | 5.30 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.04% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
194 Russell Global Equity Fund
Russell Investment Company
Russell Global Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Common Stocks - 92.7% | Baidu, Inc. - ADR(Æ) | 73,400 | 13,760 | |||||||
Australia - 0.4% | Tencent Holdings, Ltd. | 557,700 | 10,467 | |||||||
ASX, Ltd. - ADR | 14,281 | 420 | 32,135 | |||||||
New Hope Corp., Ltd. | 18,210 | 25 | ||||||||
Qantas Airways, Ltd.(Æ) | 1,062,122 | 2,993 | China - 0.1% | |||||||
Rio Tinto, Ltd. - ADR | 111,467 | 3,988 | China Petroleum & Chemical Corp. | |||||||
South32, Ltd. Class W - ADR(Æ) | 52,720 | 271 | Class H | 2,975,600 | 2,146 | |||||
Telstra Corp., Ltd. | 187,122 | 721 | ||||||||
Washington H Soul Pattinson & Co., Ltd. | 3,821 | 44 | Denmark - 0.0% | |||||||
Woodside Petroleum, Ltd. | 34,039 | 715 | Genmab A/S(Æ) | 8,876 | 873 | |||||
WorleyParsons, Ltd. | 751,300 | 3,495 | Tryg A/S | 7,970 | 143 | |||||
12,672 | 1,016 | |||||||||
Austria - 0.0% | Finland - 0.7% | |||||||||
Erste Group Bank AG(Æ) | 8,571 | 251 | Caverion Corp. | 291,645 | 2,537 | |||||
Fortum OYJ | 51,023 | 764 | ||||||||
Belgium - 0.5% | Kone OYJ Class B | 144,046 | 6,138 | |||||||
Ageas | 8,512 | 375 | Konecranes OYJ | 184,789 | 4,946 | |||||
Groupe Bruxelles Lambert SA | 5,535 | 449 | Neste OYJ | 52,743 | 1,284 | |||||
KBC Groep NV | 5,019 | 305 | Sampo OYJ Class A | 33,772 | 1,648 | |||||
Proximus SADP | 1,259 | 44 | YIT OYJ(Ñ) | 458,600 | 2,407 | |||||
Solvay SA | 40,096 | 4,525 | 19,724 | |||||||
UCB SA | 102,371 | 8,843 | ||||||||
14,541 | France - 6.3% | |||||||||
BNP Paribas SA | 628,977 | 38,150 | ||||||||
Bermuda - 0.2% | Christian Dior SE | 30,968 | 6,087 | |||||||
Assured Guaranty, Ltd. | 156,600 | 4,297 | Cie Generale des Etablissements | |||||||
Axis Capital Holdings, Ltd. | 8,300 | 448 | Michelin Class B | 65,500 | 6,517 | |||||
China Hongxing Sports, Ltd.(Å)(Æ) | 6,320,000 | — | Danone SA | 421,598 | 29,352 | |||||
Endurance Specialty Holdings, Ltd. | 3,400 | 215 | Engie SA | 86,822 | 1,521 | |||||
Hiscox, Ltd. | 21,591 | 322 | Etablissements Maurel et Prom(Æ) | 70,853 | 255 | |||||
PartnerRe, Ltd. | 3,900 | 542 | Euler Hermes Group | 251 | 24 | |||||
REXLot Holdings, Ltd.(Å)(Ñ) | 27,960,023 | 36 | Imerys SA | 88,389 | 6,046 | |||||
Seadrill, Ltd.(Æ)(Ñ) | 141,000 | 912 | IPSOS | 165,176 | 3,352 | |||||
6,772 | Legrand SA - ADR | 273,720 | 15,005 | |||||||
LVMH Moet Hennessy Louis Vuitton | ||||||||||
Canada - 1.4% | SE - ADR | 138,143 | 25,701 | |||||||
BCE, Inc. | 31,000 | 1,340 | Numericable-SFR SAS(Æ) | 30,223 | 1,367 | |||||
Canadian Imperial Bank of Commerce(Ñ) | 20,300 | 1,557 | PPR SA | 60,874 | 11,247 | |||||
Canadian National Railway Co. | 357,669 | 21,850 | Renault SA | 125,260 | 11,784 | |||||
Emera, Inc.(Ñ) | 23,600 | 773 | Sanofi - ADR | 140,750 | 14,190 | |||||
Enbridge, Inc. | 19,100 | 816 | Suez Environnement Co. | 40,933 | 778 | |||||
Encana Corp. | 222,100 | 1,690 | Total SA | 123,511 | 5,985 | |||||
Genworth MI Canada, Inc.(Ñ) | 3,000 | 74 | Veolia Environnement SA | 111,777 | 2,599 | |||||
Great-West Lifeco, Inc. | 24,100 | 639 | 179,960 | |||||||
Husky Energy, Inc. | 40,200 | 543 | ||||||||
Intact Financial Corp. | 11,100 | 793 | Germany - 4.4% | |||||||
Keyera Corp. | 12,900 | 398 | Allianz SE | 177,531 | 31,086 | |||||
Methanex Corp. | 109,400 | 4,365 | BASF SE | 64,552 | 5,291 | |||||
Pembina Pipeline Corp. | 26,500 | 666 | Daimler AG | 238,791 | 20,721 | |||||
Royal Bank of Canada - GDR | 12,700 | 726 | Deutsche Telekom AG | 374,587 | 7,004 | |||||
Suncor Energy, Inc. | 49,000 | 1,458 | Deutsche Wohnen AG | 6,290 | 178 | |||||
TELUS Corp. | 17,100 | 571 | Freenet AG | 178,132 | 6,010 | |||||
Thomson Reuters Corp. | 29,000 | 1,190 | Hannover Rueck SE | 73,475 | 8,507 | |||||
Toronto Dominion Bank | 17,300 | 710 | Lanxess AG | 104,992 | 5,639 | |||||
Valeant Pharmaceuticals International, | Linde AG | 118,952 | 20,631 | |||||||
Inc.(Æ) | 7,400 | 691 | Muenchener Rueckversicherungs- | |||||||
40,850 | Gesellschaft AG in Muenchen | 32,020 | 6,391 | |||||||
Symrise AG | 94,420 | 6,221 | ||||||||
Cayman Islands - 1.1% | Wincor Nixdorf AG | 128,163 | 6,565 | |||||||
Alibaba Group Holding, Ltd. - ADR(Æ) | 124,244 | |||||||||
(Ñ) | 94,337 | 7,908 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Equity Fund 195
Russell Investment Company
Russell Global Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Hong Kong - 0.8% | Sumitomo Mitsui Financial Group, Inc. | 475,800 | 18,916 | |||||||
Cathay Pacific Airways, Ltd. | 1,885,800 | 3,741 | Takeda Pharmaceutical Co., Ltd. | 27,400 | 1,332 | |||||
China Resources Power Holdings Co., | Tohoku Electric Power Co., Inc. | 40,900 | 572 | |||||||
Ltd. | 1,101,600 | 2,487 | Tokio Marine Holdings, Inc. | 14,500 | 556 | |||||
Guangdong Investment, Ltd. | 2,241,400 | 3,151 | Tokyo Electric Power Co., Inc.(Æ) | 546,200 | 3,714 | |||||
Hang Seng Bank, Ltd. | 59,200 | 1,084 | Toyota Motor Corp. | 349,400 | 21,394 | |||||
Hong Kong Exchanges and Clearing, | 115,283 | |||||||||
Ltd. | 154,300 | 4,028 | ||||||||
MTR Corp., Ltd. | 55,500 | 251 | Jersey - 1.0% | |||||||
Power Assets Holdings, Ltd. | 196,500 | 1,954 | Delphi Automotive PLC | 158,400 | 13,177 | |||||
Wharf Holdings, Ltd. (The) | 332,000 | 1,971 | Glencore PLC(Æ) | 8,540,200 | 14,709 | |||||
Wheelock & Co., Ltd. | 688,000 | 3,198 | 27,886 | |||||||
21,865 | ||||||||||
Luxembourg - 0.4% | ||||||||||
India - 0.8% | ArcelorMittal | 237,196 | 1,319 | |||||||
Axis Bank, Ltd. | 717,745 | 5,204 | Samsonite International SA | 3,649,200 | 10,741 | |||||
Bharti Infratel, Ltd. | 553,145 | 3,287 | 12,060 | |||||||
ICICI Bank, Ltd. | 1,887,087 | 7,964 | ||||||||
Infosys, Ltd. - ADR(Ñ) | 295,800 | 5,372 | Netherlands - 2.5% | |||||||
21,827 | Akzo Nobel NV | 185,317 | 13,094 | |||||||
Altice NV Class A(Æ) | 15,630 | 269 | ||||||||
Ireland - 2.6% | Altice NV Class B(Æ) | 12,782 | 226 | |||||||
Accenture PLC Class A | 302,838 | 32,464 | CNH Industrial NV | 2,118,715 | 14,304 | |||||
Greencore Group PLC Class A | 1,207,952 | 5,618 | Euronext NV(Þ) | 1,928 | 85 | |||||
Medtronic PLC | 491,079 | 36,301 | Heineken NV | 207,142 | 18,887 | |||||
XL Group PLC Class A | 1,000 | 38 | ING Groep NV | 28,434 | 412 | |||||
74,421 | Koninklijke Ahold NV | 68,541 | 1,392 | |||||||
Koninklijke Philips NV | 462,797 | 12,484 | ||||||||
Israel - 0.3% | Mylan NV(Æ) | 199,797 | 8,809 | |||||||
Teva Pharmaceutical Industries, Ltd. | NXP Semiconductors NV(Æ) | 2,636 | 207 | |||||||
- ADR | 119,100 | 7,050 | 70,169 | |||||||
Italy - 0.4% | Netherlands Antilles - 0.1% | |||||||||
A2A SpA | 610,733 | 838 | Schlumberger, Ltd. | 24,200 | 1,892 | |||||
Enel SpA | 1,154,698 | 5,331 | ||||||||
ENI SpA - ADR | 68,802 | 1,123 | New Zealand - 0.0% | |||||||
Intesa Sanpaolo SpA | 283,283 | 970 | Contact Energy, Ltd. | 26,297 | 92 | |||||
Snam Rete Gas SpA | 161,453 | 835 | ||||||||
Trevi Finanziaria Industriale SpA(Ñ) | 1,800,905 | 2,328 | Norway - 0.5% | |||||||
11,425 | DNB ASA | 343,898 | 4,363 | |||||||
SpareBank 1 SR-Bank ASA | 881,252 | 4,205 | ||||||||
Japan - 4.1% | Statoil ASA Class N | 8,920 | 144 | |||||||
Asahi Group Holdings, Ltd. | 192,300 | 5,918 | TGS Nopec Geophysical Co. ASA - ADR | 7,860 | 156 | |||||
Canon, Inc. | 38,800 | 1,159 | Yara International ASA | 145,300 | 6,589 | |||||
Chubu Electric Power Co., Inc. | 99,800 | 1,530 | 15,457 | |||||||
Dai-ichi Life Insurance Co., Ltd. (The) | 22,900 | 396 | ||||||||
Daiwa House Industry Co., Ltd. | 24,200 | 632 | Portugal - 0.2% | |||||||
Daiwa Securities Group, Inc. | 2,442,000 | 16,654 | Energias de Portugal SA | 1,403,889 | 5,187 | |||||
Eisai Co., Ltd. | 104,000 | 6,470 | ||||||||
Honda Motor Co., Ltd. | 146,200 | 4,854 | Russia - 0.1% | |||||||
Inpex Corp. | 17,600 | 168 | Sberbank PAO - ADR | 363,500 | 2,221 | |||||
Japan Tobacco, Inc. | 49,300 | 1,703 | Singapore - 0.3% | |||||||
Kakaku.com, Inc. | 317,900 | 5,936 | Singapore Telecommunications, Ltd. | 248,300 | 703 | |||||
KDDI Corp. | 255,900 | 6,182 | United Overseas Bank, Ltd. | 440,800 | 6,389 | |||||
Kyushu Electric Power Co., Inc. | 43,400 | 523 | 7,092 | |||||||
MEIJI Holdings Co., Ltd. | 2,200 | 173 | ||||||||
NTT DOCOMO, Inc. | 104,700 | 2,055 | South Africa - 0.2% | |||||||
Ono Pharmaceutical Co., Ltd. | 57,340 | 7,813 | Sasol, Ltd. - ADR | 162,293 | 5,169 | |||||
Shikoku Electric Power Co., Inc.(Æ) | 27,500 | 465 | ||||||||
Showa Denko KK | 4,778,000 | 6,002 | South Korea - 2.2% | |||||||
Sompo Japan Nipponkoa Holdings, Inc. | 2,500 | 78 | BNK Financial Group, Inc. | 237,415 | 2,904 | |||||
Sony Corp. | 3,100 | 88 | DGB Financial Group, Inc. | 7,635 | 71 |
196 Russell Global Equity Fund
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Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Hyundai Motor Co. | 11,187 | 1,529 | Experian PLC | 499,400 | 8,516 | ||||
Kia Motors Corp. | 165,800 | 8,091 | GlaxoSmithKline PLC - ADR | 60,901 | 1,312 | ||||
LG Household & Health Care, Ltd. | 3,748 | 3,101 | HSBC Holdings PLC | 206,019 | 1,609 | ||||
Samsung Electronics Co., Ltd. | 37,657 | 45,109 | Imperial Tobacco Group PLC | 98,251 | 5,292 | ||||
Shinhan Financial Group Co., Ltd. | 76,879 | 2,926 | International Game Technology PLC(Ñ) | 312,516 | 5,069 | ||||
63,731 | Land Securities Group PLC(ö) | 31,272 | 645 | ||||||
Marks & Spencer Group PLC | 712,222 | 5,623 | |||||||
Spain - 0.1% | National Grid PLC | 49,708 | 707 | ||||||
Acciona SA | 1,419 | 119 | Persimmon PLC Class A(Æ) | 298,435 | 9,153 | ||||
Endesa SA - ADR | 25,849 | 575 | Reckitt Benckiser Group PLC | 272,766 | 26,613 | ||||
Iberdrola SA | 305,423 | 2,180 | Rexam PLC | 473,226 | 3,935 | ||||
Tecnicas Reunidas SA | 2,415 | 108 | Royal Dutch Shell PLC Class A | 183,388 | 4,796 | ||||
2,982 | Royal Dutch Shell PLC Class B | 115,764 | 3,024 | ||||||
Standard Chartered PLC | 414,744 | 4,603 | |||||||
Sweden - 1.1% | Taylor Wimpey PLC | 3,054,669 | 9,302 | ||||||
Atlas Copco AB Class B(Ñ) | 129,100 | 3,116 | Tesco PLC(Æ) | 1,747,954 | 4,925 | ||||
Duni AB | 260,200 | 3,951 | Vodafone Group PLC | 386,027 | 1,273 | ||||
Fastighets AB Balder Class B(Æ) | 5,546 | 112 | 214,212 | ||||||
Investor AB Class B | 183,329 | 6,787 | |||||||
Loomis AB Class B | 188,660 | 4,889 | United States - 46.1% | ||||||
Nordea Bank AB | 599,899 | 6,615 | 3M Co. | 117,672 | 18,499 | ||||
Svenska Handelsbanken AB Class A | 436,287 | 5,917 | Aflac, Inc. | 12,100 | 771 | ||||
31,387 | Allergan PLC(Æ) | 52,519 | 16,201 | ||||||
ALLETE, Inc. | 129,800 | 6,517 | |||||||
Switzerland - 5.1% | Alphabet, Inc. Class A(Æ) | 33,169 | 24,458 | ||||||
Allied World Assurance Co. Holdings | Alphabet, Inc. Class C(Æ) | 13,242 | 9,413 | ||||||
AG | 7,600 | 276 | Altria Group, Inc. | 48,400 | 2,927 | ||||
Basellandschaftliche Kantonalbank | 79 | 71 | Amazon.com, Inc.(Æ) | 33,373 | 20,888 | ||||
Basler Kantonalbank | 7,914 | 540 | Ameren Corp. | 7,400 | 323 | ||||
Cie Financiere Richemont SA(Æ) | 286,236 | 24,482 | American Electric Power Co., Inc. | 25,300 | 1,433 | ||||
Credit Suisse Group AG(Æ) | 759,709 | 18,918 | American Financial Group, Inc. | 5,600 | 404 | ||||
Julius Baer Group, Ltd.(Æ) | 455,180 | 22,554 | American International Group, Inc. | 454,336 | 28,650 | ||||
Kuehne & Nagel International AG | 42,300 | 5,859 | American Tower Corp.(ö) | 104,522 | 10,685 | ||||
LafargeHolcim, Ltd.(Æ) | 206,875 | 11,635 | Ameris Bancorp | 290,520 | 9,151 | ||||
Nestle SA | 331,413 | 25,301 | Ametek, Inc. | 73,598 | 4,035 | ||||
Novartis AG | 267,374 | 24,242 | Anadarko Petroleum Corp. | 143,500 | 9,597 | ||||
Roche Holding AG | 40,693 | 11,022 | Analog Devices, Inc. | 3,800 | 228 | ||||
Swisscom AG | 330 | 170 | Anthem, Inc. | 140,300 | 19,523 | ||||
UBS Group AG | 30,895 | 617 | Apple, Inc. | 246,420 | 29,447 | ||||
145,687 | Applied Materials, Inc. | 289,500 | 4,855 | ||||||
Taiwan - 0.6% | Astoria Financial Corp. | 445,200 | 7,105 | ||||||
Taiwan Semiconductor Manufacturing | Atmos Energy Corp. | 6,200 | 391 | ||||||
Co., Ltd. - ADR | 774,400 | 17,006 | Automatic Data Processing, Inc. | 8,000 | 696 | ||||
Baker Hughes, Inc. | 12,700 | 669 | |||||||
Thailand - 0.2% | Bank of America Corp. | 1,110,200 | 18,629 | ||||||
Thai Oil PCL | 3,653,800 | 5,549 | Becton Dickinson and Co. | 66,003 | 9,407 | ||||
Bed Bath & Beyond, Inc.(Æ) | 52,500 | 3,131 | |||||||
United Kingdom - 7.6% | Berkshire Hathaway, Inc. Class B(Æ) | 26,300 | 3,577 | ||||||
Amlin PLC | 38,643 | 392 | BioMarin Pharmaceutical, Inc.(Æ) | 600 | 70 | ||||
Aon PLC | 113,700 | 10,609 | BlackRock, Inc. Class A | 21,430 | 7,543 | ||||
AstraZeneca PLC | 146,792 | 9,370 | Boeing Co. (The) | 9,500 | 1,407 | ||||
Barclays PLC | 4,667,520 | 16,612 | Boston Scientific Corp.(Æ) | 340,225 | 6,219 | ||||
Barratt Developments PLC | 962,443 | 9,067 | Bristol-Myers Squibb Co. | 253,415 | 16,713 | ||||
BBA Aviation PLC | 1,731,672 | 5,083 | Brookline Bancorp, Inc. | 352,276 | 3,998 | ||||
Bellway PLC | 193,757 | 7,738 | Brooks Automation, Inc. | 358,977 | 3,963 | ||||
BG Group PLC | 17,456 | 275 | CalAtlantic Group, Inc.(Æ) | 111,184 | 4,235 | ||||
BHP Billiton PLC - ADR | 131,800 | 4,250 | Capital One Financial Corp. | 78,900 | 6,225 | ||||
BP PLC | 2,609,896 | 15,492 | Carter's, Inc. | 57,000 | 5,180 | ||||
British American Tobacco PLC | 24,933 | 1,480 | Caterpillar, Inc. | 116,400 | 8,496 | ||||
Burberry Group PLC | 347,030 | 7,095 | Cerner Corp.(Æ) | 145,459 | 9,642 | ||||
Diageo PLC | 1,050,317 | 30,352 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Equity Fund 197
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Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Charter Communications, Inc. Class | Johnson & Johnson | 192,000 | 19,398 | ||||||||
A(Æ) | 1,900 | 363 | JPMorgan Chase & Co. | 551,100 | 35,408 | ||||||
Chesapeake Energy Corp.(Ñ) | 160,600 | 1,145 | Kimberly-Clark Corp. | 4,300 | 515 | ||||||
Chevron Corp. | 37,400 | 3,399 | Kinder Morgan, Inc. | 22,200 | 607 | ||||||
Chipotle Mexican Grill, Inc. Class A(Æ) | 6,248 | 4,000 | Lennar Corp. Class A | 199,000 | 9,964 | ||||||
Chubb Corp. (The) | 58,400 | 7,554 | Lockheed Martin Corp. | 9,700 | 2,132 | ||||||
Cigna Corp. | 96,000 | 12,868 | Marathon Petroleum Corp. | 186,100 | 9,640 | ||||||
Cincinnati Financial Corp. | 12,200 | 735 | MasterCard, Inc. Class A | 17,500 | 1,732 | ||||||
Cisco Systems, Inc. | 22,900 | 661 | McDonald's Corp. | 17,800 | 1,998 | ||||||
Citigroup, Inc. | 423,900 | 22,539 | Merck & Co., Inc. | 342,600 | 18,726 | ||||||
Clorox Co. (The) | 2,100 | 256 | Mercury General Corp. | 2,000 | 108 | ||||||
CMS Energy Corp. | 8,400 | 303 | Meritage Homes Corp.(Æ) | 116,600 | 4,111 | ||||||
Coca-Cola Co. (The) | 57,500 | 2,435 | MetLife, Inc. | 160,300 | 8,076 | ||||||
Colgate-Palmolive Co. | 6,500 | 431 | Microsoft Corp. | 799,400 | 42,080 | ||||||
Columbia Pipeline Group, Inc. | 40,800 | 847 | Mondelez International, Inc. Class A | 219,140 | 10,115 | ||||||
Comcast Corp. Class A(Æ) | 5,300 | 332 | Monster Beverage Corp.(Æ) | 56,911 | 7,758 | ||||||
Consolidated Edison, Inc. | 20,700 | 1,361 | Morgan Stanley | 14,400 | 475 | ||||||
Corning, Inc. | 397,400 | 7,392 | National Oilwell Varco, Inc. | 3,800 | 143 | ||||||
CoStar Group, Inc.(Æ) | 46,559 | 9,455 | NextEra Energy, Inc. | 85,300 | 8,757 | ||||||
Cummins, Inc. | 58,800 | 6,086 | Northern Trust Corp. | 90,880 | 6,397 | ||||||
CVS Health Corp. | 7,600 | 751 | Occidental Petroleum Corp. | 30,000 | 2,236 | ||||||
Danaher Corp. | 82,564 | 7,704 | Oracle Corp. | 469,525 | 18,236 | ||||||
DexCom, Inc.(Æ) | 9,000 | 750 | PepsiCo, Inc. | 27,500 | 2,810 | ||||||
DigitalGlobe, Inc.(Æ) | 213,867 | 3,193 | Pfizer, Inc. | 90,600 | 3,064 | ||||||
Dime Community Bancshares, Inc. | 309,300 | 5,366 | PG&E Corp. | 33,900 | 1,810 | ||||||
Dominion Resources, Inc. | 6,800 | 486 | Philip Morris International, Inc. | 27,900 | 2,466 | ||||||
DR Horton, Inc. | 672,100 | 19,787 | Phillips 66(Æ) | 41,700 | 3,713 | ||||||
Dr Pepper Snapple Group, Inc. | 10,800 | 965 | Pinnacle West Capital Corp. | 9,000 | 572 | ||||||
DTE Energy Co. | 7,600 | 620 | Platform Specialty Products Corp.(Æ)(Ñ) | 532,828 | 5,563 | ||||||
Duke Energy Corp. | 24,200 | 1,730 | PPL Corp. | 51,800 | 1,782 | ||||||
Edison International | 22,300 | 1,350 | Praxair, Inc. | 172,296 | 19,140 | ||||||
Electronic Arts, Inc.(Æ) | 13,900 | 1,002 | Priceline Group, Inc. (The)(Æ) | 6,802 | 9,892 | ||||||
Eli Lilly & Co. | 30,600 | 2,496 | ProAssurance Corp. | 4,600 | 244 | ||||||
EP Energy Corp. Class A(Æ)(Ñ) | 167,800 | 925 | Procter & Gamble Co. (The) | 37,600 | 2,872 | ||||||
Eversource Energy | 10,400 | 530 | Progressive Corp. (The) | 47,300 | 1,567 | ||||||
Exelon Corp. | 36,800 | 1,027 | Public Service Enterprise Group, Inc. | 40,700 | 1,680 | ||||||
Exxon Mobil Corp. | 49,500 | 4,096 | Public Storage(ö) | 11,000 | 2,524 | ||||||
Facebook, Inc. Class A(Æ) | 80,682 | 8,227 | Pure Storage, Inc. Class A(Æ) | 8,200 | 145 | ||||||
FairPoint Communications, Inc.(Æ)(Ñ) | 200,904 | 3,222 | QUALCOMM, Inc. | 30,100 | 1,789 | ||||||
Fortune Brands Home & Security, Inc. | 147,408 | 7,714 | Quest Diagnostics, Inc. | 84,900 | 5,769 | ||||||
Frontier Communications Corp.(Ñ) | 1,006,300 | 5,172 | Range Resources Corp.(Ñ) | 324,700 | 9,884 | ||||||
General Dynamics Corp. | 102,400 | 15,215 | Raytheon Co. | 14,400 | 1,691 | ||||||
General Electric Co. | 298,700 | 8,638 | Regal Entertainment Group Class A(Ñ) | 138,585 | 2,686 | ||||||
General Motors Co. | 484,900 | 16,928 | Reynolds American, Inc. | 49,600 | 2,397 | ||||||
Goldman Sachs Group, Inc. (The) | 48,300 | 9,056 | Rite Aid Corp.(Æ) | 100,800 | 794 | ||||||
Goodyear Tire & Rubber Co. (The) | 60,500 | 1,987 | SCANA Corp. | 9,100 | 539 | ||||||
Graham Holdings Co. Class B | 5,700 | 3,149 | Sempra Energy | 4,900 | 502 | ||||||
Harman International Industries, Inc. | 57,661 | 6,340 | ServiceNow, Inc.(Æ) | 56,904 | 4,646 | ||||||
Hartford Financial Services Group, Inc. | 18,800 | 870 | Skechers U.S.A., Inc. Class A(Æ) | 58,800 | 1,835 | ||||||
HollyFrontier Corp. | 15,400 | 754 | Southern Co. (The) | 38,500 | 1,736 | ||||||
Home Depot, Inc. | 24,100 | 2,980 | Southwest Bancorp, Inc. | 364,200 | 6,159 | ||||||
Honeywell International, Inc. | 274,803 | 28,382 | St. Jude Medical, Inc. | 182,100 | 11,620 | ||||||
HP Inc.(Æ) | 191,800 | 5,171 | State Street Corp. | 337,643 | 23,297 | ||||||
Hyatt Hotels Corp. Class A(Æ) | 24,300 | 1,225 | Stericycle, Inc.(Æ) | 32,929 | 3,997 | ||||||
Independent Bank Corp. | 144,292 | 6,744 | SunTrust Banks, Inc. | 110,900 | 4,605 | ||||||
Intel Corp. | 887,400 | 30,047 | Tesoro Corp. | 36,600 | 3,914 | ||||||
International Bancshares Corp. | 201,918 | 5,442 | Texas Instruments, Inc. | 17,400 | 987 | ||||||
International Business Machines Corp. | 49,150 | 6,885 | Thermo Fisher Scientific, Inc. | 219,464 | 28,701 | ||||||
JetBlue Airways Corp.(Æ) | 72,200 | 1,793 | Tiffany & Co. | 51,539 | 4,249 | ||||||
JM Smucker Co. (The) | 58,700 | 6,891 | Time Warner, Inc. | 372,654 | 28,076 |
See accompanying notes which are an integral part of the financial statements.
198 Russell Global Equity Fund
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||||
Principal | Fair | Principal | Fair | |||||||||
Amount ($) | Value | Amount ($) | Value | |||||||||
or Shares | $ | or Shares | $ | |||||||||
Travelers Cos., Inc. (The) | 15,500 | 1,750 | ||||||||||
United Parcel Service, Inc. Class B | 216,359 | 22,289 | Other Securities - 2.1% | |||||||||
United Technologies Corp. | 122,669 | 12,072 | Russell U.S. Cash Collateral Fund(×) | 58,265,487 | (8) | 58,265 | ||||||
UnitedHealth Group, Inc. | 160,000 | 18,845 | Total Other Securities | |||||||||
US Bancorp | 5,800 | 245 | (cost $58,265) | 58,265 | ||||||||
Valero Energy Corp. | 44,900 | 2,960 | ||||||||||
Veeva Systems, Inc. Class A(Æ) | 226,635 | 5,750 | Total Investments 101.6% | |||||||||
Verizon Communications, Inc. | 123,700 | 5,799 | (identified cost $2,355,662) | 2,884,012 | ||||||||
Visa, Inc. Class A | 451,617 | 35,036 | ||||||||||
Voya Financial, Inc. | 94,100 | 3,818 | Other Assets and Liabilities, Net | |||||||||
Walgreens Boots Alliance, Inc. | 2,600 | 220 | ||||||||||
Wal-Mart Stores, Inc. | 41,800 | 2,393 | - | (1.6%) | (45,583 | ) | ||||||
Walt Disney Co. (The) | 294,156 | 33,457 | Net Assets - 100.0% | 2,838,429 | ||||||||
Waters Corp.(Æ) | 128,925 | 16,477 | ||||||||||
Webster Financial Corp. | 183,600 | 6,812 | ||||||||||
WEC Energy Group, Inc. | 14,100 | 727 | ||||||||||
Wells Fargo & Co. | 347,000 | 18,787 | ||||||||||
Western Union Co. (The) | 302,200 | 5,817 | ||||||||||
Workday, Inc. Class A(Æ) | 113,553 | 8,967 | ||||||||||
Wyndham Worldwide Corp. | 75,681 | 6,157 | ||||||||||
Xcel Energy, Inc. | 25,700 | 916 | ||||||||||
Xerox Corp. | 503,600 | 4,729 | ||||||||||
Yahoo!, Inc.(Æ) | 67,800 | 2,415 | ||||||||||
Zillow Group, Inc.(Æ)(Ñ) | 149,012 | 4,126 | ||||||||||
Zillow Group, Inc. Class A(Æ)(Ñ) | 64,398 | 1,984 | ||||||||||
Zimmer Biomet Holdings, Inc. | 132,008 | 13,804 | ||||||||||
1,307,754 | ||||||||||||
Virgin Islands, British - 0.3% | ||||||||||||
Nomad Foods, Ltd.(Æ) | 554,277 | 8,091 | ||||||||||
Total Common Stocks | ||||||||||||
(cost $2,097,419) | 2,629,806 | |||||||||||
Investments in Other Funds - 0.0% | ||||||||||||
Vanguard FTSE All-World ex-US ETF | 21,500 | 978 | ||||||||||
Class U | ||||||||||||
Total Investments in Other Funds | ||||||||||||
(cost $1,053) | 978 | |||||||||||
Preferred Stocks - 0.2% | ||||||||||||
Brazil - 0.1% | ||||||||||||
Investimentos Itau SA | 1,858,912 | 3,470 | ||||||||||
Germany - 0.1% | ||||||||||||
Porsche Automobil Holding SE | 57,600 | 2,699 | ||||||||||
Japan - 0.0% | ||||||||||||
Shinkin Central Bank Class A | 37 | 69 | ||||||||||
Total Preferred Stocks | ||||||||||||
(cost $10,210) | 6,238 | |||||||||||
Short-Term Investments - 6.6% | ||||||||||||
United States - 6.6% | ||||||||||||
Russell U.S. Cash Management Fund | 166,732,262 | (8) | 166,732 | |||||||||
United States Treasury Bills (§) | ||||||||||||
0.230% due 03/03/16 | 22,000 | 21,993 | ||||||||||
188,725 | ||||||||||||
Total Short-Term Investments | ||||||||||||
(cost $188,715) | 188,725 |
See accompanying notes which are an integral part of the financial statements
Russell Global Equity Fund 199
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Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | ||||||
% of Net Assets Securities | Date | or shares | $ | $ | $ | |||||||
0.0% | ||||||||||||
China Hongxing Sports, Ltd. | 08/27/10 | SGD | 6,320,000 | — | 765 | — | ||||||
REXLot Holdings, Ltd. | 08/22/14 | HKD | 27,960,023 | 0.10 | 2,842 | 36 | ||||||
36 | ||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
200 Russell Global Equity Fund
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Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||||
Amounts in thousands (except contract amounts) | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||
Contracts | Amount | Date | $ | ||||||
Long Positions | |||||||||
CAC40 10 EURO Index Futures | 251 | EUR | 12,288 | 11/15 | 633 | ||||
DAX Index Futures | 44 | EUR | 11,902 | 12/15 | 781 | ||||
Euro STOXX Index 50 Futures | 244 | EUR | 8,303 | 12/15 | 455 | ||||
FTSE 100 Index Futures | 156 | GBP | 9,859 | 12/15 | 179 | ||||
Hang Seng Index Futures | 19 | HKD | 21,550 | 11/15 | (52 | ) | |||
OMXS30 Index Futures | 119 | SEK | 17,802 | 11/15 | 55 | ||||
S&P 500 E-Mini Index Futures | 1,217 | USD | 126,185 | 12/15 | 5,359 | ||||
S&P Mid 400 E-Mini Index Futures | 66 | USD | 9,513 | 12/15 | 154 | ||||
S&P/TSX 50 Index Futures | 238 | CAD | 37,718 | 12/15 | 360 | ||||
SPI 200 Index Futures | 286 | AUD | 37,437 | 12/15 | 734 | ||||
TOPIX Index Futures | 1,110 | JPY | 17,299,350 | 12/15 | 10,687 | ||||
Short Positions | |||||||||
Euro STOXX Index 50 Futures | 1,584 | EUR | 53,904 | 12/15 | (3,652 | ) | |||
FTSE 100 Index Futures | 522 | GBP | 32,990 | 12/15 | (2,159 | ) | |||
Hang Seng Index Futures | 134 | HKD | 151,983 | 11/15 | 311 | ||||
MSCI Emerging Markets Mini Index Futures | 1,278 | USD | 53,912 | 12/15 | (3,591 | ) | |||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 10,254 | ||||||||
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Bank of America | USD | 71 | AUD | 100 | 12/16/15 | — | |||
Bank of America | USD | 278 | AUD | 400 | 12/16/15 | 6 | |||
Bank of America | USD | 2,176 | AUD | 3,000 | 12/16/15 | (42 | ) | ||
Bank of America | USD | 20,918 | AUD | 30,000 | 12/16/15 | 428 | |||
Bank of America | USD | 151 | CAD | 200 | 12/16/15 | 2 | |||
Bank of America | USD | 373 | CAD | 500 | 12/16/15 | 9 | |||
Bank of America | USD | 3,096 | CAD | 4,000 | 12/16/15 | (38 | ) | ||
Bank of America | USD | 20,960 | CAD | 28,000 | 12/16/15 | 447 | |||
Bank of America | USD | 284 | CHF | 281 | 11/02/15 | 1 | |||
Bank of America | USD | 637 | CHF | 631 | 11/03/15 | 2 | |||
Bank of America | USD | 713 | CHF | 706 | 11/03/15 | 2 | |||
Bank of America | USD | 757 | EUR | 688 | 11/03/15 | — | |||
Bank of America | USD | 569 | EUR | 500 | 12/16/15 | (19 | ) | ||
Bank of America | USD | 1,121 | EUR | 1,000 | 12/16/15 | (20 | ) | ||
Bank of America | USD | 1,712 | EUR | 1,500 | 12/16/15 | (61 | ) | ||
Bank of America | USD | 1,763 | EUR | 1,600 | 12/16/15 | (3 | ) | ||
Bank of America | USD | 2,249 | EUR | 2,000 | 12/16/15 | (48 | ) | ||
Bank of America | USD | 15,376 | EUR | 13,500 | 12/16/15 | (521 | ) | ||
Bank of America | USD | 23,610 | EUR | 21,000 | 12/16/15 | (502 | ) | ||
Bank of America | USD | 617 | GBP | 402 | 11/03/15 | 3 | |||
Bank of America | USD | 825 | GBP | 538 | 11/03/15 | 4 | |||
Bank of America | USD | 307 | GBP | 200 | 12/16/15 | 2 | |||
Bank of America | USD | 310 | GBP | 200 | 12/16/15 | (2 | ) | ||
Bank of America | USD | 606 | GBP | 400 | 12/16/15 | 11 | |||
Bank of America | USD | 612 | GBP | 400 | 12/16/15 | 4 | |||
Bank of America | USD | 910 | GBP | 600 | 12/16/15 | 15 | |||
Bank of America | USD | 6,488 | GBP | 4,200 | 12/16/15 | (14 | ) | ||
Bank of America | USD | 352 | HKD | 2,725 | 11/03/15 | — | |||
Bank of America | USD | 914 | HKD | 7,083 | 11/03/15 | — | |||
Bank of America | USD | 941 | HKD | 7,290 | 11/03/15 | — | |||
Bank of America | USD | 194 | HKD | 1,500 | 12/16/15 | — | |||
Bank of America | USD | 258 | HKD | 2,000 | 12/16/15 | — | |||
Bank of America | USD | 710 | HKD | 5,500 | 12/16/15 | — | |||
Bank of America | USD | 1,290 | HKD | 10,000 | 12/16/15 | — | |||
Bank of America | USD | 516 | JPY | 62,336 | 11/05/15 | — | |||
Bank of America | USD | 685 | JPY | 82,694 | 11/05/15 | — |
See accompanying notes which are an integral part of the financial statements.
Russell Global Equity Fund 201
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Russell Global Equity Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Bank of America | USD | 416 | JPY | 50,000 | 12/16/15 | (1 | ) |
Bank of America | USD | 423 | JPY | 50,000 | 12/16/15 | (8 | ) |
Bank of America | USD | 824 | JPY | 100,000 | 12/16/15 | 5 | |
Bank of America | USD | 1,002 | JPY | 120,000 | 12/16/15 | (7 | ) |
Bank of America | USD | 7,542 | JPY | 900,000 | 12/16/15 | (79 | ) |
Bank of America | USD | 121,211 | JPY | 14,500,000 | 12/16/15 | (971 | ) |
Bank of America | USD | 118 | SEK | 1,000 | 12/16/15 | (1 | ) |
Bank of America | USD | 975 | SEK | 8,000 | 12/16/15 | (37 | ) |
Bank of America | AUD | 100 | USD | 72 | 12/16/15 | 1 | |
Bank of America | AUD | 150 | USD | 107 | 12/16/15 | — | |
Bank of America | AUD | 200 | USD | 146 | 12/16/15 | 4 | |
Bank of America | AUD | 200 | USD | 147 | 12/16/15 | 4 | |
Bank of America | AUD | 800 | USD | 588 | 12/16/15 | 19 | |
Bank of America | CAD | 100 | USD | 76 | 12/16/15 | (1 | ) |
Bank of America | CAD | 100 | USD | 75 | 12/16/15 | (1 | ) |
Bank of America | CAD | 150 | USD | 115 | 12/16/15 | — | |
Bank of America | CAD | 200 | USD | 154 | 12/16/15 | 1 | |
Bank of America | CAD | 260 | USD | 201 | 12/16/15 | 2 | |
Bank of America | CAD | 300 | USD | 233 | 12/16/15 | 4 | |
Bank of America | EUR | 684 | USD | 749 | 11/02/15 | (3 | ) |
Bank of America | EUR | 412 | USD | 453 | 11/03/15 | 1 | |
Bank of America | EUR | 300 | USD | 337 | 12/16/15 | 7 | |
Bank of America | EUR | 400 | USD | 456 | 12/16/15 | 16 | |
Bank of America | EUR | 700 | USD | 801 | 12/16/15 | 30 | |
Bank of America | EUR | 900 | USD | 1,025 | 12/16/15 | 35 | |
Bank of America | EUR | 1,200 | USD | 1,364 | 12/16/15 | 44 | |
Bank of America | EUR | 1,500 | USD | 1,658 | 12/16/15 | 7 | |
Bank of America | GBP | 114 | USD | 174 | 11/02/15 | (1 | ) |
Bank of America | GBP | 121 | USD | 185 | 11/02/15 | (1 | ) |
Bank of America | GBP | 100 | USD | 153 | 12/16/15 | (2 | ) |
Bank of America | GBP | 200 | USD | 312 | 12/16/15 | 3 | |
Bank of America | GBP | 300 | USD | 460 | 12/16/15 | (2 | ) |
Bank of America | GBP | 300 | USD | 464 | 12/16/15 | 2 | |
Bank of America | GBP | 31,700 | USD | 48,158 | 12/16/15 | (702 | ) |
Bank of America | HKD | 1,699 | USD | 219 | 11/02/15 | — | |
Bank of America | HKD | 1,118 | USD | 144 | 11/03/15 | — | |
Bank of America | HKD | 800 | USD | 103 | 12/16/15 | — | |
Bank of America | HKD | 1,000 | USD | 129 | 12/16/15 | — | |
Bank of America | HKD | 145,500 | USD | 18,772 | 12/16/15 | (4 | ) |
Bank of America | JPY | 10,000 | USD | 83 | 12/16/15 | 1 | |
Bank of America | JPY | 30,000 | USD | 251 | 12/16/15 | 2 | |
Bank of America | JPY | 50,000 | USD | 417 | 12/16/15 | 3 | |
Bank of America | JPY | 60,000 | USD | 505 | 12/16/15 | 8 | |
Bank of America | JPY | 60,000 | USD | 500 | 12/16/15 | 3 | |
Bank of America | JPY | 200,000 | USD | 1,669 | 12/16/15 | 10 | |
Bank of America | JPY | 380,000 | USD | 3,174 | 12/16/15 | 23 | |
Bank of America | SEK | 800 | USD | 97 | 12/16/15 | 4 | |
Bank of America | SEK | 800 | USD | 98 | 12/16/15 | 5 | |
Bank of Montreal | USD | 488 | AUD | 698 | 12/16/15 | 9 | |
Bank of Montreal | USD | 646 | CAD | 854 | 12/16/15 | 7 | |
Bank of Montreal | USD | 1,362 | EUR | 1,200 | 12/16/15 | (42 | ) |
Bank of Montreal | USD | 3,551 | EUR | 3,180 | 12/16/15 | (52 | ) |
Bank of Montreal | USD | 1,469 | GBP | 957 | 12/16/15 | 5 | |
Bank of Montreal | USD | 237 | HKD | 1,838 | 12/16/15 | — | |
Bank of Montreal | USD | 853 | JPY | 103,200 | 12/16/15 | 3 | |
Bank of Montreal | USD | 1,626 | JPY | 196,672 | 12/16/15 | 5 | |
Bank of Montreal | USD | 238 | SEK | 1,999 | 12/16/15 | (3 | ) |
Bank of Montreal | EUR | 25,809 | USD | 28,824 | 12/16/15 | 424 | |
Bank of New York | USD | 362 | AUD | 500 | 12/16/15 | (6 | ) |
Bank of New York | USD | 155 | CAD | 200 | 12/16/15 | (2 | ) |
Bank of New York | USD | 585 | JPY | 70,000 | 12/16/15 | (5 | ) |
Bank of New York | USD | 668 | JPY | 80,000 | 12/16/15 | (5 | ) |
Bank of New York | EUR | 1,500 | USD | 1,707 | 12/16/15 | 58 |
See accompanying notes which are an integral part of the financial statements.
202 Russell Global Equity Fund
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Russell Global Equity Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Bank of New York | JPY | 25,000 | USD | 210 | 12/16/15 | 2 | ||
Bank of New York | JPY | 50,000 | USD | 416 | 12/16/15 | 1 | ||
BNP Paribas | USD | 488 | AUD | 698 | 12/16/15 | 9 | ||
BNP Paribas | USD | 645 | CAD | 854 | 12/16/15 | 8 | ||
BNP Paribas | USD | 340 | EUR | 300 | 12/16/15 | (10 | ) | |
BNP Paribas | USD | 3,555 | EUR | 3,180 | 12/16/15 | (57 | ) | |
BNP Paribas | USD | 1,469 | GBP | 957 | 12/16/15 | 6 | ||
BNP Paribas | USD | 237 | HKD | 1,838 | 12/16/15 | — | ||
BNP Paribas | USD | 854 | JPY | 103,200 | 12/16/15 | 2 | ||
BNP Paribas | USD | 1,628 | JPY | 196,672 | 12/16/15 | 3 | ||
BNP Paribas | USD | 238 | SEK | 1,999 | 12/16/15 | (4 | ) | |
BNP Paribas | AUD | 60 | USD | 44 | 12/16/15 | 1 | ||
BNP Paribas | CAD | 70 | USD | 54 | 12/16/15 | 1 | ||
BNP Paribas | EUR | 300 | USD | 345 | 12/16/15 | 14 | ||
BNP Paribas | EUR | 25,809 | USD | 28,855 | 12/16/15 | 455 | ||
BNP Paribas | GBP | 100 | USD | 155 | 12/16/15 | 1 | ||
BNP Paribas | JPY | 20,000 | USD | 168 | 12/16/15 | 3 | ||
Brown Brothers Harriman | USD | 495 | AUD | 700 | 12/16/15 | 4 | ||
Brown Brothers Harriman | USD | 228 | CAD | 300 | 12/16/15 | 1 | ||
Citigroup | USD | 349 | AUD | 500 | 12/16/15 | 6 | ||
Citigroup | USD | 299 | CAD | 400 | 12/16/15 | 7 | ||
Citigroup | USD | 612 | GBP | 400 | 12/16/15 | 4 | ||
Citigroup | USD | 181 | HKD | 1,400 | 12/16/15 | — | ||
Citigroup | USD | 165 | JPY | 20,000 | 12/16/15 | 1 | ||
Citigroup | USD | 829 | JPY | 100,000 | 12/16/15 | 1 | ||
Citigroup | USD | 4,351 | JPY | 520,000 | 12/16/15 | (39 | ) | |
Citigroup | AUD | 300 | USD | 216 | 12/16/15 | 2 | ||
Citigroup | CAD | 250 | USD | 192 | 12/16/15 | — | ||
Citigroup | CAD | 300 | USD | 230 | 12/16/15 | 1 | ||
Citigroup | EUR | 400 | USD | 441 | 12/16/15 | 1 | ||
Citigroup | EUR | 1,000 | USD | 1,121 | 12/16/15 | 21 | ||
Citigroup | EUR | 1,800 | USD | 2,032 | 12/16/15 | 52 | ||
Citigroup | GBP | 300 | USD | 463 | 12/16/15 | 1 | ||
Citigroup | GBP | 500 | USD | 758 | 12/16/15 | (13 | ) | |
Citigroup | HKD | 2,000 | USD | 258 | 12/16/15 | — | ||
Citigroup | HKD | 3,500 | USD | 452 | 12/16/15 | — | ||
Deutsche Bank | USD | 341 | EUR | 300 | 12/16/15 | (11 | ) | |
HSBC | USD | 488 | AUD | 698 | 12/16/15 | 9 | ||
HSBC | USD | 645 | CAD | 854 | 12/16/15 | 7 | ||
HSBC | USD | 3,552 | EUR | 3,180 | 12/16/15 | (52 | ) | |
HSBC | USD | 1,469 | GBP | 957 | 12/16/15 | 6 | ||
HSBC | USD | 237 | HKD | 1,838 | 12/16/15 | — | ||
HSBC | USD | 854 | JPY | 103,200 | 12/16/15 | 2 | ||
HSBC | USD | 1,627 | JPY | 196,672 | 12/16/15 | 4 | ||
HSBC | USD | 238 | SEK | 1,999 | 12/16/15 | (4 | ) | |
HSBC | EUR | 25,809 | USD | 28,826 | 12/16/15 | 427 | ||
Morgan Stanley | USD | 337 | EUR | 300 | 12/16/15 | (6 | ) | |
Morgan Stanley | USD | 129 | HKD | 1,000 | 12/16/15 | — | ||
Morgan Stanley | USD | 250 | JPY | 30,000 | 12/16/15 | (2 | ) | |
Morgan Stanley | USD | 120 | SEK | 1,000 | 12/16/15 | (3 | ) | |
Northern Trust | USD | 43 | EUR | 39 | 11/02/15 | — | ||
Northern Trust | USD | 656 | JPY | 79,327 | 11/02/15 | 1 | ||
Royal Bank of Canada | USD | 144 | AUD | 200 | 12/16/15 | (1 | ) | |
Royal Bank of Canada | USD | 488 | AUD | 698 | 12/16/15 | 9 | ||
Royal Bank of Canada | USD | 153 | CAD | 200 | 12/16/15 | — | ||
Royal Bank of Canada | USD | 645 | CAD | 854 | 12/16/15 | 8 | ||
Royal Bank of Canada | USD | 788 | EUR | 700 | 12/16/15 | (18 | ) | |
Royal Bank of Canada | USD | 3,553 | EUR | 3,180 | 12/16/15 | (54 | ) | |
Royal Bank of Canada | USD | 306 | GBP | 200 | 12/16/15 | 2 | ||
Royal Bank of Canada | USD | 1,469 | GBP | 957 | 12/16/15 | 6 | ||
Royal Bank of Canada | USD | 237 | HKD | 1,838 | 12/16/15 | — | ||
Royal Bank of Canada | USD | 250 | JPY | 30,000 | 12/16/15 | (2 | ) | |
Royal Bank of Canada | USD | 854 | JPY | 103,200 | 12/16/15 | 2 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Equity Fund 203
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Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Royal Bank of Canada | USD | 1,627 | JPY | 196,672 | 12/16/15 | 4 | |
Royal Bank of Canada | USD | 238 | SEK | 1,999 | 12/16/15 | (4 | ) |
Royal Bank of Canada | EUR | 25,809 | USD | 28,837 | 12/16/15 | 438 | |
State Street | USD | 175 | AUD | 250 | 12/16/15 | 3 | |
State Street | USD | 216 | AUD | 300 | 12/16/15 | (2 | ) |
State Street | USD | 356 | AUD | 500 | 12/16/15 | — | |
State Street | USD | 224 | CAD | 300 | 12/16/15 | 5 | |
State Street | USD | 229 | CAD | 300 | 12/16/15 | — | |
State Street | USD | 382 | CAD | 500 | 12/16/15 | 1 | |
State Street | USD | 382 | CAD | 500 | 12/16/15 | — | |
State Street | USD | 28 | CHF | 27 | 11/02/15 | — | |
State Street | USD | 498 | CHF | 492 | 11/02/15 | 1 | |
State Street | USD | 11 | CHF | 11 | 11/03/15 | — | |
State Street | USD | 7,345 | CHF | 7,156 | 12/16/15 | (96 | ) |
State Street | USD | 363 | EUR | 331 | 11/02/15 | 1 | |
State Street | USD | 228 | EUR | 200 | 12/16/15 | (8 | ) |
State Street | USD | 334 | EUR | 300 | 12/16/15 | (3 | ) |
State Street | USD | 500 | EUR | 450 | 12/16/15 | (5 | ) |
State Street | USD | 896 | EUR | 800 | 12/16/15 | (15 | ) |
State Street | USD | 876 | GBP | 572 | 11/02/15 | 6 | |
State Street | USD | 454 | GBP | 300 | 12/16/15 | 8 | |
State Street | USD | 770 | GBP | 500 | 12/16/15 | 1 | |
State Street | USD | 925 | GBP | 600 | 12/16/15 | — | |
State Street | USD | 129 | HKD | 1,000 | 12/16/15 | — | |
State Street | USD | 129 | HKD | 1,000 | 12/16/15 | — | |
State Street | USD | 361 | HKD | 2,800 | 12/16/15 | — | |
State Street | USD | 418 | JPY | 50,000 | 12/16/15 | (3 | ) |
State Street | USD | 829 | JPY | 100,000 | 12/16/15 | — | |
State Street | USD | 1,165 | JPY | 140,000 | 12/16/15 | (4 | ) |
State Street | USD | 1,664 | JPY | 200,000 | 12/16/15 | (6 | ) |
State Street | USD | 1,786 | KRW | 2,031,422 | 11/02/15 | (4 | ) |
State Street | USD | 178 | SEK | 1,500 | 12/16/15 | (2 | ) |
State Street | AUD | 200 | USD | 142 | 12/16/15 | — | |
State Street | CAD | 200 | USD | 151 | 12/16/15 | (2 | ) |
State Street | CHF | 22,284 | USD | 23,058 | 12/16/15 | 480 | |
State Street | EUR | 800 | USD | 903 | 12/16/15 | 23 | |
State Street | EUR | 900 | USD | 994 | 12/16/15 | 4 | |
State Street | EUR | 1,000 | USD | 1,098 | 12/16/15 | (3 | ) |
State Street | GBP | — | USD | — | 11/02/15 | — | |
State Street | GBP | 259 | USD | 399 | 11/03/15 | 1 | |
State Street | GBP | 200 | USD | 306 | 12/16/15 | (2 | ) |
State Street | GBP | 300 | USD | 460 | 12/16/15 | (3 | ) |
State Street | GBP | 400 | USD | 612 | 12/16/15 | (4 | ) |
State Street | HKD | 356 | USD | 46 | 11/02/15 | — | |
State Street | HKD | 700 | USD | 90 | 12/16/15 | — | |
State Street | JPY | 10,000 | USD | 83 | 12/16/15 | — | |
State Street | JPY | 300,000 | USD | 2,486 | 12/16/15 | (1 | ) |
State Street | SEK | 900 | USD | 109 | 12/16/15 | 3 | |
UBS | USD | 488 | AUD | 698 | 12/16/15 | 9 | |
UBS | USD | 646 | CAD | 854 | 12/16/15 | 7 | |
UBS | USD | 3,553 | EUR | 3,180 | 12/16/15 | (54 | ) |
UBS | USD | 1,469 | GBP | 957 | 12/16/15 | 6 | |
UBS | USD | 237 | HKD | 1,838 | 12/16/15 | — | |
UBS | USD | 854 | JPY | 103,200 | 12/16/15 | 2 | |
UBS | USD | 1,627 | JPY | 196,672 | 12/16/15 | 4 | |
UBS | USD | 238 | SEK | 1,999 | 12/16/15 | (4 | ) |
UBS | EUR | 25,809 | USD | 28,840 | 12/16/15 | 440 | |
UBS | JPY | 350,000 | USD | 2,933 | 12/16/15 | 31 | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 553 |
See accompanying notes which are an integral part of the financial statements.
204 Russell Global Equity Fund
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Russell Global Equity Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Common Stocks | ||||||||||||
Australia | $ | 3,264 | $ | 9,408 | $ | — | $ | 12,672 | 0.4 | |||
Austria | — | 251 | — | 251 | —* | |||||||
Belgium | — | 14,541 | — | 14,541 | 0.5 | |||||||
Bermuda | 6,414 | 322 | 36 | 6,772 | 0.2 | |||||||
Canada | 40,850 | — | — | 40,850 | 1.4 | |||||||
Cayman Islands | 21,668 | 10,467 | — | 32,135 | 1.1 | |||||||
China | — | 2,146 | — | 2,146 | 0.1 | |||||||
Denmark | — | 1,016 | — | 1,016 | —* | |||||||
Finland | — | 19,724 | — | 19,724 | 0.7 | |||||||
France | — | 179,960 | — | 179,960 | 6.3 | |||||||
Germany | — | 124,244 | — | 124,244 | 4.4 | |||||||
Hong Kong | — | 21,865 | — | 21,865 | 0.8 | |||||||
India | 5,372 | 16,455 | — | 21,827 | 0.8 | |||||||
Ireland | 68,803 | 5,618 | — | 74,421 | 2.6 | |||||||
Israel | 7,050 | — | — | 7,050 | 0.3 | |||||||
Italy | — | 11,425 | — | 11,425 | 0.4 | |||||||
Japan | — | 115,283 | — | 115,283 | 4.1 | |||||||
Jersey | 13,177 | 14,709 | — | 27,886 | 1.0 | |||||||
Luxembourg | — | 12,060 | — | 12,060 | 0.4 | |||||||
Netherlands | 9,016 | 61,153 | — | 70,169 | 2.5 | |||||||
Netherlands Antilles | 1,892 | — | — | 1,892 | 0.1 | |||||||
New Zealand | — | 92 | — | 92 | —* | |||||||
Norway | — | 15,457 | — | 15,457 | 0.5 | |||||||
Portugal | — | 5,187 | — | 5,187 | 0.2 | |||||||
Russia | — | 2,221 | — | 2,221 | 0.1 | |||||||
Singapore | — | 7,092 | — | 7,092 | 0.3 | |||||||
South Africa | — | 5,169 | — | 5,169 | 0.2 | |||||||
South Korea | — | 63,731 | — | 63,731 | 2.2 | |||||||
Spain | — | 2,982 | — | 2,982 | 0.1 | |||||||
Sweden | — | 31,387 | — | 31,387 | 1.1 | |||||||
Switzerland | 276 | 145,411 | — | 145,687 | 5.1 | |||||||
Taiwan | 17,006 | — | — | 17,006 | 0.6 | |||||||
Thailand | — | 5,549 | — | 5,549 | 0.2 | |||||||
United Kingdom | 19,928 | 194,284 | — | 214,212 | 7.6 | |||||||
United States | 1,307,754 | — | — | 1,307,754 | 46.1 | |||||||
Virgin Islands, British | — | 8,091 | — | 8,091 | 0.3 | |||||||
Investments in Other Funds | 978 | — | — | 978 | —* | |||||||
Preferred Stocks | 3,470 | 2,768 | — | 6,238 | 0.2 | |||||||
Short-Term Investments | — | 188,725 | — | 188,725 | 6.6 | |||||||
Other Securities | — | 58,265 | — | 58,265 | 2.1 | |||||||
Total Investments | 1,526,918 | 1,357,058 | 36 | 2,884,012 | 101.6 | |||||||
Other Assets and Liabilities, Net | (1.6 | ) | ||||||||||
100.0 | ||||||||||||
Other Financial Instruments | ||||||||||||
Futures Contracts | 10,254 | — | — | 10,254 | 0.4 | |||||||
Foreign Currency Exchange Contracts | 11 | 542 | — | 553 | —* | |||||||
Total Other Financial Instruments** | $ | 10,265 | $ | 542 | $ | — | $ | 10,807 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation/depreciation on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended October
31, 2015 were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
Russell Global Equity Fund 205
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Russell Global Equity Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 4,260 | ||
Variation margin on futures contracts* | 19,708 | — | ||||
Total | $ | 19,708 | $ | 4,260 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | 9,454 | $ | — | ||
Unrealized depreciation on foreign currency exchange contracts | — | 3,707 | ||||
Total | $ | 9,454 | $ | 3,707 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Futures contracts | $ | 24,455 | $ | — | ||
Foreign currency-related transactions** | — | 16,207 | ||||
Total | $ | 24,455 | $ | 16,207 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | (9,746 | ) | $ | — | |
Foreign currency-related transactions*** | — | (5,037 | ) | |||
Total | $ | (9,746 | ) | $ | (5,037 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
*** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
206 Russell Global Equity Fund
Russell Investment Company
Russell Global Equity Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Securities on Loan* | Investments, at fair value | $ | 54,155 | $ | — $ | 54,155 | |||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 4,260 | — | 4,260 | |||||
Futures Contracts | Variation margin on futures contracts | 1,550 | — | 1,550 | |||||
Total Financial and Derivative Assets | 59,965 | — | 59,965 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (1,576) | — | (1,576 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 58,389 | $ | — $ | 58,389 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Assets | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||
Bank of America | $ | 1,166 | $ | 1,166 | $ | — $ | — | ||||
Bank of Montreal | 454 | 97 | — | 357 | |||||||
Bank of New York | 60 | 17 | — | 43 | |||||||
Barclays | 1,310 | — | 1,310 | — | |||||||
BNP Paribas | 502 | 70 | — | 432 | |||||||
Citigroup | 3,809 | 52 | 3,712 | 45 | |||||||
Credit Suisse | 12,077 | — | 12,077 | — | |||||||
Deutsche Bank | 9,621 | — | 9,621 | — | |||||||
Fidelity | 4,624 | — | 4,624 | — | |||||||
Goldman Sachs | 12,088 | — | 12,088 | — | |||||||
HSBC | 455 | 56 | — | 399 | |||||||
ING | 133 | — | 133 | — | |||||||
JPMorgan Chase | 2,922 | — | 2,922 | — | |||||||
Morgan Stanley | 2,107 | — | 2,107 | — | |||||||
Royal Bank of Canada | 468 | 78 | — | 390 | |||||||
State Street | 533 | 144 | — | 389 | |||||||
UBS | 6,060 | 58 | 5,561 | 441 | |||||||
Total | $ | 58,389 | $ | 1,738 | $ | 54,155 | $ | 2,496 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Equity Fund 207
Russell Investment Company
Russell Global Equity Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 1,555 | $ | — $ | 1,555 | |||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 3,707 | — | 3,707 | |||||
Total Financial and Derivative Liabilities | 5,262 | — | 5,262 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (1,566) | — | (1,566 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 3,696 | $ | — $ | 3,696 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Liabilities | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||
Bank of America | $ | 3,087 | $ | 1,166 | $ | — | $ 1,921 | ||
Bank of Montreal | 97 | 97 | — | — | |||||
Bank of New York | 17 | 17 | — | — | |||||
BNP Paribas | 70 | 70 | — | — | |||||
Citigroup | 52 | 52 | — | — | |||||
Deutsche Bank | 11 | — | — | 11 | |||||
HSBC | 56 | 56 | — | — | |||||
Morgan Stanley | 11 | — | — | 11 | |||||
Royal Bank of Canada | 78 | 78 | — | — | |||||
State Street | 159 | 144 | — | 15 | |||||
UBS | 58 | 58 | — | — | |||||
Total | $ | 3,696 | $ | 1,738 | $ | — | $ 1,958 |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
208 Russell Global Equity Fund
Russell Investment Company
Russell Global Equity Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 2,355,662 |
Investments, at fair value(*)(>) | 2,884,012 | |
Cash | 23 | |
Cash (restricted)(a) | 17,600 | |
Foreign currency holdings(^) | 157 | |
Unrealized appreciation on foreign currency exchange contracts | 4,260 | |
Receivables: | ||
Dividends and interest | 2,985 | |
Dividends from affiliated Russell funds | 11 | |
Investments sold | 13,073 | |
Fund shares sold | 1,636 | |
Foreign capital gains taxes recoverable | 957 | |
Variation margin on futures contracts | 1,550 | |
Total assets | 2,926,264 | |
Liabilities | ||
Payables: | ||
Investments purchased | 18,153 | |
Fund shares redeemed | 3,147 | |
Accrued fees to affiliates | 2,745 | |
Other accrued expenses | 263 | |
Variation margin on futures contracts | 1,555 | |
Unrealized depreciation on foreign currency exchange contracts | 3,707 | |
Payable upon return of securities loaned | 58,265 | |
Total liabilities | 87,835 | |
Net Assets | $ | 2,838,429 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Equity Fund 209
Russell Investment Company
Russell Global Equity Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | ||
Net Assets Consist of: | ||
Undistributed (overdistributed) net investment income | $ | 33,906 |
Accumulated net realized gain (loss) | 210,110 | |
Unrealized appreciation (depreciation) on: | ||
Investments (net of deferred tax liability for foreign capital gains taxes) | 528,350 | |
Futures contracts | 10,254 | |
Foreign currency-related transactions | 464 | |
Shares of beneficial interest | 2,477 | |
Additional paid-in capital | 2,052,868 | |
Net Assets | $ | 2,838,429 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class A(#) | $ | 11.40 |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 12.10 |
Class A — Net assets | $ | 13,589,214 |
Class A — Shares outstanding ($.01 par value) | 1,191,829 | |
Net asset value per share: Class C(#) | $ | 11.24 |
Class C — Net assets | $ | 13,356,041 |
Class C — Shares outstanding ($.01 par value) | 1,188,239 | |
Net asset value per share: Class E(#) | $ | 11.41 |
Class E — Net assets | $ | 46,407,209 |
Class E — Shares outstanding ($.01 par value) | 4,065,478 | |
Net asset value per share: Class S(#) | $ | 11.45 |
Class S — Net assets | $ 1,976,079,816 | |
Class S — Shares outstanding ($.01 par value) | 172,534,629 | |
Net asset value per share: Class Y(#) | $ | 11.48 |
Class Y — Net assets | $ | 788,996,272 |
Class Y — Shares outstanding ($.01 par value) | 68,719,622 | |
Amounts in thousands | ||
(^) Foreign currency holdings - cost | $ | 159 |
(*) Securities on loan included in investments | $ | 54,155 |
(>) Investments in affiliates, Russell U.S. Cash Management Fund and Russell U.S. Cash Collateral Fund | $ | 224,997 |
(a) Cash Collateral for Futures | $ | 17,600 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements
210 Russell Global Equity Fund
Russell Investment Company
Russell Global Equity Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 72,374 | |
Dividends from affiliated Russell funds | 98 | ||
Interest | 8 | ||
Securities lending income | 1,592 | ||
Less foreign taxes withheld | (4,044 | ) | |
Total investment income | 70,028 | ||
Expenses | |||
Advisory fees | 29,726 | ||
Administrative fees | 1,490 | ||
Custodian fees | 704 | ||
Distribution fees - Class A | 34 | ||
Distribution fees - Class C | 108 | ||
Transfer agent fees - Class A | 27 | ||
Transfer agent fees - Class C | 29 | ||
Transfer agent fees - Class E | 103 | ||
Transfer agent fees - Class S | 4,297 | ||
Transfer agent fees - Class Y | 40 | ||
Professional fees | 191 | ||
Registration fees | 128 | ||
Shareholder servicing fees - Class C | 36 | ||
Shareholder servicing fees - Class E | 128 | ||
Trustees’ fees | 80 | ||
Printing fees | 240 | ||
Miscellaneous | 75 | ||
Total expenses | 37,436 | ||
Net investment income (loss) | 32,592 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | 263,968 | ||
Futures contracts | 24,455 | ||
Foreign currency-related transactions | 15,256 | ||
Net realized gain (loss) | 303,679 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | (182,130 | ) | |
Futures contracts | (9,746 | ) | |
Foreign currency-related transactions | (4,981 | ) | |
Net change in unrealized appreciation (depreciation) | (196,857 | ) | |
Net realized and unrealized gain (loss) | 106,822 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 139,414 | |
See accompanying notes which are an integral part of the financial statements.
Russell Global Equity Fund 211
Russell Investment Company
Russell Global Equity Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 32,592 | $ | 30,091 | ||
Net realized gain (loss) | 303,679 | 148,440 | ||||
Net change in unrealized appreciation (depreciation) | (196,857 | ) | 96,354 | |||
Net increase (decrease) in net assets from operations | 139,414 | 274,885 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (162 | ) | (47 | ) | ||
Class C | (69 | ) | (—)** | |||
Class E | (636 | ) | (220 | ) | ||
Class S | (33,090 | ) | (13,352 | ) | ||
Class Y | (15,988 | ) | (8,451 | ) | ||
From net realized gain | ||||||
Class A | (648 | ) | (206 | ) | ||
Class C | (721 | ) | (258 | ) | ||
Class E | (2,643 | ) | (1,009 | ) | ||
Class S | (110,608 | ) | (37,208 | ) | ||
Class Y | (47,542 | ) | (18,439 | ) | ||
Net decrease in net assets from distributions | (212,107 | ) | (79,190 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (418,038 | ) | (93,950 | ) | ||
Total Net Increase (Decrease) in Net Assets | (490,731 | ) | 101,745 | |||
Net Assets | ||||||
Beginning of period | 3,329,160 | 3,227,415 | ||||
End of period | $ | 2,838,429 | $ | 3,329,160 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 33,906 | $ | 32,884 | ||
** Less than $500. |
See accompanying notes which are an integral part of the financial statements.
212 Russell Global Equity Fund
Russell Investment Company
Russell Global Equity Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 198 | $ | 2,299 | 247 | $ | 2,818 | ||||||
Proceeds from reinvestment of distributions | 70 | 795 | 22 | 246 | ||||||||
Payments for shares redeemed | (170 | ) | (1,956 | ) | (207 | ) | (2,390 | ) | ||||
Net increase (decrease) | 98 | 1,138 | 62 | 674 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 212 | 2,422 | 205 | 2,309 | ||||||||
Proceeds from reinvestment of distributions | 70 | 789 | 23 | 257 | ||||||||
Payments for shares redeemed | (330 | ) | (3,779 | ) | (280 | ) | (3,181 | ) | ||||
Net increase (decrease) | (48 | ) | (568 | ) | (52 | ) | (615 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 293 | 3,364 | 861 | 9,820 | ||||||||
Proceeds from reinvestment of distributions | 270 | 3,056 | 103 | 1,157 | ||||||||
Payments for shares redeemed | (1,041 | ) | (11,953 | ) | (1,496 | ) | (17,363 | ) | ||||
Net increase (decrease) | (478 | ) | (5,533 | ) | (532 | ) | (6,386 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 28,057 | 325,326 | 45,595 | 522,725 | ||||||||
Proceeds from reinvestment of distributions | 12,460 | 141,178 | 4,413 | 49,647 | ||||||||
Payments for shares redeemed | (58,451 | ) | (679,009 | ) | (46,524 | ) | (533,520 | ) | ||||
Net increase (decrease) | (17,934 | ) | (212,505 | ) | 3,484 | 38,852 | ||||||
Class Y | ||||||||||||
Proceeds from shares sold | 2,170 | 25,156 | 13,589 | 153,808 | ||||||||
Proceeds from reinvestment of distributions | 5,607 | 63,530 | 2,388 | 26,890 | ||||||||
Payments for shares redeemed | (24,516 | ) | (289,256 | ) | (26,377 | ) | (307,173 | ) | ||||
Net increase (decrease) | (16,739 | ) | (200,570 | ) | (10,400 | ) | (126,475 | ) | ||||
Total increase (decrease) | (35,101 | ) | $ | (418,038 | ) | (7,438 | ) | $ | (93,950 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Global Equity Fund 213
Russell Investment Company
Russell Global Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | |||||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||||||
Class A | ||||||||||||||||||||
October 31, 2015 | 11.72 | .09 | .32 | .41 | (.15 | ) | (.58 | ) | ||||||||||||
October 31, 2014 | 11.07 | .07 | .83 | .90 | (.05 | ) | (.20 | ) | ||||||||||||
October 31, 2013 | 8.76 | .07 | 2.31 | 2.38 | (.07 | ) | — | |||||||||||||
October 31, 2012 | 8.37 | .06 | .38 | .44 | (.05 | ) | — | |||||||||||||
October 31, 2011 | 8.41 | .04 | (.05 | ) | (.01 | ) | (.03 | ) | — | |||||||||||
Class C | ||||||||||||||||||||
October 31, 2015 | 11.55 | — (f) | .33 | .33 | (.06 | ) | (.58 | ) | ||||||||||||
October 31, 2014 | 10.96 | (.02 | ) | .81 | .79 | — (f) | (.20 | ) | ||||||||||||
October 31, 2013 | 8.66 | (.01 | ) | 2.31 | 2.30 | — | — | |||||||||||||
October 31, 2012 | 8.29 | — (f) | .37 | .37 | — | — | ||||||||||||||
October 31, 2011 | 8.37 | (.03 | ) | (.05 | ) | (.08 | ) | — | — | |||||||||||
Class E | ||||||||||||||||||||
October 31, 2015 | 11.72 | .09 | .32 | .41 | (.14 | ) | (.58 | ) | ||||||||||||
October 31, 2014 | 11.07 | .07 | .82 | .89 | (.04 | ) | (.20 | ) | ||||||||||||
October 31, 2013 | 8.76 | .07 | 2.31 | 2.38 | (.07 | ) | — | |||||||||||||
October 31, 2012 | 8.38 | .06 | .37 | .43 | (.05 | ) | — | |||||||||||||
October 31, 2011 | 8.42 | .04 | (.06 | ) | (.02 | ) | (.02 | ) | — | |||||||||||
Class S | ||||||||||||||||||||
October 31, 2015 | 11.77 | .12 | .32 | .44 | (.18 | ) | (.58 | ) | ||||||||||||
October 31, 2014 | 11.11 | .09 | .84 | .93 | (.07 | ) | (.20 | ) | ||||||||||||
October 31, 2013 | 8.79 | .09 | 2.33 | 2.42 | (.10 | ) | — | |||||||||||||
October 31, 2012 | 8.41 | .08 | .37 | .45 | (.07 | ) | — | |||||||||||||
October 31, 2011 | 8.45 | .06 | (.06 | ) | — | (.04 | ) | — | ||||||||||||
Class Y | ||||||||||||||||||||
October 31, 2015 | 11.79 | .14 | .33 | .47 | (.20 | ) | (.58 | ) | ||||||||||||
October 31, 2014 | 11.14 | .12 | .82 | .94 | (.09 | ) | (.20 | ) | ||||||||||||
October 31, 2013 | 8.81 | .11 | 2.33 | 2.44 | (.11 | ) | — | |||||||||||||
October 31, 2012 | 8.42 | .10 | .38 | .48 | (.09 | ) | — | |||||||||||||
October 31, 2011 | 8.46 | .08 | (.07 | ) | .01 | (.05 | ) | — | ||||||||||||
See accompanying notes which are an integral part of the financial statements.
214 Russell Global Equity Fund
% | % | % | |||||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||||||
(.73 | ) | 11.40 | 3.56 | 13,589 | 1.49 | 1.49 | .75 | 50 | |||||||||||
(.25 | ) | 11.72 | 8.18 | 12,819 | 1.49 | 1.49 | .59 | 39 | |||||||||||
(.07 | ) | 11.07 | 27.37 | 11,427 | 1.49 | 1.49 | .67 | 82 | |||||||||||
(.05 | ) | 8.76 | 5.32 | 9,684 | 1.48 | 1.48 | .72 | 107 | |||||||||||
(.03 | ) | 8.37 | (.18 | ) | 9,598 | 1.50 | 1.50 | .45 | 83 | ||||||||||
(.64 | ) | 11.24 | 2.87 | 13,356 | 2.24 | 2.24 | — (i) | 50 | |||||||||||
(.20 | ) | 11.55 | 7.26 | 14,286 | 2.24 | 2.24 | (.16 | ) | 39 | ||||||||||
— | 10.96 | 26.56 | 14,118 | 2.24 | 2.24 | (.08 | ) | 82 | |||||||||||
— | 8.66 | 4.46 | 11,794 | 2.23 | 2.23 | (.02 | ) | 107 | |||||||||||
— | 8.29 | (.96 | ) | 14,319 | 2.25 | 2.25 | (.31 | ) | 83 | ||||||||||
(.72 | ) | 11.41 | 3.59 | 46,407 | 1.49 | 1.49 | .75 | 50 | |||||||||||
(.24 | ) | 11.72 | 8.15 | 53,265 | 1.49 | 1.49 | .60 | 39 | |||||||||||
(.07 | ) | 11.07 | 27.41 | 56,210 | 1.49 | 1.49 | .67 | 82 | |||||||||||
(.05 | ) | 8.76 | 5.25 | 47,176 | 1.48 | 1.48 | .71 | 107 | |||||||||||
(.02 | ) | 8.38 | (.19 | ) | 47,601 | 1.50 | 1.50 | .47 | 83 | ||||||||||
(.76 | ) | 11.45 | 3.80 | 1,976,080 | 1.24 | 1.24 | .99 | 50 | |||||||||||
(.27 | ) | 11.77 | 8.48 | 2,240,991 | 1.24 | 1.24 | .83 | 39 | |||||||||||
(.10 | ) | 11.11 | 27.74 | 2,078,046 | 1.24 | 1.24 | .92 | 82 | |||||||||||
(.07 | ) | 8.79 | 5.49 | 1,538,904 | 1.23 | 1.23 | .97 | 107 | |||||||||||
(.04 | ) | 8.41 | .01 | 1,391,111 | 1.25 | 1.25 | .70 | 83 | |||||||||||
(.78 | ) | 11.48 | 4.09 | 788,997 | 1.04 | 1.04 | 1.20 | 50 | |||||||||||
(.29 | ) | 11.79 | 8.56 | 1,007,799 | 1.04 | 1.04 | 1.06 | 39 | |||||||||||
(.11 | ) | 11.14 | 28.01 | 1,067,614 | 1.04 | 1.04 | 1.13 | 82 | |||||||||||
(.09 | ) | 8.81 | 5.79 | 1,043,120 | 1.05 | 1.05 | 1.18 | 107 | |||||||||||
(.05 | ) | 8.42 | .13 | 1,215,633 | 1.07 | 1.07 | .85 | 83 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Equity Fund 215
Russell Investment Company
Russell Emerging Markets Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Emerging Markets Fund - Class A‡ | Russell Emerging Markets Fund - Class Y‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (20.94 | )% | 1 Year | (15.70 | )% | ||
5 Years | (4.21 | )%§ | 5 Years | (2.63 | )%§ | ||
10 Years | 4.77 | %§ | 10 Years | 5.80 | %§ | ||
Russell Emerging Markets Fund - Class C | Russell Emerging Markets® Index Net** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (16.70 | )% | 1 Year | (13.58 | )% | ||
5 Years | (3.79 | )%§ | 5 Years | (2.02 | )%§ | ||
10 Years | 4.61 | %§ | 10 Years | 6.37 | %§ | ||
Russell Emerging Markets Fund - Class E | Emerging Markets Linked Benchmark*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (16.12 | )% | 1 Year | (13.58 | )% | ||
5 Years | (3.07 | )%§ | 5 Years | (2.08 | )%§ | ||
10 Years | 5.39 | %§ | 10 Years | 6.09 | %§ | ||
Russell Emerging Markets Fund - Class S | |||||||
Total | |||||||
Return | |||||||
1 Year | (15.86 | )% | |||||
5 Years | (2.82 | )%§ | |||||
10 Years | 5.66 | %§ |
216 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Emerging Markets Fund (the “Fund”) employs | Brazil was negatively impacted by the falling price of oil and its |
a multi-manager approach whereby portions of the Fund are | economic ties to China. In addition, President Dilma Rouseff |
allocated to different money manager strategies. Fund assets not | faced a corruption scandal and loss of political capital. Investor |
allocated to money managers are managed by Russell Investment | confidence waned as Dilma struggled to stabilize the beleaguered |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | economy, and markets sunk lower as a result. |
may change the allocation of the Fund’s assets among money | As the largest country weight in the Fund, the sell-off in China |
managers at any time. An exemptive order from the Securities | was a significant detractor from total returns. In addition, |
and Exchange Commission (“SEC”) permits RIMCo to engage | emerging markets with ties to China sold off worldwide. While |
or terminate a money manager at any time, subject to approval | not as large as China, Brazil’s significant weight in the fund was |
by the Fund’s Board, without a shareholder vote. Pursuant to the | a further detractor from performance. For the fiscal year, Brazil’s |
terms of the exemptive order, the Fund is required to notify its | returns were especially poor given the compounded effect of both |
shareholders within 90 days of when a money manager begins | political and economic headwinds. |
providing services. As of October 31, 2015, the Fund had eight | |
money managers. | How did the investment strategies and techniques employed |
What is the Fund’s investment objective? | by the Fund and its money managers affect its benchmark- |
relative performance? | |
The Fund seeks to provide long term capital growth. | The Fund employs discretionary and non-discretionary money |
How did the Fund perform relative to its benchmark for the | managers. The Fund’s discretionary money managers select |
fiscal year ended October 31, 2015? | the individual portfolio securities for the assets assigned to |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | them. The Fund’s non-discretionary money managers provide |
Class C, Class E, Class S and Class Y Shares lost 16.11%, 16.70%, | a model portfolio to RIMCo representing their investment |
16.12%, 15.86% and 15.70%, respectively. This is compared | recommendations, based upon which RIMCo purchases and sells |
to the Fund’s benchmark, the Russell Emerging Markets® Net | securities for the Fund. Fund assets not allocated to discretionary |
Index, which lost 13.58% during the same period. The Fund’s | money managers include assets managed by RIMCo based upon |
performance includes operating expenses, whereas index returns | model portfolios provided by non-discretionary money managers, |
are unmanaged and do not include expenses of any kind. | the Fund’s liquidity reserves and assets which may be managed |
directly by RIMCo to effect the Fund’s investment strategies and/ | |
For the fiscal year ended October 31, 2015, the Morningstar® | or to actively manage the Fund’s overall exposures by investing in |
Diversified Emerging Markets, a group of funds that Morningstar | securities or other instruments that RIMCo believes will achieve |
considers to have investment strategies similar to those of the | the desired risk/return profile for the Fund. |
Fund, lost 14.62%. This result serves as a peer comparison and is | |
expressed net of operating expenses. | With respect to certain of the Fund’s money managers, Numeric |
Investors LLC (“Numeric”), which utilizes quantitative investment | |
How did the market conditions described in the Market | models, was the best performing money manager for the period |
Summary report affect the Fund’s performance? | and outperformed the Fund’s benchmark. This was driven by |
During the fiscal year, market conditions in emerging markets | positive stock selection in China and in the materials and energy |
were volatile and the asset class ended the fiscal year with losses. | sectors. In particular, the overweights to China Railway Group |
In particular, sell-offs within Brazil and China and the resulting | and Evergrande Real Estate, both in China, were beneficial to |
economic impact on other emerging markets countries had a | relative performance. |
negative impact on Fund performance. | Delaware Management Company (“Delaware”) was the worst |
China experienced as sizeable rally early in the fiscal year as | performing manager for the period and underperformed the Fund’s |
investors speculated that policy makers would increase stimulus | benchmark. This was driven by unrewarded stock selection, |
but this was punctuated by a subsequent sell-off as China’s | particularly in Brazil. The manager held overweights to stocks |
economy signaled a slowdown and the rapid rise proved to be | that lost a significant portion of their value as the Brazil market |
unsubstantiated by fundamentals. This resulted in a depressed | sold off. This included TIM Participacoes, B2W Companhia |
global commodity market, which negatively impacted many | Digital and Petrobras. Stock selection was also unrewarded in |
commodity-exporting emerging market countries such as Brazil | China, driven by the manager’s overweight to Baidu, underweight |
and Malaysia. For the fiscal year, however, China generally | to Tencent and overweight to Tsingtao Brewery Co. |
outperformed other emerging markets. | In April 2015, RIMCo implemented a positioning strategy |
designed to manage Fund-level factor exposures, including style |
Russell Emerging Markets Fund 217
Russell Investment Company
Russell Emerging Markets Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
and country, through the direct purchase of emerging markets | In January 2015, RIMCo terminated UBS Global Asset | |
stocks. Using the output from a quantitative model, the strategy | Management (Americas) Inc. as a money manager for the | |
seeks to position the portfolio to meet RIMCo’s overall preferred | Fund. In March 2015, RIMCo hired frontier markets manager | |
positioning, while optimizing the portfolio to minimize tracking | Consilium Investment Management, LLC as a non-discretionary | |
error relative to the Fund’s money manager portfolios. During | money manager. In April, RIMCo began to manage the strategy | |
the portion of fiscal year in which the positioning strategy was | described above. | |
implemented, it performed in-line with the Fund’s benchmark. The | ||
positioning strategy’s holdings in China generally underperformed | Money Managers as of October 31, | |
the Chinese market. In particular, the positioning strategy held an | 2015 | Styles |
overweight to Bank of China and China Construction, which sold | AllianceBernstein L.P. | Value |
off. However, the positioning strategy’s underweight to Brazil was | Consilium Investment Management, LLC | Market Oriented |
Delaware Management Company | Value | |
beneficial. | Genesis Asset Managers, LLP | Market Oriented |
During the period, RIMCo used index futures, swaps and | Harding Loevner LP | Market Oriented |
Numeric Investors LLC | Market Oriented | |
currency forwards to equitize the Fund’s cash in order to gain | Oaktree Capital Management, L.P. | Market Oriented |
market exposure. RIMCo maintained its equitized cash position | Westwood Management Corp | Market Oriented |
throughout the period in order to maintain the Fund’s overall | The views expressed in this report reflect those of the portfolio | |
beta exposure (beta is a measure of a portfolio’s volatility and its | managers only through the end of the period covered by | |
sensitivity to the market) at close to benchmark-neutral. Over the | the report. These views do not necessarily represent the | |
period, RIMCo’s cash equitization strategy had a negative effect on | views of RIMCo or any other person in RIMCo or any other | |
the Fund’s performance due to the negative market environment. | affiliated organization. These views are subject to change | |
Fair value pricing adjustments on the last business day of | at any time based upon market conditions or other events, | |
the period detracted from the Fund’s benchmark-relative | and RIMCo disclaims any responsibility to update the views | |
performance because the Fund’s index does not use fair value | contained herein. These views should not be relied on as | |
pricing adjustments. | investment advice and, because investment decisions for | |
a Russell Investment Company (“RIC”) Fund are based on | ||
Describe any changes to the Fund’s structure or the money | numerous factors, should not be relied on as an indication | |
manager line-up. | of investment decisions of any RIC Fund. |
* Assumes initial investment on November 1, 2005.
** The Russell Emerging Markets® Index is an index which measures the performance of the investable securities in emerging countries globally. It is constructed
to provide a comprehensive and unbiased barometer for this market segment and is completely reconstituted annually to accurately reflect the changes in the
market over time.
*** The Emerging Markets Linked Benchmark provides a means to compare the Fund’s average annual returns to a secondary benchmark that takes into account
historical changes in the Fund’s primary benchmark. The Emerging Markets Linked Benchmark represents the returns of the MSCI Emerging Markets Index
(net of tax on dividends from foreign holdings) through December 31, 2010 and the returns of the Russell Emerging Markets Index (net of tax on dividends from
foreign holdings) thereafter.
‡ The Fund first issued Class A Shares on March 1, 2007. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
‡‡ The Fund first issued Class Y Shares on September 26, 2008. The returns shown for Class Y Shares prior to that date are the returns of the Fund’s Class S
Shares. Class Y Shares will have substantially similar annual returns as the Class S Shares because the Shares of each Class are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class Y Shares do not have the same expenses as the Class S Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
218 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 822.30 | $ | 1,016.18 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 8.22 | $ | 9.10 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.79% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). | |||||
and actual expenses. You may use the information in this column, | ||||||
together with the amount you invested, to estimate the expenses | Hypothetical | |||||
Performance (5% | ||||||
that you paid over the period. Simply divide your account value by | Actual | return before | ||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Class C | Performance | expenses) | |||
= 8.6), then multiply the result by the number in the first column | Beginning Account Value | |||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
the expenses you paid on your account during this period. | October 31, 2015 | $ | 819.20 | $ | 1,012.40 | |
Expenses Paid During Period* | $ | 11.65 | $ | 12.88 | ||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | * Expenses are equal to the Fund's annualized expense ratio of 2.54% | |||||
Performance (5% return before expenses)” provides information | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
about hypothetical account values and hypothetical expenses | year period). | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | Hypothetical | |||||
actual return. The hypothetical account values and expenses | Performance (5% | |||||
Actual | return before | |||||
may not be used to estimate the actual ending account balance or | Class E | Performance | expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
to compare the ongoing costs of investing in the Fund and other | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
funds. To do so, compare this 5% hypothetical example with the | Ending Account Value | |||||
October 31, 2015 | $ | 821.90 | $ | 1,016.18 | ||
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 8.22 | $ | 9.10 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 1.79% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
Russell Emerging Markets Fund 219
Russell Investment Company
Russell Emerging Markets Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 823.40 | $ | 1,017.44 | |
Expenses Paid During Period* | $ | 7.08 | $ | 7.83 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.54% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class Y | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 824.20 | $ | 1,018.45 | |
Expenses Paid During Period* | $ | 6.16 | $ | 6.82 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.34% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
220 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Common Stocks - 91.7% | Even Construtora e Incorporadora SA | 990,000 | 1,027 | ||||||||
Argentina - 1.0% | Fibria Celulose SA - ADR(Ñ) | 253,100 | 3,422 | ||||||||
Banco Macro SA - ADR(Æ) | 117,329 | 7,243 | Gafisa SA(Æ) | 577,560 | 374 | ||||||
Cresud SACIF y A - ADR(Æ)(Ñ) | 399,439 | 5,105 | Gerdau SA | 20,287 | 21 | ||||||
Pampa Energia SA - ADR(Æ) | 170,905 | 4,139 | Gol Linhas Aereas Inteligentes SA - | ||||||||
YPF SA - ADR | 325,389 | 6,950 | ADR(Æ)(Ñ) | 552,000 | 490 | ||||||
23,437 | Grendene SA | 524,014 | 2,452 | ||||||||
Hypermarcas SA(Æ) | 715,300 | 3,246 | |||||||||
Austria - 0.1% | Itau Unibanco Holding SA - ADR | 2,015,397 | 13,805 | ||||||||
Vienna Insurance Group AG | 32,206 | 1,030 | Itausa - Investimentos Itau SA | 1 | — | ||||||
Bangladesh - 0.4% | JBS SA | 2,342,000 | 8,654 | ||||||||
Beximco Pharmaceuticals, Ltd. | 3,794,460 | 3,478 | Linx SA(Æ) | 37,300 | 454 | ||||||
BRAC Bank, Ltd. | 5,433,902 | 3,229 | Multiplus SA | 34,500 | 307 | ||||||
United Commercial Bank, Ltd. | 8,573,380 | 2,336 | Odontoprev SA | 148,200 | 380 | ||||||
9,043 | Petroleo Brasileiro SA - ADR(Æ)(Ñ) | 2,618,546 | 11,018 | ||||||||
Porto Seguro SA | 219,031 | 1,836 | |||||||||
Bermuda - 2.0% | Rumo Logistica Operadora Multimodal | ||||||||||
Brilliance China Automotive Holdings, | SA(Æ) | 398,582 | 759 | ||||||||
Ltd.(Æ) | 2,316,200 | 3,198 | Smiles SA | 10,000 | 78 | ||||||
China Foods, Ltd.(Æ) | 849,732 | 386 | Sul America SA | 234,000 | 1,149 | ||||||
China Resources Gas Group, Ltd. | 1,085,392 | 2,972 | Telefonica Brasil SA - ADR | 575,494 | 5,962 | ||||||
Credicorp, Ltd. | 67,400 | 7,628 | Tim Participacoes SA - ADR | 372,800 | 4,142 | ||||||
Haier Electronics Group Co., Ltd. | 1,683,956 | 3,250 | TOTVS SA | 44,600 | 395 | ||||||
Hanergy Thin Film Power Group, Ltd. | Tractebel Energia SA | 121,801 | 1,070 | ||||||||
(Æ) | 1,630,000 | 822 | Ultrapar Participacoes SA | 66,492 | 1,155 | ||||||
Hopson Development Holdings, Ltd.(Æ) | 840,000 | 707 | Ultrapar Participacoes SA - ADR | 10,980 | 190 | ||||||
Huabao International Holdings, Ltd. | 5,214,733 | 2,179 | Vale SA Class B - ADR(Ñ) | 1,522,379 | 5,634 | ||||||
Kerry Logistics Network, Ltd. | 384,000 | 571 | 130,742 | ||||||||
Kerry Properties, Ltd. | 407,000 | 1,204 | |||||||||
Kosmos Energy, Ltd.(Æ) | 113,362 | 773 | Canada - 0.1% | ||||||||
Luye Pharma Group, Ltd.(Æ) | 3,310,376 | 3,242 | First Quantum Minerals, Ltd.(Ñ) | 400,977 | 2,140 | ||||||
Nine Dragons Paper Holdings, Ltd. | 2,270,000 | 1,492 | Torex Gold Resources, Inc.(Æ) | 471,855 | 448 | ||||||
Skyworth Digital Holdings, Ltd.(Ñ) | 10,172,028 | 7,488 | 2,588 | ||||||||
SmarTone Telecommunications Holdings, | Cayman Islands - 8.5% | ||||||||||
Ltd. | 2,028,940 | 3,588 | 51job, Inc. - ADR(Æ)(Ñ) | 139,188 | 4,706 | ||||||
VTech Holdings, Ltd. | 201,050 | 2,437 | AAC Technologies Holdings, Inc. | 512,404 | 3,244 | ||||||
Yue Yuen Industrial Holdings, Ltd. | 1,333,000 | 4,859 | Agile Property Holdings, Ltd.(Ñ) | 3,424,000 | 1,859 | ||||||
46,796 | Alibaba Group Holding, Ltd. - ADR(Æ) | ||||||||||
Brazil - 5.6% | (Ñ) | 86,778 | 7,275 | ||||||||
Ambev SA - ADR | 2,068,500 | 10,074 | Anta Sports Products, Ltd. | 805,000 | 2,245 | ||||||
B2W Cia Digital(Æ) | 1,334,608 | 5,046 | ASM Pacific Technology, Ltd. | 1,006,614 | 7,126 | ||||||
Banco Bradesco SA - ADR(Æ) | 915,788 | 4,982 | Baidu, Inc. - ADR(Æ) | 100,446 | 18,831 | ||||||
Banco Bradesco SA(Æ) | 354,940 | 2,157 | Boer Power Holdings, Ltd.(Ñ) | 544,000 | 887 | ||||||
Banco do Brasil SA | 1,573,100 | 6,514 | China Dongxiang Group Co., Ltd. | 5,746,000 | 1,456 | ||||||
Banco Santander Brasil SA - ADR(Ñ) | 812,674 | 2,901 | China Forestry Holdings Co., Ltd.(Å)(Æ) | 871,100 | — | ||||||
BB Seguridade Participacoes SA | 439,006 | 3,028 | China High Speed Transmission | ||||||||
BM&FBovespa SA - Bolsa de Valores | Equipment Group Co., Ltd.(Æ) | 1,946,000 | 1,743 | ||||||||
Mercadorias e Futuros | 1,779,100 | 5,259 | China Huishan Dairy Holdings Co., Ltd. | ||||||||
BR Malls Participacoes SA | 696,295 | 2,022 | (Æ)(Ñ) | 3,031,000 | 1,152 | ||||||
Braskem SA - ADR(Ñ) | 227,338 | 2,535 | China Lesso Group Holdings, Ltd.(Æ) | 314,000 | 254 | ||||||
BRF SA - ADR | 385,039 | 5,903 | China Lilang, Ltd. | 610,000 | 519 | ||||||
BTG Pactual Group | 202,887 | 1,510 | China Lumena New Materials Corp.(Æ) | ||||||||
CCR SA | 148,192 | 466 | (Ñ) | 3,024,000 | 4 | ||||||
Centrais Eletricas Brasileiras SA(Æ) | 737,600 | 960 | China Mengniu Dairy Co., Ltd. | 2,494,000 | 4,823 | ||||||
Cia Brasileira de Distribuicao - ADR(Ñ) | 318,208 | 4,178 | China Metal Recycling Holdings, Ltd. | ||||||||
Cia de Saneamento Basico do Estado de | (Å)(Æ) | 335,400 | — | ||||||||
Sao Paulo | 444,140 | 1,928 | China Overseas Property Holdings, Ltd. | ||||||||
Cia de Saneamento de Minas | (Æ) | 637,346 | 109 | ||||||||
Gerais-COPASA(Æ) | 241,400 | 814 | China Resources Land, Ltd. | 1,280,000 | 3,315 | ||||||
Cielo SA | 257,580 | 2,445 | China Zhongwang Holdings, Ltd.(Ñ) | 372,800 | 164 |
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 221
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Chlitina Holding, Ltd.(Æ) | 166,000 | 1,345 | Yuzhou Properties Co., Ltd. | 872,000 | 209 | ||||||
CIFI Holdings Group Co., Ltd.(Ñ) | 17,464,000 | 3,717 | 200,121 | ||||||||
CKH Food & Health, Ltd.(Æ)(Ñ) | 317,160 | 1,034 | |||||||||
Country Garden Holdings Co., Ltd. | 6,098,000 | 2,317 | Chile - 0.5% | ||||||||
Ctrip.com International, Ltd. - ADR(Æ) | 67,600 | 6,285 | Banco Santander Chile - ADR | 257,175 | 4,884 | ||||||
ENN Energy Holdings, Ltd. | 542,100 | 3,107 | Cia Cervecerias Unidas SA - ADR | 166,592 | 1,998 | ||||||
Eurasia Drilling Co., Ltd. - GDR | 66,883 | 759 | Embotelladora Andina SA - ADR | 39,587 | 855 | ||||||
Evergrande Real Estate Group, Ltd.(Ñ) | 2,647,000 | 2,022 | Empresa Nacional de | ||||||||
Fantasia Holdings Group Co., Ltd. | 3,907,500 | 463 | Telecomunicaciones SA | 258,942 | 2,395 | ||||||
Fufeng Group, Ltd.(Ñ) | 1,360,000 | 714 | Sociedad Quimica y Minera de Chile | ||||||||
Future Land Development Holdings, Ltd. | 4,526,000 | 703 | SA - ADR | 87,600 | 1,698 | ||||||
GCL-Poly Energy Holdings, Ltd.(Æ)(Ñ) | 13,953,855 | 2,875 | 11,830 | ||||||||
Geely Automobile Holdings, Ltd. | 2,565,000 | 1,367 | |||||||||
Golden Eagle Retail Group, Ltd. | 1,055,000 | 1,357 | China - 9.6% | ||||||||
Hengan International Group Co., Ltd. | 119,000 | 1,283 | Agricultural Bank of China, Ltd. Class H | 8,039,000 | 3,280 | ||||||
JA Solar Holdings Co., Ltd. - ADR(Æ) | Air China, Ltd. Class H | 964,000 | 923 | ||||||||
(Ñ) | 66,300 | 565 | Angang Steel Co., Ltd. Class H | 1,870,000 | 775 | ||||||
JD.com, Inc. - ADR(Æ) | 274,609 | 7,585 | Anhui Conch Cement Co., Ltd. Class A | 762,103 | 2,130 | ||||||
JinkoSolar Holding Co., Ltd. - ADR(Æ) | Anhui Conch Cement Co., Ltd. Class H | 3,848,472 | 11,715 | ||||||||
(Ñ) | 10,500 | 272 | Bank of China, Ltd. Class H | 31,157,000 | 14,675 | ||||||
Ju Teng International Holdings, Ltd. | 2,911,000 | 1,589 | Bank of Chongqing Co., Ltd. Class H | 341,500 | 255 | ||||||
Kaisa Group Holdings, Ltd.(Å)(Æ)(Ñ) | 3,280,000 | 660 | Bank of Communications Co., Ltd. Class | ||||||||
Kingboard Chemical Holdings, Ltd. | 1,047,500 | 1,479 | H | 7,317,000 | 5,386 | ||||||
KWG Property Holding, Ltd. | 9,649,400 | 6,947 | BBMG Corp. Class H | 414,500 | 290 | ||||||
Lee & Man Paper Manufacturing, Ltd. | 2,107,000 | 1,310 | Beijing Capital International Airport Co., | ||||||||
Lekoil, Ltd.(Æ) | 9,541,416 | 4,076 | Ltd. Class H | 736,000 | 788 | ||||||
Logan Property Holdings Co., Ltd.(Ñ) | 880,000 | 369 | Beijing Capital Land, Ltd. Class H | 2,506,000 | 1,199 | ||||||
Longfor Properties Co., Ltd. | 1,141,552 | 1,525 | BOE Technology Group Co., Ltd. Class | ||||||||
Mindray Medical International, Ltd. | B(Æ) | 711,030 | 206 | ||||||||
- ADR | 32,807 | 787 | Central China Securities Co., Ltd. Class | ||||||||
Mongolian Mining Corp.(Æ) | 5,845,129 | 163 | H(Æ) | 169,000 | 88 | ||||||
NagaCorp, Ltd. | 5,008,248 | 3,536 | China Cinda Asset Management Co., | ||||||||
NetEase, Inc. - ADR | 20,470 | 2,959 | Ltd. Class H | 8,495,282 | 3,295 | ||||||
Pharmally International Holding Co., | China CITIC Bank Corp., Ltd. Class | ||||||||||
Ltd.(Æ) | 28,000 | 271 | H(Æ) | 5,909,000 | 3,814 | ||||||
Qunar Cayman Islands, Ltd. - ADR(Æ) | China Communications Construction Co., | ||||||||||
(Ñ) | 47,900 | 2,325 | Ltd. Class H | 923,000 | 1,264 | ||||||
Real Gold Mining, Ltd.(Å)(Æ) | 463,232 | — | China Construction Bank Corp. Class H | 44,009,172 | 31,732 | ||||||
Sands China, Ltd. | 2,231,039 | 8,008 | China Everbright Bank Co., Ltd. Class H | 7,675,000 | 3,732 | ||||||
Semiconductor Manufacturing | China Life Insurance Co., Ltd. Class H | 1,752,250 | 6,284 | ||||||||
International Corp.(Æ) | 6,783,000 | 635 | China Machinery Engineering Corp. | ||||||||
Shimao Property Holdings, Ltd. | 505,500 | 886 | Class H | 2,273,000 | 1,969 | ||||||
SINA Corp.(Æ) | 86,352 | 4,114 | China Merchants Bank Co., Ltd. Class H | 3,238,167 | 8,446 | ||||||
Sino Biopharmaceutical, Ltd. | 2,938,590 | 3,635 | China Merchants Property Development | ||||||||
Soho China, Ltd. | 1,731,000 | 885 | Co., Ltd. Class B(Æ) | 438,142 | 1,639 | ||||||
Sunac China Holdings, Ltd. | 544,000 | 332 | China Minsheng Banking Corp., Ltd. | ||||||||
TAL Education Group - ADR(Æ) | 8,900 | 342 | Class H | 460,000 | 461 | ||||||
Tencent Holdings, Ltd. | 1,050,743 | 19,719 | China Molybdenum Co., Ltd. Class H(Ñ) | 508,000 | 281 | ||||||
Tianneng Power International, Ltd.(Æ) | 2,162,000 | 1,566 | China National Building Material Co., | ||||||||
Tingyi Cayman Islands Holding Corp. | 3,828,800 | 6,542 | Ltd. Class H | 1,786,000 | 1,110 | ||||||
Trina Solar, Ltd. - ADR(Æ)(Ñ) | 563,739 | 5,744 | China Pacific Insurance Group Co., Ltd. | ||||||||
Uni-President China Holdings, Ltd. | 5,285,200 | 4,324 | Class H | 1,539,928 | 6,137 | ||||||
China Petroleum & Chemical Corp. | |||||||||||
VinaCapital Vietnam Opportunity Fund, | Class H | 5,162,550 | 3,723 | ||||||||
Ltd. | 2,025,223 | 5,228 | |||||||||
Want Want China Holdings, Ltd. | 1,266,000 | 1,051 | China Railway Construction Corp., Ltd. | ||||||||
Class H | 695,500 | 1,037 | |||||||||
WH Group, Ltd.(Æ)(Þ) | 10,121,500 | 5,583 | China Railway Group, Ltd. Class H | 6,602,000 | 6,224 | ||||||
WuXi PharmaTech Cayman, Inc. | China Shenhua Energy Co., Ltd. Class H | 2,226,752 | 3,762 | ||||||||
- ADR(Æ) | 116,911 | 5,226 | |||||||||
XTEP International Holdings, Ltd.(Æ) | 1,186,500 | 614 | China Shipping Development Co., Ltd. | ||||||||
Class H | 1,780,000 | 1,261 |
See accompanying notes which are an integral part of the financial statements.
222 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
China Southern Airlines Co., Ltd. Class | Wumart Stores, Inc. Class H(Æ) | 664,327 | 472 | ||||||||
H | 374,000 | 316 | Xinjiang Goldwind Science & | ||||||||
China Telecom Corp., Ltd. Class H | 10,176,000 | 5,320 | Technology Co., Ltd. Class H(Æ)(Ñ) | 791,600 | 1,484 | ||||||
China Vanke Co., Ltd. Class H | 383,600 | 895 | Zhejiang Expressway Co., Ltd. Class H | 1,814,000 | 2,226 | ||||||
Chongqing Changan Automobile Co., | ZTE Corp. Class H(Æ) | 150,800 | 361 | ||||||||
Ltd. Class B | 848,102 | 1,560 | 224,790 | ||||||||
Chongqing Rural Commercial Bank Co., | |||||||||||
Ltd. Class H | 10,008,000 | 6,266 | Colombia - 0.2% | ||||||||
CRRC Corp., Ltd.(Æ) | 220,000 | 280 | Almacenes Exito SA | 394,613 | 1,779 | ||||||
Dongfeng Motor Group Co., Ltd. Class H | 1,298,000 | 1,862 | Bancolombia SA | 106,756 | 867 | ||||||
Fuyao Glass Industry Group Co., Ltd. | Bancolombia SA - ADR(Ñ) | 88,350 | 3,059 | ||||||||
Class H(Æ)(Þ) | 368,800 | 783 | 5,705 | ||||||||
Great Wall Motor Co., Ltd. Class H(Å) | 681,000 | 826 | |||||||||
Gree Electric Appliances, Inc. of Zhuhai | Cyprus - 0.0% | ||||||||||
Class A | 552,200 | 1,508 | Global Ports Investments PLC - GDR(Æ) | ||||||||
Guangdong Electric Power Development | (Þ) | 32,776 | 144 | ||||||||
Co., Ltd. Class B | 2,115,736 | 1,380 | Global Ports Investments PLC - GDR(Æ) | 37,002 | 163 | ||||||
Guangshen Railway Co., Ltd. Class H | 856,000 | 444 | Qiwi PLC - ADR | 14,540 | 250 | ||||||
Guangzhou R&F Properties Co., Ltd. | 2,356,800 | 2,330 | 557 | ||||||||
Hainan Airlines Co., Ltd. Class B | 163,300 | 103 | |||||||||
Haitong Securities Co., Ltd. Class H | 381,600 | 662 | Czech Republic - 0.1% | ||||||||
Harbin Bank Co., Ltd. Class H(Þ) | 530,000 | 163 | Komercni Banka AS | 13,667 | 2,825 | ||||||
Huadian Fuxin Energy Corp., Ltd. Class | Egypt - 0.5% | ||||||||||
H | 9,591,983 | 2,941 | Commercial International Bank Egypt | ||||||||
Huadian Power International Corp., Ltd. | SAE | 663,136 | 4,360 | ||||||||
Class H | 8,582,000 | 6,270 | Eastern Tobacco | 137,085 | 3,500 | ||||||
Huaneng Power International, Inc. Class | Edita Food Industries SAE - GDR(Æ) | 112,199 | 2,125 | ||||||||
H | 314,000 | 340 | Talaat Moustafa Group | 2,491,559 | 2,107 | ||||||
Huishang Bank Corp., Ltd. Class H | 1,462,000 | 630 | 12,092 | ||||||||
Industrial & Commercial Bank of China, | |||||||||||
Ltd. Class H | 34,279,697 | 21,752 | Greece - 0.1% | ||||||||
Jiangsu Expressway Co., Ltd. Class H | 240,000 | 324 | OPAP SA | 96,383 | 852 | ||||||
Jiangsu Yanghe Brewery Joint-Stock Co., | Sarantis SA | 264,357 | 2,142 | ||||||||
Ltd. Class A | 172,764 | 1,702 | 2,994 | ||||||||
Jiangxi Copper Co., Ltd. Class H | 180,000 | 237 | |||||||||
Kweichow Moutai Co., Ltd. Class A | 72,845 | 2,459 | Hong Kong - 4.9% | ||||||||
Lao Feng Xiang Co., Ltd. Class B | 444,104 | 1,902 | AIA Group, Ltd. | 2,027,230 | 11,838 | ||||||
Metallurgical Corp. of China, Ltd. Class | BOC Hong Kong Holdings, Ltd. | 149,500 | 477 | ||||||||
H | 9,119,000 | 3,365 | BYD Electronic International Co., Ltd. | ||||||||
New China Life Insurance Co., Ltd. | (Æ) | 5,585,000 | 3,619 | ||||||||
Class H | 490,200 | 2,149 | China Everbright International, Ltd. | 3,001,978 | 4,812 | ||||||
PetroChina Co., Ltd. Class H | 550,000 | 433 | China Everbright, Ltd. | 720,000 | 1,688 | ||||||
PetroChina Co., Ltd. - ADR(Ñ) | 31,700 | 2,493 | China Jinmao Holdings Group, Ltd. | 3,260,000 | 893 | ||||||
PICC Property & Casualty Co., Ltd. | China Merchants Holdings International | ||||||||||
Class H(Æ) | 1,518,000 | 3,439 | Co., Ltd. | 1,332,433 | 4,411 | ||||||
Ping An Insurance Group Co. of China, | China Mobile, Ltd. | 1,095,532 | 13,033 | ||||||||
Ltd. Class H | 805,000 | 4,503 | China Mobile, Ltd. - ADR | 515,265 | 31,076 | ||||||
Qingling Motors Co., Ltd. Class H | 1,154,000 | 371 | China Overseas Land & Investment, Ltd. | 3,244,707 | 10,451 | ||||||
Qinhuangdao Port Co., Ltd. Class H | 736,000 | 353 | China Resources Beer Holdings Co., Ltd. | 614,480 | 1,159 | ||||||
Shanghai Baosight Software Co., Ltd. | China Unicom Hong Kong, Ltd. | 4,586,405 | 5,620 | ||||||||
Class B(Æ) | 304,200 | 1,192 | CITIC, Ltd. | 1,741,000 | 3,238 | ||||||
Shanghai Electric Group Co., Ltd. Class | CNOOC, Ltd. | 459,000 | 522 | ||||||||
H(Ñ) | 1,510,000 | 937 | CNOOC, Ltd. - ADR(Ñ) | 31,783 | 3,613 | ||||||
Shanghai Mechanical and Electrical | CT Environmental Group, Ltd.(Æ)(Ñ) | 8,123,006 | 2,875 | ||||||||
Industry Co., Ltd. Class B | 281,954 | 708 | Galaxy Entertainment Group, Ltd. | 1,224,840 | 4,168 | ||||||
Shanghai Pharmaceuticals Holding Co., | Hua Hong Semiconductor, Ltd.(Æ)(Þ) | 2,483,000 | 2,507 | ||||||||
Ltd. Class H | 1,968,600 | 4,527 | Lenovo Group, Ltd. | 4,082,795 | 3,787 | ||||||
Shenzhen Expressway Co., Ltd. Class H | 180,000 | 138 | Shenzhen Investment, Ltd. | 4,902,000 | 1,979 | ||||||
Tsingtao Brewery Co., Ltd. Class H | 864,000 | 4,121 | Shui On Land, Ltd. | 3,147,000 | 863 | ||||||
Weichai Power Co., Ltd. Class H | 214,000 | 227 | Tianjin Development Holdings, Ltd. | 766,000 | 496 | ||||||
Weiqiao Textile Co. Class H | 345,500 | 155 |
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 223
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Yuexiu Real Estate Investment Trust(ö) | 2,281,000 | 1,205 | Welspun India, Ltd. | 42,826 | 470 | |||||
114,330 | 174,785 | |||||||||
Hungary - 0.7% | Indonesia - 1.0% | |||||||||
MOL Hungarian Oil & Gas PLC | 23,139 | 1,046 | Astra International Tbk PT | 4,935,100 | 2,116 | |||||
OTP Bank PLC | 474,825 | 9,195 | Bank Rakyat Indonesia Persero Tbk PT | 13,603,300 | 10,389 | |||||
Richter Gedeon Nyrt | 360,954 | 6,021 | Bank Tabungan Pensiunan Nasional Tbk | |||||||
16,262 | PT(Å)(Æ) | 492,300 | 94 | |||||||
Media Nusantara Citra Tbk PT | 20,325,040 | 2,628 | ||||||||
India - 7.5% | Perusahaan Gas Negara Persero Tbk PT | 11,398,761 | 2,482 | |||||||
Ambuja Cements, Ltd. | 1,543,051 | 4,876 | Ramayana Lestari Sentosa Tbk PT | 5,036,892 | 231 | |||||
Axis Bank, Ltd. | 1,811,214 | 13,132 | Semen Indonesia Persero Tbk PT | 1,387,625 | 987 | |||||
Bank of Baroda | 1,482,560 | 3,614 | Steel Pipe Industry of Indonesia PT | 74,270,100 | 1,044 | |||||
Bharat Petroleum Corp., Ltd. | 238,128 | 3,168 | Tambang Batubara Bukit Asam Persero | |||||||
Bharti Airtel, Ltd. | 1,884,926 | 10,043 | Tbk PT | 1,702,000 | 902 | |||||
Bosch, Ltd. | 174 | 54 | Telekomunikasi Indonesia Persero Tbk | |||||||
Chennai Petroleum Corp., Ltd.(Æ) | 329,935 | 1,079 | PT | 3,195,200 | 632 | |||||
Dabur India, Ltd. Class A | 1,522,821 | 6,272 | Tiga Pilar Sejahtera Food Tbk | 6,199,000 | 716 | |||||
Eros International Media, Ltd.(Æ) | 89,282 | 377 | United Tractors Tbk PT | 767,757 | 1,013 | |||||
Federal Bank, Ltd.(Æ) | 1,115,670 | 924 | 23,234 | |||||||
GlaxoSmithKline Consumer Healthcare, | ||||||||||
Ltd. | 1,009 | 93 | Israel - 0.3% | |||||||
HCL Technologies, Ltd. | 260,896 | 3,477 | Israel Chemicals, Ltd. | 293,420 | 1,626 | |||||
Hero MotoCorp, Ltd. | 44,163 | 1,741 | Teva Pharmaceutical Industries, Ltd. | |||||||
Hindustan Petroleum Corp., Ltd.(Æ) | 210,731 | 2,473 | - ADR | 91,300 | 5,404 | |||||
Housing Development Finance Corp., | 7,030 | |||||||||
Ltd. | 171,000 | 3,280 | ||||||||
ICICI Bank, Ltd. - ADR | 1,084,092 | 9,345 | Jersey - 0.3% | |||||||
ICICI Bank, Ltd. | 519,820 | 2,194 | Randgold Resources, Ltd. | 42,793 | 2,869 | |||||
Indian Oil Corp., Ltd.(Æ) | 640,504 | 3,911 | West China Cement, Ltd. | 10,525,485 | 1,802 | |||||
Indraprastha Gas, Ltd.(Æ) | 25,865 | 193 | WNS Holdings, Ltd. - ADR(Æ) | 66,700 | 2,273 | |||||
Infosys, Ltd. - ADR(Ñ) | 194,053 | 3,524 | 6,944 | |||||||
Infosys, Ltd. | 187,907 | 3,261 | ||||||||
JBF Industries, Ltd. | 67,599 | 224 | Kazakhstan - 0.0% | |||||||
Jubilant Life Sciences, Ltd. | 36,701 | 229 | KazMunaiGas Exploration Production | |||||||
Kotak Mahindra Bank, Ltd. | 456,926 | 4,798 | JSC - GDR | 141,760 | 992 | |||||
Larsen & Toubro, Ltd.(Æ) | 199,602 | 4,297 | Kenya - 0.1% | |||||||
LIC Housing Finance, Ltd. | 475,905 | 3,482 | Equity Group Holdings, Ltd. | 2,660,701 | 1,095 | |||||
Lupin, Ltd. | 53,766 | 1,579 | Safaricom, Ltd.(Æ) | 3,350,800 | 471 | |||||
Mahindra & Mahindra, Ltd. | 126,242 | 2,281 | 1,566 | |||||||
Maruti Suzuki India, Ltd. | 56,040 | 3,806 | ||||||||
NTPC, Ltd. | 1,508,170 | 3,057 | Kuwait - 0.3% | |||||||
Petronet LNG, Ltd.(Æ) | 1,227,681 | 3,639 | National Bank of Kuwait SAKP | 2,056,419 | 5,564 | |||||
Piramal Enterprises, Ltd. Class A(Æ) | 160,486 | 2,294 | VIVA Kuwait Telecom Co.(Æ) | 740,777 | 2,127 | |||||
Power Finance Corp., Ltd. | 623,053 | 2,280 | 7,691 | |||||||
Power Grid Corp. of India, Ltd. | 277,644 | 546 | ||||||||
Punjab National Bank | 1,028,965 | 2,012 | Luxembourg - 0.5% | |||||||
Rajesh Exports, Ltd.(Æ) | 119,531 | 1,174 | Kernel Holding SA | 334,203 | 4,510 | |||||
Reliance Capital, Ltd.(Æ) | 164,851 | 1,061 | MHP SA - GDR | 350,797 | 3,192 | |||||
Reliance Industries, Ltd. | 979,656 | 14,174 | O'Key Group SA - GDR(Æ) | 15,666 | 33 | |||||
Reliance Industries, Ltd. - GDR(Þ) | 459,343 | 13,183 | Tenaris SA - ADR(Ñ) | 146,300 | 3,697 | |||||
State Bank of India | 421,210 | 1,522 | Ternium SA - ADR | 56,735 | 815 | |||||
Sun Pharmaceutical Industries, Ltd.(Æ) | 480,252 | 6,521 | 12,247 | |||||||
Syndicate Bank | 560,453 | 802 | ||||||||
Tata Chemicals, Ltd. | 316,601 | 1,976 | Malaysia - 0.8% | |||||||
Tata Communications, Ltd.(Æ) | 65,019 | 426 | 7-Eleven Malaysia Holdings BHD | 911,500 | 301 | |||||
Tata Consultancy Services, Ltd. | 254,695 | 9,712 | Axiata Group BHD | 231,500 | 333 | |||||
Tata Motors, Ltd. Class A(Æ) | 769,425 | 3,050 | Batu Kawan BHD | 9,100 | 37 | |||||
Tata Motors, Ltd.(Æ) | 413,032 | 2,420 | British American Tobacco Malaysia BHD | 167,143 | 2,402 | |||||
UltraTech Cement, Ltd. | 128,176 | 5,651 | Cahya Mata Sarawak BHD | 945,500 | 1,169 | |||||
Union Bank of India | 456,270 | 1,088 | CIMB Group Holdings BHD | 846,065 | 905 |
See accompanying notes which are an integral part of the financial statements.
224 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Evergreen Fibreboard BHD(Æ) | 871,400 | 448 | Netherlands - 0.4% | |||||||
Hong Leong Bank BHD | 305,700 | 990 | OCI NV(Æ) | 45,784 | 1,291 | |||||
Hong Leong Financial Group BHD | 56,700 | 186 | X5 Retail Group NV - GDR(Æ) | 230,928 | 4,780 | |||||
IHH Healthcare BHD | 323,600 | 475 | Yandex NV Class A(Æ) | 141,000 | 2,270 | |||||
IJM Corp. BHD | 3,022,010 | 2,334 | 8,341 | |||||||
KLCCP Stapled Group | 107,000 | 175 | ||||||||
Lafarge Malaysia BHD | 159,041 | 337 | Nigeria - 0.6% | |||||||
Malayan Banking BHD | 57,800 | 111 | Access Bank PLC | 94,465,707 | 2,187 | |||||
Maxis BHD | 109,500 | 168 | Dangote Cement PLC | 5,198,286 | 4,257 | |||||
MISC BHD | 241,900 | 508 | FCMB Group PLC(Å) | 15,631,592 | 153 | |||||
Nestle Malaysia BHD | 13,300 | 224 | Guaranty Trust Bank PLC | 32,140,479 | 3,718 | |||||
Petronas Dagangan BHD | 305,074 | 1,596 | Guaranty Trust Bank PLC - GDR(Å) | 129,606 | 745 | |||||
Petronas Gas BHD | 25,000 | 133 | Guaranty Trust Bank PLC - GDR(Þ) | 105,919 | 609 | |||||
Public Bank BHD | 37,700 | 158 | Nestle Nigeria PLC | 164,473 | 682 | |||||
Steppe Cement, Ltd.(Æ) | 1,110,093 | 291 | Nigerian Breweries PLC | 2,548,587 | 1,754 | |||||
Telekom Malaysia BHD | 114,600 | 178 | United Bank for Africa PLC Class A | 10,763,242 | 188 | |||||
Tenaga Nasional BHD | 238,200 | 700 | 14,293 | |||||||
Top Glove Corp. BHD | 466,200 | 1,028 | ||||||||
UEM Sunrise BHD | 4,329,500 | 1,256 | Pakistan - 0.7% | |||||||
VS Industry BHD | 2,539,900 | 915 | Allied Bank, Ltd. | 1,785,418 | 1,704 | |||||
Westports Holdings BHD | 480,546 | 479 | Dawood Hercules Corp., Ltd. | 2,023,500 | 2,494 | |||||
17,837 | Engro Corp., Ltd. | 803,600 | 2,324 | |||||||
Lucky Cement, Ltd.(Æ) | 766,254 | 3,884 | ||||||||
Mexico - 3.5% | Nishat Mills, Ltd.(Æ) | 3,306,899 | 3,220 | |||||||
America Movil SAB de CV Class L | United Bank, Ltd.(Å) | 1,948,817 | 3,028 | |||||||
- ADR | 312,595 | 5,567 | 16,654 | |||||||
Cemex SAB de CV - ADR(Æ) | 1,322,170 | 8,343 | ||||||||
Controladora Vuela Cia de Aviacion SAB | Panama - 0.1% | |||||||||
de CV Class A(Æ) | 364,026 | 621 | Copa Holdings SA Class A(Ñ) | 25,560 | 1,291 | |||||
Controladora Vuela Cia de Aviacion SAB | Philippines - 0.4% | |||||||||
de CV - ADR(Æ) | 99,133 | 1,684 | Aboitiz Power Corp. | 614,400 | 550 | |||||
Corp. Moctezuma SAB de CV(Å) | 261,063 | 855 | Ayala Land, Inc. | 3,457,425 | 2,639 | |||||
El Puerto de Liverpool SAB de CV | 106,708 | 1,482 | Bank of the Philippine Islands | 380,589 | 687 | |||||
Empresas ICA SAB de CV - ADR(Æ)(Ñ) | 205,700 | 317 | BDO Unibank, Inc. | 4,920 | 11 | |||||
Fomento Economico Mexicano SAB de | International Container Terminal | |||||||||
CV - ADR | 63,200 | 6,263 | Services, Inc. | 27,600 | 48 | |||||
Genomma Lab Internacional SAB de CV | Manila Electric Co. | 33,810 | 234 | |||||||
Class B(Æ) | 3,249,319 | 2,386 | Metro Pacific Investments Corp. | 26,154,999 | 2,909 | |||||
Gentera SAB de CV(Æ) | 73,400 | 135 | Metropolitan Bank & Trust Co. - ADR | 152,270 | 276 | |||||
Gruma SAB de CV Class B | 326,825 | 5,044 | Security Bank Corp. | 294,890 | 893 | |||||
Grupo Aeroportuario del Sureste SAB de | SM Investments Corp. | 15,310 | 285 | |||||||
CV - ADR | 37,100 | 5,741 | Universal Robina Corp. | 242,150 | 1,033 | |||||
Grupo Financiero Banorte SAB de CV | 9,565 | |||||||||
Class O | 3,265,982 | 17,588 | ||||||||
Grupo Financiero Inbursa SAB de CV | Poland - 0.4% | |||||||||
Class O | 596,054 | 1,198 | Alior Bank SA(Æ) | 44,656 | 938 | |||||
Grupo Lala SAB de CV Class B(Æ) | 593,640 | 1,517 | Asseco Poland SA | 57,391 | 846 | |||||
Grupo Mexico SAB de CV | 1,631,432 | 3,974 | Bank Pekao SA | 81,144 | 3,150 | |||||
Grupo Televisa SAB - ADR | 423,829 | 12,350 | KGHM Polska Miedz SA | 25,210 | 585 | |||||
Kimberly-Clark de Mexico SAB de CV | Polski Koncern Naftowy Orlen SA(Ñ) | 215,342 | 3,488 | |||||||
Class A | 1,267,475 | 3,059 | Polskie Gornictwo Naftowe i | |||||||
Megacable Holdings SAB de CV | 387,403 | 1,476 | Gazownictwo SA | 645,083 | 1,144 | |||||
Wal-Mart de Mexico SAB de CV(Æ) | 1,125,173 | 2,969 | 10,151 | |||||||
82,569 | ||||||||||
Qatar - 0.3% | ||||||||||
Morocco - 0.1% | Al Meera Consumer Goods Co. QSC | 54,399 | 3,502 | |||||||
Attijariwafa Bank | 8,449 | 280 | Industries Qatar QSC | 83,368 | 2,817 | |||||
Maroc Telecom - ADR | 44,797 | 501 | 6,319 | |||||||
Residences Dar Saada | 72,341 | 1,029 | ||||||||
1,810 | Romania - 0.3% | |||||||||
Banca Transilvania(Æ) | 6,199,744 | 3,894 |
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 225
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Fondul Proprietatea SA/Fund(Æ) | 16,605,696 | 3,373 | Remgro, Ltd. | 154,084 | 3,080 | ||||||
7,267 | Resilient Property Income Fund, Ltd. | ||||||||||
(Æ)(ö) | 70,495 | 619 | |||||||||
Russia - 4.4% | Reunert, Ltd. | 519,223 | 2,531 | ||||||||
Alrosa PAO | 2,511,426 | 2,026 | RMB Holdings, Ltd. | 700,385 | 3,411 | ||||||
Federal Grid Co. Unified Energy System | Sasol, Ltd. - ADR | 258,383 | 8,245 | ||||||||
PJSC | 583,180,000 | 567 | Standard Bank Group, Ltd. | 730,775 | 7,588 | ||||||
Gazprom PAO - ADR | 3,030,001 | 12,726 | Steinhoff International Holdings, Ltd. | 129,436 | 792 | ||||||
LSR Group PJSC - GDR | 188,217 | 423 | Truworths International, Ltd.(Æ) | 246,248 | 1,664 | ||||||
LSR Group PJSC | 6,272 | 61 | Vodacom Group, Ltd. - ADR | 199,873 | 2,161 | ||||||
Lukoil PJSC - ADR | 454,201 | 16,465 | Woolworths Holdings, Ltd. | 343,932 | 2,545 | ||||||
Lukoil PJSC - ADR(Æ) | 137,970 | 4,993 | 94,937 | ||||||||
Magnit PJSC - GDR | 125,150 | 5,684 | |||||||||
Magnitogorsk Iron & Steel Works OJSC | 9,976,400 | 3,760 | South Korea - 12.9% | ||||||||
MMC Norilsk Nickel PJSC(Æ) | 74,610 | 1,112 | Asia Paper Manufacturing Co., Ltd. | 5,070 | 87 | ||||||
Mobile TeleSystems PJSC - ADR | 387,600 | 2,725 | BGF retail Co., Ltd.(Ñ) | 16,463 | 2,445 | ||||||
Moscow Exchange MICEX-RTS PJSC | 469,000 | 661 | BNK Financial Group, Inc. | 194,140 | 2,375 | ||||||
Novatek OAO - GDR | 60,931 | 5,573 | Coway Co., Ltd. | 29,627 | 2,202 | ||||||
Novolipetsk Steel OJSC | 351,600 | 431 | Crown Confectionery Co., Ltd.(Ñ) | 1,825 | 936 | ||||||
Novolipetsk Steel OJSC - GDR | 475,261 | 5,837 | Daelim Industrial Co., Ltd. | 65,182 | 4,245 | ||||||
PhosAgro OAO - GDR | 252,867 | 3,412 | Daishin Securities Co., Ltd. | 6,615 | 60 | ||||||
Raspadskaya OAO(Æ) | 297,534 | 176 | Daou Technology, Inc. | 57,882 | 1,253 | ||||||
Rosneft OAO - GDR | 509,444 | 2,038 | DGB Financial Group, Inc. | 461,017 | 4,272 | ||||||
Sberbank PAO | 4,022,058 | 5,673 | Dongbu Insurance Co., Ltd. | 43,543 | 2,612 | ||||||
Sberbank PAO - ADR | 1,901,918 | 11,622 | Dongwon Development Co., Ltd. | 2,052 | 77 | ||||||
Severstal PAO - GDR | 473,792 | 5,566 | e-LITECOM Co., Ltd. | 5,277 | 92 | ||||||
Sistema JSFC - GDR(Æ) | 31,200 | 216 | E-MART, Inc. | 5,192 | 966 | ||||||
Surgutneftegas OAO - ADR | 232,766 | 1,270 | GS Holdings Corp. | 4,996 | 219 | ||||||
Tatneft PAO - ADR | 293,142 | 9,058 | GS Retail Co., Ltd. | 38,037 | 1,910 | ||||||
Uralkali PJSC - GDR(Æ) | 92,191 | 1,108 | Hana Financial Group, Inc. | 21,992 | 534 | ||||||
103,183 | Hankook Tire Co., Ltd. | 277,487 | 10,605 | ||||||||
Hanon Systems | 83,496 | 3,282 | |||||||||
Singapore - 0.1% | Hanwha General Insurance Co., Ltd.(Æ) | 16,463 | 108 | ||||||||
Yangzijiang Shipbuilding Holdings, Ltd. | 1,650,100 | 1,466 | Hotel Shilla Co., Ltd.(Ñ) | 56,137 | 5,387 | ||||||
HwaSung Industrial Co., Ltd. | 36,579 | 548 | |||||||||
South Africa - 4.0% | Hyosung Corp. | 20,645 | 2,103 | ||||||||
African Bank Investments, Ltd.(Æ) | 887,049 | — | Hyundai Development Co.-Engineering | ||||||||
Anglo American Platinum, Ltd.(Æ) | 22,395 | 392 | & Construction | 27,624 | 1,107 | ||||||
AngloGold Ashanti, Ltd. - ADR(Æ) | 394,945 | 3,333 | Hyundai Engineering & Construction | ||||||||
Aspen Pharmacare Holdings, Ltd.(Æ) | 305,137 | 6,843 | Co., Ltd. | 71,891 | 2,165 | ||||||
Astral Foods, Ltd. | 26,492 | 333 | Hyundai Marine & Fire Insurance Co., | ||||||||
AVI, Ltd. | 447,297 | 2,847 | Ltd. | 79,737 | 2,373 | ||||||
Barclays Africa Group, Ltd. - ADR | 14,529 | 186 | Hyundai Motor Co. | 60,436 | 8,258 | ||||||
Bidvest Group, Ltd. (The) | 414,028 | 10,578 | Hyundai Securities Co., Ltd. | 174,783 | 1,052 | ||||||
Capevin Holdings, Ltd. | 189,486 | 137 | JB Financial Group Co., Ltd. | 168,797 | 877 | ||||||
Capitec Bank Holdings, Ltd. | 13,985 | 603 | Kangwon Land, Inc. | 35,554 | 1,318 | ||||||
DataTec, Ltd.(Æ) | 199,553 | 854 | KB Financial Group, Inc. | 487,044 | 15,427 | ||||||
Discovery Holdings, Ltd. | 787,708 | 8,412 | KB Financial Group, Inc. - ADR | 156,600 | 4,938 | ||||||
Distell Group, Ltd. | 2,714 | 35 | KB Insurance Co., Ltd.(Æ) | 22,026 | 513 | ||||||
FirstRand, Ltd. | 514,437 | 1,885 | KC Tech Co., Ltd. | 78,735 | 658 | ||||||
Foschini Group, Ltd. (The) | 197,232 | 2,013 | KCC Corp. | 13,919 | 4,961 | ||||||
Growthpoint Properties, Ltd.(ö) | 95,593 | 175 | Kia Motors Corp. | 123,241 | 6,014 | ||||||
Investec, Ltd. | 117,910 | 973 | Korea Electric Power Corp. - ADR(Ñ) | 148,700 | 3,331 | ||||||
JSE, Ltd.(Æ) | 36,033 | 347 | Korea Electric Power Corp. | 12,594 | 567 | ||||||
Liberty Holdings, Ltd. | 55,866 | 546 | Korea Investment Holdings Co., Ltd. | 16,130 | 858 | ||||||
Massmart Holdings, Ltd. | 290,973 | 2,405 | Korea Kolmar Co., Ltd.(Ñ) | 38,349 | 3,000 | ||||||
Naspers, Ltd. Class N(Æ) | 120,960 | 17,669 | Korea PetroChemical Industries Co., | ||||||||
Nedbank Group, Ltd.(Æ) | 21,343 | 354 | Ltd.(Ñ) | 12,748 | 1,960 | ||||||
Netcare, Ltd. Class H | 29,886 | 85 | KT Corp.(Æ) | 38,439 | 995 | ||||||
Pick n Pay Holdings, Ltd. | 38,790 | 80 | KT&G Corp. | 8,618 | 861 | ||||||
Pick n Pay Stores, Ltd. | 251,958 | 1,216 | LG Chem, Ltd. | 20,460 | 5,423 |
See accompanying notes which are an integral part of the financial statements.
226 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
LG International Corp. | 55,284 | 1,684 | China Steel Corp. Class H | 1,444,000 | 872 | ||||||
LG Uplus Corp. | 300,954 | 2,880 | Chunghwa Telecom Co., Ltd. | 1,861,000 | 5,703 | ||||||
Lotte Chemical Corp. | 45,224 | 9,438 | Compeq Manufacturing Co., Ltd. | 2,778,000 | 1,820 | ||||||
Lotte Chilsung Beverage Co., Ltd. | 3,510 | 6,867 | CTBC Financial Holding Co., Ltd. | 2,615,867 | 1,431 | ||||||
Lotte Confectionery Co., Ltd. | 2,343 | 4,081 | Delta Electronics, Inc. | 1,039,214 | 5,268 | ||||||
Lotte Shopping Co., Ltd. | 8,111 | 1,641 | E.Sun Financial Holding Co., Ltd. | 4,284,357 | 2,571 | ||||||
Macquarie Korea Infrastructure Fund | 254,956 | 1,787 | Eclat Textile Co., Ltd. | 55,000 | 809 | ||||||
Meritz Securities Co., Ltd. | 135,190 | 600 | Far Eastern New Century Corp. | 1,485,340 | 1,348 | ||||||
NAVER Corp. | 4,149 | 2,176 | Far EasTone Telecommunications Co., | ||||||||
OCI Materials Co., Ltd. | 4,503 | 365 | Ltd. | 530,000 | 1,148 | ||||||
Osstem Implant Co., Ltd.(Æ) | 2,418 | 141 | Feng TAY Enterprise Co., Ltd. | 74,160 | 421 | ||||||
S&T Motiv Co., Ltd. | 1,233 | 78 | First Financial Holding Co., Ltd. | 2,572,415 | 1,245 | ||||||
Samsung Electro-Mechanics Co., Ltd. | 9,950 | 566 | Formosa Petrochemical Corp. | 895,000 | 2,170 | ||||||
Samsung Electronics Co., Ltd. | 66,609 | 79,791 | Foxconn Technology Co., Ltd. | 628,770 | 1,640 | ||||||
Samsung Electronics Co., Ltd. - GDR(Þ) | 10,112 | 6,052 | Fubon Financial Holding Co., Ltd. | 1,146,000 | 1,845 | ||||||
Samsung Electronics Co., Ltd. - GDR | 12,998 | 7,378 | Giant Manufacturing Co., Ltd. | 309,461 | 2,327 | ||||||
Samsung Fire & Marine Insurance Co., | Global Mixed Mode Technology, Inc. | 1,073,274 | 1,973 | ||||||||
Ltd. | 35,042 | 9,809 | Highwealth Construction Corp.(Æ) | 419,700 | 617 | ||||||
Samsung Life Insurance Co., Ltd. | 105,603 | 10,079 | Hiwin Technologies Corp. | 435,201 | 2,416 | ||||||
Samsung SDI Co., Ltd.(Æ) | 5,137 | 477 | Hon Hai Precision Industry Co., Ltd.(Æ) | 7,427,821 | 19,695 | ||||||
Shinhan Financial Group Co., Ltd. | 469,963 | 17,888 | Hua Nan Financial Holdings Co., Ltd. | 1,982,102 | 952 | ||||||
Shinsegae Co., Ltd. | 11,552 | 2,344 | Huaku Development Co., Ltd. | 348,000 | 658 | ||||||
Shinsegae Engineering & Construction | Innolux Corp. | 5,209,000 | 1,743 | ||||||||
Co., Ltd.(Æ)(Ñ) | 22,003 | 951 | Inventec Corp. | 1,053,000 | 602 | ||||||
Silicon Works Co., Ltd. | 17,871 | 530 | Kinsus Interconnect Technology Corp. | 1,434,000 | 2,926 | ||||||
SK Hynix, Inc. | 142,317 | 3,802 | Largan Precision Co., Ltd. | 177,252 | 13,690 | ||||||
SK Telecom Co., Ltd. - ADR | 460,700 | 10,854 | Lite-On Technology Corp. | 1,645,414 | 1,706 | ||||||
SK Telecom Co., Ltd. | 19,018 | 4,030 | MediaTek, Inc. | 1,049,422 | 8,146 | ||||||
Tongyang Life Insurance Co., Ltd. | 67,219 | 822 | Mega Financial Holding Co., Ltd. | 5,630,677 | 4,083 | ||||||
Ubiquoss, Inc. | 39,647 | 500 | Mercuries Life Insurance Co., Ltd.(Æ) | 1,624,000 | 989 | ||||||
UniTest, Inc.(Ñ) | 67,708 | 495 | Nan Ya Plastics Corp. | 69,000 | 137 | ||||||
Woori Bank | 242,813 | 2,106 | Novatek Microelectronics Corp. | 681,000 | 2,302 | ||||||
303,186 | Pegatron Corp. | 1,923,000 | 4,679 | ||||||||
Pou Chen Corp. Class B | 1,937,000 | 2,724 | |||||||||
Spain - 0.0% | Powertech Technology, Inc.(Æ) | 118,000 | 262 | ||||||||
Cemex Latam Holdings SA(Æ) | 277,562 | 966 | Radiant Opto-Electronics Corp.(Æ) | 633,000 | 1,944 | ||||||
Shin Kong Financial Holding Co., Ltd. | 12,317,059 | 2,940 | |||||||||
Sri Lanka - 0.2% | Shin Zu Shing Co., Ltd. | 363,000 | 1,166 | ||||||||
Distilleries Co. of Sri Lanka PLC(Æ) | 1,869,944 | 3,645 | Siliconware Precision Industries Co., | ||||||||
Switzerland - 0.5% | Ltd. | 437,000 | 578 | ||||||||
Coca-Cola HBC AG - ADR(Æ) | 251,538 | 5,993 | SinoPac Financial Holdings Co., Ltd. | 3,989,243 | 1,312 | ||||||
Dufry AG(Æ) | 51,478 | 6,014 | Sitronix Technology Corp.(Æ) | 43,000 | 120 | ||||||
12,007 | Synnex Technology International Corp. | 395,000 | 415 | ||||||||
Taishin Financial Holding Co., Ltd. | 2,929,000 | 1,143 | |||||||||
Taiwan - 9.2% | Taiwan Cement Corp. | 493,000 | 547 | ||||||||
Advanced Semiconductor Engineering, | Taiwan Cooperative Financial Holding | ||||||||||
Inc. | 6,658,459 | 7,715 | Co., Ltd. | 3,278,800 | 1,465 | ||||||
Advantech Co., Ltd. | 402,815 | 2,882 | Taiwan Fertilizer Co., Ltd. Class H | 275,000 | 350 | ||||||
Airtac International Group | 185,850 | 961 | Taiwan Mobile Co., Ltd. | 292,000 | 919 | ||||||
Asia Cement Corp.(Æ) | 1,341,000 | 1,388 | Taiwan Paiho, Ltd.(Æ) | 97,000 | 231 | ||||||
Asustek Computer, Inc. | 94,000 | 839 | Taiwan PCB Techvest Co., Ltd. | 483,000 | 535 | ||||||
AU Optronics Corp. | 4,538,000 | 1,326 | Taiwan Semiconductor Manufacturing | ||||||||
Catcher Technology Co., Ltd. | 867,000 | 8,454 | Co., Ltd. | 8,654,133 | 36,577 | ||||||
Cathay Financial Holding Co., Ltd. | 550,000 | 781 | Taiwan Semiconductor Manufacturing | ||||||||
Chang Hwa Commercial Bank, Ltd. | 1,407,500 | 729 | Co., Ltd. - ADR | 1,202,860 | 26,415 | ||||||
Chang Type Industrial Co., Ltd.(Æ) | 55,000 | 105 | Tripod Technology Corp. | 1,558,780 | 2,401 | ||||||
Chen Full International Co., Ltd.(Æ) | 830,000 | 1,318 | Uni-President Enterprises Corp. | 799,000 | 1,348 | ||||||
Cheng Shin Rubber Industry Co., Ltd. | 335,000 | 606 | United Microelectronics Corp. | 3,344,000 | 1,218 | ||||||
China Development Financial Holding | Yi Jinn Industrial Co., Ltd.(Æ) | 286,000 | 120 | ||||||||
Corp. | 7,107,000 | 1,905 | Yuanta Financial Holding Co., Ltd. | 12,262,667 | 4,801 |
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 227
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Yulon Motor Co., Ltd. | 445,000 | 471 | Torunlar Gayrimenkul Yatirim Ortakligi | ||||||||
216,943 | AS(ö) | 226,524 | 257 | ||||||||
Tupras Turkiye Petrol Rafinerileri AS(Æ) | 198,186 | 5,233 | |||||||||
Thailand - 2.7% | Turk Hava Yollari AO(Æ) | 904,258 | 2,669 | ||||||||
Airports of Thailand PCL | 667,747 | 5,581 | Turkcell Iletisim Hizmetleri AS | 609,150 | 2,423 | ||||||
Bangkok Bank PCL | 1,021,200 | 4,799 | Turkcell Iletisim Hizmetleri AS | ||||||||
Bangkok Expressway PCL | 183,500 | 186 | - ADR(Ñ) | 134,691 | 1,335 | ||||||
BEC World PCL | 1,693,697 | 1,496 | Turkiye Garanti Bankasi AS | 2,420,650 | 6,282 | ||||||
Big C Supercenter PCL | 404,000 | 2,270 | Turkiye Halk Bankasi AS | 1,145,962 | 4,301 | ||||||
Central Pattana PCL | 5,118,172 | 6,613 | Ulker Biskuvi Sanayi AS | 140,361 | 948 | ||||||
Delta Electronics Thailand PCL | 547,400 | 1,296 | Yapi ve Kredi Bankasi AS | 1,052,185 | 1,281 | ||||||
Jasmine International PCL | 21,556,762 | 3,423 | 58,480 | ||||||||
Kasikornbank PCL | 1,318,433 | 6,379 | |||||||||
Krung Thai Bank PCL | 377,600 | 181 | United Arab Emirates - 0.2% | ||||||||
Krungthai Card PCL - ADR | 348,000 | 973 | Abu Dhabi Commercial Bank PJSC | 419,307 | 856 | ||||||
Pruksa Real Estate PCL | 2,871,919 | 2,256 | Air Arabia PJSC | 2,388,160 | 877 | ||||||
PTT Exploration & Production PCL(Æ) | 1,186,701 | 2,422 | DAMAC Properties Dubai Co. PJSC(Æ) | 1,433,616 | 1,158 | ||||||
PTT Global Chemical PCL | 1,574,300 | 2,457 | DP World, Ltd.(Æ) | 64,100 | 1,295 | ||||||
PTT PCL | 338,500 | 2,606 | Dubai Islamic Bank PJSC | 216,322 | 381 | ||||||
Robinson Department Store PCL | 623,100 | 690 | Orascom Construction, Ltd. | 26,323 | 263 | ||||||
Siam Cement PCL (The) | 237,750 | 3,028 | 4,830 | ||||||||
Siam Commercial Bank PCL (The) | 960,601 | 3,592 | |||||||||
Thai Beverage PCL | 7,992,790 | 3,838 | United Kingdom - 2.1% | ||||||||
Thai Union Group PCL Class F(Æ) | 5,796,870 | 2,875 | Anglo American PLC | 776,747 | 6,503 | ||||||
Tipco Asphalt PCL | 2,636,700 | 3,143 | Anglo American PLC - ADR | 123,400 | 517 | ||||||
Tisco Financial Group PCL | 2,095,249 | 2,176 | Bank of Georgia Holdings PLC | 370,742 | 11,420 | ||||||
Tisco Financial Group PCL(Æ) | 142,954 | 152 | Cable & Wireless Communications PLC | 2,204,877 | 2,495 | ||||||
TMB Bank PCL | 18,428,805 | 1,374 | Hikma Pharmaceuticals PLC | 176,503 | 5,881 | ||||||
63,806 | Nostrum Oil & Gas PLC(Ñ) | 315,198 | 2,089 | ||||||||
SABMiller PLC - ADR | 294,815 | 18,082 | |||||||||
Togo - 0.1% | Tullow Oil PLC(Æ) | 823,134 | 2,562 | ||||||||
Ecobank Transnational, Inc.(Æ) | 26,351,004 | 2,470 | 49,549 | ||||||||
Tunisia - 0.0% | United States - 0.7% | ||||||||||
Societe Frigorifique et Brasserie de Tunis | 60,902 | 678 | Cognizant Technology Solutions Corp. | ||||||||
Class A(Æ) | 63,055 | 4,295 | |||||||||
Turkey - 2.5% | First Cash Financial Services, Inc.(Æ) | 24,543 | 936 | ||||||||
Akbank TAS | 1,437,626 | 3,692 | Maginet Corp.(Æ) | 34,700 | 1,580 | ||||||
Akfen Holding AS | 138,748 | 390 | Sohu.com, Inc.(Æ) | 95,100 | 4,804 | ||||||
Anadolu Efes Biracilik Ve Malt Sanayii | X5 Retail Group NV - GDR(Æ) | 200,106 | 4,140 | ||||||||
AS | 284,441 | 2,243 | 15,755 | ||||||||
Arcelik AS | 1,018,711 | 5,554 | |||||||||
BIM Birlesik Magazalar AS(Æ) | 10,659 | 217 | Vietnam - 0.1% | ||||||||
Coca-Cola Icecek AS | 21,879 | 277 | Hoa Phat Group JSC | 715,750 | 1,007 | ||||||
Emlak Konut Gayrimenkul Yatirim | PetroVietnam Drilling and Well Services | ||||||||||
Ortakligi AS(ö) | 5,280,214 | 5,124 | JSC - ADR | 1,159,180 | 1,904 | ||||||
Enka Insaat ve Sanayi AS | 1,403,224 | 2,486 | 2,911 | ||||||||
Ford Otomotiv Sanayi AS | 152,878 | 1,798 | |||||||||
GSD Holding AS | 456,116 | 187 | Virgin Islands, British - 0.1% | ||||||||
Gubre Fabrikalari TAS | 214,618 | 485 | Arcos Dorados Holdings, Inc. Class A(Ñ) | 288,800 | 890 | ||||||
Haci Omer Sabanci Holding AS | 670,547 | 2,126 | Tianhe Chemicals Group, Ltd.(Å)(Æ) | 25,778,000 | 2,328 | ||||||
Ipek Dogal Enerji Kaynaklari Arastirma | 3,218 | ||||||||||
Ve Uretim AS(Æ) | 53,479 | 32 | |||||||||
Koza Altin Isletmeleri AS | 519,361 | 2,919 | Zimbabwe - 0.0% | ||||||||
Koza Anadolu Metal Madencilik | Delta Corp., Ltd. | 475,650 | 390 | ||||||||
Isletmeleri AS(Æ) | 696,955 | 368 | Total Common Stocks | ||||||||
Soda Sanayii AS | 318,512 | 527 | |||||||||
Tat Gida Sanayi AS(Æ) | 480,094 | 922 | (cost $2,312,538) | 2,154,148 | |||||||
TAV Havalimanlari Holding AS | 535,933 | 4,208 | |||||||||
Tofas Turk Otomobil Fabrikasi AS(Æ) | 29,701 | 196 | Investments in Other Funds - 1.3% |
See accompanying notes which are an integral part of the financial statements.
228 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||||||
Principal | Fair | Principal | Fair | |||||||||||
Amount ($) | Value | Amount ($) | Value | |||||||||||
or Shares | $ | or Shares | $ | |||||||||||
Jersey - 0.0% | Series 000A | |||||||||||||
Platinum Group Metal, Ltd. | 134,500 | 33 | Zero coupon due 01/22/18 | 98 | 693 | |||||||||
Series 000W | ||||||||||||||
Luxembourg - 0.5% | Zero coupon due 07/31/17 | 87 | 1,826 | |||||||||||
SHS Genesis Smaller Co. | 105,399 | 10,736 | 4,374 | |||||||||||
Total Certificates of Participation | ||||||||||||||
United Kingdom - 0.7% | (cost $9,752) | 13,635 | ||||||||||||
Genesis Indian Investment Co., Ltd. | 117,170 | 16,620 | ||||||||||||
United States - 0.1% | Warrants & Rights - 0.4% | |||||||||||||
Hyprop Investments, Ltd. | 228,136 | 2,067 | Cayman Islands - 0.0% | |||||||||||
Ju Teng International Holdings, Ltd.(Æ) | ||||||||||||||
Total Investments in Other Funds | 2016 Warrants | 449,125 | 17 | |||||||||||
(cost $5,033) | 29,456 | Germany - 0.0% | ||||||||||||
Almarai Co.(Æ)(Þ) | ||||||||||||||
Preferred Stocks - 0.9% | 2016 Warrants | 20,126 | 421 | |||||||||||
Brazil - 0.5% | ||||||||||||||
Braskem SA(Æ) | 301,200 | 1,701 | Netherlands - 0.2% | |||||||||||
Cia Brasileira de Distribuicao | 76,400 | 1,005 | Grasim Industries, Ltd.(Æ) | |||||||||||
Eletropaulo Metropolitana Eletricidade | 2017 Warrants | 45,928 | 2,598 | |||||||||||
de Sao Paulo SA(Æ) | 120,578 | 310 | Indraprastha Gas, Ltd.(Æ)(Þ) | |||||||||||
Investimentos Itau SA | 580,894 | 1,085 | 2016 Warrants | 61,222 | 456 | |||||||||
Itau Unibanco Holding SA | 98,370 | 675 | TTK Prestige, Ltd.(Æ)(Þ) | |||||||||||
Lojas Americanas SA | 542,878 | 2,352 | 2017 Warrants | 5,763 | 386 | |||||||||
Telefonica Brasil SA(Þ) | 479,531 | 4,968 | 3,440 | |||||||||||
Telefonica Brasil SA(Å) | 110 | 1 | ||||||||||||
12,097 | United Kingdom - 0.2% | |||||||||||||
HSBC Bank PLC(Æ) | ||||||||||||||
Chile - 0.0% | 2018 Warrants | 99,436 | 4,295 | |||||||||||
Embotelladora Andina SA | 101,587 | 354 | ||||||||||||
Total Warrants & Rights | ||||||||||||||
Colombia - 0.0% | (cost $9,362) | 8,173 | ||||||||||||
Bancolombia SA | 11,591 | 101 | ||||||||||||
Russia - 0.0% | Short | -Term Investments - 4.6% | ||||||||||||
AK Transneft OAO | 180 | 419 | United States - 4.6% | |||||||||||
Surgutneftegas OAO | 215,900 | 147 | Russell U.S. Cash Management Fund | 99,452,422 | (8) | 99,452 | ||||||||
566 | United States Treasury Bills(§) | |||||||||||||
0.180% due 02/04/16 | 9,000 | 8,998 | ||||||||||||
South Korea - 0.4% | 108,450 | |||||||||||||
Samsung Electronics Co., Ltd. | 8,243 | 8,597 | Total Short-Term Investments | |||||||||||
(cost $108,448) | 108,450 | |||||||||||||
Total Preferred Stocks | ||||||||||||||
(cost $23,365) | 21,715 | Other Securities - 3.4% | ||||||||||||
Russell U.S. Cash Collateral Fund(×) | 79,490,846 | (8) | 79,491 | |||||||||||
Certificates of Participation - 0.6% | Total Other Securities | |||||||||||||
China - 0.0% | (cost $79,491) | 79,491 | ||||||||||||
JPMorgan Structured Products BV | ||||||||||||||
Zero coupon due 08/14/17 | 48 | 7 | Total Investments 102.9% | |||||||||||
Netherlands - 0.4% | (identified cost $2,547,989) | 2,415,068 | ||||||||||||
JPMorgan Structured Products BV | ||||||||||||||
Zero coupon due 08/14/17 | 560 | 2,987 | Other Assets and Liabilities, Net | |||||||||||
Series 0001 | - | (2.9%) | (67,174 | ) | ||||||||||
Zero coupon due 05/16/17 | 195 | 2,556 | ||||||||||||
Zero coupon due 07/02/18 | 18 | 1,237 | Net Assets - 100.0% | 2,347,894 | ||||||||||
Series 0002 | ||||||||||||||
Zero coupon due 07/02/18 | 332 | 2,474 | ||||||||||||
9,254 | ||||||||||||||
United Kingdom - 0.2% | ||||||||||||||
HSBC Bank PLC | ||||||||||||||
Zero coupon due 09/12/16 | 37 | 1,855 |
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 229
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
0.4% | ||||||||||||
Bank Tabungan Pensiunan Nasional Tbk PT | 06/27/13 | IDR | 492,300 | 0.39 | 193 | 94 | ||||||
China Forestry Holdings Co., Ltd. | 07/26/10 | HKD | 871,100 | 0.43 | 372 | — | ||||||
China Metal Recycling Holdings, Ltd. | 11/16/12 | HKD | 335,400 | — | 339 | — | ||||||
Corp. Moctezuma SAB de CV | 03/01/06 | MXN | 261,063 | 1.82 | 474 | 855 | ||||||
FCMB Group PLC | 11/20/07 | NGN | 15,631,592 | 0.04 | 577 | 153 | ||||||
Great Wall Motor Co., Ltd. | 05/23/14 | HKD | 681,000 | 1.25 | 851 | 826 | ||||||
Guaranty Trust Bank PLC | 07/20/07 | NGN | 129,606 | 5.02 | 650 | 745 | ||||||
Kaisa Group Holdings, Ltd. | 09/04/14 | HKD | 3,280,000 | 0.38 | 1,261 | 660 | ||||||
Real Gold Mining, Ltd. | 04/26/10 | HKD | 463,232 | 1.60 | 741 | — | ||||||
Telefonica Brasil SA | 09/09/11 | BRL | 110 | — | — | 1 | ||||||
Tianhe Chemicals Group, Ltd. | 06/13/14 | HKD | 25,778,000 | 0.23 | 5,886 | 2,328 | ||||||
United Bank, Ltd. | 06/13/14 | PKR | 1,948,817 | 1.64 | 3,199 | 3,028 | ||||||
8,690 | ||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
BIST 30 Index Futures | 725 | TRY | 7,270 | 12/15 | 36 | ||
FTSE/JSE Top 40 Index Futures | 253 | ZAR | 123,348 | 12/15 | 732 | ||
Hang Seng Index Futures | 120 | HKD | 136,104 | 11/15 | (275 | ) | |
H-Shares Index Futures | 269 | HKD | 140,243 | 11/15 | (454 | ) | |
iShares MSCI Taiwan Index | 499 | USD | 15,768 | 11/15 | (310 | ) | |
KOSPI2 Index Futures | 168 | KRW | 21,100,800 | 12/15 | 1,167 | ||
Mexican Bolsa Index Futures | 205 | MXN | 91,207 | 12/15 | 223 | ||
MSCI Emerging Markets Mini Index Futures | 278 | USD | 11,727 | 12/15 | 637 | ||
SGX CNX NIFTY Index | 729 | USD | 11,776 | 11/15 | (292 | ) | |
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 1,464 |
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Bank of America | USD | 7,525 | BRL | 29,040 | 11/04/15 | 5 | ||
Bank of America | USD | 7,424 | BRL | 29,040 | 12/02/15 | 34 | ||
Bank of America | USD | 37 | GBP | 24 | 11/03/15 | — | ||
Bank of America | USD | 833 | GBP | 539 | 11/03/15 | (2 | ) | |
Bank of America | USD | 13 | HKD | 104 | 11/02/15 | — | ||
Bank of America | USD | 192 | HKD | 1,484 | 11/02/15 | — | ||
Bank of America | USD | 270 | HKD | 2,090 | 11/02/15 | — | ||
Bank of America | USD | 339 | HKD | 2,627 | 11/02/15 | — | ||
Bank of America | USD | 29 | HKD | 225 | 11/03/15 | — | ||
Bank of America | USD | 76 | HKD | 586 | 11/03/15 | — | ||
Bank of America | USD | 88 | HKD | 679 | 11/03/15 | — | ||
Bank of America | USD | 149 | HKD | 1,155 | 11/03/15 | — | ||
Bank of America | USD | 64 | HUF | 18,051 | 11/02/15 | — | ||
Bank of America | USD | 169 | HUF | 47,654 | 11/03/15 | — | ||
Bank of America | USD | 607 | INR | 40,000 | 12/16/15 | — | ||
Bank of America | USD | 8,701 | INR | 589,000 | 12/16/15 | 245 | ||
Bank of America | USD | 4,007 | KRW | 4,770,000 | 12/16/15 | 165 | ||
Bank of America | USD | 2,125 | TRY | 6,641 | 12/16/15 | 124 | ||
Bank of America | BRL | 29,040 | USD | 7,498 | 11/04/15 | (32 | ) | |
Bank of America | HKD | 676 | USD | 87 | 11/02/15 | — | ||
Bank of America | HKD | 369 | USD | 48 | 11/03/15 | — | ||
Bank of America | HKD | 7,339 | USD | 947 | 11/03/15 | — |
See accompanying notes which are an integral part of the financial statements.
230 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Bank of America | HKD | 5,000 | USD | 645 | 12/16/15 | — | |
Bank of America | HKD | 10,000 | USD | 1,290 | 12/16/15 | — | |
Bank of America | HKD | 10,000 | USD | 1,290 | 12/16/15 | — | |
Bank of America | HKD | 18,000 | USD | 2,323 | 12/16/15 | — | |
Bank of America | INR | 30,000 | USD | 442 | 12/16/15 | (13 | ) |
Bank of America | INR | 30,000 | USD | 445 | 12/16/15 | (11 | ) |
Bank of America | KRW | 800,000 | USD | 674 | 12/16/15 | (25 | ) |
Bank of America | KRW | 1,500,000 | USD | 1,255 | 12/16/15 | (57 | ) |
Bank of America | KRW | 2,000,000 | USD | 1,681 | 12/16/15 | (69 | ) |
Bank of America | MXN | 7,000 | USD | 414 | 12/16/15 | (9 | ) |
Bank of Montreal | USD | 3,655 | HKD | 28,332 | 12/16/15 | 1 | |
Bank of Montreal | USD | 1,976 | MXN | 33,406 | 12/16/15 | 40 | |
Bank of Montreal | USD | 1,428 | ZAR | 19,917 | 12/15/15 | 1 | |
Bank of New York | TRY | 44 | USD | 15 | 11/02/15 | — | |
Barclays | USD | 1,366 | CNY | 8,675 | 12/15/15 | (2 | ) |
Barclays | USD | 2,086 | MYR | 8,796 | 12/15/15 | (42 | ) |
Barclays | CNY | 8,563 | USD | 1,337 | 12/15/15 | (10 | ) |
Barclays | CNY | 10,896 | USD | 1,705 | 12/15/15 | (9 | ) |
BNP Paribas | USD | 3,655 | HKD | 28,332 | 12/16/15 | 1 | |
BNP Paribas | USD | 1,427 | ZAR | 19,917 | 12/15/15 | 1 | |
BNP Paribas | HKD | 5,000 | USD | 645 | 12/16/15 | — | |
BNP Paribas | ZAR | 10,000 | USD | 702 | 12/15/15 | (16 | ) |
Citigroup | USD | 4,370 | BRL | 16,865 | 11/04/15 | 3 | |
Citigroup | BRL | 16,865 | USD | 4,136 | 11/04/15 | (238 | ) |
Citigroup | HKD | 10,000 | USD | 1,290 | 12/16/15 | — | |
Citigroup | RUB | 113,097 | USD | 1,755 | 11/25/15 | (5 | ) |
Deutsche Bank | USD | 1,535 | ZAR | 20,616 | 12/15/15 | (57 | ) |
Deutsche Bank | PLN | 13,188 | USD | 3,543 | 12/15/15 | 135 | |
Goldman Sachs | USD | 4,473 | BRL | 16,865 | 11/04/15 | (100 | ) |
Goldman Sachs | USD | 3,797 | KRW | 4,453,572 | 12/15/15 | 99 | |
Goldman Sachs | USD | 9,017 | MXN | 152,446 | 12/15/15 | 185 | |
Goldman Sachs | BRL | 16,865 | USD | 4,370 | 11/04/15 | (3 | ) |
Goldman Sachs | KRW | 1,633,235 | USD | 1,441 | 12/15/15 | 13 | |
Goldman Sachs | KRW | 12,473,662 | USD | 10,465 | 12/15/15 | (446 | ) |
Goldman Sachs | MXN | 70,555 | USD | 4,283 | 12/15/15 | 24 | |
Goldman Sachs | PHP | 72,146 | USD | 1,538 | 12/15/15 | (1 | ) |
Goldman Sachs | RUB | 585,799 | USD | 9,231 | 11/25/15 | 117 | |
HSBC | USD | 2,968 | BRL | 12,000 | 11/04/15 | 144 | |
HSBC | USD | 3,655 | HKD | 28,332 | 12/16/15 | 1 | |
HSBC | USD | 2,710 | INR | 180,000 | 12/16/15 | 24 | |
HSBC | USD | 6,765 | KRW | 8,000,000 | 12/16/15 | 233 | |
HSBC | USD | 2,195 | TWD | 71,066 | 12/15/15 | (7 | ) |
HSBC | USD | 2,905 | TWD | 94,148 | 12/15/15 | (6 | ) |
HSBC | USD | 1,429 | ZAR | 19,917 | 12/15/15 | — | |
HSBC | BRL | 12,000 | USD | 3,110 | 11/04/15 | (2 | ) |
HSBC | KRW | 1,731,839 | USD | 1,468 | 12/15/15 | (47 | ) |
Morgan Stanley | USD | 2,477 | CNY | 15,794 | 12/15/15 | 7 | |
Morgan Stanley | USD | 4,800 | MYR | 20,773 | 12/15/15 | 25 | |
Morgan Stanley | USD | 1,982 | ZAR | 25,882 | 12/15/15 | (126 | ) |
Morgan Stanley | KRW | 2,718,287 | USD | 2,395 | 12/15/15 | 18 | |
Northern Trust | MXN | 31,791 | USD | 1,906 | 12/15/15 | (13 | ) |
Royal Bank of Canada | USD | 5,162 | BRL | 21,040 | 11/04/15 | 293 | |
Royal Bank of Canada | USD | 3,655 | HKD | 28,332 | 12/16/15 | 1 | |
Royal Bank of Canada | USD | 1,975 | MXN | 33,406 | 12/16/15 | 41 | |
Royal Bank of Canada | USD | 1,429 | ZAR | 19,917 | 12/15/15 | — | |
Royal Bank of Canada | BRL | 21,040 | USD | 5,452 | 11/04/15 | (3 | ) |
Royal Bank of Scotland | USD | 3,360 | CLP | 2,274,005 | 12/15/15 | (86 | ) |
Royal Bank of Scotland | USD | 1,722 | COP | 4,920,460 | 12/15/15 | (31 | ) |
Royal Bank of Scotland | USD | 1,524 | PHP | 72,146 | 12/15/15 | 15 | |
Standard Chartered | USD | 2,045 | IDR | 30,495,254 | 12/15/15 | 147 | |
Standard Chartered | USD | 3,767 | IDR | 55,693,184 | 12/15/15 | 238 | |
Standard Chartered | USD | 1,066 | MYR | 4,386 | 12/15/15 | (47 | ) |
Standard Chartered | USD | 3,432 | PHP | 157,133 | 12/15/15 | (81 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 231
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Standard Chartered | CNY | 8,051 | USD | 1,237 | 12/15/15 | (30 | ) |
Standard Chartered | CNY | 12,367 | USD | 1,934 | 12/15/15 | (11 | ) |
Standard Chartered | CNY | 47,692 | USD | 7,394 | 12/15/15 | (107 | ) |
Standard Chartered | CNY | 84,255 | USD | 13,190 | 12/15/15 | (62 | ) |
Standard Chartered | KRW | 1,161,202 | USD | 1,014 | 12/15/15 | (2 | ) |
Standard Chartered | KRW | 3,958,672 | USD | 3,332 | 12/15/15 | (131 | ) |
Standard Chartered | TWD | 67,929 | USD | 2,104 | 12/15/15 | 13 | |
Standard Chartered | TWD | 97,285 | USD | 2,995 | 12/15/15 | (1 | ) |
State Street | USD | 126 | BRL | 485 | 11/04/15 | — | |
State Street | USD | 747 | BRL | 3,000 | 11/04/15 | 31 | |
State Street | USD | 1,814 | BRL | 7,000 | 11/04/15 | 1 | |
State Street | USD | 188 | HKD | 1,459 | 11/02/15 | — | |
State Street | USD | 699 | HKD | 5,417 | 11/03/15 | — | |
State Street | USD | 13,548 | HKD | 105,000 | 12/16/15 | 1 | |
State Street | USD | 42 | IDR | 566,547 | 11/02/15 | — | |
State Street | USD | 1,363 | INR | 90,000 | 12/16/15 | 4 | |
State Street | USD | 33 | KES | 3,337 | 11/02/15 | — | |
State Street | USD | 8 | KRW | 8,716 | 11/02/15 | — | |
State Street | USD | 11 | KRW | 12,467 | 11/02/15 | — | |
State Street | USD | 200 | KRW | 226,931 | 11/02/15 | (1 | ) |
State Street | USD | 383 | KRW | 434,989 | 11/02/15 | (1 | ) |
State Street | USD | 1,695 | KRW | 2,000,000 | 12/16/15 | 54 | |
State Street | USD | 14 | MAD | 140 | 11/02/15 | — | |
State Street | USD | 2,060 | MXN | 35,000 | 12/16/15 | 52 | |
State Street | USD | 3,484 | PLN | 13,188 | 12/15/15 | (75 | ) |
State Street | USD | 19 | QAR | 67 | 11/02/15 | — | |
State Street | USD | 24 | THB | 872 | 11/02/15 | — | |
State Street | USD | 27 | THB | 960 | 11/02/15 | — | |
State Street | USD | 6,770 | THB | 241,551 | 12/15/15 | 11 | |
State Street | USD | 28 | TRY | 82 | 11/02/15 | — | |
State Street | USD | 201 | TRY | 590 | 11/02/15 | 2 | |
State Street | USD | 99 | TRY | 289 | 11/03/15 | — | |
State Street | USD | 969 | TRY | 3,000 | 12/16/15 | 47 | |
State Street | USD | 115 | ZAR | 1,569 | 11/03/15 | (1 | ) |
State Street | USD | 10 | ZAR | 143 | 11/05/15 | — | |
State Street | USD | 145 | ZAR | 2,012 | 11/05/15 | — | |
State Street | USD | 3,199 | ZAR | 45,000 | 12/15/15 | 29 | |
State Street | USD | 11,211 | ZAR | 156,118 | 12/15/15 | (13 | ) |
State Street | BRL | 72 | USD | 19 | 11/03/15 | — | |
State Street | BRL | 132 | USD | 34 | 11/03/15 | (1 | ) |
State Street | BRL | 1,097 | USD | 279 | 11/03/15 | (5 | ) |
State Street | BRL | 57 | USD | 15 | 11/04/15 | — | |
State Street | BRL | 3,000 | USD | 777 | 11/04/15 | — | |
State Street | BRL | 7,000 | USD | 1,705 | 11/04/15 | (110 | ) |
State Street | HKD | 109 | USD | 14 | 11/02/15 | — | |
State Street | HKD | 178 | USD | 23 | 11/02/15 | — | |
State Street | HKD | 238 | USD | 31 | 11/03/15 | — | |
State Street | HKD | 500 | USD | 65 | 11/03/15 | — | |
State Street | HKD | 7,000 | USD | 903 | 12/16/15 | — | |
State Street | HKD | 10,000 | USD | 1,290 | 12/16/15 | — | |
State Street | HKD | 16,000 | USD | 2,064 | 12/16/15 | — | |
State Street | INR | 70,000 | USD | 1,061 | 12/16/15 | (2 | ) |
State Street | KRW | 3,505,239 | USD | 2,923 | 12/15/15 | (144 | ) |
State Street | KRW | 1,500,000 | USD | 1,309 | 12/16/15 | (3 | ) |
State Street | MXN | 469 | USD | 28 | 11/02/15 | — | |
State Street | MXN | 362 | USD | 22 | 11/05/15 | — | |
State Street | MXN | 3,000 | USD | 180 | 12/16/15 | (1 | ) |
State Street | MXN | 11,000 | USD | 642 | 12/16/15 | (22 | ) |
State Street | MYR | 32 | USD | 8 | 11/02/15 | — | |
State Street | THB | 227 | USD | 6 | 11/02/15 | — | |
State Street | THB | 1,292 | USD | 36 | 11/02/15 | — | |
State Street | THB | 3,346 | USD | 94 | 11/02/15 | — | |
State Street | THB | 241,551 | USD | 6,670 | 12/15/15 | (111 | ) |
See accompanying notes which are an integral part of the financial statements.
232 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
State Street | TRY | 74 | USD | 25 | 11/02/15 | — | ||
State Street | TRY | 500 | USD | 163 | 12/16/15 | (7 | ) | |
State Street | TRY | 1,000 | USD | 336 | 12/16/15 | (3 | ) | |
State Street | TRY | 1,500 | USD | 482 | 12/16/15 | (26 | ) | |
State Street | ZAR | 760 | USD | 55 | 11/02/15 | — | ||
State Street | ZAR | 7,000 | USD | 502 | 12/15/15 | — | ||
State Street | ZAR | 7,500 | USD | 556 | 12/15/15 | 18 | ||
State Street | ZAR | 18,000 | USD | 1,271 | 12/15/15 | (20 | ) | |
UBS | USD | 3,655 | HKD | 28,332 | 12/16/15 | 1 | ||
UBS | USD | 3,871 | HKD | 30,000 | 12/16/15 | — | ||
UBS | USD | 591 | MXN | 10,000 | 12/16/15 | 12 | ||
UBS | USD | 392 | TRY | 1,200 | 12/16/15 | 14 | ||
UBS | USD | 1,075 | ZAR | 15,000 | 12/15/15 | 1 | ||
UBS | USD | 1,429 | ZAR | 19,917 | 12/15/15 | (1 | ) | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 184 |
Total Return Swap Contracts (*) | ||||||
Amounts in thousands | ||||||
Fund Receives/(Pays) | Notional | Termination | Fair Value | |||
Underlying Reference Entity | Counterparty | Amount | Date | $ | ||
Long Reference Entity | ||||||
Bovespa Future Index | Goldman Sachs | BRL | 13,057 | 12/16/15 | (178 | ) |
Bovespa Future Index | Goldman Sachs | BRL | 13,467 | 12/16/15 | (273 | ) |
Total Fair Value of Open Total Return Swap Contracts Premiums Paid (Received) - $— (å) | (451 | ) | ||||
(*) Total return swaps (which includes index swaps) are agreements between counterparties to exchange cash flows, one based on a market-linked | ||||||
returns of an individual asset or a basket of assets (i.e. an index), and the other on a fixed or floating rate. The floating rate fees were all based | ||||||
on the total return of underlying security at termination. |
Presentation of Portfolio Holdings | ||||||||||
Amounts in thousands | ||||||||||
Fair Value | ||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||
Common Stocks | ||||||||||
Argentina | $ | 23,437 | $ | — | $ | — | $ | 23,437 | 1.0 | |
Austria | — | 1,030 | — | 1,030 | 0.1 | |||||
Bangladesh | — | 9,043 | — | 9,043 | 0.4 | |||||
Bermuda | 8,401 | 37,573 | 822 | 46,796 | 2.0 | |||||
Brazil | 130,742 | — | — | 130,742 | 5.6 | |||||
Canada | 2,588 | — | — | 2,588 | 0.1 | |||||
Cayman Islands | 67,624 | 131,833 | 664 | 200,121 | 8.5 | |||||
Chile | 11,830 | — | — | 11,830 | 0.5 | |||||
China | 4,132 | 215,095 | 5,563 | 224,790 | 9.6 | |||||
Colombia | 5,705 | — | — | 5,705 | 0.2 | |||||
Cyprus | 316 | 241 | — | 557 | —* | |||||
Czech Republic | — | 2,825 | — | 2,825 | 0.1 | |||||
Egypt | — | 12,092 | — | 12,092 | 0.5 | |||||
Greece | — | 2,994 | — | 2,994 | 0.1 | |||||
Hong Kong | 34,689 | 79,641 | — | 114,330 | 4.9 | |||||
Hungary | — | 16,262 | — | 16,262 | 0.7 | |||||
India | 26,052 | 148,733 | — | 174,785 | 7.5 | |||||
Indonesia | — | 23,234 | — | 23,234 | 1.0 | |||||
Israel | 5,404 | 1,626 | — | 7,030 | 0.3 | |||||
Jersey | 2,273 | 4,671 | — | 6,944 | 0.3 | |||||
Kazakhstan | 992 | — | — | 992 | —* | |||||
Kenya | — | 1,566 | — | 1,566 | 0.1 | |||||
Kuwait | — | 7,691 | — | 7,691 | 0.3 |
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 233
Russell Investment Company
Russell Emerging Markets Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fair Value | ||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||||
Luxembourg | 7,704 | 4,543 | — | 12,247 | 0.5 | |||||||||
Malaysia | 291 | 17,546 | — | 17,837 | 0.8 | |||||||||
Mexico | 82,569 | — | — | 82,569 | 3.5 | |||||||||
Morocco | — | 1,810 | — | 1,810 | 0.1 | |||||||||
Netherlands | 7,050 | 1,291 | — | 8,341 | 0.4 | |||||||||
Nigeria | 1,354 | 12,939 | — | 14,293 | 0.6 | |||||||||
Pakistan | — | 16,654 | — | 16,654 | 0.7 | |||||||||
Panama | 1,291 | — | — | 1,291 | 0.1 | |||||||||
Philippines | — | 9,565 | — | 9,565 | 0.4 | |||||||||
Poland | — | 10,151 | — | 10,151 | 0.4 | |||||||||
Qatar | — | 6,319 | — | 6,319 | 0.3 | |||||||||
Romania | — | 7,267 | — | 7,267 | 0.3 | |||||||||
Russia | 46,460 | 56,723 | — | 103,183 | 4.4 | |||||||||
Singapore | — | 1,466 | — | 1,466 | 0.1 | |||||||||
South Africa | 4,890 | 90,047 | — | 94,937 | 4.0 | |||||||||
South Korea | 25,175 | 278,011 | — | 303,186 | 12.9 | |||||||||
Spain | 966 | — | — | 966 | —* | |||||||||
Sri Lanka | — | 3,645 | — | 3,645 | 0.2 | |||||||||
Switzerland | — | 12,007 | — | 12,007 | 0.5 | |||||||||
Taiwan | 26,677 | 190,266 | — | 216,943 | 9.2 | |||||||||
Thailand | — | 63,806 | — | 63,806 | 2.7 | |||||||||
Togo | — | 2,470 | — | 2,470 | 0.1 | |||||||||
Tunisia | — | 678 | — | 678 | —* | |||||||||
Turkey | 1,752 | 56,728 | — | 58,480 | 2.5 | |||||||||
United Arab Emirates | — | 4,830 | — | 4,830 | 0.2 | |||||||||
United Kingdom | 517 | 49,032 | — | 49,549 | 2.1 | |||||||||
United States | 11,615 | 4,140 | — | 15,755 | 0.7 | |||||||||
Vietnam | — | 2,911 | — | 2,911 | 0.1 | |||||||||
Virgin Islands, British | 890 | — | 2,328 | 3,218 | 0.1 | |||||||||
Zimbabwe | — | 390 | — | 390 | —* | |||||||||
Investments in Other Funds | 10,769 | 18,687 | — | 29,456 | 1.3 | |||||||||
Preferred Stocks | 12,552 | 9,163 | — | 21,715 | 0.9 | |||||||||
Certificates of Participation | 7 | 13,628 | — | 13,635 | 0.6 | |||||||||
Warrants & Rights | 17 | 8,156 | — | 8,173 | 0.4 | |||||||||
Short-Term Investments | — | 108,450 | — | 108,450 | 4.6 | |||||||||
Other Securities | — | 79,491 | — | 79,491 | 3.4 | |||||||||
Total Investments | 566,731 | 1,838,960 | 9,377 | 2,415,068 | 102.9 | |||||||||
Other Assets and Liabilities, Net | (2.9 | ) | ||||||||||||
100.0 | ||||||||||||||
Other Financial Instruments | ||||||||||||||
Futures Contracts | 1,464 | — | — | 1,464 | 0.1 | |||||||||
Foreign Currency Exchange Contracts | (11 | ) | 195 | — | 184 | —* | ||||||||
Total Return Swap Contracts | — | (451 | ) | — | (451 | ) | (—)* | |||||||
Total Other Financial Instruments** | $ | 1,453 | $ | (256 | ) | $ | — | $ | 1,197 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation/depreciation on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended October
31, 2015 were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
234 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 2,671 | ||
Variation margin on futures contracts* | 2,795 | — | ||||
Total | $ | 2,795 | $ | 2,671 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | 1,331 | $ | — | ||
Unrealized depreciation on foreign currency exchange contracts | — | 2,487 | ||||
Total return swap contracts, at fair value | 451 | — | ||||
Total | $ | 1,782 | $ | 2,487 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Futures contracts | $ | 6,891 | $ | — | ||
Total return swap contracts | (2,147 | ) | — | |||
Foreign currency-related transactions** | — | (16,461 | ) | |||
Total | $ | 4,744 | $ | (16,461 | ) | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | 760 | $ | — | ||
Total return swap contracts | 594 | — | ||||
Foreign currency-related transactions*** | — | (507 | ) | |||
Total | $ | 1,354 | $ | (507 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
*** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 235
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Assets | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||||
Securities on Loan* | Investments, at fair value | $ | 76,410 | $ | — | $ | 76,410 | ||||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 2,671 | — | 2,671 | |||||||||
Futures Contracts | Variation margin on futures contracts | 9,996 | — | 9,996 | |||||||||
Total Financial and Derivative Assets | 89,077 | — | 89,077 | ||||||||||
Financial and Derivative Assets not subject to a netting agreement | (9,999) | — | (9,999 | ) | |||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 79,078 | $ | — | $ | 79,078 | |||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Assets | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||||
Bank of America | $ | 573 | $ | 216 | $ | — | $ | 357 | |||||
Bank of Montreal | 42 | — | — | 42 | |||||||||
Barclays | 13,258 | — | 13,258 | — | |||||||||
BNP Paribas | 2 | 2 | — | — | |||||||||
Citigroup | 2,167 | 3 | 2,164 | — | |||||||||
Credit Suisse | 7,332 | — | 7,332 | — | |||||||||
Deutsche Bank | 1,614 | 57 | 1,479 | 78 | |||||||||
Fidelity | 2,114 | — | 2,114 | — | |||||||||
Goldman Sachs | 14,975 | 438 | 14,537 | — | |||||||||
HSBC | 401 | 2 | — | 399 | |||||||||
ING | 28 | — | 28 | — | |||||||||
JPMorgan Chase | 5,366 | — | 5,366 | — | |||||||||
Merrill Lynch | 5,721 | — | 5,721 | — | |||||||||
Morgan Stanley | 19,816 | 50 | 19,766 | — | |||||||||
Royal Bank of Canada | 335 | 4 | — | 331 | |||||||||
Royal Bank of Scotland | 15 | 15 | — | — | |||||||||
Standard Chartered | 397 | 397 | — | — | |||||||||
State Street | 249 | 205 | — | 44 | |||||||||
UBS | 4,673 | 1 | 4,645 | 27 | |||||||||
Total | $ | 79,078 | $ | 1,390 | $ | 76,410 | $ | 1,278 |
See accompanying notes which are an integral part of the financial statements.
236 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | ||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Liabilities | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | ||||||||
Futures Contracts | Variation margin on futures contracts | $ | 169 | $ — | $ | 169 | ||||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 2,487 | — | 2,487 | ||||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 451 | — | 451 | ||||||||
Total Financial and Derivative Liabilities | 3,107 | — | 3,107 | |||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (182) | — | (182 | ) | ||||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 2,925 | $ — | $ | 2,925 | |||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Liabilities | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | ||||||||
Bank of America | $ | 216 | $ | 216 | $ | — | $ — | |||||
Barclays | 63 | — | — | 63 | ||||||||
BNP Paribas | 16 | 2 | — | 14 | ||||||||
Citigroup | 242 | 3 | — | 239 | ||||||||
Deutsche Bank | 57 | 57 | — | — | ||||||||
Goldman Sachs | 1,002 | 438 | — | 564 | ||||||||
HSBC | 62 | 2 | — | 60 | ||||||||
Morgan Stanley | 125 | 50 | — | 75 | ||||||||
Northern Trust | 13 | — | — | 13 | ||||||||
Royal Bank of Canada | 4 | 4 | — | — | ||||||||
Royal Bank of Scotland | 116 | 15 | — | 101 | ||||||||
Standard Chartered | 471 | 397 | — | 74 | ||||||||
State Street | 537 | 205 | — | 332 | ||||||||
UBS | 1 | 1 | — | — | ||||||||
Total | $ | 2,925 | $ | 1,390 | $ | — | $ 1,535 |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 237
Russell Investment Company
Russell Emerging Markets Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 2,547,989 |
Investments, at fair value(*)(>) | 2,415,068 | |
Cash | 57 | |
Cash (restricted)(a) | 1,168 | |
Foreign currency holdings(^) | 6,961 | |
Unrealized appreciation on foreign currency exchange contracts | 2,671 | |
Receivables: | ||
Dividends and interest | 1,352 | |
Dividends from affiliated Russell funds | 11 | |
Investments sold | 10,734 | |
Fund shares sold | 2,552 | |
Foreign capital gains taxes recoverable | 44 | |
Variation margin on futures contracts | 9,996 | |
Total assets | 2,450,614 | |
Liabilities | ||
Payables: | ||
Due to broker (b) | 6 | |
Investments purchased | 14,257 | |
Fund shares redeemed | 1,560 | |
Accrued fees to affiliates | 2,744 | |
Other accrued expenses | 535 | |
Variation margin on futures contracts | 169 | |
Deferred capital gains tax liability | 1,020 | |
Unrealized depreciation on foreign currency exchange contracts | 2,487 | |
Payable upon return of securities loaned | 79,491 | |
Total return swap contracts, at fair value(8) | 451 | |
Total liabilities | 102,720 | |
Net Assets | $ | 2,347,894 |
See accompanying notes which are an integral part of the financial statements.
238 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | (29,319 | ) |
Accumulated net realized gain (loss) | (83,996 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | (133,941 | ) | |
Futures contracts | 1,464 | ||
Total return swap contracts | (451 | ) | |
Foreign currency-related transactions | 396 | ||
Shares of beneficial interest | 1,545 | ||
Additional paid-in capital | 2,592,196 | ||
Net Assets | $ | 2,347,894 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 15.09 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 16.01 | |
Class A — Net assets | $ | 16,963,503 | |
Class A — Shares outstanding ($.01 par value) | 1,123,985 | ||
Net asset value per share: Class C(#) | $ | 14.09 | |
Class C — Net assets | $ | 20,414,825 | |
Class C — Shares outstanding ($.01 par value) | 1,448,998 | ||
Net asset value per share: Class E(#) | $ | 15.14 | |
Class E — Net assets | $ | 37,873,558 | |
Class E — Shares outstanding ($.01 par value) | 2,500,879 | ||
Net asset value per share: Class S(#) | $ | 15.20 | |
Class S — Net assets | $ 1,760,569,250 | ||
Class S — Shares outstanding ($.01 par value) | 115,852,208 | ||
Net asset value per share: Class Y(#) | $ | 15.24 | |
Class Y — Net assets | $ | 512,072,852 | |
Class Y — Shares outstanding ($.01 par value) | 33,603,558 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 7,052 | |
(*) Securities on loan included in investments | $ | 76,410 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund and Russell U.S. Cash Collateral Fund | $ | 178,943 | |
(8) Total return swap contracts - premiums paid (received) | $ | — | |
(a) Cash Collateral for Futures | $ | 1,168 | |
(b) Due to Broker for Futures | $ | 6 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 239
Russell Investment Company
Russell Emerging Markets Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 70,448 | |
Dividends from affiliated Russell funds | 141 | ||
Interest | 76 | ||
Securities lending income | 1,661 | ||
Less foreign taxes withheld | (7,417 | ) | |
Total investment income | 64,909 | ||
Expenses | |||
Advisory fees | 31,296 | ||
Administrative fees | 1,296 | ||
Custodian fees | 2,231 | ||
Distribution fees - Class A | 50 | ||
Distribution fees - Class C | 184 | ||
Transfer agent fees - Class A | 40 | ||
Transfer agent fees - Class C | 49 | ||
Transfer agent fees - Class E | 92 | ||
Transfer agent fees - Class S | 4,092 | ||
Transfer agent fees - Class Y | 26 | ||
Professional fees | 314 | ||
Registration fees | 148 | ||
Shareholder servicing fees - Class C | 61 | ||
Shareholder servicing fees - Class E | 114 | ||
Trustees’ fees | 76 | ||
Printing fees | 480 | ||
Miscellaneous | 67 | ||
Total expenses | 40,616 | ||
Net investment income (loss) | 24,293 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | (42,374 | ) | |
Futures contracts | 6,891 | ||
Total return swap contracts | (2,147 | ) | |
Foreign currency-related transactions | (19,909 | ) | |
Net realized gain (loss) | (57,539 | ) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | (424,461 | ) | |
Futures contracts | 760 | ||
Total return swap contracts | 594 | ||
Foreign currency-related transactions | 306 | ||
Net change in unrealized appreciation (depreciation) | (422,801 | ) | |
Net realized and unrealized gain (loss) | (480,340 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (456,047 | ) |
See accompanying notes which are an integral part of the financial statements.
240 Russell Emerging Markets Fund
Russell Investment Company
Russell Emerging Markets Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 24,293 | $ | 28,468 | ||
Net realized gain (loss) | (57,539 | ) | 38,256 | |||
Net change in unrealized appreciation (depreciation) | (422,801 | ) | 3,234 | |||
Net increase (decrease) in net assets from operations | (456,047 | ) | 69,958 | |||
Distributions | ||||||
From net investment income | ||||||
Class A | (254 | ) | (96 | ) | ||
Class C | (143 | ) | (—)** | |||
Class E | (575 | ) | (170 | ) | ||
Class S | (31,776 | ) | (11,119 | ) | ||
Class Y | (10,628 | ) | (4,235 | ) | ||
From net realized gain | ||||||
Class A | (308 | ) | (624 | ) | ||
Class C | (426 | ) | (904 | ) | ||
Class E | (706 | ) | (1,133 | ) | ||
Class S | (31,455 | ) | (45,961 | ) | ||
Class Y | (9,279 | ) | (13,854 | ) | ||
Net decrease in net assets from distributions | (85,550 | ) | (78,096 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (94,667 | ) | 823,559 | |||
Total Net Increase (Decrease) in Net Assets | (636,264 | ) | 815,421 | |||
Net Assets | ||||||
Beginning of period | 2,984,158 | 2,168,737 | ||||
End of period | $ | 2,347,894 | $ | 2,984,158 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | (29,319 | ) | $ | 5,397 | |
** Less than $500. |
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 241
Russell Investment Company
Russell Emerging Markets Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 250 | $ | 4,259 | 327 | $ | 5,917 | ||||||
Proceeds from reinvestment of distributions | 33 | 555 | 39 | 692 | ||||||||
Payments for shares redeemed | (369 | ) | (6,261 | ) | (303 | ) | (5,543 | ) | ||||
Net increase (decrease) | (86 | ) | (1,447 | ) | 63 | 1,066 | ||||||
Class C | ||||||||||||
Proceeds from shares sold | 196 | 3,098 | 394 | 6,740 | ||||||||
Proceeds from reinvestment of distributions | 35 | 564 | 53 | 886 | ||||||||
Payments for shares redeemed | (436 | ) | (6,825 | ) | (411 | ) | (7,016 | ) | ||||
Net increase (decrease) | (205 | ) | (3,163 | ) | 36 | 610 | ||||||
Class E | ||||||||||||
Proceeds from shares sold | 638 | 10,295 | 1,424 | 25,324 | ||||||||
Proceeds from reinvestment of distributions | 72 | 1,213 | 71 | 1,256 | ||||||||
Payments for shares redeemed | (884 | ) | (13,928 | ) | (886 | ) | (16,716 | ) | ||||
Net increase (decrease) | (174 | ) | (2,420 | ) | 609 | 9,864 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 33,452 | 562,136 | 56,245 | 1,007,872 | ||||||||
Proceeds from reinvestment of distributions | 3,687 | 62,747 | 3,191 | 56,703 | ||||||||
Payments for shares redeemed | (41,075 | ) | (687,360 | ) | (23,271 | ) | (428,433 | ) | ||||
Net increase (decrease) | (3,936 | ) | (62,477 | ) | 36,165 | 636,142 | ||||||
Class Y | ||||||||||||
Proceeds from shares sold | 2,781 | 47,300 | 14,643 | 270,290 | ||||||||
Proceeds from reinvestment of distributions | 1,168 | 19,908 | 1,017 | 18,089 | ||||||||
Payments for shares redeemed | (5,229 | ) | (92,368 | ) | (5,968 | ) | (112,502 | ) | ||||
Net increase (decrease) | (1,280 | ) | (25,160 | ) | 9,692 | 175,877 | ||||||
Total increase (decrease) | (5,681 | ) | $ | (94,667 | ) | 46,565 | $ | 823,559 |
See accompanying notes which are an integral part of the financial statements.
242 Russell Emerging Markets Fund
(This page intentionally left blank)
Russell Investment Company
Russell Emerging Markets Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | |||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||||
Class A | ||||||||||||||||||
October 31, 2015 | 18.50 | .10 | (3.03 | ) | (2.93 | ) | (.22 | ) | (.26 | ) | ||||||||
October 31, 2014 | 18.96 | .13 | .04 | .17 | (.08 | ) | (.55 | ) | ||||||||||
October 31, 2013 | 17.79 | .13 | 1.18 | 1.31 | (.14 | ) | — | |||||||||||
October 31, 2012 | 18.06 | .19 | .46 | .65 | (.22 | ) | (.70 | ) | ||||||||||
October 31, 2011 | 20.37 | .21 | (2.14 | ) | (1.93 | ) | (.38 | ) | — | |||||||||
Class C | ||||||||||||||||||
October 31, 2015 | 17.29 | (.02 | ) | (2.83 | ) | (2.85 | ) | (.09 | ) | (.26 | ) | |||||||
October 31, 2014 | 17.81 | (.01 | ) | .04 | .03 | — | (.55 | ) | ||||||||||
October 31, 2013 | 16.72 | (.01 | ) | 1.10 | 1.09 | — | — | |||||||||||
October 31, 2012 | 16.99 | .05 | .45 | .50 | (.07 | ) | (.70 | ) | ||||||||||
October 31, 2011 | 19.20 | .05 | (2.02 | ) | (1.97 | ) | (.24 | ) | — | |||||||||
Class E | ||||||||||||||||||
October 31, 2015 | 18.56 | .11 | (3.05 | ) | (2.94 | ) | (.22 | ) | (.26 | ) | ||||||||
October 31, 2014 | 19.01 | .15 | .03 | .18 | (.08 | ) | (.55 | ) | ||||||||||
October 31, 2013 | 17.83 | .14 | 1.17 | 1.31 | (.13 | ) | — | |||||||||||
October 31, 2012 | 18.10 | .18 | .47 | .65 | (.22 | ) | (.70 | ) | ||||||||||
October 31, 2011 | 20.41 | .22 | (2.16 | ) | (1.94 | ) | (.37 | ) | — | |||||||||
Class S | ||||||||||||||||||
October 31, 2015 | 18.63 | .15 | (3.05 | ) | (2.90 | ) | (.27 | ) | (.26 | ) | ||||||||
October 31, 2014 | 19.09 | .19 | .03 | .22 | (.13 | ) | (.55 | ) | ||||||||||
October 31, 2013 | 17.91 | .18 | 1.18 | 1.36 | (.18 | ) | — | |||||||||||
October 31, 2012 | 18.19 | .23 | .46 | .69 | (.27 | ) | (.70 | ) | ||||||||||
October 31, 2011 | 20.50 | .27 | (2.17 | ) | (1.90 | ) | (.41 | ) | — | |||||||||
Class Y | ||||||||||||||||||
October 31, 2015 | 18.68 | .18 | (3.06 | ) | (2.88 | ) | (.30 | ) | (.26 | ) | ||||||||
October 31, 2014 | 19.14 | .22 | .03 | .25 | (.16 | ) | (.55 | ) | ||||||||||
October 31, 2013 | 17.96 | .23 | 1.17 | 1.40 | (.22 | ) | — | |||||||||||
October 31, 2012 | 18.23 | .26 | .47 | .73 | (.30 | ) | (.70 | ) | ||||||||||
October 31, 2011 | 20.54 | .29 | (2.16 | ) | (1.87 | ) | (.44 | ) | — | |||||||||
See accompanying notes which are an integral part of the financial statements.
244 Russell Emerging Markets Fund
% | % | % | ||||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | ||||||||||
(.48 | ) | 15.09 | (16.11 | ) | 16,963 | 1.77 | 1.77 | .62 | 72 | |||||||||
(.63 | ) | 18.50 | 1.04 | 22,378 | 1.76 | 1.76 | .72 | 67 | ||||||||||
(.14 | ) | 18.96 | 7.36 | 21,736 | 1.75 | 1.75 | .74 | 93 | ||||||||||
(.92 | ) | 17.79 | 4.11 | 20,585 | 1.75 | 1.75 | 1.07 | 94 | ||||||||||
(.38 | ) | 18.06 | (9.67 | ) | 21,834 | 1.78 | 1.78 | 1.06 | 73 | |||||||||
(.35 | ) | 14.09 | (16.70 | ) | 20,415 | 2.52 | 2.52 | (.15 | ) | 72 | ||||||||
(.55 | ) | 17.29 | .26 | 28,601 | 2.51 | 2.51 | (.05 | ) | 67 | |||||||||
— | 17.81 | 6.55 | 28,808 | 2.50 | 2.50 | (.04 | ) | 93 | ||||||||||
(.77 | ) | 16.72 | 3.37 | 31,671 | 2.50 | 2.50 | .29 | 94 | ||||||||||
(.24 | ) | 16.99 | (10.37 | ) | 36,942 | 2.53 | 2.53 | .25 | 73 | |||||||||
(.48 | ) | 15.14 | (16.12 | ) | 37,874 | 1.77 | 1.77 | .64 | 72 | |||||||||
(.63 | ) | 18.56 | 1.09 | 49,652 | 1.76 | 1.76 | .80 | 67 | ||||||||||
(.13 | ) | 19.01 | 7.37 | 39,296 | 1.75 | 1.75 | .74 | 93 | ||||||||||
(.92 | ) | 17.83 | 4.11 | 38,808 | 1.75 | 1.75 | 1.05 | 94 | ||||||||||
(.37 | ) | 18.10 | (9.70 | ) | 45,591 | 1.78 | 1.78 | 1.11 | 73 | |||||||||
(.53 | ) | 15.20 | (15.86 | ) | 1,760,569 | 1.52 | 1.52 | .87 | 72 | |||||||||
(.68 | ) | 18.63 | 1.31 | 2,231,799 | 1.51 | 1.51 | 1.02 | 67 | ||||||||||
(.18 | ) | 19.09 | 7.64 | 1,596,632 | 1.50 | 1.50 | .99 | 93 | ||||||||||
(.97 | ) | 17.91 | 4.33 | 1,341,106 | 1.50 | 1.50 | 1.33 | 94 | ||||||||||
(.41 | ) | 18.19 | (9.45 | ) | 1,215,031 | 1.53 | 1.53 | 1.34 | 73 | |||||||||
(.56 | ) | 15.24 | (15.70 | ) | 512,073 | 1.32 | 1.32 | 1.04 | 72 | |||||||||
(.71 | ) | 18.68 | 1.50 | 651,728 | 1.31 | 1.31 | 1.16 | 67 | ||||||||||
(.22 | ) | 19.14 | 7.80 | 482,265 | 1.30 | 1.30 | 1.26 | 93 | ||||||||||
(1.00 | ) | 17.96 | 4.58 | 387,848 | 1.32 | 1.32 | 1.50 | 94 | ||||||||||
(.44 | ) | 18.23 | (9.30 | ) | 471,717 | 1.35 | 1.35 | 1.45 | 73 |
See accompanying notes which are an integral part of the financial statements.
Russell Emerging Markets Fund 245
Russell Investment Company
Russell Tax-Managed U.S. Large Cap Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Tax-Managed U.S. Large Cap Fund - Class A‡ | S&P 500® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.34 | )% | 1 Year | 5.20 | % | ||
5 Years | 11.83 | %§ | 5 Years | 14.33 | %§ | ||
10 Years | 6.14 | %§ | 10 Years | 7.85 | %§ | ||
Russell Tax-Managed U.S. Large Cap Fund - Class C | |||||||
Total | |||||||
Return | |||||||
1 Year | 3.88 | % | |||||
5 Years | 12.34 | %§ | |||||
10 Years | 5.98 | %§ | |||||
Russell Tax-Managed U.S. Large Cap Fund - Class E | |||||||
Total | |||||||
Return | |||||||
1 Year | 4.65 | % | |||||
5 Years | 13.18 | %§ | |||||
10 Years | 6.78 | %§ | |||||
Russell Tax-Managed U.S. Large Cap Fund - Class S | |||||||
Total | |||||||
Return | |||||||
1 Year | 4.92 | % | |||||
5 Years | 13.46 | %§ | |||||
10 Years | 7.05 | %§ |
246 Russell Tax-Managed U.S. Large Cap Fund
Russell Investment Company
Russell Tax-Managed U.S. Large Cap Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Tax-Managed U.S. Large Cap Fund (the “Fund”) | yield stocks, midcap stocks, and energy stocks. These tilts were |
employs a multi-manager approach whereby Russell Investment | beneficial as these stocks lagged during the fiscal year. The Fund |
Management Company (“RIMCo”) manages a portion of the | was also tilted toward stocks within the financial services and |
Fund’s assets based upon model portfolios provided by multiple | producer durables sectors, which was not rewarded relative to the |
non-discretionary money managers. The Fund’s money managers | S&P 500 Index during the fiscal year. |
have non-discretionary asset management assignments pursuant | |
to which they provide a model portfolio to RIMCo representing | How did the investment strategies and techniques employed |
their investment recommendations, based upon which RIMCo | by the Fund and its money managers affect its benchmark- |
purchases and sells securities for the Fund. RIMCo also manages | relative performance? |
the portion of the Fund's assets that RIMCo determines not to | The Fund’s money managers have non-discretionary asset |
manage based upon model portfolios provided by the Fund's | management assignments pursuant to which they provide |
money managers. RIMCo may change the allocation of the Fund's | a model portfolio to RIMCo representing their investment |
assets at any time. An exemptive order from the Securities and | recommendations, based upon which RIMCo purchases and |
Exchange Commission (“SEC”) permits RIMCo to engage or | sells securities for the Fund. With respect to this portion of the |
terminate a money manager at any time, subject to approval by | Fund, RIMCo manages the Fund’s assets based upon the model |
the Fund’s Board, without a shareholder vote. Pursuant to the | portfolios provided by the Fund’s money managers. RIMCo also |
terms of the exemptive order, the Fund is required to notify its | manages the portion of the Fund’s assets that RIMCo determines |
shareholders within 90 days of when a money manager begins | not to manage based upon model portfolios provided by the |
providing services. As of October 31, 2015, the Fund had five | Fund's money managers. This includes assets managed directly |
money managers. | by RIMCo to effect the Fund's investment strategies and/or to |
actively manage the Fund's overall exposures to seek to achieve | |
What is the Fund’s investment objective? | the desired risk/return profile for the Fund. RIMCo also manages |
The Fund seeks to provide long term capital growth on an after- | the Fund’s liquidity reserves. |
tax basis. | An overweight to the financial services sector detracted, but an |
How did the Fund perform relative to its benchmark for the | underweight to the energy sector was beneficial. Factor exposures |
fiscal year ended October 31, 2015? | were mixed, specifically an overweight to stocks with the lowest |
For the fiscal year ended October 31, 2015, the Fund’s Class | valuations (lowest price-to-book ratios) detracted, while an |
A, Class C, Class E and Class S Shares gained 4.68%, 3.88%, | underweight to high dividend yield stocks was rewarded. Stock |
4.65% and 4.92%, respectively. This is compared to the Fund’s | selection effects within the consumer discretionary sector (an |
benchmark, the S&P 500® Index, which gained 5.20% during | overweight to Starbucks Corporation) and the technology sector |
the same period. The Fund’s performance includes operating | (an underweight Micron Technology, Inc.) were beneficial. |
expenses, whereas index returns are unmanaged and do not | With respect to certain of the Fund’s money managers, J.P. Morgan |
include expenses of any kind. | Investment Management, Inc. (“JPM”) was the worst performing |
For the fiscal year ended October 31, 2015, the Morningstar® | manager for the period and slightly outperformed the S&P 500 |
Large Growth, a group of funds that Morningstar considers to have | Index for the fiscal year. An underweight to high dividend yield |
investment strategies similar to those of the Fund, gained 6.59%. | stocks and an overweight to stocks with high forecasted growth |
This result serves as a peer comparison and is expressed net of | were rewarded. From a sector perspective, an underweight to |
operating expenses. | energy and an overweight to consumer discretionary contributed |
positively to relative returns. Stock selection within the producer | |
RIMCo may assign a money manager a specific style or | durables sector (an overweight to Union Pacific Corporation and |
capitalization benchmark other than the Fund’s index. However, | PACCAR, Inc.) detracted. |
the Fund’s primary index remains the benchmark for the Fund | |
and is representative of the aggregate of each money manager’s | Armstrong Shaw Associates Inc. (“Armstrong”) was the best |
benchmark index. | performing manager for the period and outperformed the Russell |
1000® Value Index for the fiscal year. A tilt toward stocks with | |
How did the market conditions described in the Market | rising earnings estimates contributed positively to benchmark- |
Summary report affect the Fund’s performance? | relative performance. Armstrong’s underweight to the energy |
During the fiscal year, the U.S. large capitalization equity market | sector and overweight to the producer durables sector were |
produced positive returns. Compared to the Fund’s benchmark, | beneficial. Stock selection within the producer durables sector |
relevant Fund exposures included tilts away from high dividend |
Russell Tax-Managed U.S. Large Cap Fund 247
Russell Investment Company
Russell Tax-Managed U.S. Large Cap Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
(an overweight Delta Air Lines and Honeywell International) was | was rewarded while a tilt toward high dividend yield stocks held | |
additive to relative returns. | back relative performance. | |
RIMCo manages a positioning strategy within the Fund, which is | During the period, RIMCo used index futures contracts to equitize | |
designed with the dual mandate of improving the Fund’s after-tax | the Fund’s cash. The decision to equitize the Fund’s cash was | |
returns as well as controlling Fund-level exposures and/or risks. | beneficial to Fund performance for the fiscal year as the market | |
The active tax management aspect of the strategy is focused on | had a positive absolute return. | |
improving the after-tax returns of the Fund. Effective May 1, | Describe any changes to the Fund’s structure or the money | |
2015, all the Fund’s money managers managed non-discretionary | manager line-up. | |
assignments and RIMCo controlled all trading for the Fund. As a | In December 2014, RIMCo terminated NWQ Investment | |
result, RIMCo was able to monitor the tax impacts of the Fund’s | Management Company and hired Barrow, Hanley, Mewhinney & | |
trading and harvest losses and defer capital gains with respect to | Strauss, LLC (“Barrow”) in order to move to a higher conviction | |
certain transactions. | value manager. | |
In addition, using the output from a quantitative model to guide | On May 1, 2015, RIMCo changed the mandates for Armstrong, | |
the purchase of a stock portfolio, RIMCo seeks to position the | JPM and Barrow from discretionary to non-discretionary, such that | |
Fund to meet RIMCo���s overall preferred positioning with respect | all money managers in the Fund would have non-discretionary | |
to Fund exposures, while optimizing the portfolio to minimize | assignments. RIMCo implemented this change to seek to reduce | |
tracking error relative to the Fund’s money manager portfolios. | transaction costs and improve the tax efficiency of the Fund. | |
Over the period, the Fund’s positioning strategy was designed | There were no other changes to the Fund’s structure during the | |
to provide exposure to Russell Top 200 Index holdings and to | fiscal year. | |
certain sectors that tend to be underweighted by the Fund’s money | ||
managers relative to the Fund’s S&P 500 benchmark (technology, | Money Managers as of October 31, | |
health care, energy, consumer discretionary and utilities). The | 2015 | Styles |
Russell Top 200® Index, consists of the largest Russell 1000® | Armstrong Shaw Associates Inc. | Value |
Index stocks. The positioning strategy was also designed to help | Barrow, Hanley, Mewhinney & Strauss, LLC Value | |
control the beta (beta is a measure of a portfolio’s volatility and its | J.P. Morgan Investment Management Inc. Market-Oriented | |
sensitivity to the direction of the market), volatility, and market | Mar Vista Investment Partners, LLC | Growth |
Sustainable Growth Advisers, LP | Growth | |
capitalization exposures arising from the money managers’ stock | The views expressed in this report reflect those of the portfolio | |
selection while preserving the potential benefits of active stock | managers only through the end of the period covered by | |
selection. | the report. These views do not necessarily represent the | |
RIMCo’s tax management strategies contributed to a reduction | views of RIMCo, or any other person in RIMCo or any other | |
of realized capital gains for the Fund for the fiscal year, resulting | affiliated organization. These views are subject to change | |
in the generation of a capital loss carry-forward which may be | at any time based upon market conditions or other events, | |
utilized to offset a portion of realized capital gains in future tax | and RIMCo disclaims any responsibility to update the views | |
years. From a benchmark-relative perspective, the strategy | contained herein. These views should not be relied on as | |
underperformed the S&P 500 Index for the fiscal year. An | investment advice and, because investment decisions for | |
overweight to the utilities and energy sectors detracted as | a Russell Investment Company (“RIC”) Fund are based on | |
these sectors underperformed. Factor exposures were mixed, | numerous factors, should not be relied on as an indication | |
specifically a tilt away from lower market capitalization stocks | of investment decisions of any RIC Fund. |
248 Russell Tax-Managed U.S. Large Cap Fund
Russell Investment Company
Russell Tax-Managed U.S. Large Cap Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* Assumes initial investment on November 1, 2005.
** The Standard & Poor’s 500® Index is composed of 500 common stocks which are chosen by Standard & Poor’s Corporation to best capture the price performance
of a large cross-section of the U.S. publicly traded stock market. The index is structured to approximate the general distribution of industries in the U.S.
economy.
‡ The Fund first issued Class A Shares on June 1, 2010. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Russell Tax-Managed U.S. Large Cap Fund 249
Russell Investment Company
Russell Tax-Managed U.S. Large Cap Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 1,001.30 | $ | 1,018.95 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 6.26 | $ | 6.31 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.24% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). | |||||
and actual expenses. You may use the information in this column, | ||||||
together with the amount you invested, to estimate the expenses | Hypothetical | |||||
Performance (5% | ||||||
that you paid over the period. Simply divide your account value by | Actual | return before | ||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Class C | Performance | expenses) | |||
= 8.6), then multiply the result by the number in the first column | Beginning Account Value | |||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
the expenses you paid on your account during this period. | October 31, 2015 | $ | 997.70 | $ | 1,015.17 | |
Expenses Paid During Period* | $ | 10.02 | $ | 10.11 | ||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | * Expenses are equal to the Fund's annualized expense ratio of 1.99% | |||||
Performance (5% return before expenses)” provides information | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
about hypothetical account values and hypothetical expenses | year period). | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | Hypothetical | |||||
actual return. The hypothetical account values and expenses | Performance (5% | |||||
Actual | return before | |||||
may not be used to estimate the actual ending account balance or | Class E | Performance | expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
to compare the ongoing costs of investing in the Fund and other | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
funds. To do so, compare this 5% hypothetical example with the | Ending Account Value | |||||
October 31, 2015 | $ | 1,001.30 | $ | 1,018.95 | ||
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 6.26 | $ | 6.31 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 1.24% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
250 Russell Tax-Managed U.S. Large Cap Fund
Russell Investment Company
Russell Tax-Managed U.S. Large Cap Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 1,002.50 | $ | 1,020.21 | |
Expenses Paid During Period* | $ | 5.00 | $ | 5.04 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.99% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
Russell Tax-Managed U.S. Large Cap Fund 251
Russell Investment Company
Russell Tax-Managed U.S. Large Cap Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Common Stocks - 94.1% | CVS Health Corp. | 196,844 | 19,444 | ||||
Consumer Discretionary - 13.1% | Dr Pepper Snapple Group, Inc. | 14,940 | 1,335 | ||||
Advance Auto Parts, Inc. | 18,971 | 3,764 | Hershey Co. (The) | 71,019 | 6,299 | ||
Amazon.com, Inc.(Æ) | 31,885 | 19,957 | Kimberly-Clark Corp. | 16,379 | 1,961 | ||
AutoZone, Inc.(Æ) | 2,200 | 1,726 | Kraft Heinz Co. (The) | 13,100 | 1,021 | ||
CBS Corp. Class B | 23,777 | 1,106 | Kroger Co. (The) | 28,400 | 1,074 | ||
Charter Communications, Inc. Class A(Æ) | 5,690 | 1,086 | Molson Coors Brewing Co. Class B | 16,799 | 1,480 | ||
Comcast Corp. Class A(Æ) | 283,582 | 17,775 | Mondelez International, Inc. Class A | 523,075 | 24,145 | ||
Costco Wholesale Corp. | 16,740 | 2,647 | PepsiCo, Inc. | 133,949 | 13,688 | ||
CST Brands, Inc. | 3,500 | 126 | Philip Morris International, Inc. | 120,289 | 10,634 | ||
DISH Network Corp. Class A(Æ) | 21,489 | 1,353 | Procter & Gamble Co. (The) | 71,537 | 5,464 | ||
Dollar General Corp. | 8,600 | 583 | Reynolds American, Inc. | 31,314 | 1,513 | ||
Dollar Tree, Inc.(Æ) | 5,970 | 391 | Unilever NV | 163,712 | 7,364 | ||
DR Horton, Inc. | 30,594 | 901 | Walgreens Boots Alliance, Inc. | 9,505 | 805 | ||
eBay, Inc.(Æ) | 5,789 | 162 | Whole Foods Market, Inc. | 170,007 | 5,093 | ||
Estee Lauder Cos., Inc. (The) Class A | 10,961 | 882 | 120,184 | ||||
Expedia, Inc. | 5,900 | 804 | |||||
Ford Motor Co. | 589,261 | 8,727 | Energy - 6.9% | ||||
Gap, Inc. (The) | 93,008 | 2,532 | Anadarko Petroleum Corp. | 30,824 | 2,062 | ||
General Motors Co. | 47,200 | 1,648 | Baker Hughes, Inc. | 25,670 | 1,352 | ||
Harman International Industries, Inc. | 6,000 | 660 | BP PLC - ADR | 92,145 | 3,290 | ||
Home Depot, Inc. | 57,634 | 7,126 | Cabot Oil & Gas Corp. | 32,455 | 705 | ||
Interpublic Group of Cos., Inc. (The) | 14,867 | 341 | Cheniere Energy, Inc.(Æ) | 5,800 | 287 | ||
Johnson Controls, Inc. | 21,100 | 953 | Chevron Corp. | 127,133 | 11,554 | ||
Lennar Corp. Class A | 81,669 | 4,089 | Columbia Pipeline Group, Inc. | 48,744 | 1,012 | ||
Liberty Global PLC Class C(Æ) | 116,605 | 4,972 | Concho Resources, Inc.(Æ) | 13,616 | 1,578 | ||
Liberty Global PLC LiLAC(Æ) | 50,319 | 1,945 | ConocoPhillips | 109,368 | 5,835 | ||
Lowe's Cos., Inc. | 173,617 | 12,818 | Core Laboratories NV | 93,743 | 10,905 | ||
Macy's, Inc. | 12,300 | 627 | Devon Energy Corp. | 34,806 | 1,459 | ||
McDonald's Corp. | 5,663 | 636 | EOG Resources, Inc. | 51,264 | 4,401 | ||
Michael Kors Holdings, Ltd.(Æ) | 111,401 | 4,305 | EQT Corp. | 16,898 | 1,116 | ||
Nike, Inc. Class B | 14,597 | 1,913 | Exxon Mobil Corp. | 176,249 | 14,583 | ||
Norwegian Cruise Line Holdings, Ltd.(Æ) | 13,224 | 841 | Halliburton Co. | 238,588 | 9,157 | ||
O'Reilly Automotive, Inc.(Æ) | 20,764 | 5,736 | Kinder Morgan, Inc. | 42,159 | 1,153 | ||
Priceline Group, Inc. (The)(Æ) | 7,236 | 10,523 | Marathon Petroleum Corp. | 31,050 | 1,608 | ||
PulteGroup, Inc. | 44,100 | 808 | Occidental Petroleum Corp. | 118,602 | 8,841 | ||
Ralph Lauren Corp. Class A | 5,313 | 589 | Phillips 66(Æ) | 79,479 | 7,078 | ||
Ross Stores, Inc. | 18,800 | 951 | Royal Dutch Shell PLC Class A - ADR(Æ) | 13,760 | 722 | ||
Royal Caribbean Cruises, Ltd. | 13,290 | 1,307 | Schlumberger, Ltd. | 254,394 | 19,883 | ||
Starbucks Corp. | 291,470 | 18,237 | Valero Energy Corp. | 21,078 | 1,389 | ||
Target Corp. | 118,264 | 9,128 | Williams Cos., Inc. (The) | 4,510 | 178 | ||
TE Connectivity, Ltd. | 36,465 | 2,350 | 110,148 | ||||
Time Warner Cable, Inc. | 10,232 | 1,938 | |||||
Time Warner, Inc. | 67,362 | 5,075 | Financial Services - 18.6% | ||||
TJX Cos., Inc. | 167,704 | 12,274 | ACE, Ltd. | 107,520 | 12,208 | ||
Twenty-First Century Fox, Inc. Class A | 80,925 | 2,484 | Aflac, Inc. | 71 | 5 | ||
VF Corp. | 35,920 | 2,425 | Alliance Data Systems Corp.(Æ) | 1,700 | 505 | ||
Viacom, Inc. Class B | 13,776 | 679 | American Express Co. | 86,322 | 6,324 | ||
Wal-Mart Stores, Inc. | 106,958 | 6,122 | American International Group, Inc. | 195,529 | 12,330 | ||
Walt Disney Co. (The) | 95,353 | 10,845 | American Tower Corp.(ö) | 131,291 | 13,422 | ||
Whirlpool Corp. | 12,373 | 1,981 | Ameriprise Financial, Inc. | 35,620 | 4,109 | ||
Wyndham Worldwide Corp. | 80,793 | 6,572 | Aon PLC | 62,352 | 5,818 | ||
Yum! Brands, Inc. | 4,260 | 302 | AvalonBay Communities, Inc.(ö) | 7,200 | 1,259 | ||
207,722 | Bank of America Corp. | 1,113,849 | 18,690 | ||||
Bank of New York Mellon Corp. (The) | 310 | 13 | |||||
Consumer Staples - 7.6% | BB&T Corp. | 127 | 5 | ||||
Altria Group, Inc. | 99,756 | 6,032 | Berkshire Hathaway, Inc. Class B(Æ) | 101,336 | 13,784 | ||
Archer-Daniels-Midland Co. | 26,319 | 1,202 | BlackRock, Inc. Class A | 2,639 | 929 | ||
Coca-Cola Co. (The) | 67,940 | 2,877 | Boston Properties, Inc.(ö) | 6,165 | 776 | ||
Colgate-Palmolive Co. | 94,454 | 6,267 | Capital One Financial Corp. | 133,776 | 10,555 | ||
Constellation Brands, Inc. Class A | 18,440 | 2,486 | Charles Schwab Corp. (The) | 60,873 | 1,858 |
See accompanying notes which are an integral part of the financial statements.
252 Russell Tax-Managed U.S. Large Cap Fund
Russell Investment Company
Russell Tax-Managed U.S. Large Cap Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Chubb Corp. (The) | 821 | 106 | Johnson & Johnson | 206,175 | 20,830 | ||
Citigroup, Inc. | 276,193 | 14,685 | Mallinckrodt PLC(Æ) | 143 | 9 | ||
Equinix, Inc.(ö) | 29,524 | 8,759 | McKesson Corp. | 14,534 | 2,599 | ||
Everest Re Group, Ltd. | 900 | 160 | Medtronic PLC | 153,694 | 11,361 | ||
Extra Space Storage, Inc.(ö) | 6,120 | 485 | Merck & Co., Inc. | 200,582 | 10,964 | ||
Fidelity National Information Services, Inc. | 26,184 | 1,909 | PerkinElmer, Inc. | 2,100 | 109 | ||
FleetCor Technologies, Inc.(Æ) | 35,249 | 5,106 | Perrigo Co. PLC | 6,987 | 1,102 | ||
Goldman Sachs Group, Inc. (The) | 49,738 | 9,326 | Pfizer, Inc. | 497,997 | 16,842 | ||
Hartford Financial Services Group, Inc. | 55,496 | 2,567 | Regeneron Pharmaceuticals, Inc.(Æ) | 11,615 | 6,474 | ||
Highwoods Properties, Inc.(ö) | 8,040 | 349 | Sanofi - ADR | 65,501 | 3,297 | ||
Intercontinental Exchange, Inc. | 46,000 | 11,610 | St. Jude Medical, Inc. | 62,971 | 4,018 | ||
Invesco, Ltd. | 31,202 | 1,035 | Stryker Corp. | 18,925 | 1,810 | ||
JPMorgan Chase & Co. | 274,543 | 17,639 | Teva Pharmaceutical Industries, Ltd. - ADR | 12,650 | 749 | ||
Kilroy Realty Corp.(ö) | 9,100 | 599 | Thermo Fisher Scientific, Inc. | 71,191 | 9,310 | ||
Loews Corp. | 141,967 | 5,176 | UnitedHealth Group, Inc. | 114,331 | 13,466 | ||
Markel Corp.(Æ) | 11,087 | 9,624 | Valeant Pharmaceuticals International, Inc. | ||||
MasterCard, Inc. Class A | 18,270 | 1,809 | (Æ) | 4,612 | 433 | ||
MetLife, Inc. | 191,362 | 9,641 | Vertex Pharmaceuticals, Inc.(Æ) | 9,951 | 1,241 | ||
Morgan Stanley | 109,840 | 3,621 | Zoetis, Inc. Class A | 13,700 | 589 | ||
PayPal Holdings, Inc.(Æ) | 5,789 | 208 | 208,057 | ||||
PNC Financial Services Group, Inc. (The) | 26,570 | 2,398 | |||||
Prologis, Inc.(ö) | 14,951 | 639 | Materials and Processing - 3.8% | ||||
Prudential Financial, Inc. | 9,362 | 772 | Air Products & Chemicals, Inc. | 57,117 | 7,938 | ||
Realogy Holdings Corp.(Æ) | 173,389 | 6,780 | Alcoa, Inc. | 21,732 | 194 | ||
Simon Property Group, Inc.(ö) | 9,970 | 2,009 | Axiall Corp. | 1,220 | 25 | ||
SL Green Realty Corp.(ö) | 1,755 | 208 | Ball Corp. | 3,000 | 205 | ||
State Street Corp. | 210,129 | 14,499 | CF Industries Holdings, Inc. | 8,500 | 432 | ||
SunTrust Banks, Inc. | 10,372 | 431 | Chemours Co. (The) | 2,820 | 20 | ||
SVB Financial Group(Æ) | 2,100 | 256 | CRH PLC - ADR | 223,378 | 6,112 | ||
Synchrony Financial(Æ) | 140,647 | 4,326 | Crown Holdings, Inc.(Æ) | 39,181 | 2,078 | ||
TD Ameritrade Holding Corp. | 6,600 | 228 | Dow Chemical Co. (The) | 101,561 | 5,248 | ||
Thomson Reuters Corp. | 3,730 | 153 | Eastman Chemical Co. | 10,967 | 791 | ||
Travelers Cos., Inc. (The) | 657 | 74 | Ecolab, Inc. | 126,172 | 15,185 | ||
US Bancorp | 72,660 | 3,065 | EI du Pont de Nemours & Co. | 14,100 | 894 | ||
Visa, Inc. Class A | 300,488 | 23,312 | Ingersoll-Rand PLC | 8,027 | 476 | ||
Wells Fargo & Co. | 544,270 | 29,467 | International Paper Co. | 61,195 | 2,612 | ||
XL Group PLC Class A | 14,100 | 537 | LyondellBasell Industries NV Class A | 11 | 1 | ||
296,158 | Martin Marietta Materials, Inc. | 6,558 | 1,017 | ||||
Masco Corp. | 34,250 | 993 | |||||
Health Care - 13.1% | Monsanto Co. | 40,941 | 3,817 | ||||
Abbott Laboratories | 72,784 | 3,261 | Mosaic Co. (The) | 30,979 | 1,047 | ||
AbbVie, Inc. | 156,092 | 9,295 | PPG Industries, Inc. | 4,260 | 444 | ||
Aetna, Inc. | 25,618 | 2,940 | Praxair, Inc. | 35,245 | 3,915 | ||
Alexion Pharmaceuticals, Inc.(Æ) | 9,372 | 1,650 | Precision Castparts Corp. | 16,038 | 3,702 | ||
Allergan PLC(Æ) | 50,012 | 15,427 | Rio Tinto PLC - ADR | 49,165 | 1,795 | ||
Amgen, Inc. | 108,322 | 17,134 | Southern Copper Corp. | 1,984 | 55 | ||
Anthem, Inc. | 65,311 | 9,088 | WestRock Co. | 16,842 | 905 | ||
Becton Dickinson and Co. | 1,909 | 272 | 59,901 | ||||
Biogen, Inc.(Æ) | 12,139 | 3,527 | |||||
Boston Scientific Corp.(Æ) | 124,350 | 2,273 | Producer Durables - 12.1% | ||||
Bristol-Myers Squibb Co. | 84,335 | 5,562 | 3M Co. | 6,010 | 945 | ||
Cardinal Health, Inc. | 66,889 | 5,498 | Accenture PLC Class A | 45,610 | 4,889 | ||
Celgene Corp.(Æ) | 43,640 | 5,355 | American Airlines Group, Inc. | 4,608 | 213 | ||
Cerner Corp.(Æ) | 99,683 | 6,608 | Automatic Data Processing, Inc. | 85,223 | 7,414 | ||
Eli Lilly & Co. | 50,491 | 4,119 | B/E Aerospace, Inc. | 91,973 | 4,318 | ||
Express Scripts Holding Co.(Æ) | 6,094 | 526 | Boeing Co. (The) | 5,308 | 786 | ||
Gilead Sciences, Inc. | 58,239 | 6,297 | Canadian Pacific Railway, Ltd. | 2,691 | 378 | ||
Humana, Inc. | 17,180 | 3,069 | CSX Corp. | 90,528 | 2,443 | ||
Illumina, Inc.(Æ) | 6,287 | 901 | Cummins, Inc. | 6,032 | 624 | ||
Intuitive Surgical, Inc.(Æ) | 104 | 52 | Danaher Corp. | 5,344 | 499 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed U.S. Large Cap Fund 253
Russell Investment Company
Russell Tax-Managed U.S. Large Cap Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) or | Value | Amount ($) or | Value | ||||||
Shares | $ | Shares | $ | ||||||
Deere & Co. | 1,500 | 117 | Microsoft Corp. | 692,916 | 36,475 | ||||
Delta Air Lines, Inc. | 322,460 | 16,394 | NXP Semiconductors NV(Æ) | 8,670 | 679 | ||||
Eaton Corp. PLC | 32,372 | 1,810 | Oracle Corp. | 276,698 | 10,747 | ||||
Emerson Electric Co. | 13,090 | 618 | QUALCOMM, Inc. | 28,570 | 1,698 | ||||
FedEx Corp. | 1,893 | 295 | Red Hat, Inc.(Æ) | 64,295 | 5,086 | ||||
Fluor Corp. | 8,730 | 417 | Salesforce.com, Inc.(Æ) | 60,506 | 4,702 | ||||
General Dynamics Corp. | 35,897 | 5,334 | SanDisk Corp. | 2,700 | 208 | ||||
General Electric Co. | 575,022 | 16,630 | SAP SE - ADR | 81,526 | 6,417 | ||||
Honeywell International, Inc. | 354,717 | 36,635 | Texas Instruments, Inc. | 46,951 | 2,663 | ||||
Illinois Tool Works, Inc. | 1,831 | 168 | Twitter, Inc.(Æ) | 2,959 | 84 | ||||
Kansas City Southern | 56,662 | 4,689 | VMware, Inc. Class A(Æ) | 84 | 5 | ||||
L-3 Communications Holdings, Inc. | 4,583 | 579 | Xilinx, Inc. | 5,800 | 276 | ||||
Lockheed Martin Corp. | 3,081 | 677 | Yahoo!, Inc.(Æ) | 11,551 | 411 | ||||
Mettler-Toledo International, Inc.(Æ) | 26,175 | 8,140 | 226,791 | ||||||
Norfolk Southern Corp. | 28,012 | 2,242 | |||||||
Northrop Grumman Corp. | 6,189 | 1,162 | Utilities - 4.6% | ||||||
PACCAR, Inc. | 48,867 | 2,573 | American Electric Power Co., Inc. | 26,048 | 1,476 | ||||
Parker-Hannifin Corp. | 5,116 | 536 | AT&T, Inc. | 498,563 | 16,707 | ||||
Pentair PLC | 6,410 | 359 | Calpine Corp.(Æ) | 329,459 | 5,110 | ||||
Raytheon Co. | 71,152 | 8,353 | CMS Energy Corp. | 37,178 | 1,341 | ||||
Sensata Technologies Holding NV(Æ) | 218,250 | 10,496 | Dominion Resources, Inc. | 12,133 | 867 | ||||
Southwest Airlines Co. | 146,188 | 6,767 | Duke Energy Corp. | 23,270 | 1,663 | ||||
Stanley Black & Decker, Inc. | 62,537 | 6,628 | Edison International | 31,273 | 1,893 | ||||
TopBuild Corp.(Æ) | 3,805 | 107 | Energy Transfer Equity, LP | 185,233 | 3,992 | ||||
TransDigm Group, Inc.(Æ) | 34,516 | 7,588 | Entergy Corp. | 86,956 | 5,927 | ||||
Tyco International PLC | 144,190 | 5,254 | Exelon Corp. | 26,084 | 728 | ||||
Union Pacific Corp. | 93,246 | 8,332 | NextEra Energy, Inc. | 46,330 | 4,756 | ||||
United Continental Holdings, Inc.(Æ) | 22,829 | 1,377 | NiSource, Inc. | 38,538 | 738 | ||||
United Parcel Service, Inc. Class B | 2,834 | 292 | PG&E Corp. | 37,988 | 2,028 | ||||
United Technologies Corp. | 120,321 | 11,841 | PPL Corp. | 47,857 | 1,646 | ||||
Verisk Analytics, Inc. Class A(Æ) | 48,126 | 3,446 | Public Service Enterprise Group, Inc. | 14,667 | 606 | ||||
Waste Management, Inc. | 4,229 | 227 | Sempra Energy | 14,900 | 1,526 | ||||
WW Grainger, Inc. | 2,470 | 519 | Southern Co. (The) | 28,934 | 1,305 | ||||
193,111 | T-Mobile US, Inc.(Æ) | 8,037 | 304 | ||||||
Verizon Communications, Inc. | 412,898 | 19,357 | |||||||
Technology - 14.3% | Xcel Energy, Inc. | 41,419 | 1,476 | ||||||
Adobe Systems, Inc.(Æ) | 127,132 | 11,272 | 73,446 | ||||||
Alphabet, Inc. Class A(Æ) | 9,553 | 7,044 | |||||||
Alphabet, Inc. Class C(Æ) | 35,116 | 24,961 | Total Common Stocks | ||||||
Amphenol Corp. Class A | 16,079 | 872 | (cost $1,157,306) | 1,495,518 | |||||
Analog Devices, Inc. | 62,800 | 3,776 | |||||||
Apple, Inc. | 278,978 | 33,338 | Short-Term Investments - 5.9% | ||||||
Applied Materials, Inc. | 56,937 | 955 | Russell U.S. Cash Management Fund | 88,188,609 | (8) | 88,189 | |||
ARM Holdings PLC - ADR | 123,117 | 5,839 | United States Treasury Bills | ||||||
Avago Technologies, Ltd. Class A | 30,330 | 3,735 | 0.183% due 02/04/16 (§) | 1,700 | 1,699 | ||||
Broadcom Corp. Class A | 36,440 | 1,873 | 0.112% due 04/07/16 (§) | 3,500 | 3,498 | ||||
CDK Global Inc. | 4,813 | 240 | Total Short-Term Investments | ||||||
Cisco Systems, Inc. | 288,707 | 8,329 | (cost $93,386) | 93,386 | |||||
Cognizant Technology Solutions Corp. Class | |||||||||
A(Æ) | 31,159 | 2,122 | Total Investments 100.0% | ||||||
EMC Corp. | 301,200 | 7,898 | (identified cost $1,250,692) | 1,588,904 | |||||
Facebook, Inc. Class A(Æ) | 161,240 | 16,442 | |||||||
Freescale Semiconductor, Ltd.(Æ) | 7,400 | 248 | Other Assets and Liabilities, Net | ||||||
HP Inc.(Æ) | 143,146 | 3,859 | - 0.0% | 592 | |||||
Intel Corp. | 153,931 | 5,212 | Net Assets - 100.0% | 1,589,496 | |||||
International Business Machines Corp. | 41,924 | 5,873 | |||||||
Intuit, Inc. | 69,231 | 6,745 | |||||||
KLA-Tencor Corp. | 5,800 | 389 | |||||||
Lam Research Corp. | 32,446 | 2,485 | |||||||
LinkedIn Corp. Class A(Æ) | 15,915 | 3,833 |
See accompanying notes which are an integral part of the financial statements.
254 Russell Tax-Managed U.S. Large Cap Fund
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Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||
Amounts in thousands (except contract amounts) | ||||||
Unrealized | ||||||
Appreciation | ||||||
Number of | Notional | Expiration | (Depreciation) | |||
Contracts | Amount | Date | $ | |||
Long Positions | ||||||
S&P 500 E-Mini Index Futures | 586 | USD | 60,759 | 12/15 | 3,344 | |
S&P E-Mini Energy Select Sector Index Futures | 127 | USD | 8,622 | 12/15 | 649 | |
S&P Health Care Index Futures | 125 | USD | 8,940 | 12/15 | 180 | |
S&P Technology Index Futures | 308 | USD | 13,463 | 12/15 | 1,031 | |
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 5,204 |
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Common Stocks | |||||||||||
Consumer Discretionary | $ | 207,722 | $ | — | $ | — | $ | 207,722 | 13.1 | ||
Consumer Staples | 120,184 | — | — | 120,184 | 7.6 | ||||||
Energy | 110,148 | — | — | 110,148 | 6.9 | ||||||
Financial Services | 296,158 | — | — | 296,158 | 18.6 | ||||||
Health Care | 208,057 | — | — | 208,057 | 13.1 | ||||||
Materials and Processing | 59,901 | — | — | 59,901 | 3.8 | ||||||
Producer Durables | 193,111 | — | — | 193,111 | 12.1 | ||||||
Technology | 226,791 | — | — | 226,791 | 14.3 | ||||||
Utilities | 73,446 | — | — | 73,446 | 4.6 | ||||||
Short-Term Investments | — | 93,386 | — | 93,386 | 5.9 | ||||||
Total Investments | 1,495,518 | 93,386 | — | 1,588,904 | 100.0 | ||||||
Other Assets and Liabilities, Net | —* | ||||||||||
100.0 | |||||||||||
Other Financial Instruments | |||||||||||
Futures Contracts | 5,204 | — | — | 5,204 | 0.3 | ||||||
Total Other Financial Instruments** | $ | 5,204 | $ | — | $ | — | $ | 5,204 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
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Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Assets and Liabilities - Assets | |||
Variation margin on futures contracts* | $ | 5,204 | |
Equity | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Operations - Net realized gain (loss) | |||
Futures contracts | $ | (1,901 | ) |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||
Futures contracts | $ | 3,191 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
256 Russell Tax-Managed U.S. Large Cap Fund
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands
Offsetting of Financial Assets and Derivative Assets | ||||||||||
Gross | Net Amounts | |||||||||
Amounts | of Assets | |||||||||
Gross | Offset in the | Presented in | ||||||||
Amounts of | Statement of | the Statement | ||||||||
Recognized | Assets and | of Assets and | ||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||||
Futures Contracts | Variation margin on futures contracts | $ | 74 | $ | — $ | 74 | ||||
Total Financial and Derivative Assets | 74 | — | 74 | |||||||
Financial and Derivative Assets not subject to a netting agreement | (74) | — | (74 | ) | ||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | — | $ | — $ | — | |||||
Offsetting of Financial Liabilities and Derivative Liabilities | ||||||||||
Gross | Net Amounts | |||||||||
Amounts | of Liabilities | |||||||||
Gross | Offset in the | Presented in | ||||||||
Amounts of | Statement of | the Statement | ||||||||
Recognized | Assets and | of Assets and | ||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | ||||||
Futures Contracts | Variation margin on futures contracts | $ | 378 | $ | — $ | 378 | ||||
Total Financial and Derivative Liabilities | 378 | — | 378 | |||||||
Financial and Derivative Liabilities not subject to a netting agreement | (378) | — | (378 | ) | ||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | — | $ | — $ | — | |||||
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance | ||||||||||
Sheet collateral and adjustments made to exclude overcollateralization. | ||||||||||
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
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Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 1,250,692 |
Investments, at fair value(>) | 1,588,904 | |
Cash | 41 | |
Cash (restricted)(a) | 302 | |
Receivables: | ||
Dividends and interest | 1,950 | |
Dividends from affiliated Russell funds | 10 | |
Investments sold | 4,796 | |
Fund shares sold | 5,041 | |
Variation margin on futures contracts | 74 | |
Total assets | 1,601,118 | |
Liabilities | ||
Payables: | ||
Investments purchased | 8,865 | |
Fund shares redeemed | 990 | |
Accrued fees to affiliates | 1,267 | |
Other accrued expenses | 122 | |
Variation margin on futures contracts | 378 | |
Total liabilities | 11,622 | |
Net Assets | $ | 1,589,496 |
See accompanying notes which are an integral part of the financial statements.
258 Russell Tax-Managed U.S. Large Cap Fund
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Russell Tax-Managed U.S. Large Cap Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 8,567 | |
Accumulated net realized gain (loss) | (12,359 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | 338,212 | ||
Futures contracts | 5,204 | ||
Shares of beneficial interest | 496 | ||
Additional paid-in capital | 1,249,376 | ||
Net Assets | $ | 1,589,496 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 31.76 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 33.70 | |
Class A — Net assets | $ | 24,395,634 | |
Class A — Shares outstanding ($.01 par value) | 768,178 | ||
Net asset value per share: Class C(#) | $ | 30.17 | |
Class C — Net assets | $ | 24,808,327 | |
Class C — Shares outstanding ($.01 par value) | 822,383 | ||
Net asset value per share: Class E(#) | $ | 31.89 | |
Class E — Net assets | $ | 53,565,490 | |
Class E — Shares outstanding ($.01 par value) | 1,679,823 | ||
Net asset value per share: Class S(#) | $ | 32.08 | |
Class S — Net assets | $ 1,486,726,556 | ||
Class S — Shares outstanding ($.01 par value) | 46,346,091 | ||
Amounts in thousands | |||
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 88,189 | |
(a) Cash Collateral for Futures | $ | 302 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
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Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 24,989 | |
Dividends from affiliated Russell funds | 91 | ||
Interest | 3 | ||
Total investment income | 25,083 | ||
Expenses | |||
Advisory fees | 9,976 | ||
Administrative fees | 679 | ||
Custodian fees | 234 | ||
Distribution fees - Class A | 54 | ||
Distribution fees - Class C | 166 | ||
Transfer agent fees - Class A | 43 | ||
Transfer agent fees - Class C | 44 | ||
Transfer agent fees - Class E | 98 | ||
Transfer agent fees - Class S | 2,665 | ||
Professional fees | 69 | ||
Registration fees | 121 | ||
Shareholder servicing fees - Class C | 55 | ||
Shareholder servicing fees - Class E | 122 | ||
Trustees’ fees | 35 | ||
Printing fees | 85 | ||
Miscellaneous | 36 | ||
Total expenses | 14,482 | ||
Net investment income (loss) | 10,601 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (5,794 | ) | |
Futures contracts | (1,901 | ) | |
Net realized gain (loss) | (7,695 | ) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments | 59,730 | ||
Futures contracts | 3,191 | ||
Net change in unrealized appreciation (depreciation) | 62,921 | ||
Net realized and unrealized gain (loss) | 55,226 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 65,827 |
See accompanying notes which are an integral part of the financial statements.
260 Russell Tax-Managed U.S. Large Cap Fund
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Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 10,601 | $ | 6,916 | ||
Net realized gain (loss) | (7,695 | ) | 86,658 | |||
Net change in unrealized appreciation (depreciation) | 62,921 | 47,197 | ||||
Net increase (decrease) in net assets from operations | 65,827 | 140,771 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (82 | ) | (15 | ) | ||
Class E | (185 | ) | (58 | ) | ||
Class S | (7,822 | ) | (2,947 | ) | ||
From net realized gain | ||||||
Class A | (825 | ) | — | |||
Class C | (908 | ) | — | |||
Class E | (2,040 | ) | — | |||
Class S | (52,960 | ) | — | |||
Net decrease in net assets from distributions | (64,822 | ) | (3,020 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 322,913 | 306,318 | ||||
Total Net Increase (Decrease) in Net Assets | 323,918 | 444,069 | ||||
Net Assets | ||||||
Beginning of period | 1,265,578 | 821,509 | ||||
End of period | $ | 1,589,496 | $ | 1,265,578 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 8,567 | $ | 6,002 |
See accompanying notes which are an integral part of the financial statements.
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Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 314 | $ | 9,824 | 260 | $ | 7,781 | ||||||
Proceeds from reinvestment of distributions | 29 | 907 | —** | 15 | ||||||||
Payments for shares redeemed | (162 | ) | (5,095 | ) | (91 | ) | (2,722 | ) | ||||
Net increase (decrease) | 181 | 5,636 | 169 | 5,074 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 253 | 7,583 | 204 | 5,834 | ||||||||
Proceeds from reinvestment of distributions | 30 | 902 | — | — | ||||||||
Payments for shares redeemed | (98 | ) | (2,892 | ) | (125 | ) | (3,609 | ) | ||||
Net increase (decrease) | 185 | 5,593 | 79 | 2,225 | ||||||||
Class E | ||||||||||||
Proceeds from shares sold | 396 | 12,388 | 387 | 11,609 | ||||||||
Proceeds from reinvestment of distributions | 70 | 2,204 | 2 | 57 | ||||||||
Payments for shares redeemed | (215 | ) | (6,760 | ) | (262 | ) | (7,965 | ) | ||||
Net increase (decrease) | 251 | 7,832 | 127 | 3,701 | ||||||||
Class S | ||||||||||||
Proceeds from shares sold | 15,492 | 490,821 | 14,141 | 427,200 | ||||||||
Proceeds from reinvestment of distributions | 1,874 | 59,304 | 99 | 2,886 | ||||||||
Payments for shares redeemed | (7,804 | ) | (246,273 | ) | (4,449 | ) | (134,768 | ) | ||||
Net increase (decrease) | 9,562 | 303,852 | 9,791 | 295,318 | ||||||||
Total increase (decrease) | 10,179 | $ | 322,913 | 10,166 | $ | 306,318 | ||||||
** Less than 500 shares. |
See accompanying notes which are an integral part of the financial statements.
262 Russell Tax-Managed U.S. Large Cap Fund
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Russell Tax-Managed U.S. Large Cap Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class A | ||||||||||||||||
October 31, 2015 | 31.83 | .16 | 1.31 | 1.47 | (.14 | ) | (1.40 | ) | ||||||||
October 31, 2014 | 27.84 | .13 | 3.90 | 4.03 | (.04 | ) | — | |||||||||
October 31, 2013 | 22.11 | .06 | 5.79 | 5.85 | (.12 | ) | — | |||||||||
October 31, 2012 | 19.49 | .06 | 2.58 | 2.64 | (.02 | ) | — | |||||||||
October 31, 2011 | 18.15 | .02 | 1.38 | 1.40 | (.06 | ) | — | |||||||||
Class C | ||||||||||||||||
October 31, 2015 | 30.40 | (.07 | ) | 1.24 | 1.17 | — | (1.40 | ) | ||||||||
October 31, 2014 | 26.76 | (.09 | ) | 3.73 | 3.64 | — | — | |||||||||
October 31, 2013 | 21.29 | (.11 | ) | 5.58 | 5.47 | — | — | |||||||||
October 31, 2012 | 18.88 | (.08 | ) | 2.49 | 2.41 | — | — | |||||||||
October 31, 2011 | 17.65 | (.12 | ) | 1.35 | 1.23 | — | — | |||||||||
Class E | ||||||||||||||||
October 31, 2015 | 31.95 | .16 | 1.31 | 1.47 | (.13 | ) | (1.40 | ) | ||||||||
October 31, 2014 | 27.95 | .14 | 3.90 | 4.04 | (.04 | ) | — | |||||||||
October 31, 2013 | 22.17 | .07 | 5.81 | 5.88 | (.10 | ) | — | |||||||||
October 31, 2012 | 19.53 | .08 | 2.57 | 2.65 | (.01 | ) | — | |||||||||
October 31, 2011 | 18.15 | .02 | 1.40 | 1.42 | (.04 | ) | — | |||||||||
Class S | ||||||||||||||||
October 31, 2015 | 32.13 | .24 | 1.32 | 1.56 | (.21 | ) | (1.40 | ) | ||||||||
October 31, 2014 | 28.10 | .21 | 3.92 | 4.13 | (.10 | ) | — | |||||||||
October 31, 2013 | 22.28 | .13 | 5.84 | 5.97 | (.15 | ) | — | |||||||||
October 31, 2012 | 19.63 | .13 | 2.58 | 2.71 | (.06 | ) | — | |||||||||
October 31, 2011 | 18.24 | .07 | 1.40 | 1.47 | (.08 | ) | — | |||||||||
See accompanying notes which are an integral part of the financial statements.
264 Russell Tax-Managed U.S. Large Cap Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||||
(1.54 | ) | 31.76 | 4.68 | 24,396 | 1.24 | 1.24 | .52 | 127 | |||||||||
(.04 | ) | 31.83 | 14.48 | 18,676 | 1.24 | 1.24 | .45 | 63 | |||||||||
(.12 | ) | 27.84 | 26.60 | 11,631 | 1.24 | 1.24 | .25 | 35 | |||||||||
(.02 | ) | 22.11 | 13.54 | 5,765 | 1.23 | 1.23 | .29 | 48 | |||||||||
(.06 | ) | 19.49 | 7.73 | 2,682 | 1.24 | 1.24 | .10 | 58 | |||||||||
(1.40 | ) | 30.17 | 3.88 | 24,808 | 1.99 | 1.99 | (.23 | ) | 127 | ||||||||
— | 30.40 | 13.60 | 19,360 | 1.99 | 1.99 | (.30 | ) | 63 | |||||||||
— | 26.76 | 25.69 | 14,927 | 1.99 | 1.98 | (.46 | ) | 35 | |||||||||
— | 21.29 | 12.71 | 10,733 | 1.98 | 1.94 | (.39 | ) | 48 | |||||||||
— | 18.88 | 7.03 | 9,217 | 2.01 | 1.95 | (.64 | ) | 58 | |||||||||
(1.53 | ) | 31.89 | 4.65 | 53,565 | 1.24 | 1.24 | .52 | 127 | |||||||||
(.04 | ) | 31.95 | 14.48 | 45,651 | 1.24 | 1.24 | .45 | 63 | |||||||||
(.10 | ) | 27.95 | 26.61 | 36,395 | 1.24 | 1.23 | .29 | 35 | |||||||||
(.01 | ) | 22.17 | 13.57 | 23,578 | 1.23 | 1.19 | .36 | 48 | |||||||||
(.04 | ) | 19.53 | 7.82 | 20,474 | 1.26 | 1.20 | .12 | 58 | |||||||||
(1.61 | ) | 32.08 | 4.92 | 1,486,727 | .99 | .99 | .77 | 127 | |||||||||
(.10 | ) | 32.13 | 14.75 | 1,181,891 | .99 | .99 | .70 | 63 | |||||||||
(.15 | ) | 28.10 | 26.94 | 758,556 | .99 | .98 | .53 | 35 | |||||||||
(.06 | ) | 22.28 | 13.84 | 473,227 | .98 | .94 | .61 | 48 | |||||||||
(.08 | ) | 19.63 | 8.04 | 400,643 | 1.01 | .95 | .36 | 58 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed U.S. Large Cap Fund 265
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Russell Tax-Managed U.S. Mid & Small Cap Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Tax-Managed U.S. Mid & Small Cap Fund – | Russell 2500TM Index** | ||||||
Class A‡ | Total | ||||||
Total | Return | ||||||
Return | 1 Year | 1.50 | % | ||||
1 Year | (6.51 | )% | 5 Years | 13.07 | %§ | ||
5 Years | 10.96 | %§ | 10 Years | 8.33 | %§ | ||
10 Years | 7.26 | %§ | |||||
Russell Tax-Managed U.S. Mid & Small Cap Fund - Class C | |||||||
Total | |||||||
Return | |||||||
1 Year | (1.53 | )% | |||||
5 Years | 11.48 | %§ | |||||
10 Years | 7.11 | %§ | |||||
Russell Tax-Managed U.S. Mid & Small Cap Fund - Class E | |||||||
Total | |||||||
Return | |||||||
1 Year | (0.81 | )% | |||||
5 Years | 12.31 | %§ | |||||
10 Years | 7.91 | %§ | |||||
Russell Tax-Managed U.S. Mid & Small Cap Fund - Class S | |||||||
Total | |||||||
Return | |||||||
1 Year | (0.55 | )% | |||||
5 Years | 12.59 | %§ | |||||
10 Years | 8.18 | %§ |
266 Russell Tax-Managed U.S. Mid & Small Cap Fund
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Tax-Managed U.S. Mid & Small Cap Fund (the | beginning of 2015, although initially negative, introduced a pick- | ||
“Fund”) employs a multi-manager approach whereby Russell | up in performance which eventually reversed towards the end of | ||
Investment Management Company (“RIMCo”) manages a portion | the 2015 fiscal year. | ||
of the Fund’s assets based upon model portfolios provided | Over the period, the Fund maintained exposure to securities | ||
by multiple non-discretionary money managers. The Fund’s | towards the bottom end of the capitalization opportunity set that | ||
money managers have non-discretionary asset management | were trading at discounted valuations, as well as companies with | ||
assignments pursuant to which they provide a model portfolio | higher quality characteristics such as lower financial leverage | ||
to RIMCo representing their investment recommendations, | and higher returns-on-equity. Within the Russell 2500™ Index, | ||
based upon which RIMCo purchases and sells securities for the | larger cap growth stocks significantly outperformed smaller cap | ||
Fund. RIMCo also manages the portion of the Fund's assets that | value stocks which negatively impacted Fund performance. | ||
RIMCo determines not to manage based upon model portfolios | However, the Fund’s quality positioning was a positive contributor | ||
provided by the Fund's money managers. RIMCo may change the | as companies with high financial leverage lagged. | ||
allocation of the Fund's assets at any time. An exemptive order | |||
from the Securities and Exchange Commission (“SEC”) permits | From a sector standpoint, the expectation for a continued | ||
RIMCo to engage or terminate a money manager at any time, | domestic economic recovery led to the Fund’s overweight in | ||
subject to approval by the Fund’s Board, without a shareholder | several sectors such as technology and producer durables as well | ||
vote. Pursuant to the terms of the exemptive order, the Fund is | as an avoidance of sectors that are traditionally considered to be | ||
required to notify its shareholders within 90 days of when a money | interest rate sensitive such as real estate investment trusts and | ||
manager begins providing services. As of October 31, 2015, the | utilities. The impact of this sector positioning on performance was | ||
Fund had four money managers. | slightly positive as real estate investment trusts underperformed | ||
and the fund was also underweight energy which was the largest | |||
What is the Fund’s investment objective? | underperforming sector during the 2015 fiscal year. However, | ||
The Fund seeks to provide long term capital growth on an after- | stock selection within the health care and producer durables | ||
tax basis. | sectors had a negative impact on performance. | ||
How did the Fund perform relative to its benchmark for the | How did the investment strategies and techniques employed | ||
fiscal year ended October 31, 2015? | by the Fund and its money managers affect its benchmark- | ||
For the fiscal year ended October 31, 2015, the Fund’s Class | relative performance? | ||
A, Class C, Class E and Class S Shares lost 0.81%, 1.53%, | The Fund’s money managers have non-discretionary asset | ||
0.81% and 0.55%, respectively. This is compared to the Fund’s | management assignments pursuant to which they provide | ||
benchmark, the Russell 2500™ Index, which gained 1.50% | a model portfolio to RIMCo representing their investment | ||
during the same period. The Fund’s performance includes | recommendations, based upon which RIMCo purchases and | ||
operating expenses, whereas index returns are unmanaged and | sells securities for the Fund. With respect to this portion of the | ||
do not include expenses of any kind. | Fund, RIMCo manages the Fund’s assets based upon the model | ||
For the fiscal year ended October 31, 2015, the Morningstar® | portfolios provided by the Fund’s money managers. | ||
Small Growth, a group of funds that Morningstar considers to have | RIMCo also manages the portion of the Fund's assets that RIMCo | ||
investment strategies similar to those of the Fund, gained 1.52%. | determines not to manage based upon model portfolios provided | ||
These results serve as peer comparisons and are expressed net of | by the Fund's money managers. This includes assets managed | ||
operating expenses. | directly by RIMCo to effect the Fund's investment strategies and/ | ||
RIMCo may assign a money manager a specific style or | or to actively manage the Fund's overall exposures to seek to | ||
capitalization benchmark other than the Fund’s index. However, | achieve the desired risk/return profile for the Fund. RIMCo also | ||
the Fund’s primary index remains the benchmark for the Fund | manages the Fund’s liquidity reserves. | ||
and is representative of the aggregate of each money manager’s | With respect to certain of the Fund’s money managers, Chartwell | ||
benchmark index. | Investment Partners (“Chartwell”) was the strongest performing | ||
money manager for the fiscal year and outperformed the Russell | |||
How did the market conditions described in the Market | 2500™ Value Index. Chartwell’s fundamental quality approach | ||
Summary report affect the Fund’s performance? | led to strong stock selection in the financial services and consumer | ||
The fiscal year ended October 31, 2015 saw the Fund underperform | discretionary sectors. An underweight to energy and overweight | ||
the Russell 2500™ Index. Through the end of 2014, the Russell | to consumer staples also added value. | ||
2500™ Index produced modest positive returns, while the |
Russell Tax-Managed U.S. Mid & Small Cap Fund 267
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Summit Creek Advisors, LLC (“Summit Creek”) faced the | were out of favor also detracted from performance. A preference | |
strongest headwinds over the fiscal year and underperformed the | for holdings with below average levels of financial leverage and | |
Russell 2500™ Growth Index. Summit Creek’s tilt towards stocks | higher profitability offset further losses. | |
with low price momentum detracted as did its underweight to | During the period, RIMCo equitized the Fund’s cash using index | |
health care and financial services. | futures contracts to provide the Fund with full market exposure. | |
RIMCo manages a positioning strategy within the Fund, which is | This had a marginally positive impact on the Fund’s performance. | |
designed with the dual mandate of improving the Fund’s after tax | ||
returns as well as controlling Fund-level exposures and/or risks. | Describe any changes to the Fund’s structure or the money | |
manager line-up. | ||
The active tax management aspect of the strategy is focused on | On May 1, 2015, RIMCo changed the mandates for Chartwell, | |
improving the after tax returns of the Fund. Effective May 1, 2015, | Summit Creek and Netols Asset Management, Inc. from | |
all of the Fund’s money managers managed non-discretionary | discretionary to non-discretionary, such that all money managers | |
assignments and RIMCo controlled all trading for the Funds. As | in the Fund would have non-discretionary assignments. RIMCo | |
a result, RIMCo was able to monitor the tax impacts of the Fund’s | implemented this change to seek to reduce transaction costs | |
trading and harvest losses and defer capital gains with respect to | and improve the tax efficiency of the Fund. There were no other | |
certain transactions. | changes to the Fund’s structure during the fiscal year. | |
In addition, using the output from a quantitative model to guide | ||
the purchase of a stock portfolio, RIMCo seeks to position the | Money Managers as of October 31, | |
Fund to meet RIMCo’s overall preferred positioning with respect | 2015 | Styles |
to Fund exposures, while optimizing the portfolio to minimize | Chartwell Investment Partners | Small/Mid Cap Value |
tracking error relative to the Fund’s money manager portfolios. | Luther King Capital Management | |
Over the period, the Fund’s positioning strategy was designed to | Corporation | Small/Mid Cap Growth |
Netols Asset Management, Inc. | Small Cap Value | |
provide exposure to lower capitalization (overweight the smaller | Summit Creek Advisors, LLC | Small/Mid Cap Growth |
stocks in the benchmark), higher value (overweight stocks | The views expressed in this report reflect those of the portfolio | |
with lower valuations than the benchmark) and higher quality | managers only through the end of the period covered by | |
(overweight stocks with lower debt and higher profitability) while | the report. These views do not necessarily represent the | |
preserving the potential benefit of the money managers’ active | views of RIMCo or any other person in RIMCo or any other | |
stock selection. | affiliated organization. These views are subject to change | |
RIMCo’s tax management strategy successfully reduced the | at any time based upon market conditions or other events, | |
Fund’s capital gains distribution per share relative to the prior | and RIMCo disclaims any responsibility to update the views | |
fiscal year ended October 31, 2014. From a benchmark-relative | contained herein. These views should not be relied on as | |
perspective, RIMCo’s strategy designed to control Fund-level | investment advice and, because investment decisions for | |
exposures and risks underperformed the Russell 2500™ Index | a Russell Investment Company (“RIC”) Fund are based on | |
for the fiscal year. An overweight to the utilities and energy sectors | numerous factors, should not be relied on as an indication | |
was penalized. A tilt towards lower price momentum stocks that | of investment decisions of any RIC Fund. |
* Assumes initial investment on November 1, 2005.
** Russell 2500TM Index is composed of the bottom 500 stocks in the Russell 1000® Index and all the stocks in the Russell 2000® Index. The Russell 2500TM Index
return reflect adjustments for income dividends and capital gains distributions reinvested as of the ex-dividend dates.
‡ The Fund first issued Class A Shares on June 1, 2010. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
268 Russell Tax-Managed U.S. Mid & Small Cap Fund
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 963.80 | $ | 1,017.49 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 7.57 | $ | 7.78 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.53% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 960.30 | $ | 1,013.86 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 11.12 | $ | 11.42 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 2.25% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 963.90 | $ | 1,017.64 | |
Expenses Paid During Period* | $ | 7.43 | $ | 7.63 | ||
* Expenses are equal to the Fund's annualized expense ratio of 1.50% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell Tax-Managed U.S. Mid & Small Cap Fund 269
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 965.10 | $ | 1,018.90 | ||
Expenses Paid During Period* | $ | 6.19 | $ | 6.36 | ||
* Expenses are equal to the Fund's annualized expense ratio of 1.25% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
270 Russell Tax-Managed U.S. Mid & Small Cap Fund
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Common Stocks - 93.7% | GoPro, Inc. Class A(Æ)(Ñ) | 1,576 | 39 | ||||
Consumer Discretionary - 14.4% | Graham Holdings Co. Class B | 297 | 164 | ||||
1-800-Flowers.com, Inc. Class A(Æ) | 21,956 | 218 | Grand Canyon Education, Inc.(Æ) | 5,539 | 230 | ||
Aaron's, Inc. Class A | 5,967 | 147 | Hanesbrands, Inc. | 18,736 | 598 | ||
Abercrombie & Fitch Co. Class A(Ñ) | 16,889 | 358 | Harman International Industries, Inc. | 2,407 | 265 | ||
AMC Entertainment Holdings, Inc. Class A | 6,575 | 180 | Hasbro, Inc. | 18,313 | 1,407 | ||
AMC Networks, Inc. Class A(Æ) | 993 | 73 | Hertz Global Holdings, Inc.(Æ) | 2,222 | 43 | ||
Amerco, Inc. | 585 | 238 | Hillenbrand, Inc. | 7,084 | 210 | ||
American Eagle Outfitters, Inc.(Ñ) | 2,217 | 34 | HomeAway, Inc.(Æ) | 2,488 | 79 | ||
Aramark | 3,415 | 104 | HSN, Inc. | 10,211 | 632 | ||
Asbury Automotive Group, Inc.(Æ) | 291 | 23 | Iconix Brand Group, Inc.(Æ) | 10,259 | 157 | ||
Ascena Retail Group, Inc.(Æ) | 16,425 | 219 | Interpublic Group of Cos., Inc. (The) | 14,186 | 325 | ||
Avon Products, Inc. | 12,989 | 52 | Jack in the Box, Inc. | 691 | 52 | ||
Barnes & Noble Education, Inc.(Æ) | 4,717 | 70 | Jarden Corp.(Æ) | 2,232 | 100 | ||
Barnes & Noble, Inc. | 7,464 | 97 | JC Penney Co., Inc.(Æ)(Ñ) | 11,591 | 106 | ||
Bassett Furniture Industries, Inc. | 4,992 | 160 | John Wiley & Sons, Inc. Class A(Æ) | 3,050 | 160 | ||
Beazer Homes USA, Inc.(Æ) | 5,350 | 76 | KB Home | 15,907 | 208 | ||
Big Lots, Inc. | 927 | 43 | La Quinta Holdings, Inc.(Æ) | 38,345 | 581 | ||
Biglari Holdings, Inc.(Æ) | 263 | 101 | Lamar Advertising Co. Class A(ö) | 2,956 | 167 | ||
Blue Nile, Inc.(Æ) | 3,554 | 121 | Lands' End, Inc.(Æ)(Ñ) | 12,650 | 312 | ||
Bob Evans Farms, Inc. | 21,581 | 934 | Lear Corp. | 724 | 91 | ||
Bridgepoint Education, Inc.(Æ) | 5,510 | 43 | Leggett & Platt, Inc. | 1,002 | 45 | ||
Brinker International, Inc. | 20,319 | 925 | Lennar Corp. Class A | 18,757 | 939 | ||
Buffalo Wild Wings, Inc.(Æ) | 11,122 | 1,716 | Lennar Corp. Class B(Æ) | 9,845 | 408 | ||
Burlington Stores, Inc.(Æ) | 14,363 | 691 | Liberty Broadband Corp. Class A(Æ) | 4,172 | 228 | ||
Cabela's, Inc.(Æ) | 18,048 | 707 | Liberty Broadband Corp. Class C(Æ) | 1,205 | 65 | ||
Cable One, Inc.(Æ) | 745 | 323 | Liberty Media Corp.(Æ) | 2,096 | 82 | ||
Cablevision Systems Corp. Class A | 3,394 | 111 | Liberty Media Corp. Class A(Æ) | 2,097 | 85 | ||
Callaway Golf Co. | 14,281 | 142 | Liberty TripAdvisor Holdings, Inc. Class | ||||
Capella Education Co. | 9,277 | 419 | A(Æ) | 2,130 | 66 | ||
CarMax, Inc.(Æ) | 3,653 | 216 | Liberty Ventures Class A(Æ) | 3,244 | 141 | ||
Carter's, Inc. | 13,155 | 1,196 | Lithia Motors, Inc. Class A | 7,913 | 929 | ||
Cheesecake Factory, Inc. (The) | 16,639 | 802 | Live Nation Entertainment, Inc.(Æ) | 602 | 16 | ||
Chico's FAS, Inc. | 10,882 | 150 | LKQ Corp.(Æ) | 72,525 | 2,147 | ||
Cimpress NV(Æ)(Ñ) | 544 | 43 | Lumber Liquidators Holdings, Inc.(Æ)(Ñ) | 56,954 | 787 | ||
Columbia Sportswear Co. | 436 | 24 | M/I Homes, Inc.(Æ) | 8,799 | 202 | ||
Cooper Tire & Rubber Co. | 4,271 | 178 | Madison Square Garden Co. (The) Class A(Æ) | 171 | 31 | ||
Coty, Inc. Class A(Æ)(Ñ) | 1,704 | 49 | Matthews International Corp. Class A | 13,450 | 776 | ||
Dana Holding Corp. | 9,122 | 153 | Men's Wearhouse, Inc. (The) | 432 | 17 | ||
DeVry Education Group, Inc. | 1,126 | 27 | Monro Muffler Brake, Inc. | 26,254 | 1,947 | ||
Dick's Sporting Goods, Inc. | 1,558 | 69 | Morgans Hotel Group Co.(Æ) | 57,341 | 206 | ||
Domino's Pizza, Inc. | 11,736 | 1,252 | Motorcar Parts of America, Inc.(Æ) | 2,581 | 87 | ||
Dorman Products, Inc.(Æ)(Ñ) | 12,502 | 584 | Movado Group, Inc. | 974 | 25 | ||
DR Horton, Inc. | 3,084 | 91 | MSG Networks, Inc.(Æ) | 515 | 11 | ||
DreamWorks Animation SKG, Inc. Class | Murphy USA, Inc.(Æ) | 2,975 | 183 | ||||
A(Æ)(Ñ) | 5,210 | 105 | National Presto Industries, Inc.(Ñ) | 764 | 67 | ||
Dunkin' Brands Group, Inc. | 1,169 | 48 | New York Times Co. (The) Class A | 1,570 | 21 | ||
Eros International PLC(Æ)(Ñ) | 5,416 | 61 | Nu Skin Enterprises, Inc. Class A(Ñ) | 990 | 38 | ||
Ethan Allen Interiors, Inc. | 46,074 | 1,254 | Nutrisystem, Inc. | 2,651 | 61 | ||
EVINE Live, Inc.(Æ) | 19,301 | 50 | NVR, Inc.(Æ) | 216 | 354 | ||
Express, Inc.(Æ) | 1,517 | 29 | Office Depot, Inc.(Æ) | 13,050 | 99 | ||
Finish Line, Inc. (The) Class A | 25,864 | 482 | Outerwall, Inc. | 220 | 13 | ||
Five Below, Inc.(Æ) | 49,726 | 1,708 | Oxford Industries, Inc. | 9,700 | 706 | ||
Foot Locker, Inc. | 1,763 | 119 | Pandora Media, Inc.(Æ) | 7,398 | 85 | ||
Fortune Brands Home & Security, Inc. | 16,105 | 843 | Panera Bread Co. Class A(Æ) | 414 | 73 | ||
Fred's, Inc. Class A | 3,490 | 48 | Performance Sports Group, Ltd.(Æ) | 55,825 | 641 | ||
GameStop Corp. Class A(Ñ) | 1,529 | 70 | Pier 1 Imports, Inc.(Ñ) | 7,572 | 56 | ||
Gannett Co., Inc. | 27,057 | 428 | Polaris Industries, Inc. | 2,800 | 315 | ||
Gentex Corp. | 12,980 | 213 | Pool Corp. | 14,463 | 1,179 | ||
Gentherm, Inc.(Æ) | 55,445 | 2,726 | PriceSmart, Inc. | 343 | 30 | ||
Goodyear Tire & Rubber Co. (The) | 21,790 | 716 | PulteGroup, Inc. | 22,107 | 405 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed U.S. Mid & Small Cap Fund 271
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
PVH Corp. | 317 | 29 | Post Holdings, Inc.(Æ) | 7,873 | 506 | ||
Red Robin Gourmet Burgers, Inc.(Æ) | 2,684 | 201 | Rite Aid Corp.(Æ) | 20,382 | 161 | ||
Remy International, Inc. | 439 | 13 | Safeway, Inc.(Æ) | 9,450 | 5 | ||
Restaurant Brands International, Inc. | 2,988 | 120 | Snyders-Lance, Inc. | 57,524 | 2,044 | ||
Revlon, Inc. Class A(Æ) | 1,384 | 43 | Spectrum Brands Holdings, Inc. | 921 | 88 | ||
Ross Stores, Inc. | 4,846 | 245 | SUPERVALU, Inc.(Æ) | 83,310 | 547 | ||
Saga Communications, Inc. Class A(Æ) | 3,003 | 129 | Synutra International, Inc.(Æ)(Ñ) | 10,300 | 59 | ||
Sally Beauty Holdings, Inc.(Æ) | 33,169 | 780 | TreeHouse Foods, Inc.(Æ) | 20,193 | 1,729 | ||
SeaWorld Entertainment, Inc.(Ñ) | 1,451 | 29 | Universal Corp. | 1,582 | 86 | ||
Service Corp. International | 12,050 | 341 | Vector Group, Ltd. | 1,747 | 42 | ||
Shoe Carnival, Inc. | 6,564 | 148 | Village Super Market, Inc. Class A | 706 | 18 | ||
Shutterfly, Inc.(Æ) | 27,333 | 1,140 | WhiteWave Foods Co. (The) Class A(Æ) | 24,408 | 1,000 | ||
Signet Jewelers, Ltd. | 2,947 | 445 | 14,202 | ||||
Skechers U.S.A., Inc. Class A(Æ) | 2,757 | 86 | |||||
Stamps.com, Inc.(Æ) | 2,739 | 207 | Energy - 2.7% | ||||
Starz Class A(Æ) | 5,402 | 181 | Abraxas Petroleum Corp.(Æ) | 69,405 | 110 | ||
Sturm Ruger & Co., Inc. | 3,231 | 184 | Approach Resources, Inc.(Æ)(Ñ) | 24,244 | 57 | ||
TEGNA, Inc.(Ñ) | 22,816 | 617 | Atwood Oceanics, Inc.(Ñ) | 17,963 | 297 | ||
Tempur Sealy International, Inc.(Æ) | 1,078 | 84 | Bill Barrett Corp.(Æ)(Ñ) | 82,168 | 400 | ||
Tenneco, Inc.(Æ) | 20,477 | 1,159 | California Resources Corp. | 43,369 | 175 | ||
Tiffany & Co. | 1,713 | 141 | Carrizo Oil & Gas, Inc.(Æ) | 3,467 | 130 | ||
TiVo, Inc.(Æ) | 8,638 | 78 | Civeo Corp.(Æ) | 26,695 | 50 | ||
Toll Brothers, Inc.(Æ) | 48,350 | 1,739 | Cloud Peak Energy, Inc.(Æ)(Ñ) | 109,216 | 324 | ||
Tractor Supply Co. | 7,578 | 700 | CONSOL Energy, Inc. | 9,253 | 62 | ||
TRI Pointe Group, Inc.(Æ) | 16,719 | 217 | Delek US Holdings, Inc. | 480 | 13 | ||
Tribune Media Co. Class A | 2,716 | 110 | Denbury Resources, Inc.(Ñ) | 51,270 | 181 | ||
Tuesday Morning Corp.(Æ) | 41,437 | 224 | Diamondback Energy, Inc.(Æ) | 13,464 | 994 | ||
Tumi Holdings, Inc.(Æ) | 2,147 | 34 | Energen Corp. | 1,291 | 75 | ||
Tupperware Brands Corp.(Ñ) | 2,897 | 171 | Energy XXI, Ltd.(Ñ) | 16,700 | 29 | ||
Ulta Salon Cosmetics & Fragrance, Inc.(Æ) | 5,465 | 951 | EP Energy Corp. Class A(Æ)(Ñ) | 24,085 | 133 | ||
Vail Resorts, Inc. | 589 | 67 | Exterran Holdings, Inc. | 6,019 | 131 | ||
Vera Bradley, Inc.(Æ) | 18,470 | 231 | First Solar, Inc.(Æ) | 7,131 | 407 | ||
Vista Outdoor, Inc.(Æ) | 856 | 38 | Gastar Exploration, Inc.(Æ) | 39,873 | 63 | ||
WABCO Holdings, Inc.(Æ) | 449 | 50 | Golar LNG, Ltd.(Ñ) | 2,220 | 64 | ||
Wayfair, Inc. Class A(Æ)(Ñ) | 1,360 | 57 | Green Brick Partners, Inc.(Æ) | 3,181 | 34 | ||
WCI Communities, Inc.(Æ) | 873 | 21 | Helix Energy Solutions Group, Inc.(Æ) | 29,495 | 170 | ||
Williams-Sonoma, Inc. | 1,726 | 127 | Helmerich & Payne, Inc.(Ñ) | 17,856 | 1,005 | ||
Wolverine World Wide, Inc. | 6,392 | 119 | Hornbeck Offshore Services, Inc.(Æ) | 10,092 | 136 | ||
Wyndham Worldwide Corp. | 2,673 | 217 | ION Geophysical Corp.(Æ) | 85,169 | 32 | ||
ZAGG, Inc.(Æ) | 42,101 | 357 | Jones Energy, Inc. Class A(Æ) | 26,399 | 136 | ||
53,381 | Key Energy Services, Inc.(Æ) | 72,313 | 38 | ||||
Matador Resources Co.(Æ) | 26,511 | 682 | |||||
Consumer Staples - 3.8% | Matrix Service Co.(Æ) | 2,166 | 49 | ||||
Cal-Maine Foods, Inc.(Ñ) | 23,070 | 1,233 | McDermott International, Inc.(Æ) | 248,989 | 1,148 | ||
Casey's General Stores, Inc. | 19,988 | 2,123 | Memorial Resource Development Corp.(Æ) | 13,265 | 235 | ||
Constellation Brands, Inc. Class A | 2,422 | 327 | Nabors Industries, Ltd. | 8,692 | 87 | ||
Energizer Holdings, Inc. | 10,512 | 498 | Newfield Exploration Co.(Æ) | 2,876 | 116 | ||
Fresh Del Monte Produce, Inc. | 6,427 | 293 | Noble Corp. PLC(Ñ) | 5,406 | 73 | ||
Fresh Market, Inc. (The)(Æ)(Ñ) | 46,225 | 1,152 | Noble Energy, Inc. | 2,014 | 72 | ||
GNC Holdings, Inc. Class A | 379 | 11 | Nordic American Offshore, Ltd.(Ñ) | 9,642 | 58 | ||
Hain Celestial Group, Inc. (The)(Æ) | 5,750 | 287 | North Atlantic Drilling, Ltd.(Æ) | 57,081 | 47 | ||
Herbalife, Ltd.(Æ)(Ñ) | 1,246 | 70 | NOW, Inc.(Æ)(Ñ) | 1,916 | 32 | ||
Ingles Markets, Inc. Class A | 1,543 | 77 | Oasis Petroleum, Inc.(Æ)(Ñ) | 10,009 | 116 | ||
JM Smucker Co. (The) | 1,628 | 191 | Oceaneering International, Inc. | 3,328 | 140 | ||
Lancaster Colony Corp. | 10,600 | 1,205 | Oil States International, Inc.(Æ) | 14,888 | 447 | ||
MGP Ingredients, Inc. | 5,280 | 92 | Patterson-UTI Energy, Inc. | 1,280 | 19 | ||
Monster Beverage Corp.(Æ) | 2,242 | 306 | REX American Resources Corp.(Æ) | 3,448 | 189 | ||
Nutraceutical International Corp.(Æ) | 1,030 | 25 | Rowan Cos. PLC Class A | 2,620 | 52 | ||
PetMed Express, Inc.(Ñ) | 835 | 14 | Seadrill, Ltd.(Æ)(Ñ) | 29,393 | 190 | ||
Pinnacle Foods, Inc. | 285 | 13 | Seventy Seven Energy, Inc.(Æ)(Ñ) | 31,749 | 36 |
See accompanying notes which are an integral part of the financial statements.
272 Russell Tax-Managed U.S. Mid & Small Cap Fund
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Russell Tax-Managed U.S. Mid & Small Cap Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
SM Energy Co. | 583 | 19 | CNO Financial Group, Inc. | 1,302 | 25 | ||
SolarCity Corp.(Æ)(Ñ) | 1,380 | 41 | Columbia Banking System, Inc. | 5,350 | 178 | ||
SunPower Corp. Class A(Æ)(Ñ) | 7,412 | 199 | Communications Sales & Leasing, Inc.(ö) | 2,156 | 43 | ||
Synergy Resources Corp.(Æ) | 12,491 | 140 | Community Bank System, Inc. | 26,516 | 1,081 | ||
TerraForm Power, Inc. Class A | 2,407 | 44 | Community Trust Bancorp, Inc. | 652 | 22 | ||
Tesoro Corp. | 3,098 | 331 | Corrections Corp. of America(ö) | 5,353 | 153 | ||
Ultra Petroleum Corp.(Æ)(Ñ) | 4,897 | 27 | Cowen Group, Inc. Class A(Æ)(Ñ) | 58,413 | 246 | ||
Unit Corp.(Æ) | 3,824 | 48 | CubeSmart(ö) | 12,709 | 354 | ||
Whiting Petroleum Corp.(Æ) | 4,941 | 85 | CVB Financial Corp. | 10,947 | 191 | ||
World Fuel Services Corp. | 3,375 | 150 | CYS Investments, Inc.(ö) | 39,350 | 304 | ||
WPX Energy, Inc.(Æ) | 3,907 | 27 | DCT Industrial Trust, Inc.(ö) | 56,311 | 2,090 | ||
10,145 | Duke Realty Corp.(ö) | 1,172 | 24 | ||||
E*Trade Financial Corp.(Æ) | 51,924 | 1,480 | |||||
Financial Services - 24.1% | East West Bancorp, Inc. | 7,106 | 287 | ||||
Alexander & Baldwin, Inc. | 614 | 23 | Education Realty Trust, Inc.(ö) | 62,473 | 2,243 | ||
Alexandria Real Estate Equities, Inc.(ö) | 1,282 | 115 | Emergent Capital, Inc.(Æ) | 12,830 | 64 | ||
Alleghany Corp.(Æ) | 694 | 344 | Endurance Specialty Holdings, Ltd. | 17,337 | 1,095 | ||
Alliance Data Systems Corp.(Æ) | 443 | 132 | Enova International, Inc. Class W(Æ) | 480 | 6 | ||
Allied World Assurance Co. Holdings AG | 1,568 | 57 | Equifax, Inc. | 4,676 | 498 | ||
Ambac Financial Group, Inc.(Æ) | 20,709 | 334 | Equinix, Inc.(ö) | 679 | 201 | ||
American Capital Mortgage Investment | Equity LifeStyle Properties, Inc. Class A(ö) | 1,461 | 88 | ||||
Corp.(ö) | 16,000 | 232 | Euronet Worldwide, Inc.(Æ) | 16,902 | 1,356 | ||
American Equity Investment Life Holding | Everest Re Group, Ltd. | 2,053 | 365 | ||||
Co. | 44,650 | 1,147 | Extra Space Storage, Inc.(ö) | 5,406 | 428 | ||
American National Insurance Co. | 2,344 | 242 | Ezcorp, Inc. Class A(Æ) | 34,647 | 231 | ||
Anchor BanCorp Wisconsin, Inc.(Æ) | 76 | 3 | FactSet Research Systems, Inc. | 364 | 64 | ||
Apollo Investment Corp. | 3,000 | 16 | Fair Isaac Corp. | 22,970 | 2,122 | ||
Arch Capital Group, Ltd.(Æ) | 2,102 | 157 | FCB Financial Holdings, Inc. Class A(Æ) | 894 | 32 | ||
Ares Capital Corp. | 10,550 | 161 | Federal Agricultural Mortgage Corp. Class C | 8,229 | 242 | ||
Argo Group International Holdings, Ltd. | 25,852 | 1,616 | Federal Realty Investment Trust(ö) | 2,297 | 330 | ||
Arthur J Gallagher & Co. | 2,251 | 98 | FelCor Lodging Trust, Inc.ö) | 100,087 | 806 | ||
Aspen Insurance Holdings, Ltd. | 378 | 18 | Fidelity & Guaranty Life | 14,793 | 395 | ||
Assured Guaranty, Ltd. | 16,923 | 464 | Financial Engines, Inc.(Ñ) | 7,014 | 226 | ||
Astoria Financial Corp. | 9,124 | 146 | First American Financial Corp. | 965 | 37 | ||
AV Homes, Inc.(Æ) | 1,000 | 13 | First BanCorp(Æ) | 80,792 | 306 | ||
Axis Capital Holdings, Ltd. | 5,244 | 283 | First Community Bancshares, Inc. | 1,301 | 25 | ||
Banco Latinoamericano de Comercio Exterior | First Financial Bankshares, Inc.(Ñ) | 1,133 | 38 | ||||
SA Class E | 6,718 | 182 | First Industrial Realty Trust, Inc.(ö) | 86,600 | 1,878 | ||
BancorpSouth, Inc. | 67,227 | 1,676 | First Midwest Bancorp, Inc. | 9,149 | 163 | ||
Bank of the Ozarks, Inc. | 16,446 | 823 | First Niagara Financial Group, Inc. | 37,103 | 384 | ||
BankFinancial Corp. | 8,402 | 104 | First Republic Bank | 44,541 | 2,909 | ||
BankUnited, Inc. | 732 | 27 | Fiserv, Inc.(Æ) | 23,514 | 2,269 | ||
Blackhawk Network Holdings, Inc. Class | FNF Group | 7,383 | 260 | ||||
A(Æ) | 1,024 | 44 | FNFV Group(Æ) | 2,460 | 28 | ||
Blue Hills Bancorp, Inc. | 1,568 | 22 | Forest City Enterprises, Inc. Class A(Æ) | 3,006 | 66 | ||
BofI Holding, Inc.(Æ)(Ñ) | 10,166 | 813 | Forestar Group, Inc.(Æ) | 31,654 | 448 | ||
BOK Financial Corp. | 990 | 67 | Glacier Bancorp, Inc. | 35,344 | 967 | ||
Brixmor Property Group, Inc.(ö) | 833 | 21 | Global Indemnity PLC Class A(Æ) | 5,558 | 158 | ||
Broadridge Financial Solutions, Inc. | 5,818 | 347 | Global Payments, Inc. | 1,979 | 270 | ||
Camden Property Trust(ö) | 3,242 | 239 | Great Western Bancorp, Inc. | 14,167 | 400 | ||
Cardtronics, Inc.(Æ) | 34,884 | 1,204 | Green Bancorp, Inc.(Æ) | 4,791 | 59 | ||
Care Capital Properties, Inc.(Æ)(ö) | 564 | 19 | Green Dot Corp. Class A(Æ) | 6,919 | 128 | ||
Cash America International, Inc. | 13,972 | 482 | Greenlight Capital Re, Ltd. Class A(Æ) | 6,396 | 140 | ||
CBL & Associates Properties, Inc.(ö) | 9,772 | 143 | Hampton Roads Bankshares, Inc.(Æ) | 32,994 | 61 | ||
CBOE Holdings, Inc. | 4,828 | 324 | Hanover Insurance Group, Inc. (The) | 43,093 | 3,631 | ||
Cedar Realty Trust, Inc.(ö) | 20,389 | 143 | Healthcare Realty Trust, Inc.(ö) | 42,238 | 1,113 | ||
CenterState Banks, Inc. | 48,900 | 713 | Houlihan Lokey, Inc. Class A(Æ) | 10,780 | 236 | ||
Central Pacific Financial Corp. | 8,782 | 196 | Howard Hughes Corp. (The)(Æ) | 729 | 90 | ||
Chesapeake Lodging Trust(ö) | 5,194 | 143 | HRG Group, Inc.(Æ) | 665 | 9 | ||
Chimera Investment Corp.(ö) | 8,840 | 124 | Hudson City Bancorp, Inc.(Ñ) | 54,209 | 549 | ||
City National Corp. | 26,152 | 2,343 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed U.S. Mid & Small Cap Fund 273
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Huntington Bancshares, Inc. | 21,443 | 235 | Resource Capital Corp.(Æ)(Ñ)(ö) | 24,660 | 317 | ||
Iberiabank Corp. | 2,759 | 167 | Retail Opportunity Investments Corp.(ö) | 9,870 | 179 | ||
Independent Bank Group, Inc. | 1,847 | 72 | Retail Properties of America, Inc. Class A(ö) | 128,285 | 1,920 | ||
Inland Real Estate Corp.(ö) | 14,388 | 127 | Ryman Hospitality Properties, Inc.(ö) | 4,049 | 213 | ||
Iron Mountain, Inc.(ö) | 3,747 | 115 | Safeguard Scientifics, Inc.(Æ) | 14,965 | 266 | ||
iStar, Inc.(Æ)(ö) | 15,472 | 200 | Safety Insurance Group, Inc. | 4,268 | 247 | ||
Jack Henry & Associates, Inc. | 502 | 39 | SEI Investments Co. | 2,461 | 128 | ||
JG Wentworth Co. (The) Class A(Æ)(Ñ) | 51,847 | 265 | Selective Insurance Group, Inc. | 84,773 | 3,093 | ||
Jones Lang LaSalle, Inc. | 7,935 | 1,323 | ServisFirst Bancshares, Inc. | 382 | 16 | ||
Kayne Anderson Energy Development Co. | 5,082 | 114 | Signature Bank(Æ) | 14,530 | 2,164 | ||
Kemper Corp. | 911 | 33 | SL Green Realty Corp.(ö) | 1,767 | 210 | ||
Kennedy-Wilson Holdings, Inc. | 9,935 | 244 | SLM Corp.(Æ) | 53,954 | 381 | ||
KeyCorp | 15,208 | 189 | South State Corp. | 16,733 | 1,297 | ||
Kilroy Realty Corp.(ö) | 242 | 16 | Sovran Self Storage, Inc.(ö) | 9,790 | 978 | ||
LaSalle Hotel Properties(ö) | 10,756 | 316 | St. Joe Co. (The)(Æ)(Ñ) | 20,199 | 400 | ||
Liberty Property Trust(ö) | 304 | 10 | StanCorp Financial Group, Inc. | 2,478 | 284 | ||
LPL Financial Holdings, Inc.(Ñ) | 1,334 | 57 | State Bank Financial Corp. | 55,778 | 1,194 | ||
Macerich Co. (The)(ö) | 2,415 | 205 | Sterling Bancorp | 75,572 | 1,163 | ||
Mack-Cali Realty Corp.(ö) | 8,374 | 182 | Strategic Hotels & Resorts, Inc.(Æ)(ö) | 37,286 | 526 | ||
Markel Corp.(Æ) | 428 | 372 | Sun Communities, Inc.(ö) | 28,693 | 1,923 | ||
MarketAxess Holdings, Inc. | 488 | 49 | SVB Financial Group(Æ) | 262 | 32 | ||
MBIA, Inc.(Æ) | 50,330 | 378 | Tanger Factory Outlet Centers, Inc.(ö) | 5,573 | 195 | ||
MGIC Investment Corp.(Æ) | 167,802 | 1,577 | Taubman Centers, Inc.(ö) | 1,033 | 80 | ||
Mid-America Apartment Communities, Inc. | Tejon Ranch Co.(Æ) | 5,835 | 131 | ||||
(ö) | 13,474 | 1,148 | Texas Capital Bancshares, Inc.(Æ) | 12,004 | 663 | ||
MoneyGram International, Inc.(Æ) | 6,038 | 61 | Third Point Reinsurance, Ltd.(Æ) | 1,603 | 22 | ||
MSCI, Inc. Class A | 2,167 | 145 | Torchmark Corp. | 2,228 | 129 | ||
Nasdaq, Inc. | 2,676 | 155 | Total System Services, Inc. | 1,055 | 55 | ||
National Health Investors, Inc.(ö) | 10,173 | 598 | Towne Bank/Portsmouth VA | 1,344 | 29 | ||
National Retail Properties, Inc.(ö) | 465 | 18 | TriState Capital Holdings, Inc.(Æ) | 6,662 | 83 | ||
National Western Life Group, Inc. Class A(Æ) | 783 | 202 | Two Harbors Investment Corp.(ö) | 14,321 | 121 | ||
Navigators Group, Inc. (The)(Æ) | 2,541 | 217 | UMB Financial Corp. | 15,256 | 749 | ||
New York Mortgage Trust, Inc.(Ñ)(ö) | 19,093 | 108 | Umpqua Holdings Corp. | 4,467 | 75 | ||
Northrim BanCorp, Inc. | 4,932 | 136 | United Community Banks, Inc. | 9,570 | 193 | ||
NorthStar Asset Management Group, Inc. | 1,710 | 25 | United Community Financial Corp. | 19,423 | 106 | ||
NorthStar Realty Finance Corp.(ö) | 6,152 | 74 | Universal Insurance Holdings, Inc. | 8,695 | 274 | ||
Northwest Bancshares, Inc. | 8,090 | 109 | Vantiv, Inc. Class A(Æ) | 407 | 20 | ||
OceanFirst Financial Corp. | 3,062 | 57 | Ventas, Inc.(ö) | 2,256 | 121 | ||
OFG Bancorp(Ñ) | 39,188 | 361 | Virtu Financial, Inc. Class A(Æ)(Ñ) | 7,047 | 171 | ||
Old National Bancorp | 55,677 | 780 | Voya Financial, Inc. | 4,128 | 167 | ||
OneBeacon Insurance Group, Ltd. Class A | 7,859 | 113 | Waddell & Reed Financial, Inc. Class A | 4,533 | 167 | ||
Opus Bank | 8,976 | 334 | Webster Financial Corp. | 28,103 | 1,043 | ||
Oritani Financial Corp. | 8,387 | 134 | Welltower, Inc.(Æ)(ö) | 1,344 | 87 | ||
PacWest Bancorp | 26,566 | 1,197 | White Mountains Insurance Group, Ltd. | 65 | 51 | ||
Paramount Group, Inc.ö) | 20,006 | 356 | WP Carey, Inc.(ö) | 1,857 | 118 | ||
PartnerRe, Ltd. | 1,038 | 144 | WP GLIMCHER, Inc.(ö) | 28,180 | 327 | ||
Pebblebrook Hotel Trust(ö) | 4,149 | 142 | WR Berkley Corp. | 606 | 34 | ||
Popular, Inc.(Æ) | 3,291 | 97 | WSFS Financial Corp. | 8,031 | 255 | ||
Post Properties, Inc.(ö) | 3,782 | 226 | Zillow Group, Inc.(Æ)(Ñ) | 1,634 | 45 | ||
PRA Group, Inc.(Æ)(Ñ) | 15,618 | 856 | Zillow Group, Inc. Class A(Æ)(Ñ) | 3,275 | 101 | ||
PrivateBancorp, Inc. Class A | 19,182 | 802 | Zions Bancorporation | 9,757 | 281 | ||
ProAssurance Corp. | 1,549 | 82 | 89,057 | ||||
Prosperity Bancshares, Inc. | 1,237 | 64 | |||||
Radian Group, Inc. | 16,993 | 246 | Health Care - 11.1% | ||||
Raymond James Financial, Inc. | 9,421 | 519 | AbbVie, Inc. | 822 | 49 | ||
Realogy Holdings Corp.(Æ) | 3,680 | 144 | Abiomed, Inc.(Æ) | 4,220 | 311 | ||
Regional Management Corp.(Æ) | 1,375 | 22 | Acadia Healthcare Co., Inc.(Æ) | 27,817 | 1,708 | ||
Reinsurance Group of America, Inc. Class A | 5,473 | 494 | Agios Pharmaceuticals, Inc.(Æ) | 305 | 22 | ||
RenaissanceRe Holdings, Ltd. | 352 | 39 | Akorn, Inc.(Æ) | 100,247 | 2,681 | ||
Republic Bancorp, Inc. Class A | 2,012 | 51 | Albany Molecular Research, Inc.(Æ)(Ñ) | 55,435 | 1,000 |
See accompanying notes which are an integral part of the financial statements.
274 Russell Tax-Managed U.S. Mid & Small Cap Fund
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Alere, Inc.(Æ) | 5,509 | 254 | Merrimack Pharmaceuticals, Inc.(Æ) | 2,347 | 22 | ||
Alexion Pharmaceuticals, Inc.(Æ) | 1,299 | 229 | Neurocrine Biosciences, Inc.(Æ) | 6,870 | 337 | ||
Align Technology, Inc.(Æ) | 22,636 | 1,482 | Novavax, Inc.(Æ) | 5,803 | 39 | ||
Alkermes PLC(Æ) | 2,188 | 157 | Omnicell, Inc.(Æ) | 8,346 | 227 | ||
Allergan PLC(Æ) | 318 | 98 | Ophthotech Corp.(Æ) | 706 | 35 | ||
Alnylam Pharmaceuticals, Inc.(Æ) | 3,122 | 268 | Orexigen Therapeutics, Inc.(Æ)(Ñ) | 26,292 | 80 | ||
AMAG Pharmaceuticals, Inc.(Æ) | 594 | 24 | Orthofix International NV(Æ) | 4,798 | 163 | ||
Analogic Corp. | 14,061 | 1,232 | PAREXEL International Corp.(Æ) | 2,226 | 140 | ||
ARIAD Pharmaceuticals, Inc.(Æ) | 1,802 | 12 | Patterson Cos., Inc. | 477 | 23 | ||
BioMarin Pharmaceutical, Inc.(Æ) | 2,801 | 328 | PerkinElmer, Inc. | 21,008 | 1,085 | ||
Bio-Rad Laboratories, Inc. Class A(Æ) | 137 | 19 | Pernix Therapeutics Holdings, Inc.(Æ)(Ñ) | 13,999 | 39 | ||
Bio-Techne Corp. | 27,752 | 2,448 | Phibro Animal Health Corp. Class A | 192 | 6 | ||
Bluebird Bio, Inc.(Æ) | 46 | 4 | Prestige Brands Holdings, Inc.(Æ) | 175 | 9 | ||
Catalent, Inc.(Æ) | 1,241 | 33 | Qiagen NV(Æ) | 1,890 | 46 | ||
Celldex Therapeutics, Inc.(Æ) | 7,464 | 90 | Quality Systems, Inc. | 2,976 | 42 | ||
Centene Corp.(Æ) | 1,814 | 108 | Quintiles Transnational Holdings, Inc.(Æ) | 678 | 43 | ||
Cepheid(Æ) | 955 | 32 | Regeneron Pharmaceuticals, Inc.(Æ) | 337 | 188 | ||
Charles River Laboratories International, | ResMed, Inc.(Ñ) | 4,741 | 273 | ||||
Inc.(Æ) | 8,921 | 582 | SeaSpine Holdings Corp.(Æ) | 923 | 14 | ||
Chemed Corp. | 2,336 | 367 | Seattle Genetics, Inc.(Æ) | 4,553 | 189 | ||
Chimerix, Inc.(Æ) | 4,132 | 162 | Team Health Holdings, Inc.(Æ) | 14,247 | 850 | ||
Clovis Oncology, Inc.(Æ) | 1,249 | 125 | Tenet Healthcare Corp.(Æ) | 4,944 | 155 | ||
Community Health Systems, Inc.(Æ) | 1,865 | 52 | Triple-S Management Corp. Class B(Æ) | 5,261 | 108 | ||
CONMED Corp. | 24,541 | 995 | United Therapeutics Corp.(Æ) | 736 | 108 | ||
Cooper Cos., Inc. (The) | 2,058 | 314 | Universal Health Services, Inc. Class B | 1,289 | 157 | ||
Dentsply International, Inc. | 2,470 | 150 | US Physical Therapy, Inc. | 29,208 | 1,433 | ||
Depomed, Inc.(Æ) | 1,316 | 23 | VCA, Inc.(Æ) | 68,060 | 3,728 | ||
DexCom, Inc.(Æ) | 15,661 | 1,305 | VWR Corp.(Æ)(Ñ) | 22,023 | 606 | ||
Dyax Corp.(Æ) | 5,306 | 146 | WellCare Health Plans, Inc.(Æ) | 23,324 | 2,066 | ||
ExamWorks Group, Inc.(Æ) | 643 | 18 | ZIOPHARM Oncology, Inc.(Æ)(Ñ) | 2,026 | 23 | ||
Genomic Health, Inc.(Æ) | 11,281 | 236 | 40,961 | ||||
Greatbatch, Inc.(Æ) | 13,350 | 714 | |||||
Haemonetics Corp.(Æ) | 38,389 | 1,297 | Materials and Processing - 6.5% | ||||
Hanger, Inc.(Æ) | 2,331 | 34 | AAON, Inc. | 11,226 | 230 | ||
Health Net, Inc.(Æ) | 1,064 | 68 | Acuity Brands, Inc. | 14,328 | 3,132 | ||
Henry Schein, Inc.(Æ) | 1,751 | 266 | Advanced Drainage Systems, Inc.(Ñ) | 11,068 | 348 | ||
Hologic, Inc.(Æ) | 9,896 | 385 | Airgas, Inc. | 1,657 | 159 | ||
ICON PLC(Æ) | 26,083 | 1,666 | Albemarle Corp. | 461 | 25 | ||
ICU Medical, Inc.(Æ) | 1,191 | 131 | Allegheny Technologies, Inc. | 6,147 | 90 | ||
IDEXX Laboratories, Inc.(Æ) | 1,228 | 84 | Ashland, Inc. | 2,458 | 270 | ||
Impax Laboratories, Inc.(Æ) | 576 | 20 | Balchem Corp. | 35,161 | 2,402 | ||
Incyte Corp.(Æ) | 2,174 | 256 | Ball Corp. | 4,470 | 306 | ||
Integra LifeSciences Holdings Corp.(Æ) | 18,489 | 1,101 | Belden, Inc. | 3,675 | 235 | ||
Intercept Pharmaceuticals, Inc.(Æ)(Ñ) | 353 | 55 | Berry Plastics Group, Inc.(Æ) | 35 | 1 | ||
Intra-Cellular Therapies, Inc.(Æ) | 8,018 | 384 | Carpenter Technology Corp. | 20,061 | 668 | ||
Intrexon Corp.(Æ) | 681 | 23 | Century Aluminum Co.(Æ) | 12,944 | 47 | ||
Invacare Corp. | 67,207 | 1,161 | Chemtura Corp.(Æ) | 13,058 | 417 | ||
Ironwood Pharmaceuticals, Inc. Class A(Æ) | 3,895 | 44 | Compass Minerals International, Inc. | 11,002 | 894 | ||
Isis Pharmaceuticals, Inc.(Æ)(Ñ) | 6,951 | 335 | Core Molding Technologies, Inc.(Æ) | 6,293 | 126 | ||
Kindred Healthcare, Inc. | 47,902 | 642 | Crown Holdings, Inc.(Æ) | 11,324 | 601 | ||
Laboratory Corp. of America Holdings(Æ) | 463 | 57 | Domtar Corp. | 1,102 | 45 | ||
Landauer, Inc. | 1,569 | 62 | Eagle Materials, Inc. | 3,008 | 199 | ||
LifePoint Health, Inc.(Æ) | 11,488 | 791 | Eastman Chemical Co. | 2,170 | 157 | ||
Ligand Pharmaceuticals, Inc. Class B(Æ) | 9,648 | 872 | Global Brass & Copper Holdings, Inc. | 9,421 | 212 | ||
LivaNova PLC(Æ) | 5,516 | 366 | Hexcel Corp. | 14,765 | 684 | ||
Mallinckrodt PLC(Æ) | 2,291 | 150 | Horsehead Holding Corp.(Æ)(Ñ) | 1,101 | 3 | ||
MedAssets, Inc.(Æ) | 8,685 | 206 | Innophos Holdings, Inc. | 14,863 | 632 | ||
Medidata Solutions, Inc.(Æ) | 456 | 20 | Interface, Inc. Class A | 6,980 | 136 | ||
Medivation, Inc.(Æ) | 2,690 | 113 | International Flavors & Fragrances, Inc. | 1,279 | 148 | ||
MEDNAX, Inc.(Æ) | 5,112 | 360 | Lennox International, Inc. | 3,671 | 488 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed U.S. Mid & Small Cap Fund 275
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Louisiana-Pacific Corp.(Æ) | 4,704 | 83 | Clean Harbors, Inc.(Æ) | 1,082 | 50 | ||
Martin Marietta Materials, Inc. | 9,559 | 1,483 | Commercial Vehicle Group, Inc.(Æ) | 80,231 | 334 | ||
Materion Corp. | 2,304 | 69 | Convergys Corp. | 879 | 23 | ||
Minerals Technologies, Inc. | 20,463 | 1,206 | CoStar Group, Inc.(Æ) | 11,704 | 2,377 | ||
MRC Global, Inc.(Æ) | 3,373 | 40 | Covanta Holding Corp. | 2,022 | 34 | ||
NL Industries, Inc.(Æ) | 1,036 | 4 | Deluxe Corp. | 894 | 53 | ||
Owens Corning | 5,179 | 236 | Dorian LPG, Ltd.(Æ) | 13,581 | 160 | ||
Owens-Illinois, Inc.(Æ) | 2,849 | 61 | Electronics For Imaging, Inc.(Æ) | 4,867 | 226 | ||
Packaging Corp. of America | 4,726 | 323 | Ennis, Inc. | 3,601 | 72 | ||
PGT, Inc.(Æ) | 91,509 | 1,104 | EnPro Industries, Inc. | 15,950 | 783 | ||
PolyOne Corp. | 8,970 | 300 | ESCO Technologies, Inc. | 37,788 | 1,402 | ||
RBC Bearings, Inc.(Æ) | 1,937 | 132 | Essendant, Inc. | 9,660 | 334 | ||
Reliance Steel & Aluminum Co. | 856 | 51 | ExlService Holdings, Inc.(Æ) | 4,894 | 217 | ||
RPM International, Inc. | 6,601 | 302 | Exponent, Inc. | 446 | 23 | ||
Schweitzer-Mauduit International, Inc. | 5,361 | 208 | Fenix Parts, Inc.(Æ)(Ñ) | 16,562 | 130 | ||
Sealed Air Corp. | 2,777 | 136 | Forward Air Corp. | 3,832 | 174 | ||
Sensient Technologies Corp. | 12,041 | 786 | Franklin Electric Co., Inc. | 12,723 | 419 | ||
Sonoco Products Co. | 4,585 | 196 | FTI Consulting, Inc.(Æ) | 22,326 | 759 | ||
Steel Dynamics, Inc. | 10,715 | 198 | G&K Services, Inc. Class A | 5,726 | 377 | ||
Unifi, Inc.(Æ) | 42,792 | 1,309 | GATX Corp. | 13,475 | 629 | ||
United States Steel Corp.(Ñ) | 6,417 | 75 | Generac Holdings, Inc.(Æ)(Ñ) | 22,508 | 710 | ||
Universal Forest Products, Inc. | 2,625 | 191 | General Cable Corp. | 2,727 | 42 | ||
Valspar Corp. | 421 | 34 | Genesee & Wyoming, Inc. Class A(Æ) | 9,846 | 661 | ||
Vulcan Materials Co. | 15,496 | 1,497 | Genpact, Ltd.(Æ) | 1,138 | 28 | ||
Watsco, Inc. | 6,354 | 782 | Golden Ocean Group, Ltd.(Æ)(Ñ) | 43,556 | 86 | ||
WestRock Co. | 3,030 | 163 | Granite Construction, Inc. | 4,810 | 158 | ||
WR Grace & Co.(Æ) | 2,986 | 299 | Greenbrier Cos., Inc.(Ñ) | 3,134 | 119 | ||
23,923 | Gulfmark Offshore, Inc. Class A(Ñ) | 3,838 | 24 | ||||
Harsco Corp. | 6,042 | 65 | |||||
Producer Durables - 14.4% | Hawaiian Holdings, Inc.(Æ) | 7,530 | 261 | ||||
ABM Industries, Inc. | 729 | 21 | HD Supply Holdings, Inc.(Æ) | 30 | 1 | ||
Accuride Corp.(Æ) | 81,161 | 229 | Healthcare Services Group, Inc. | 90,419 | 3,369 | ||
ADT Corp. (The)(Ñ) | 42,499 | 1,404 | Heartland Express, Inc. | 9,440 | 178 | ||
Advisory Board Co. (The)(Æ) | 52,959 | 2,321 | HEICO Corp. | 4,771 | 241 | ||
AECOM(Æ) | 11,766 | 347 | Heritage-Crystal Clean, Inc.(Æ) | 5,001 | 60 | ||
AGCO Corp. | 1,618 | 78 | Herman Miller, Inc. | 30,037 | 953 | ||
Aircastle, Ltd. | 8,190 | 186 | HNI Corp. | 4,654 | 200 | ||
Alaska Air Group, Inc. | 2,290 | 175 | Hubbell, Inc. Class B(Æ) | 450 | 44 | ||
Allegiant Travel Co. Class A | 1,795 | 354 | IDEX Corp. | 1,377 | 106 | ||
Allegion PLC | 373 | 24 | Insperity, Inc. | 588 | 27 | ||
Allison Transmission Holdings, Inc. Class A | 34,222 | 982 | Jacobs Engineering Group, Inc.(Æ) | 4,317 | 173 | ||
Altra Industrial Motion Corp. | 32,563 | 862 | JetBlue Airways Corp.(Æ) | 17,191 | 427 | ||
Ametek, Inc. | 3,761 | 206 | Joy Global, Inc. | 19,853 | 341 | ||
AO Smith Corp. | 378 | 29 | Kansas City Southern | 1,553 | 129 | ||
Applied Industrial Technologies, Inc. | 4,000 | 165 | KBR, Inc. | 5,707 | 105 | ||
Babcock & Wilcox Co. (The) Class W | 1,426 | 40 | Kennametal, Inc. | 661 | 19 | ||
Babcock & Wilcox Enterprises, Inc.(Æ) | 424 | 7 | Keysight Technologies, Inc.(Æ) | 5,307 | 176 | ||
Barnes Group, Inc. | 29,293 | 1,101 | Kimball International, Inc. Class B | 5,704 | 62 | ||
Brady Corp. Class A | 39,595 | 901 | KLX, Inc.(Æ) | 932 | 36 | ||
Briggs & Stratton Corp. | 53,636 | 953 | Knight Transportation, Inc. | 10,775 | 274 | ||
Brink's Co. (The) | 1,241 | 38 | Knoll, Inc. | 54,469 | 1,266 | ||
Bristow Group, Inc. | 10,887 | 378 | Korn/Ferry International | 731 | 27 | ||
CAI International, Inc.(Æ) | 4,711 | 55 | Lexmark International, Inc. Class A | 4,190 | 136 | ||
Carlisle Cos., Inc. | 3,258 | 283 | Liquidity Services, Inc.(Æ) | 6,312 | 52 | ||
Casella Waste Systems, Inc. Class A(Æ) | 12,058 | 73 | Littelfuse, Inc. | 2,549 | 255 | ||
CDI Corp. | 11,222 | 90 | Macquarie Infrastructure Corp. | 3,211 | 255 | ||
Celadon Group, Inc. | 5,958 | 86 | Manitowoc Co., Inc. (The)(Ñ) | 7,453 | 114 | ||
Chicago Bridge & Iron Co. | 6,706 | 301 | ManpowerGroup, Inc. | 3,614 | 332 | ||
Cintas Corp. | 3,849 | 358 | Marlin Business Services Corp. | 2,347 | 41 | ||
Clarcor, Inc. | 14,139 | 705 | Matson, Inc. | 1,614 | 74 |
See accompanying notes which are an integral part of the financial statements.
276 Russell Tax-Managed U.S. Mid & Small Cap Fund
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
MAXIMUS, Inc. | 45,808 | 3,124 | Bottomline Technologies de, Inc.(Æ) | 41,974 | 1,162 | ||
Mettler-Toledo International, Inc.(Æ) | 812 | 253 | CACI International, Inc. Class A(Æ) | 13,459 | 1,306 | ||
Middleby Corp.(Æ) | 9,919 | 1,160 | Cadence Design Systems, Inc.(Æ) | 3,334 | 74 | ||
Mobile Mini, Inc. | 466 | 16 | Cavium, Inc.(Æ) | 19,238 | 1,365 | ||
MSA Safety, Inc. | 1,203 | 52 | Checkpoint Systems, Inc. | 81,538 | 610 | ||
MSC Industrial Direct Co., Inc. Class A | 5,011 | 315 | Ciena Corp.(Æ) | 25,580 | 617 | ||
Multi-Color Corp. | 676 | 53 | comScore, Inc.(Æ) | 52,493 | 2,246 | ||
MYR Group, Inc.(Æ) | 842 | 19 | Cornerstone OnDemand, Inc.(Æ) | 1,690 | 53 | ||
Navigant Consulting, Inc.(Æ) | 8,155 | 140 | Cree, Inc.(Æ)(Ñ) | 2,623 | 66 | ||
Orbital ATK, Inc. | 4,746 | 406 | Criteo SA - ADR(Æ)(Ñ) | 15,181 | 578 | ||
Oshkosh Corp. | 1,107 | 45 | Cypress Semiconductor Corp.(Æ) | 21,153 | 223 | ||
Pentair PLC | 2,864 | 160 | DigitalGlobe, Inc.(Æ) | 5,661 | 85 | ||
Pitney Bowes, Inc. | 2,573 | 53 | Diodes, Inc.(Æ) | 27,723 | 635 | ||
Proto Labs, Inc.(Æ)(Ñ) | 27,064 | 1,755 | DST Systems, Inc. | 232 | 28 | ||
Quanta Services, Inc.(Æ) | 2,742 | 55 | EchoStar Corp. Class A(Æ) | 6,142 | 275 | ||
Republic Airways Holdings, Inc.(Æ) | 72,784 | 419 | EMCORE Corp.(Æ) | 50,501 | 345 | ||
Robert Half International, Inc. | 4,436 | 234 | Entegris, Inc.(Æ) | 63,980 | 821 | ||
Rollins, Inc. | 817 | 22 | Envestnet, Inc.(Æ) | 29,227 | 873 | ||
RR Donnelley & Sons Co.(Ñ) | 2,275 | 38 | EPAM Systems, Inc.(Æ) | 28,114 | 2,175 | ||
Rush Enterprises, Inc. Class A(Æ) | 32,499 | 792 | Etsy, Inc.(Æ) | 3,954 | 43 | ||
Scorpio Tankers, Inc. | 5,323 | 49 | F5 Networks, Inc.(Æ) | 912 | 101 | ||
SkyWest, Inc. | 20,209 | 385 | FireEye, Inc.(Æ)(Ñ) | 1,161 | 30 | ||
Snap-on, Inc. | 1,026 | 170 | FormFactor, Inc.(Æ) | 93,289 | 769 | ||
Spirit AeroSystems Holdings, Inc. Class A(Æ) | 4,216 | 222 | Fortinet, Inc.(Æ) | 29,969 | 1,030 | ||
SPX Corp. | 26,935 | 330 | Gartner, Inc.(Æ) | 2,505 | 227 | ||
Sykes Enterprises, Inc.(Æ) | 804 | 23 | Harris Corp. | 690 | 55 | ||
TASER International, Inc.(Æ)(Ñ) | 12,309 | 288 | IAC/InterActiveCorp | 516 | 35 | ||
Teledyne Technologies, Inc.(Æ) | 3,852 | 344 | Infinera Corp.(Æ) | 12,023 | 238 | ||
Terex Corp. | 4,352 | 87 | Inovalon Holdings, Inc. Class A(Æ)(Ñ) | 39,548 | 912 | ||
Tetra Tech, Inc. | 4,369 | 118 | Integrated Device Technology, Inc.(Æ) | 9,405 | 240 | ||
Thermon Group Holdings, Inc.(Æ) | 35,003 | 704 | Integrated Silicon Solution, Inc. | 5,960 | 134 | ||
Titan International, Inc. | 7,920 | 56 | IPG Photonics Corp.(Æ) | 1,991 | 164 | ||
Toro Co. (The) | 3,832 | 288 | IXYS Corp. | 5,974 | 74 | ||
Towers Watson & Co. Class A | 757 | 94 | Jabil Circuit, Inc. | 9,924 | 228 | ||
TriMas Corp.(Æ) | 23,937 | 479 | JDS Uniphase Corp. Class W(Æ) | 15,012 | 89 | ||
Trinity Industries, Inc. | 12,367 | 335 | Leidos Holdings, Inc. | 1,377 | 72 | ||
TrueBlue, Inc.(Æ) | 52,347 | 1,516 | MA-COM Technology Solutions Holdings, | ||||
Twin Disc, Inc. | 4,065 | 48 | Inc.(Æ) | 73,182 | 2,469 | ||
United Rentals, Inc.(Æ) | 11,111 | 832 | Manhattan Associates, Inc.(Æ) | 12,443 | 906 | ||
Vectrus, Inc.(Æ) | 14,801 | 368 | ManTech International Corp. Class A | 21,927 | 634 | ||
Virgin America, Inc.(Æ)(Ñ) | 1,196 | 43 | Marin Software, Inc.(Æ) | 5,285 | 19 | ||
Wabtec Corp. | 15,892 | 1,317 | Mentor Graphics Corp. | 10,513 | 286 | ||
WageWorks, Inc.(Æ) | 43,543 | 2,091 | Methode Electronics, Inc. | 3,089 | 103 | ||
Waste Connections, Inc. | 909 | 50 | Monolithic Power Systems, Inc. | 6,476 | 404 | ||
Werner Enterprises, Inc. | 644 | 17 | NCR Corp.(Æ) | 2,995 | 80 | ||
Xylem, Inc. | 8,159 | 297 | NeuStar, Inc. Class A(Æ) | 768 | 21 | ||
Zebra Technologies Corp. Class A(Æ) | 9,745 | 749 | Newport Corp.(Æ) | 8,837 | 134 | ||
53,366 | ON Semiconductor Corp.(Æ) | 9,500 | 104 | ||||
Pacific DataVision, Inc.(Æ)(Ñ) | 1,591 | 45 | |||||
Technology - 12.9% | Palo Alto Networks, Inc.(Æ) | 753 | 121 | ||||
ACI Worldwide, Inc.(Æ) | 44,852 | 1,074 | Plexus Corp.(Æ) | 52,487 | 1,817 | ||
Alpha & Omega Semiconductor, Ltd.(Æ) | 16,117 | 143 | Progress Software Corp.(Æ) | 79,823 | 1,938 | ||
Anixter International, Inc.(Æ) | 12,466 | 855 | PTC, Inc.(Æ) | 61,149 | 2,167 | ||
Ansys, Inc.(Æ) | 3,035 | 289 | Qlik Technologies, Inc.(Æ) | 5,493 | 172 | ||
Applied Micro Circuits Corp.(Æ) | 13,404 | 87 | QLogic Corp.(Æ) | 14,466 | 179 | ||
Arrow Electronics, Inc.(Æ) | 4,745 | 261 | Qorvo, Inc.(Æ) | 4,523 | 199 | ||
Aspen Technology, Inc.(Æ) | 21,748 | 900 | Rambus, Inc.(Æ)(Ñ) | 67,774 | 699 | ||
Atmel Corp. | 16,416 | 125 | Rogers Corp.(Æ) | 2,812 | 131 | ||
Avnet, Inc. | 5,555 | 252 | Sabre Corp. | 4,413 | 129 | ||
AVX Corp. | 14,582 | 197 | Science Applications International Corp. | 272 | 12 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) or | Value | Amount ($) or | Value | ||||||||
Shares | $ | Shares | $ | ||||||||
ServiceNow, Inc.(Æ) | 1,918 | 157 | Talen Energy Corp.(Æ) | 21,244 | 184 | ||||||
Skyworks Solutions, Inc. | 2,478 | 191 | TECO Energy, Inc. | 6,490 | 175 | ||||||
SolarWinds, Inc.(Æ) | 35,965 | 2,087 | Telephone & Data Systems, Inc. | 1,798 | 52 | ||||||
Splunk, Inc.(Æ) | 561 | 32 | UGI Corp. | 1,134 | 42 | ||||||
Stratasys, Ltd.(Æ)(Ñ) | 25,505 | 650 | Unitil Corp. | 2,759 | 98 | ||||||
SunEdison, Inc.(Æ)(Ñ) | 4,042 | 30 | US Cellular Corp.(Æ) | 11,763 | 479 | ||||||
Synaptics, Inc.(Æ) | 18,944 | 1,612 | Vectren Corp. | 1,460 | 66 | ||||||
Synchronoss Technologies, Inc.(Æ) | 6,060 | 213 | WEC Energy Group, Inc. | 1,455 | 75 | ||||||
Synopsys, Inc.(Æ) | 6,679 | 334 | Westar Energy, Inc. Class A | 2,336 | 93 | ||||||
Syntel, Inc.(Æ) | 18,509 | 871 | Zayo Group Holdings, Inc.(Æ) | 2,536 | 67 | ||||||
Take-Two Interactive Software, Inc.(Æ) | 29,448 | 978 | 13,877 | ||||||||
Tech Data Corp.(Æ) | 6,046 | 440 | |||||||||
Teradyne, Inc. | 16,279 | 318 | Total Common Stocks | ||||||||
Tyler Technologies, Inc.(Æ) | 14,216 | 2,422 | (cost $263,774) | 346,488 | |||||||
Ultimate Software Group, Inc.(Æ) | 5,105 | 1,043 | |||||||||
VeriFone Systems, Inc.(Æ) | 40,189 | 1,211 | Short | -Term Investments - 5.9% | |||||||
Xura, Inc.(Æ) | 2,206 | 57 | Russell U.S. Cash Management Fund | 21,775,616 | (8) | 21,776 | |||||
47,576 | Total Short-Term Investments | ||||||||||
(cost $21,776) | 21,776 | ||||||||||
Utilities - 3.8% | |||||||||||
8x8, Inc.(Æ) | 7,793 | 83 | Other Securities - 5.9% | ||||||||
Abengoa Yield PLC | 2,188 | 41 | Russell U.S. Cash Collateral Fund(×) | 21,647,167 | (8) | 21,647 | |||||
AGL Resources, Inc.(Æ) | 2,119 | 132 | Total Other Securities | ||||||||
ALLETE, Inc. | 3,252 | 163 | (cost $21,647) | 21,647 | |||||||
American Water Works Co., Inc. | 1,933 | 111 | |||||||||
Aqua America, Inc. | 3,129 | 90 | Total Investments 105.5% | ||||||||
Atlantic Tele-Network, Inc. | 424 | 32 | (identified cost $307,197) | 389,911 | |||||||
Avista Corp. | 1,100 | 37 | |||||||||
Black Hills Corp. | 2,447 | 112 | Other Assets and Liabilities, Net | ||||||||
CenterPoint Energy, Inc. | 7,174 | 133 | - | (5.5%) | (20,443 | ) | |||||
Cleco Corp. | 25,993 | 1,378 | Net Assets - 100.0% | 369,468 | |||||||
CMS Energy Corp. | 66,130 | 2,385 | |||||||||
Connecticut Water Service, Inc. | 4,800 | 177 | |||||||||
El Paso Electric Co. | 31,354 | 1,213 | |||||||||
Empire District Electric Co. (The) | 6,336 | 143 | |||||||||
Eversource Energy | 3,872 | 197 | |||||||||
Fairmount Santrol Holdings, Inc.(Æ)(Ñ) | 17,535 | 47 | |||||||||
Frontier Communications Corp. | 50,060 | 257 | |||||||||
Great Plains Energy, Inc. | 2,726 | 75 | |||||||||
Idacorp, Inc. | 3,075 | 206 | |||||||||
Inteliquent, Inc. | 4,598 | 95 | |||||||||
Iridium Communications, Inc.(Æ)(Ñ) | 12,062 | 99 | |||||||||
ITC Holdings Corp. | 2,742 | 90 | |||||||||
Level 3 Communications, Inc.(Æ) | 5,357 | 273 | |||||||||
MGE Energy, Inc. | 1,100 | 45 | |||||||||
National Fuel Gas Co. | 23,115 | 1,214 | |||||||||
New Jersey Resources Corp. | 6,600 | 209 | |||||||||
Northwest Natural Gas Co. | 2,731 | 131 | |||||||||
NorthWestern Corp. | 28,250 | 1,531 | |||||||||
NRG Yield, Inc. Class C(Ñ) | 20,922 | 302 | |||||||||
ONE Gas, Inc. | 7,521 | 367 | |||||||||
Pepco Holdings, Inc. | 4,472 | 119 | |||||||||
Piedmont Natural Gas Co., Inc.(Ñ) | 1,392 | 80 | |||||||||
Pinnacle West Capital Corp. | 1,957 | 124 | |||||||||
PNM Resources, Inc. | 5,304 | 149 | |||||||||
Portland General Electric Co. | 1,384 | 51 | |||||||||
Questar Corp. | 3,105 | 64 | |||||||||
SCANA Corp. | 4,991 | 296 | |||||||||
Southwest Gas Corp. | 4,108 | 253 | |||||||||
Spark Energy, Inc. Class A | 2,480 | 42 |
See accompanying notes which are an integral part of the financial statements.
278 Russell Tax-Managed U.S. Mid & Small Cap Fund
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Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||
Amounts in thousands (except contract amounts) | ||||||
Unrealized | ||||||
Appreciation | ||||||
Number of | Notional | Expiration | (Depreciation) | |||
Contracts | Amount | Date | $ | |||
Long Positions | ||||||
S&P Mid 400 E-Mini Index Futures | 155 | USD | 22,342 | 12/15 | 515 | |
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 515 |
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Common Stocks | ||||||||||||
Consumer Discretionary | $ | 53,381 | $ | — | $ | — | $ | 53,381 | 14.4 | |||
Consumer Staples | 14,197 | — | 5 | 14,202 | 3.8 | |||||||
Energy | 10,145 | — | — | 10,145 | 2.7 | |||||||
Financial Services | 89,057 | — | — | 89,057 | 24.1 | |||||||
Health Care | 40,961 | — | — | 40,961 | 11.1 | |||||||
Materials and Processing | 23,923 | — | — | 23,923 | 6.5 | |||||||
Producer Durables | 53,366 | — | — | 53,366 | 14.4 | |||||||
Technology | 47,576 | — | — | 47,576 | 12.9 | |||||||
Utilities | 13,877 | — | — | 13,877 | 3.8 | |||||||
Short-Term Investments | — | 21,776 | — | 21,776 | 5.9 | |||||||
Other Securities | — | 21,647 | — | 21,647 | 5.9 | |||||||
Total Investments | 346,483 | 43,423 | 5 | 389,911 | 105.5 | |||||||
Other Assets and Liabilities, Net | (5.5 | ) | ||||||||||
100.0 | ||||||||||||
Other Financial Instruments | ||||||||||||
Futures Contracts | 515 | — | — | 515 | 0.1 | |||||||
Total Other Financial Instruments* | $ | 515 | $ | — | $ | — | $ | 515 |
* Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining fair value for the period ended October 31,
2015 were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
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Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Equity | ||
Derivatives not accounted for as hedging instruments | Contracts | |
Location: Statement of Assets and Liabilities - Assets | ||
Variation margin on futures contracts* | $ | 515 |
Equity | ||
Derivatives not accounted for as hedging instruments | Contracts | |
Location: Statement of Operations - Net realized gain (loss) | ||
Futures contracts | $ | 850 |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||
Futures contracts | $ | 354 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
280 Russell Tax-Managed U.S. Mid & Small Cap Fund
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Assets | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||||
Securities on Loan* | Investments, at fair value | $ | 20,980 | $ | — | $ | 20,980 | ||||||
Futures Contracts | Variation margin on futures contracts | 5 | — | 5 | |||||||||
Total Financial and Derivative Assets | 20,985 | — | 20,985 | ||||||||||
Financial and Derivative Assets not subject to a netting agreement | (5) | — | (5 | ) | |||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 20,980 | $ | — | $ | 20,980 | |||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Assets | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||||
Barclays | $ | 3,528 | $ | — | $ | 3,528 | $ | — | |||||
Citigroup | 3,065 | — | 3,065 | — | |||||||||
Credit Suisse | 83 | — | 83 | — | |||||||||
Deutsche Bank | 1,352 | — | 1,352 | — | |||||||||
Fidelity | 6,586 | — | 6,586 | — | |||||||||
Goldman Sachs | 747 | — | 747 | — | |||||||||
ING | 69 | — | 69 | — | |||||||||
JPMorgan Chase | 2,592 | — | 2,592 | — | |||||||||
Merrill Lynch | 49 | — | 49 | — | |||||||||
Morgan Stanley | 2,367 | — | 2,367 | — | |||||||||
UBS | 542 | — | 542 | — | |||||||||
Total | $ | 20,980 | $ | — | $ | 20,980 | $ | — |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
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Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 307,197 |
Investments, at fair value(*)(>) | 389,911 | |
Cash | 100 | |
Cash (restricted)(a) | 1,545 | |
Receivables: | ||
Dividends and interest | 144 | |
Dividends from affiliated Russell funds | 3 | |
Investments sold | 2,023 | |
Fund shares sold | 886 | |
Variation margin on futures contracts | 5 | |
Total assets | 394,617 | |
Liabilities | ||
Payables: | ||
Investments purchased | 2,808 | |
Fund shares redeemed | 271 | |
Accrued fees to affiliates | 353 | |
Other accrued expenses | 70 | |
Payable upon return of securities loaned | 21,647 | |
Total liabilities | 25,149 | |
Net Assets | $ | 369,468 |
See accompanying notes which are an integral part of the financial statements.
282 Russell Tax-Managed U.S. Mid & Small Cap Fund
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Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | (1,029 | ) |
Accumulated net realized gain (loss) | 672 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | 82,714 | ||
Futures contracts | 515 | ||
Shares of beneficial interest | 177 | ||
Additional paid-in capital | 286,419 | ||
Net Assets | $ | 369,468 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 20.26 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 21.49 | |
Class A — Net assets | $ | 9,188,993 | |
Class A — Shares outstanding ($.01 par value) | 453,642 | ||
Net asset value per share: Class C(#) | $ | 17.68 | |
Class C — Net assets | $ | 12,391,543 | |
Class C — Shares outstanding ($.01 par value) | 700,991 | ||
Net asset value per share: Class E(#) | $ | 20.29 | |
Class E — Net assets | $ | 7,917,569 | |
Class E — Shares outstanding ($.01 par value) | 390,165 | ||
Net asset value per share: Class S(#) | $ | 21.03 | |
Class S — Net assets | $ | 339,970,212 | |
Class S — Shares outstanding ($.01 par value) | 16,162,923 | ||
Amounts in thousands | |||
(*) Securities on loan included in investments | $ | 20,980 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund and Russell U.S. Cash Collateral Fund | $ | 43,423 | |
(a) Cash Collateral for Futures | $ | 1,545 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
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Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 3,496 | |
Dividends from affiliated Russell funds | 28 | ||
Securities lending income | 149 | ||
Total investment income | 3,673 | ||
Expenses | |||
Advisory fees | 3,463 | ||
Administrative fees | 168 | ||
Custodian fees | 118 | ||
Distribution fees - Class A | 21 | ||
Distribution fees - Class C | 90 | ||
Transfer agent fees - Class A | 17 | ||
Transfer agent fees - Class C | 24 | ||
Transfer agent fees - Class E | 14 | ||
Transfer agent fees - Class S | 652 | ||
Professional fees | 50 | ||
Registration fees | 80 | ||
Shareholder servicing fees - Class C | 30 | ||
Shareholder servicing fees - Class E | 17 | ||
Trustees’ fees | 8 | ||
Printing fees | 47 | ||
Miscellaneous | 26 | ||
Expenses before reductions | 4,825 | ||
Expense reductions | (245 | ) | |
Net expenses | 4,580 | ||
Net investment income (loss) | (907 | ) | |
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 895 | ||
Futures contracts | 850 | ||
Net realized gain (loss) | 1,745 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (4,583 | ) | |
Futures contracts | 354 | ||
Net change in unrealized appreciation (depreciation) | (4,229 | ) | |
Net realized and unrealized gain (loss) | (2,484 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (3,391 | ) |
See accompanying notes which are an integral part of the financial statements.
284 Russell Tax-Managed U.S. Mid & Small Cap Fund
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | (907 | ) | $ | (1,284 | ) |
Net realized gain (loss) | 1,745 | 18,520 | ||||
Net change in unrealized appreciation (depreciation) | (4,229 | ) | 2,058 | |||
Net increase (decrease) in net assets from operations | (3,391 | ) | 19,294 | |||
Distributions | ||||||
From net investment income | ||||||
Class A | — | (—)** | ||||
Class C | — | (—)** | ||||
Class E | — | (—)** | ||||
Class S | — | (—)** | ||||
From net realized gain | ||||||
Class A | (383 | ) | (263 | ) | ||
Class C | (747 | ) | (1,021 | ) | ||
Class E | (376 | ) | (432 | ) | ||
Class S | (16,931 | ) | (18,502 | ) | ||
Net decrease in net assets from distributions | (18,437 | ) | (20,218 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 69,370 | 68,824 | ||||
Total Net Increase (Decrease) in Net Assets | 47,542 | 67,900 | ||||
Net Assets | ||||||
Beginning of period | 321,926 | 254,026 | ||||
End of period | $ | 369,468 | $ | 321,926 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | (1,029 | ) | $ | (1,278 | ) |
** Less than $500. |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed U.S. Mid & Small Cap Fund 285
Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows:
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 185 | $ | 3,844 | 183 | $ | 3,852 | ||||||
Proceeds from reinvestment of distributions | 18 | 380 | 13 | 263 | ||||||||
Payments for shares redeemed | (49 | ) | (1,041 | ) | (44 | ) | (931 | ) | ||||
Net increase (decrease) | 154 | 3,183 | 152 | 3,184 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 170 | 3,132 | 143 | 2,713 | ||||||||
Proceeds from reinvestment of distributions | 41 | 745 | 54 | 1,009 | ||||||||
Payments for shares redeemed | (112 | ) | (2,055 | ) | (161 | ) | (3,049 | ) | ||||
Net increase (decrease) | 99 | 1,822 | 36 | 673 | ||||||||
Class E | ||||||||||||
Proceeds from shares sold | 124 | 2,534 | 87 | 1,848 | ||||||||
Proceeds from reinvestment of distributions | 18 | 370 | 20 | 423 | ||||||||
Payments for shares redeemed | (46 | ) | (955 | ) | (70 | ) | (1,507 | ) | ||||
Net increase (decrease) | 96 | 1,949 | 37 | 764 | ||||||||
Class S | ||||||||||||
Proceeds from shares sold | 4,818 | 104,704 | 3,767 | 82,154 | ||||||||
Proceeds from reinvestment of distributions | 767 | 16,477 | 839 | 18,177 | ||||||||
Payments for shares redeemed | (2,717 | ) | (58,765 | ) | (1,657 | ) | (36,128 | ) | ||||
Net increase (decrease) | 2,868 | 62,416 | 2,949 | 64,203 | ||||||||
Total increase (decrease) | 3,217 | $ | 69,370 | 3,174 | $ | 68,824 |
See accompanying notes which are an integral part of the financial statements.
286 Russell Tax-Managed U.S. Mid & Small Cap Fund
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Russell Investment Company
Russell Tax-Managed U.S. Mid & Small Cap Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | ||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||||
Class A | |||||||||||||||||
October 31, 2015 | 21.65 | (.10 | ) | (.04 | ) | (.14 | ) | — | (1.25 | ) | |||||||
October 31, 2014 | 21.99 | (.14 | ) | 1.56 | 1.42 | —(f) | (1.76 | ) | |||||||||
October 31, 2013 | 16.00 | (.08 | ) | 6.09 | 6.01 | —(f) | (.02 | ) | |||||||||
October 31, 2012 | 14.47 | (.05 | ) | 1.58 | 1.53 | — | — | ||||||||||
October 31, 2011 | 13.06 | (.07 | ) | 1.48 | 1.41 | — | — | ||||||||||
Class C | |||||||||||||||||
October 31, 2015 | 19.18 | (.22 | ) | (.03 | ) | (.25 | ) | — | (1.25 | ) | |||||||
October 31, 2014 | 19.81 | (.26 | ) | 1.39 | 1.13 | —(f) | (1.76 | ) | |||||||||
October 31, 2013 | 14.51 | (.18 | ) | 5.50 | 5.32 | — | (.02 | ) | |||||||||
October 31, 2012 | 13.23 | (.15 | ) | 1.43 | 1.28 | — | — | ||||||||||
October 31, 2011 | 12.02 | (.18 | ) | 1.39 | 1.21 | — | — | ||||||||||
Class E | |||||||||||||||||
October 31, 2015 | 21.68 | (.10 | ) | (.04 | ) | (.14 | ) | — | (1.25 | ) | |||||||
October 31, 2014 | 22.01 | (.14 | ) | 1.57 | 1.43 | —(f) | (1.76 | ) | |||||||||
October 31, 2013 | 16.01 | (.06 | ) | 6.08 | 6.02 | — | (.02 | ) | |||||||||
October 31, 2012 | 14.48 | (.05 | ) | 1.58 | 1.53 | — | — | ||||||||||
October 31, 2011 | 13.06 | (.08 | ) | 1.50 | 1.42 | — | — | ||||||||||
Class S | |||||||||||||||||
October 31, 2015 | 22.38 | (.05 | ) | (.05 | ) | (.10 | ) | — | (1.25 | ) | |||||||
October 31, 2014 | 22.61 | (.09 | ) | 1.62 | 1.53 | —(f) | (1.76 | ) | |||||||||
October 31, 2013 | 16.43 | (.02 | ) | 6.25 | 6.23 | (.03 | ) | (.02 | ) | ||||||||
October 31, 2012 | 14.83 | (.01 | ) | 1.61 | 1.60 | — | — | ||||||||||
October 31, 2011 | 13.34 | (.05 | ) | 1.54 | 1.49 | — | — | ||||||||||
See accompanying notes which are an integral part of the financial statements.
288 Russell Tax-Managed U.S. Mid & Small Cap Fund
% | % | % | ||||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | ||||||||||
(1.25 | ) | 20.26 | (.77 | ) | 9,189 | 1.57 | 1.53 | (.49 | ) | 125 | ||||||||
(1.76 | ) | 21.65 | 6.73 | 6,489 | 1.58 | 1.53 | (.69 | ) | 80 | |||||||||
(.02 | ) | 21.99 | 37.62 | 3,256 | 1.56 | 1.53 | (.44 | ) | 46 | |||||||||
— | 16.00 | 10.57 | 1,426 | 1.58 | 1.53 | (.34 | ) | 48 | ||||||||||
— | 14.47 | 11.03 | 932 | 1.63 | 1.53 | (.48 | ) | 46 | ||||||||||
(1.25 | ) | 17.68 | (1.48 | ) | 12,392 | 2.32 | 2.25 | (1.21 | ) | 125 | ||||||||
(1.76 | ) | 19.18 | 5.95 | 11,555 | 2.32 | 2.25 | (1.39 | ) | 80 | |||||||||
(.02 | ) | 19.81 | 36.71 | 11,218 | 2.31 | 2.25 | (1.11 | ) | 46 | |||||||||
— | 14.51 | 9.68 | 7,083 | 2.34 | 2.25 | (1.06 | ) | 48 | ||||||||||
— | 13.23 | 10.23 | 6,571 | 2.36 | 2.25 | (1.33 | ) | 46 | ||||||||||
(1.25 | ) | 20.29 | (.77 | ) | 7,918 | 1.57 | 1.50 | (.46 | ) | 125 | ||||||||
(1.76 | ) | 21.68 | 6.77 | 6,383 | 1.57 | 1.50 | (.65 | ) | 80 | |||||||||
(.02 | ) | 22.01 | 37.64 | 5,665 | 1.56 | 1.50 | (.36 | ) | 46 | |||||||||
— | 16.01 | 10.57 | 3,898 | 1.59 | 1.50 | (.31 | ) | 48 | ||||||||||
— | 14.48 | 11.10 | 3,443 | 1.61 | 1.50 | (.56 | ) | 46 | ||||||||||
(1.25 | ) | 21.03 | (.55 | ) | 339,969 | 1.32 | 1.25 | (.21 | ) | 125 | ||||||||
(1.76 | ) | 22.38 | 7.01 | 297,498 | 1.32 | 1.25 | (.40 | ) | 80 | |||||||||
(.05 | ) | 22.61 | 38.02 | 233,887 | 1.31 | 1.25 | (.11 | ) | 46 | |||||||||
— | 16.43 | 10.79 | 152,403 | 1.34 | 1.25 | (.06 | ) | 48 | ||||||||||
— | 14.83 | 11.32 | 137,579 | 1.36 | 1.25 | (.32 | ) | 46 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed U.S. Mid & Small Cap Fund 289
Russell Investment Company
Russell Tax-Managed International Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Tax-Managed International Equity Fund - Class A‡ | Russell Tax-Managed International Equity Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
Inception* | (14.33 | )% | Inception* | (9.00 | )% | ||
Russell Tax-Managed International Equity Fund - Class C | Russell Global ex-U.S. Large Cap® Index Net** | ||||||
Total | Total | ||||||
Return | Return | ||||||
Inception* | (9.40 | )% | Inception* | (7.79 | )% | ||
Russell Tax-Managed International Equity Fund - Class E | |||||||
Total | |||||||
Return | |||||||
Inception* | (9.10 | )% |
290 Russell Tax-Managed International Equity Fund
Russell Investment Company
Russell Tax-Managed International Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Tax-Managed International Equity Fund (the “Fund”) | -7.79%. During this period, emerging markets experienced a | |
employs a multi-manager approach whereby Russell Investment | selloff, driven primarily by Brazil and China. Commodity heavy | |
Management Company (“RIMCo”) manages a portion of the | economies like Canada and Australia lagged significantly due to a | |
Fund’s assets based upon model portfolios provided by multiple | demand slowdown, particularly from China. Energy and materials | |
non-discretionary money managers. The Fund’s money managers | were the worst hit sectors as oil prices tumbled to the lowest levels | |
have non-discretionary asset management assignments pursuant | since 2009 and a demand slowdown in emerging markets caused | |
to which they provide a model portfolio to RIMCo representing | commodity prices to plunge. Defensive sectors held up relatively | |
their investment recommendations, based upon which RIMCo | well amid the volatility. Stocks with lower volatility outperformed | |
purchases and sells securities for the Fund. RIMCo also manages | during the period and higher momentum stocks broadly held up | |
the portion of the Fund's assets that RIMCo determines not to | well. | |
manage based upon model portfolios provided by the Fund's | ||
money managers. RIMCo may change the allocation of the Fund's | How did the investment strategies and techniques employed | |
assets at any time. An exemptive order from the Securities and | by the Fund and its money managers affect its benchmark- | |
Exchange Commission (“SEC”) permits RIMCo to engage or | relative performance? | |
terminate a money manager at any time, subject to approval by | The Fund’s money managers have non-discretionary asset | |
the Fund’s Board, without a shareholder vote. Pursuant to the | management assignments pursuant to which they provide | |
terms of the exemptive order, the Fund is required to notify its | a model portfolio to RIMCo representing their investment | |
shareholders within 90 days of when a money manager begins | recommendations, based upon which RIMCo purchases and | |
providing services. As of October 31, 2015, the Fund had six | sells securities for the Fund. With respect to this portion of the | |
money managers. | Fund, RIMCo manages the Fund’s assets based upon the model | |
portfolios provided by the Fund’s money managers. RIMCo also | ||
What is the Fund’s investment objective? | manages the portion of the Fund's assets that RIMCo determines | |
The Fund seeks to provide long term capital growth on an after- | not to manage based upon model portfolios provided by the | |
tax basis. | Fund's money managers. This includes assets managed directly | |
How did the Fund perform relative to its benchmark for the | by RIMCo to effect the Fund's investment strategies and/or to | |
fiscal year ended October 31, 2015? | actively manage the Fund's overall exposures to seek to achieve | |
the desired risk/return profile for the Fund. RIMCo also manages | ||
For the period of June 1, 2015 (inception of the Fund) through | the Fund’s liquidity reserves. | |
October 31, 2015, the Fund’s Class A, Class C, Class E and Class | ||
S Shares lost 9.10%, 9.40%, 9.10%, and 9.00%, respectively. | The Fund was launched on June 1, 2015. From inception to | |
This is compared to the Fund’s benchmark, the Russell Global ex- | October 31, 2015, the Fund underperformed its benchmark. The | |
U.S. Large Cap® Index (Net), which lost 7.79% during the same | Fund’s overweight to Europe ex-UK detracted from benchmark- | |
period. The Fund’s performance includes operating expenses, | relative performance though this was partially mitigated by a | |
whereas index returns are unmanaged and do not include | favorable underweight to Asia Pacific ex-Japan. Fair value pricing | |
expenses of any kind. | adjustments on the last business day of the period detracted from | |
the Fund’s benchmark-relative performance because the Fund’s | ||
For the period of June 1, 2015 (inception of the Fund) through | index does not use fair value pricing adjustments. | |
October 31, 2015, the Morningstar® Foreign Large Blend, a group | ||
of funds that Morningstar considers to have investment strategies | Bel Air Investment Advisors (“Bel Air”) was the best performing | |
similar to those of the Fund, lost 7.06%. This result serves as a | manager during the period of inception to October 31, 2015 | |
peer comparison and is expressed net of operating expenses | and outperformed the Russell Global Large Cap Developed ex | |
US index. The manager’s significant underweights to Canada | ||
RIMCo may assign a money manager a specific style or | and the energy sector were favorable. This partially offset by an | |
capitalization benchmark other than the Fund’s index. However, | unfavorable underweight to Telecom during the period. | |
the Fund’s primary index remains the benchmark for the Fund | ||
and is representative of the aggregate of each money manager’s | AllianceBernstein L.P. (“AllianceBernstein”) was the worst | |
benchmark index. | performing manager during the period of inception to October | |
31, 2015 and underperformed the Russell Emerging Markets | ||
How did the market conditions described in the Market | Index. The manager’s underweights to consumer staples and | |
Summary report affect the Fund’s performance? | financials coupled with an overweight to value stocks were the | |
From June 1, 2015 (inception of the Fund) to October 31, 2015, | key detractors during the period. This was partially offset by | |
the Russell Global ex-U.S. Large Cap® Index (Net) returned | positive stock selection in materials and industrials. |
Russell Tax-Managed International Equity Fund 291
Russell Investment Company
Russell Tax-Managed International Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
RIMCo manages a positioning strategy within the Fund, which is | During the period, RIMCo equitized the Fund’s cash using index | |
designed with the dual mandate of improving the Fund’s after-tax | futures contracts to provide the Fund with full market exposure. | |
returns as well as controlling Fund-level exposures and/or risks. | This had a negative impact on Fund performance as markets | |
The active tax management aspect of the strategy is focused on | declined significantly during the period. | |
improving the after tax returns of the Fund. During the period, | Describe any changes to the Fund’s structure or the money | |
all of the Fund’s money managers managed non-discretionary | manager line-up. | |
assignments and RIMCo controlled all trading for the Fund. As a | There were no changes to the Fund’s structure or money manager | |
result, RIMCo was able to monitor the tax impacts of the Fund’s | line-up during the period. | |
trading and harvest losses and defer capital gains with respect to | ||
certain transactions. | Money Managers as of October 31, | |
In addition, using the output from a quantitative model to guide | 2015 | Styles |
the purchase of a stock portfolio, RIMCo seeks to position the | AllianceBernstein L.P. | Emerging - Value |
Fund to meet RIMCo’s overall preferred positioning with respect | Bel Air Investment Advisors LLC | Developed - Growth |
Delaware Investment Fund Advisers, A series | ||
to Fund exposures, while optimizing the portfolio to minimize | of Delaware Management Business Trust | Emerging - Value |
tracking error relative to the Fund’s money manager portfolios. | Janus Capital Management LL and Perkins | |
Over the period, the Fund’s positioning strategy was designed to | Investment Management, LLC | Developed - Value |
provide exposure to lower capitalization (overweight the smaller | Pzena Investment Management, LLC | Developed - Value |
stocks in the benchmark), higher value (overweight stocks with | RWC Asset Advisors (US) LLC | Emerging |
lower valuations than the benchmark), higher quality (overweight | - Market-oriented | |
stocks with lower debt and higher profitability) and slightly higher | The views expressed in this report reflect those of the portfolio | |
momentum, while preserving the potential benefits of the money | managers only through the end of the period covered by | |
managers’ active stock selection. | the report. These views do not necessarily represent the | |
views of RIMCo, or any other person in RIMCo or any other | ||
RIMCo’s tax management strategies contributed to a reduction of | affiliated organization. These views are subject to change | |
realized capital gains for the Fund for the fiscal year, resulting in | at any time based upon market conditions or other events, | |
the generation of a capital loss carry-forward which may be utilized | and RIMCo disclaims any responsibility to update the views | |
to offset a portion of realized capital gains in future tax years. | contained herein. These views should not be relied on as | |
From a benchmark-relative perspective, the positioning strategy | investment advice and, because investment decisions for | |
outperformed the Fund’s benchmark. Allocations to quality and | a Russell Investment Company (“RIC”) Fund are based on | |
momentum paid off, while the value exposure detracted. | numerous factors, should not be relied on as an indication | |
of investment decisions of any RIC Fund. |
* Assumes initial investment on June 1, 2015.
** The Russell Global ex-U.S. Large Cap® Index Net is an index which represents the large-cap segment of the global equity market, including both developed
and emerging market countries and excluding companies assigned to the United States. The performance for this index is calculated “Net” of the relevant
withholding tax in each country to reflect the tax implication for U.S. investors investing outside of the U.S.
‡ The performance has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
292 Russell Tax-Managed International Equity Fund
Russell Investment Company
Russell Tax-Managed International Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | ||||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | ||||||
and other Fund expenses. The Example is intended to help | Performance (5% | ||||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | |||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | ||||
Beginning Account Value | |||||||
investing in other mutual funds. The Example is based on an | June 2, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
investment of $1,000 invested at the beginning of the period and | Ending Account Value | ||||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 909.00 | $ | 1,018.45 | ||
June 2, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 5.33 | $ | 6.82 | ||
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.34% | ||||||
(representing the 152-day period annualized), multiplied by the average | |||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 152/365 (to reflect the period | ||||||
Performance” provides information about actual account values | since commencement of operations). May reflect amounts waived and/or | ||||||
and actual expenses. You may use the information in this column, | reimbursed. Without any waivers and/or reimbursements, expenses would have | ||||||
together with the amount you invested, to estimate the expenses | been higher. Hypothetical expenses are equal to the Fund’s annualized expense | ||||||
ratio of 1.34% (representing the six-month period annualized), multiplied by | |||||||
that you paid over the period. Simply divide your account value by | the average account value over the period, multiplied by 184/365 (to reflect the | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | one-half year period). | ||||||
= 8.6), then multiply the result by the number in the first column | |||||||
in the row entitled “Expenses Paid During Period” to estimate | Hypothetical | ||||||
Performance (5% | |||||||
the expenses you paid on your account during this period. | Actual | return before | |||||
Class C | Performance | expenses) | |||||
Hypothetical Example for Comparison Purposes | Beginning Account Value | ||||||
The information in the table under the heading “Hypothetical | June 2, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Performance (5% return before expenses)” provides information | Ending Account Value | ||||||
October 31, 2015 | $ | 906.00 | $ | 1,014.67 | |||
about hypothetical account values and hypothetical expenses | Expenses Paid During Period* | $ | 8.29 | $ | 10.61 | ||
based on the Fund’s actual expense ratio and an assumed rate of | |||||||
return of 5% per year before expenses, which is not the Fund’s | * Expenses are equal to the Fund's annualized expense ratio of 2.09% | ||||||
actual return. The hypothetical account values and expenses | (representing the 152-day period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 152/365 (to reflect the period | |||||||
may not be used to estimate the actual ending account balance or | since commencement of operations). May reflect amounts waived and/or | ||||||
expenses you paid for the period. You may use this information | reimbursed. Without any waivers and/or reimbursements, expenses would have | ||||||
to compare the ongoing costs of investing in the Fund and other | been higher. Hypothetical expenses are equal to the Fund’s annualized expense | ||||||
funds. To do so, compare this 5% hypothetical example with the | ratio of 2.09% (representing the six-month period annualized), multiplied by | ||||||
the average account value over the period, multiplied by 184/365 (to reflect the | |||||||
5% hypothetical examples that appear in the shareholder reports | one-half year period). | ||||||
of other funds. |
Russell Tax-Managed International Equity Fund 293
Russell Investment Company
Russell Tax-Managed International Equity Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class E | Performance | expenses) | |||
Beginning Account Value | |||||
June 2, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 909.00 | $ | 1,018.45 | |
Expenses Paid During Period* | $ | 5.33 | $ | 6.82 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.34% | |||||
(representing the 152-day period annualized), multiplied by the average | |||||
account value over the period, multiplied by 152/365 (to reflect the period | |||||
since commencement of operations). May reflect amounts waived and/or | |||||
reimbursed. Without any waivers and/or reimbursements, expenses would have | |||||
been higher. Hypothetical expenses are equal to the Fund’s annualized expense | |||||
ratio of 1.34% (representing the six-month period annualized), multiplied by | |||||
the average account value over the period, multiplied by 184/365 (to reflect the | |||||
one-half year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
June 2, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 910.00 | $ | 1,019.71 | |
Expenses Paid During Period* | $ | 4.33 | $ | 5.55 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.09% | |||||
(representing the 152-day period annualized), multiplied by the average | |||||
account value over the period, multiplied by 152/365 (to reflect the period | |||||
since commencement of operations). May reflect amounts waived and/or | |||||
reimbursed. Without any waivers and/or reimbursements, expenses would have | |||||
been higher. Hypothetical expenses are equal to the Fund’s annualized expense | |||||
ratio of 1.09% (representing the six-month period annualized), multiplied by | |||||
the average account value over the period, multiplied by 184/365 (to reflect the | |||||
one-half year period). |
294 Russell Tax-Managed International Equity Fund
Russell Investment Company
Russell Tax-Managed International Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Common Stocks - 92.8% | B2W Cia Digital(Æ) | 38,178 | 144 | |||||||
Argentina - 0.3% | Banco Bradesco SA - ADR(Æ) | 20,468 | 111 | |||||||
Banco Macro SA - ADR(Æ) | 7,573 | 467 | BB Seguridade Participacoes SA | 81,922 | 565 | |||||
Grupo Financiero Galicia SA - ADR | 14,564 | 390 | BM&FBovespa SA - Bolsa de Valores | |||||||
YPF SA - ADR | 15,295 | 327 | Mercadorias e Futuros | 134,548 | 398 | |||||
1,184 | Braskem SA - ADR | 18,027 | 201 | |||||||
BRF SA - ADR | 3,666 | 56 | ||||||||
Australia - 1.7% | Cia de Saneamento Basico do Estado de | |||||||||
AGL Energy, Ltd. | 14,311 | 171 | Sao Paulo - ADR(Æ) | 43,371 | 190 | |||||
ASX, Ltd. - ADR | 4,813 | 142 | Even Construtora e Incorporadora SA | 14,346 | 15 | |||||
Australia & New Zealand Banking | Hypermarcas SA(Æ) | 55,824 | 253 | |||||||
Group, Ltd. - ADR | 122,352 | 2,354 | Itau Unibanco Holding SA - ADR | 70,142 | 480 | |||||
Bendigo & Adelaide Bank, Ltd. | 18,965 | 145 | JBS SA | 91,897 | 340 | |||||
BHP Billiton, Ltd. - ADR | 26,434 | 434 | Kroton Educacional SA | 109,973 | 281 | |||||
Commonwealth Bank of Australia - ADR | 22,249 | 1,218 | Petroleo Brasileiro SA - ADR(Æ) | 279,188 | 1,245 | |||||
CSL, Ltd. | 1,486 | 99 | Telefonica Brasil SA - ADR | 42,460 | 440 | |||||
Fortescue Metals Group, Ltd. | 194,234 | 285 | Tim Participacoes SA - ADR | 17,390 | 193 | |||||
GPT Group (The)(ö) | 138,365 | 468 | 5,128 | |||||||
Macquarie Group, Ltd. | 4,196 | 254 | ||||||||
Medibank Pvt, Ltd. | 265,610 | 447 | Canada - 3.7% | |||||||
Mirvac Group(ö) | 103,514 | 133 | Alimentation Couche-Tard, Inc. Class B | 11,294 | 486 | |||||
National Australia Bank, Ltd. - ADR | 2,954 | 63 | Bank of Montreal | 6,008 | 349 | |||||
Scentre Group(ö) | 159,140 | 470 | Bank of Nova Scotia (The) | 4,380 | 206 | |||||
Stockland(ö) | 29,894 | 86 | BCE, Inc. | 8,854 | 383 | |||||
Telstra Corp., Ltd. | 41,652 | 160 | Brookfield Asset Management, Inc. | |||||||
Wesfarmers, Ltd. | 397 | 11 | Class A | 11,167 | 390 | |||||
Westpac Banking Corp. | 10,344 | 231 | Brookfield Real Estate Services, Inc. | 37,733 | 407 | |||||
Woodside Petroleum, Ltd. | 12,222 | 257 | Canadian Imperial Bank of Commerce | 1,783 | 137 | |||||
Woolworths, Ltd. | 8,824 | 152 | Canadian National Railway Co. | 26,559 | 1,622 | |||||
7,580 | Canadian Natural Resources, Ltd. | 35,419 | 821 | |||||||
CCL Industries, Inc. Class B | 2,253 | 319 | ||||||||
Austria - 0.1% | Cenovus Energy, Inc. | 46,011 | 685 | |||||||
UNIQA Insurance Group AG | 35,374 | 329 | CGI Group, Inc. Class A(Æ) | 3,049 | 113 | |||||
Belgium - 0.8% | Dollarama, Inc. | 2,149 | 145 | |||||||
Ackermans & van Haaren NV | 1,983 | 302 | Empire Co., Ltd. Class A | 16,935 | 355 | |||||
Ageas | 10,179 | 449 | Encana Corp. | 4,306 | 33 | |||||
Anheuser-Busch InBev SA | 14,640 | 1,745 | Fairfax Financial Holdings, Ltd. | 416 | 205 | |||||
Colruyt SA(Æ) | 511 | 25 | First Quantum Minerals, Ltd. | 40,272 | 215 | |||||
KBC Groep NV | 15,777 | 959 | Gildan Activewear, Inc. Class A | 18,446 | 530 | |||||
Proximus SADP | 105 | 4 | Great-West Lifeco, Inc. | 9,476 | 251 | |||||
3,484 | Imperial Oil, Ltd. | 6,919 | 230 | |||||||
Intact Financial Corp. | 1,675 | 120 | ||||||||
Bermuda - 0.6% | Jean Coutu Group PJC, Inc. (The) Class | |||||||||
Brilliance China Automotive Holdings, | A | 11,179 | 170 | |||||||
Ltd.(Æ) | 150,000 | 207 | Loblaw Cos., Ltd. | 2,231 | 118 | |||||
Cheung Kong Infrastructure Holdings, | Magna International, Inc. Class A | 4,696 | 248 | |||||||
Ltd. | 41,000 | 381 | Manulife Financial Corp. | 53,189 | 882 | |||||
Credicorp, Ltd. | 674 | 76 | Metro, Inc. Class A | 4,660 | 133 | |||||
Goldin Financial Holdings, Ltd.(Æ) | 26,453 | 49 | National Bank of Canada | 6,346 | 210 | |||||
HAL Trust | 320 | 59 | Open Text Corp. | 7,037 | 326 | |||||
Hiscox, Ltd. | 3,638 | 54 | Potash Corp. of Saskatchewan, Inc. | 57,110 | 1,157 | |||||
Hongkong Land Holdings, Ltd. | 16,900 | 127 | Restaurant Brands International, Inc. | 16,346 | 656 | |||||
Jardine Matheson Holdings, Ltd. | 4,000 | 217 | Rogers Communications, Inc. Class B | 57,769 | 2,299 | |||||
Markit, Ltd.(Æ) | 15,853 | 484 | Royal Bank of Canada - GDR | 7,243 | 414 | |||||
Nine Dragons Paper Holdings, Ltd. | 325,000 | 214 | SNC-Lavalin Group, Inc. | 11,644 | 373 | |||||
Skyworth Digital Holdings, Ltd. | 602,000 | 443 | Sun Life Financial, Inc. | 6,012 | 203 | |||||
Yue Yuen Industrial Holdings, Ltd. | 118,000 | 430 | Suncor Energy, Inc. | 29,766 | 886 | |||||
2,741 | Toronto Dominion Bank | 11,185 | 459 | |||||||
16,536 | ||||||||||
Brazil - 1.2% | ||||||||||
Ambev SA - ADR | 44,263 | 216 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed International Equity Fund 295
Russell Investment Company
Russell Tax-Managed International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Cayman Islands - 2.7% | CITIC Securities Co., Ltd. Class H | 264,500 | 569 | |||||||
Alibaba Group Holding, Ltd. - ADR(Æ) | 10,702 | 897 | Huadian Fuxin Energy Corp., Ltd. Class | |||||||
Baidu, Inc. - ADR(Æ) | 6,904 | 1,295 | H | 572,000 | 175 | |||||
Belle International Holdings, Ltd. Class | Huadian Power International Corp., Ltd. | |||||||||
H | 322,000 | 312 | Class H | 536,000 | 392 | |||||
Cheung Kong Property Holdings, Ltd. | 62,823 | 439 | Industrial & Commercial Bank of China, | |||||||
China Mengniu Dairy Co., Ltd. | 64,000 | 124 | Ltd. Class H | 871,000 | 553 | |||||
China Resources Land, Ltd. | 80,000 | 207 | New China Life Insurance Co., Ltd. | |||||||
CIFI Holdings Group Co., Ltd. | 754,000 | 160 | Class H | 32,900 | 144 | |||||
CK Hutchison Holdings, Ltd. | 102,350 | 1,399 | PetroChina Co., Ltd. - ADR | 2,833 | 223 | |||||
Ctrip.com International, Ltd. - ADR(Æ) | 5,823 | 541 | PICC Property & Casualty Co., Ltd. | |||||||
Geely Automobile Holdings, Ltd. | 425,000 | 226 | Class H(Æ) | 126,000 | 285 | |||||
Hengan International Group Co., Ltd. | 119,592 | 1,289 | Ping An Insurance Group Co. of China, | |||||||
Ju Teng International Holdings, Ltd. | 98,000 | 53 | Ltd. Class H | 41,500 | 232 | |||||
KWG Property Holding, Ltd. | 583,500 | 420 | Shanghai Pharmaceuticals Holding Co., | |||||||
New World China Land, Ltd.(Æ) | 210,000 | 139 | Ltd. Class H | 200,100 | 460 | |||||
Qunar Cayman Islands, Ltd. - ADR(Æ) | 4,163 | 202 | Tsingtao Brewery Co., Ltd. Class H | 44,000 | 210 | |||||
SINA Corp.(Æ) | 9,184 | 438 | Zhejiang Expressway Co., Ltd. Class H | 18,000 | 22 | |||||
Sino Biopharmaceutical, Ltd. | 136,000 | 168 | 10,232 | |||||||
Sunac China Holdings, Ltd. | 163,000 | 100 | ||||||||
Tencent Holdings, Ltd. | 50,865 | 955 | Colombia - 0.2% | |||||||
Tingyi Cayman Islands Holding Corp. | 68,000 | 116 | Bancolombia SA - ADR | 23,686 | 820 | |||||
Uni-President China Holdings, Ltd. | 260,715 | 213 | ||||||||
Vipshop Holdings, Ltd. - ADR(Æ) | 24,764 | 508 | Czech Republic - 0.2% | |||||||
Want China Holdings, Ltd. | 1,298,013 | 1,078 | CEZ AS | 48,985 | 979 | |||||
WH Group, Ltd.(Æ)(Þ) | 393,500 | 217 | Komercni Banka AS | 303 | 63 | |||||
WuXi PharmaTech Cayman, Inc. | 1,042 | |||||||||
- ADR(Æ) | 9,360 | 418 | Denmark - 1.2% | |||||||
11,914 | Carlsberg A/S Class B | 3,542 | 290 | |||||||
Chile - 0.1% | Christian Hansen Holding | 1,138 | 68 | |||||||
Banco de Credito e Inversiones | 1 | — | Danske Bank A/S | 38,534 | 1,057 | |||||
Empresas CMPC SA | 191,698 | 472 | DSV A/S | 5,558 | 225 | |||||
SACI Falabella(Æ) | 13,805 | 93 | GN Store Nord A/S | 7,692 | 140 | |||||
Sociedad Quimica y Minera de Chile | Jyske Bank A/S(Æ) | 8,405 | 409 | |||||||
SA - ADR | 2,101 | 41 | Matas A/S | 27,341 | 495 | |||||
606 | Novo Nordisk A/S Class B | 37,885 | 2,007 | |||||||
Pandora A/S | 787 | 91 | ||||||||
China - 2.3% | Vestas Wind Systems A/S | 1,320 | 77 | |||||||
Bank of China, Ltd. Class H | 2,304,883 | 1,086 | William Demant Holding A/S(Æ) | 5,079 | 441 | |||||
China CITIC Bank Corp., Ltd. Class | 5,300 | |||||||||
H(Æ) | 494,000 | 319 | ||||||||
China Communications Services Corp., | Egypt - 0.0% | |||||||||
Ltd. Class H(Æ) | 784,000 | 314 | Commercial International Bank Egypt | |||||||
China Construction Bank Corp. Class H | 1,961,562 | 1,414 | SAE - GDR(Æ) | 11,271 | 66 | |||||
China Everbright Bank Co., Ltd. Class H | 666,000 | 324 | ||||||||
China Machinery Engineering Corp. | Finland - 0.3% | |||||||||
Class H | 523,000 | 453 | Elisa OYJ Class A | 9,328 | 351 | |||||
China Merchants Bank Co., Ltd. Class H | 145,000 | 378 | Kone OYJ Class B | 2,441 | 104 | |||||
China Minsheng Banking Corp., Ltd. | Neste OYJ | 1,217 | 30 | |||||||
Class H | 345,500 | 346 | Nokia OYJ | 29,549 | 219 | |||||
China Oilfield Services, Ltd. Class H(Æ) | 292,000 | 324 | Orion OYJ Class B | 786 | 28 | |||||
China Petroleum & Chemical Corp. | Sampo OYJ Class A | 10,857 | 530 | |||||||
Class H | 510,000 | 368 | UPM-Kymmene OYJ | 5,229 | 98 | |||||
China Railway Group, Ltd. Class H | 337,000 | 318 | 1,360 | |||||||
China Telecom Corp., Ltd. Class H | 789,654 | 413 | France - 7.8% | |||||||
China Vanke Co., Ltd. Class H | 261,764 | 611 | Air Liquide SA Class A | 18,982 | 2,456 | |||||
Chongqing Changan Automobile Co., | Alstom SA(Æ) | 14,752 | 481 | |||||||
Ltd. Class B | 31,200 | 57 | AXA SA | 26,791 | 715 | |||||
Chongqing Rural Commercial Bank Co., | BioMerieux | 2,113 | 245 | |||||||
Ltd. Class H | 387,000 | 242 | BNP Paribas SA | 694 | 42 |
See accompanying notes which are an integral part of the financial statements.
296 Russell Tax-Managed International Equity Fund
Russell Investment Company
Russell Tax-Managed International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Bouygues SA - ADR | 49,286 | 1,865 | Rational AG | 2,233 | 886 | ||||||
Capital Gemini SA | 1,937 | 172 | SAP SE - ADR | 40,692 | 3,216 | ||||||
Carrefour SA | 2,038 | 66 | Siemens AG | 22,812 | 2,294 | ||||||
Christian Dior SE | 1,130 | 222 | Symrise AG | 2,008 | 132 | ||||||
Credit Agricole SA | 97,084 | 1,228 | Talanx AG | 9,909 | 318 | ||||||
Danone SA | 35,601 | 2,479 | United Internet AG | 783 | 41 | ||||||
Dassault Systemes SA | 2,108 | 166 | Wirecard AG | 7,324 | 378 | ||||||
Engie SA | 111,857 | 1,959 | 18,649 | ||||||||
Essilor International SA | 12,623 | 1,656 | |||||||||
Faurecia | 32,707 | 1,292 | Greece - 0.1% | ||||||||
Gecina SA(ö) | 2,039 | 260 | National Bank of Greece SA(Æ) | 466,231 | 344 | ||||||
Lectra | 36,622 | 433 | |||||||||
L'Oreal SA | 18,101 | 3,299 | Hong Kong - 2.2% | ||||||||
LVMH Moet Hennessy Louis Vuitton | AIA Group, Ltd. | 71,209 | 416 | ||||||||
SE - ADR | 2,696 | 502 | Bank of East Asia, Ltd. (The) | 89,600 | 334 | ||||||
Natixis SA | 94,212 | 577 | BYD Electronic International Co., Ltd. | ||||||||
Orange SA - ADR | 12,888 | 227 | (Æ) | 830,500 | 538 | ||||||
Publicis Groupe SA - ADR | 21,870 | 1,419 | Champion(Æ)(ö) | 194,000 | 101 | ||||||
Renault SA | 3,754 | 353 | China Mobile, Ltd. - ADR | 53,776 | 3,243 | ||||||
Safran SA | 8,590 | 652 | China Power International Development, | ||||||||
Sanofi - ADR | 28,144 | 2,837 | Ltd.(Æ) | 25,000 | 16 | ||||||
Schneider Electric SE | 31,911 | 1,930 | CLP Holdings, Ltd. | 35,000 | 304 | ||||||
SCOR SE - ADR | 624 | 23 | CNOOC, Ltd. | 154,000 | 175 | ||||||
Societe Generale SA | 8,236 | 382 | Far East Horizon, Ltd.(Æ) | 370,000 | 307 | ||||||
Teleperformance - GDR | 2,067 | 162 | Hang Seng Bank, Ltd. | 12,300 | 225 | ||||||
Total SA | 65,769 | 3,188 | Henderson Land Development Co., Ltd. | 41,000 | 261 | ||||||
Unibail-Rodamco SE(ö) | 2,075 | 580 | Hong Kong Exchanges and Clearing, | ||||||||
Valeo SA | 1,365 | 211 | Ltd. | 12,300 | 321 | ||||||
Vallourec SA | 57,883 | 642 | Hopewell Holdings, Ltd. | 95,000 | 343 | ||||||
Vicat | 9,770 | 626 | Hua Hong Semiconductor, Ltd.(Å)(Æ) | 143,000 | 144 | ||||||
Vinci SA | 8,654 | 583 | Lenovo Group, Ltd. | 300,000 | 278 | ||||||
Vivendi SA - ADR | 16,714 | 402 | Link Real Estate Investment True (The) | ||||||||
Wendel SA | 700 | 84 | (ö) | 68,000 | 404 | ||||||
Worldline SA(Æ)(Þ) | 17,726 | 430 | Luk Fook Holdings International, Ltd. | 226 | 1 | ||||||
34,846 | MTR Corp., Ltd. | 24,500 | 111 | ||||||||
New World Development Co., Ltd. | 329,000 | 351 | |||||||||
Germany - 4.2% | Power Assets Holdings, Ltd. | 35,500 | 353 | ||||||||
Adidas AG | 2,086 | 187 | Shengjing Bank Co., Ltd. Class H(Æ)(Þ) | 275,500 | 368 | ||||||
Allianz SE | 3,950 | 692 | Shenzhen International Holdings, Ltd. | ||||||||
BASF SE | 14,408 | 1,181 | (Æ) | 223,500 | 339 | ||||||
Bayerische Motoren Werke AG | 4,088 | 420 | Sino Land Co., Ltd. | 106,000 | 163 | ||||||
Brenntag AG | 7,756 | 469 | Sun Hung Kai Properties, Ltd. | 17,000 | 227 | ||||||
Continental AG | 4,271 | 1,027 | Swire Pacific, Ltd. Class A | 18,000 | 208 | ||||||
Daimler AG | 7,478 | 649 | Wharf Holdings, Ltd. (The) | 26,000 | 154 | ||||||
Deutsche Bank AG | 8,747 | 245 | 9,685 | ||||||||
Deutsche Boerse AG | 32,877 | 3,025 | |||||||||
Deutsche Post AG | 7,751 | 231 | Hungary - 0.3% | ||||||||
Deutsche Telekom AG | 14,611 | 273 | OTP Bank PLC | 56,971 | 1,103 | ||||||
Deutsche Wohnen AG | 4,110 | 116 | India - 1.7% | ||||||||
Fresenius Medical Care AG & Co. KGaA | 2,251 | 203 | Axis Bank, Ltd. - GDR | 14,794 | 535 | ||||||
Fresenius SE & Co. KGaA | 694 | 51 | Dr Reddy's Laboratories, Ltd. - ADR | 9,943 | 644 | ||||||
GEA Group AG | 15 | 1 | GAIL India, Ltd. - GDR(Æ) | 7,528 | 218 | ||||||
Hamburger Hafen und Logistik AG | 22,999 | 333 | HDFC Bank, Ltd. - ADR | 31,553 | 1,928 | ||||||
Hannover Rueck SE | 1,235 | 143 | ICICI Bank, Ltd. - ADR | 56,743 | 489 | ||||||
HeidelbergCement AG | 12,546 | 935 | Infosys, Ltd. - ADR | 39,553 | 718 | ||||||
Infineon Technologies AG - ADR | 7,948 | 98 | Mahindra & Mahindra, Ltd. - GDR | 17,997 | 326 | ||||||
LEG Immobilien AG(Æ) | 389 | 31 | Reliance Industries, Ltd. - GDR(Þ) | 48,078 | 1,380 | ||||||
Muenchener Rueckversicherungs- | State Bank of India - GDR | 11,804 | 428 | ||||||||
Gesellschaft AG in Muenchen | 2,075 | 414 | Tata Motors, Ltd. - ADR(Æ) | 27,344 | 809 | ||||||
OSRAM Licht AG | 814 | 48 | |||||||||
Pfeiffer Vacuum Technology AG | 4,908 | 612 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed International Equity Fund 297
Russell Investment Company
Russell Tax-Managed International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Wipro, Ltd. - ADR | 20,137 | 249 | Central Japan Railway Co. | 500 | 91 | ||||||
7,724 | Chiba Bank, Ltd. (The) | 18,000 | 131 | ||||||||
Chubu Electric Power Co., Inc. | 11,412 | 175 | |||||||||
Indonesia - 0.1% | Cosel Co., Ltd. | 48,777 | 475 | ||||||||
Indocement Tunggal Prakarsa Tbk | Daihatsu Motor Co., Ltd. | 121,285 | 1,479 | ||||||||
PT(Æ) | 56,800 | 74 | Dai-ichi Life Insurance Co., Ltd. (The) | 40,785 | 705 | ||||||
Pakuwon Jati Tbk PT(Æ) | 5,762,100 | 178 | Daiichi Sankyo Co., Ltd. | 7,300 | 142 | ||||||
United Tractors Tbk PT | 107,200 | 141 | Daiwa House Industry Co., Ltd. | 7,900 | 206 | ||||||
393 | Daiwa Securities Group, Inc. | 19,000 | 130 | ||||||||
Denso Corp. | 4,000 | 185 | |||||||||
Ireland - 0.9% | Dentsu, Inc. | 3,268 | 183 | ||||||||
Bank of Ireland(Æ) | 663,166 | 247 | FamilyMart Co., Ltd. | 800 | 33 | ||||||
CRH PLC | 2,539 | 69 | FANUC Corp. | 13,560 | 2,387 | ||||||
Glanbia PLC | 20,309 | 394 | Fuji Heavy Industries, Ltd. | 10,040 | 388 | ||||||
ICON PLC(Æ) | 3,032 | 194 | FUJIFILM Holdings Corp. | 9,721 | 386 | ||||||
Irish Continental Group PLC | 163,686 | 894 | Fujitsu, Ltd. | 355,146 | 1,671 | ||||||
Smurfit Kappa Group PLC | 489 | 14 | Fukuoka Financial Group, Inc. | 22,000 | 115 | ||||||
Willis Group Holdings PLC | 29,304 | 1,306 | Hitachi, Ltd. | 32,000 | 184 | ||||||
XL Group PLC Class A | 25,098 | 956 | Honda Motor Co., Ltd. | 108,765 | 3,612 | ||||||
4,074 | Hoshizaki Electric Co., Ltd. | 1,400 | 101 | ||||||||
Isle of Man - 0.0% | Hoya Corp. | 3,800 | 156 | ||||||||
Playtech PLC | 2,994 | 39 | Icom, Inc. | 11,900 | 247 | ||||||
Iida Group Holdings Co., Ltd. | 78,200 | 1,461 | |||||||||
Israel - 0.4% | ITOCHU Corp. | 174,403 | 2,172 | ||||||||
Bank Leumi Le-Israel BM(Æ) | 32,276 | 122 | Japan Tobacco, Inc. | 6,000 | 207 | ||||||
Check Point Software Technologies, Ltd. | JSR Corp. | 4,900 | 77 | ||||||||
(Æ) | 2,262 | 192 | Kajima Corp. | 25,000 | 143 | ||||||
NICE-Systems, Ltd. | 6,348 | 393 | Kao Corp. | 3,700 | 189 | ||||||
Taro Pharmaceutical Industries, Ltd.(Æ) | 2,782 | 404 | KDDI Corp. | 30,700 | 742 | ||||||
Teva Pharmaceutical Industries, Ltd. | 7,105 | 422 | Keyence Corp. | 7,322 | 3,801 | ||||||
Teva Pharmaceutical Industries, Ltd. | Kikkoman Corp. | 2,000 | 62 | ||||||||
- ADR | 6,117 | 362 | Kitagawa Industries Co., Ltd. | 15,000 | 164 | ||||||
1,895 | Kobe Steel, Ltd. | 91,000 | 114 | ||||||||
Komatsu, Ltd. | 17,300 | 286 | |||||||||
Italy - 1.7% | Konica Minolta, Inc. | 10,000 | 103 | ||||||||
Assicurazioni Generali SpA | 15,717 | 298 | Kuraray Co., Ltd. | 8,700 | 107 | ||||||
Buzzi Unicem SpA | 25,827 | 437 | Kuroda Electric Co., Ltd. | 12,209 | 247 | ||||||
Davide Campari-Milano SpA | 11,235 | 96 | Kyocera Corp. | 2,400 | 108 | ||||||
Enel SpA | 402,426 | 1,858 | M3, Inc. | 1,100 | 21 | ||||||
ENI SpA - ADR | 117,584 | 1,919 | Medipal Holdings Corp. | 2,600 | 45 | ||||||
Finmeccanica SpA(Æ) | 9,944 | 130 | MEIJI Holdings Co., Ltd. | 400 | 31 | ||||||
Intesa Sanpaolo SpA | 120,283 | 419 | Mitsubishi Chemical Holdings Corp. | 43,600 | 271 | ||||||
Luxottica Group SpA | 3,086 | 216 | Mitsubishi Corp. | 18,400 | 333 | ||||||
Snam Rete Gas SpA | 61,480 | 318 | Mitsubishi Electric Corp. | 13,000 | 135 | ||||||
Telecom Italia SpA(Æ) | 1,239,770 | 1,727 | Mitsubishi Heavy Industries, Ltd. | 649 | 3 | ||||||
UniCredit SpA | 51,212 | 331 | Mitsubishi Materials Corp. | 18,000 | 62 | ||||||
7,749 | Mitsubishi Motors Corp. | 14,600 | 129 | ||||||||
Mitsubishi UFJ Financial Group, Inc. | 156,816 | 1,014 | |||||||||
Japan - 11.7% | Mitsui & Co., Ltd. | 19,100 | 241 | ||||||||
Aisin Seiki Co., Ltd. | 4,100 | 162 | Mitsui Fudosan Co., Ltd. | 13,664 | 370 | ||||||
Ajinomoto Co., Inc. | 3,000 | 67 | Mizuho Financial Group, Inc. | 200,200 | 409 | ||||||
Alfresa Holdings Corp. | 2,400 | 46 | MS&AD Insurance Group Holdings, Inc. | 17,939 | 526 | ||||||
Aozora Bank, Ltd. | 33,000 | 120 | Murata Manufacturing Co., Ltd. | 305 | 43 | ||||||
As One Corp. | 16,374 | 577 | Nakanishi, Inc. | 7,659 | 261 | ||||||
Asahi Group Holdings, Ltd. | 700 | 22 | NEC Corp. | 46,000 | 142 | ||||||
Asahi Kasei Corp. | 37,000 | 226 | NH Foods, Ltd. | 2,000 | 42 | ||||||
Asics Corp. | 56,192 | 1,547 | NHK Spring Co., Ltd. | 35,685 | 363 | ||||||
Astellas Pharma, Inc. | 2,299 | 33 | Nikon Corp. | 8,800 | 113 | ||||||
Bank of Yokohama, Ltd. (The) | 30,000 | 186 | Nintendo Co., Ltd. | 7,800 | 1,245 | ||||||
Bridgestone Corp. | 6,200 | 227 | Nippon Express Co., Ltd. | 23,000 | 118 | ||||||
Canon, Inc. | 25,606 | 765 |
See accompanying notes which are an integral part of the financial statements.
298 Russell Tax-Managed International Equity Fund
Russell Investment Company
Russell Tax-Managed International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Nippon Fine Chemical Co., Ltd. | 34,200 | 260 | Regus PLC | 4,916 | 25 | ||||
Nippon Steel & Sumitomo Metal Corp. | 6,900 | 140 | Shire PLC - ADR | 3,311 | 251 | ||||
Nippon Telegraph & Telephone Corp. | 6,200 | 228 | United Business Media, Ltd. | 82,359 | 649 | ||||
Nissan Motor Co., Ltd. | 20,400 | 212 | West China Cement, Ltd. | 874,000 | 150 | ||||
Nitori Holdings Co., Ltd. | 11,900 | 926 | WPP PLC | 64,051 | 1,435 | ||||
Nitto Denko Corp. | 4,000 | 255 | 2,782 | ||||||
Nitto FC Co., Ltd. | 46,000 | 373 | |||||||
NOK Corp. | 4,800 | 113 | Kazakhstan - 0.0% | ||||||
Nomura Holdings, Inc. | 46,600 | 292 | KazMunaiGas Exploration Production | ||||||
NTT DOCOMO, Inc. | 47,399 | 930 | JSC - GDR | 3,752 | 26 | ||||
Obayashi Corp. | 14,000 | 123 | |||||||
Obic Co., Ltd. | 300 | 16 | Luxembourg - 0.1% | ||||||
Oji Holdings Corp. | 10,000 | 52 | MHP SA - GDR | 1,431 | 13 | ||||
Ono Pharmaceutical Co., Ltd. | 1,400 | 191 | Tenaris SA | 21,607 | 272 | ||||
Oriental Land Co., Ltd. | 3,178 | 192 | Ternium SA - ADR | 22,647 | 326 | ||||
ORIX Corp. | 13,500 | 197 | 611 | ||||||
Osaka Gas Co., Ltd. | 37,000 | 145 | Malaysia - 0.0% | ||||||
Otsuka Holdings Co., Ltd. | 7,400 | 245 | UEM Sunrise BHD | 167,400 | 49 | ||||
Panasonic Corp. | 9,600 | 113 | |||||||
Pola Orbis Holdings, Inc. | 9,570 | 605 | Mexico - 1.5% | ||||||
Recruit Holdings Co., Ltd. | 12,272 | 394 | America Movil SAB de CV | 1,926,294 | 1,719 | ||||
Resona Holdings, Inc. | 21,400 | 113 | America Movil SAB de CV Class L | ||||||
Ricoh Co., Ltd. | 14,300 | 154 | - ADR | 11,677 | 208 | ||||
Ryohin Keikaku Co., Ltd. | 500 | 100 | Cemex SAB de CV - ADR(Æ) | 98,364 | 621 | ||||
Secom Co., Ltd. | 14,863 | 989 | Coca-Cola Femsa SAB de CV(Æ) | 42,352 | 326 | ||||
Secom Joshinetsu Co., Ltd. | 4,700 | 154 | El Puerto de Liverpool SAB de CV | 15,111 | 210 | ||||
Sekisui House, Ltd. | 19,500 | 323 | Fomento Economico Mexicano SAB de | ||||||
Seven & i Holdings Co., Ltd. | 7,159 | 323 | CV - ADR | 3,007 | 298 | ||||
Shimadzu Corp. | 3,000 | 47 | Gruma SAB de CV Class B | 8,864 | 137 | ||||
Shimano, Inc. | 8,587 | 1,350 | Grupo Carso SAB de CV | 20,894 | 93 | ||||
Shingakukai Co., Ltd. | 32,400 | 195 | Grupo Financiero Banorte SAB de CV | ||||||
Shinsei Bank, Ltd. | 195,310 | 408 | Class O | 123,275 | 664 | ||||
Shionogi & Co., Ltd. | 4,500 | 184 | Grupo Lala SAB de CV Class B(Æ) | 42,851 | 110 | ||||
Shizuoka Bank, Ltd. (The) | 12,000 | 120 | Grupo Televisa SAB - ADR | 57,745 | 1,682 | ||||
Sompo Japan Nipponkoa Holdings, Inc. | 45,293 | 1,412 | Promotora y Operadora de | ||||||
Sumitomo Chemical Co., Ltd. | 46,000 | 263 | Infraestructura SAB de CV(Æ) | 34,137 | 428 | ||||
Sumitomo Electric Industries, Ltd. | 11,000 | 150 | Wal-Mart de Mexico SAB de CV(Æ) | 107,878 | 285 | ||||
Sumitomo Metal Mining Co., Ltd. | 13,000 | 162 | 6,781 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 38,202 | 1,519 | |||||||
Suzuken Co., Ltd. | 2,300 | 88 | Netherlands - 3.5% | ||||||
Sysmex Corp. | 130 | 7 | Aalberts Industries NV | 2,677 | 87 | ||||
T&D Holdings, Inc. | 9,600 | 125 | Aegon NV | 39,337 | 242 | ||||
Taiheiyo Cement Corp. | 34,000 | 112 | AerCap Holdings NV(Æ) | 3,764 | 156 | ||||
Terumo Corp. | 1,300 | 38 | ASM International NV | 17,669 | 674 | ||||
Tohoku Electric Power Co., Inc. | 7,800 | 109 | ASML Holding NV | 2,789 | 259 | ||||
Tokyo Electric Power Co., Inc.(Æ) | 65,065 | 442 | Fiat Chrysler Automobiles NV | 20,888 | 307 | ||||
Tokyo Gas Co., Ltd. | 25,000 | 123 | GrandVision NV(Þ) | 16,079 | 444 | ||||
Toyota Industries Corp. | 5,600 | 293 | Heineken Holding NV | 264 | 21 | ||||
Toyota Motor Corp. | 29,221 | 1,789 | Heineken NV | 5,301 | 483 | ||||
Toyota Tsusho Corp. | 5,300 | 121 | ING Groep NV | 125,364 | 1,818 | ||||
Unicharm Corp. | 60,925 | 1,298 | Koninklijke KPN NV | 577,974 | 2,117 | ||||
West Japan Railway Co. | 3,000 | 210 | NN Group NV | 46,671 | 1,464 | ||||
Yamada Denki Co., Ltd. | 25,400 | 114 | Randstad Holding NV | 239 | 14 | ||||
Yamaguchi Financial Group, Inc. | 5,000 | 61 | RELX NV | 17,024 | 290 | ||||
Yamaha Corp. | 3,400 | 84 | STMicroelectronics NV | 182,753 | 1,263 | ||||
52,042 | Unilever NV | 112,496 | 5,071 | ||||||
X5 Retail Group NV - GDR(Æ) | 24,965 | 517 | |||||||
Jersey - 0.6% | Yandex NV Class A(Æ) | 31,813 | 512 | ||||||
Henderson Group PLC | 43,970 | 194 | 15,739 | ||||||
Integrated Diagnostics Holdings PLC(Æ) | |||||||||
(Þ) | 14,202 | 78 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed International Equity Fund 299
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
New Zealand - 0.0% | South Africa - 0.8% | |||||||||
Fonterra Group, Ltd. | 35,614 | 130 | AngloGold Ashanti, Ltd. - ADR(Æ) | 62,431 | 526 | |||||
Aspen Pharmacare Holdings, Ltd.(Æ) | 15,327 | 344 | ||||||||
Nigeria - 0.0% | Bidvest Group, Ltd. (The) | 7,565 | 193 | |||||||
Guaranty Trust Bank PLC - GDR(Æ) | 11,749 | 68 | Foschini Group, Ltd. (The) | 21,354 | 218 | |||||
Growthpoint Properties, Ltd.(ö) | 123,284 | 226 | ||||||||
Norway - 0.6% | MTN Group, Ltd. | 5,143 | 59 | |||||||
DNB ASA | 59,183 | 751 | Naspers, Ltd. Class N(Æ) | 1,722 | 252 | |||||
Orkla ASA | 99,081 | 842 | Remgro, Ltd. | 26,596 | 531 | |||||
Telenor ASA | 27,725 | 522 | Resilient Property Income Fund, Ltd. | |||||||
TGS Nopec Geophysical Co. ASA - ADR | 17,074 | 338 | (Æ)(ö) | 37,971 | 334 | |||||
Yara International ASA | 6,605 | 300 | Sasol, Ltd. - ADR | 6,582 | 210 | |||||
2,753 | Standard Bank Group, Ltd. | 18,743 | 195 | |||||||
Panama - 0.0% | Steinhoff International Holdings, Ltd. | 57,877 | 354 | |||||||
Avianca Holdings SA - ADR(Æ) | 2,473 | 10 | Vodacom Group, Ltd. - ADR | 16,025 | 173 | |||||
InRetail Peru Corp.(Æ)(Þ) | 6,893 | 84 | Woolworths Holdings, Ltd. | 20,137 | 149 | |||||
94 | 3,764 | |||||||||
Philippines - 0.3% | South Korea - 4.6% | |||||||||
BDO Unibank, Inc. | 150,820 | 325 | BNK Financial Group, Inc. | 15,593 | 191 | |||||
GT Capital Holdings, Inc. | 1,225 | 34 | Daelim Industrial Co., Ltd. | 5,369 | 350 | |||||
Jollibee Foods Corp.(Æ) | 47,090 | 207 | DGB Financial Group, Inc. | 25,054 | 232 | |||||
Universal Robina Corp. | 190,090 | 812 | Hana Financial Group, Inc. | 47,598 | 1,155 | |||||
1,378 | Hankook Tire Co., Ltd. | 9,673 | 370 | |||||||
Hyosung Corp. | 2,114 | 215 | ||||||||
Poland - 0.0% | Hyundai Department Store Co., Ltd. | 2,115 | 232 | |||||||
Polskie Gornictwo Naftowe i | Hyundai Engineering & Construction | |||||||||
Gazownictwo SA | 94,669 | 168 | Co., Ltd. | 7,680 | 231 | |||||
Hyundai Mobis Co., Ltd. | 2,129 | 448 | ||||||||
Portugal - 0.1% | Hyundai Motor Co. | 15,262 | 2,085 | |||||||
Energias de Portugal SA | 54,660 | 202 | Hyundai Wia Corp. | 4,502 | 526 | |||||
KB Financial Group, Inc. | 29,553 | 936 | ||||||||
Russia - 1.0% | KB Financial Group, Inc. - ADR | 7,633 | 241 | |||||||
Gazprom PAO - ADR | 306,036 | 1,279 | KCC Corp. | 779 | 278 | |||||
Gazprom PAO | 74,811 | 159 | Kia Motors Corp. | 9,441 | 461 | |||||
Lukoil PJSC - ADR | 20,302 | 736 | Korea Electric Power Corp. | 7,410 | 334 | |||||
Lukoil PJSC | 413 | 15 | Korea Investment Holdings Co., Ltd. | 4,233 | 225 | |||||
MMC Norilsk Nickel PJSC(Æ) | 5,432 | 81 | KT Corp. - ADR | 10,102 | 133 | |||||
Mobile TeleSystems PJSC - ADR | 4,481 | 32 | KT&G Corp. | 13,605 | 1,360 | |||||
Novolipetsk Steel OJSC - GDR | 49,960 | 615 | LG Chem, Ltd. | 3,482 | 923 | |||||
Novolipetsk Steel OJSC | 20,640 | 25 | LG Display Co., Ltd. | 5,979 | 114 | |||||
Rosneft OAO - GDR | 24,806 | 99 | LG Uplus Corp. | 31,373 | 300 | |||||
RusHydro PJSC(Æ) | 39,008,130 | 397 | Lotte Chemical Corp. | 2,738 | 571 | |||||
Sberbank PAO - ADR | 84,578 | 517 | Lotte Chilsung Beverage Co., Ltd. | 180 | 352 | |||||
Severstal PAO - GDR(Æ) | 24,814 | 292 | Lotte Confectionery Co., Ltd. | 112 | 195 | |||||
Tatneft PAO | 17,090 | 88 | Lotte Shopping Co., Ltd. | 2,031 | 411 | |||||
Tatneft PAO - ADR | 8,887 | 275 | NAVER Corp. | 766 | 402 | |||||
4,610 | Samsung Electro-Mechanics Co., Ltd. | 1,077 | 61 | |||||||
Samsung Electronics Co., Ltd. | 3,513 | 4,207 | ||||||||
Singapore - 0.7% | Samsung Fire & Marine Insurance Co., | |||||||||
CapitaLand Commercial Trust, Ltd.(Æ) | Ltd. | 776 | 217 | |||||||
(ö) | 351,300 | 353 | Samsung Life Insurance Co., Ltd. | 7,322 | 699 | |||||
CapitaLand, Ltd. | 68,100 | 150 | Shinhan Financial Group Co., Ltd. | 24,644 | 938 | |||||
DBS Group Holdings, Ltd. | 23,700 | 292 | Shinsegae Co., Ltd. | 1,157 | 235 | |||||
Oversea-Chinese Banking Corp., Ltd. | 33,400 | 214 | SK Telecom Co., Ltd. - ADR | 25,598 | 603 | |||||
Singapore Telecommunications, Ltd. | 512,263 | 1,449 | SK Telecom Co., Ltd. | 1,246 | 264 | |||||
United Overseas Bank, Ltd. | 15,200 | 220 | 20,495 | |||||||
Yangzijiang Shipbuilding Holdings, Ltd. | 405,000 | 360 | ||||||||
3,038 | Spain - 1.1% | |||||||||
Amadeus IT Holding SA Class A | 8,007 | 341 | ||||||||
Banco de Sabadell SA - ADR | 258,334 | 499 |
See accompanying notes which are an integral part of the financial statements.
300 Russell Tax-Managed International Equity Fund
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Banco Popular Espanol SA | 162,616 | 617 | Zurich Insurance Group AG(Æ) | 1,562 | 412 | |||||
Banco Santander SA - ADR | 99,974 | 560 | 40,516 | |||||||
Bankia SA Class A | 199,376 | 257 | ||||||||
Ebro Foods SA | 1,531 | 29 | Taiwan - 2.4% | |||||||
Ferrovial SA | 13,307 | 336 | Advanced Semiconductor Engineering, | |||||||
Iberdrola SA | 57,514 | 411 | Inc. - ADR | 89,103 | 511 | |||||
Indra Sistemas SA(Æ) | 50,784 | 544 | Asustek Computer, Inc. | 50,000 | 446 | |||||
Industria de Diseno Textil SA | 9,857 | 369 | Catcher Technology Co., Ltd. | 50,678 | 494 | |||||
Mediaset Espana Comunicacion SA | 33,346 | 405 | China Life Insurance Co., Ltd. | 260,000 | 213 | |||||
Telefonica SA - ADR | 25,225 | 333 | China Steel Corp. Class H | 521,000 | 314 | |||||
4,701 | Chunghwa Telecom Co., Ltd. - ADR | 10,843 | 332 | |||||||
Compal Electronics, Inc. | 1,222,178 | 758 | ||||||||
Sweden - 2.1% | E.Sun Financial Holding Co., Ltd. | 16,430 | 10 | |||||||
Assa Abloy AB Class B | 14,932 | 296 | Eclat Textile Co., Ltd. | 17,000 | 250 | |||||
Atlas Copco AB Class A | 9,228 | 240 | Far Eastern New Century Corp. | 356,000 | 323 | |||||
Boliden AB | 42,443 | 812 | Hon Hai Precision Industry Co., Ltd. | |||||||
Fastighets AB Balder Class B(Æ) | 23,179 | 467 | - GDR(Æ) | 193,350 | 1,109 | |||||
Hennes & Mauritz AB Class B | 2,406 | 93 | Inotera Memories, Inc.(Æ) | 593,000 | 454 | |||||
Hexagon AB Class B | 4,444 | 154 | Kinsus Interconnect Technology Corp. | 68,000 | 139 | |||||
Hufvudstaden AB Class A | 3,405 | 48 | Largan Precision Co., Ltd. | 14,087 | 1,089 | |||||
L E Lundbergforetagen AB Class B | 8,737 | 445 | MediaTek, Inc. | 36,000 | 279 | |||||
Nibe Industrier AB Class B | 3,695 | 119 | Novatek Microelectronics Corp. | 53,000 | 179 | |||||
Nordea Bank AB | 33,071 | 365 | Radiant Opto-Electronics Corp.(Æ) | 19,000 | 58 | |||||
Skandinaviska Enskilda Banken AB | SinoPac Financial Holdings Co., Ltd. | 969,000 | 319 | |||||||
Class A | 23,593 | 247 | Taiwan Semiconductor Manufacturing | |||||||
Svenska Cellulosa AB SCA Class B | 5,320 | 157 | Co., Ltd. - ADR | 138,617 | 3,045 | |||||
Svenska Handelsbanken AB Class A | 183,799 | 2,492 | United Microelectronics Corp. - ADR | 206,680 | 382 | |||||
Swedbank AB Class A | 14,030 | 322 | 10,704 | |||||||
Swedish Match AB | 72,273 | 2,271 | ||||||||
Telefonaktiebolaget LM Ericsson Class B | 23,067 | 224 | Thailand - 0.4% | |||||||
TeliaSonera AB | 50,294 | 257 | Bangkok Bank PCL | 66,900 | 314 | |||||
Trelleborg AB Class B | 20,776 | 350 | Carabao Group PCL(Æ) | 167,300 | 183 | |||||
9,359 | Intouch Holdings PCL(Æ) | 182,400 | 384 | |||||||
Kasikornbank PCL | 61,202 | 296 | ||||||||
Switzerland - 9.1% | Siam Cement PCL (The) | 3,800 | 48 | |||||||
ABB, Ltd.(Æ) | 129,318 | 2,436 | Sino-Thai Engineering & Construction | |||||||
ACE, Ltd. | 9,044 | 1,027 | PCL(Æ) | 973,380 | 690 | |||||
Actelion, Ltd.(Æ) | 1,338 | 186 | 1,915 | |||||||
Chocoladefabriken Lindt & Spruengli | ||||||||||
AG | 15 | 91 | Turkey - 0.4% | |||||||
Cie Financiere Richemont SA(Æ) | 21,901 | 1,873 | Akbank TAS | 142,854 | 366 | |||||
Credit Suisse Group AG(Æ) | 86,456 | 2,153 | Coca-Cola Icecek AS | 14,845 | 188 | |||||
Flughafen Zuerich AG | 1,108 | 839 | KOC Holding AS | 24,886 | 113 | |||||
GAM Holding AG(Æ) | 25,355 | 463 | Pegasus Hava Tasimaciligi AS(Æ) | 10,731 | 69 | |||||
Geberit AG | 5,122 | 1,651 | Turk Hava Yollari AO(Æ) | 87,365 | 258 | |||||
Georg Fischer AG | 393 | 241 | Turkcell Iletisim Hizmetleri AS | 68,047 | 271 | |||||
LafargeHolcim, Ltd.(Æ) | 3,478 | 196 | Turkiye Garanti Bankasi AS | 100,164 | 260 | |||||
Lonza Group AG(Æ) | 163 | 24 | Turkiye Is Bankasi Class C | 22,241 | 38 | |||||
Nestle SA | 100,006 | 7,634 | 1,563 | |||||||
Novartis AG | 82,527 | 7,481 | ||||||||
Panalpina Welttransport Holding AG | 5,478 | 626 | United Arab Emirates - 0.2% | |||||||
Partners Group Holding AG | 81 | 29 | Air Arabia PJSC | 32,925 | 12 | |||||
Roche Holding AG | 22,251 | 6,027 | DAMAC Properties Dubai Co. PJSC(Æ) | 330,806 | 267 | |||||
Schindler Holding AG | 15,258 | 2,474 | Dubai Islamic Bank PJSC | 93,154 | 164 | |||||
Straumann Holding AG | 153 | 43 | Emaar Properties PJSC | 234,364 | 408 | |||||
Swatch Group AG (The) Class B | 3,371 | 1,316 | 851 | |||||||
Swiss Life Holding AG(Æ) | 413 | 98 | United Kingdom - 16.0% | |||||||
Swiss Re AG(Æ) | 4,081 | 379 | 3i Group PLC | 13,736 | 106 | |||||
Syngenta AG | 481 | 162 | Al Noor Hospitals Group PLC(Æ) | 12,054 | 218 | |||||
TE Connectivity, Ltd. | 5,789 | 373 | Amec Foster Wheeler PLC - GDR | 33,153 | 362 | |||||
UBS Group AG | 114,329 | 2,282 | Amlin PLC | 14,754 | 150 |
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
ARM Holdings PLC | 26,495 | 419 | Rotork PLC | 567,539 | 1,638 | |||||
Ashtead Group PLC | 23,047 | 355 | Royal Bank of Scotland Group PLC(Æ) | 276,551 | 1,352 | |||||
Associated British Foods PLC | 3,305 | 176 | Royal Dutch Shell PLC Class A | 179,698 | 4,694 | |||||
AstraZeneca PLC | 3,301 | 211 | Royal Dutch Shell PLC Class B | 8,024 | 210 | |||||
Aviva PLC | 203,146 | 1,519 | RSA Insurance Group PLC | 133,065 | 862 | |||||
BAE Systems PLC | 261,596 | 1,772 | SABMiller PLC - ADR | 5,008 | 308 | |||||
Barclays PLC | 434,179 | 1,545 | Segro PLC(ö) | 56,440 | 391 | |||||
Barratt Developments PLC | 19,137 | 180 | Smith & Nephew PLC | 23,211 | 396 | |||||
BBA Aviation PLC | 225,470 | 662 | Smiths Group PLC | 47,610 | 705 | |||||
Bellway PLC | 6,312 | 252 | Spirax-Sarco Engineering PLC | 43,131 | 2,020 | |||||
Berkeley Group Holdings PLC | 2,153 | 110 | Standard Chartered PLC | 15,422 | 171 | |||||
BHP Billiton PLC | 34,129 | 546 | Standard Life PLC | 34,422 | 223 | |||||
BP PLC | 444,231 | 2,637 | Stock Spirits Group PLC | 324,429 | 953 | |||||
BP PLC - ADR | 39,605 | 1,414 | Taylor Wimpey PLC | 137,740 | 419 | |||||
British American Tobacco PLC | 8,091 | 480 | Tesco PLC(Æ) | 507,347 | 1,429 | |||||
British Land Co. PLC (The)(ö) | 53,016 | 710 | Travis Perkins PLC | 69,482 | 2,048 | |||||
Capital & Counties Properties PLC | 17,688 | 121 | Unilever PLC | 5,925 | 263 | |||||
Carnival PLC | 2,792 | 155 | United Utilities Group PLC | 13,935 | 212 | |||||
Cobham PLC | 329,808 | 1,408 | Vodafone Group PLC | 1,281,590 | 4,225 | |||||
Compass Group PLC | 9,655 | 166 | William Hill PLC | 39,121 | 191 | |||||
Croda International PLC | 3,325 | 148 | 71,249 | |||||||
Derwent London PLC(ö) | 3,486 | 208 | ||||||||
Diageo PLC | 169,679 | 4,903 | United States - 0.8% | |||||||
Direct Line Insurance Group PLC | 30,311 | 184 | Autoliv, Inc. | 3,554 | 431 | |||||
DS Smith PLC Class F | 24,607 | 147 | Maginet Corp.(Æ) | 5,030 | 229 | |||||
easyJet PLC | 5,180 | 139 | News Corp. Class A | 141,090 | 2,172 | |||||
Essentra PLC | 25,754 | 334 | PriceSmart, Inc. | 1,519 | 131 | |||||
G4S PLC | 315,733 | 1,179 | Sohu.com, Inc.(Æ) | 7,558 | 382 | |||||
Galiform PLC | 192,143 | 1,371 | Southern Copper Corp. | 3,015 | 84 | |||||
GlaxoSmithKline PLC - ADR | 122,908 | 2,647 | 3,429 | |||||||
Great Portland Estates PLC(ö) | 12,245 | 168 | ||||||||
Greene King PLC | 359 | 4 | Virgin Islands, British - 0.0% | |||||||
Halma PLC | 50,615 | 595 | Arcos Dorados Holdings, Inc. Class A | 2,858 | 9 | |||||
Hammerson PLC(ö) | 16,674 | 163 | Total Common Stocks | |||||||
Hikma Pharmaceuticals PLC | 2,135 | 71 | ||||||||
HSBC Holdings PLC | 340,160 | 2,657 | (cost $412,112) | 413,849 | ||||||
Imperial Tobacco Group PLC | 78,715 | 4,240 | ||||||||
Inchcape PLC | 8,308 | 102 | Preferred Stocks - 0.9% | |||||||
InterContinental Hotels Group PLC | 73,579 | 2,945 | Brazil - 0.1% | |||||||
Intermediate Capital Group PLC | 77,187 | 672 | Investimentos Itau SA | 58,946 | 110 | |||||
Intertek Group PLC | 55,821 | 2,256 | Usinas Siderurgicas de Minas Gerais SA | 333,179 | 240 | |||||
ITV PLC | 57,386 | 223 | 350 | |||||||
Kingfisher PLC | 104,749 | 569 | Germany - 0.7% | |||||||
Land Securities Group PLC(ö) | 27,448 | 566 | Funchs Petrolub SE | 32,629 | 1,566 | |||||
Legal & General Group PLC | 61,943 | 249 | Henkel AG & Co. KGaA | 2,731 | 296 | |||||
Lloyds Banking Group PLC | 161,335 | 183 | Porsche Automobil Holding SE | 2,056 | 96 | |||||
Man Group PLC | 57,447 | 147 | Volkswagen AG | 9,558 | 1,148 | |||||
Marks & Spencer Group PLC | 31,371 | 248 | 3,106 | |||||||
Meggitt PLC | 23,414 | 127 | ||||||||
Michael Page International PLC | 196,970 | 1,499 | Japan - 0.0% | |||||||
Mondi PLC | 7,372 | 170 | Shinkin Central Bank Class A | 123 | 228 | |||||
National Grid PLC | 25,134 | 358 | ||||||||
Old Mutual PLC | 105,663 | 345 | Russia - 0.1% | |||||||
Pearson PLC | 15,044 | 199 | AK Transneft OAO | 73 | 170 | |||||
Persimmon PLC Class A(Æ) | 9,358 | 287 | Surgutneftegas OAO | 340,692 | 232 | |||||
Prudential PLC | 39,888 | 931 | 402 | |||||||
Reckitt Benckiser Group PLC | 5,547 | 541 | ||||||||
Rexam PLC | 15,487 | 129 | Total Preferred Stocks | |||||||
Rightmove PLC | 2,194 | 130 | (cost $4,532) | 4,086 | ||||||
Rio Tinto PLC | 22,907 | 831 |
See accompanying notes which are an integral part of the financial statements.
302 Russell Tax-Managed International Equity Fund
Russell Investment Company
Russell Tax-Managed International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | |||||
Principal | Fair | ||||
Amount ($) | Value | ||||
or Shares | $ | ||||
Warrants & Rights - 0.0% | |||||
Australia - 0.0% | |||||
Westpac Banking Corp.(Æ) | |||||
2017 Rights | 450 | 2 | |||
Total Warrants & Rights | |||||
(cost $—) | 2 | ||||
Short-Term Investments - 5.3% | |||||
United States - 5.3% | |||||
Russell U.S. Cash Management Fund | 23,470,524 | (8) | 23,471 | ||
Total Short-Term Investments | |||||
(cost $23,471) | 23,471 | ||||
Total Investments 99.0% | |||||
(identified cost $440,115) | 441,408 | ||||
Other Assets and Liabilities, Net | |||||
- 1.0% | 4,457 | ||||
Net Assets - 100.0% | 445,865 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed International Equity Fund 303
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Russell Tax-Managed International Equity Fund
Schedule of Investments, continued — October 31, 2015
Restricted Securities
Amounts in thousands (except share and cost per unit amounts)
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
0.0% | ||||||||||||
Hua Hong Semiconductor, Ltd. | 07/28/15 | HKD | 143,000 | 1.04 | 148 | 144 | ||||||
144 | ||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
304 Russell Tax-Managed International Equity Fund
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Russell Tax-Managed International Equity Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||
Amounts in thousands (except contract amounts) | ||||||
Unrealized | ||||||
Appreciation | ||||||
Number of | Notional | Expiration | (Depreciation) | |||
Contracts | Amount | Date | $ | |||
Long Positions | ||||||
MSCI EAFE Mini Index Futures | 288 | USD | 25,302 | 12/15 | 1,195 | |
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 1,195 |
Foreign Currency Exchange Contracts | |||||||||||
Amounts in thousands | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Amount | Amount | (Depreciation) | |||||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||||
Bank of America | USD | 25 | CAD | 33 | 11/02/15 | — | |||||
Bank of America | USD | 75 | CAD | 99 | 11/03/15 | 1 | |||||
Bank of America | USD | 71 | JPY | 8,588 | 11/02/15 | — | |||||
Bank of America | USD | 116 | JPY | 14,049 | 11/04/15 | — | |||||
State Street | USD | 814 | ZAR | 11,104 | 11/02/15 | (11 | ) | ||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | (10 | ) | |||||||||
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Common Stocks | |||||||||||
Argentina | $ | 1,184 | $ | — | $ | — | $ | 1,184 | 0.3 | ||
Australia | — | 7,580 | — | 7,580 | 1.7 | ||||||
Austria | — | 329 | — | 329 | 0.1 | ||||||
Belgium | — | 3,484 | — | 3,484 | 0.8 | ||||||
Bermuda | 560 | 2,181 | — | 2,741 | 0.6 | ||||||
Brazil | 5,128 | — | — | 5,128 | 1.2 | ||||||
Canada | 16,536 | — | — | 16,536 | 3.7 | ||||||
Cayman Islands | 4,299 | 7,615 | — | 11,914 | 2.7 | ||||||
Chile | 606 | — | — | 606 | 0.1 | ||||||
China | 223 | 10,009 | — | 10,232 | 2.3 | ||||||
Colombia | 820 | — | — | 820 | 0.2 | ||||||
Czech Republic | — | 1,042 | — | 1,042 | 0.2 | ||||||
Denmark | — | 5,300 | — | 5,300 | 1.2 | ||||||
Egypt | 66 | — | — | 66 | —* | ||||||
Finland | — | 1,360 | — | 1,360 | 0.3 | ||||||
France | 580 | 34,266 | — | 34,846 | 7.8 | ||||||
Germany | — | 18,649 | — | 18,649 | 4.2 | ||||||
Greece | — | 344 | — | 344 | 0.1 | ||||||
Hong Kong | 3,243 | 6,442 | — | 9,685 | 2.2 | ||||||
Hungary | — | 1,103 | — | 1,103 | 0.3 | ||||||
India | 7,724 | — | — | 7,724 | 1.7 | ||||||
Indonesia | — | 393 | — | 393 | 0.1 | ||||||
Ireland | 2,456 | 1,618 | — | 4,074 | 0.9 | ||||||
Isle of Man | — | 39 | — | 39 | —* | ||||||
Israel | 958 | 937 | — | 1,895 | 0.4 | ||||||
Italy | — | 7,749 | — | 7,749 | 1.7 | ||||||
Japan | — | 52,042 | — | 52,042 | 11.7 | ||||||
Jersey | — | 2,782 | — | 2,782 | 0.6 | ||||||
Kazakhstan | 26 | — | — | 26 | —* | ||||||
Luxembourg | 339 | 272 | — | 611 | 0.1 | ||||||
Malaysia | — | 49 | — | 49 | —* | ||||||
Mexico | 6,781 | — | — | 6,781 | 1.5 | ||||||
Netherlands | 1,185 | 14,554 | — | 15,739 | 3.5 | ||||||
New Zealand | — | 130 | — | 130 | —* | ||||||
Nigeria | 68 | — | — | 68 | —* |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed International Equity Fund 305
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Russell Tax-Managed International Equity Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | |||||||||||||
Amounts in thousands | |||||||||||||
Fair Value | |||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||
Norway | — | 2,753 | — | 2,753 | 0.6 | ||||||||
Panama | 94 | — | — | 94 | —* | ||||||||
Philippines | — | 1,378 | — | 1,378 | 0.3 | ||||||||
Poland | — | 168 | — | 168 | —* | ||||||||
Portugal | — | 202 | — | 202 | 0.1 | ||||||||
Russia | 3,926 | 684 | — | 4,610 | 1.0 | ||||||||
Singapore | — | 3,038 | — | 3,038 | 0.7 | ||||||||
South Africa | 564 | 3,200 | — | 3,764 | 0.8 | ||||||||
South Korea | 977 | 19,518 | — | 20,495 | 4.6 | ||||||||
Spain | — | 4,701 | — | 4,701 | 1.1 | ||||||||
Sweden | — | 9,359 | — | 9,359 | 2.1 | ||||||||
Switzerland | 1,400 | 39,116 | — | 40,516 | 9.1 | ||||||||
Taiwan | 5,379 | 5,325 | — | 10,704 | 2.4 | ||||||||
Thailand | — | 1,915 | — | 1,915 | 0.4 | ||||||||
Turkey | — | 1,563 | — | 1,563 | 0.4 | ||||||||
United Arab Emirates | — | 851 | — | 851 | 0.2 | ||||||||
United Kingdom | 1,414 | 69,835 | — | 71,249 | 16.0 | ||||||||
United States | 3,429 | — | — | 3,429 | 0.8 | ||||||||
Virgin Islands, British | 9 | — | — | 9 | —* | ||||||||
Preferred Stocks | 350 | 3,736 | — | 4,086 | 0.9 | ||||||||
Warrants & Rights | 2 | — | — | 2 | —* | ||||||||
Short-Term Investments | — | 23,471 | — | 23,471 | 5.3 | ||||||||
Total Investments | 70,326 | 371,082 | — | 441,408 | 99.0 | ||||||||
Other Assets and Liabilities, Net | 1.0 | ||||||||||||
100.0 | |||||||||||||
Other Financial Instruments | |||||||||||||
Futures Contracts | 1,195 | — | — | 1,195 | 0.3 | ||||||||
Foreign Currency Exchange Contracts | (10 | ) | — | — | (10 | ) | (—)* | ||||||
Total Other Financial Instruments** | $ | 1,185 | $ | — | $ | — | $ | 1,185 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation/depreciation on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
306 Russell Tax-Managed International Equity Fund
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Russell Tax-Managed International Equity Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 1 | ||
Variation margin on futures contracts* | 1,195 | — | ||||
Total | $ | 1,195 | $ | 1 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Unrealized depreciation on foreign currency exchange contracts | $ | — | $ | 11 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Futures contracts | $ | (2,962 | ) | $ | — | |
Foreign currency-related transactions** | — | 765 | ||||
Total | $ | (2,962 | ) | $ | 765 | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | 1,195 | $ | — | ||
Foreign currency-related transactions*** | — | (10 | ) | |||
Total | $ | 1,195 | $ | (10 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
*** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed International Equity Fund 307
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Russell Tax-Managed International Equity Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | $ | 1 | $ | — $ | 1 | |||
Total Financial and Derivative Assets | 1 | — | 1 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (1) | — | (1 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | — | $ | — $ | — |
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 53 | $ | — $ | 53 | |||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 11 | — | 11 | |||||
Total Financial and Derivative Liabilities | 64 | — | 64 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (64) | — | (64 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | — | $ | — $ | — |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
308 Russell Tax-Managed International Equity Fund
Russell Investment Company
Russell Tax-Managed International Equity Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 440,115 |
Investments, at fair value(>) | 441,408 | |
Cash (restricted)(a) | 1,400 | |
Foreign currency holdings(^) | 246 | |
Unrealized appreciation on foreign currency exchange contracts | 1 | |
Receivables: | ||
Dividends and interest | 604 | |
Dividends from affiliated Russell funds | 4 | |
Investments sold | 248 | |
Fund shares sold | 4,358 | |
Foreign capital gains taxes recoverable | 71 | |
Prepaid expenses | 49 | |
Total assets | 448,389 | |
Liabilities | ||
Payables: | ||
Investments purchased | 1,454 | |
Fund shares redeemed | 638 | |
Accrued fees to affiliates | 332 | |
Other accrued expenses | 30 | |
Variation margin on futures contracts | 53 | |
Deferred capital gains tax liability | 6 | |
Unrealized depreciation on foreign currency exchange contracts | 11 | |
Total liabilities | 2,524 | |
Net Assets | $ | 445,865 |
See accompanying notes which are an integral part of the financial statements.
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Russell Tax-Managed International Equity Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 1,877 | |
Accumulated net realized gain (loss) | (38,383 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | 1,287 | ||
Futures contracts | 1,195 | ||
Foreign currency-related transactions | (2 | ) | |
Shares of beneficial interest | 490 | ||
Additional paid-in capital | 479,401 | ||
Net Assets | $ | 445,865 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 9.09 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 9.64 | |
Class A — Net assets | $ | 935,492 | |
Class A — Shares outstanding ($.01 par value) | 102,866 | ||
Net asset value per share: Class C(#) | $ | 9.06 | |
Class C — Net assets | $ | 1,239,268 | |
Class C — Shares outstanding ($.01 par value) | 136,758 | ||
Net asset value per share: Class E(#) | $ | 9.09 | |
Class E — Net assets | $ | 29,333,798 | |
Class E — Shares outstanding ($.01 par value) | 3,227,407 | ||
Net asset value per share: Class S(#) | $ | 9.10 | |
Class S — Net assets | $ | 414,356,426 | |
Class S — Shares outstanding ($.01 par value) | 45,532,445 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 246 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 23,471 | |
(a) Cash Collateral for Futures | $ | 1,400 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
310 Russell Tax-Managed International Equity Fund
Russell Investment Company
Russell Tax-Managed International Equity Fund
Statement of Operations — For the Period Ended October 31, 2015(1)
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 3,649 | |
Less foreign taxes withheld | (316 | ) | |
Total investment income | 3,333 | ||
Expenses | |||
Advisory fees | 1,398 | ||
Administrative fees | 78 | ||
Custodian fees | 106 | ||
Distribution fees - Class A | 1 | ||
Distribution fees - Class C | 2 | ||
Transfer agent fees - Class A | —** | ||
Transfer agent fees - Class C | 1 | ||
Transfer agent fees - Class E | 7 | ||
Transfer agent fees - Class S | 321 | ||
Professional fees | 67 | ||
Registration fees | 42 | ||
Shareholder servicing fees - Class C | 1 | ||
Shareholder servicing fees - Class E | 9 | ||
Trustees’ fees | 5 | ||
Printing fees | 17 | ||
Offering fees | 28 | ||
Miscellaneous | 5 | ||
Expenses before reductions | 2,088 | ||
Expense reductions | (283 | ) | |
Net expenses | 1,805 | ||
Net investment income (loss) | 1,528 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (35,388 | ) | |
Futures contracts | (2,962 | ) | |
Foreign currency-related transactions | 289 | ||
Net realized gain (loss) | (38,061 | ) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | 1,287 | ||
Futures contracts | 1,195 | ||
Foreign currency-related transactions | (2 | ) | |
Net change in unrealized appreciation (depreciation) | 2,480 | ||
Net realized and unrealized gain (loss) | (35,581 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (34,053 | ) |
** Less than $500.
(1) For the period June 2, 2015 (commencement of operations) to October 31, 2015.
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed International Equity Fund 311
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Russell Tax-Managed International Equity Fund
Statement of Changes in Net Assets | |||
For the Periods Ended | |||
Amounts in thousands | 2015 | (1) | |
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $ | 1,528 | |
Net realized gain (loss) | (38,061 | ) | |
Net change in unrealized appreciation (depreciation) | 2,480 | ||
Net increase (decrease) in net assets from operations | (34,053 | ) | |
Share Transactions* | |||
Net increase (decrease) in net assets from share transactions | 479,918 | ||
Total Net Increase (Decrease) in Net Assets | 445,865 | ||
Net Assets | |||
Beginning of period | — | ||
End of period | $ | 445,865 | |
Undistributed (overdistributed) net investment income included in net assets | $ | 1,877 |
(1) For the period June 2, 2015 (commencement of operations) to October 31, 2015.
See accompanying notes which are an integral part of the financial statements.
312 Russell Tax-Managed International Equity Fund
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Russell Tax-Managed International Equity Fund
Statement of Changes in Net Assets, continued | |||||||
* Share transaction amounts (in thousands) for the period ended October 31, 2015 were as follows: | |||||||
2015 | (1) | ||||||
Shares | Dollars | ||||||
Class A | |||||||
Proceeds from shares sold | 112 | $ | 1,072 | ||||
Payments for shares redeemed | (9 | ) | (91 | ) | |||
Net increase (decrease) | 103 | 981 | |||||
Class C | |||||||
Proceeds from shares sold | 137 | 1,297 | |||||
Payments for shares redeemed | — | (3 | ) | ||||
Net increase (decrease) | 137 | 1,294 | |||||
Class E | |||||||
Proceeds from shares sold | 3,274 | 28,813 | |||||
Payments for shares redeemed | (47 | ) | (408 | ) | |||
Net increase (decrease) | 3,227 | 28,405 | |||||
Class S | |||||||
Proceeds from shares sold | 49,357 | 484,264 | |||||
Payments for shares redeemed | (3,825 | ) | (35,026 | ) | |||
Net increase (decrease) | 45,532 | 449,238 | |||||
Total increase (decrease) | 48,999 | $ | 479,918 |
(1) For the period June 2, 2015 (commencement of operations) to October 31, 2015.
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed International Equity Fund 313
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Russell Tax-Managed International Equity Fund
Financial Highlights — For the Period Ended
For a Share Outstanding Throughout the Period. | |||||||||||||
$ | $ | $ | $ | $ | |||||||||
Net Asset Value, | Net | Net Realized | Total from | Net Asset Value, | |||||||||
Beginning of | Investment | and Unrealized | Investment | End of | |||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Period | |||||||||
Class A | |||||||||||||
October 31, 2015(7) | 10.00 | .03 | (.94 | ) | (.91 | ) | 9.09 | ||||||
Class C | |||||||||||||
October 31, 2015(7) | 10.00 | (.01 | ) | (.93 | ) | (.94 | ) | 9.06 | |||||
Class E | |||||||||||||
October 31, 2015(7) | 10.00 | .02 | (.93 | ) | (.91 | ) | 9.09 | ||||||
Class S | |||||||||||||
October 31, 2015(7) | 10.00 | .04 | (.94 | ) | (.90 | ) | 9.10 | ||||||
See accompanying notes which are an integral part of the financial statements.
314 Russell Tax-Managed International Equity Fund
% | % | % | ||||||||||||
$ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||
% | Net Assets, | to Average | to Average | Investment Income | % | |||||||||
Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||
Return(b)(c) | (000 | ) | Gross(e) | Net(d)(e) | Net Assets(d)(e) | Turnover Rate(b) | ||||||||
(9.10 | ) | 935 | 1.50 | 1.34 | .66 | 79 | ||||||||
(9.40 | ) | 1,239 | 2.25 | 2.09 | (.16 | ) | 79 | |||||||
(9.10 | ) | 29,334 | 1.53 | 1.34 | .59 | 79 | ||||||||
(9.00 | ) | 414,357 | 1.24 | 1.09 | .94 | 79 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax-Managed International Equity Fund 315
Russell Investment Company
Russell Global Opportunistic Credit Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Global Opportunistic Credit Fund - Class A‡ | BofA Merrill Lynch Global High Yield Index (USD | ||||||
Total | Hedged)** | ||||||
Return | Total | ||||||
1 Year | (6.98 | )% | Return | ||||
5 Years | 3.00 | %§ | 1 Year | (0.63 | )% | ||
Inception* | 3.12 | %§ | 5 Years | 6.51 | %§ | ||
Inception* | 6.88 | %§ | |||||
Russell Global Opportunistic Credit Fund - Class C | Global Opportunistic Credit Blended Benchmark*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (4.14 | )% | 1 Year | (0.22 | )% | ||
5 Years | 3.01 | %§ | 5 Years | 5.90 | %§ | ||
Inception* | 3.12 | %§ | Inception* | 6.24 | %§ | ||
Russell Global Opportunistic Credit Fund - Class E | |||||||
Total | |||||||
Return | |||||||
1 Year | (3.44 | )% | |||||
5 Years | 3.78 | %§ | |||||
Inception* | 3.90 | %§ | |||||
Russell Global Opportunistic Credit Fund - Class S | |||||||
Total | |||||||
Return | |||||||
1 Year | (3.11 | )% | |||||
5 Years | 4.06 | %§ | |||||
Inception* | 4.17 | %§ | |||||
Russell Global Opportunistic Credit Fund - Class Y | |||||||
Total | |||||||
Return | |||||||
1 Year | (3.04 | )% | |||||
5 Years | 4.14 | %§ | |||||
Inception* | 4.25 | %§ |
316 Russell Global Opportunistic Credit Fund
Russell Investment Company
Russell Global Opportunistic Credit Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Global Opportunistic Credit Fund (the “Fund”) | underperformed equivalent-duration U.S. Treasuries by 2.74%) |
employs a multi-manager approach whereby portions of the | as growth disappointed, particularly in key markets China and |
Fund are allocated to different money manager strategies. Fund | Brazil. Local currency EM bonds (those issued in the issuing |
assets not allocated to money managers are managed by Russell | country’s own currency) saw much larger declines (the Barclays |
Investment Management Company (“RIMCo”), the Fund’s | EM Local Currency Government Index returned -12.42%) as |
advisor. RIMCo may change the allocation of the Fund’s assets | currencies were hit by both the slowdown in emerging market |
among money managers at any time. An exemptive order from the | growth and the broader U.S. dollar rally that occurred during the |
Securities and Exchange Commission (“SEC”) permits RIMCo | fiscal year. |
to engage or terminate a money manager at any time, subject | |
to approval by the Fund’s Board, without a shareholder vote. | How did the investment strategies and techniques employed |
Pursuant to the terms of the exemptive order, the Fund is required | by the Fund and its money managers affect its benchmark- |
to notify its shareholders within 90 days of when a money manager | relative performance? |
begins providing services. As of October 31, 2015, the Fund had | The Fund employs discretionary money managers. The Fund’s |
five money managers. | discretionary money managers select the individual portfolio |
securities for the assets assigned to them. Fund assets not | |
What is the Fund’s investment objective? | allocated to discretionary money managers include the Fund’s |
The Fund seeks to provide total return. | liquidity reserves and assets which may be managed directly |
How did the Fund perform relative to its benchmark for the | by RIMCo to effect the Fund’s investment strategies and/or to |
fiscal year ended October 31, 2015? | actively manage the Fund’s overall exposures by investing in |
securities or other instruments that RIMCo believes will achieve | |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | the desired risk/return profile for the Fund. |
Class C, Class E, Class S, and Class Y Shares lost 3.35%, 4.14%, | |
3.44%, 3.11%, and 3.04%, respectively. This is compared to the | The majority of the Fund’s money managers outperformed their |
Fund’s benchmark, the BofA Merrill Lynch Global High Yield | sector benchmarks, while the Fund’s asset allocation detracted |
Index Hedged (USD), which lost 0.63% during the same period. | relative to the Fund’s benchmark. The Fund’s asset allocation |
The Fund’s performance includes operating expenses, whereas | detracted largely because of an ex-benchmark allocation to local |
index returns are unmanaged and do not include expenses of any | currency emerging market debt and the associated currency |
kind. | risk as the U.S. dollar appreciated strongly versus emerging |
market currencies. An overweight to the U.S. (and the associated | |
For the fiscal year ended October 31, 2015, Morningstar® Multi- | commodity price exposure) also detracted. An ex-benchmark |
Sector Bond, a group of funds that Morningstar considers to have | allocation to U.S. bank loans added value. |
investment strategies similar to those of the Fund, lost 0.93%. | |
This return serves as a peer comparison and is expressed net of | With respect to certain of the Fund’s money managers, DuPont |
operating expenses. | Capital Management Corporation, the Fund’s hard currency |
emerging market debt manager, was the best performing | |
RIMCo may assign a money manager a benchmark other that the | manager for the period, and strongly outperformed both its sector |
Fund’s index. However, the Fund’s primary index remains the | benchmark and the Fund’s benchmark. Key contributors included |
benchmark for the Fund. | an overweight to – and security selection within – Ukraine |
How did the market conditions described in the Market | (most significantly) as a favorable financing deal was reached |
Summary report affect the Fund’s performance? | with creditors, as well as an overweight to Greece amid an EU |
The Fund’s performance suffered from underperformance among | debt agreement. Detractors included overweights to Mexico, |
both developed market corporate high yield and emerging market | Indonesia and embattled Brazilian oil giant Petrobras. DDJ |
bonds, the two primary sectors in which the Fund invests. | Capital Management, LLC, the Fund’s U.S. high yield corporate |
credit manager, was the worst performing manager for the period | |
High yield corporate credit was among the worst-performing | and underperformed the Fund’s benchmark, due primarily to |
segments of the market (the Barclays Global High Yield Index | its U.S.-only focus (as the U.S. underperformed Europe) as well |
returned 1.97% below equivalent-duration U.S. Treasuries), due | as an overweight to lower-quality corporate credit. However, an |
in large part to the strong sell-off among U.S. energy companies | allocation to bank loans contributed positively. |
as the price of oil fell sharply and stayed low, significantly raising | |
the likelihood of defaults across the sector. | During the period, the Fund’s money managers used currency |
derivatives to manage benchmark-relative currency risk, which | |
Emerging market (EM) debt underperformed developed | performed as expected and generally contributed positively to |
markets (the Barclays EM Hard Currency Aggregate Index |
Russell Global Opportunistic Credit Fund 317
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Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
the Fund’s benchmark-relative performance. The Fund’s money | Describe any changes to the Fund’s structure or the money | |
managers also used derivatives to gain or hedge credit or interest | manager line-up. | |
rate exposures, though the impact on Fund-level performance was | In February 2015, RIMCo terminated Stone Harbor Investment | |
marginal. | Partners L.P. and hired DuPont Capital Management Corporation | |
During the period, RIMCo utilized credit and interest rate | to manage the Fund’s hard currency emerging market debt | |
derivatives, such as futures, forwards and swaps, to seek to | mandate. | |
achieve the Fund benchmark’s duration and credit exposures | ||
with respect to the portion of the Fund allocated to cash | Money Managers as of October 31, | |
reserves. This performed as intended by mitigating market- | 2015 | Styles |
relative risk. Derivatives were also used in connection with the | DDJ Capital Management, LLC | Sector Specialist |
DuPont Capital Management Corporation | Sector Specialist | |
cash management process to manage Fund characteristics by | Lazard Asset Management, LLC | Sector Specialist |
augmenting or reducing specific exposures associated with one | Oaktree Capital Management, L.P. | Sector Specialist |
or more managers or strategies and gaining desired exposures | THL Credit Advisors LLC | Sector Specialist |
beyond those generated by the manager strategies. Overall, these | The views expressed in this report reflect those of the portfolio | |
activities detracted slightly, in line with the benchmark’s negative | managers only through the end of the period covered by | |
returns. | the report. These views do not necessarily represent the | |
RIMCo also, at times, managed a basket of developed market | views of RIMCo, or any other person in RIMCo or any other | |
currency forwards to seek to hedge part of the Fund’s ex- | affiliated organization. These views are subject to change | |
benchmark emerging market currency exposure. This “proxy” | at any time based upon market conditions or other events, | |
hedge, while it was in place, had positive results and outweighed | and RIMCo disclaims any responsibility to update the views | |
detracting impacts from the use of currency forwards and swaps | contained herein. These views should not be relied on as | |
by the Fund’s local currency emerging markets debt money | investment advice and, because investment decisions for | |
managers to gain emerging currency exposure. | a Russell Investment Company (“RIC”) Fund are based on | |
numerous factors, should not be relied on as an indication | ||
of investment decisions of any RIC Fund. |
* Assumes initial investment on September 30, 2010.
** The BofA Merrill Lynch Global High Yield Index (USD Hedged) is composed of below investment grade bonds of corporate issuers domiciled in countries
having an investment foreign currency long-term debt rating.
*** The Global Opportunistic Credit Blended Benchmark is a composite index consisting of 60% BofA Merrill Lynch Global High Yield Index (USD Hedged) and
40% JP Morgan EMBI Global Diversified Index. The Global Opportunistic Credit Blended Benchmark provides a means to compare the Fund’s average annual
returns to a secondary benchmark that is more representative of the investment strategies pursued by the Fund.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 3.75%.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
318 Russell Global Opportunistic Credit Fund
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Russell Global Opportunistic Credit Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | (5% return | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | before expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 968.70 | $ | 1,019.41 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 5.71 | $ | 5.85 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.15% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | (5% return | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | before expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 964.40 | $ | 1,015.63 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 9.41 | $ | 9.65 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.90% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance | |||||
expenses you paid for the period. You may use this information | Actual | (5% return | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | before expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 967.70 | $ | 1,019.41 | |
Expenses Paid During Period* | $ | 5.70 | $ | 5.85 | ||
* Expenses are equal to the Fund's annualized expense ratio of 1.15% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell Global Opportunistic Credit Fund 319
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Russell Global Opportunistic Credit Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance | ||||||
Actual | (5% return | |||||
Class S | Performance | before expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 969.90 | $ | 1,020.67 | ||
Expenses Paid During Period* | $ | 4.47 | $ | 4.58 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.90% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance | ||||||
Actual | (5% return | |||||
Class Y | Performance | before expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 970.20 | $ | 1,021.07 | ||
Expenses Paid During Period* | $ | 4.07 | $ | 4.18 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.82% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
320 Russell Global Opportunistic Credit Fund
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Russell Global Opportunistic Credit Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Long-Term Fixed Income Investments - 88.4% | 4.250% due 04/30/24 | 4,000 | 4,108 | ||||||||
Argentina - 1.0% | First Quantum Minerals, Ltd. | ||||||||||
Argentina Bonar Bonds | 7.250% due 05/15/22 (Þ) | 2,405 | 1,754 | ||||||||
Series X | HudBay Minerals, Inc. | ||||||||||
7.000% due 04/17/17 | 2,250 | 2,235 | 9.500% due 10/01/20 | 1,415 | 1,235 | ||||||
Argentine Republic Government | Mood Media Corp. Term Loan | ||||||||||
International Bond | 7.000% due 05/01/19 (Ê) | 1,729 | 1,681 | ||||||||
Series dscEUR | |||||||||||
7.820% due 12/31/33 (Ø) | EUR | 4,679 | 5,184 | Novelis, Inc. | |||||||
8.750% due 12/15/20 | 1,160 | 1,163 | |||||||||
Series EURGDP | |||||||||||
Zero coupon due 12/15/35 (Ê)(Ø) | EUR | 60,000 | 6,492 | Open Text Corp. | |||||||
5.625% due 01/15/23 (Þ) | 1,955 | 1,975 | |||||||||
Series L-GP | |||||||||||
6.000% due 03/31/23 (Ø) | 1,295 | 1,412 | Parq Holdings, LP 1st Lien Term Loan | ||||||||
8.500% due 12/17/20 (Ê) | 701 | 687 | |||||||||
YPF SA | |||||||||||
8.750% due 04/04/24 (Þ) | 2,000 | 2,027 | Parq Holdings, LP Term Loan | ||||||||
8.500% due 12/17/20 (Ê) | 3,428 | 3,360 | |||||||||
17,350 | Precision Drilling Corp. | ||||||||||
Armenia - 0.1% | 6.500% due 12/15/21 | 1,165 | 1,014 | ||||||||
Republic of Armenia | Teine Energy, Ltd. | ||||||||||
Series REGS | 6.875% due 09/30/22 (Þ) | 460 | 414 | ||||||||
6.000% due 09/30/20 | 1,000 | 988 | Valeant Pharmaceuticals International, | ||||||||
Inc. | |||||||||||
Azerbaijan - 0.1% | 5.625% due 12/01/21 (Þ) | 1,685 | 1,462 | ||||||||
State Oil Co. of the Azerbaijan Republic | 5.500% due 03/01/23 (Þ) | 1,800 | 1,512 | ||||||||
4.750% due 03/13/23 | 2,000 | 1,726 | 5.875% due 05/15/23 (Þ) | 1,930 | 1,625 | ||||||
Belarus - 0.1% | 34,984 | ||||||||||
Republic of Belarus | Cayman Islands - 0.4% | ||||||||||
8.950% due 01/26/18 | 1,300 | 1,340 | Cole Park CLO, Ltd. | ||||||||
Series 2015-1A Class E | |||||||||||
Belgium - 0.1% | 6.424% due 10/20/28 | 414 | 372 | ||||||||
Ontex Group NV | Country Garden Holdings Co., Ltd. | ||||||||||
Series REGS | Series REGS | ||||||||||
4.750% due 11/15/21 | EUR | 1,340 | 1,562 | 7.250% due 04/04/21 | 300 | 313 | |||||
Evergrande Real Estate Group, Ltd. | |||||||||||
Brazil - 2.5% | 12.000% due 02/17/20 | 500 | 546 | ||||||||
Banco Nacional de Desenvolvimento | Series REGS | ||||||||||
Economico e Social | 8.750% due 10/30/18 | 4,500 | 4,551 | ||||||||
5.750% due 09/26/23 (Þ) | 6,200 | 5,487 | Marfrig Overseas, Ltd. | ||||||||
Brazil Letras do Tesouro Nacional | Series REGS | ||||||||||
Series LTN | 9.500% due 05/04/20 | 1,800 | 1,800 | ||||||||
15.850% due 01/01/17 | BRL | 38,340 | 8,416 | 7,582 | |||||||
16.430% due 01/01/19 | BRL | 124,100 | 20,183 | Chile - 0.5% | |||||||
16.380% due 07/01/19 | BRL | 10,840 | 1,639 | Chile Government International Bond | |||||||
Brazil Notas do Tesouro Nacional | 5.500% due 08/05/20 | CLP | 600,000 | 900 | |||||||
Series NTNB | Series REGS | ||||||||||
6.000% due 08/15/50 | BRL | 1,670 | 1,027 | 6.000% due 01/01/18 | CLP | 95,000 | 143 | ||||
Series NTNF | Corp. Nacional del Cobre de Chile | ||||||||||
10.000% due 01/01/23 | BRL | 8,000 | 1,657 | 4.500% due 08/13/23 (Þ) | 2,000 | 2,037 | |||||
10.000% due 01/01/25 | BRL | 10,070 | 2,002 | 4.875% due 11/04/44 (Þ) | 4,000 | 3,560 | |||||
Vale SA | Series REGS | ||||||||||
5.625% due 09/11/42 | 4,800 | 3,431 | 3.750% due 11/04/20 | 1,500 | 1,528 | ||||||
43,842 | 6.150% due 10/24/36 | 1,000 | 1,064 | ||||||||
Canada - 2.0% | 9,232 | ||||||||||
1011778 BC ULC / New Red Finance, | Colombia - 1.8% | ||||||||||
Inc. | Colombia Government International | ||||||||||
4.625% due 01/15/22 (Þ) | 1,800 | 1,827 | Bond | ||||||||
4.625% due 01/15/22 (Å) | 250 | 254 | 7.750% due 04/14/21 | COP | 4,905,000 | 1,723 | |||||
6.000% due 04/01/22 (Þ) | 5,130 | 5,367 | 4.375% due 07/12/21 | 3,750 | 3,863 | ||||||
Bombardier, Inc. | 4.000% due 02/26/24 | 3,500 | 3,435 | ||||||||
6.000% due 10/15/22 (Þ) | 1,790 | 1,378 | 9.850% due 06/28/27 | COP | 9,971,000 | 4,008 | |||||
Burger King | 10.375% due 01/28/33 | 514 | 735 | ||||||||
3.750% due 12/12/21 (Ê) | 1,703 | 1,706 | 7.375% due 09/18/37 | 3,000 | 3,480 | ||||||
Cascades, Inc. | 5.000% due 06/15/45 | 2,500 | 2,219 | ||||||||
5.750% due 07/15/23 (Þ) | 2,565 | 2,462 | Colombian TES | ||||||||
CNOOC Nexen Finance 2014 ULC |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 321
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Series B | Series REGS | ||||||||||
7.000% due 09/11/19 | COP | 1,418,000 | 491 | 4.000% due 07/15/22 | EUR | 2,230 | 2,560 | ||||
11.000% due 07/24/20 | COP | 2,937,000 | 1,168 | Holding Medi-Partenaires SAS | |||||||
10.000% due 07/24/24 | COP | 10,050,000 | 3,941 | 7.000% due 05/15/20 (Þ) | EUR | 970 | 1,138 | ||||
6.000% due 04/28/28 | COP | 14,740,000 | 4,206 | Series REGS | |||||||
Colombian Titulos de Tesoreria B Notes | 7.000% due 05/15/20 | EUR | 1,910 | 2,241 | |||||||
Series B | HomeVi SAS | ||||||||||
5.000% due 11/21/18 | COP | 6,725,000 | 2,221 | Series REGS | |||||||
Emgesa SA ESP | 6.875% due 08/15/21 | EUR | 2,680 | 3,058 | |||||||
Series REGS | Kerneos Corporate SAS | ||||||||||
8.750% due 01/25/21 | COP | 1,000,000 | 349 | 5.750% due 03/01/21 (Þ) | EUR | 1,060 | 1,142 | ||||
Empresas Publicas de Medellin ESP | Series REGS | ||||||||||
Series REGS | 5.750% due 03/01/21 | EUR | 1,505 | 1,622 | |||||||
8.375% due 02/01/21 | COP | 570,000 | 196 | Novafives SAS | |||||||
32,035 | Series REGS | ||||||||||
Costa Rica - 0.3% | 4.500% due 06/30/21 | EUR | 2,400 | 2,217 | |||||||
Costa Rica Government International | Novalis SAS | ||||||||||
Bond | Series REGS | ||||||||||
4.375% due 04/30/25 (Þ) | 2,044 | 1,768 | 3.000% due 04/30/22 | EUR | 2,430 | 2,586 | |||||
7.000% due 04/04/44 (Þ) | 3,000 | 2,700 | Numericable-SFR SAS | ||||||||
Series REGS | 5.375% due 05/15/22 (Þ) | EUR | 160 | 182 | |||||||
4.250% due 01/26/23 | 1,000 | 900 | Series REGS | ||||||||
5,368 | 5.375% due 05/15/22 | EUR | 1,800 | 2,049 | |||||||
Croatia - 0.8% | 5.625% due 05/15/24 | EUR | 2,785 | 3,134 | |||||||
Croatia Government International Bond | Picard Groupe SAS | ||||||||||
6.000% due 01/26/24 (Þ) | 2,200 | 2,329 | 4.250% due 08/01/19 (Ê)(Þ) | EUR | 1,650 | 1,821 | |||||
Series REGS | Series REGS | ||||||||||
6.625% due 07/14/20 | 1,200 | 1,304 | 4.250% due 08/01/19 (Ê) | EUR | 205 | 226 | |||||
6.000% due 01/26/24 | 9,500 | 10,058 | Rexel SA | ||||||||
5.250% due 06/15/20 (Þ) | 3,195 | 3,324 | |||||||||
13,691 | |||||||||||
Dominican Republic - 0.6% | SPCM 6.000% SA due 01/15/22 (Þ) | 200 | 201 | ||||||||
Dominican Republic International Bond | 2.875% due 06/15/23 (Þ) | EUR | 1,350 | 1,416 | |||||||
7.450% due 04/30/44 (Þ) | 2,000 | 2,110 | |||||||||
6.850% due 01/27/45 (Þ) | 4,000 | 3,990 | 30,993 | ||||||||
Series REGS | Gabon - 0.0% | ||||||||||
7.500% due 05/06/21 | 4,000 | 4,350 | Gabon Government International Bond | ||||||||
6.375% due 12/12/24 (Þ) | 500 | 430 | |||||||||
10,450 | |||||||||||
Egypt - 0.5% | Germany - 1.0% | ||||||||||
Egypt Government International Bond | Deutsche Raststaetten Gruppe IV GmbH | ||||||||||
6.875% due 04/30/40 (Þ) | 8,000 | 7,168 | Series REGS | ||||||||
Series REGS | 6.750% due 12/30/20 | EUR | 2,195 | 2,603 | |||||||
6.875% due 04/30/40 | 1,000 | 896 | Techem Energy Metering Service GmbH | ||||||||
8,064 | & Co. KG | ||||||||||
El Salvador - 0.4% | 7.875% due 10/01/20 (Þ) | EUR | 560 | 667 | |||||||
El Salvador Government International | Series REGS | ||||||||||
Bond | 7.875% due 10/01/20 | EUR | 2,120 | 2,525 | |||||||
6.375% due 01/18/27 (Þ) | 1,500 | 1,339 | Trionista TopCo GmbH | ||||||||
Series REGS | 6.875% due 04/30/21 (Þ) | EUR | 1,045 | 1,218 | |||||||
7.375% due 12/01/19 | 1,000 | 1,024 | Series REGS | ||||||||
7.750% due 01/24/23 | 2,400 | 2,436 | 6.875% due 04/30/21 | EUR | 3,410 | 3,975 | |||||
5.875% due 01/30/25 | 2,500 | 2,219 | Unitymedia Hessen GmbH & Co. KG / | ||||||||
7.650% due 06/15/35 | 998 | 904 | Unitymedia NRW GmbH | ||||||||
7,922 | 5.750% due 01/15/23 (Þ) | EUR | 720 | 845 | |||||||
Ethiopia - 0.0% | Series REGS | ||||||||||
Federal Democratic Republic of Ethiopia | 5.500% due 09/15/22 | EUR | 135 | 159 | |||||||
6.625% due 12/11/24 (Þ) | 1,000 | 928 | 5.750% due 01/15/23 | EUR | 1,682 | 1,975 | |||||
5.625% due 04/15/23 | EUR | 540 | 634 | ||||||||
France - 1.8% | 4.000% due 01/15/25 | EUR | 1,350 | 1,484 | |||||||
CMA CGM SA | WEPA Hygieneprodukte GmbH | ||||||||||
7.750% due 01/15/21 (Þ) | EUR | 1,195 | 1,215 | 6.500% due 05/15/20 (Þ) | EUR | 870 | 1,019 | ||||
Crown European Holdings SA | |||||||||||
4.000% due 07/15/22 (Þ) | EUR | 750 | 861 |
See accompanying notes which are an integral part of the financial statements.
322 Russell Global Opportunistic Credit Fund
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Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Series REGS | Series FR68 | ||||||||||
6.500% due 05/15/20 | EUR | 290 | 340 | 8.375% due 03/15/34 | IDR | 42,375,000 | 2,886 | ||||
17,444 | Series FR70 | ||||||||||
Ghana - 0.3% | 8.375% due 03/15/24 | IDR | 126,280,000 | 8,987 | |||||||
Republic of Ghana | Series FR71 | ||||||||||
7.875% due 08/07/23 (Þ) | 4,000 | 3,431 | 9.000% due 03/15/29 | IDR | 93,588,000 | 6,786 | |||||
8.125% due 01/18/26 (Þ) | 700 | 594 | Pertamina Persero PT | ||||||||
10.750% due 10/14/30 (Þ) | 1,250 | 1,324 | Series REGS | ||||||||
6.000% due 05/03/42 | 908 | 788 | |||||||||
Greece - 0.3% | 5,349 | 5.625% due 05/20/43 | 2,000 | 1,663 | |||||||
Hellenic Republic Government Bond | 6.450% due 05/30/44 | 8,000 | 7,410 | ||||||||
3.375% due 07/17/17 (Þ) | EUR | 1,000 | 1,018 | Perusahaan Listrik Negara PT | |||||||
4.750% due 04/17/19 (Þ) | EUR | 2,500 | 2,513 | Series REGS | |||||||
5.250% due 10/24/42 | 5,350 | 4,400 | |||||||||
Series PSI | |||||||||||
3.650% due 02/24/20 | EUR | 2,800 | 2,096 | 45,117 | |||||||
5,627 | Iraq - 0.1% | ||||||||||
Honduras - 0.2% | Republic of Iraq | ||||||||||
Honduras Government International | Series REGS | ||||||||||
Bond | 5.800% due 01/15/28 | 3,000 | 2,198 | ||||||||
Series REGS | |||||||||||
7.500% due 03/15/24 | 500 | 529 | Ireland - 1.3% | ||||||||
AerCap Ireland Capital, Ltd. / AerCap | |||||||||||
Republic of Honduras | Global Aviation Trust | ||||||||||
Series REGS | 4.250% due 07/01/20 | 1,660 | 1,699 | ||||||||
8.750% due 12/16/20 | 2,342 | 2,614 | 4.625% due 10/30/20 | 2,100 | 2,176 | ||||||
3,143 | Series WI | ||||||||||
Hong Kong - 0.0% | 5.000% due 10/01/21 | 491 | 513 | ||||||||
CITIC, Ltd. | Ardagh Packaging Finance PLC | ||||||||||
7.875% due 04/15/49 (ƒ) | 625 | 637 | Series REGS | ||||||||
9.250% due 10/15/20 | EUR | 1,490 | 1,720 | ||||||||
Hungary - 1.8% | Ardagh Packaging Finance PLC / | ||||||||||
Hungary Government Bond | Ardagh Holdings USA, Inc. | ||||||||||
Series 18/B | 4.250% due 01/15/22 (Þ) | EUR | 1,560 | 1,733 | |||||||
4.000% due 04/25/18 | HUF | 452,450 | 1,688 | Series REGS | |||||||
Series 19/A | 4.250% due 01/15/22 | EUR | 730 | 811 | |||||||
6.500% due 06/24/19 | HUF | 2,665,710 | 10,805 | Grifols Worldwide Operations, Ltd. | |||||||
Series 20/A | Series WI | ||||||||||
7.500% due 11/12/20 | HUF | 30 | — | 5.250% due 04/01/22 | 5,165 | 5,346 | |||||
Series 22/A | Smurfit Kappa Acquisitions | ||||||||||
7.000% due 06/24/22 | HUF | 355,000 | 1,542 | 3.250% due 06/01/21 (Þ) | EUR | 1,700 | 1,962 | ||||
Series 25/B | Series REGS | ||||||||||
5.500% due 06/24/25 | HUF | 422,170 | 1,748 | 3.250% due 06/01/21 | EUR | 330 | 381 | ||||
Hungary Government International Bond | Vimpel Communications Via VIP | ||||||||||
5.750% due 11/22/23 | 2,500 | 2,816 | Finance Ireland, Ltd. OJSC | ||||||||
5.375% due 03/25/24 | 650 | 718 | Series REGS | ||||||||
7.625% due 03/29/41 | 8,500 | 11,591 | 7.748% due 02/02/21 | 2,600 | 2,764 | ||||||
30,908 | Vnesheconombank Via VEB Finance | ||||||||||
Indonesia - 2.6% | PLC | ||||||||||
Indonesia Government International | Series REGS | ||||||||||
Bond | 6.902% due 07/09/20 | 1,500 | 1,530 | ||||||||
Series REGS | 6.025% due 07/05/22 | 2,500 | 2,414 | ||||||||
8.500% due 10/12/35 | 3,000 | 3,934 | 23,049 | ||||||||
7.750% due 01/17/38 | 3,000 | 3,704 | Israel - 0.4% | ||||||||
Indonesia Treasury Bond | Israel Electric Corp., Ltd. | ||||||||||
Series FR56 | 6.875% due 06/21/23 (Þ) | 3,500 | 4,029 | ||||||||
8.375% due 09/15/26 | IDR | 18,300,000 | 1,283 | Series 6 | |||||||
Series FR58 | 5.000% due 11/12/24 (Þ) | 3,000 | 3,114 | ||||||||
8.250% due 06/15/32 | IDR | 7,539,000 | 503 | 7,143 | |||||||
Series FR59 | Italy - 0.6% | ||||||||||
7.000% due 05/15/27 | IDR | 25,035,000 | 1,563 | Enel SpA | |||||||
Series FR61 | 6.500% due 01/10/74 | EUR | 2,725 | 3,240 | |||||||
7.000% due 05/15/22 | IDR | 13,144,000 | 871 | Finmeccanica SpA | |||||||
Series FR65 | 8.000% due 12/16/19 | GBP | 845 | 1,505 | |||||||
6.625% due 05/15/33 | IDR | 6,000,000 | 339 | Telecom Italia SpA |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 323
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
3.250% due 01/16/23 | EUR | 4,700 | 5,369 | 7.000% due 05/15/19 (Þ) | 4,190 | 4,221 | |||||
10,114 | ConvaTec Finance International SA | ||||||||||
Ivory Coast - 0.1% | 8.250% due 01/15/19 (Þ) | 6,425 | 6,409 | ||||||||
Ivory Coast Government International | Delta 2 Lux Sarl Covenant-Lite Lien | ||||||||||
Bond | Term Loan B | ||||||||||
Series REGS | 7.750% due 07/29/22 (Ê) | 3,495 | 3,327 | ||||||||
5.750% due 12/31/32 | 1,500 | 1,335 | Delta 2 Lux Sarl Covenant-Lite Term | ||||||||
Loan B3 | |||||||||||
Jersey - 0.3% | 4.750% due 07/30/21 (Ê) | 1,250 | 1,224 | ||||||||
AA Bond Co., Ltd. | Dufry Finance SCA | ||||||||||
5.500% due 07/31/22 (Þ) | GBP | 1,795 | 2,636 | 4.500% due 07/15/22 (Þ) | EUR | 1,350 | 1,566 | ||||
CPUK Finance, Ltd. | 4.500% due 08/01/23 (Þ) | EUR | 870 | 1,002 | |||||||
7.000% due 08/28/20 (Þ) | GBP | 1,710 | 2,672 | Series REGS | |||||||
5,308 | 4.500% due 07/15/22 | EUR | 230 | 267 | |||||||
Kazakhstan - 0.9% | Elior Finance & Co. SCA | ||||||||||
KazMunayGas National Co. JSC | 6.500% due 05/01/20 (Þ) | EUR | 546 | 640 | |||||||
9.125% due 07/02/18 (Þ) | 2,000 | 2,206 | Series REGS | ||||||||
6.375% due 04/09/21 (Þ) | 4,000 | 4,041 | 6.500% due 05/01/20 | EUR | 650 | 762 | |||||
6.000% due 11/07/44 (Þ) | 3,000 | 2,345 | Gategroup Finance Luxembourg SA | ||||||||
Series REGS | 6.750% due 03/01/19 (Þ) | EUR | 807 | 933 | |||||||
7.000% due 05/05/20 | 4,045 | 4,205 | Series REGS | ||||||||
5.750% due 04/30/43 | 2,000 | 1,540 | 6.750% due 03/01/19 | EUR | 850 | 982 | |||||
6.000% due 11/07/44 | 1,000 | 782 | Gazprom OAO Via Gaz Capital SA | ||||||||
9.250% due 04/23/19 (Þ) | 1,000 | 1,124 | |||||||||
15,119 | 4.300% due 11/12/20 (Þ) | 1,000 | 1,000 | ||||||||
Kenya - 0.2% | Series REGS | ||||||||||
Kenya Government International Bond | 9.250% due 04/23/19 | 3,250 | 3,652 | ||||||||
5.875% due 06/24/19 (Þ) | 2,000 | 1,936 | 6.510% due 03/07/22 | 2,000 | 2,080 | ||||||
Series REGS | 8.625% due 04/28/34 | 2,000 | 2,278 | ||||||||
6.875% due 06/24/24 | 1,000 | 927 | GCS Holdco Finance I SA | ||||||||
2,863 | Series REGS | ||||||||||
Lebanon - 0.2% | 6.500% due 11/15/18 | EUR | 1,200 | 1,363 | |||||||
Lebanon Government International Bond | Gestamp Funding Luxembourg SA | ||||||||||
Series REGS | 5.875% due 05/31/20 (Þ) | EUR | 400 | 458 | |||||||
8.250% due 04/12/21 | 3,000 | 3,301 | Series REGS | ||||||||
5.875% due 05/31/20 | EUR | 1,795 | 2,055 | ||||||||
Lithuania - 0.3% | Intelsat Jackson Holdings SA | ||||||||||
Lithuania Government International | 7.250% due 10/15/20 | 255 | 233 | ||||||||
Bond | 7.500% due 04/01/21 | 2,345 | 2,116 | ||||||||
Series REGS | Mallinckrodt International Finance SA / | ||||||||||
6.625% due 02/01/22 | 3,700 | 4,495 | Mallinckrodt CB LLC | ||||||||
Luxembourg - 4.6% | 5.750% due 08/01/22 (Þ) | 1,995 | 1,896 | ||||||||
5.625% due 10/15/23 (Å) | 82 | 77 | |||||||||
Altice Financing SA | Mallinckrodt International Finance SA | ||||||||||
6.625% due 02/15/23 (Þ) | 1,465 | 1,469 | Covenant-Lite Term Loan B | ||||||||
Series REGS | 3.250% due 03/19/21 | 983 | 932 | ||||||||
5.250% due 02/15/23 (Þ) | EUR | 970 | 1,077 | Matterhorn Telecom SA | |||||||
5.250% due 02/15/23 | EUR | 500 | 555 | 3.625% due 05/01/22 (Þ) | CHF | 240 | 215 | ||||
Altice Luxembourg SA | 3.875% due 05/01/22 (Þ) | EUR | 1,215 | 1,224 | |||||||
7.250% due 05/15/22 (Þ) | EUR | 1,550 | 1,653 | Series REGS | |||||||
7.625% due 02/15/25 (Þ) | 575 | 529 | 3.875% due 05/01/22 | EUR | 1,050 | 1,058 | |||||
Series REGS | SIG Combibloc Holdings SCA | ||||||||||
7.250% due 05/15/22 | EUR | 730 | 779 | 7.750% due 02/15/23 (Þ) | EUR | 1,845 | 2,141 | ||||
ArcelorMittal | SkillSoft Corp. Covenant-Lite 2nd Lien | ||||||||||
6.250% due 03/01/21 | 7,795 | 7,361 | Term Loan | ||||||||
Auris Luxembourg II SA | 9.250% due 04/28/22 (Ê) | 3,590 | 2,711 | ||||||||
8.000% due 01/15/23 (Þ) | EUR | 710 | 848 | SkillsSoft Corp. Covenant-Lite Term | |||||||
Series REGS | Loan | ||||||||||
8.000% due 01/15/23 | EUR | 1,515 | 1,809 | 5.750% due 04/28/21 (Ê) | 1,234 | 1,043 | |||||
BMBG Bond Finance SCA | Stena International SA Covenant-Lite | ||||||||||
4.951% due 10/15/20 (Ê)(Þ) | EUR | 1,325 | 1,460 | Term Loan B | |||||||
Series REGS | 4.000% due 03/03/21 (Ê) | 1,478 | 1,248 | ||||||||
4.951% due 10/15/20 (Ê) | EUR | 455 | 501 | Telenet Finance III Luxembourg SCA | |||||||
Capsugel SA |
See accompanying notes which are an integral part of the financial statements.
324 Russell Global Opportunistic Credit Fund
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Series REGS | Mongolia - 0.2% | ||||||||||
6.625% due 02/15/21 | EUR | 350 | 402 | Mongolia Government International | |||||||
Telenet Finance V Luxembourg SCA | Bond | ||||||||||
6.750% due 08/15/24 (Þ) | EUR | 600 | 724 | 5.125% due 12/05/22 (Þ) | 300 | 250 | |||||
Series REGS | Series REGS | ||||||||||
6.250% due 08/15/22 | EUR | 520 | 615 | 5.125% due 12/05/22 | 4,405 | 3,672 | |||||
6.750% due 08/15/24 | EUR | 1,880 | 2,269 | 3,922 | |||||||
Travelport Finance Sarl Term Loan B | Morocco - 0.1% | ||||||||||
5.750% due 09/02/21 | 1,489 | 1,475 | Morocco Government International Bond | ||||||||
Wind Acquisition Finance SA | 4.250% due 12/11/22 (Þ) | 1,000 | 1,007 | ||||||||
7.000% due 04/23/21 (Þ) | EUR | 2,500 | 2,839 | 5.500% due 12/11/42 (Þ) | 1,250 | 1,253 | |||||
Series REGS | 2,260 | ||||||||||
7.000% due 04/23/21 | EUR | 3,150 | 3,577 | Netherlands - 2.4% | |||||||
Xefin Lux SCA | AP NMT Acquisition BV 1st Lien Term | ||||||||||
Series REGS | Loan | ||||||||||
3.750% due 06/01/19 (Ê) | EUR | 195 | 214 | 6.750% due 08/13/21 (Ê) | 990 | 942 | |||||
80,393 | Carlson Wagonlit BV | ||||||||||
Malaysia - 1.6% | Series REGS | ||||||||||
1MDB Global Investments, Ltd. | 7.500% due 06/15/19 | EUR | 1,765 | 2,036 | |||||||
Series REGS | Darling Global Finance BV | ||||||||||
4.400% due 03/09/23 | 7,500 | 5,730 | 4.750% due 05/30/22 (Þ) | EUR | 2,310 | 2,371 | |||||
Malaysia Government Bond | EMATUM Via Mozambique EMATUM | ||||||||||
Series 0111 | Finance 2020 BV | ||||||||||
4.160% due 07/15/21 | MYR | 15,810 | 3,710 | Series REGS | |||||||
Series 0114 | 6.305% due 09/11/20 | 1,092 | 970 | ||||||||
4.181% due 07/15/24 | MYR | 10,400 | 2,423 | Grupo Antolin Dutch BV | |||||||
Series 0115 | 4.750% due 04/01/21 (Þ) | EUR | 475 | 535 | |||||||
3.955% due 09/15/25 | MYR | 4,530 | 1,039 | 5.125% due 06/30/22 (Þ) | EUR | 465 | 523 | ||||
Series 0310 | Series REGS | ||||||||||
4.498% due 04/15/30 | MYR | 6,255 | 1,473 | 4.750% due 04/01/21 | EUR | 1,830 | 2,060 | ||||
Series 0314 | InterXion Holding NV | ||||||||||
4.048% due 09/30/21 | MYR | 17,000 | 3,954 | Series REGS | |||||||
Series 0414 | 6.000% due 07/15/20 | EUR | 2,490 | 2,904 | |||||||
3.654% due 10/31/19 | MYR | 37,830 | 8,779 | LGE HoldCo VI BV | |||||||
Series 0902 | Series REGS | ||||||||||
4.378% due 11/29/19 | MYR | 2,490 | 594 | 7.125% due 05/15/24 | EUR | 100 | 119 | ||||
Lukoil International Finance BV | |||||||||||
27,702 | 3.416% due 04/24/18 (Þ) | 500 | 487 | ||||||||
Mexico - 3.3% | Series REGS | ||||||||||
America Movil SAB de CV | 6.125% due 11/09/20 | 1,000 | 1,033 | ||||||||
6.000% due 06/09/19 | MXN | 5,210 | 317 | Majapahit Holding BV | |||||||
Mexican Bonos | Series REGS | ||||||||||
Series M 10 | 7.875% due 06/29/37 | 1,500 | 1,682 | ||||||||
8.500% due 12/13/18 | MXN | 35,000 | 2,350 | Marfrig Holdings Europe BV | |||||||
Series M 20 | Series REGS | ||||||||||
10.000% due 12/05/24 | MXN | 113,979 | 8,833 | 6.875% due 06/24/19 | 2,000 | 1,825 | |||||
Series M 30 | OI European Group BV | ||||||||||
10.000% due 11/20/36 | MXN | 84,665 | 7,063 | Series REGS | |||||||
Series M | 4.875% due 03/31/21 | EUR | 3,065 | 3,623 | |||||||
5.000% due 12/11/19 | MXN | 226,748 | 13,687 | Petrobras Global Finance BV | |||||||
7.750% due 05/29/31 | MXN | 28,535 | 1,942 | 4.375% due 05/20/23 | 2,900 | 2,113 | |||||
7.750% due 11/13/42 | MXN | 39,590 | 2,690 | 6.250% due 03/17/24 | 1,400 | 1,121 | |||||
Mexican Udibonos | 6.875% due 01/20/40 | 2,728 | 1,964 | ||||||||
Series S | 6.850% due 06/05/15 | 1,900 | 1,304 | ||||||||
4.000% due 11/15/40 | MXN | 5,329 | 343 | Playa Resorts Holding BV 1st Lien Term | |||||||
Mexico Government International Bond | Loan B | ||||||||||
4.750% due 03/08/44 | 1,000 | 950 | 4.000% due 08/09/19 (Ê) | 738 | 727 | ||||||
5.550% due 01/21/45 | 6,000 | 6,360 | PortAventura Entertainment Barcelona | ||||||||
5.750% due 10/12/10 | 9,000 | 8,798 | BV | ||||||||
Petroleos Mexicanos | 5.592% due 12/01/19 (Ê)(Þ) | EUR | 370 | 408 | |||||||
6.625% due 06/15/38 | 4,000 | 3,855 | 7.250% due 12/01/20 (Þ) | EUR | 330 | 375 | |||||
Series 14-2 | Series REGS | ||||||||||
7.470% due 11/12/26 | MXN | 5,975 | 332 | 7.250% due 12/01/20 | EUR | 2,060 | 2,344 | ||||
57,520 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 325
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Republic of Angola Via Northern Lights | Series 0922 | ||||||||||
III BV | 5.750% due 09/23/22 | PLN | 26,345 | 8,246 | |||||||
Series REGS | Series 1019 | ||||||||||
7.000% due 08/16/19 | 750 | 729 | 5.500% due 10/25/19 | PLN | 8,505 | 2,501 | |||||
Schaeffler Holding Finance BV | Series 1020 | ||||||||||
6.875% due 08/15/18 (Þ) | EUR | 1,370 | 1,563 | 5.250% due 10/25/20 | PLN | 7,660 | 2,276 | ||||
5.750% due 11/15/21 (Þ) | EUR | 1,300 | 1,538 | Poland Government International Bond | |||||||
Series REGS | 3.000% due 03/17/23 | 2,000 | 2,021 | ||||||||
6.875% due 08/15/18 | EUR | 150 | 171 | 4.000% due 01/22/24 | 5,650 | 6,017 | |||||
5.750% due 11/15/21 | EUR | 2,450 | 2,898 | 26,950 | |||||||
UPC Holding BV | Romania - 0.6% | ||||||||||
Series REGS | Romania Government Bond | ||||||||||
6.750% due 03/15/23 | EUR | 1,285 | 1,548 | Series 05YR | |||||||
VimpelCom Holdings BV | 5.900% due 07/26/17 | RON | 11,660 | 3,116 | |||||||
7.504% due 03/01/22 (Þ) | 299 | 315 | Series 10YR | ||||||||
Ziggo Bond Finance BV | 5.950% due 06/11/21 | RON | 12,240 | 3,541 | |||||||
4.625% due 01/15/25 (Þ) | EUR | 1,580 | 1,625 | Series 10Y | |||||||
Series REGS | 4.750% due 02/24/25 | RON | 1,790 | 490 | |||||||
4.625% due 01/15/25 | EUR | 705 | 725 | Romania Government International Bond | |||||||
42,578 | Series REGS | ||||||||||
Nigeria - 0.1% | 6.750% due 02/07/22 | 3,000 | 3,576 | ||||||||
Nigeria Government International Bond | 10,723 | ||||||||||
Series REGS | Russia - 0.9% | ||||||||||
6.750% due 01/28/21 | 1,000 | 985 | Russian Federal Bond - OFZ | ||||||||
Series 6208 | |||||||||||
Pakistan - 0.7% | 7.500% due 02/27/19 | RUB | 276,200 | 4,032 | |||||||
Pakistan Government International Bond | Series 6211 | ||||||||||
8.250% due 04/15/24 (Þ) | 6,500 | 6,927 | 7.000% due 01/25/23 | RUB | 294,140 | 3,936 | |||||
Series REGS | Series 6212 | ||||||||||
7.875% due 03/31/36 | 6,000 | 5,679 | 7.050% due 01/19/28 | RUB | 216,550 | 2,730 | |||||
12,606 | Series 6215 | ||||||||||
Panama - 0.6% | 7.000% due 08/16/23 | RUB | 98,000 | 1,302 | |||||||
Panama Government International Bond | Russian Federal Inflation Linked Bond | ||||||||||
7.125% due 01/29/26 | 1,500 | 1,901 | Series 2001 | ||||||||
9.375% due 04/01/29 | 4,500 | 6,621 | 2.500% due 08/16/23 | RUB | 51,790 | 791 | |||||
6.700% due 01/26/36 | 1,500 | 1,856 | Russian Federation International Bond | ||||||||
10,378 | Series REGS | ||||||||||
Paraguay - 0.3% | 4.875% due 09/16/23 | 2,000 | 2,067 | ||||||||
Republic of Paraguay | 7.500% due 03/31/30 | 893 | 1,062 | ||||||||
4.625% due 01/25/23 (Þ) | 624 | 630 | 15,920 | ||||||||
6.100% due 08/11/44 (Þ) | 4,551 | 4,619 | Serbia - 0.4% | ||||||||
5,249 | Republic of Serbia | ||||||||||
Peru - 0.5% | Series REGS | ||||||||||
Peruvian Government International Bond | 5.875% due 12/03/18 | 1,400 | 1,486 | ||||||||
8.750% due 11/21/33 | 3,000 | 4,380 | 7.250% due 09/28/21 | 5,000 | 5,714 | ||||||
Series REGS | 7,200 | ||||||||||
6.950% due 08/12/31 | PEN | 4,580 | 1,343 | Slovenia - 0.3% | |||||||
6.900% due 08/12/37 | PEN | 9,610 | 2,742 | Slovenia Government International Bond | |||||||
8,465 | 5.250% due 02/18/24 (Þ) | 3,500 | 3,920 | ||||||||
Philippines - 0.5% | Series REGS | ||||||||||
Philippine Government International | 5.850% due 05/10/23 | 500 | 578 | ||||||||
Bond | 4,498 | ||||||||||
4.950% due 01/15/21 | PHP | 42,000 | 933 | South Africa - 2.3% | |||||||
9.500% due 02/02/30 | 4,000 | 6,447 | Eskom Holdings SOC, Ltd. | ||||||||
6.250% due 01/14/36 | PHP | 30,000 | 712 | Series REGS | |||||||
8,092 | 5.750% due 01/26/21 | 5,800 | 5,387 | ||||||||
Poland - 1.5% | 6.750% due 08/06/23 | 1,000 | 928 | ||||||||
Poland Government Bond | South Africa Government Bond | ||||||||||
Series 0718 | Series 2032 | ||||||||||
2.500% due 07/25/18 | PLN | 5,530 | 1,459 | 8.250% due 03/31/32 | ZAR | 136,320 | 9,378 | ||||
Series 0725 | Series R186 | ||||||||||
3.250% due 07/25/25 | PLN | 16,300 | 4,430 | 10.500% due 12/21/26 | ZAR | 139,790 | 11,661 |
See accompanying notes which are an integral part of the financial statements.
326 Russell Global Opportunistic Credit Fund
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Series R203 | Series REGS | ||||||||||
8.250% due 09/15/17 | ZAR | 4,620 | 341 | 10.375% due 03/28/18 | 222 | 113 | |||||
Series R207 | 7.875% due 04/04/18 | 500 | 235 | ||||||||
7.250% due 01/15/20 | ZAR | 90,911 | 6,465 | Ephios Bondco PLC | |||||||
Series R208 | 6.250% due 07/01/22 (Å) | EUR | 1,050 | 1,207 | |||||||
6.750% due 03/31/21 | ZAR | 8,510 | 585 | Ephios Holdco II PLC | |||||||
South Africa Government International | 8.250% due 07/01/23 (Þ) | EUR | 460 | 515 | |||||||
Bond | Hyperion Insurance Group, Ltd. Term | ||||||||||
5.875% due 09/16/25 | 5,000 | 5,434 | Loan B | ||||||||
Transnet SOC, Ltd. | 5.500% due 03/26/22 | 746 | 746 | ||||||||
9.500% due 05/13/21 (Þ) | ZAR | 7,700 | 531 | Iceland Bondco PLC | |||||||
40,710 | Series REGS | ||||||||||
Sri Lanka - 0.5% | 6.250% due 07/15/21 | GBP | 1,255 | 1,751 | |||||||
Sri Lanka Government International | Iglo Foods BondCo PLC | ||||||||||
Bond | Series REGS | ||||||||||
Series REGS | 4.462% due 06/15/20 (Ê) | EUR | 1,450 | 1,595 | |||||||
5.875% due 07/25/22 | 9,600 | 9,240 | Ineos Finance PLC | ||||||||
4.000% due 05/01/23 (Þ) | EUR | 3,130 | 3,304 | ||||||||
Thailand - 0.8% | Iron Mountain Europe PLC | ||||||||||
PTT Exploration & Production PCL | 6.125% due 09/15/22 (Þ) | GBP | 1,015 | 1,589 | |||||||
4.875% due 12/29/49 (ƒ)(Þ) | 1,000 | 987 | Series REGS | ||||||||
Thailand Government Bond | 6.125% due 09/15/22 | GBP | 1,400 | 2,192 | |||||||
3.875% due 06/13/19 | THB | 20 | 1 | Merlin Entertainments PLC | |||||||
3.650% due 12/17/21 | THB | 265,140 | 7,955 | 2.750% due 03/15/22 (Þ) | EUR | 680 | 724 | ||||
3.850% due 12/12/25 | THB | 137,120 | 4,261 | Series REGS | |||||||
3.580% due 12/17/27 | THB | 26,600 | 804 | 2.750% due 03/15/22 | EUR | 1,780 | 1,895 | ||||
14,008 | Moto Finance PLC | ||||||||||
Turkey - 2.6% | 6.375% due 09/01/20 (Þ) | GBP | 1,350 | 2,123 | |||||||
Export Credit Bank of Turkey | Series REGS | ||||||||||
5.875% due 04/24/19 (Þ) | 9,000 | 9,424 | 6.375% due 09/01/20 | GBP | 310 | 487 | |||||
Turkey Government Bond | Oschadbank Via SSB #1 PLC | ||||||||||
9.400% due 07/08/20 | TRY | 10,190 | 3,443 | 9.375% due 03/10/23 (Þ) | 6,593 | 5,848 | |||||
7.100% due 03/08/23 | TRY | 23,950 | 7,131 | 9.625% due 03/20/25 (Þ) | 2,400 | 2,088 | |||||
8.000% due 03/12/25 | TRY | 15,580 | 4,836 | Paragon Offshore PLC | |||||||
Turkey Government International Bond | 6.750% due 07/15/22 (Þ) | 3,255 | 496 | ||||||||
10.400% due 03/27/19 | TRY | 22,170 | 7,719 | Pendragon PLC | |||||||
7.500% due 11/07/19 | 1,000 | 1,145 | 6.875% due 05/01/20 | GBP | 2,640 | 4,244 | |||||
7.000% due 06/05/20 | 4,000 | 4,532 | Premier Foods Finance PLC | ||||||||
7.375% due 02/05/25 | 1,200 | 1,435 | Series REGS | ||||||||
6.750% due 05/30/40 | 1,000 | 1,140 | 6.500% due 03/15/21 | GBP | 950 | 1,361 | |||||
6.625% due 02/17/45 | 4,000 | 4,600 | Priory Group No. 3 PLC | ||||||||
Series REGS | |||||||||||
45,405 | 7.000% due 02/15/18 | GBP | 490 | 777 | |||||||
Ukraine - 1.1% | R&R Ice Cream PLC | ||||||||||
Financing of Infrastrucural Projects State | Series REGS | ||||||||||
Enterprise | 5.500% due 05/15/20 | GBP | 1,050 | 1,661 | |||||||
Series REGS | R&R Pik PLC | ||||||||||
9.000% due 12/07/17 | 3,000 | 2,340 | 9.250% due 05/15/18 (Þ) | EUR | 1,125 | 1,249 | |||||
Ukraine Government International Bond | Series REGS | ||||||||||
6.580% due 11/21/16 (Þ) | 8,000 | 6,240 | 9.250% due 05/15/18 | EUR | 735 | 816 | |||||
Series REGS | TA MFG., Ltd. | ||||||||||
6.580% due 11/21/16 | 7,500 | 5,850 | 3.625% due 04/15/23 (Þ) | EUR | 1,665 | 1,742 | |||||
9.250% due 07/24/17 | 6,750 | 5,282 | Tullow Oil PLC | ||||||||
7.800% due 11/28/22 | 550 | 429 | 6.000% due 11/01/20 (Þ) | 1,600 | 1,215 | ||||||
20,141 | Ukreximbank Via Biz Finance PLC | ||||||||||
United Kingdom - 3.6% | 9.625% due 04/27/22 (Þ) | 1,250 | 1,134 | ||||||||
Arqiva Broadcast Finance PLC | 7.509% due 02/09/23 (Ê)(Þ) | 6,067 | 4,460 | ||||||||
9.500% due 03/31/20 (Þ) | GBP | 1,270 | 2,127 | 9.750% due 01/22/25 (Þ) | 2,369 | 2,110 | |||||
Series REGS | Virgin Media Finance PLC | ||||||||||
9.500% due 03/31/20 | GBP | 925 | 1,549 | 4.875% due 02/15/22 | 1,000 | 912 | |||||
Boparan Finance PLC | 7.000% due 04/15/23 (Þ) | GBP | 1,200 | 1,934 | |||||||
Series REGS | Series REGS | ||||||||||
5.500% due 07/15/21 | GBP | 815 | 1,143 | 7.000% due 04/15/23 | GBP | 1,740 | 2,804 | ||||
DTEK Finance PLC |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 327
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Virgin Media Investment Holdings, Ltd. | Ancestry.com Inc. Term Loan B | ||||||||||
Term Loan F | 5.000% due 08/17/22 | 1,100 | 1,097 | ||||||||
3.500% due 06/30/23 (Ê) | 842 | 837 | Ancestry.com, Inc. | ||||||||
Virgin Media Secured Finance PLC | 11.000% due 12/15/20 | 3,600 | 3,933 | ||||||||
Series REGS | AP Gaming I LLC 1st Lien Term Loan B | ||||||||||
6.000% due 04/15/21 | GBP | 252 | 410 | 9.250% due 12/20/20 (Ê) | 497 | 485 | |||||
Vougeot Bidco PLC | Apex Tool Group LLC | ||||||||||
7.875% due 07/15/20 (Þ) | GBP | 160 | 261 | 7.000% due 02/01/21 (Þ) | 2,855 | 2,298 | |||||
Series REGS | Arctic Glacier USA, Inc. Covenant-Lite | ||||||||||
7.875% due 07/15/20 | GBP | 2,050 | 3,350 | Term Loan | |||||||
63,004 | 6.000% due 05/13/19 (Ê) | 482 | 456 | ||||||||
United States - 33.4% | AssuredPartners Capital, Inc. 1st Lien | ||||||||||
99 Cents Only Stores LLC | Term Loan | ||||||||||
11.000% due 12/15/19 | 1,550 | 806 | 5.750% due 10/06/22 | 929 | 928 | ||||||
99 Cents Only Stores LLC Covenant-Lite | Asurion LLC Covenant-Lite 2nd Lien | ||||||||||
Term Loan B2 | Term Loan | ||||||||||
1.000% due 01/13/19 (Ê)(v) | 350 | 278 | 8.500% due 03/03/21 (Ê) | 500 | 449 | ||||||
ABG Intermediate Holdings 2, LLC 1st | Asurion LLC Covenant-Lite Term Loan | ||||||||||
Lien Term Loan | B1 | ||||||||||
5.500% due 05/27/21 (Ê) | 1,313 | 1,303 | 5.000% due 05/24/19 (Ê) | 730 | 695 | ||||||
ABG Intermediate Holdings 2, LLC 2nd | Asurion LLC Covenant-Lite Term Loan | ||||||||||
Lien Term Loan | B2 | ||||||||||
9.500% due 05/27/22 (Ê) | 500 | 502 | 4.250% due 07/08/20 (Ê) | 982 | 913 | ||||||
Asurion LLC Covenant-Lite Term Loan | |||||||||||
Ability Network, Inc. 1st Lien Term Loan | B4 | ||||||||||
6.000% due 05/14/21 (Ê) | 2,750 | 2,738 | 5.000% due 08/04/22 (Ê) | 499 | 471 | ||||||
ACCO Brands Corp. | |||||||||||
6.750% due 04/30/20 | 2,790 | 2,971 | Avaya, Inc. Term Loan | ||||||||
6.250% due 05/29/20 (Ê) | 994 | 761 | |||||||||
ADT Corp. (The) | Axalta Coating Systems US Holdings, | ||||||||||
6.250% due 10/15/21 | 1,835 | 1,982 | Inc. / Axalta Coating Systems Dutch | ||||||||
AECOM | Holding B | ||||||||||
5.750% due 10/15/22 (Þ) | 2,110 | 2,194 | 5.750% due 02/01/21 (Þ) | 730 | 835 | ||||||
AF Borrower LLC 2nd Lien Term Loan | Series REGS | ||||||||||
10.000% due 12/02/22 | 4,270 | 4,190 | 5.750% due 02/01/21 | 3,730 | 4,266 | ||||||
Affinion Group, Inc. Term Loan B | Belden, Inc. | ||||||||||
6.750% due 04/30/18 (Ê) | 961 | 921 | 5.500% due 04/15/23 (Þ) | 105 | 116 | ||||||
Albertson's Holdings LLC Covenant-Lite | |||||||||||
Series REGS | |||||||||||
Term Loan B4 | 5.500% due 04/15/23 | 1,475 | 1,624 | ||||||||
5.500% due 08/25/21 (Ê) | 1,489 | 1,488 | |||||||||
Berry Plastics Corp. | |||||||||||
Ally Financial, Inc. | 6.000% due 10/15/22 (Å) | 82 | 86 | ||||||||
4.125% due 02/13/22 | 355 | 359 | |||||||||
4.625% due 05/19/22 | 2,400 | 2,496 | Bill Barrett Corp. | ||||||||
7.625% due 10/01/19 | 1,340 | 1,028 | |||||||||
Alphabet Holding Co., Inc. | BioScrip, Inc. Covenant-Lite 1st Lien | ||||||||||
7.750% due 11/01/17 | 2,695 | 2,648 | Term Loan B | ||||||||
Alvogen Pharmaceutical US, Inc. Term | 6.500% due 07/31/20 (Ê) | 2,419 | 2,201 | ||||||||
Loan | |||||||||||
6.000% due 04/02/22 (Ê) | 484 | 475 | BioScrip, Inc. Covenant-Lite Term Loan | ||||||||
6.500% due 07/31/20 (Ê) | 1,451 | 1,320 | |||||||||
American Airlines, Inc. Term Loan | |||||||||||
3.250% due 05/21/20 (Ê) | 987 | 978 | Blue Coat Holdings, Inc. | ||||||||
American Builders & Contractors Supply | 8.375% due 06/01/23 (Å) | 250 | 259 | ||||||||
Co., Inc. | BlueLine Rental Finance Corp. | ||||||||||
5.625% due 04/15/21 (Þ) | 2,525 | 2,594 | 7.000% due 02/01/19 (Þ) | 505 | 509 | ||||||
American Pacific Corp. 1st Lien Term | BMC Software Finance, Inc. Term Loan | ||||||||||
Loan B | 5.000% due 09/10/20 (Ê) | 948 | 852 | ||||||||
7.000% due 02/27/19 (Ê) | 985 | 975 | Brazil Loan Trust 1 | ||||||||
American Tire Distributors, Inc. | 5.477% due 07/24/23 (Þ) | 2,068 | 1,836 | ||||||||
10.250% due 03/01/22 (Þ) | 3,130 | 3,161 | BreitBurn Energy Partners, LP / | ||||||||
AmeriGas Finance LLC / AmeriGas | BreitBurn Finance Corp. | ||||||||||
Finance Corp. | 8.625% due 10/15/20 | 540 | 240 | ||||||||
6.750% due 05/20/20 | 560 | 580 | 7.875% due 04/15/22 | 4,200 | 1,575 | ||||||
7.000% due 05/20/22 | 2,315 | 2,442 | Brickman Group, Ltd. LLC Term Loan | ||||||||
Amsurg Corp. | 4.000% due 12/18/20 (Ê) | 1,985 | 1,936 | ||||||||
Series WI | Building Materials Corp. of America | ||||||||||
5.625% due 07/15/22 | 1,435 | 1,410 | 6.000% due 10/15/25 (Å) | 163 | 173 | ||||||
Ancestry.com Holdings LLC | BWAY Holding Co. Covenant-Lite Term | ||||||||||
9.625% due 10/15/18 (Þ) | 6,350 | 6,413 | Loan B |
See accompanying notes which are an integral part of the financial statements.
328 Russell Global Opportunistic Credit Fund
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
5.500% due 08/14/20 (Ê) | 487 | 488 | Cincinnati Bell, Inc. 1st Lien Term | ||||||||
Caesars Entertainment Corp. 1st Lien | Loan B | ||||||||||
Term Loan B | 4.000% due 09/10/20 (Ê) | 1,237 | 1,222 | ||||||||
7.000% due 10/11/20 (Ê) | 1,967 | 1,859 | CITGO Petroleum Corp. | ||||||||
Caesars Entertainment Operating Co., | 6.250% due 08/15/22 (Þ) | 2,015 | 1,975 | ||||||||
Inc. | Clear Channel Worldwide Holdings, Inc. | ||||||||||
11.250% due 06/01/17 (Ø) | 7,485 | 5,932 | 6.500% due 11/15/22 | 5,070 | 5,222 | ||||||
California Resources Corp. | Series A | ||||||||||
Series WI | 7.625% due 03/15/20 | 3,690 | 3,745 | ||||||||
5.500% due 09/15/21 | 2,285 | 1,571 | Cleaver-Brooks, Inc. | ||||||||
Calpine Corp. | 8.750% due 12/15/19 (Þ) | 1,470 | 1,415 | ||||||||
5.500% due 02/01/24 | 1,895 | 1,800 | Cliffs Natural Resources, Inc. | ||||||||
Camping World, Inc. Covenant-Lite 1st | 8.250% due 03/31/20 (Þ) | 1,740 | 1,557 | ||||||||
Lien Term Loan B | Commercial Barge Line Co. 2nd Lien | ||||||||||
5.250% due 02/20/20 (Ê) | 1,411 | 1,404 | Term Loan | ||||||||
Carlson Travel Holdings, Inc. | 10.750% due 03/22/20 (Ê) | 1,000 | 1,015 | ||||||||
7.500% due 08/15/19 (Þ) | 3,145 | 3,161 | CommScope Holding Co., Inc. | ||||||||
Carrizo Oil & Gas, Inc. | 6.625% due 06/01/20 (Þ) | 2,015 | 2,096 | ||||||||
6.250% due 04/15/23 | 585 | 556 | CommScope, Inc. | ||||||||
Cast & Crew Payroll, LLC 2nd Lien Term | 5.000% due 06/15/21 (Þ) | 1,410 | 1,419 | ||||||||
Loan | Communications Sales & Leasing, Inc. | ||||||||||
8.750% due 07/23/23 | 250 | 247 | Covenant-Lite Term Loan B | ||||||||
CCO Holdings LLC / CCO Holdings | 5.000% due 10/16/22 (Ê) | 1,496 | 1,410 | ||||||||
Capital Corp. | Compuware Corp. Term Loan B2 | ||||||||||
5.125% due 05/01/23 (Þ) | 1,885 | 1,890 | 6.250% due 12/15/21 (Ê) | 1,000 | 947 | ||||||
Celanese US Holdings LLC | Concentra, Inc. 2nd Lien Term Loan | ||||||||||
3.250% due 10/15/19 | 2,070 | 2,363 | 9.000% due 06/01/23 (Ê) | 1,220 | 1,214 | ||||||
Cemex Finance LLC | Connolly Corp. Covenant-Lite 2nd Lien | ||||||||||
9.375% due 10/12/22 (Þ) | 1,000 | 1,088 | Term Loan | ||||||||
Cengage Learning Acquisitions, Inc. | 8.000% due 05/14/22 (Ê) | 5,970 | 5,918 | ||||||||
Covenant-Lite 1st Lien Term Loan | Constellis Holdings LLC / Constellis | ||||||||||
7.000% due 03/31/20 (Ê) | 962 | 955 | Finance Corp. | ||||||||
Central Garden & Pet Co. | 9.750% due 05/15/20 (Å) | 500 | 452 | ||||||||
8.250% due 03/01/18 | 1,289 | 1,313 | Continental Building Products Operating | ||||||||
Century Aluminum Co. | Co. LLC 1st Lien Term Loan | ||||||||||
7.500% due 06/01/21 (Þ) | 10,395 | 8,784 | 4.000% due 08/28/20 (Ê) | 1,744 | 1,737 | ||||||
CenturyLink, Inc. | ConvergeOne Holdings Corp. Covenant- | ||||||||||
Series WI | Lite 1st Lien Term Loan | ||||||||||
5.625% due 04/01/25 | 1,275 | 1,144 | 6.000% due 06/17/20 (Ê) | 247 | 244 | ||||||
Cequel Communications Holdings I LLC | CPI Buyer LLC Covenant-Lite 2nd Lien | ||||||||||
/ Cequel Capital Corp. | Term Loan | ||||||||||
5.125% due 12/15/21 (Þ) | 2,450 | 2,354 | 8.500% due 08/18/22 (Å)(Ê) | 3,150 | 3,111 | ||||||
Charming Charlie, Inc. Term Loan B | CPI Card Group, Inc. Covenant-Lite | ||||||||||
9.000% due 12/24/19 (Ê) | 184 | 169 | Term Loan B | ||||||||
Checkout Holding Corp. Covenant-Lite | 6.750% due 08/17/22 (Ê) | 185 | 185 | ||||||||
1st Lien Term Loan B | CPM Holdings, Inc. 2nd Lien Term Loan | ||||||||||
4.500% due 04/09/21 (Ê) | 1,975 | 1,708 | 10.250% due 02/12/22 (Å) | 3,980 | 3,980 | ||||||
Checkout Holding Corp. Covenant-Lite | Creative Artists Agency LLC Covenant- | ||||||||||
2nd Lien Term Loan | Lite Term Loan B | ||||||||||
7.750% due 04/09/22 (Ê) | 750 | 486 | 5.500% due 12/12/21 (Ê) | 1,241 | 1,241 | ||||||
Chelsea Petroleum Products Term Loan | Crowne Group LLC 1st Lien Term Loan | ||||||||||
B | 6.000% due 09/29/20 | 495 | 491 | ||||||||
1.000% due 07/07/22(v) | 1,000 | 991 | CSC Holdings LLC | ||||||||
Chemours Co. (The) | 6.750% due 11/15/21 | 1,000 | 970 | ||||||||
6.125% due 05/15/23 (Þ) | 2,380 | 1,975 | 5.250% due 06/01/24 | 1,150 | 1,011 | ||||||
Chrysler Group LLC 1st Lien Term | CSC Holdings LLC Term Loan | ||||||||||
Loan B | 5.000% due 09/21/22 | 500 | 501 | ||||||||
3.250% due 12/31/18 (Ê) | 1,482 | 1,477 | DBP Holding Corp. | ||||||||
CHS/Community Health Systems, Inc. | 7.750% due 10/15/20 (Þ) | 3,320 | 2,208 | ||||||||
6.875% due 02/01/22 | 2,905 | 2,927 | Dell International LLC Term Loan B2 | ||||||||
CHS/Community Health Systems, Inc. | 4.000% due 04/29/20 (Ê) | 745 | 745 | ||||||||
1st Lien Term Loan F | Denbury Resources, Inc. | ||||||||||
3.575% due 12/31/18 (Ê) | 995 | 990 | 6.375% due 08/15/21 | 1,130 | 825 | ||||||
CHS/Community Health Systems, Inc. | |||||||||||
1st Lien Term Loan G | 5.500% due 05/01/22 | 965 | 675 | ||||||||
3.750% due 12/31/19 (Ê) | 783 | 780 | DISH DBS Corp. |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 329
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
5.875% due 07/15/22 | 1,410 | 1,382 | 7.625% due 04/15/24 | 1,340 | 1,199 | ||||||
Dollar Tree, Inc. 1st Lien Term Loan B1 | FULLBEAUTY Brands, Inc. 1st Lien | ||||||||||
3.500% due 03/09/22 (Ê) | 751 | 752 | Term Loan | ||||||||
Dynegy, Inc. | 5.750% due 09/22/22 | 500 | 474 | ||||||||
5.875% due 06/01/23 | 310 | 290 | FULLBEAUTY Brands, Inc. 2nd Lien | ||||||||
Series WI | Term Loan | ||||||||||
6.750% due 11/01/19 | 1,685 | 1,681 | 1.000% due 09/22/23 | 500 | 435 | ||||||
Educational Management LLC Term | GENEX Holdings, Inc. 1st Lien Term | ||||||||||
Loan B | Loan | ||||||||||
8.500% due 07/02/20 | 279 | 29 | 5.250% due 05/30/21 (Ê) | 486 | 482 | ||||||
GENEX Holdings, Inc. 2nd Lien Term | |||||||||||
Emerald 3, Ltd. 2nd Lien Term Loan | Loan | ||||||||||
8.000% due 05/09/22 | 800 | 790 | |||||||||
Emerald Performance Materials LLC | 8.750% due 05/30/22 (Ê) | 250 | 239 | ||||||||
Getty Images, Inc. Covenant-Lite Term | |||||||||||
Covenant-Lite 2nd Lien Term Loan | Loan B | ||||||||||
7.750% due 08/01/22 (Ê) | 250 | 246 | 4.750% due 10/18/19 (Ê) | 1,485 | 991 | ||||||
Emerald US, Inc. Term Loan B1 | |||||||||||
5.000% due 05/09/21 | 1,000 | 995 | Gibson Brands, Inc. | ||||||||
8.875% due 08/01/18 (Þ) | 1,480 | 1,299 | |||||||||
Endo Finance LLC | GOBP Holdings, Inc. Covenant-Lite | ||||||||||
5.750% due 01/15/22 (Þ) | 2,015 | 1,970 | Term Loan B | ||||||||
Endo Finance LLC / Endo Finco, Inc. | 4.750% due 10/21/21 (Ê) | 993 | 983 | ||||||||
5.375% due 01/15/23 (Þ) | 1,010 | 991 | Goodyear Tire & Rubber Co. (The) | ||||||||
Energizer Holdings, Inc. | 7.000% due 05/15/22 | 1,860 | 2,023 | ||||||||
5.500% due 06/15/25 (Þ) | 2,070 | 2,111 | Gray Television, Inc. Term Loan B | ||||||||
Energy XXI Gulf Coast, Inc. | 3.750% due 06/13/21 (Ê) | 893 | 890 | ||||||||
11.000% due 03/15/20 (Þ) | 1,755 | 946 | GTCR Valor Cos., Inc. 1st Lien Term | ||||||||
EnergySolutions LLC Term Loan | Loan | ||||||||||
6.750% due 05/29/20 (Ê) | 1,407 | 1,365 | 6.000% due 05/30/21 (Ê) | 989 | 964 | ||||||
Envision Healthcare Corp. | Gulfport Energy Corp. | ||||||||||
5.125% due 07/01/22 (Þ) | 2,470 | 2,396 | Series WI | ||||||||
ExamWorks Group, Inc. | 6.625% due 05/01/23 | 1,875 | 1,716 | ||||||||
5.625% due 04/15/23 | 1,530 | 1,591 | H&E Equipment Services, Inc. | ||||||||
Extreme Reach, Inc. 1st Lien Term | 7.000% due 09/01/22 | 390 | 396 | ||||||||
Loan B | Harland Clarke Holdings Corp. | ||||||||||
6.750% due 02/07/20 (Ê) | 1,486 | 1,480 | Covenant-Lite Term Loan B4 | ||||||||
FCA US LLC 1st Lien Term Loan B | 6.000% due 08/04/19 (Ê) | 1,920 | 1,909 | ||||||||
3.500% due 05/24/17 (Ê) | 737 | 735 | Hawaiian Telcom Communications, Inc. | ||||||||
Fieldwood Energy LLC 2nd Lien Term | Term Loan B | ||||||||||
Loan | 5.000% due 06/06/19 (Ê) | 1,241 | 1,236 | ||||||||
8.375% due 09/30/20 (Ê) | 2,335 | 846 | HCA Holdings, Inc. | ||||||||
First Data Corp. | 6.250% due 02/15/21 | 2,045 | 2,234 | ||||||||
8.250% due 01/15/21 (Þ) | 1,910 | 2,003 | HCA, Inc. | ||||||||
First Date Corp. | 5.375% due 02/01/25 | 795 | 816 | ||||||||
7.000% due 12/01/23 | 4,135 | 4,207 | HealthSouth Corp. | ||||||||
First Quality Finance Co., Inc. | 5.750% due 11/01/24 (Þ) | 2,075 | 2,075 | ||||||||
4.625% due 05/15/21 (Þ) | 940 | 872 | Heartland Dental Care LLC Covenant- | ||||||||
Fitness International LLC Covenant-Lite | Lite 2nd Lien Term Loan | ||||||||||
Term Loan B | 9.750% due 06/21/19 (Ê) | 2,200 | 2,185 | ||||||||
5.500% due 07/01/20 (Ê) | 741 | 700 | HGIM Corp. Covenant-Lite Term Loan B | ||||||||
Foresight Energy LLC / Foresight Energy | 5.500% due 06/18/20 (Ê) | 739 | 479 | ||||||||
Finance Corp. | HRG Group, Inc. | ||||||||||
7.875% due 08/15/21 (Þ) | 12,760 | 9,379 | 7.875% due 07/15/19 | 1,387 | 1,472 | ||||||
Foundation Building Materials LLC 2nd | 7.750% due 01/15/22 | 11,663 | 11,576 | ||||||||
Lien Term Loan | 7.750% due 01/15/22 (Þ) | 680 | 675 | ||||||||
11.500% due 10/06/23 | 3,020 | 2,839 | |||||||||
HUB International, Ltd. | |||||||||||
FPC Holdings, Inc. 1st Lien Term Loan | 7.875% due 10/01/21 (Þ) | 2,645 | 2,638 | ||||||||
5.250% due 11/27/19 (Ê) | 985 | 933 | |||||||||
IMS Health, Inc. | |||||||||||
FPC Holdings, Inc. 2nd Lien Term Loan | 4.125% due 04/01/23 (Þ) | 2,500 | 2,632 | ||||||||
9.250% due 05/27/20 (Å)(Ê) | 2,000 | 1,920 | |||||||||
Interactive Data Corp. Term Loan | |||||||||||
Fresenius US Finance II, Inc. | 4.750% due 05/02/21 (Ê) | 484 | 484 | ||||||||
4.500% due 01/15/23 (Å) | 163 | 167 | Intrawest Operations Group, LLC Term | ||||||||
Frontier Communications Corp. | Loan | ||||||||||
8.875% due 09/15/20 (Å) | 33 | 34 | 4.750% due 12/09/20 (Ê) | 1,960 | 1,962 | ||||||
10.500% due 09/15/22 (Þ) | 1,260 | 1,307 | Intrepid Aviation Group Holdings LLC / | ||||||||
7.125% due 01/15/23 | 1,010 | 901 | Intrepid Finance Co. |
See accompanying notes which are an integral part of the financial statements.
330 Russell Global Opportunistic Credit Fund
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
6.875% due 02/15/19 (Þ) | 2,285 | 1,985 | Medpace Holdings, Inc. 1st Lien Term | ||||||||
IPC Corp. 2nd Lien Term Loan | Loan B | ||||||||||
10.500% due 02/06/22 (Ê) | 500 | 463 | 4.750% due 04/01/21 (Ê) | 830 | 824 | ||||||
J Crew Group, Inc. Covenant-Lite Term | Memorial Production Partners, LP / | ||||||||||
Loan B | Memorial Production Finance Corp. | ||||||||||
4.000% due 03/05/21 (Ê) | 497 | 365 | 7.625% due 05/01/21 | 3,600 | 2,412 | ||||||
Jaguar Holding Co. II / Pharmaceutical | 6.875% due 08/01/22 | 3,550 | 2,236 | ||||||||
Product Development LLC | Mercer International, Inc. | ||||||||||
6.375% due 08/01/23 (Þ) | 2,025 | 2,028 | Series WI | ||||||||
Jarden Corp. | 7.000% due 12/01/19 | 1,680 | 1,714 | ||||||||
3.750% due 10/01/21 (Þ) | 1,845 | 2,069 | 7.750% due 12/01/22 | 1,050 | 1,097 | ||||||
Series REGS | Mergermarket USA, Inc. 1st Lien Term | ||||||||||
3.750% due 10/01/21 | 420 | 471 | Loan | ||||||||
JBS USA LLC / JBS USA Finance, Inc. | 4.500% due 02/04/21 (Ê) | 985 | 959 | ||||||||
7.250% due 06/01/21 (Þ) | 2,585 | 2,704 | Michaels Stores, Inc. | ||||||||
5.875% due 07/15/24 (Þ) | 120 | 118 | 5.875% due 12/15/20 (Þ) | 2,355 | 2,485 | ||||||
Jo-Ann Stores Holdings, Inc. | Milacron LLC / Mcron Finance Corp. | ||||||||||
9.750% due 10/15/19 (Þ) | 2,820 | 2,129 | 7.750% due 02/15/21 (Þ) | 1,610 | 1,650 | ||||||
Jo-Ann Stores LLC | Millennium Laboratories, Inc. Term | ||||||||||
8.125% due 03/15/19 (Þ) | 2,250 | 2,053 | Loan B | ||||||||
5.250% due 04/16/21 (Ê) | 1,486 | 524 | |||||||||
Joseph T Ryerson & Son, Inc. | MPG Holdco I, Inc. Covenant-Lite 1st | ||||||||||
9.000% due 10/15/17 | 4,920 | 4,293 | Lien Term Loan B | ||||||||
Kloeckner Pentaplast of America, Inc. | 3.750% due 10/20/21 (Ê) | 305 | 303 | ||||||||
7.125% due 11/01/20 (Þ) | 1,250 | 1,426 | |||||||||
La Quinta Intermediate Holdings LLC | MPH Acquisition Holdings LLC | ||||||||||
6.625% due 04/01/22 (Þ) | 5,490 | 5,600 | |||||||||
Covenant-Lite Term Loan B | MPT Operating Partnership, LP / MPT | ||||||||||
3.750% due 04/14/21 (Ê) | 163 | 162 | Finance Corp. | ||||||||
Laredo Petroleum, Inc. | 4.000% due 08/19/22 | 1,000 | 1,113 | ||||||||
5.625% due 01/15/22 | 1,530 | 1,438 | |||||||||
6.250% due 03/15/23 | 295 | 283 | MSC.Software Corp. 1st Lien Term Loan | ||||||||
Lattice Semiconductor Corp. 1st Lien | 5.000% due 05/29/20 (Ê) | 1,481 | 1,455 | ||||||||
Term Loan B | Murray Energy Corp. Term Loan B | ||||||||||
5.250% due 03/10/21 (Ê) | 1,493 | 1,373 | 7.500% due 03/19/21 | 2,085 | 1,347 | ||||||
Legacy Reserves, LP / Legacy Reserves | National Vision, Inc. Covenant-Lite 2nd | ||||||||||
Finance Corp. | Lien Term Loan | ||||||||||
6.625% due 12/01/21 | 3,290 | 2,171 | 6.750% due 03/13/22 (Ê) | 380 | 367 | ||||||
Natural Resource Partners, LP / NRP | |||||||||||
Level 3 Financing, Inc. | Finance Corp. | ||||||||||
5.125% due 05/01/23 (Þ) | 1,265 | 1,279 | 9.125% due 10/01/18 | 2,955 | 2,157 | ||||||
5.375% due 01/15/24 | 1,500 | 1,519 | Navient Corp. | ||||||||
Series WI | 4.875% due 06/17/19 | 2,440 | 2,361 | ||||||||
6.125% due 01/15/21 | 650 | 685 | Navistar, Inc. 1st Lien Term Loan B | ||||||||
5.375% due 08/15/22 | 620 | 631 | 6.500% due 08/07/20 (Ê) | 500 | 470 | ||||||
Level 3 Financing, Inc. Term Loan B2 | Neiman Marcus Group, Ltd. LLC | ||||||||||
3.500% due 05/31/22 (Ê) | 1,000 | 997 | 8.750% due 10/15/21 (Þ) | 1,835 | 1,906 | ||||||
Linn Energy LLC / Linn Energy Finance | Neptune Finco Corp. | ||||||||||
Corp. | 6.625% due 10/15/25 (Å) | 82 | 86 | ||||||||
6.500% due 05/15/19 | 1,645 | 428 | North American Lifting Holdings, Inc. | ||||||||
6.250% due 11/01/19 | 920 | 216 | 1st Lien Term Loan | ||||||||
Linxens France SA 2nd Lien Term Loan | 5.500% due 11/27/20 (Ê) | 983 | 877 | ||||||||
1.000% due 07/15/23 (Å)(v) | 1,840 | 1,812 | North American Lifting Holdings, Inc. | ||||||||
Lonestar Resources America, Inc. | Covenant-Lite 2nd Lien Term Loan | ||||||||||
8.750% due 04/15/19 (Þ) | 1,010 | 674 | 10.000% due 11/27/21 (Ê) | 250 | 224 | ||||||
LTS Buyer LLC 2nd Lien Term Loan | North Atlantic Trading Co., Inc. 1st Lien | ||||||||||
8.000% due 04/01/21 (Ê) | 1,510 | 1,467 | Term Loan B | ||||||||
M/A-COM Technology Solutions | 7.750% due 01/13/20 (Ê) | 2,505 | 2,473 | ||||||||
Holdings, Inc. Term Loan | Novitex Acquisition Term Loan B2 | ||||||||||
4.500% due 05/08/21 (Ê) | 630 | 632 | 7.500% due 07/07/20 (Ê) | 247 | 232 | ||||||
MacDermid, Inc. 1st Lien Term Loan B2 | NRG Energy, Inc. | ||||||||||
4.750% due 06/07/20 (Ê) | 1,985 | 1,916 | 6.250% due 07/15/22 | 1,500 | 1,380 | ||||||
MCC Iowa LLC Term Loan H | 6.625% due 03/15/23 | 2,440 | 2,269 | ||||||||
3.250% due 01/29/21 (Ê) | 1,489 | 1,463 | Nuance Communications, Inc. | ||||||||
Meccanica Holdings USA, Inc. | 5.375% due 08/15/20 (Þ) | 5,950 | 6,069 | ||||||||
6.250% due 07/15/19 (Þ) | 965 | 1,039 | Numericable US LLC 1st Lien Term | ||||||||
Loan B1 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 331
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
4.500% due 05/21/20 (Ê) | 198 | 195 | 10.250% due 07/01/20 (Ê) | 500 | 493 | ||||||
Numericable US LLC 1st Lien Term | PSPC Escrow Corp. | ||||||||||
Loan B2 | 6.000% due 02/01/23 (Þ) | 810 | 734 | ||||||||
4.500% due 05/21/20 (Ê) | 171 | 169 | Series REGS | ||||||||
Numericable US LLC Term Loan | 6.000% due 02/01/23 | 1,495 | 1,355 | ||||||||
1.000% due 01/31/23(v) | 500 | 494 | Qualitytech, LP/QTS Finance Corp. | ||||||||
NVA Holdings, Inc. 2nd Lien Term Loan | Series WI | ||||||||||
8.000% due 08/14/22 (Ê) | 250 | 247 | 5.875% due 08/01/22 | 1,890 | 1,942 | ||||||
Oasis Petroleum, Inc. | Quincy Newspapers, Inc. Term Loan B | ||||||||||
6.875% due 01/15/23 | 1,920 | 1,661 | 1.000% due 10/13/22 (v) | 500 | 495 | ||||||
Ocwen Loan Servicing LLC Term Loan B | Range Resources Corp. | ||||||||||
5.500% due 02/15/18 (Ê) | 1,140 | 1,140 | 4.875% due 05/15/25 (Þ) | 1,475 | 1,320 | ||||||
Opal Acquisition, Inc. | RCN Telecom Services LLC / RCN | ||||||||||
8.875% due 12/15/21 (Þ) | 3,500 | 3,111 | Capital Corp. | ||||||||
Optima Specialty Steel, Inc. | 8.500% due 08/15/20 (Þ) | 3,996 | 4,201 | ||||||||
12.500% due 12/15/16 (Þ) | 2,030 | 1,807 | Real Alloy Holding, Inc. | ||||||||
12.000% due 12/30/16 (Å) | 3,700 | 3,358 | 10.000% due 01/15/19 (Þ) | 5,080 | 5,182 | ||||||
Optimas OE Solutions Holding LLC / | Renaissance Learning, Inc. Term Loan | ||||||||||
Optimas OE Solutions, Inc. | 4.500% due 04/09/21 (Ê) | 985 | 951 | ||||||||
8.625% due 06/01/21 (Þ) | 2,770 | 2,631 | Rent-A-Center, Inc. | ||||||||
P2 Newco Acquisition Inc. Covenant- | 6.625% due 11/15/20 | 2,250 | 2,115 | ||||||||
Lite 2nd Lien Term Loan | 4.750% due 05/01/21 | 370 | 303 | ||||||||
9.500% due 10/22/21 (Ê) | 750 | 741 | RentPath, Inc. Covenant-Lite 1st Lien | ||||||||
Party City Holdings, Inc. | Term Loan | ||||||||||
6.125% due 08/15/23 (Þ) | 1,930 | 1,988 | 6.250% due 12/17/21 (Ê) | 1,985 | 1,760 | ||||||
Patterson Medical Holdings Inc. 2nd | Rex Energy Corp. | ||||||||||
Lien Term Loan | 8.875% due 12/01/20 | 160 | 80 | ||||||||
8.750% due 08/14/23 | 3,490 | 3,438 | Series WI | ||||||||
Peabody Energy Corp. | 6.250% due 08/01/22 | 2,340 | 959 | ||||||||
6.250% due 11/15/21 | 6,020 | 798 | Reynolds Group Issuer, Inc. / Reynolds | ||||||||
Pelican Products, Inc. Covenant-Lite | Group Issuer LLC | ||||||||||
Term Loan | 5.750% due 10/15/20 | 2,065 | 2,148 | ||||||||
5.250% due 04/11/20 (Ê) | 992 | 978 | Reynolds Group Issuer, Inc. / Reynolds | ||||||||
PetSmart, Inc. Term Loan B | Group Issuer LLC / Reynolds Group | ||||||||||
4.250% due 03/10/22 (Ê) | 1,995 | 1,994 | Issuer Lu | ||||||||
PFS Acquisition LLC 2nd Lien Term | 6.875% due 02/15/21 | 5 | 5 | ||||||||
Loan | 8.250% due 02/15/21 | 1,000 | 1,039 | ||||||||
8.250% due 01/31/22 (Ê) | 7,390 | 5,493 | |||||||||
PGX Holdings, Inc. Covenant-Lite 1st | Rite Aid Corp. | ||||||||||
Lien Term Loan | 6.125% due 04/01/23 (Þ) | 1,125 | 1,212 | ||||||||
5.750% due 08/21/20 (Ê) | 479 | 476 | Riverbed Technology, Inc. Term Loan B | ||||||||
PharMEDium Healthcare Corp. | 6.000% due 04/27/22 (Ê) | 1,990 | 1,990 | ||||||||
Covenant-Lite 2nd Lien Term Loan | Roundy's Supermarkets, Inc. Covenant- | ||||||||||
7.750% due 01/28/22 (Ê) | 2,770 | 2,776 | Lite 1st Lien Term Loan B | ||||||||
5.750% due 03/03/21 (Ê) | 967 | 789 | |||||||||
PHI, Inc. | Rovi Solutions Corp. Syndicated Loans | ||||||||||
5.250% due 03/15/19 | 1,850 | 1,637 | Covenant-Lite Term Loan B | ||||||||
Pilgrim's Pride Corp. | 3.750% due 07/02/21 (Ê) | 988 | 922 | ||||||||
5.750% due 03/15/25 (Þ) | 1,480 | 1,513 | RP Crown Parent LLC Term Loan | ||||||||
Pilot Travel Centers LLC Term Loan B | 6.000% due 12/21/18 (Ê) | 983 | 898 | ||||||||
4.250% due 10/03/21 (Ê) | 1,410 | 1,413 | |||||||||
Pinnacle Foods Finance LLC / Pinnacle | RPI Finance Trust Term Loan B4 | ||||||||||
Foods Finance Corp. | 3.500% due 12/11/20 | 993 | 989 | ||||||||
4.875% due 05/01/21 | 1,400 | 1,410 | RR Donnelley & Sons Co. | ||||||||
Pipeline Supply and Service LLC Term | 6.000% due 04/01/24 | 1,700 | 1,558 | ||||||||
Loan B | Sabine Pass Liquefaction LLC | ||||||||||
5.500% due 01/28/20 (Ê) | 492 | 394 | 5.625% due 02/01/21 | 5,467 | 5,426 | ||||||
Plastipak Holdings, Inc. | 5.625% due 04/15/23 | 145 | 141 | ||||||||
6.500% due 10/01/21 (Þ) | 1,180 | 1,168 | 5.625% due 03/01/25 (Þ) | 345 | 331 | ||||||
Post Holdings, Inc. | Scientific Games International, Inc. | ||||||||||
6.000% due 12/15/22 (Þ) | 1,405 | 1,412 | 6.250% due 09/01/20 | 2,740 | 1,904 | ||||||
7.750% due 03/15/24 (Þ) | 865 | 921 | 7.000% due 01/01/22 (Þ) | 1,700 | 1,708 | ||||||
Preferred Proppants LLC Term Loan | Scientific Games International, Inc. | ||||||||||
6.750% due 08/12/20 | 495 | 282 | Covenant-Lite Term Loan B1 | ||||||||
Pre-Paid Legal Services, Inc. 2nd Lien | 6.000% due 10/18/20 (Ê) | 2,211 | 2,157 | ||||||||
Term Loan | Sealed Air Corp. |
See accompanying notes which are an integral part of the financial statements.
332 Russell Global Opportunistic Credit Fund
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
4.500% due 09/15/23 (Þ) | 1,775 | 2,050 | TCH-2 Holdings LLC Covenant-Lite 1st | ||||||||
Series REGS | Lien Term Loan | ||||||||||
4.500% due 09/15/23 | 2,190 | 2,529 | 5.500% due 05/12/21 (Ê) | 1,388 | 1,376 | ||||||
Seaworld Parks & Entertainment, Inc. | TCH-2 Holdings LLC Covenant-Lite 2nd | ||||||||||
Term Loan B3 | Lien Term Loan | ||||||||||
4.000% due 05/14/20 | 444 | 428 | 8.750% due 11/12/21 (Ê) | 500 | 490 | ||||||
Sequa Corp. | Tempur Sealy International, Inc. | ||||||||||
7.000% due 12/15/17 (Þ) | 2,095 | 1,058 | 6.875% due 12/15/20 | 305 | 326 | ||||||
Shale-Inland Holdings LLC / Shale- | 5.625% due 10/15/23 (Þ) | 715 | 749 | ||||||||
Inland Finance Corp. | Tenet Healthcare Corp. | ||||||||||
8.750% due 11/15/19 (Þ) | 2,030 | 1,512 | 4.375% due 10/01/21 | 2,470 | 2,464 | ||||||
Signode Industrial Group US, Inc. | 8.125% due 04/01/22 | 8,000 | 8,460 | ||||||||
Covenant-Lite 1st Lien Term Loan B | Series WI | ||||||||||
3.750% due 05/01/21 (Ê) | 1,089 | 1,067 | 6.750% due 06/15/23 | 1,320 | 1,310 | ||||||
Simmons Foods, Inc. | TerraForm Power Operating LLC | ||||||||||
7.875% due 10/01/21 (Þ) | 460 | 430 | 5.875% due 02/01/23 (Þ) | 2,395 | 2,209 | ||||||
Sinclair Television Group, Inc. | Tesoro Logistics, LP / Tesoro Logistics | ||||||||||
5.375% due 04/01/21 | 1,765 | 1,769 | Finance Corp. | ||||||||
6.375% due 11/01/21 | 665 | 685 | 5.500% due 10/15/19 (Þ) | 1,890 | 1,956 | ||||||
Sirius Computer Solutions, Inc. 1st Lien | The Active Network, Inc. 1st Lien Term | ||||||||||
Term Loan | Loan | ||||||||||
1.000% due 10/08/22 (v) | 500 | 493 | 5.500% due 11/15/20 (Ê) | 1,234 | 1,220 | ||||||
SIRVA Worldwide, Inc. Term Loan | Time, Inc. | ||||||||||
7.500% due 03/27/19 (Ê) | 1,907 | 1,821 | 5.750% due 04/15/22 (Þ) | 2,555 | 2,555 | ||||||
Six Flags Entertainment Corp. | T-Mobile USA, Inc. | ||||||||||
5.250% due 01/15/21 (Þ) | 3,310 | 3,434 | 5.250% due 09/01/18 | 270 | 276 | ||||||
SourceHOV LLC 1st Lien Term Loan B | 6.542% due 04/28/20 | 130 | 133 | ||||||||
7.750% due 10/31/19 (Ê) | 981 | 883 | 6.633% due 04/28/21 | 1,015 | 1,051 | ||||||
Spectrum Brands, Inc. | 6.000% due 03/01/23 | 1,805 | 1,799 | ||||||||
6.625% due 11/15/22 | 500 | 546 | TMS International Corp. | ||||||||
Spectrum Brands, Inc. Term Loan | 7.625% due 10/15/21 (Þ) | 2,420 | 2,214 | ||||||||
3.750% due 06/09/22 | 846 | 849 | Tower Development Corp. Term Loan | ||||||||
Sprint Communications, Inc. | 6.750% due 01/02/17 (Å) | 2,567 | 2,567 | ||||||||
6.000% due 11/15/22 | 1,335 | 1,141 | Toys "R" Us Property Co. I LLC Term | ||||||||
Sprint Corp. | Loan B | ||||||||||
7.625% due 02/15/25 | 1,350 | 1,198 | 6.000% due 08/21/19 (Ê) | 1,665 | 1,551 | ||||||
Series WI | TransDigm, Inc. | ||||||||||
7.250% due 09/15/21 | 2,785 | 2,559 | 5.500% due 10/15/20 | 4,280 | 4,291 | ||||||
Staples, Inc. Term Loan B | 6.000% due 07/15/22 | 710 | 717 | ||||||||
1.000% due 04/24/21 (Ê)(v) | 500 | 497 | Tribune Media Co. Term Loan | ||||||||
Steak N' Shake Operations, Inc. Term | 3.750% due 12/27/20 (Ê) | 499 | 497 | ||||||||
Loan | Tronox Finance LLC | ||||||||||
4.750% due 03/19/21 (Ê) | 739 | 731 | 6.375% due 08/15/20 | 1,675 | 1,193 | ||||||
SterlingBackcheck, Inc. 2nd Lien Term | 7.500% due 03/15/22 (Þ) | 1,495 | 1,058 | ||||||||
Loan | TWCC Holding Corp. 2nd Lien | ||||||||||
8.750% due 06/08/23 | 3,960 | 3,930 | Covenant-Lite Term Loan | ||||||||
Stone Energy Corp. | 7.000% due 06/26/20 (Ê) | 1,000 | 998 | ||||||||
7.500% due 11/15/22 | 1,395 | 900 | United Airlines, Inc. Term Loan B | ||||||||
Suburban Propane Partners, LP/ | 3.250% due 04/01/19 (Ê) | 1,985 | 1,974 | ||||||||
Suburban Energy Finance Corp. | United Rentals NA, Inc. | ||||||||||
7.375% due 08/01/21 | 1,440 | 1,512 | 7.625% due 04/15/22 | 1,645 | 1,785 | ||||||
5.750% due 03/01/25 | 1,025 | 987 | |||||||||
Summit Materials LLC / Summit | United States Treasury Notes | ||||||||||
2.250% due 11/15/24 | 1,500 | 1,516 | |||||||||
Materials Finance Corp. | US Foods, Inc. | ||||||||||
Series WI | |||||||||||
6.125% due 07/15/23 | 2,795 | 2,781 | 8.500% due 06/30/19 | 12,780 | 13,291 | ||||||
SunCoke Energy Partners, LP / SunCoke | UTEX Industries, Inc. Covenant-Lite 1st | ||||||||||
Energy Partners Finance Corp. | Lien Term Loan B | ||||||||||
7.375% due 02/01/20 (Þ) | 2,750 | 2,282 | 5.000% due 05/22/21 (Ê) | 1,185 | 1,005 | ||||||
Sungard Availability Services Capital, | UTEX Industries, Inc. Covenant-Lite | ||||||||||
Inc. Covenant-Lite 1st Lien Term | 2nd Lien Term Loan B | ||||||||||
8.250% due 05/22/22 (Ê) | 1,910 | 1,518 | |||||||||
Loan B | Utility Services Associates, Inc. 1st Lien | ||||||||||
6.000% due 03/31/19 (Ê) | 1,324 | 1,154 | Term Loan B | ||||||||
Surgical Care Affiliates, Inc. | 8.000% due 10/18/19 (Ê) | 744 | 742 | ||||||||
6.000% due 04/01/23 (Þ) | 1,360 | 1,367 | Varsity Brands, Inc. 1st Lien Term Loan |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 333
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
5.000% due 12/11/21 | 1,241 | 1,241 | |||||||||
Verdesion Life Sciences LLC Term Loan | Virgin Islands, British - 0.2% | ||||||||||
6.000% due 07/01/20 (Ê) | 1,448 | 1,437 | Sinochem Overseas Capital Co., Ltd. | ||||||||
Vertellus Specialties, Inc. Term Loan B | 4.500% due 11/12/20 (Þ) | 3,000 | 3,157 | ||||||||
10.500% due 10/31/19 (Ê) | 371 | 314 | |||||||||
ViaSat, Inc. | Total Long-Term Fixed Income | ||||||||||
6.875% due 06/15/20 | 2,005 | 2,100 | Investments | ||||||||
Vince LLC 1st Lien Term Loan B | (cost $1,674,764) | 1,545,934 | |||||||||
5.750% due 11/27/19 (Ê) | 257 | 247 | |||||||||
Visant Corp. Covenant-Lite Term Loan | Common Stocks - 0.0% | ||||||||||
7.000% due 09/23/21 (Ê) | 932 | 928 | United States - 0.0% | ||||||||
VWR Funding, Inc. | Educational Management(Æ)(Þ) | 4,460,190 | 14 | ||||||||
4.625% due 04/15/22 (Þ) | 2,475 | 2,598 | |||||||||
Walter Investment Management Corp. | Total Common Stocks | ||||||||||
Series WI | (cost $327) | 14 | |||||||||
7.875% due 12/15/21 | 1,805 | 1,462 | |||||||||
Washington Inventory Service 2nd Lien | |||||||||||
Term Loan | Preferred Stocks - 0.0% | ||||||||||
10.250% due 06/20/19 (Ê) | 2,600 | 2,522 | United States - 0.0% | ||||||||
Wayne Merger Sub LLC | Education Management Corp.(Æ) | 2,128 | 32 | ||||||||
8.250% due 08/01/23 (Þ) | 4,680 | 4,651 | |||||||||
Whiting Petroleum Corp. | Total Preferred Stocks | ||||||||||
Series WI | (cost $297) | 32 | |||||||||
6.250% due 04/01/23 | 1,505 | 1,400 | |||||||||
William Morris Endeavor Entertainment | Warrants & Rights - 0.0% | ||||||||||
LLC Covenant-Lite Term Loan | United States - 0.0% | ||||||||||
5.250% due 05/06/21 (Ê) | 1,481 | 1,477 | Educational Management Corp.(Æ) | ||||||||
WMG Acquisition Corp. | 2021 Warrants | 1,564,221 | — | ||||||||
6.750% due 04/15/22 (Þ) | 4,020 | 3,721 | |||||||||
Series REGS | Total Warrants & Rights | ||||||||||
6.250% due 01/15/21 | 3,456 | 3,876 | |||||||||
World Endurance Holdings Term Loan | (cost $—) | — | |||||||||
5.250% due 06/26/21 (Ê) | 992 | 984 | |||||||||
Zayo Group LLC / Zayo Capital, Inc. | Short-Term Investments - 10.0% | ||||||||||
6.000% due 04/01/23 (Þ) | 8,250 | 8,411 | Brazil - 0.1% | ||||||||
Zebra Technologies Corp. | Brazil Letras do Tesouro Nacional | ||||||||||
7.250% due 10/15/22 (Þ) | 3,440 | 3,754 | Series LTN | ||||||||
Zebra Technologies Corp. Term Loan | Zero coupon due 01/01/16 | BRL | 4,470 | 1,133 | |||||||
4.750% due 10/27/21 (Ê) | 1,793 | 1,803 | Colombia - 0.1% | ||||||||
ZF NA Capital, Inc. | Colombian TES | ||||||||||
4.500% due 04/29/22 (Þ) | 1,735 | 1,747 | Series B | ||||||||
583,699 | 7.250% due 06/15/16 | COP | 4,893,000 | 1,706 | |||||||
Venezuela, Bolivarian Republic of - 1.6% | Mexico - 0.1% | ||||||||||
Petroleos de Venezuela SA | Mexican Udibonos | ||||||||||
5.375% due 04/12/27 | 15,000 | 5,213 | Series S | ||||||||
Series REGS | 5.000% due 06/16/16 | MXN | 27,762 | 1,732 | |||||||
5.250% due 04/12/17 | 4,900 | 2,756 | Poland - 0.4% | ||||||||
8.500% due 11/02/17 | 4,000 | 2,430 | Poland Government Bond | ||||||||
9.000% due 11/17/21 | 5,000 | 2,064 | Series 0716 | ||||||||
6.000% due 05/16/24 | 13,000 | 4,664 | 0.010% due 07/25/16 | PLN | 26,760 | 6,848 | |||||
9.750% due 05/17/35 | 2,000 | 830 | Romania - 0.1% | ||||||||
5.500% due 04/12/37 | 9,000 | 3,078 | Romania Government Bond | ||||||||
Venezuela Government International | 4.750% due 08/29/16 | RON | 6,310 | 1,611 | |||||||
Bond | Ukraine - 0.2% | ||||||||||
Series REGS | Ukraine Government International Bond | ||||||||||
7.000% due 12/01/18 | 3,000 | 1,305 | Series REGS | ||||||||
7.750% due 10/13/19 | 7,000 | 2,765 | 6.250% due 06/17/16 | 4,800 | 3,720 | ||||||
12.750% due 08/23/22 | 1,000 | 475 | United States - 8.9% | ||||||||
11.950% due 08/05/31 | 5,000 | 2,250 | Russell U.S. Cash Management Fund | 144,929,160 | (8) | 144,929 | |||||
27,830 | United States Treasury Bills | ||||||||||
Viet Nam - 0.1% | 0.010% due 02/04/16 | 1,000 | 1,000 | ||||||||
Vietnam Government International Bond | 0.230% due 03/03/16 | 4,900 | 4,898 | ||||||||
6.750% due 01/29/20 (Þ) | 1,500 | 1,662 |
See accompanying notes which are an integral part of the financial statements.
334 Russell Global Opportunistic Credit Fund
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Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||
Principal | Fair | |||
Amount ($) | Value | |||
or Shares | $ | |||
Zero coupon due 04/07/16 | 5,500 | 5,496 | ||
156,323 | ||||
Venezuela, Bolivarian Republic of - 0.1% | ||||
Venezuela Government International | ||||
Bond | ||||
Series REGS | ||||
5.750% due 02/26/16 | 2,000 | 1,820 | ||
Total Short-Term Investments | ||||
(cost $175,631) | 174,893 | |||
Total Investments 98.4% | ||||
(identified cost $1,851,019) | 1,720,873 | |||
Other Assets and Liabilities, Net | ||||
- 1.6% | 28,275 | |||
Net Assets - 100.0% | 1,749,148 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 335
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Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
1.1% | ||||||||||||
1011778 BC ULC / New Red Finance, Inc. | 05/14/15 | 250,000 | 100.00 | 250 | 254 | |||||||
Berry Plastics Corp. | 09/16/15 | 82,000 | 100.00 | 82 | 86 | |||||||
Blue Coat Holdings, Inc. | 05/19/15 | 250,000 | 100.00 | 250 | 259 | |||||||
Building Materials Corp. of America | 09/22/15 | 163,000 | 100.00 | 163 | 173 | |||||||
Constellis Holdings LLC / Constellis Finance Corp. | 05/06/15 | 500,000 | 99.55 | 498 | 452 | |||||||
CPI Buyer LLC Covenant-Lite 2nd Lien Term Loan | 08/18/14 | 3,150,000 | 98.11 | 3,091 | 3,111 | |||||||
CPM Holdings, Inc. 2nd Lien Term Loan | 04/02/15 | 3,980,000 | 97.50 | 3,881 | 3,980 | |||||||
Ephios Bondco PLC | 07/23/15 | EUR | 1,050,000 | 108.89 | 1,143 | 1,207 | ||||||
FPC Holdings, Inc. 2nd Lien Term Loan | 05/23/13 | 2,000,000 | 98.00 | 1,960 | 1,920 | |||||||
Fresenius US Finance II, Inc. | 09/16/15 | 163,000 | 100.00 | 163 | 167 | |||||||
Frontier Communications Corp. | 09/11/15 | 33,000 | 100.00 | 33 | 34 | |||||||
Linxens France SA 2nd Lien Term Loan | 07/31/15 | 1,840,000 | 99.00 | 1,822 | 1,812 | |||||||
Mallinckrodt International Finance SA / Mallinckrodt CB LLC | 09/09/15 | 82,000 | 100.00 | 82 | 77 | |||||||
Neptune Finco Corp. | 09/25/15 | 82,000 | 100.00 | 82 | 86 | |||||||
Optima Specialty Steel, Inc. | 01/20/15 | 3,700,000 | 100.00 | 3,700 | 3,358 | |||||||
Tower Development Corp. Term Loan | 10/29/14 | 2,567,100 | 99.25 | 2,548 | 2,567 | |||||||
19,543 | ||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
United States 2 Year Treasury Note Futures | 76 | USD | 16,618 | 12/15 | (20 | ) | |
United States 5 Year Treasury Note Futures | 309 | USD | 37,010 | 12/15 | (109 | ) | |
United States 10 Year Treasury Note Futures | 92 | USD | 11,747 | 12/15 | 16 | ||
United States Treasury Long Bond Futures | 216 | USD | 33,790 | 12/15 | (57 | ) | |
United States Treasury Ultra Bond Futures | 5 | USD | 799 | 12/15 | (3 | ) | |
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | (173 | ) |
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Bank of Montreal | USD | 15,537 | EUR | 13,400 | 11/09/15 | (801 | ) | |
Bank of Montreal | EUR | 13,400 | USD | 14,656 | 11/09/15 | (80 | ) | |
Barclays | USD | 273 | BRL | 1,083 | 11/04/15 | 8 | ||
Barclays | USD | 1,019 | BRL | 3,931 | 11/04/15 | 1 | ||
Barclays | USD | 1,440 | BRL | 5,642 | 11/04/15 | 23 | ||
Barclays | USD | 1,624 | BRL | 6,267 | 11/04/15 | 1 | ||
Barclays | USD | 94 | COP | 269,821 | 11/17/15 | (1 | ) | |
Barclays | USD | 120 | COP | 349,200 | 11/17/15 | — | ||
Barclays | USD | 120 | COP | 346,800 | 11/17/15 | — | ||
Barclays | USD | 120 | COP | 349,680 | 11/17/15 | 1 | ||
Barclays | USD | 120 | COP | 351,840 | 11/17/15 | 1 | ||
Barclays | USD | 120 | COP | 346,800 | 11/17/15 | (1 | ) | |
Barclays | USD | 391 | COP | 1,136,471 | 11/17/15 | 1 | ||
Barclays | USD | 812 | COP | 2,365,260 | 11/17/15 | 3 | ||
Barclays | USD | 1,089 | IDR | 15,015,850 | 11/16/15 | 4 | ||
Barclays | USD | 388 | INR | 25,379 | 11/16/15 | (1 | ) | |
Barclays | USD | 766 | INR | 50,917 | 11/16/15 | 11 | ||
Barclays | USD | 3,874 | MYR | 16,328 | 01/15/16 | (86 | ) | |
Barclays | USD | 347 | RUB | 21,744 | 11/16/15 | (8 | ) | |
Barclays | USD | 347 | RUB | 21,761 | 11/16/15 | (8 | ) | |
Barclays | USD | 394 | RUB | 24,680 | 11/16/15 | (9 | ) | |
Barclays | USD | 4,432 | THB | 161,570 | 11/16/15 | 108 |
See accompanying notes which are an integral part of the financial statements.
336 Russell Global Opportunistic Credit Fund
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Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Barclays | BRL | 1,083 | USD | 281 | 11/04/15 | — | |
Barclays | BRL | 3,931 | USD | 964 | 11/04/15 | (55 | ) |
Barclays | BRL | 5,642 | USD | 1,462 | 11/04/15 | (1 | ) |
Barclays | BRL | 6,267 | USD | 1,537 | 11/04/15 | (88 | ) |
Barclays | BRL | 5,642 | USD | 1,425 | 12/02/15 | (24 | ) |
Barclays | COP | 1,566,828 | USD | 536 | 11/17/15 | (4 | ) |
Barclays | COP | 7,952,562 | USD | 2,726 | 11/17/15 | (15 | ) |
Barclays | HUF | 183,859 | USD | 674 | 11/16/15 | 24 | |
Barclays | IDR | 5,142,884 | USD | 375 | 11/16/15 | 1 | |
Barclays | MXN | 19,086 | USD | 1,145 | 11/17/15 | (10 | ) |
Barclays | NGN | 178,925 | USD | 850 | 11/04/15 | (48 | ) |
Barclays | PEN | 3,286 | USD | 1,012 | 11/16/15 | 14 | |
Barclays | PHP | 12,191 | USD | 264 | 11/16/15 | 4 | |
Barclays | RUB | 34,177 | USD | 544 | 11/16/15 | 11 | |
Barclays | ZAR | 2,070 | USD | 153 | 11/16/15 | 4 | |
Citigroup | USD | 1,899 | NGN | 378,393 | 11/04/15 | — | |
Citigroup | NGN | 465,685 | USD | 2,181 | 03/09/16 | 91 | |
Citigroup | NGN | 147,270 | USD | 676 | 04/07/16 | 28 | |
Citigroup | PLN | 4,173 | USD | 1,076 | 11/16/15 | (3 | ) |
HSBC | USD | 1,440 | BRL | 5,642 | 11/04/15 | 23 | |
HSBC | USD | 597 | NGN | 155,229 | 03/09/16 | 100 | |
HSBC | USD | 2,314 | THB | 83,245 | 11/16/15 | 25 | |
HSBC | BRL | 5,642 | USD | 1,462 | 11/04/15 | (1 | ) |
HSBC | BRL | 5,642 | USD | 1,426 | 12/02/15 | (23 | ) |
HSBC | NGN | 199,468 | USD | 940 | 11/04/15 | (61 | ) |
JPMorgan Chase | USD | 1,440 | BRL | 5,642 | 11/04/15 | 23 | |
JPMorgan Chase | USD | 1,624 | BRL | 6,267 | 11/04/15 | 1 | |
JPMorgan Chase | USD | 120 | COP | 350,400 | 11/17/15 | 1 | |
JPMorgan Chase | USD | 839 | COP | 2,436,383 | 11/17/15 | — | |
JPMorgan Chase | USD | 388 | INR | 25,379 | 11/16/15 | (1 | ) |
JPMorgan Chase | USD | 766 | INR | 50,917 | 11/16/15 | 11 | |
JPMorgan Chase | USD | 662 | RUB | 41,033 | 11/16/15 | (22 | ) |
JPMorgan Chase | USD | 149 | THB | 5,416 | 11/16/15 | 4 | |
JPMorgan Chase | USD | 1,420 | TWD | 45,745 | 11/05/15 | (11 | ) |
JPMorgan Chase | USD | 2,972 | TWD | 96,338 | 11/05/15 | (4 | ) |
JPMorgan Chase | USD | 1,490 | TWD | 48,082 | 11/16/15 | (9 | ) |
JPMorgan Chase | BRL | 5,642 | USD | 1,462 | 11/04/15 | (1 | ) |
JPMorgan Chase | BRL | 6,267 | USD | 1,537 | 11/04/15 | (88 | ) |
JPMorgan Chase | BRL | 5,642 | USD | 1,425 | 12/02/15 | (24 | ) |
JPMorgan Chase | HUF | 56,857 | USD | 209 | 11/16/15 | 7 | |
JPMorgan Chase | HUF | 368,471 | USD | 1,330 | 11/16/15 | 27 | |
JPMorgan Chase | IDR | 4,534,200 | USD | 330 | 11/16/15 | — | |
JPMorgan Chase | INR | 29,386 | USD | 449 | 11/16/15 | 1 | |
JPMorgan Chase | RUB | 34,177 | USD | 544 | 11/16/15 | 10 | |
JPMorgan Chase | TWD | 50,149 | USD | 1,580 | 11/05/15 | 35 | |
JPMorgan Chase | TWD | 100,442 | USD | 3,165 | 11/05/15 | 71 | |
JPMorgan Chase | TWD | 13,163 | USD | 402 | 11/16/15 | (3 | ) |
JPMorgan Chase | TWD | 11,646 | USD | 360 | 01/28/16 | 1 | |
JPMorgan Chase | TWD | 96,338 | USD | 2,971 | 01/28/16 | 4 | |
JPMorgan Chase | ZAR | 2,070 | USD | 153 | 11/16/15 | 4 | |
Standard Chartered | USD | 147 | BRL | 584 | 11/04/15 | 4 | |
Standard Chartered | USD | 228 | BRL | 878 | 11/04/15 | — | |
Standard Chartered | USD | 1,440 | BRL | 5,642 | 11/04/15 | 23 | |
Standard Chartered | USD | 1,624 | BRL | 6,267 | 11/04/15 | 1 | |
Standard Chartered | USD | 26 | COP | 74,183 | 11/17/15 | — | |
Standard Chartered | USD | 1,088 | IDR | 15,015,850 | 11/16/15 | 4 | |
Standard Chartered | USD | 766 | INR | 50,917 | 11/16/15 | 11 | |
Standard Chartered | USD | 840 | MXN | 13,865 | 11/17/15 | (1 | ) |
Standard Chartered | USD | 596 | NGN | 155,228 | 03/09/16 | 101 | |
Standard Chartered | USD | 597 | NGN | 155,228 | 03/09/16 | 100 | |
Standard Chartered | USD | 950 | NGN | 239,400 | 04/07/16 | 103 | |
Standard Chartered | USD | 2,362 | PLN | 8,891 | 11/16/15 | (62 | ) |
Standard Chartered | USD | 910 | RUB | 58,317 | 11/16/15 | — |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 337
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Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Standard Chartered | USD | 978 | RUB | 63,261 | 11/16/15 | 9 | |
Standard Chartered | USD | 559 | THB | 20,361 | 11/16/15 | 13 | |
Standard Chartered | USD | 1,375 | THB | 49,411 | 11/16/15 | 13 | |
Standard Chartered | USD | 2,617 | TRY | 7,748 | 11/16/15 | 29 | |
Standard Chartered | USD | 270 | TWD | 8,508 | 11/05/15 | (8 | ) |
Standard Chartered | BRL | 584 | USD | 151 | 11/04/15 | — | |
Standard Chartered | BRL | 878 | USD | 216 | 11/04/15 | (12 | ) |
Standard Chartered | BRL | 5,642 | USD | 1,462 | 11/04/15 | (1 | ) |
Standard Chartered | BRL | 6,267 | USD | 1,538 | 11/04/15 | (87 | ) |
Standard Chartered | BRL | 5,642 | USD | 1,425 | 12/02/15 | (24 | ) |
Standard Chartered | CLP | 513,491 | USD | 752 | 11/16/15 | 11 | |
Standard Chartered | COP | 451,040 | USD | 154 | 11/17/15 | (1 | ) |
Standard Chartered | COP | 7,952,562 | USD | 2,732 | 11/17/15 | (9 | ) |
Standard Chartered | IDR | 3,897,693 | USD | 285 | 11/16/15 | 1 | |
Standard Chartered | INR | 19,685 | USD | 301 | 11/16/15 | — | |
Standard Chartered | MXN | 5,766 | USD | 347 | 11/17/15 | (2 | ) |
Standard Chartered | MXN | 7,588 | USD | 455 | 11/17/15 | (4 | ) |
Standard Chartered | NGN | 92,130 | USD | 370 | 04/07/16 | (35 | ) |
Standard Chartered | PLN | 4,230 | USD | 1,105 | 11/16/15 | 11 | |
Standard Chartered | RON | 3,318 | USD | 845 | 11/16/15 | 22 | |
Standard Chartered | RUB | 34,177 | USD | 544 | 11/16/15 | 11 | |
Standard Chartered | TRY | 531 | USD | 180 | 11/16/15 | (1 | ) |
Standard Chartered | TWD | 5,809 | USD | 178 | 11/16/15 | (1 | ) |
Standard Chartered | TWD | 10,679 | USD | 330 | 01/28/16 | 1 | |
Standard Chartered | ZAR | 2,070 | USD | 153 | 11/16/15 | 4 | |
Standard Chartered | ZAR | 6,908 | USD | 510 | 11/16/15 | 12 | |
Standard Chartered | ZAR | 9,517 | USD | 710 | 11/16/15 | 24 | |
State Street | USD | 818 | EUR | 747 | 11/04/15 | 3 | |
State Street | CHF | 211 | USD | 218 | 11/04/15 | 4 | |
State Street | EUR | 1,322 | USD | 1,501 | 11/04/15 | 47 | |
State Street | EUR | 1,625 | USD | 1,848 | 11/04/15 | 61 | |
State Street | EUR | 1,838 | USD | 2,035 | 11/04/15 | 13 | |
State Street | EUR | 152,929 | USD | 171,729 | 11/04/15 | 3,558 | |
State Street | EUR | 20,100 | USD | 22,873 | 11/13/15 | 768 | |
State Street | GBP | 208 | USD | 319 | 11/04/15 | (2 | ) |
State Street | GBP | 1,173 | USD | 1,813 | 11/04/15 | 5 | |
State Street | GBP | 23,518 | USD | 35,679 | 11/04/15 | (576 | ) |
UBS | USD | 1,441 | BRL | 5,642 | 11/04/15 | 23 | |
UBS | USD | 1,624 | BRL | 6,267 | 11/04/15 | 1 | |
UBS | USD | 450 | BRL | 1,745 | 12/02/15 | (2 | ) |
UBS | USD | 388 | INR | 25,379 | 11/16/15 | (1 | ) |
UBS | USD | 58 | MXN | 955 | 11/17/15 | — | |
UBS | USD | 190 | MYR | 819 | 01/15/16 | — | |
UBS | USD | 260 | PEN | 856 | 11/16/15 | — | |
UBS | USD | 1,650 | PLN | 6,358 | 11/16/15 | (5 | ) |
UBS | USD | 593 | RUB | 37,102 | 11/16/15 | (14 | ) |
UBS | USD | 2,612 | TRY | 7,748 | 11/16/15 | 35 | |
UBS | USD | 550 | ZAR | 7,610 | 11/16/15 | (1 | ) |
UBS | BRL | 5,642 | USD | 1,462 | 11/04/15 | (1 | ) |
UBS | BRL | 6,267 | USD | 1,538 | 11/04/15 | (87 | ) |
UBS | BRL | 5,642 | USD | 1,426 | 12/02/15 | (23 | ) |
UBS | COP | 1,044,360 | USD | 360 | 11/17/15 | (1 | ) |
UBS | RUB | 34,177 | USD | 544 | 11/16/15 | 11 | |
UBS | THB | 20,693 | USD | 580 | 11/16/15 | (2 | ) |
UBS | THB | 45,868 | USD | 1,290 | 11/16/15 | 1 | |
UBS | TRY | 2,252 | USD | 770 | 11/16/15 | 1 | |
UBS | ZAR | 2,070 | USD | 153 | 11/16/15 | 4 | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 3,276 |
See accompanying notes which are an integral part of the financial statements.
338 Russell Global Opportunistic Credit Fund
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Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Credit Default Swap Contracts | |||||||||||
Amounts in thousands | |||||||||||
Corporate Issues | |||||||||||
Implied | Fund (Pays)/ | ||||||||||
Credit | Receives | Termination | Fair Value | ||||||||
Reference Entity | Counterparty | Spread | Notional Amount | Fixed Rate | Date | $ | |||||
iTraxx Europe Index | Morgan Stanley | 3.024 | % | EUR | 17,000 | 5.000 | % | 12/20/20 | 1,796 | ||
Total Fair Value on Open Corporate Issues Premiums Paid (Received) - $1,463 | 1,796 | ||||||||||
Credit Indices | |||||||||||
Fund (Pays)/ | |||||||||||
Receives | Termination | Fair Value | |||||||||
Reference Entity | Counterparty | Notional Amount | Fixed Rate | Date | $ | ||||||
CDX Emerging Markets Index | Morgan Stanley | USD | 37,200 | 1.000 | % | 12/20/20 | (3,754 | ) | |||
CDX NA High Yield Index | Morgan Stanley | USD | 36,000 | 5.000 | % | 12/20/20 | 1,358 | ||||
Total Fair Value on Open Credit Indices Premiums Paid (Received) - ($3,892) | (2,396 | ) | |||||||||
Total Fair Value on Open Credit Default Swap Contracts Premiums Paid (Received) - ($2,429) (å) | (600 | ) |
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Long-Term Fixed Income Investments | ||||||||||||
Argentina | — | 17,350 | — | 17,350 | 1.0 | |||||||
Armenia | — | 988 | — | 988 | 0.1 | |||||||
Azerbaijan | — | 1,726 | — | 1,726 | 0.1 | |||||||
Belarus | — | 1,340 | — | 1,340 | 0.1 | |||||||
Belgium | — | 1,562 | — | 1,562 | 0.1 | |||||||
Brazil | — | 43,842 | — | 43,842 | 2.5 | |||||||
Canada | — | 34,984 | — | 34,984 | 2.0 | |||||||
Cayman Islands | — | 7,582 | — | 7,582 | 0.4 | |||||||
Chile | — | 9,232 | — | 9,232 | 0.5 | |||||||
Colombia | — | 32,035 | — | 32,035 | 1.8 | |||||||
Costa Rica | — | 5,368 | — | 5,368 | 0.3 | |||||||
Croatia | — | 13,691 | — | 13,691 | 0.8 | |||||||
Dominican Republic | — | 10,450 | — | 10,450 | 0.6 | |||||||
Egypt | — | 8,064 | — | 8,064 | 0.5 | |||||||
El Salvador | — | 7,922 | — | 7,922 | 0.4 | |||||||
Ethiopia | — | 928 | — | 928 | —* | |||||||
France | — | 30,993 | — | 30,993 | 1.8 | |||||||
Gabon | — | 430 | — | 430 | —* | |||||||
Germany | — | 17,444 | — | 17,444 | 1.0 | |||||||
Ghana | — | 5,349 | — | 5,349 | 0.3 | |||||||
Greece | — | 5,627 | — | 5,627 | 0.3 | |||||||
Honduras | — | 3,143 | — | 3,143 | 0.2 | |||||||
Hong Kong | — | 637 | — | 637 | —* | |||||||
Hungary | — | 30,908 | — | 30,908 | 1.8 | |||||||
Indonesia | — | 45,117 | — | 45,117 | 2.6 | |||||||
Iraq | — | 2,198 | — | 2,198 | 0.1 | |||||||
Ireland | — | 23,049 | — | 23,049 | 1.3 | |||||||
Israel | — | 7,143 | — | 7,143 | 0.4 | |||||||
Italy | — | 10,114 | — | 10,114 | 0.6 | |||||||
Ivory Coast | — | 1,335 | — | 1,335 | 0.1 | |||||||
Jersey | — | 5,308 | — | 5,308 | 0.3 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 339
Russell Investment Company
Russell Global Opportunistic Credit Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Kazakhstan | — | 15,119 | — | 15,119 | 0.9 | ||||||
Kenya | — | 2,863 | — | 2,863 | 0.2 | ||||||
Lebanon | — | 3,301 | — | 3,301 | 0.2 | ||||||
Lithuania | — | 4,495 | — | 4,495 | 0.3 | ||||||
Luxembourg | — | 80,393 | — | 80,393 | 4.6 | ||||||
Malaysia | — | 27,702 | — | 27,702 | 1.6 | ||||||
Mexico | — | 57,520 | — | 57,520 | 3.3 | ||||||
Mongolia | — | 3,922 | — | 3,922 | 0.2 | ||||||
Morocco | — | 2,260 | — | 2,260 | 0.1 | ||||||
Netherlands | — | 42,578 | — | 42,578 | 2.4 | ||||||
Nigeria | — | 985 | — | 985 | 0.1 | ||||||
Pakistan | — | 12,606 | — | 12,606 | 0.7 | ||||||
Panama | — | 10,378 | — | 10,378 | 0.6 | ||||||
Paraguay | — | 5,249 | — | 5,249 | 0.3 | ||||||
Peru | — | 8,465 | — | 8,465 | 0.5 | ||||||
Philippines | — | 8,092 | — | 8,092 | 0.5 | ||||||
Poland | — | 26,950 | — | 26,950 | 1.5 | ||||||
Romania | — | 10,723 | — | 10,723 | 0.6 | ||||||
Russia | — | 15,920 | — | 15,920 | 0.9 | ||||||
Serbia | — | 7,200 | — | 7,200 | 0.4 | ||||||
Slovenia | — | 4,498 | — | 4,498 | 0.3 | ||||||
South Africa | — | 40,710 | — | 40,710 | 2.3 | ||||||
Sri Lanka | — | 9,240 | — | 9,240 | 0.5 | ||||||
Thailand | — | 14,008 | — | 14,008 | 0.8 | ||||||
Turkey | — | 45,405 | — | 45,405 | 2.6 | ||||||
Ukraine | — | 20,141 | — | 20,141 | 1.1 | ||||||
United Kingdom | — | 63,004 | — | 63,004 | 3.6 | ||||||
United States | — | 577,774 | 5,925 | 583,699 | 33.4 | ||||||
Venezuela, Bolivarian Republic of | — | 27,830 | — | 27,830 | 1.6 | ||||||
Viet Nam | — | 1,662 | — | 1,662 | 0.1 | ||||||
Virgin Islands, British | — | 3,157 | — | 3,157 | 0.2 | ||||||
Common Stocks | — | — | 14 | 14 | —* | ||||||
Preferred Stocks | 32 | — | — | 32 | —* | ||||||
Warrants & Rights | — | — | — | — | — | ||||||
Short-Term Investments | — | 174,893 | — | 174,893 | 10.0 | ||||||
Total Investments | 32 | 1,714,902 | 5,939 | 1,720,873 | 98.4 | ||||||
Other Assets and Liabilities, Net | 1.6 | ||||||||||
100.0 |
See accompanying notes which are an integral part of the financial statements.
340 Russell Global Opportunistic Credit Fund
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Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fair Value | ||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||||
Other Financial Instruments | ||||||||||||||
Futures Contracts | (173 | ) | — | — | (173 | ) | (—)* | |||||||
Foreign Currency Exchange Contracts | 14 | 3,262 | — | 3,276 | 0.2 | |||||||||
Credit Default Swap Contracts | — | (600 | ) | — | (600 | ) | (—)* | |||||||
Total Other Financial Instruments** | $ | (159 | ) | $ | 2,662 | $ | — | $ | 2,503 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation/depreciation on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended October
31, 2015 were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 341
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Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||
Foreign | ||||||
Credit | Currency | Interest Rate | ||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | |||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 5,730 | $ | — |
Variation margin on futures contracts* | — | — | 16 | |||
Credit default swap contracts, at fair value | 3,154 | — | — | |||
Total | $ | 3,154 | $ | 5,730 | $ | 16 |
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | — | $ | — | $ | 189 |
Unrealized depreciation on foreign currency exchange contracts | — | 2,454 | — | |||
Credit default swap contracts, at fair value | 3,754 | — | — | |||
Total | $ | 3,754 | $ | 2,454 | $ | 189 |
Foreign | |||||||
Credit | Currency | Interest Rate | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | |||||||
Futures contracts | $ | — | $ | — | $ | 1,033 | |
Interest rate swap contracts | — | — | 80 | ||||
Credit default swap contracts | 839 | — | — | ||||
Foreign currency-related transactions** | — | 19,134 | — | ||||
Total | $ | 839 | $ | 19,134 | $ | 1,113 | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||||||
Futures contracts | $ | — | $ | — | $ | (753 | ) |
Credit default swap contracts | 994 | — | — | ||||
Foreign currency-related transactions*** | — | 2,924 | — | ||||
Total | $ | 994 | $ | 2,924 | $ | (753 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
*** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
342 Russell Global Opportunistic Credit Fund
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | $ | 5,730 | $ | — $ | 5,730 | |||
Futures Contracts | Variation margin on futures contracts | 141 | — | 141 | |||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 3,154 | — | 3,154 | |||||
Total Financial and Derivative Assets | 9,025 | — | 9,025 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (3,311) | — | (3,311 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 5,714 | $ | — $ | 5,714 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Assets | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||
Barclays | $ | 219 | $ | 219 | $ | — | $ — | ||
Citigroup | 119 | 3 | — | 116 | |||||
HSBC | 147 | 85 | — | 62 | |||||
JPMorgan Chase | 202 | 163 | — | 39 | |||||
Standard Chartered | 510 | 250 | — | 260 | |||||
State Street | 4,442 | 576 | — | 3,866 | |||||
UBS | 75 | 75 | — | — | |||||
Total | $ | 5,714 | $ | 1,371 | $ | — | $ 4,343 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 343
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Russell Global Opportunistic Credit Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 7 | $ | — $ | 7 | |||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 2,454 | — | 2,454 | |||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 3,754 | — | 3,754 | |||||
Total Financial and Derivative Liabilities | 6,215 | — | 6,215 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (3,763) | — | (3,763 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 2,452 | $ | — $ | 2,452 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Liabilities | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||
Bank of Montreal | $ | 882 | $ | — | $ | — | $ 882 | ||
Barclays | 357 | 219 | — | 138 | |||||
Citigroup | 3 | 3 | — | — | |||||
HSBC | 85 | 85 | — | — | |||||
JPMorgan Chase | 163 | 163 | — | — | |||||
Standard Chartered | 250 | 250 | — | — | |||||
State Street | 576 | 576 | — | — | |||||
UBS | 136 | 75 | — | 61 | |||||
Total | $ | 2,452 | $ | 1,371 | $ | — | $ 1,081 |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
344 Russell Global Opportunistic Credit Fund
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Russell Global Opportunistic Credit Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 1,851,019 |
Investments, at fair value(>) | 1,720,873 | |
Cash | 880 | |
Cash (restricted)(a)(b) | 2,727 | |
Foreign currency holdings(^) | 9,024 | |
Unrealized appreciation on foreign currency exchange contracts | 5,730 | |
Receivables: | ||
Dividends and interest | 23,833 | |
Dividends from affiliated Russell funds | 14 | |
Investments sold | 7,408 | |
Fund shares sold | 1,575 | |
Foreign capital gains taxes recoverable | 29 | |
Variation margin on futures contracts | 141 | |
Credit default swap contracts, at fair value(+) | 3,154 | |
Total assets | 1,775,388 | |
Liabilities | ||
Payables: | ||
Due to broker (c) | 1,604 | |
Investments purchased | 15,932 | |
Fund shares redeemed | 1,065 | |
Accrued fees to affiliates | 1,168 | |
Other accrued expenses | 256 | |
Variation margin on futures contracts | 7 | |
Unrealized depreciation on foreign currency exchange contracts | 2,454 | |
Credit default swap contracts, at fair value(+) | 3,754 | |
Total liabilities | 26,240 | |
Net Assets | $ | 1,749,148 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 345
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Russell Global Opportunistic Credit Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | (3,525 | ) |
Accumulated net realized gain (loss) | (28,821 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | (130,146 | ) | |
Futures contracts | (173 | ) | |
Credit default swap contracts | 1,829 | ||
Foreign currency-related transactions | 3,045 | ||
Shares of beneficial interest | 1,914 | ||
Additional paid-in capital | 1,905,025 | ||
Net Assets | $ | 1,749,148 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 9.11 | |
Maximum offering price per share (Net asset value plus sales charge of 3.75%): Class A | $ | 9.46 | |
Class A — Net assets | $ | 4,848,840 | |
Class A — Shares outstanding ($.01 par value) | 532,344 | ||
Net asset value per share: Class C(#) | $ | 9.06 | |
Class C — Net assets | $ | 9,711,357 | |
Class C — Shares outstanding ($.01 par value) | 1,071,473 | ||
Net asset value per share: Class E(#) | $ | 9.12 | |
Class E — Net assets | $ | 31,022,015 | |
Class E — Shares outstanding ($.01 par value) | 3,400,275 | ||
Net asset value per share: Class S(#) | $ | 9.14 | |
Class S — Net assets | $ 1,101,648,582 | ||
Class S — Shares outstanding ($.01 par value) | 120,556,015 | ||
Net asset value per share: Class Y(#) | $ | 9.14 | |
Class Y — Net assets | $ | 601,917,591 | |
Class Y — Shares outstanding ($.01 par value) | 65,846,908 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 9,122 | |
(+) Credit default swap contracts - premiums paid (received) | $ | (2,429 | ) |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 144,929 | |
(a) Cash Collateral for Futures | $ | 600 | |
(b) Cash Collateral for Swaps | $ | 2,127 | |
(c) Due to Broker for Swaps | $ | 1,604 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
346 Russell Global Opportunistic Credit Fund
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Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 213 | |
Dividends from affiliated Russell funds | 167 | ||
Interest | 111,765 | ||
Less foreign taxes withheld | (299 | ) | |
Total investment income | 111,846 | ||
Expenses | |||
Advisory fees | 17,600 | ||
Administrative fees | 839 | ||
Custodian fees | 646 | ||
Distribution fees - Class A | 13 | ||
Distribution fees - Class C | 83 | ||
Transfer agent fees - Class A | 11 | ||
Transfer agent fees - Class C | 22 | ||
Transfer agent fees - Class E | 67 | ||
Transfer agent fees - Class S | 2,276 | ||
Transfer agent fees - Class Y | 25 | ||
Professional fees | 233 | ||
Registration fees | 130 | ||
Shareholder servicing fees - Class C | 28 | ||
Shareholder servicing fees - Class E | 84 | ||
Trustees’ fees | 45 | ||
Printing fees | 295 | ||
Miscellaneous | 61 | ||
Expenses before reductions | 22,458 | ||
Expense reductions | (6,902 | ) | |
Net expenses | 15,556 | ||
Net investment income (loss) | 96,290 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (72,237 | ) | |
Futures contracts | 1,033 | ||
Interest rate swap contracts | 80 | ||
Credit default swap contracts | 839 | ||
Foreign currency-related transactions | 17,513 | ||
Net realized gain (loss) | (52,772 | ) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (102,944 | ) | |
Futures contracts | (753 | ) | |
Credit default swap contracts | 994 | ||
Foreign currency-related transactions | 2,967 | ||
Net change in unrealized appreciation (depreciation) | (99,736 | ) | |
Net realized and unrealized gain (loss) | (152,508 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (56,218 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 347
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Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 96,290 | $ | 69,201 | ||
Net realized gain (loss) | (52,772 | ) | 18,470 | |||
Net change in unrealized appreciation (depreciation) | (99,736 | ) | (34,818 | ) | ||
Net increase (decrease) in net assets from operations | (56,218 | ) | 52,853 | |||
Distributions | ||||||
From net investment income | ||||||
Class A | (271 | ) | (334 | ) | ||
Class C | (495 | ) | (485 | ) | ||
Class E | (1,626 | ) | (1,112 | ) | ||
Class S | (58,534 | ) | (42,423 | ) | ||
Class Y | (29,102 | ) | (20,283 | ) | ||
From net realized gain | ||||||
Class A | (34 | ) | (55 | ) | ||
Class C | (78 | ) | (83 | ) | ||
Class E | (179 | ) | (107 | ) | ||
Class S | (6,598 | ) | (4,071 | ) | ||
Class Y | (2,809 | ) | (2,113 | ) | ||
Net decrease in net assets from distributions | (99,726 | ) | (71,066 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 316,226 | 665,009 | ||||
Total Net Increase (Decrease) in Net Assets | 160,282 | 646,796 | ||||
Net Assets | ||||||
Beginning of period | 1,588,866 | 942,070 | ||||
End of period | $ | 1,749,148 | $ | 1,588,866 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | (3,525 | ) | $ | 16,898 |
See accompanying notes which are an integral part of the financial statements.
348 Russell Global Opportunistic Credit Fund
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Russell Global Opportunistic Credit Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 123 | $ | 1,161 | 211 | $ | 2,115 | ||||||
Proceeds from reinvestment of distributions | 31 | 293 | 37 | 372 | ||||||||
Payments for shares redeemed | (198 | ) | (1,845 | ) | (484 | ) | (4,876 | ) | ||||
Net increase (decrease) | (44 | ) | (391 | ) | (236 | ) | (2,389 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 134 | 1,254 | 413 | 4,136 | ||||||||
Proceeds from reinvestment of distributions | 60 | 568 | 56 | 557 | ||||||||
Payments for shares redeemed | (455 | ) | (4,277 | ) | (338 | ) | (3,381 | ) | ||||
Net increase (decrease) | (261 | ) | (2,455 | ) | 131 | 1,312 | ||||||
Class E | ||||||||||||
Proceeds from shares sold | 1,621 | 15,278 | 1,542 | 15,385 | ||||||||
Proceeds from reinvestment of distributions | 177 | 1,676 | 110 | 1,100 | ||||||||
Payments for shares redeemed | (1,313 | ) | (12,138 | ) | (291 | ) | (2,930 | ) | ||||
Net increase (decrease) | 485 | 4,816 | 1,361 | 13,555 | ||||||||
Class S | ||||||||||||
Proceeds from shares sold | 56,358 | 535,559 | 61,647 | 616,388 | ||||||||
Proceeds from reinvestment of distributions | 6,836 | 64,781 | 4,591 | 46,143 | ||||||||
Payments for shares redeemed | (50,894 | ) | (479,685 | ) | (15,788 | ) | (158,977 | ) | ||||
Net increase (decrease) | 12,300 | 120,655 | 50,450 | 503,554 | ||||||||
Class Y | ||||||||||||
Proceeds from shares sold | 31,442 | 299,822 | 18,461 | 184,356 | ||||||||
Proceeds from reinvestment of distributions | 3,370 | 31,911 | 2,228 | 22,396 | ||||||||
Payments for shares redeemed | (14,778 | ) | (138,132 | ) | (5,754 | ) | (57,775 | ) | ||||
Net increase (decrease) | 20,034 | 193,601 | 14,935 | 148,977 | ||||||||
Total increase (decrease) | 32,514 | $ | 316,226 | 66,641 | $ | 665,009 |
See accompanying notes which are an integral part of the financial statements.
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Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class A | ||||||||||||||||
October 31, 2015 | 9.97 | .49 | (.82 | ) | (.33 | ) | (.47 | ) | (.06 | ) | ||||||
October 31, 2014 | 10.18 | .46 | (.15 | ) | .31 | (.45 | ) | (.07 | ) | |||||||
October 31, 2013 | 10.47 | .52 | (.17 | ) | .35 | (.57 | ) | (.07 | ) | |||||||
October 31, 2012 | 10.32 | .58 | .67 | 1.25 | (1.10 | ) | — | |||||||||
October 31, 2011 | 10.09 | .57 | (.25 | ) | .32 | (.09 | ) | —(f) | ||||||||
Class C | ||||||||||||||||
October 31, 2015 | 9.93 | .41 | (.81 | ) | (.40 | ) | (.41 | ) | (.06 | ) | ||||||
October 31, 2014 | 10.14 | .39 | (.15 | ) | .24 | (.38 | ) | (.07 | ) | |||||||
October 31, 2013 | 10.44 | .42 | (.15 | ) | .27 | (.50 | ) | (.07 | ) | |||||||
October 31, 2012 | 10.25 | .51 | .67 | 1.18 | (.99 | ) | — | |||||||||
October 31, 2011 | 10.08 | .48 | (.23 | ) | .25 | (.08 | ) | —(f) | ||||||||
Class E | ||||||||||||||||
October 31, 2015 | 9.99 | .49 | (.83 | ) | (.34 | ) | (.47 | ) | (.06 | ) | ||||||
October 31, 2014 | 10.20 | .46 | (.15 | ) | .31 | (.45 | ) | (.07 | ) | |||||||
October 31, 2013 | 10.49 | .52 | (.17 | ) | .35 | (.57 | ) | (.07 | ) | |||||||
October 31, 2012 | 10.32 | .59 | .67 | 1.26 | (1.09 | ) | — | |||||||||
October 31, 2011 | 10.09 | .56 | (.24 | ) | .32 | (.09 | ) | —(f) | ||||||||
Class S | ||||||||||||||||
October 31, 2015 | 10.00 | .51 | (.81 | ) | (.30 | ) | (.50 | ) | (.06 | ) | ||||||
October 31, 2014 | 10.21 | .49 | (.15 | ) | .34 | (.48 | ) | (.07 | ) | |||||||
October 31, 2013 | 10.50 | .54 | (.16 | ) | .38 | (.60 | ) | (.07 | ) | |||||||
October 31, 2012 | 10.35 | .62 | .66 | 1.28 | (1.13 | ) | — | |||||||||
October 31, 2011 | 10.09 | .58 | (.22 | ) | .36 | (.10 | ) | —(f) | ||||||||
Class Y | ||||||||||||||||
October 31, 2015 | 10.00 | .52 | (.82 | ) | (.30 | ) | (.50 | ) | (.06 | ) | ||||||
October 31, 2014 | 10.22 | .50 | (.17 | ) | .33 | (.48 | ) | (.07 | ) | |||||||
October 31, 2013 | 10.51 | .56 | (.17 | ) | .39 | (.61 | ) | (.07 | ) | |||||||
October 31, 2012 | 10.36 | .63 | .66 | 1.29 | (1.14 | ) | — | |||||||||
October 31, 2011 | 10.09 | .58 | (.21 | ) | .37 | (.10 | ) | —(f) | ||||||||
See accompanying notes which are an integral part of the financial statements.
350 Russell Global Opportunistic Credit Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||||
(.53 | ) | 9.11 | (3.35 | ) | 4,849 | 1.58 | 1.15 | 5.18 | 125 | ||||||||
(.52 | ) | 9.97 | 3.15 | 5,745 | 1.57 | 1.17 | 4.61 | 80 | |||||||||
(.64 | ) | 10.18 | 3.48 | 8,273 | 1.59 | 1.20 | 5.12 | 85 | |||||||||
(1.10 | ) | 10.47 | 13.09 | 8,857 | 1.57 | 1.20 | 5.67 | 109 | |||||||||
(.09 | ) | 10.32 | 3.24 | 2,468 | 1.57 | 1.20 | 5.58 | 126 | |||||||||
(.47 | ) | 9.06 | (4.14 | ) | 9,711 | 2.32 | 1.90 | 4.40 | 125 | ||||||||
(.45 | ) | 9.93 | 2.41 | 13,224 | 2.32 | 1.92 | 3.86 | 80 | |||||||||
(.57 | ) | 10.14 | 2.65 | 12,184 | 2.34 | 1.95 | 4.34 | 85 | |||||||||
(.99 | ) | 10.44 | 12.33 | 6,918 | 2.32 | 1.95 | 4.94 | 109 | |||||||||
(.08 | ) | 10.25 | 2.51 | 3,432 | 2.32 | 1.95 | 4.78 | 126 | |||||||||
(.53 | ) | 9.12 | (3.44 | ) | 31,022 | 1.58 | 1.15 | 5.22 | 125 | ||||||||
(.52 | ) | 9.99 | 3.16 | 29,115 | 1.57 | 1.17 | 4.59 | 80 | |||||||||
(.64 | ) | 10.20 | 3.42 | 15,856 | 1.59 | 1.20 | 5.09 | 85 | |||||||||
(1.09 | ) | 10.49 | 13.18 | 13,165 | 1.57 | 1.20 | 5.75 | 109 | |||||||||
(.09 | ) | 10.32 | 3.22 | 14,029 | 1.57 | 1.20 | 5.53 | 126 | |||||||||
(.56 | ) | 9.14 | (3.11 | ) | 1,101,648 | 1.33 | .90 | 5.45 | 125 | ||||||||
(.55 | ) | 10.00 | 3.41 | 1,082,505 | 1.32 | .92 | 4.86 | 80 | |||||||||
(.67 | ) | 10.21 | 3.72 | 590,280 | 1.34 | .95 | 5.33 | 85 | |||||||||
(1.13 | ) | 10.50 | 13.37 | 457,523 | 1.32 | .95 | 6.00 | 109 | |||||||||
(.10 | ) | 10.35 | 3.57 | 412,737 | 1.32 | .95 | 5.71 | 126 | |||||||||
(.56 | ) | 9.14 | (3.04 | ) | 601,918 | 1.13 | .82 | 5.56 | 125 | ||||||||
(.55 | ) | 10.00 | 3.39 | 458,277 | 1.12 | .84 | 4.92 | 80 | |||||||||
(.68 | ) | 10.22 | 3.76 | 315,477 | 1.14 | .86 | 5.43 | 85 | |||||||||
(1.14 | ) | 10.51 | 13.43 | 308,114 | 1.13 | .85 | 6.11 | 109 | |||||||||
(.10 | ) | 10.36 | 3.69 | 344,443 | 1.14 | .86 | 5.73 | 126 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Opportunistic Credit Fund 351
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Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Strategic Bond Fund - Class A‡ | Russell Strategic Bond Fund - Class S‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (2.25 | )% | 1 Year | 1.82 | % | ||
5 Years | 2.41 | %§ | 5 Years | 3.45 | %§ | ||
10 Years | 4.27 | %§ | 10 Years | 4.96 | %§ | ||
Russell Strategic Bond Fund - Class C‡‡ | Russell Strategic Bond Fund - Class Y | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.78 | % | 1 Year | 2.00 | % | ||
5 Years | 2.38 | %§ | 5 Years | 3.62 | %§ | ||
10 Years | 4.11 | %§ | 10 Years | 5.07 | %§ | ||
Russell Strategic Bond Fund - Class E | Barclays U.S. Aggregate Bond Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 1.50 | % | 1 Year | 1.96 | % | ||
5 Years | 3.19 | %§ | 5 Years | 3.03 | %§ | ||
10 Years | 4.71 | %§ | 10 Years | 4.72 | %§ | ||
Russell Strategic Bond Fund - Class I | |||||||
Total | |||||||
Return | |||||||
1 Year | 1.89 | % | |||||
5 Years | 3.51 | %§ | |||||
10 Years | 4.97 | %§ |
352 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Strategic Bond Fund (the “Fund”) employs a multi- | How did the investment strategies and techniques employed | |
manager approach whereby portions of the Fund are allocated to | by the Fund and its money managers affect its benchmark- | |
different money manager strategies. Fund assets not allocated | relative performance? | |
to money managers are managed by Russell Investment | The Fund employs discretionary money managers. The Fund’s | |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | discretionary money managers select the individual portfolio | |
may change the allocation of the Fund’s assets among money | securities for the assets assigned to them. Fund assets not | |
managers at any time. An exemptive order from the Securities | allocated to discretionary money managers include the Fund’s | |
and Exchange Commission (“SEC”) permits RIMCo to engage | liquidity reserves and assets which may be managed directly | |
or terminate a money manager at any time, subject to approval | by RIMCo to effect the Fund’s investment strategies and/or to | |
by the Fund’s Board, without a shareholder vote. Pursuant to the | actively manage the Fund’s overall exposures by investing in | |
terms of the exemptive order, the Fund is required to notify its | securities or other instruments that RIMCo believes will achieve | |
shareholders within 90 days of when a money manager begins | the desired risk/return profile for the Fund. | |
providing services. As of October 31, 2015, the Fund had seven | ||
money managers. | With respect to certain of the Fund’s money managers, Colchester | |
Global Investors Limited was the worst performing manager | ||
What is the Fund’s investment objective? | for the period and underperformed the Fund’s benchmark, due | |
The Fund seeks to provide current income, and as a secondary | to both currency and global bond positioning. Top currency | |
objective, capital appreciation. | detractors included long positions in Brazilian Real, Norwegian | |
Krone, Mexican Peso, and Swedish Krona while detracting bond | ||
How did the Fund perform relative to its benchmark for the | positions included short positions in ‘core’ Europe and a long | |
fiscal year ended October 31, 2015? | position in Brazil. | |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | ||
Class C, Class E, Class I, Class S and Class Y Shares gained 1.57%, | Brookfield Investment Management Inc., the Fund’s securitized | |
0.78%, 1.50%, 1.89%, 1.82% and 2.00%, respectively. This is | assets specialist, was the best performing manager for the period | |
compared to the Fund’s benchmark, the Barclays U.S. Aggregate | and outperformed the Fund’s benchmark as securitized credit | |
Bond Index, which gained 1.96% during the same period. The | outperformed corporate credit on better market technicals | |
Fund’s performance includes operating expenses, whereas index | (restrained new supply) and fundamentals (a strong property | |
returns are unmanaged and do not include expenses of any kind. | sector). Security selection also contributed positively. | |
For the fiscal year ended October 31, 2015, Morningstar® | During the period, RIMCo utilized futures and swaps to seek to | |
Intermediate-Term Bond, a group of funds that Morningstar | achieve the Fund benchmark’s duration exposures with respect to | |
considers to have investment strategies similar to those of the | the portion of the Fund allocated to cash reserves. This performed | |
Fund, gained 0.98%. This return serves as a peer comparison | as intended and was a positive in terms of absolute return | |
and is expressed net of operating expenses. | contribution and benchmark-relative performance. | |
RIMCo also managed a three-pronged strategy to seek to generate | ||
How did the market conditions described in the Market | active returns through currency positioning by supplementing the | |
Summary report affect the Fund’s performance? | Fund’s existing active currency mandate with a more mechanistic | |
The fiscal year ended October 31, 2015 saw slowing global growth | strategy and to further reduce the Fund’s reliance on traditional | |
and commodity price weakness. Overall, this was modestly | fixed income market risks. This approach incorporates a currency | |
positive for fixed income assets, as yields fell, particularly among | overlay, an index replication and an enhanced cash strategy. The | |
sovereign bonds. On the other hand, credit sectors, primarily | currency overlay utilizes currency forward contracts to take long | |
within the U.S., were challenged in this environment. Corporate | and short positions in global foreign exchange markets. Because | |
bonds saw the largest drawdowns as sharply reduced commodity | the currency overlay is an out-of-benchmark position, RIMCo | |
prices (oil in particular), weakening earnings growth and elevated | managed an index replication strategy in connection with the | |
new issuance weighed on returns. In this environment, the Fund’s | currency overlay to provide benchmark-like exposure to its overall | |
strategic overweight to credit detracted. | strategy. The enhanced cash strategy is designed to provide for | |
The Fund’s currency positioning, on the other hand, added value, | modest returns on the cash held in connection with the currency | |
as the Fund benefited from a strong U.S. dollar rally, particularly | overlay and index replication strategies. Over the fiscal year, the | |
against European currencies, as the U.S. economy continued to | currency overlay strategy was positive for the Fund’s benchmark- | |
lead the global recovery. | relative performance, as was the underlying index replication | |
strategy, due to its interest rate sensitivity as yields fell. |
Russell Strategic Bond Fund 353
Russell Investment Company
Russell Strategic Bond Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Throughout the period, RIMCo also implemented tactical ‘tilts’ | * Principal Global Investors LLC is the asset management arm of the Principal | |
based on its judgments regarding shorter-term opportunities to | Financial Group® (The Principal® ), which includes various member | |
companies including Principal Global Investors LLC, Principal Global | ||
seek to generate returns and/or mitigate risk by purchasing and | Investors (Europe) Limited, and others. The Macro Currency Group is the | |
shorting U.S. Treasury futures and currency forward contracts. | specialist currency investment group within Principal Global Investors. Where | |
These tilts had a modestly positive benchmark-relative | used herein, Macro Currency Group means Principal Global Investors LLC. | |
contribution during the period due to RIMCo’s U.S. Treasury | The views expressed in this report reflect those of the portfolio | |
futures selections. | managers only through the end of the period covered by | |
Describe any changes to the Fund’s structure or the money | the report. These views do not necessarily represent the | |
manager line-up. | views of RIMCo, or any other person in RIMCo or any other | |
affiliated organization. These views are subject to change | ||
There were no changes to the Fund’s structure or the money | at any time based upon market conditions or other events, | |
manager line-up during the fiscal year. | and RIMCo disclaims any responsibility to update the views | |
Money Managers as of October 31, | contained herein. These views should not be relied on as | |
2015 | Styles | investment advice and, because investment decisions for |
Brookfield Investment Management Inc. | Sector Specialist | a Russell Investment Company (“RIC”) Fund are based on |
Colchester Global Investors Limited | Fully Discretionary | numerous factors, should not be relied on as an indication |
Logan Circle Partners, L.P. | Fully Discretionary | of investment decisions of any RIC Fund. |
Macro Currency Group – an investment | ||
group within Principal Global Investors | ||
LLC* | Fully Discretionary | |
Metropolitan West Asset Management, LLC | Fully Discretionary | |
Scout Investments, Inc. | Fully Discretionary | |
Wellington Management Company, LLP | Fully Discretionary |
* Assumes initial investment on November 1, 2005.
** The Barclays U.S. Aggregate Bond Index is an index, with income reinvested, generally representative of intermediate-term government bonds, investment-grade
corporate debt securities and mortgage-backed securities.
‡ The Fund first issued Class A Shares on September 2, 2008. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 3.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
‡‡ The Fund first issued Class C Shares on September 2, 2008. The returns shown for Class C Shares prior to that date are the returns of the Fund’s Class E Shares
and do not reflect deduction of Rule 12b-1 distribution fees that apply to Class C Shares. Had they done so, the returns shown for those periods would have been
lower. Annual returns for each Class will differ only to the extent that the Class C Shares do not have the same expenses as the Class E Shares.
‡‡‡ The Fund first issued Class S Shares on September 2, 2008. The returns shown for Class S Shares prior to that date are the returns of the Fund’s Class I
Shares. Class S Shares will have substantially similar annual returns as the Class I Shares because the Shares of each Class are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class S Shares do not have the same expenses as the Class I Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
354 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 996.90 | $ | 1,020.32 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 4.88 | $ | 4.94 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.97% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 992.20 | $ | 1,016.53 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 8.64 | $ | 8.74 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.72% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 996.00 | $ | 1,020.32 | |
Expenses Paid During Period* | $ | 4.88 | $ | 4.94 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.97% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell Strategic Bond Fund 355
Russell Investment Company
Russell Strategic Bond Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class I | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 998.40 | $ | 1,021.78 | ||
Expenses Paid During Period* | $ | 3.43 | $ | 3.47 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.68% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 998.20 | $ | 1,021.58 | ||
Expenses Paid During Period* | $ | 3.63 | $ | 3.67 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.72% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class Y | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 999.00 | $ | 1,022.38 | ||
Expenses Paid During Period* | $ | 2.82 | $ | 2.85 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.56% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
356 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Long-Term Investments - 86.4% | Cabela's Credit Card Master Note Trust | ||||||
Asset-Backed Securities - 9.2% | Series 2012-1A Class A2 | ||||||
0.727% due 02/18/20 (Ê)(Þ) | 6,500 | 6,504 | |||||
Access Group, Inc. | |||||||
Series 2003-A Class A2 | Series 2014-1 Class A | ||||||
1.225% due 07/01/38 (Ê) | 1,471 | 1,442 | 0.547% due 03/16/20 (Ê) | 1,820 | 1,817 | ||
Series 2004-2 Class A3 | Capital Auto Receivables Asset Trust | ||||||
0.510% due 10/25/24 (Ê) | 3,700 | 3,454 | Series 2013-1 Class B | ||||
1.290% due 04/20/18 | 900 | 899 | |||||
Accredited Mortgage Loan Trust | |||||||
Series 2006-1 Class A4 | Series 2013-4 Class A2 | ||||||
0.501% due 04/25/36 (Ê) | 3,510 | 3,062 | 0.850% due 02/21/17 | 800 | 800 | ||
Series 2014-1 Class A2 | |||||||
Series 2006-2 Class A4 | 0.960% due 04/20/17 | 1,871 | 1,871 | ||||
0.481% due 09/25/36 (Ê) | 9,855 | 8,309 | |||||
Ally Auto Receivables Trust | CarFinance Capital Auto Trust | ||||||
Series 2014-1A Class A | |||||||
Series 2012-5 Class A3 | 1.460% due 12/17/18 (Þ) | 3,015 | 3,019 | ||||
0.620% due 03/15/17 | 558 | 557 | |||||
Series 2013-1 Class A3 | CarMax Auto Owner Trust | ||||||
0.630% due 05/15/17 | 889 | 889 | Series 2013-1 Class A3 | ||||
0.600% due 10/16/17 | 776 | 775 | |||||
Ally Master Owner Trust | |||||||
Series 2013-1 Class A2 | CCG Receivables Trust | ||||||
1.000% due 02/15/18 | 3,395 | 3,397 | Series 2013-1 Class A2 | ||||
1.050% due 08/14/20 (Þ) | 460 | 460 | |||||
Series 2014-2 Class A | |||||||
0.567% due 01/16/18 (Ê) | 6,220 | 6,219 | Series 2014-1 Class A2 | ||||
AmeriCredit Automobile Receivables | 1.060% due 11/15/21 (Þ) | 2,053 | 2,048 | ||||
Trust | Centex Home Equity Loan Trust | ||||||
Series 2012-4 Class B | Series 2002-D Class AF4 | ||||||
1.310% due 11/08/17 | 1,652 | 1,652 | 5.210% due 11/25/28 | 79 | 79 | ||
Series 2014-2 Class A2A | Series 2006-A Class AV4 | ||||||
0.540% due 10/10/17 | 727 | 727 | 0.471% due 06/25/36 (Ê) | 4,713 | 4,347 | ||
Series 2014-2 Class A2B | Chase Issuance Trust | ||||||
0.475% due 10/10/17 (Ê) | 2,422 | 2,421 | Series 2007-A2 Class A2 | ||||
AMMC CDO | 0.247% due 04/15/19 (Ê) | 2,925 | 2,915 | ||||
Series 2015-16A Class A1 | Series 2014-A1 Class A1 | ||||||
1.821% due 04/14/27 (Ê)(Þ) | 550 | 545 | 1.150% due 01/15/19 | 6,560 | 6,573 | ||
AMMC CLO XIV, Ltd. | Series 2014-A2 Class A2 | ||||||
Series 2014-14A Class A1L | 2.770% due 03/15/23 | 6,750 | 6,975 | ||||
1.770% due 07/27/26 (µ)(Ê)(Þ) | 3,250 | 3,223 | Series 2014-A8 Class A8 | ||||
ARI Fleet Lease Trust | 0.447% due 11/15/18 (Ê) | 10,500 | 10,492 | ||||
Series 2013-A Class A3 | Series 2015-A4 Class A | ||||||
0.920% due 07/15/21 (Þ) | 3,698 | 3,696 | 1.840% due 04/15/22 | 3,800 | 3,781 | ||
Asset Backed Securities Corp. Home | Chesapeake Funding LLC | ||||||
Equity Loan Trust | Series 2012-1A Class A | ||||||
Series 2006-HE5 Class A5 | 0.945% due 11/07/23 (Ê)(Þ) | 236 | 234 | ||||
0.461% due 07/25/36 (Ê) | 8,729 | 7,283 | Series 2014-1A Class A | ||||
BA Credit Card Trust | 0.615% due 03/07/26 (Ê)(Þ) | 3,744 | 3,733 | ||||
Series 2007-A1 Class A1 | Series 2014-1A Class C | ||||||
5.170% due 06/15/19 | 9,150 | 9,602 | 1.395% due 03/07/26 (Ê)(Þ) | 1,370 | 1,368 | ||
Ballyrock CLO LLC | CIT Education Loan Trust | ||||||
Series 2014-1A Class A1 | Series 2007-1 Class A | ||||||
1.797% due 10/20/26 (Ê)(Þ) | 670 | 667 | 0.416% due 03/25/42 (Ê)(Þ) | 3,490 | 3,238 | ||
Bank of The West Auto Trust | Citibank Credit Card Issuance Trust | ||||||
Series 2014-1 Class A3 | Series 2006-A7 Class A7 | ||||||
1.090% due 03/15/19 (Þ) | 8,025 | 8,013 | 0.397% due 12/17/18 (Ê) | 11,480 | 11,447 | ||
Bear Stearns Second Lien Trust | Series 2014-A3 Class A3 | ||||||
Series 2007-SV1A Class A2 | 0.395% due 05/09/18 (Ê) | 2,920 | 2,919 | ||||
0.517% due 12/25/36 (Å)(Ê) | 1,878 | 1,817 | Citigroup Mortgage Loan Trust, Inc. | ||||
BMW Vehicle Owner Trust | Series 2007-WFH1 Class A3 | ||||||
Series 2013-A Class A3 | 0.371% due 01/25/37 (Ê) | 2,084 | 2,051 | ||||
0.670% due 11/27/17 | 4,121 | 4,118 | Series 2007-WFH1 Class A4 | ||||
BNC Mortgage Loan Trust | 0.421% due 01/25/37 (Ê) | 7,880 | 7,359 | ||||
Series 2007-2 Class A5 | CNH Equipment Trust | ||||||
0.531% due 05/25/37 (Ê) | 3,915 | 2,792 | Series 2012-D Class A3 | ||||
Brazos Higher Education Authority, Inc. | 0.650% due 04/16/18 | 259 | 259 | ||||
Series 2010-1 Class A2 | Conseco Finance Securitizations Corp. | ||||||
1.529% due 02/25/35 (Ê) | 5,000 | 4,989 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 357
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2001-4 Class A4 | Series 2007-HE2 Class A2 | ||||||
7.360% due 08/01/32 | 1,648 | 1,782 | 6.054% due 12/25/37 | 2,181 | 2,132 | ||
Conseco Financial Corp. | Series 2007-HE2 Class A3 | ||||||
Series 1997-7 Class A6 | 6.193% due 12/25/37 | 813 | 798 | ||||
6.760% due 07/15/28 | 134 | 137 | Green Tree Financial Corp. | ||||
Countrywide Asset-Backed Certificates | Series 1994-1 Class A5 | ||||||
Series 2006-S8 Class A3 | 7.650% due 04/15/19 | 114 | 118 | ||||
5.555% due 04/25/36 | 3,301 | 3,279 | Greenpoint Manufactured Housing | ||||
Series 2007-4 Class A2 | Series 1999-1 Class A5 | ||||||
5.429% due 04/25/47 | 1,285 | 1,386 | 6.770% due 08/15/29 | 2,915 | 2,842 | ||
Credit-Based Asset Servicing and | Series 1999-3 Class 1A7 | ||||||
Securitization LLC | 7.270% due 06/15/29 | 2,913 | 2,872 | ||||
Series 2003-CB6 Class M1 | GSAA Trust | ||||||
1.271% due 12/25/33 (Ê) | 3,398 | 3,109 | Series 2006-2 Class 2A3 | ||||
Dryden Senior Loan Fund | 0.727% due 12/25/35 (Ê) | 305 | 305 | ||||
Series 2015-37A Class A | Series 2006-S1 Class 2M2 | ||||||
1.821% due 04/15/27 (Ê)(Þ) | 3,540 | 3,519 | 5.850% due 08/25/34 (Å) | 3,968 | 3,330 | ||
Dryden XXV Senior Loan Fund | GSAMP Trust | ||||||
Series 2012-25A Class A | Series 2006-HE5 Class A2C | ||||||
1.701% due 01/15/25 (Ê)(Þ) | 4,000 | 3,976 | 0.349% due 08/25/36 (Ê) | 5,892 | 5,104 | ||
Eaton Vance CLO, Ltd. | Hertz Vehicle Financing LLC | ||||||
Series 2014-1A Class A | Series 2013-1A Class A1 | ||||||
1.771% due 07/15/26 (Ê)(Þ) | 1,300 | 1,290 | 1.120% due 08/25/17 (Þ) | 4,515 | 4,507 | ||
Education Loan Asset-Backed Trust I | Series 2015-2A Class A | ||||||
Series 2013-1 Class B1 | 2.020% due 09/25/19 (Å) | 5,305 | 5,265 | ||||
1.221% due 11/25/33 (Ê)(Þ) | 6,116 | 5,686 | Higher Education Funding I | ||||
Enterprise Fleet Financing LLC | Series 2014-1 Class A | ||||||
Series 2013-2 Class A2 | 1.283% due 05/25/34 (Ê)(Þ) | 2,975 | 2,935 | ||||
1.060% due 03/20/19 (Þ) | 2,653 | 2,651 | Home Equity Asset Trust | ||||
Series 2014-1 Class A2 | Series 2005-9 Class M1 | ||||||
0.870% due 09/20/19 (Þ) | 1,238 | 1,235 | 0.580% due 04/25/36 (Ê) | 2,977 | 2,487 | ||
EquiFirst Mortgage Loan Trust | Series 2006-3 Class M1 | ||||||
Series 2003-2 Class M2 | 0.584% due 07/25/36 (Ê) | 3,380 | 2,643 | ||||
2.771% due 09/25/33 (Ê) | 1,496 | 1,417 | Series 2006-4 Class 2A4 | ||||
Exeter Automobile Receivables Trust | 0.454% due 08/25/36 (Ê) | 3,729 | 3,169 | ||||
Series 2013-1A Class A | Honda Auto Receivables Owner Trust | ||||||
1.290% due 10/16/17 (Þ) | 2 | 2 | Series 2012-3 Class A4 | ||||
Fannie Mae Grantor Trust | 0.740% due 10/15/18 | 1,762 | 1,762 | ||||
Series 2003-T4 Class 2A5 | Series 2013-2 Class A3 | ||||||
5.224% due 09/26/33 | 524 | 572 | 0.530% due 02/16/17 | 2,523 | 2,521 | ||
Federal Home Loan Mortgage Corp. | Series 2014-2 Class A3 | ||||||
Structured Pass-Through Securities | 0.770% due 03/19/18 | 1,857 | 1,855 | ||||
Series 2000-30 Class A5 | |||||||
7.602% due 12/25/30 | 349 | 366 | Series 2015-2 Class A2 | ||||
First Franklin Mortgage Loan Asset | 0.690% due 08/21/17 | 1,400 | 1,399 | ||||
Backed Certificates | Series 2015-3 Class A2 | ||||||
Series 2006-FF18 Class A2B | 0.920% due 11/20/17 | 1,875 | 1,875 | ||||
0.331% due 12/25/37 (Ê) | 8,752 | 5,537 | Series 2015-4 Class A2 | ||||
First Investors Auto Owner Trust | 0.820% due 07/23/18 | 2,940 | 2,936 | ||||
Series 2014-3A Class A2 | HSBC Home Equity Loan Trust | ||||||
1.060% due 11/15/18 (Þ) | 3,956 | 3,956 | Series 2007-1 Class AS | ||||
Ford Credit Auto Owner Trust | 0.366% due 03/20/36 (Ê) | 2,726 | 2,713 | ||||
Series 2012-D Class A3 | HSI Asset Securitization Corp. Trust | ||||||
0.510% due 04/15/17 | 398 | 398 | Series 2007-WF1 Class 2A4 | ||||
Series 2013-A Class A3 | 0.420% due 05/25/37 (Ê) | 9,069 | 7,706 | ||||
0.550% due 07/15/17 | 796 | 795 | Hyundai Auto Receivables Trust | ||||
Series 2013-C Class A3 | Series 2011-C Class A4 | ||||||
0.820% due 12/15/17 | 3,166 | 3,166 | 1.300% due 02/15/18 | 2,611 | 2,613 | ||
Series 2014-A Class A3 | Series 2013-A Class A3 | ||||||
0.790% due 05/15/18 | 6,565 | 6,562 | 0.560% due 07/17/17 | 2,853 | 2,852 | ||
GM Financial Automobile Leasing Trust | Series 2013-C Class A3 | ||||||
Series 2015-3 Class A3 | 1.010% due 02/15/18 | 9,330 | 9,341 | ||||
1.690% due 03/20/19 | 3,060 | 3,054 | Series 2014-A Class A3 | ||||
GMACM Home Equity Loan Trust | 0.790% due 07/16/18 | 6,097 | 6,094 | ||||
Irwin Home Equity Loan Trust |
See accompanying notes which are an integral part of the financial statements.
358 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2006-1 Class 2A3 | Series 2006-B Class M1 | ||||||
5.770% due 09/25/35 | 3,383 | 3,464 | 0.524% due 09/25/36 (Ê) | 5,340 | 3,893 | ||
IXIS Real Estate Capital Trust | Series 2007-A Class AV4 | ||||||
Series 2006-HE1 Class A3 | 0.424% due 03/25/37 (Ê) | 4,290 | 3,615 | ||||
0.374% due 03/25/36 (Ê) | 1,931 | 1,189 | Navient Private Education Loan Trust | ||||
Series 2006-HE1 Class A4 | Series 2014-AA Class A2A | ||||||
0.474% due 03/25/36 (Ê) | 5,245 | 3,308 | 2.740% due 02/15/29 (Þ) | 5,085 | 5,077 | ||
Series 2006-HE2 Class A3 | Navient Student Loan Trust | ||||||
0.359% due 08/25/36 (Ê) | 673 | 281 | Series 2014-1 Class A3 | ||||
Series 2006-HE2 Class A4 | 0.680% due 06/25/31 (Ê) | 6,465 | 6,160 | ||||
0.430% due 08/25/36 (Ê) | 5,564 | 2,382 | Series 2014-2 Class A | ||||
Series 2007-HE1 Class A3 | 0.806% due 03/25/43 (Ê) | 5,788 | 5,448 | ||||
0.354% due 05/25/37 (Ê) | 7,259 | 2,525 | Series 2014-3 Class A | ||||
JGWPT XXX LLC | 0.786% due 03/25/43 (Ê) | 5,924 | 5,582 | ||||
Series 2013-3A Class A | Nelnet Student Loan Trust | ||||||
4.080% due 01/17/73 (Þ) | 2,092 | 2,215 | Series 2014-4A Class A2 | ||||
JGWPT XXXII LLC | 1.119% due 11/25/43 (Ê)(Þ) | 3,225 | 2,927 | ||||
Series 2014-2A Class A | Nissan Auto Receivables Owner Trust | ||||||
3.610% due 01/17/73 (Þ) | 2,513 | 2,558 | Series 2014-A Class A3 | ||||
JPMorgan Mortgage Acquisition Trust | 0.720% due 08/15/18 | 4,727 | 4,725 | ||||
Series 2006-WF1 Class A4 | Series 2015-C Class A2A | ||||||
6.130% due 07/25/36 | 6,141 | 3,659 | 0.870% due 11/15/18 | 2,930 | 2,928 | ||
Series 2007-CH2 Class AV4 | Panhandle-Plains Higher Education | ||||||
0.349% due 01/25/37 (Ê) | 10,370 | 9,147 | Authority, Inc. | ||||
Lehman ABS Manufactured Housing | Series 2011-1 Class A3 | ||||||
Contract Trust | 1.276% due 10/01/37 (Ê) | 2,500 | 2,451 | ||||
Series 2001-B Class A6 | Popular ABS Mortgage Pass-Through | ||||||
6.467% due 04/15/40 | 561 | 596 | Trust | ||||
Series 2001-B Class M1 | Series 2006-C Class A4 | ||||||
6.630% due 04/15/40 | 1,615 | 1,746 | 0.471% due 07/25/36 (Ê) | 7,224 | 6,832 | ||
Lehman XS Trust | Series 2006-D Class A3 | ||||||
Series 2006-9 Class A1B | 0.481% due 11/25/46 (Ê) | 5,455 | 4,757 | ||||
0.359% due 05/25/46 (Ê) | 816 | 694 | Prestige Auto Receivables Trust | ||||
Series 2006-13 Class 1A2 | Series 2013-1A Class A3 | ||||||
0.369% due 09/25/36 (Ê) | 838 | 752 | 1.330% due 05/15/19 (Þ) | 2,739 | 2,744 | ||
Series 2006-19 Class A2 | Series 2014-1A Class A3 | ||||||
0.369% due 12/25/36 (Ê) | 1,204 | 1,009 | 1.520% due 04/15/20 (Þ) | 3,360 | 3,358 | ||
M&T Bank Auto Receivables Trust | Renaissance Home Equity Loan Trust | ||||||
Series 2013-1A Class A3 | Series 2005-4 Class A3 | ||||||
1.060% due 11/15/17 (Þ) | 2,854 | 2,856 | 5.565% due 02/25/36 | 113 | 112 | ||
Mastr Asset Backed Securities Trust | Series 2006-1 Class AF3 | ||||||
Series 2005-NC2 Class A3 | 5.608% due 05/25/36 | 71 | 47 | ||||
0.471% due 11/25/35 (Ê) | 5,560 | 3,710 | Series 2006-1 Class AF6 | ||||
Series 2006-HE5 Class A3 | 5.746% due 05/25/36 | 1,548 | 1,075 | ||||
0.359% due 11/25/36 (Ê) | 3,903 | 2,434 | Series 2006-2 Class AF2 | ||||
Series 2006-HE5 Class A4 | 5.762% due 08/25/36 | 228 | 141 | ||||
0.441% due 11/25/36 (Å)(Ê) | 1,107 | 696 | Series 2007-1 Class AF2 | ||||
Series 2006-NC2 Class A4 | 5.512% due 04/25/37 | 4,635 | 2,402 | ||||
0.349% due 08/25/36 (Ê) | 11,425 | 5,728 | Santander Drive Auto Receivables Trust | ||||
Series 2006-NC3 Class A5 | Series 2013-1 Class B | ||||||
0.431% due 10/25/36 (Ê) | 6,747 | 4,117 | 1.160% due 01/15/19 | 1,207 | 1,207 | ||
Mercedes Benz Auto Lease Trust | Series 2014-2 Class A3 | ||||||
Series 2013-B Class A4 | 0.800% due 04/16/18 | 5,866 | 5,862 | ||||
0.760% due 07/15/19 | 2,470 | 2,470 | Series 2014-3 Class A2A | ||||
Mercedes-Benz Auto Receivables Trust | 0.540% due 08/15/17 | 1,059 | 1,059 | ||||
Series 2014-1 Class A2 | Series 2014-4 Class B | ||||||
0.430% due 02/15/17 | 5,324 | 5,322 | 1.820% due 05/15/19 | 3,225 | 3,233 | ||
Mid-State Capital Corp. Trust | Series 2015-4 Class A3 | ||||||
Series 2005-1 Class A | 1.580% due 09/16/19 | 2,910 | 2,904 | ||||
5.745% due 01/15/40 | 1,933 | 2,076 | Saxon Asset Securities Trust | ||||
MSCC Heloc Trust | Series 2007-2 Class A2C | ||||||
Series 2007-1 Class A | 0.461% due 05/25/47 (Ê) | 6,979 | 4,812 | ||||
0.299% due 12/25/31 (Ê) | 2,067 | 1,992 | Scholar Funding Trust | ||||
Nationstar Home Equity Loan Trust |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 359
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Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2012-B Class A2 | Series 2005-4XS Class 2A1A | ||||||
1.332% due 03/28/46 (Ê)(Þ) | 3,500 | 3,464 | 1.906% due 03/25/35 (Ê) | 1,249 | 1,191 | ||
Securitized Asset Backed Receivables | Series 2006-BC6 Class A4 | ||||||
LLC Trust | 0.369% due 01/25/37 (Ê) | 4,740 | 4,032 | ||||
Series 2007-BR4 Class A2B | Series 2006-WF2 Class A3 | ||||||
0.421% due 05/25/37 (Ê) | 6,601 | 4,110 | 0.349% due 07/25/36 (Ê) | 247 | 246 | ||
Series 2007-BR5 Class A2A | Series 2006-WF3 Class A4 | ||||||
0.329% due 05/25/37 (Ê) | 3,675 | 2,490 | 0.480% due 09/25/36 (Ê) | 5,740 | 5,350 | ||
Series 2007-NC1 Class A2B | Series 2007-BC1 Class A4 | ||||||
0.349% due 12/25/36 (Ê) | 7,147 | 3,986 | 0.329% due 02/25/37 (Ê) | 9,815 | 8,628 | ||
Series 2007-NC1 Class A2C | SunTrust Student Loan Trust | ||||||
0.431% due 12/25/36 (Ê) | 1,774 | 998 | Series 2006-1A Class A4 | ||||
SLM Private Education Loan Trust | 0.423% due 10/28/37 (Ê)(Þ) | 5,000 | 4,554 | ||||
Series 2010-A Class 2A | Synchrony Credit Card Master Note Trust | ||||||
3.447% due 05/16/44 (Ê)(Þ) | 6,703 | 6,969 | Series 2014-1 Class A | ||||
SLM Student Loan Trust | 1.610% due 11/15/20 | 3,425 | 3,433 | ||||
Series 2004-8 Class B | Toyota Auto Receivables Owner Trust | ||||||
0.780% due 01/25/40 (Ê) | 809 | 688 | Series 2013-A Class A3 | ||||
Series 2006-2 Class A6 | 0.550% due 01/17/17 | 1,017 | 1,017 | ||||
0.490% due 01/25/41 (Ê) | 4,400 | 3,887 | Series 2014-B Class A3 | ||||
Series 2006-8 Class A6 | 0.760% due 03/15/18 | 3,000 | 2,997 | ||||
0.480% due 01/25/41 (Ê) | 4,400 | 3,835 | Series 2014-C Class A2 | ||||
Series 2007-6 Class B | 0.510% due 02/15/17 | 1,724 | 1,723 | ||||
1.170% due 04/27/43 (Ê) | 1,308 | 1,089 | Series 2015-B Class A2B | ||||
Series 2008-2 Class B | 0.407% due 11/15/17 (Ê) | 3,465 | 3,463 | ||||
1.520% due 01/25/29 (Ê) | 1,270 | 1,014 | Volkswagen Auto Loan Enhanced Trust | ||||
Series 2008-3 Class A3 | Series 2012-2 Class A3 | ||||||
1.320% due 10/25/21 (Ê) | 5,132 | 5,022 | 0.460% due 01/20/17 | 653 | 653 | ||
Series 2008-3 Class B | World Financial Network Credit Card | ||||||
1.520% due 04/25/29 (Ê) | 1,270 | 1,043 | Master Trust | ||||
Series 2008-4 Class B | Series 2014-A Class A | ||||||
2.084% due 04/25/29 (Ê) | 1,290 | 1,168 | 0.577% due 12/15/19 (Ê) | 3,525 | 3,525 | ||
Series 2008-5 Class B | World Omni Auto Receivables Trust | ||||||
2.127% due 07/25/29 (Ê) | 1,290 | 1,195 | Series 2014-A Class A2 | ||||
Series 2008-6 Class B | 0.430% due 05/15/17 | 1,063 | 1,063 | ||||
2.084% due 07/25/29 (Ê) | 1,290 | 1,184 | World Omni Master Owner Trust | ||||
Series 2008-7 Class B | Series 2013-1 Class A | ||||||
2.084% due 07/25/29 (Ê) | 1,295 | 1,128 | 0.547% due 02/15/18 (Ê)(Þ) | 7,075 | 7,073 | ||
Series 2008-8 Class B | 572,323 | ||||||
2.484% due 10/25/29 (Ê) | 1,300 | 1,237 | Corporate Bonds and Notes - 22.0% | ||||
Series 2008-9 Class A | 21st Century Fox America, Inc. | ||||||
1.777% due 04/25/23 (Ê) | 5,291 | 5,319 | 4.500% due 02/15/21 | 3,080 | 3,336 | ||
Series 2008-9 Class B | 3.000% due 09/15/22 | 2,250 | 2,233 | ||||
2.527% due 10/25/29 (Ê) | 1,300 | 1,249 | AbbVie, Inc. | ||||
Series 2013-4 Class A | 3.600% due 05/14/25 | 1,500 | 1,475 | ||||
0.720% due 06/25/27 (Ê) | 2,643 | 2,558 | 4.500% due 05/14/35 | 3,820 | 3,644 | ||
SMART Trust | ACE INA Holdings, Inc. | ||||||
Series 2012-1USA Class A4A | 2.300% due 11/03/20 | 3,560 | 3,562 | ||||
2.010% due 12/14/17 (Þ) | 2,665 | 2,687 | 2.875% due 11/03/22 | 3,880 | 3,885 | ||
SMB Private Education Loan Trust | Advanced Micro Devices, Inc. | ||||||
Series 2015-A Class A3 | 6.750% due 03/01/19 | 3,180 | 2,449 | ||||
1.697% due 02/17/32 (Ê)(Þ) | 6,125 | 6,000 | Aetna, Inc. | ||||
SoFi Professional Loan Program LLC | 2.750% due 11/15/22 | 1,645 | 1,615 | ||||
Series 2014-B Class A2 | AIG Global Funding | ||||||
2.550% due 08/27/29 (Þ) | 4,093 | 4,103 | 1.650% due 12/15/17 (Þ) | 2,455 | 2,456 | ||
Soundview Home Loan Trust | Albemarle Corp. | ||||||
Series 2005-4 Class M2 | 4.150% due 12/01/24 | 2,020 | 2,000 | ||||
0.691% due 03/25/36 (Ê) | 3,870 | 3,287 | Series 30YR | ||||
Structured Asset Investment Loan Trust | 5.450% due 12/01/44 | 3,885 | 3,846 | ||||
Series 2006-2 Class A3 | Ally Financial, Inc. | ||||||
0.354% due 04/25/36 (Ê) | 2,807 | 2,502 | 2.750% due 01/30/17 | 6,500 | 6,533 | ||
Structured Asset Securities Corp. | |||||||
Mortgage Loan Trust | 3.600% due 05/21/18 | 5,530 | 5,599 | ||||
Altria Group, Inc. |
See accompanying notes which are an integral part of the financial statements.
360 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
4.000% due 01/31/24 | 1,800 | 1,894 | 6.875% due 04/25/18 | 5,100 | 5,692 | ||
9.950% due 11/10/38 | 370 | 603 | 5.875% due 01/05/21 | 1,075 | 1,229 | ||
10.200% due 02/06/39 | 2,155 | 3,562 | 3.300% due 01/11/23 | 2,950 | 2,942 | ||
4.250% due 08/09/42 | 2,285 | 2,157 | 4.000% due 01/22/25 | 5,630 | 5,551 | ||
5.375% due 01/31/44 | 600 | 653 | 3.875% due 08/01/25 | 1,175 | 1,195 | ||
Amazon.com, Inc. | Series L | ||||||
4.950% due 12/05/44 | 3,035 | 3,164 | 4.750% due 04/21/45 | 1,300 | 1,269 | ||
American Airlines Pass-Through Trust | Series MTNL | ||||||
Series 2011-1 Class A | 5.650% due 05/01/18 | 3,500 | 3,808 | ||||
5.250% due 01/31/21 | 1,610 | 1,706 | Bank of America NA | ||||
Series 2013-2 Class A | Series BKNT | ||||||
4.950% due 01/15/23 | 4,996 | 5,352 | 5.300% due 03/15/17 | 4,165 | 4,370 | ||
Series 2014-1 Class B | 0.637% due 06/15/17 (Ê) | 4,175 | 4,146 | ||||
4.375% due 10/01/22 | 2,172 | 2,183 | 6.100% due 06/15/17 | 2,000 | 2,135 | ||
American Express Credit Corp. | 1.650% due 03/26/18 | 2,955 | 2,950 | ||||
Series F | 1.750% due 06/05/18 | 6,965 | 6,957 | ||||
2.600% due 09/14/20 | 8,170 | 8,232 | Bank of Nova Scotia (The) | ||||
American International Group, Inc. | Series YCD | ||||||
6.400% due 12/15/20 | 8,455 | 9,983 | 0.524% due 11/07/16 (Ê)(~) | 6,495 | 6,494 | ||
3.875% due 01/15/35 | 1,500 | 1,405 | Bayer US Finance LLC | ||||
4.375% due 01/15/55 | 3,313 | 3,052 | 2.375% due 10/08/19 (Þ) | 4,085 | 4,125 | ||
8.175% due 05/15/58 | 1,350 | 1,782 | BB&T Corp. | ||||
American Tower Trust I | 1.197% due 06/15/18 (Ê) | 4,000 | 4,022 | ||||
3.070% due 03/15/23 (Þ) | 2,145 | 2,091 | Bear Stearns Cos. LLC (The) | ||||
Ameriprise Financial, Inc. | 5.550% due 01/22/17 | 3,681 | 3,857 | ||||
7.518% due 06/01/66 | 2,705 | 2,691 | Bellsouth Capital Funding Corp. | ||||
Amgen, Inc. | 7.875% due 02/15/30 | 3,130 | 3,770 | ||||
2.125% due 05/15/17 | 1,030 | 1,043 | Berkshire Hathaway, Inc. | ||||
Anadarko Petroleum Corp. | 4.500% due 02/11/43 | 1,100 | 1,116 | ||||
6.375% due 09/15/17 | 2,890 | 3,112 | Biogen, Inc. | ||||
6.950% due 06/15/19 | 1,675 | 1,900 | 2.900% due 09/15/20 | 6,085 | 6,139 | ||
6.450% due 09/15/36 | 8,247 | 9,278 | 3.625% due 09/15/22 | 3,940 | 4,006 | ||
4.500% due 07/15/44 | 2,680 | 2,480 | 5.200% due 09/15/45 | 3,070 | 3,096 | ||
Anheuser-Busch InBev Finance, Inc. | Blue Cube Spinco, Inc. | ||||||
0.513% due 01/27/17 (Ê) | 6,215 | 6,195 | 10.000% due 10/15/25 (Þ) | 2,655 | 2,881 | ||
Anheuser-Busch InBev Worldwide, Inc. | BMW US Capital LLC | ||||||
5.375% due 01/15/20 | 1,725 | 1,920 | 0.669% due 06/02/17 (Ê) | 11,200 | 11,084 | ||
Anthem, Inc. | Boardwalk Pipelines, LP | ||||||
3.125% due 05/15/22 | 1,175 | 1,165 | 4.950% due 12/15/24 | 3,000 | 2,745 | ||
4.650% due 01/15/43 | 1,780 | 1,750 | Burlington Northern Santa Fe LLC | ||||
Apache Corp. | 3.050% due 03/15/22 | 2,100 | 2,111 | ||||
4.750% due 04/15/43 | 6,350 | 5,872 | 3.400% due 09/01/24 | 9,390 | 9,427 | ||
4.250% due 01/15/44 | 1,930 | 1,692 | 4.150% due 04/01/45 | 1,200 | 1,129 | ||
Apollo Management Holdings, LP | Capital One Bank USA NA | ||||||
4.000% due 05/30/24 (Þ) | 3,325 | 3,342 | Series BKNT | ||||
Appalachian Power Co. | 1.150% due 11/21/16 | 2,000 | 1,995 | ||||
4.450% due 06/01/45 | 2,300 | 2,236 | Capital One NA | ||||
Apple, Inc. | 2.350% due 08/17/18 | 3,365 | 3,381 | ||||
0.584% due 05/03/18 (Ê) | 10,416 | 10,421 | Series BKNT | ||||
AT&T, Inc. | 1.650% due 02/05/18 | 4,140 | 4,116 | ||||
1.700% due 06/01/17 | 4,155 | 4,175 | Cargill, Inc. | ||||
3.000% due 06/30/22 | 2,425 | 2,379 | 6.000% due 11/27/17 (Þ) | 3,250 | 3,530 | ||
3.400% due 05/15/25 | 2,250 | 2,183 | Caterpillar Financial Services Corp. | ||||
4.800% due 06/15/44 | 1,000 | 930 | 7.150% due 02/15/19 | 1,575 | 1,828 | ||
4.750% due 05/15/46 | 2,405 | 2,208 | CBS Corp. | ||||
AutoNation, Inc. | 4.300% due 02/15/21 | 1,444 | 1,523 | ||||
4.500% due 10/01/25 | 5,070 | 5,192 | 3.375% due 03/01/22 | 2,650 | 2,648 | ||
Avaya, Inc. | CCO Safari II LLC | ||||||
9.000% due 04/01/19 (Þ) | 5,350 | 4,360 | 4.464% due 07/23/22 (Þ) | 7,980 | 8,096 | ||
Axiall Corp. | 4.908% due 07/23/25 (Þ) | 2,925 | 2,973 | ||||
4.875% due 05/15/23 | 5,155 | 4,900 | 6.384% due 10/23/35 (Þ) | 3,230 | 3,327 | ||
Bank of America Corp. | Celgene Corp. | ||||||
5.750% due 12/01/17 | 3,495 | 3,776 | 2.250% due 05/15/19 | 2,385 | 2,396 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 361
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
2.875% due 08/15/20 | 4,005 | 4,030 | CVS Health Corp. | ||||
3.875% due 08/15/25 | 1,700 | 1,705 | 2.800% due 07/20/20 | 5,825 | 5,924 | ||
CF Industries, Inc. | 3.875% due 07/20/25 | 5,735 | 5,899 | ||||
5.150% due 03/15/34 | 1,305 | 1,286 | 5.125% due 07/20/45 | 4,357 | 4,671 | ||
Chase Capital III | Series 7YR | ||||||
Series C | 3.500% due 07/20/22 | 890 | 918 | ||||
0.964% due 03/01/27 (Ê) | 1,740 | 1,470 | Daimler Finance NA LLC | ||||
Chesapeake Energy Corp. | 0.682% due 03/10/17 (Ê)(Þ) | 5,145 | 5,113 | ||||
3.571% due 04/15/19 (Ê) | 6,795 | 4,383 | 2.000% due 08/03/18 (Þ) | 6,020 | 6,017 | ||
6.625% due 08/15/20 | 4,045 | 2,740 | DaVita HealthCare Partners, Inc. | ||||
5.375% due 06/15/21 | 1,560 | 1,010 | 5.125% due 07/15/24 | 1,400 | 1,421 | ||
4.875% due 04/15/22 | 2,755 | 1,708 | DCP Midstream Operating, LP | ||||
Chevron Corp. | 2.500% due 12/01/17 | 685 | 638 | ||||
2.355% due 12/05/22 | 3,450 | 3,365 | Delta Air Lines Pass-Through Trust | ||||
CHS/Community Health Systems, Inc. | Series 2002-1 Class G-1 | ||||||
8.000% due 11/15/19 | 1,375 | 1,430 | 6.718% due 01/02/23 | 2,796 | 3,181 | ||
CIT Group, Inc. | Series 2007-1 Class A | ||||||
6.625% due 04/01/18 (Þ) | 3,155 | 3,400 | 6.821% due 08/10/22 | 2,928 | 3,411 | ||
Citigroup, Inc. | Devon Energy Corp. | ||||||
4.450% due 01/10/17 | 3,035 | 3,149 | 5.600% due 07/15/41 | 3,835 | 3,713 | ||
6.000% due 08/15/17 | 1,500 | 1,614 | 5.000% due 06/15/45 | 5,315 | 4,931 | ||
6.125% due 11/21/17 | 7,695 | 8,368 | DIRECTV Holdings LLC / DIRECTV | ||||
1.850% due 11/24/17 | 5,715 | 5,732 | Financing Co., Inc. | ||||
1.800% due 02/05/18 | 8,005 | 7,991 | 4.600% due 02/15/21 | 1,950 | 2,093 | ||
2.150% due 07/30/18 | 3,375 | 3,388 | 4.450% due 04/01/24 | 2,200 | 2,268 | ||
8.500% due 05/22/19 | 1,195 | 1,442 | Discover Bank | ||||
2.400% due 02/18/20 | 800 | 796 | Series BKNT | ||||
3.100% due 06/04/20 | 2,000 | 2,023 | |||||
4.500% due 01/14/22 | 2,400 | 2,595 | DISH DBS Corp. | ||||
4.450% due 09/29/27 | 3,385 | 3,382 | 6.750% due 06/01/21 | 580 | 599 | ||
0.943% due 08/25/36 (Ê) | 2,250 | 1,726 | Dominion Resources, Inc. | ||||
4.650% due 07/30/45 | 3,045 | 3,091 | 4.450% due 03/15/21 | 3,075 | 3,299 | ||
Series Q | Series B | ||||||
5.950% due 12/31/49 (ƒ) | 4,305 | 4,297 | 2.750% due 09/15/22 | 3,525 | 3,422 | ||
CNA Financial Corp. | Duke Energy Corp. | ||||||
5.875% due 08/15/20 | 1,650 | 1,857 | 3.050% due 08/15/22 | 6,450 | 6,401 | ||
7.250% due 11/15/23 | 1,850 | 2,195 | Duke Energy Progress LLC | ||||
Comcast Corp. | 4.100% due 03/15/43 | 1,545 | 1,528 | ||||
3.600% due 03/01/24 | 3,925 | 4,118 | eBay, Inc. | ||||
Commonwealth Edison Co. | 0.523% due 07/28/17 (Ê) | 6,190 | 6,107 | ||||
5.800% due 03/15/18 | 1,745 | 1,912 | 0.809% due 08/01/19 (Ê) | 3,950 | 3,839 | ||
Compass Bank | El Paso Natural Gas Co. LLC | ||||||
Series BKNT | 7.500% due 11/15/26 | 1,425 | 1,605 | ||||
6.400% due 10/01/17 | 4,950 | 5,296 | Enbridge Energy Partners, LP | ||||
2.750% due 09/29/19 | 1,780 | 1,766 | 5.875% due 10/15/25 | 1,000 | 1,008 | ||
ConAgra Foods, Inc. | Energy Transfer Partners, LP | ||||||
4.950% due 08/15/20 | 4,425 | 4,712 | 4.050% due 03/15/25 | 5,710 | 5,024 | ||
ConocoPhillips Co. | 6.050% due 06/01/41 | 2,158 | 1,923 | ||||
2.875% due 11/15/21 | 3,560 | 3,569 | 3.346% due 11/01/66 (Ê) | 11,467 | 7,970 | ||
4.300% due 11/15/44 | 1,930 | 1,844 | Enterprise Products Operating LLC | ||||
Continental Resources, Inc. | 5.250% due 01/31/20 | 1,010 | 1,105 | ||||
4.900% due 06/01/44 | 750 | 568 | 3.700% due 02/15/26 | 3,350 | 3,184 | ||
Credit Suisse | 5.950% due 02/01/41 | 2,850 | 2,980 | ||||
1.750% due 01/29/18 | 4,765 | 4,778 | Series B | ||||
6.000% due 02/15/18 | 690 | 747 | 7.034% due 01/15/68 | 2,590 | 2,736 | ||
3.000% due 10/29/21 | 1,200 | 1,208 | Exelon Corp. | ||||
Series GMTN | 2.850% due 06/15/20 | 3,850 | 3,853 | ||||
0.897% due 05/26/17 (Ê) | 2,050 | 2,044 | Express Scripts Holding Co. | ||||
Crown Castle Towers LLC | 7.250% due 06/15/19 | 1,000 | 1,155 | ||||
4.174% due 08/15/17 (Þ) | 3,880 | 3,969 | Exxon Mobil Corp. | ||||
3.222% due 05/15/22 (Þ) | 3,610 | 3,548 | 0.377% due 03/15/17 (Ê) | 12,250 | 12,238 | ||
CSX Corp. | Farmers Exchange Capital | ||||||
4.250% due 06/01/21 | 3,075 | 3,293 | 7.200% due 07/15/48 (Þ) | 1,100 | 1,385 |
See accompanying notes which are an integral part of the financial statements.
362 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Farmers Exchange Capital II | 2.750% due 09/15/20 | 365 | 367 | ||||
6.151% due 11/01/53 (Þ) | 4,000 | 4,259 | 5.750% due 01/24/22 | 3,985 | 4,566 | ||
Farmers Exchange Capital III | 3.625% due 01/22/23 | 650 | 664 | ||||
5.454% due 10/15/54 (Þ) | 3,275 | 3,243 | 1.925% due 11/29/23 (Ê) | 4,455 | 4,495 | ||
Fifth Third Bank | 4.250% due 10/21/25 | 4,980 | 4,978 | ||||
Series BKNT | 6.750% due 10/01/37 | 2,302 | 2,774 | ||||
2.875% due 10/01/21 | 2,900 | 2,897 | 4.750% due 10/21/45 | 1,660 | 1,684 | ||
First Data Corp. | Series 10YR | ||||||
12.625% due 01/15/21 | 1,770 | 2,029 | 3.500% due 01/23/25 | 990 | 978 | ||
First Union Capital II | Series D | ||||||
Series A | 6.000% due 06/15/20 | 1,875 | 2,148 | ||||
7.950% due 11/15/29 | 1,575 | 2,076 | Series M | ||||
FirstEnergy Transmission LLC | 5.375% due 12/31/49 (ƒ) | 4,220 | 4,178 | ||||
5.450% due 07/15/44 (Þ) | 907 | 932 | Great Plains Energy, Inc. | ||||
Ford Motor Credit Co. LLC | 5.292% due 06/15/22 | 3,785 | 4,194 | ||||
3.984% due 06/15/16 | 8,815 | 8,951 | HCP, Inc. | ||||
1.095% due 01/17/17 (Ê) | 13,900 | 13,830 | 4.250% due 11/15/23 | 2,600 | 2,611 | ||
4.250% due 02/03/17 | 9,500 | 9,781 | Hewlett Packard Enterprise Co. | ||||
3.000% due 06/12/17 | 2,800 | 2,843 | 2.450% due 10/05/17 (Å) | 9,000 | 9,026 | ||
2.240% due 06/15/18 | 3,610 | 3,598 | 4.400% due 10/15/22 (Å) | 10,475 | 10,562 | ||
2.551% due 10/05/18 | 3,565 | 3,573 | 4.900% due 10/15/25 (Å) | 6,100 | 6,028 | ||
2.459% due 03/27/20 | 3,000 | 2,937 | 6.200% due 10/15/35 (Å) | 6,175 | 6,024 | ||
3.157% due 08/04/20 | 1,750 | 1,769 | Howard Hughes Medical Institute | ||||
Series FXD | 3.500% due 09/01/23 | 1,640 | 1,706 | ||||
2.145% due 01/09/18 | 6,395 | 6,396 | HSBC Bank USA NA | ||||
Forest Laboratories LLC | Series BKNT | ||||||
4.875% due 02/15/21 (Þ) | 2,815 | 3,045 | 5.875% due 11/01/34 | 2,665 | 3,135 | ||
FPL Energy Wind Funding LLC | HSBC USA, Inc. | ||||||
6.876% due 06/27/17 (Þ) | 245 | 237 | 2.000% due 08/07/18 | 3,950 | 3,954 | ||
Freeport-McMoRan, Inc. | 2.625% due 09/24/18 | 5,875 | 5,991 | ||||
3.550% due 03/01/22 | 1,080 | 860 | Indiantown Cogeneration, LP | ||||
3.875% due 03/15/23 | 1,070 | 837 | Series A-10 | ||||
Frontier Communications Corp. | 9.770% due 12/15/20 | 1,195 | 1,356 | ||||
11.000% due 09/15/25 (Þ) | 3,805 | 3,988 | Intel Corp. | ||||
General Electric Capital Corp. | 3.700% due 07/29/25 | 2,575 | 2,674 | ||||
0.491% due 02/15/17 (Ê) | 4,995 | 4,992 | 4.900% due 07/29/45 | 2,000 | 2,080 | ||
0.684% due 05/05/26 (Ê) | 3,045 | 2,849 | International Business Machines Corp. | ||||
0.801% due 08/15/36 (Ê) | 1,000 | 846 | 0.491% due 02/06/18 (Ê) | 4,785 | 4,766 | ||
Series GMTN | 0.684% due 02/12/19 (Ê) | 3,000 | 2,976 | ||||
4.625% due 01/07/21 | 1,389 | 1,538 | International Lease Finance Corp. | ||||
3.100% due 01/09/23 | 679 | 687 | 7.125% due 09/01/18 (Þ) | 1,500 | 1,661 | ||
6.150% due 08/07/37 | 583 | 741 | International Paper Co. | ||||
Series MTNA | 5.150% due 05/15/46 | 2,955 | 2,898 | ||||
6.750% due 03/15/32 | 852 | 1,117 | IPALCO Enterprises, Inc. | ||||
General Electric Co. | 5.000% due 05/01/18 | 3,500 | 3,692 | ||||
5.250% due 12/06/17 | 3,805 | 4,107 | Janus Capital Group, Inc. | ||||
2.700% due 10/09/22 | 1,950 | 1,951 | 4.875% due 08/01/25 | 3,410 | 3,489 | ||
4.500% due 03/11/44 | 3,250 | 3,371 | JetBlue Airways Pass-Through Trust | ||||
General Motors Co. | Series 04-2 Class G-2 | ||||||
4.875% due 10/02/23 | 11,325 | 11,881 | 0.812% due 11/15/16 (Ê) | 4,039 | 3,999 | ||
6.250% due 10/02/43 | 1,655 | 1,828 | Johnson & Johnson | ||||
General Motors Financial Co., Inc. | 0.395% due 11/28/16 (Ê) | 7,190 | 7,193 | ||||
3.450% due 04/10/22 | 1,500 | 1,465 | JPMorgan Chase & Co. | ||||
Georgia-Pacific LLC | 6.300% due 04/23/19 | 3,050 | 3,468 | ||||
8.875% due 05/15/31 | 2,910 | 4,166 | 2.750% due 06/23/20 | 2,755 | 2,778 | ||
Gilead Sciences, Inc. | 4.350% due 08/15/21 | 2,900 | 3,108 | ||||
2.550% due 09/01/20 | 6,655 | 6,719 | 3.375% due 05/01/23 | 1,325 | 1,300 | ||
3.650% due 03/01/26 | 6,280 | 6,349 | 4.250% due 10/01/27 | 2,525 | 2,534 | ||
4.750% due 03/01/46 | 100 | 101 | JPMorgan Chase Bank NA | ||||
Goldman Sachs Capital I | Series BKNT | ||||||
6.345% due 02/15/34 | 3,225 | 3,776 | 6.000% due 10/01/17 | 7,800 | 8,442 | ||
Goldman Sachs Group, Inc. (The) | JPMorgan Chase Capital XIII | ||||||
6.250% due 09/01/17 | 5,310 | 5,763 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 363
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series M | 4.297% due 07/15/54 (Þ) | 3,265 | 3,207 | ||||
1.277% due 09/30/34 (Ê) | 3,530 | 2,991 | Mylan, Inc. | ||||
JPMorgan Chase Capital XXI | 2.550% due 03/28/19 | 3,760 | 3,684 | ||||
Series U | National City Bank | ||||||
1.279% due 02/02/37 (Ê) | 455 | 355 | Series BKNT | ||||
JPMorgan Chase Capital XXIII | 0.702% due 06/07/17 (Ê) | 3,075 | 3,059 | ||||
1.362% due 05/15/47 (Ê) | 8,880 | 6,593 | National Rural Utilities Cooperative | ||||
Kellogg Co. | Finance Corp. | ||||||
1.875% due 11/17/16 | 6,300 | 6,350 | 2.300% due 11/15/19 | 5,805 | 5,827 | ||
Kinder Morgan, Inc. | Neptune Finco Corp. | ||||||
3.050% due 12/01/19 | 2,260 | 2,191 | 6.625% due 10/15/25 (Þ) | 1,170 | 1,231 | ||
4.300% due 06/01/25 | 3,360 | 3,039 | New York Life Global Funding | ||||
KKR Group Finance Co. III LLC | 1.450% due 12/15/17 (Þ) | 6,090 | 6,100 | ||||
5.125% due 06/01/44 (Þ) | 5,455 | 5,391 | NextEra Energy Capital Holdings, Inc. | ||||
Kohl's Corp. | Series F | ||||||
4.250% due 07/17/25 | 6,485 | 6,436 | 2.056% due 09/01/17 | 2,000 | 2,010 | ||
5.550% due 07/17/45 | 3,115 | 3,008 | NiSource Finance Corp. | ||||
Kraft Heinz Foods Co. | 6.400% due 03/15/18 | 868 | 960 | ||||
1.600% due 06/30/17 (Þ) | 1,740 | 1,741 | Nissan Motor Acceptance Corp. | ||||
2.800% due 07/02/20 (Þ) | 1,290 | 1,295 | 0.884% due 03/03/17 (Ê)(Þ) | 4,430 | 4,422 | ||
3.500% due 07/15/22 (Þ) | 1,620 | 1,651 | Noble Energy, Inc. | ||||
4.875% due 02/15/25 (Þ) | 8,569 | 9,213 | 3.900% due 11/15/24 | 1,000 | 952 | ||
Lowe's Cos., Inc. | Norfolk Southern Corp. | ||||||
3.375% due 09/15/25 | 2,450 | 2,488 | 3.000% due 04/01/22 | 1,675 | 1,662 | ||
Manufacturers & Traders Trust Co. | NVR, Inc. | ||||||
Series BKNT | 3.950% due 09/15/22 | 3,200 | 3,260 | ||||
1.400% due 07/25/17 | 5,600 | 5,578 | Oncor Electric Delivery Co. LLC | ||||
Marathon Oil Corp. | 6.800% due 09/01/18 | 7,750 | 8,754 | ||||
5.200% due 06/01/45 | 7,375 | 6,386 | PACCAR Financial Corp. | ||||
McGraw Hill Financial, Inc. | 0.522% due 06/06/17 (Ê) | 2,500 | 2,497 | ||||
3.300% due 08/14/20 (Þ) | 4,890 | 4,976 | 0.932% due 12/06/18 (Ê) | 1,000 | 1,004 | ||
McKesson Corp. | Panhandle Eastern Pipe Line Co., LP | ||||||
2.284% due 03/15/19 | 1,825 | 1,822 | 8.125% due 06/01/19 | 3,542 | 4,089 | ||
Penske Truck Leasing Co. Lp / PTL | |||||||
Mead Johnson Nutrition Co. | Finance Corp. | ||||||
4.125% due 11/15/25 | 4,060 | 4,101 | 3.050% due 01/09/20 (Þ) | 2,500 | 2,497 | ||
Medco Health Solutions, Inc. | |||||||
4.125% due 09/15/20 | 2,027 | 2,152 | Pfizer, Inc. | ||||
0.512% due 05/15/17 (Ê) | 7,095 | 7,086 | |||||
Medtronic, Inc. | 0.637% due 06/15/18 (Ê) | 1,448 | 1,444 | ||||
Series WI | |||||||
2.500% due 03/15/20 | 615 | 625 | 5.800% due 08/12/23 | 1,388 | 1,618 | ||
Merck & Co., Inc. | Philip Morris International, Inc. | ||||||
0.724% due 05/18/18 (Ê) | 11,425 | 11,439 | 2.900% due 11/15/21 | 5,575 | 5,667 | ||
MetLife, Inc. | 3.250% due 11/10/24 | 1,725 | 1,748 | ||||
10.750% due 08/01/39 | 4,795 | 7,552 | Plains All American Pipeline, LP / PAA | ||||
Finance Corp. | |||||||
Microsoft Corp. | 2.850% due 01/31/23 | 850 | 778 | ||||
3.125% due 11/03/25 | 6,130 | 6,203 | |||||
3.750% due 02/12/45 | 2,000 | 1,844 | PNC Bank NA | ||||
Series BKNT | |||||||
4.450% due 11/03/45 | 1,905 | 1,931 | 1.850% due 07/20/18 | 5,585 | 5,598 | ||
MidAmerican Energy Co. | 2.700% due 11/01/22 | 5,180 | 5,006 | ||||
3.500% due 10/15/24 | 1,500 | 1,553 | PNC Funding Corp. | ||||
Monongahela Power Co. | 3.300% due 03/08/22 | 8,530 | 8,789 | ||||
4.100% due 04/15/24 (Þ) | 1,815 | 1,883 | |||||
5.400% due 12/15/43 (Þ) | 1,850 | 2,067 | Principal Financial Group, Inc. | ||||
3.125% due 05/15/23 | 1,683 | 1,647 | |||||
Morgan Stanley | Procter & Gamble Co. (The) | ||||||
5.550% due 04/27/17 | 2,450 | 2,594 | 0.389% due 11/04/16 (Ê) | 4,265 | 4,266 | ||
3.950% due 04/23/27 | 6,185 | 6,016 | 0.599% due 11/01/19 (Ê) | 5,000 | 4,977 | ||
4.300% due 01/27/45 | 4,780 | 4,581 | Progress Energy, Inc. | ||||
Series GMTN | 3.150% due 04/01/22 | 3,750 | 3,736 | ||||
5.450% due 01/09/17 | 2,425 | 2,540 | Prudential Financial, Inc. | ||||
6.625% due 04/01/18 | 4,905 | 5,449 | 3.500% due 05/15/24 | 3,375 | 3,429 | ||
5.500% due 07/24/20 | 1,500 | 1,685 | 5.625% due 06/15/43 | 1,650 | 1,727 | ||
4.000% due 07/23/25 | 1,275 | 1,311 | Public Service Co. of New Mexico | ||||
Mutual of Omaha Insurance Co. | 7.950% due 05/15/18 | 3,320 | 3,758 |
See accompanying notes which are an integral part of the financial statements.
364 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Quebecor World Capital Corp. | 1.800% due 03/26/18 | 7,035 | 7,045 | ||||
4.875% due 01/02/49 (Ø)(Þ) | 625 | — | Series BKNT | ||||
6.125% due 11/15/49 (Ø) | 1,955 | — | 5.750% due 04/25/18 | 940 | 1,026 | ||
QVC, Inc. | Union Pacific Railroad Co. Pass-Through | ||||||
4.375% due 03/15/23 | 5,765 | 5,560 | Trust | ||||
Series WI | Series 06-1 | ||||||
5.450% due 08/15/34 | 2,040 | 1,818 | 5.866% due 07/02/30 | 923 | 1,061 | ||
Rayonier AM Products, Inc. | United Technologies Corp. | ||||||
5.500% due 06/01/24 (Þ) | 3,360 | 2,654 | 3.100% due 06/01/22 | 1,800 | 1,847 | ||
Reliance Standard Life Global Funding | UnitedHealth Group, Inc. | ||||||
II | 1.450% due 07/17/17 | 2,810 | 2,826 | ||||
2.150% due 10/15/18 (Å) | 2,345 | 2,342 | 1.900% due 07/16/18 | 3,420 | 3,461 | ||
2.500% due 01/15/20 (Þ) | 3,070 | 3,058 | 2.700% due 07/15/20 | 4,435 | 4,529 | ||
Republic Services, Inc. | 2.875% due 12/15/21 | 3,375 | 3,438 | ||||
5.250% due 11/15/21 | 1,850 | 2,063 | 3.350% due 07/15/22 | 630 | 653 | ||
3.550% due 06/01/22 | 2,850 | 2,933 | Univision Communications, Inc. | ||||
Reynolds American, Inc. | 5.125% due 05/15/23 (Þ) | 550 | 545 | ||||
6.750% due 06/15/17 | 3,400 | 3,664 | Unum Group | ||||
3.750% due 05/20/23 (Þ) | 2,900 | 2,925 | 4.000% due 03/15/24 | 3,410 | 3,472 | ||
4.850% due 09/15/23 | 1,275 | 1,380 | US Airways Pass-Through Trust | ||||
4.450% due 06/12/25 | 1,775 | 1,852 | Series 2012-1 Class A | ||||
5.850% due 08/15/45 | 4,520 | 5,014 | 5.900% due 10/01/24 | 2,610 | 2,884 | ||
Roche Holdings, Inc. | Series A Class A | ||||||
2.875% due 09/29/21 (Þ) | 3,375 | 3,454 | 7.125% due 10/22/23 | 2,576 | 3,002 | ||
Sabine Pass LNG, LP | US Bank NA | ||||||
7.500% due 11/30/16 | 385 | 397 | Series BKNT | ||||
Series 144a | 0.533% due 09/11/17 (Ê) | 4,800 | 4,785 | ||||
7.500% due 11/30/16 (Þ) | 2,900 | 2,993 | 1.375% due 09/11/17 | 2,400 | 2,406 | ||
SABMiller Holdings, Inc. | US Bank NA/Cincinnati OH | ||||||
3.750% due 01/15/22 (Þ) | 5,045 | 5,159 | Series BKNT | ||||
Samsung Electronics America, Inc. | 0.620% due 01/26/18 (Ê) | 250 | 249 | ||||
1.750% due 04/10/17 (Þ) | 3,160 | 3,158 | USF&G Capital III | ||||
SL Green Realty Corp | 8.312% due 07/01/46 (Þ) | 2,244 | 3,278 | ||||
7.750% due 03/15/20 | 2,300 | 2,721 | Valeant Pharmaceuticals International, | ||||
Southern Power Co. | Inc. | ||||||
Series 15B | 5.500% due 03/01/23 (Þ) | 619 | 520 | ||||
2.375% due 06/01/20 | 1,775 | 1,731 | 6.125% due 04/15/25 (Þ) | 300 | 252 | ||
Sprint Capital Corp. | Valero Energy Corp. | ||||||
8.750% due 03/15/32 | 8,565 | 7,709 | 4.900% due 03/15/45 | 40 | 37 | ||
Sprint Communications, Inc. | Ventas Realty LP/CAP CRP | ||||||
9.000% due 11/15/18 (Þ) | 1,500 | 1,649 | 2.000% due 02/15/18 | 1,400 | 1,404 | ||
Stryker Corp. | Verizon Communications, Inc. | ||||||
3.375% due 11/01/25 | 3,080 | 3,079 | 0.733% due 06/09/17 (Ê) | 661 | 659 | ||
Synchrony Financial | 1.350% due 06/09/17 | 5,255 | 5,261 | ||||
4.500% due 07/23/25 | 725 | 734 | 2.086% due 09/14/18 (Ê) | 600 | 616 | ||
Sysco Corp. | 3.650% due 09/14/18 | 4,140 | 4,366 | ||||
2.600% due 10/01/20 | 5,040 | 5,091 | 3.000% due 11/01/21 | 4,000 | 4,030 | ||
3.750% due 10/01/25 | 2,450 | 2,494 | 3.500% due 11/01/21 | 2,100 | 2,165 | ||
Tenet Healthcare Corp. | 5.050% due 03/15/34 | 5,814 | 5,863 | ||||
3.837% due 06/15/20 (Ê)(Þ) | 1,165 | 1,156 | Series WI | ||||
Time Warner Cable, Inc. | 4.272% due 01/15/36 | 4,770 | 4,372 | ||||
8.250% due 04/01/19 | 2,000 | 2,331 | 4.862% due 08/21/46 | 1,000 | 957 | ||
Time Warner Entertainment Co., LP | 4.672% due 03/15/55 | 3,502 | 3,078 | ||||
8.375% due 03/15/23 | 1,000 | 1,241 | Viacom, Inc. | ||||
Toyota Motor Credit Corp. | 3.125% due 06/15/22 | 2,375 | 2,217 | ||||
1.450% due 01/12/18 | 2,070 | 2,074 | 5.850% due 09/01/43 | 5,482 | 5,162 | ||
Series MTn | Volkswagen Group of America Finance | ||||||
0.706% due 03/12/20 (Ê) | 13,210 | 12,990 | LLC | ||||
UAL Pass-Through Trust | 0.810% due 11/20/17 (Å)(Ê) | 3,785 | 3,614 | ||||
Series 09-1 | Wachovia Capital Trust III | ||||||
10.400% due 11/01/16 | 150 | 160 | 5.570% due 03/29/49 (ƒ) | 3,440 | 3,378 | ||
UBS AG | Wachovia Corp. | ||||||
1.375% due 06/01/17 | 3,700 | 3,696 | 0.607% due 06/15/17 (Ê) | 5,495 | 5,479 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 365
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Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
WEA Finance LLC / Westfield UK & | BAT International Finance PLC | |||||||
Europe Finance PLC | 2.125% due 06/07/17 (Þ) | 6,527 | 6,596 | |||||
3.250% due 10/05/20 (Þ) | 1,025 | 1,035 | 2.750% due 06/15/20 (Þ) | 2,875 | 2,930 | |||
Wells Fargo & Co. | 3.500% due 06/15/22 (Þ) | 830 | 858 | |||||
0.716% due 06/02/17 (Ê) | 10,930 | 10,905 | Berkshire Hathaway, Inc. | |||||
3.500% due 03/08/22 | 7,390 | 7,686 | 0.750% due 03/16/23 | EUR | 1,010 | 1,068 | ||
4.125% due 08/15/23 | 1,675 | 1,743 | BHP Billiton Finance USA, Ltd. | |||||
3.900% due 05/01/45 | 2,500 | 2,325 | 6.750% due 10/19/75 (Å) | 3,350 | 3,421 | |||
Series GMTN | BP Capital Markets PLC | |||||||
2.600% due 07/22/20 | 5,385 | 5,431 | 0.764% due 11/07/16 (Ê) | 3,800 | 3,798 | |||
4.300% due 07/22/27 | 2,885 | 2,977 | 2.315% due 02/13/20 | 1,370 | 1,379 | |||
Welltower, Inc. | 3.506% due 03/17/25 | 4,160 | 4,188 | |||||
6.125% due 04/15/20 | 2,740 | 3,113 | BPCE SA | |||||
4.950% due 01/15/21 | 650 | 704 | 0.934% due 11/18/16 (Ê) | 4,000 | 4,003 | |||
5.250% due 01/15/22 | 2,500 | 2,720 | 4.000% due 04/15/24 | 2,485 | 2,587 | |||
Williams Cos., Inc. (The) | Braskem Finance, Ltd. | |||||||
7.875% due 09/01/21 | 458 | 463 | 6.450% due 02/03/24 | 2,375 | 2,137 | |||
Williams Partners, LP | British Telecommunications PLC | |||||||
4.300% due 03/04/24 | 1,205 | 1,079 | 2.350% due 02/14/19 | 915 | 919 | |||
5.100% due 09/15/45 | 3,905 | 3,005 | Caisse Centrale Desjardins | |||||
Williams Partners, LP / Williams | 0.726% due 03/27/17 (Ê)(Þ) | 9,785 | 9,761 | |||||
Partners Finance Corp. | Canadian Imperial Bank of Commerce | |||||||
7.250% due 02/01/17 | 2,765 | 2,925 | 0.508% due 02/21/17 (Ê) | 8,000 | 7,981 | |||
Wm Wrigley Jr Co. | Canadian Pacific Railway Co. | |||||||
2.000% due 10/20/17 (Þ) | 5,355 | 5,408 | 7.250% due 05/15/19 | 2,500 | 2,908 | |||
ZFS Finance USA Trust II | CDP Financial, Inc. | |||||||
6.450% due 12/15/65 (Þ) | 4,650 | 4,717 | 5.600% due 11/25/39 (Þ) | 2,480 | 2,993 | |||
ZFS Finance USA Trust V | Coca-Cola Enterprises, Inc. | |||||||
6.500% due 05/09/37 (Þ) | 7,452 | 7,620 | 2.375% due 05/07/25 | EUR | 2,475 | 2,798 | ||
1,362,212 | Colombia Government International | |||||||
International Debt - 6.7% | Bond | |||||||
Abbey National Treasury Services PLC | 4.375% due 07/12/21 | 1,535 | 1,581 | |||||
2.350% due 09/10/19 | 3,250 | 3,265 | Cooperatieve Centrale Raiffeisen- | |||||
Actavis Funding SCS | Boerenleenbank BA | |||||||
3.450% due 03/15/22 | 2,420 | 2,404 | 4.625% due 12/01/23 | 3,425 | 3,574 | |||
3.800% due 03/15/25 | 4,400 | 4,360 | 4.375% due 08/04/25 | 3,840 | 3,918 | |||
4.750% due 03/15/45 | 100 | 96 | 5.250% due 08/04/45 | 3,120 | 3,264 | |||
AerCap Ireland Capital, Ltd. / AerCap | 11.000% due 06/29/49 (ƒ)(Þ) | 4,813 | 5,986 | |||||
Global Aviation Trust | Credit Suisse | |||||||
4.625% due 07/01/22 | 3,670 | 3,748 | Series GMTN | |||||
Series WI | 1.375% due 05/26/17 | 5,075 | 5,071 | |||||
5.000% due 10/01/21 | 1,160 | 1,212 | Credit Suisse Group Funding Guernsey, | |||||
Arbor Realty Collateralized Loan | Ltd. | |||||||
Obligation, Ltd. | 3.800% due 09/15/22 (Þ) | 2,000 | 2,018 | |||||
Series 2014-1A Class A | Deutsche Bank AG | |||||||
1.946% due 05/15/24 (Ê)(Þ) | 1,000 | 999 | 1.875% due 02/13/18 | 4,170 | 4,153 | |||
ArcelorMittal | Deutsche Telekom International Finance | |||||||
6.125% due 06/01/18 | 2,820 | 2,827 | BV | |||||
6.125% due 06/01/25 | 5,650 | 4,871 | 2.250% due 03/06/17 (Þ) | 6,160 | 6,217 | |||
Ardagh Packaging Finance PLC / | Electricite de France SA | |||||||
Ardagh Holdings USA, Inc. | 4.875% due 01/22/44 (Þ) | 1,535 | 1,529 | |||||
3.337% due 12/15/19 (Ê)(Þ) | 550 | 542 | Endo, Ltd. / Endo Finance LLC / Endo | |||||
Banco do Brasil SA | Finco, Inc. | |||||||
9.000% due 12/29/49 (ƒ)(Þ) | 1,920 | 1,325 | 6.000% due 07/15/23 (Å) | 550 | 550 | |||
Bank of Montreal | Ensco PLC | |||||||
Series 3FRN | 4.700% due 03/15/21 | 2,465 | 2,218 | |||||
0.681% due 04/10/18 (Ê) | 800 | 796 | 5.750% due 10/01/44 | 3,265 | 2,474 | |||
Bank of Nova Scotia (The) | GE Capital International Funding Co. | |||||||
2.350% due 10/21/20 | 4,290 | 4,264 | 2.342% due 11/15/20 (Å) | 3,936 | 3,947 | |||
Barclays PLC | 3.373% due 11/15/25 (Å) | 1,766 | 1,785 | |||||
2.000% due 03/16/18 | 4,250 | 4,241 | 4.418% due 11/15/35 (Å) | 4,862 | 5,046 | |||
2.750% due 11/08/19 | 3,435 | 3,444 | General Electric Capital Corp. | |||||
Barrick Gold Corp. | Series REGS | |||||||
4.100% due 05/01/23 | 7,811 | 7,255 | 5.500% due 09/15/67 | EUR | 900 | 1,035 |
See accompanying notes which are an integral part of the financial statements.
366 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Global SC Finance II SRL | Philip Morris International, Inc. | ||||||||
Series 2014-1A Class A2 | Series EMTn | ||||||||
3.090% due 07/17/29 (Þ) | 1,881 | 1,860 | 2.875% due 03/03/26 | EUR | 3,900 | 4,771 | |||
Granite Master Issuer PLC | Philippine Government International | ||||||||
Series 2007-1 Class 2A1 | Bond | ||||||||
0.343% due 12/20/54 (Ê) | 1,381 | 1,373 | 4.200% due 01/21/24 | 2,200 | 2,443 | ||||
HBOS PLC | Poland Government International Bond | ||||||||
Series GMTN | 5.125% due 04/21/21 | 1,250 | 1,415 | ||||||
6.750% due 05/21/18 (Þ) | 9,920 | 10,932 | Prologis, LP | ||||||
Hutchison Whampoa International 14, | 1.375% due 05/13/21 | EUR | 3,275 | 3,561 | |||||
Ltd. | Province of Ontario Canada | ||||||||
3.625% due 10/31/24 (Å) | 2,475 | 2,492 | 3.200% due 05/16/24 | 2,750 | 2,866 | ||||
ING Bank NV | Province of Quebec Canada | ||||||||
3.750% due 03/07/17 (Å) | 2,125 | 2,190 | 3.500% due 07/29/20 | 465 | 496 | ||||
4.125% due 11/21/23 | 2,000 | 2,055 | 2.625% due 02/13/23 | 550 | 552 | ||||
Intelsat Jackson Holdings SA | Rio Tinto Finance USA, Ltd. | ||||||||
7.250% due 04/01/19 | 5,960 | 5,588 | 3.750% due 06/15/25 | 3,265 | 3,212 | ||||
Intesa Sanpaolo SpA | Rolls-Royce PLC | ||||||||
2.375% due 01/13/17 | 3,175 | 3,191 | 3.625% due 10/14/25 (Å) | 5,830 | 5,909 | ||||
5.017% due 06/26/24 (Þ) | 2,805 | 2,810 | Royal Bank of Canada | ||||||
KFW | Series GMTn | ||||||||
4.000% due 01/27/20 | 8,525 | 9,366 | 0.581% due 10/13/17 (Ê) | 3,489 | 3,475 | ||||
Kinder Morgan, Inc. | Royal Bank of Scotland Group PLC | ||||||||
1.500% due 03/16/22 | EUR | 950 | 926 | 6.400% due 10/21/19 | 1,000 | 1,117 | |||
LBG Capital No 1 PLC | 5.125% due 05/28/24 | 2,185 | 2,240 | ||||||
Series 144a | 7.500% due 12/29/49 (ƒ) | 2,235 | 2,313 | ||||||
8.000% due 12/29/49 (ƒ)(Þ) | 7,055 | 7,937 | Royal Bank of Scotland PLC (The) | ||||||
Limerock CLO II, Ltd. | Series REGS | ||||||||
Series 2014-2A Class A | 9.500% due 03/16/22 | 2,825 | 3,082 | ||||||
1.817% due 04/18/26 (Ê)(Þ) | 3,540 | 3,518 | Santander UK Group Holdings PLC | ||||||
Lloyds Bank PLC | Series REGS | ||||||||
2.300% due 11/27/18 | 2,695 | 2,728 | 4.750% due 09/15/25 | 1,475 | 1,474 | ||||
Lloyds Banking Group PLC | Seagate HDD Cayman | ||||||||
7.500% due 12/31/49 (ƒ) | 4,380 | 4,654 | 5.750% due 12/01/34 (Þ) | 3,091 | 2,616 | ||||
Macquarie Bank, Ltd. | Shell International Finance BV | ||||||||
0.953% due 10/27/17 (Ê)(Þ) | 2,205 | 2,194 | 0.572% due 11/15/16 (Ê) | 15,580 | 15,589 | ||||
6.625% due 04/07/21 (Þ) | 1,750 | 1,976 | 2.000% due 11/15/18 | 2,360 | 2,386 | ||||
Magnetite XII, Ltd. | 2.250% due 01/06/23 | 925 | 886 | ||||||
Series 2015-12A Class A | 3.250% due 05/11/25 | 6,945 | 6,935 | ||||||
1.821% due 04/15/27 (Ê)(Þ) | 1,500 | 1,492 | 4.375% due 05/11/45 | 1,000 | 1,001 | ||||
Marfrig Overseas, Ltd. | Sirius International Group, Ltd. | ||||||||
9.500% due 05/04/20 (Þ) | 6,131 | 6,131 | 7.506% due 05/29/49 (ƒ)(Þ) | 4,170 | 4,212 | ||||
Morgan Stanley | Skandinaviska Enskilda Banken AB | ||||||||
Series GMTN | 2.375% due 03/25/19 (Þ) | 4,250 | 4,314 | ||||||
1.750% due 01/30/25 | EUR | 1,705 | 1,854 | Sky PLC | |||||
Noble Holding International, Ltd. | 6.100% due 02/15/18 (Þ) | 2,290 | 2,492 | ||||||
3.950% due 03/15/22 | 1,285 | 963 | 3.750% due 09/16/24 (Þ) | 2,656 | 2,647 | ||||
5.950% due 04/01/25 | 845 | 679 | SMART Trust | ||||||
Nokia OYJ | Series 2015-3US Class A3A | ||||||||
6.625% due 05/15/39 | 4,411 | 4,615 | 1.660% due 08/14/19 | 3,595 | 3,592 | ||||
NOVA Chemicals Corp. | South Africa Government International | ||||||||
5.250% due 08/01/23 (Þ) | 1,685 | 1,724 | Bond | ||||||
Peruvian Government International Bond | 4.665% due 01/17/24 | 800 | 808 | ||||||
6.550% due 03/14/37 | 675 | 815 | Statoil ASA | ||||||
Petrobras Global Finance BV | 0.804% due 11/08/18 (Ê) | 8,300 | 8,231 | ||||||
6.250% due 03/17/24 | 9,990 | 8,001 | 3.150% due 01/23/22 | 1,600 | 1,640 | ||||
Petroleos de Venezuela SA | Suncor Energy, Inc. | ||||||||
6.000% due 11/15/26 | 16,285 | 5,755 | 5.950% due 12/01/34 | 2,690 | 3,023 | ||||
5.375% due 04/12/27 | 2,030 | 706 | Teck Resources, Ltd. | ||||||
Petroleos Mexicanos | 4.750% due 01/15/22 | 2,015 | 1,312 | ||||||
4.875% due 01/24/22 | 2,125 | 2,167 | 3.750% due 02/01/23 | 8,640 | 5,487 | ||||
4.500% due 01/23/26 (Þ) | 2,875 | 2,745 | Total Capital SA | ||||||
5.625% due 01/23/46 (Þ) | 2,465 | 2,126 | 2.125% due 08/10/18 | 3,300 | 3,357 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 367
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Trade MAPS 1, Ltd. | Adjustable Rate Mortgage Trust | ||||||
Series 2013-1A Class A | Series 2006-1 Class 2A1 | ||||||
0.895% due 12/10/18 (Ê)(Þ) | 6,410 | 6,394 | 3.524% due 03/25/36 (Ê) | 692 | 524 | ||
TransCanada PipeLines, Ltd. | Alternative Loan Trust | ||||||
3.800% due 10/01/20 | 1,900 | 2,014 | Series 2005-85CB Class 2A2 | ||||
Transocean, Inc. | 5.500% due 02/25/36 | 14 | 13 | ||||
3.000% due 10/15/17 | 7,834 | 7,192 | Series 2005-J13 Class 2A7 | ||||
4.300% due 10/15/22 | 3,955 | 2,585 | 5.500% due 11/25/35 | 544 | 504 | ||
6.800% due 03/15/38 | 1,550 | 984 | Series 2006-13T1 Class A3 | ||||
Turkey Government International Bond | 6.000% due 05/25/36 | 3,318 | 2,820 | ||||
5.750% due 03/22/24 | 3,015 | 3,252 | Series 2006-OA1 Class 2A1 | ||||
Tyco Electronics Group SA | 0.417% due 03/20/46 | 1,292 | 1,020 | ||||
6.550% due 10/01/17 | 2,425 | 2,653 | Series 2007-8CB Class A1 | ||||
Tyco International Finance SA | 5.500% due 05/25/37 | 2,772 | 2,355 | ||||
3.900% due 02/14/26 | 2,745 | 2,787 | Series 2007-15CB Class A5 | ||||
UBS Group Funding Jersey, Ltd. | 5.750% due 07/25/37 | 473 | 433 | ||||
4.125% due 09/24/25 (Þ) | 3,960 | 3,977 | Series 2007-15CB Class A7 | ||||
Vale Overseas, Ltd. | 6.000% due 07/25/37 | 1,340 | 1,248 | ||||
6.875% due 11/21/36 | 2,305 | 1,877 | American Home Mortgage Investment | ||||
Validus Holdings, Ltd. | Trust | ||||||
8.875% due 01/26/40 | 2,273 | 2,924 | Series 2007-4 Class A2 | ||||
Voya CLO, Ltd. | 0.411% due 08/25/37 (Ê) | 522 | 513 | ||||
Series 2014-4A Class A1 | Banc of America Alternative Loan Trust | ||||||
1.821% due 10/14/26 (Ê)(Þ) | 1,250 | 1,241 | Series 2005-5 Class 2CB1 | ||||
6.000% due 06/25/35 | 325 | 307 | |||||
Weatherford International, Ltd. | Banc of America Commercial Mortgage | ||||||
5.125% due 09/15/20 | 3,933 | 3,368 | |||||
4.500% due 04/15/22 | 1,995 | 1,561 | Trust | ||||
Series 2006-6 Class AJ | |||||||
418,166 | 5.421% due 10/10/45 | 2,290 | 2,330 | ||||
Loan Agreements - 0.6% | Series 2007-2 Class AM | ||||||
Avago Technologies Cayman, Ltd. | 5.797% due 04/10/49 | 1,490 | 1,559 | ||||
Covenant-Lite Term Loan B | Series 2007-3 Class AJ | ||||||
3.750% due 05/06/21 | 2,983 | 2,982 | 5.730% due 06/10/49 | 2,530 | 2,611 | ||
FCA US LLC 1st Lien Term Loan B | Series 2015-UBS7 Class A4 | ||||||
3.500% due 05/24/17 (Ê) | 3,963 | 3,957 | 3.705% due 09/15/48 | 80 | 83 | ||
First Data Corp. Term Loan | Banc of America Funding Corp. | ||||||
3.697% due 03/24/18 (Ê) | 4,050 | 4,017 | Series 2006-3 Class 5A8 | ||||
HCA, Inc. Term Loan B4 | 5.500% due 03/25/36 | 1,409 | 1,328 | ||||
3.077% due 05/01/18 (Ê) | 2,852 | 2,852 | Banc of America Funding Trust | ||||
MacDermid, Inc. 1st Lien Term Loan | Series 2005-8 Class 1A1 | ||||||
4.500% due 06/07/20 (Ê) | 5,865 | 5,678 | 5.500% due 01/25/36 | 2,593 | 2,608 | ||
Numericable US LLC 1st Lien Term | Series 2006-F Class 1A2 | ||||||
Loan B1 | 2.706% due 07/20/36 (Ê) | 106 | 79 | ||||
4.500% due 05/21/20 (Ê) | 2,075 | 2,047 | Banc of America Merrill Lynch | ||||
Numericable US LLC 1st Lien Term | Commercial Mortgage, Inc. | ||||||
Loan B2 | Series 2005-3 Class AM | ||||||
4.500% due 05/21/20 (Ê) | 1,795 | 1,770 | 4.727% due 07/10/43 | 126 | 126 | ||
Sungard Availability Services Capital, | |||||||
Inc. Covenant-Lite 1st Lien Term | Series 2005-5 Class B | ||||||
Loan B | 5.476% due 10/10/45 | 1,600 | 1,601 | ||||
6.000% due 03/31/19 (Ê) | 2,869 | 2,501 | Series 2007-5 Class A4 | ||||
TWCC Holding Corp. 2nd Lien | 5.492% due 02/10/51 | 442 | 462 | ||||
Covenant-Lite Term Loan | Series 2008-1 Class A4 | ||||||
7.000% due 06/26/20 (Ê) | 4,300 | 4,291 | 6.424% due 02/10/51 | 1,282 | 1,375 | ||
Valeant Pharmaceuticals International, | Banc of America Mortgage Securities, | ||||||
Inc. 1st Lien Term Loan B | Inc. | ||||||
0.040% due 04/02/22 (Ê) | 3,313 | 3,297 | Series 2004-1 Class 5A1 | ||||
Valeant Pharmaceuticals International, | 6.500% due 09/25/33 | 12 | 12 | ||||
Inc. 1st Lien Term Loan E | Series 2004-11 Class 2A1 | ||||||
3.750% due 08/05/20 (Ê) | 764 | 709 | 5.750% due 01/25/35 | 385 | 393 | ||
34,101 | Series 2004-F Class 1A1 | ||||||
Mortgage-Backed Securities - 25.6% | 2.677% due 07/25/34 (Ê) | 316 | 322 | ||||
1211 Avenue of the Americas Trust | Series 2004-I Class 2A2 | ||||||
Series 2015-1211 Class A1A2 | 2.877% due 10/25/34 (Ê) | 63 | 61 | ||||
3.901% due 08/10/35 (Þ) | 8,305 | 8,623 |
See accompanying notes which are an integral part of the financial statements.
368 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2005-H Class 2A5 | Series 2006-1 Class A2 | ||||||
2.848% due 09/25/35 (Ê) | 1,771 | 1,623 | 6.000% due 03/25/36 | 454 | 423 | ||
Banc of America Mortgage Trust | Series 2006-14 Class A4 | ||||||
Series 2005-D Class 2A7 | 6.250% due 09/25/36 | 2,965 | 2,823 | ||||
2.726% due 05/25/35 (Ê) | 1,398 | 1,308 | Series 2006-21 Class A8 | ||||
Banc of America Re-REMIC Trust | 5.750% due 02/25/37 | 2,126 | 2,008 | ||||
Series 2010-UB5 Class A4A | Series 2007-4 Class 1A10 | ||||||
5.649% due 02/17/51 (Þ) | 1,715 | 1,766 | 6.000% due 05/25/37 | 4,953 | 4,460 | ||
BCAP LLC Trust | Series 2007-5 Class A51 | ||||||
Series 2011-R11 Class 15A1 | 5.750% due 05/25/37 | 2,085 | 1,985 | ||||
2.735% due 10/26/33 (Ê)(Þ) | 3,279 | 3,327 | Series 2007-9 Class A11 | ||||
Series 2011-R11 Class 20A5 | 5.750% due 07/25/37 | 1,268 | 1,207 | ||||
2.736% due 03/26/35 (Ê)(Þ) | 1,317 | 1,328 | Series 2007-9 Class A13 | ||||
Bear Stearns Adjustable Rate Mortgage | 5.750% due 07/25/37 | 863 | 820 | ||||
Trust | Citigroup Commercial Mortgage Trust | ||||||
Series 2003-8 Class 4A1 | Series 2006-C4 Class A3 | ||||||
2.832% due 01/25/34 (Ê) | 147 | 147 | 5.987% due 03/15/49 | 107 | 108 | ||
Series 2004-5 Class 2A | Series 2013-375P Class A | ||||||
3.109% due 07/25/34 (Ê) | 710 | 711 | 3.251% due 05/10/35 (Þ) | 3,760 | 3,817 | ||
Series 2004-10 Class 22A1 | Series 2014-GC19 Class D | ||||||
3.023% due 01/25/35 (Ê) | 200 | 195 | 5.063% due 03/10/47 (Þ) | 110 | 98 | ||
Series 2005-12 Class 13A1 | Series 2014-GC23 Class A4 | ||||||
3.634% due 02/25/36 (Ê) | 175 | 163 | 3.622% due 07/10/47 | 7,000 | 7,269 | ||
Bear Stearns Commercial Mortgage | |||||||
Securities Trust | Series 2015-GC29 Class A3 | ||||||
Series 2005-T20 Class E | 2.935% due 04/10/48 | 80 | 78 | ||||
5.342% due 10/12/42 | 170 | 170 | Series 2015-GC29 Class A4 | ||||
Series 2006-T22 Class AJ | 3.192% due 04/10/48 | 110 | 110 | ||||
5.816% due 04/12/38 | 75 | 76 | Series 2015-GC29 Class D | ||||
Series 2007-PW15 Class A4 | 3.110% due 04/10/48 (Þ) | 520 | 374 | ||||
5.331% due 02/11/44 | 231 | 239 | Series 2015-GC29 Class XA | ||||
Series 2007-PW16 Class A4 | 1.314% due 04/10/48 | 1,123 | 85 | ||||
5.912% due 06/11/40 | 41 | 42 | Series 2015-GC31 Class A4 | ||||
Series 2007-PW17 Class A4 | 3.762% due 06/10/48 | 180 | 188 | ||||
5.694% due 06/11/50 | 1,333 | 1,402 | Citigroup Mortgage Loan Trust | ||||
Series 2012-7 Class 10A2 | |||||||
Bear Stearns Structured Products, Inc. | 2.729% due 09/25/36 (Ê)(Þ) | 2,207 | 1,951 | ||||
Series 2007-R6 Class 1A1 | |||||||
2.599% due 01/26/36 (Ê) | 1,462 | 1,199 | Citigroup Mortgage Loan Trust, Inc. | ||||
Series 2004-UST1 Class A5 | |||||||
Series 2007-R6 Class 2A1 | 2.044% due 08/25/34 (Ê) | 3,203 | 3,150 | ||||
2.478% due 12/26/46 (Ê) | 1,328 | 986 | |||||
Series 2005-11 Class A2A | |||||||
BHMS Mortgage Trust | 2.730% due 10/25/35 (Ê) | 101 | 100 | ||||
Series 2014-ATLS Class AFL | |||||||
1.693% due 07/05/33 (Ê)(Þ) | 1,215 | 1,214 | Series 2007-AR8 Class 2A1A | ||||
2.799% due 07/25/37 (Ê) | 1,362 | 1,273 | |||||
Series 2014-ATLS Class BFX | Citigroup/Deutsche Bank Commercial | ||||||
4.241% due 07/05/33 (Þ) | 2,745 | 2,789 | Mortgage Trust | ||||
CD Commercial Mortgage Trust | Series 2007-CD4 Class A4 | ||||||
Series 2005-CD1 Class AJ | 5.322% due 12/11/49 | 340 | 348 | ||||
5.473% due 07/15/44 | 198 | 198 | COBALT CMBS Commercial Mortgage | ||||
Series 2005-CD1 Class C | Trust | ||||||
5.473% due 07/15/44 | 900 | 899 | Series 2006-C1 Class AM | ||||
CD Mortgage Trust | 5.254% due 08/15/48 | 110 | 112 | ||||
Series 2006-CD2 Class AM | Commercial Mortgage Pass-Through | ||||||
5.592% due 01/15/46 | 1,190 | 1,195 | Certificates | ||||
CFCRE Commercial Mortgage Trust | Interest Only STRIP | ||||||
Series 2011-C2 Class C | 1.019% due 02/10/47 | 1,619 | 68 | ||||
5.760% due 12/15/47 (Þ) | 860 | 954 | Series 2015-CR27 Class A4 | ||||
CGCMT Trust | 3.612% due 10/10/48 | 265 | 273 | ||||
Series 2009-RR1 Class MA4A | Series 2015-CR27 Class B | ||||||
5.485% due 03/17/51 (Þ) | 400 | 416 | 4.510% due 10/10/48 | 1,375 | 1,413 | ||
CHL Mortgage Pass-Through Trust | Series 2015-CR27 Class D | ||||||
Series 2004-11 Class 2A1 | 3.621% due 10/10/48 (Å) | 235 | 174 | ||||
2.288% due 07/25/34 (Ê) | 1,980 | 1,961 | Commercial Mortgage Trust | ||||
Series 2004-22 Class A3 | Series 2001-J2A Class E | ||||||
2.643% due 11/25/34 (Ê) | 893 | 843 | 6.922% due 07/16/34 (Þ) | 2,100 | 2,178 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 369
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2005-LP5 Class D | Series 2005-C3 Class AJ | ||||||
4.894% due 05/10/43 | 1,872 | 1,871 | 4.771% due 07/15/37 | 20 | 21 | ||
Series 2006-GG7 Class A4 | Series 2005-C6 Class B | ||||||
6.021% due 07/10/38 | 505 | 510 | 5.230% due 12/15/40 | 2,415 | 2,413 | ||
Series 2007-GG11 Class A4 | Credit Suisse Mortgage Capital | ||||||
5.736% due 12/10/49 | 1,347 | 1,405 | Certificates | ||||
Series 2007-GG11 Class AJ | Series 2007-2 Class 3A4 | ||||||
6.254% due 12/10/49 | 2,642 | 2,705 | 5.500% due 03/25/37 | 2,355 | 2,184 | ||
Series 2008-LS1 Class A4B | CSAIL Commercial Mortgage Trust | ||||||
6.228% due 12/10/49 | 1,409 | 1,460 | Series 2015-C2 Class XA | ||||
Series 2010-RR1 Class GEA | Interest Only STRIP | ||||||
5.543% due 12/11/49 (Þ) | 7,300 | 7,512 | 1.046% due 06/15/57 | 1,269 | 74 | ||
Series 2012-CR2 Class A1 | Series 2015-C3 Class A4 | ||||||
0.824% due 08/15/45 | 255 | 255 | 3.718% due 08/15/48 | 200 | 208 | ||
Series 2012-CR4 Class A3 | Series 2015-C3 Class D | ||||||
2.853% due 10/15/45 | 688 | 693 | 3.507% due 08/15/48 | 355 | 272 | ||
Series 2012-CR4 Class XA | CSMC | ||||||
Interest Only STRIP | Series 2010-19R Class 5A4 | ||||||
2.091% due 10/15/45 | 473 | 42 | 3.250% due 08/27/36 (Þ) | 3,201 | 3,122 | ||
Series 2012-CR5 Class A3 | Series 2010-20R Class 7A4 | ||||||
2.540% due 12/10/45 | 10 | 10 | 3.500% due 03/27/37 (Ê)(Þ) | 3,670 | 3,511 | ||
Series 2013-CR7 Class A1 | CSMC Trust | ||||||
0.716% due 03/10/46 | 3,229 | 3,215 | Series 2014-USA Class A2 | ||||
Series 2013-CR9 Class A3 | 3.953% due 09/15/37 (Þ) | 2,970 | 3,094 | ||||
4.022% due 07/10/45 | 155 | 167 | DBCCRE Mortgage Trust | ||||
Series 2013-CR9 Class A4 | Series 2014-ARCP Class C | ||||||
4.376% due 07/10/45 | 760 | 830 | 5.099% due 01/10/34 (Þ) | 2,495 | 2,608 | ||
Series 2014-CR19 Class A5 | DBUBS Mortgage Trust | ||||||
3.796% due 08/10/47 | 75 | 79 | Series 2011-LC3A Class A2 | ||||
3.642% due 08/10/44 | 4,848 | 4,881 | |||||
Series 2014-CR21 Class A3 | Deutsche Alt-A Securities Mortgage | ||||||
3.528% due 12/10/47 | 265 | 273 | Loan Trust | ||||
Series 2014-KYO Class F | Series 2007-OA4 Class 1A1A | ||||||
3.697% due 06/11/27 (Ê)(Þ) | 3,330 | 3,282 | 0.411% due 08/25/47 (Ê) | 3,694 | 3,070 | ||
Series 2014-UBS4 Class A5 | DSLA Mortgage Loan Trust | ||||||
3.694% due 08/10/47 | 310 | 322 | Series 2007-AR1 Class 2A1A | ||||
Series 2015-CR23 Class A4 | 0.343% due 04/19/47 (Ê) | 6,749 | 5,568 | ||||
3.497% due 05/10/48 | 305 | 312 | Fannie Mae | ||||
Series 2015-CR24 Class A5 | 10.000% due 2018 | 3 | 3 | ||||
3.696% due 08/10/55 | 90 | 93 | 5.000% due 2019 | 152 | 158 | ||
Series 2015-CR24 Class D | 3.766% due 2020 | 5,903 | 6,365 | ||||
3.463% due 08/10/55 | 180 | 135 | 4.000% due 2020 | 5 | 5 | ||
Series 2015-DC1 Class A5 | 3.400% due 2021 | 4,790 | 5,076 | ||||
3.350% due 02/10/48 | 290 | 293 | 3.500% due 2021 | 269 | 284 | ||
Series 2015-LC19 Class A4 | |||||||
3.183% due 02/10/48 | 55 | 55 | 3.840% due 2021 | 3,764 | 4,096 | ||
Series 2015-PC1 Class A4 | 3.890% due 2021 | 1,861 | 2,026 | ||||
3.620% due 07/10/50 | 115 | 118 | 4.338% due 2021 | 5,997 | 6,595 | ||
Series 2015-PC1 Class A5 | 5.500% due 2021 | 98 | 106 | ||||
3.902% due 07/10/50 | 185 | 195 | 2.820% due 2022 | 2,540 | 2,607 | ||
Commericial Mortgage Trust | 2.830% due 2022 | 2,333 | 2,395 | ||||
Series 2014-CR14 Class A4 | 5.000% due 2022 | 1,098 | 1,172 | ||||
4.236% due 02/10/47 | 4,156 | 4,519 | 5.500% due 2022 | 400 | 435 | ||
Credit Suisse Commercial Mortgage | 4.500% due 2023 | 61 | 66 | ||||
Trust Series | 5.500% due 2023 | 832 | 906 | ||||
Series 2007-C1 Class A3 | 2.500% due 2024 | 7,258 | 7,455 | ||||
5.383% due 02/15/40 | 4,473 | 4,613 | 4.000% due 2024 | 65 | 69 | ||
Series 2007-C3 Class A4 | 5.500% due 2024 | 572 | 624 | ||||
5.889% due 06/15/39 | 51 | 53 | 7.500% due 2024 | 1 | 1 | ||
Credit Suisse First Boston Mortgage | |||||||
Securities Corp. | 10.000% due 2024 | 2 | 3 | ||||
Series 2005-9 Class 2A1 | 2.800% due 2025 | 2,980 | 2,988 | ||||
5.500% due 10/25/35 | 2,383 | 2,259 | 4.000% due 2025 | 2,635 | 2,783 | ||
Series 2005-C2 Class AMFX | 4.500% due 2025 | 50 | 54 | ||||
4.877% due 04/15/37 | 405 | 405 | 5.500% due 2025 | 1,352 | 1,423 |
See accompanying notes which are an integral part of the financial statements.
370 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
3.500% due 2026 | 2,208 | 2,336 | 4.500% due 2039 | 773 | 840 | ||
4.000% due 2026 | 6,458 | 6,861 | 6.000% due 2039 | 632 | 717 | ||
4.500% due 2026 | 167 | 189 | 6.500% due 2039 | 122 | 140 | ||
5.500% due 2026 | 181 | 202 | 4.500% due 2040 | 286 | 311 | ||
9.000% due 2026 | 5 | 6 | 5.500% due 2040 | 645 | 722 | ||
2.966% due 2027 | 3,971 | 3,972 | 4.000% due 2041 | 8,881 | 9,561 | ||
3.000% due 2027 | 2,482 | 2,589 | 4.500% due 2041 | 1,614 | 1,830 | ||
3.500% due 2027 | 3,353 | 3,549 | 4.500% due 2041 | 7,819 | 8,495 | ||
4.500% due 2027 | 571 | 646 | 5.000% due 2041 | 17,747 | 19,605 | ||
4.500% due 2027 | 3,285 | 3,474 | 4.500% due 2042 | 716 | 778 | ||
5.500% due 2027 | 62 | 69 | 3.500% due 2043 | 11,255 | 11,773 | ||
3.500% due 2028 | 1,923 | 2,041 | 4.500% due 2044 | 10,127 | 11,035 | ||
7.000% due 2028 | 38 | 44 | 3.500% due 2045 | 13,337 | 13,910 | ||
6.500% due 2029 | 43 | 49 | 4.000% due 2045 | 19,973 | 21,333 | ||
7.000% due 2029 | 390 | 458 | 15 Year TBA(Ï) | ||||
7.500% due 2029 | 5 | 7 | 2.000% | 1,475 | 1,463 | ||
3.500% due 2030 | 4,348 | 4,603 | 2.500% | 6,075 | 6,167 | ||
6.500% due 2030 | 61 | 70 | 3.000% | 125 | 130 | ||
7.000% due 2030 | 63 | 67 | 30 Year TBA(Ï) | ||||
8.000% due 2030 | 58 | 71 | 2.500% | 975 | 952 | ||
8.500% due 2030 | 52 | 59 | 3.000% | 84,745 | 85,563 | ||
9.500% due 2030 | 22 | 25 | 3.500% | 141,990 | 147,547 | ||
4.000% due 2031 | 1,920 | 2,064 | 4.000% | 45,755 | 48,692 | ||
6.500% due 2031 | 116 | 132 | 4.500% | 29,365 | 31,524 | ||
7.000% due 2031 | 255 | 304 | 5.000% | 6,880 | 7,576 | ||
7.500% due 2031 | 23 | 26 | 5.500% | 2,820 | 3,186 | ||
8.500% due 2031 | 140 | 157 | Series 1997-281 Class 2 | ||||
3.500% due 2032 | 8,746 | 9,220 | Interest Only STRIP | ||||
6.500% due 2032 | 95 | 109 | 9.000% due 11/25/26 (Å) | 18 | 4 | ||
7.000% due 2032 | 711 | 835 | Series 2000-306 Class IO | ||||
7.500% due 2032 | 19 | 22 | Interest Only STRIP | ||||
8.500% due 2032 | 12 | 16 | 8.000% due 05/25/30 (Å) | 19 | 5 | ||
Series 2001-317 Class 2 | |||||||
2.448% due 2033(Ê) | 116 | 123 | Interest Only STRIP | ||||
3.000% due 2033 | 5,541 | 5,740 | 8.000% due 12/25/31 (Å) | 27 | 6 | ||
3.500% due 2033 | 4,814 | 5,057 | Series 2002-320 Class 2 | ||||
6.500% due 2033 | 144 | 165 | Interest Only STRIP | ||||
7.000% due 2033 | 320 | 366 | 7.000% due 04/25/32 (Å) | 8 | 2 | ||
2.267% due 2034(Ê) | 89 | 94 | Series 2003-339 Class 23 | ||||
2.424% due 2034(Ê) | 446 | 474 | Interest Only STRIP | ||||
2.536% due 2034(Ê) | 254 | 271 | 5.000% due 06/25/18 | 212 | 9 | ||
5.500% due 2034 | 1,046 | 1,179 | Series 2003-343 Class 6 | ||||
6.500% due 2034 | 285 | 339 | Interest Only STRIP | ||||
7.000% due 2034 | 40 | 48 | 5.000% due 10/25/33 | 504 | 96 | ||
2.353% due 2035(Ê) | 741 | 790 | Series 2003-345 Class 18 | ||||
2.376% due 2035(Ê) | 553 | 588 | Interest Only STRIP | ||||
4.500% due 2035 | 750 | 858 | 4.500% due 12/25/18 | 613 | 28 | ||
5.500% due 2035 | 698 | 787 | Series 2003-345 Class 19 | ||||
7.000% due 2035 | 20 | 21 | Interest Only STRIP | ||||
4.500% due 01/25/19 | 664 | 30 | |||||
7.500% due 2035 | 284 | 339 | Series 2005-365 Class 12 | ||||
2.444% due 2036(Ê) | 7 | 7 | Interest Only STRIP | ||||
4.000% due 2036 | 66 | 71 | 5.500% due 12/25/35 | 1,652 | 286 | ||
5.500% due 2036 | 503 | 546 | Series 2006-369 Class 8 | ||||
7.000% due 2036 | 86 | 94 | Interest Only STRIP | ||||
4.000% due 2037 | 75 | 80 | 5.500% due 04/25/36 | 243 | 49 | ||
5.500% due 2037 | 2,560 | 2,859 | Fannie Mae Grantor Trust | ||||
6.500% due 2037 | 224 | 256 | Series 1999-T2 Class A1 | ||||
5.500% due 2038 | 2,414 | 2,714 | 7.500% due 01/19/39 | 31 | 34 | ||
5.500% due 2038 | 2,536 | 2,863 | Series 2001-T4 Class A1 | ||||
6.500% due 2038 | 206 | 244 | 7.500% due 07/25/41 | 2,286 | 2,784 | ||
4.500% due 2039 | 777 | 895 | Fannie Mae REMICS |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 371
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 1996-46 Class ZA | Series 2011-M2 Class A3 | ||||||
7.500% due 11/25/26 | 75 | 85 | 3.764% due 04/25/21 | 4,250 | 4,617 | ||
Series 1997-68 Class SC | Series 2012-M8 Class ASQ2 | ||||||
8.338% due 05/18/27 (Å)(Ê) | 26 | 6 | 1.520% due 12/25/19 | 8,476 | 8,544 | ||
Series 1999-56 Class Z | Series 2013-M4 Class ASQ2 | ||||||
7.000% due 12/18/29 | 273 | 314 | 1.451% due 02/25/18 | 3,856 | 3,878 | ||
Series 2001-4 Class SA | Series 2013-M14 Class FA | ||||||
7.388% due 02/17/31 (Å)(Ê) | 9 | — | 0.520% due 08/25/18 (Ê) | 4,440 | 4,443 | ||
Series 2002-57 Class PG | Series 2014-M13 Class A2 | ||||||
5.500% due 09/25/17 | 349 | 358 | 3.021% due 08/25/24 | 2,735 | 2,803 | ||
Series 2003-25 Class IK | Series 2014-M13 Class AB2 | ||||||
7.000% due 04/25/33 (Å) | 74 | 14 | 2.951% due 08/25/24 | 3,645 | 3,759 | ||
Series 2003-32 Class UI | Series 2014-M13 Class ASQ2 | ||||||
6.000% due 05/25/33 (Å) | 54 | 13 | 1.637% due 11/25/17 | 28,206 | 28,524 | ||
Series 2003-33 Class IA | Series 2015-M1 Class ASQ1 | ||||||
6.500% due 05/25/33 (Å) | 354 | 62 | 0.782% due 02/25/18 | 7,213 | 7,203 | ||
Series 2003-35 Class FY | Series 2015-M1 Class ASQ2 | ||||||
0.570% due 05/25/18 (Ê) | 354 | 355 | 1.626% due 02/25/18 | 9,390 | 9,475 | ||
Series 2003-35 Class IU | Series 2015-M7 Class ASQ1 | ||||||
6.000% due 05/25/33 (Å) | 66 | 15 | 0.882% due 04/25/18 | 5,460 | 5,464 | ||
Series 2003-35 Class UI | Series 2015-M7 Class ASQ2 | ||||||
6.500% due 05/25/33 (Å) | 78 | 16 | 1.550% due 04/25/18 | 3,325 | 3,347 | ||
Series 2003-64 Class JI | Series 2015-M11 Class A1 | ||||||
6.000% due 07/25/33 (Å) | 44 | 11 | 2.097% due 04/25/25 | 4,660 | 4,684 | ||
Series 2004-70 Class EB | FDIC Guaranteed Notes Trust | ||||||
5.000% due 10/25/24 | 747 | 804 | Series 2010-S1 Class 1A | ||||
Series 2005-110 Class MB | 0.720% due 02/25/48 (Ê)(Þ) | 485 | 485 | ||||
5.500% due 09/25/35 | 279 | 299 | FDIC Trust | ||||
Series 2005-117 Class LC | Series 2010-R1 Class A | ||||||
5.500% due 11/25/35 | 2,211 | 2,406 | 2.184% due 05/25/50 (Þ) | 890 | 897 | ||
Series 2006-22 Class CE | Series 2011-R1 Class A | ||||||
4.500% due 08/25/23 | 760 | 811 | 2.672% due 07/25/26 (Þ) | 3,570 | 3,646 | ||
Series 2006-118 Class A1 | Federal Home Loan Mortgage Corp. | ||||||
0.259% due 12/25/36 (Å)(Ê) | 69 | 67 | Multifamily Structured Pass-Through | ||||
Series 2007-73 Class A1 | Certificates | ||||||
0.259% due 07/25/37 (Å)(Ê) | 712 | 670 | Series 2010-KSCT Class A2 | ||||
Series 2009-39 Class LB | 4.285% due 01/25/20 | 1,910 | 2,110 | ||||
4.500% due 06/25/29 | 1,478 | 1,595 | Series 2011-K702 Class X1 | ||||
Series 2009-70 Class PS | Interest Only STRIP | ||||||
Interest Only STRIP | 1.525% due 02/25/18 | 53,734 | 1,589 | ||||
6.581% due 01/25/37 (Ê) | 12,272 | 1,942 | Series 2015-K044 Class A2 | ||||
Series 2009-71 Class MB | 2.811% due 01/25/25 | 3,050 | 3,072 | ||||
4.500% due 09/25/24 | 1,143 | 1,214 | Series 2015-K151 Class A3 | ||||
Series 2009-96 Class DB | 3.511% due 04/25/30 | 2,405 | 2,478 | ||||
4.000% due 11/25/29 | 3,996 | 4,264 | Series 2015-KS03 Class A4 | ||||
Series 2010-95 Class S | 3.161% due 05/25/25 | 1,145 | 1,165 | ||||
Interest Only STRIP | Federal Home Loan Mortgage Corp. | ||||||
6.413% due 09/25/40 (Ê) | 11,037 | 1,713 | Structured Pass-Through Securities | ||||
Series 2002-42 Class A6 | |||||||
Series 2013-111 Class PL | 9.500% due 02/25/42 | 49 | 60 | ||||
2.000% due 12/25/42 | 3,641 | 3,308 | |||||
Series 2003-56 Class A5 | |||||||
Series 2013-119 Class NT | 5.231% due 05/25/43 | 1,854 | 2,047 | ||||
4.000% due 12/25/43 | 3,600 | 3,816 | |||||
Series 2003-58 Class 2A | |||||||
Series 2015-43 Class PA | 6.500% due 09/25/43 | 157 | 180 | ||||
3.500% due 01/25/43 | 3,382 | 3,523 | |||||
Fannie Mae Whole Loan | First Horizon Asset Securities, Inc. | ||||||
Series 2005-AR4 Class 2A1 | |||||||
Series 2003-W1 Class 2A | 2.666% due 10/25/35 (Ê) | 1,504 | 1,310 | ||||
6.475% due 12/25/42 | 62 | 72 | First Horizon Mortgage Pass-Through | ||||
Series 2004-W9 Class 2A1 | Trust | ||||||
6.500% due 02/25/44 | 126 | 142 | Series 2005-AR1 Class 2A1 | ||||
Series 2004-W11 Class 1A2 | 2.608% due 04/25/35 (Ê) | 1,048 | 1,044 | ||||
6.500% due 05/25/44 | 272 | 320 | First Union National Bank-Bank of | ||||
Fannie Mae-Aces | America NA Commercial Mortgage | ||||||
Trust |
See accompanying notes which are an integral part of the financial statements.
372 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2001-C1 Class IO1 | Freddie Mac REMICS | ||||||
Interest Only STRIP | Series 1994-1730 Class Z | ||||||
2.200% due 03/15/33 (Þ) | 2,373 | 3 | 7.000% due 05/15/24 | 86 | 97 | ||
Four Times Square Trust Commercial | Series 1999-2129 Class SG | ||||||
Mortgage Pass-Through Certificates | 6.838% due 06/17/27 (Å)(Ê) | 493 | 89 | ||||
Series 2006-4TS Class A | Series 2000-2247 Class SC | ||||||
5.401% due 12/13/28 (Þ) | 390 | 436 | 7.334% due 08/15/30 (Å)(Ê) | 16 | 3 | ||
Freddie Mac | Series 2002-2463 Class SJ | ||||||
8.500% due 2017 | 2 | 2 | 7.834% due 03/15/32 (Å)(Ê) | 45 | 13 | ||
10.500% due 2017 | — | — | Series 2003-2610 Class UI | ||||
8.000% due 2020 | 14 | 15 | 6.500% due 05/15/33 (Å) | 12 | 2 | ||
10.000% due 2020 | 4 | 4 | Series 2003-2621 Class QH | ||||
11.000% due 2020 | 2 | 2 | 5.000% due 05/15/33 | 740 | 814 | ||
10.500% due 2021 | 4 | 4 | Series 2003-2624 Class QH | ||||
8.500% due 2025 | 7 | 8 | 5.000% due 06/15/33 | 718 | 794 | ||
4.000% due 2026 | 1,614 | 1,722 | Series 2003-2649 Class IM | ||||
3.500% due 2027 | 3,509 | 3,709 | 7.000% due 07/15/33 (Å) | 93 | 22 | ||
7.000% due 2027 | 34 | 39 | Series 2003-2697 Class LG | ||||
8.500% due 2027 | 46 | 55 | 4.500% due 10/15/23 | 619 | 667 | ||
2.500% due 2030 | 8,743 | 8,908 | Series 2003-2725 Class TA | ||||
3.000% due 2030 | 3,395 | 3,532 | 4.500% due 12/15/33 | 1,300 | 1,497 | ||
3.500% due 2030 | 1,492 | 1,580 | Series 2006-3123 Class HT | ||||
7.500% due 2030 | 48 | 54 | 5.000% due 03/15/26 | 1,596 | 1,730 | ||
8.500% due 2030 | 19 | 22 | Series 2006-3150 Class EQ | ||||
6.500% due 2031 | 91 | 105 | 5.000% due 05/15/26 | 1,130 | 1,220 | ||
8.000% due 2031 | 4 | 4 | Series 2006-R006 Class ZA | ||||
6.000% due 04/15/36 | 3,592 | 4,083 | |||||
7.000% due 2032 | 45 | 53 | Series 2007-3335 Class FT | ||||
2.360% due 2033(Ê) | 145 | 154 | 0.348% due 08/15/19 (Ê) | 513 | 513 | ||
3.000% due 2035 | 1,289 | 1,319 | Series 2007-3345 Class FP | ||||
3.500% due 2035 | 2,957 | 3,098 | 0.367% due 11/15/36 (Ê) | 143 | 143 | ||
5.000% due 2035 | 61 | 68 | Series 2007-3345 Class PF | ||||
4.000% due 2036 | 151 | 160 | 0.347% due 05/15/36 (Ê) | 135 | 135 | ||
6.000% due 2038 | 2,517 | 2,890 | Series 2009-3558 Class G | ||||
6.500% due 2038 | 41 | 47 | 4.000% due 08/15/24 | 150 | 163 | ||
4.500% due 2039 | 7,531 | 8,370 | Series 2010-3704 Class DC | ||||
5.500% due 2039 | 1,583 | 1,756 | 4.000% due 11/15/36 | 1,290 | 1,368 | ||
4.000% due 2040 | 9,307 | 10,078 | Series 2011-3963 Class JB | ||||
4.500% due 2040 | 4,682 | 5,208 | 4.500% due 11/15/41 | 3,500 | 3,954 | ||
5.000% due 2040 | 346 | 381 | Series 2012-3997 Class PB | ||||
5.500% due 2040 | 2,414 | 2,688 | 4.000% due 02/15/42 | 4,000 | 4,343 | ||
4.000% due 2041 | 9,659 | 10,418 | Series 2013-4233 Class MD | ||||
5.500% due 2041 | 2,805 | 3,154 | 1.750% due 03/15/25 | 3,256 | 3,282 | ||
3.000% due 2042 | 3,047 | 3,073 | Freddie Mac Strips | ||||
3.500% due 2044 | 2,547 | 2,659 | Series 1998-191 Class IO | ||||
4.000% due 2044 | 6,990 | 7,498 | Interest Only STRIP | ||||
3.000% due 2045 | 25,500 | 25,717 | 8.000% due 01/01/28 (Å) | 17 | 4 | ||
3.500% due 2045 | 24,963 | 26,009 | Series 1998-194 Class IO | ||||
Interest Only STRIP | |||||||
4.000% due 2045 | 19,199 | 20,479 | 6.500% due 04/01/28 (Å) | 43 | 9 | ||
15 Year TBA(Ï) | Series 2001-212 Class IO | ||||||
2.500% | 5,600 | 5,698 | Interest Only STRIP | ||||
3.000% | 8,725 | 9,067 | 6.000% due 05/01/31 (Å) | 43 | 9 | ||
30 Year TBA(Ï) | Series 2001-215 Class IO | ||||||
3.500% | 18,712 | 19,427 | Interest Only STRIP | ||||
4.000% | 9,875 | 10,484 | 8.000% due 06/15/31 (Å) | 44 | 11 | ||
5.000% | 1,775 | 1,944 | GAHR Commericial Mortgage Trust | ||||
6.000% | 5,375 | 6,074 | Series 2015-NRF Class AFX | ||||
Freddie Mac Mortgage Trust | 3.235% due 12/15/19 (Þ) | 2,660 | 2,729 | ||||
Series 2010-K7 Class B | GE Capital Commercial Mortgage Corp. | ||||||
5.441% due 04/25/20 (Þ) | 5,700 | 6,383 | Series 2005-C3 Class H | ||||
Freddie Mac Reference REMIC | 5.439% due 07/10/45 (Þ) | 4,086 | 4,077 | ||||
Series 2006-R007 Class ZA | Series 2005-C4 Class A4 | ||||||
6.000% due 05/15/36 | 2,586 | 2,921 | 5.385% due 11/10/45 | 17 | 17 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
GE Commercial Mortgage Corp. Trust | Government National Mortgage | ||||||
Series 2007-C1 Class AM | Association | ||||||
5.606% due 12/10/49 | 165 | 171 | Series 1999-27 Class SE | ||||
Ginnie Mae | 8.439% due 08/16/29 (Å)(Ê) | 65 | 19 | ||||
Series 2002-27 Class SA | Series 2010-14 Class A | ||||||
7.839% due 05/16/32 (Å)(Ê) | 14 | 3 | 4.500% due 06/16/39 | 825 | 880 | ||
Series 2012-H23 Class FI | Series 2010-H04 Class BI | ||||||
Interest Only STRIP | Interest Only STRIP | ||||||
0.794% due 10/20/62 | 20,623 | 441 | 1.390% due 04/20/60 | 12,763 | 607 | ||
Series 2014-190 Class PL | Series 2010-H12 Class PT | ||||||
3.500% due 12/20/44 | 4,959 | 5,226 | 5.470% due 11/20/59 | 3,464 | 3,603 | ||
Ginnie Mae I | Series 2010-H22 Class JI | ||||||
7.000% due 2016 | — | — | Interest Only STRIP | ||||
11.000% due 2020 | 2 | 2 | 2.499% due 11/20/60 | 20,986 | 1,547 | ||
10.500% due 2021 | 7 | 8 | Series 2011-H02 Class BI | ||||
10.000% due 2022 | 12 | 13 | Interest Only STRIP | ||||
2.140% due 2023 | 3,625 | 3,646 | 0.412% due 02/20/61 | 17,210 | 229 | ||
10.000% due 2025 | 14 | 16 | Series 2012-H11 Class CI | ||||
8.000% due 2030 | 95 | 108 | Interest Only STRIP | ||||
2.906% due 04/20/62 | 20,218 | 1,500 | |||||
7.500% due 2031 | 12 | 13 | Series 2013-H03 Class HI | ||||
7.500% due 2032 | 6 | 7 | Interest Only STRIP | ||||
5.500% due 2034 | 26 | 29 | 2.595% due 12/20/62 | 13,737 | 1,265 | ||
5.500% due 2035 | 3,817 | 4,351 | Series 2013-H06 Class HI | ||||
5.500% due 2036 | 52 | 58 | Interest Only STRIP | ||||
5.500% due 2037 | 63 | 70 | 2.932% due 01/20/63 | 30,106 | 2,192 | ||
5.500% due 2038 | 49 | 55 | Series 2013-H07 Class JL | ||||
4.500% due 2039 | 12,615 | 13,698 | Interest Only STRIP | ||||
5.000% due 2039 | 6,700 | 7,495 | 2.635% due 03/20/63 | 32,481 | 2,813 | ||
4.500% due 2040 | 5,085 | 5,514 | Granite Master Issuer PLC | ||||
5.000% due 2040 | 1,110 | 1,230 | Series 2005-2 Class A6 | ||||
4.500% due 2041 | 3,863 | 4,190 | 0.426% due 12/20/54 (Ê) | 1,170 | 1,168 | ||
4.500% due 2042 | 286 | 310 | GreenPoint Mortgage Funding Trust | ||||
3.000% due 2043 | 6,878 | 7,023 | Series 2005-AR5 Class 1A1 | ||||
30 Year TBA(Ï) | 0.440% due 11/25/45 (Ê) | 154 | 133 | ||||
3.500% | 2,325 | 2,433 | GS Mortgage Securities Corp. II | ||||
4.000% | 10,175 | 10,808 | Series 2011-GC5 Class A4 | ||||
6.000% | 175 | 197 | 3.707% due 08/10/44 | 6,880 | 7,307 | ||
Series 2012-ALOH Class A | |||||||
Ginnie Mae II | 3.551% due 04/10/34 (Þ) | 940 | 983 | ||||
3.500% due 2040(Ê) | 841 | 865 | |||||
Series 2013-GC10 Class A1 | |||||||
4.000% due 2040(Ê) | 2,556 | 2,668 | 0.696% due 02/10/46 | 70 | 70 | ||
5.500% due 2043 | 3,599 | 4,022 | Series 2015-GC30 Class A4 | ||||
3.000% due 2045 | 14,763 | 15,100 | 3.382% due 05/10/50 | 175 | 177 | ||
3.500% due 2045 | 26,987 | 28,319 | GS Mortgage Securities Trust | ||||
4.000% due 2045 | 7,450 | 7,954 | Series 2011-GC5 Class XA | ||||
5.390% due 2059 | 2,274 | 2,364 | Interest Only STRIP | ||||
4.700% due 2061 | 7,079 | 7,455 | 1.643% due 08/10/44 (Þ) | 1,675 | 77 | ||
4.810% due 2061 | 7,240 | 7,657 | Series 2013-GC12 Class A1 | ||||
4.564% due 2062 | 5,859 | 6,331 | 0.742% due 06/10/46 | 1,153 | 1,147 | ||
4.845% due 2062 | 1,490 | 1,584 | Series 2013-GC13 Class XA | ||||
5.065% due 2062 | 2,446 | 2,604 | Interest Only STRIP | ||||
4.652% due 2063 | 925 | 1,005 | 0.338% due 07/10/46 | 14,097 | 129 | ||
4.661% due 2063 | 416 | 450 | Series 2013-GC16 Class A1 | ||||
30 Year TBA(Ï) | 1.264% due 11/10/46 | 1,292 | 1,289 | ||||
3.500% | 16,595 | 17,387 | Series 2014-GC18 Class A4 | ||||
4.000% | 2,250 | 2,395 | 4.074% due 01/10/47 | 195 | 209 | ||
GMAC Commercial Mortgage Securities, | Series 2014-GC20 Class A3 | ||||||
Inc. Trust | 3.680% due 04/10/47 | 705 | 743 | ||||
Series 2006-C1 Class A4 | Series 2014-GC20 Class D | ||||||
5.238% due 11/10/45 | 51 | 51 | 4.867% due 04/10/47 (Þ) | 460 | 406 | ||
GMACM Mortgage Loan Trust | Series 2014-GC26 Class C | ||||||
Series 2005-AR2 Class 4A | 4.511% due 11/10/47 | 1,525 | 1,514 | ||||
4.566% due 05/25/35 (Ê) | 1,703 | 1,629 |
See accompanying notes which are an integral part of the financial statements.
374 Russell Strategic Bond Fund
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Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2015-GC28 Class A5 | Series 2007-C1 Class A4 | ||||||
3.396% due 02/10/48 | 1,500 | 1,519 | 5.716% due 02/15/51 | 285 | 301 | ||
GSMPS Mortgage Loan Trust | Series 2007-CB19 Class A4 | ||||||
Series 1998-1 Class A | 5.883% due 02/12/49 | 865 | 903 | ||||
8.000% due 09/19/27 (Þ) | 55 | 56 | Series 2007-LDPX Class A3 | ||||
Series 1998-3 Class A | 5.420% due 01/15/49 | 186 | 192 | ||||
7.750% due 09/19/27 (Þ) | 44 | 46 | Series 2007-LDPX Class AM | ||||
Series 1999-3 Class A | 5.464% due 01/15/49 | 4,250 | 4,356 | ||||
8.000% due 08/19/29 (Þ) | 150 | 142 | Series 2008-C2 Class A4FL | ||||
Series 2005-RP1 Class 1A4 | 1.696% due 02/12/51 (Ê) | 1,407 | 1,387 | ||||
8.500% due 01/25/35 (Þ) | 477 | 515 | Series 2009-IWST Class C | ||||
Series 2006-RP1 Class 1A2 | 7.693% due 12/05/27 (Þ) | 2,020 | 2,363 | ||||
7.500% due 01/25/36 (Þ) | 1,018 | 1,066 | Series 2011-C3 Class A3 | ||||
Series 2006-RP1 Class 1A3 | 4.388% due 02/15/46 (Þ) | 5,915 | 6,246 | ||||
8.000% due 01/25/36 (Þ) | 1,058 | 1,129 | Series 2012-C8 Class A3 | ||||
GSR Mortgage Loan Trust | 2.829% due 10/15/45 | 480 | 482 | ||||
Series 2005-AR7 Class 6A1 | Series 2012-C8 Class E | ||||||
2.936% due 11/25/35 (Ê) | 517 | 496 | 4.821% due 10/15/45 (Þ) | 100 | 96 | ||
HarborView Mortgage Loan Trust | Series 2013-C10 Class A5 | ||||||
Series 2005-4 Class 3A1 | 3.143% due 12/15/47 | 5,000 | 5,092 | ||||
2.670% due 07/19/35 (Ê) | 2,218 | 1,971 | Series 2014-FBLU Class A | ||||
Hilton USA Trust | 1.147% due 12/15/28 (Å)(Ê) | 2,095 | 2,095 | ||||
Series 2013-HLF Class DFL | Series 2014-FBLU Class C | ||||||
2.944% due 11/05/30 (Å)(Ê) | 207 | 207 | 2.161% due 12/15/28 (Ê)(Þ) | 2,435 | 2,436 | ||
Series 2013-HLT Class EFX | Series 2015-CSMO Class A | ||||||
5.222% due 11/05/30 (Å) | 5,000 | 5,034 | 1.447% due 01/15/32 (Ê)(Þ) | 900 | 895 | ||
IndyMac INDA Mortgage Loan Trust | JPMorgan Mortgage Trust | ||||||
Series 2007-AR1 Class 1A1 | Series 2004-A2 Class 3A1 | ||||||
2.822% due 03/25/37 (Ê) | 2,205 | 2,038 | 2.470% due 05/25/34 (Ê) | 248 | 239 | ||
IndyMac INDX Mortgage Loan Trust | Series 2005-A1 Class 6T1 | ||||||
Series 2005-AR25 Class 1A21 | 2.594% due 02/25/35 (Ê) | 83 | 83 | ||||
4.796% due 12/25/35 (Ê) | 515 | 396 | Series 2005-A4 Class 1A1 | ||||
Series 2006-AR4 Class A1A | 2.498% due 07/25/35 (Ê) | 406 | 401 | ||||
0.391% due 05/25/46 (Ê) | 3,992 | 3,309 | Series 2005-A8 Class 1A1 | ||||
JPMBB Commercial Mortgage Securities | 2.636% due 11/25/35 (Ê) | 1,202 | 1,137 | ||||
Trust | Series 2005-S3 Class 1A2 | ||||||
Series 2014-C23 Class XA | 5.750% due 01/25/36 | 85 | 75 | ||||
Interest Only STRIP | |||||||
1.025% due 09/15/47 | 4,948 | 223 | Series 2006-A6 Class 1A2 | ||||
2.677% due 10/25/36 (Ê) | 678 | 608 | |||||
Series 2014-C26 Class C | |||||||
4.570% due 01/15/48 | 1,515 | 1,468 | Series 2007-A1 Class B1 | ||||
2.695% due 07/25/35 (Ê) | 66 | 21 | |||||
Series 2015-C27 Class A4 | |||||||
3.179% due 02/15/48 | 310 | 309 | Series 2007-A4 Class 3A3 | ||||
4.844% due 06/25/37 (Ê) | 1,391 | 1,256 | |||||
Series 2015-C28 Class D | |||||||
3.881% due 10/15/48 (Å) | 175 | 137 | Series 2015-SGP Class C | ||||
3.694% due 07/15/36 (Ê)(Þ) | 4,805 | 4,811 | |||||
Series 2015-C29 Class A4 | |||||||
3.611% due 05/15/48 | 1,930 | 1,988 | JPMorgan Resecuritization Trust Series | ||||
Series 2009-5 Class 2A2 | |||||||
Series 2015-C32 Class A5 | 1.796% due 01/26/37 (Ê)(Þ) | 5,740 | 4,658 | ||||
3.598% due 11/15/48 | 265 | 272 | LB-Commercial Mortgage Trust | ||||
JPMorgan Alternative Loan Trust | Series 2007-C3 Class AJ | ||||||
Series 2006-A2 Class 3A1 | 6.097% due 07/15/44 | 2,440 | 2,501 | ||||
2.674% due 05/25/36 (Ê) | 3,669 | 2,990 | |||||
JPMorgan Chase Commercial Mortgage | Series 2007-C3 Class AM | ||||||
Securities Trust | 6.097% due 07/15/44 | 2,830 | 2,998 | ||||
Series 2004-LN2 Class B | LB-UBS Commercial Mortgage Trust | ||||||
5.446% due 07/15/41 | 1,550 | 1,549 | Series 2003-C5 Class K | ||||
Series 2005-CB12 Class AJ | 5.250% due 04/15/37 (Þ) | 164 | 165 | ||||
4.987% due 09/12/37 | 2,197 | 2,201 | Series 2004-C6 Class F | ||||
Series 2006-CB15 Class A4 | 5.206% due 08/15/36 | 1,346 | 1,346 | ||||
5.814% due 06/12/43 | 2,565 | 2,592 | Series 2005-C7 Class F | ||||
Series 2006-LDP8 Class A4 | 5.350% due 11/15/40 | 1,320 | 1,282 | ||||
5.399% due 05/15/45 | 176 | 179 | Series 2007-C1 Class AJ | ||||
Series 2006-LDP9 Class A3 | 5.484% due 02/15/40 | 3,840 | 3,940 | ||||
5.336% due 05/15/47 | 334 | 344 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 375
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2007-C1 Class AM | Series 2005-IQ10 Class B | ||||||
5.455% due 02/15/40 | 2,570 | 2,669 | 5.519% due 09/15/42 | 590 | 591 | ||
Series 2007-C6 Class A4 | Series 2006-HQ8 Class A4 | ||||||
5.858% due 07/15/40 | 848 | 878 | 5.408% due 03/12/44 | 221 | 221 | ||
Series 2007-C7 Class AJ | Series 2006-HQ8 Class C | ||||||
6.449% due 09/15/45 | 4,830 | 5,014 | 5.488% due 03/12/44 | 1,405 | 1,400 | ||
Series 2008-C1 Class A2 | Series 2006-IQ11 Class A4 | ||||||
6.269% due 04/15/41 | 51 | 55 | 5.845% due 10/15/42 | 164 | 164 | ||
Mastr Adjustable Rate Mortgages Trust | Series 2006-T21 Class D | ||||||
Series 2004-10 Class 2A2 | 5.404% due 10/12/52 (Þ) | 85 | 85 | ||||
3.087% due 10/25/34 (Ê) | 5 | 3 | Series 2006-T21 Class E | ||||
Series 2005-1 Class B1 | 5.404% due 10/12/52 (Þ) | 55 | 54 | ||||
Interest Only STRIP | Series 2007-IQ14 Class A2FL | ||||||
2.596% due 03/25/35 (Ê) | 701 | 213 | 0.358% due 04/15/49 (Ê) | 3,405 | 3,393 | ||
Series 2006-2 Class 4A1 | Series 2007-IQ16 Class AM | ||||||
2.747% due 02/25/36 (Ê) | 760 | 747 | 6.288% due 12/12/49 | 6,907 | 7,389 | ||
Series 2007-HF2 Class A1 | Series 2007-T25 Class AJ | ||||||
0.531% due 09/25/37 (Ê) | 3,531 | 3,175 | 5.574% due 11/12/49 | 2,962 | 2,983 | ||
Mastr Reperforming Loan Trust | Series 2007-T27 Class A4 | ||||||
Series 2005-1 Class 1A3 | 5.645% due 06/11/42 | 44 | 47 | ||||
7.000% due 08/25/34 (Þ) | 376 | 391 | Series 2008-T29 Class AM | ||||
Series 2005-2 Class 1A4 | 6.261% due 01/11/43 | 4,950 | 5,363 | ||||
8.000% due 05/25/35 (Þ) | 785 | 838 | Series 2008-T29 Class D | ||||
Merrill Lynch Mortgage Investors Trust | 6.268% due 01/11/43 (Þ) | 175 | 180 | ||||
Series 2005-A9 Class 2A1C | Series 2011-C2 Class A2 | ||||||
2.649% due 12/25/35 (Ê) | 3,825 | 3,679 | 3.476% due 06/15/44 (Þ) | 4,833 | 4,873 | ||
Merrill Lynch Mortgage Trust | Morgan Stanley Capital I, Inc. | ||||||
Series 2005-A10 Class A | Series 2007-IQ14 Class A2 | ||||||
0.431% due 02/25/36 (Ê) | 368 | 337 | 5.610% due 04/15/49 | 652 | 652 | ||
Series 2006-C2 Class AM | Series 2007-IQ14 Class A4 | ||||||
5.782% due 08/12/43 | 1,400 | 1,435 | 5.692% due 04/15/49 | 1,015 | 1,055 | ||
Series 2008-C1 Class A4 | Series 2007-IQ16 Class A4 | ||||||
5.690% due 02/12/51 | 3,465 | 3,677 | 5.809% due 12/12/49 | 219 | 231 | ||
ML-CFC Commercial Mortgage Trust | Morgan Stanley Re-REMIC Trust | ||||||
Series 2007-5 Class A4 | Series 2009-GG10 Class A4A | ||||||
5.378% due 08/12/48 | 757 | 780 | 5.795% due 08/12/45 (Þ) | 1,043 | 1,090 | ||
Series 2007-5 Class AM | Series 2010-GG10 Class A4A | ||||||
5.419% due 08/12/48 | 350 | 362 | 5.795% due 08/15/45 (Þ) | 329 | 344 | ||
Morgan Stanley Bank of America Merrill | Mortgage Pass-Through Certificates | ||||||
Lynch Trust | Series 2001-CIB2 Class D | ||||||
Series 2012-C5 Class A4 | 6.802% due 04/15/35 | 249 | 249 | ||||
3.176% due 08/15/45 | 50 | 51 | Mortgage Trust | ||||
Series 2013-C7 Class A1 | Series 2007-CD5 Class A4 | ||||||
0.738% due 02/15/46 | 1,199 | 1,197 | 5.886% due 11/15/44 | 297 | 315 | ||
Series 2013-C7 Class A4 | Motel 6 Trust | ||||||
2.918% due 02/15/46 | 7,060 | 7,093 | Series 2015-MTL6 Class A2A2 | ||||
Series 2013-C8 Class A4 | 2.605% due 02/05/30 (Þ) | 3,370 | 3,376 | ||||
3.134% due 12/15/48 | 3,530 | 3,590 | MSBAM Commercial Mortgage | ||||
Series 2014-C19 Class A4 | Securities Trust | ||||||
3.526% due 12/15/47 | 130 | 134 | Series 2012-CKSV Class A2 | ||||
Series 2015-C24 Class A4 | 3.277% due 10/15/30 (Þ) | 1,065 | 1,063 | ||||
3.732% due 05/15/48 | 4,430 | 4,607 | MSCG Trust | ||||
Series 2015-C24 Class C | Series 2015-ALDR Class A2 | ||||||
4.500% due 08/15/47 | 455 | 420 | 3.577% due 06/07/35 (Þ) | 1,435 | 1,460 | ||
Series 2015-C26 Class A3 | NCUA Guaranteed Notes Trust | ||||||
3.211% due 11/15/48 | 5,055 | 5,080 | Series 2010-R1 Class 2A | ||||
Series 2015-C26 Class D | 1.840% due 10/07/20 | 604 | 605 | ||||
3.060% due 11/15/48 | 225 | 163 | Series 2010-R3 Class 3A | ||||
Series 2015-C26 Class XA | 2.400% due 12/08/20 | 1,528 | 1,546 | ||||
1.133% due 11/15/48 | 265 | 21 | Nomura Asset Acceptance Corp. | ||||
Morgan Stanley Capital I Trust | Alternative Loan Trust | ||||||
Series 2005-IQ9 Class B | Series 2005-WF1 Class 2A2 | ||||||
4.860% due 07/15/56 | 1,190 | 1,214 | 4.786% due 03/25/35 | 5 | 5 | ||
Nomura Resecuritization Trust |
See accompanying notes which are an integral part of the financial statements.
376 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2013-1R Class 3A12 | Series 2006-C26 Class AM | ||||||
0.351% due 10/26/36 (Ê)(Þ) | 2,482 | 1,992 | 6.172% due 06/15/45 | 3,960 | 4,045 | ||
Series 2014-1R Class 5A3 | Series 2006-C29 Class A4 | ||||||
0.341% due 10/26/36 (Ê)(Þ) | 4,173 | 3,141 | 5.308% due 11/15/48 | 162 | 166 | ||
Series 2015-11R Class 3A2 | Series 2007-C33 Class AJ | ||||||
2.369% due 05/25/36 (Å) | 1,272 | 1,170 | 6.150% due 02/15/51 | 5,100 | 5,224 | ||
Prime Mortgage Trust | Washington Mutual Mortgage Pass- | ||||||
Series 2004-CL1 Class 1A2 | Through Certificates Trust | ||||||
0.621% due 02/25/34 (Ê) | 27 | 26 | Series 2004-AR1 Class A | ||||
RAMP Trust | 2.436% due 03/25/34 (Ê) | 401 | 402 | ||||
Series 2004-SL1 Class A3 | Series 2004-AR13 Class A1A | ||||||
7.000% due 11/25/31 | 2 | 2 | 0.941% due 11/25/34 (Ê) | 2,504 | 2,381 | ||
RBSCF Trust | Series 2005-AR6 Class 2A1A | ||||||
Series 2010-RR4 Class WBCA | 0.451% due 04/25/45 (Ê) | 5,630 | 5,272 | ||||
5.509% due 04/16/47 (Þ) | 300 | 304 | Series 2005-AR13 Class A1A1 | ||||
RBSSP Resecuritization Trust | 0.511% due 10/25/45 (Ê) | 143 | 132 | ||||
Series 2010-3 Class 9A1 | Series 2006-AR7 Class 2A | ||||||
5.500% due 02/26/35 (Þ) | 531 | 543 | 1.093% due 07/25/46 (Ê) | 1,610 | 1,305 | ||
Reperforming Loan REMIC Trust | Series 2006-AR10 Class 1A1 | ||||||
Series 2005-R2 Class 2A4 | 2.246% due 09/25/36 | 4,385 | 3,950 | ||||
8.500% due 06/25/35 (Þ) | 95 | 101 | Series 2007-HY1 Class 3A3 | ||||
RFMSI Trust | 4.371% due 02/25/37 (Ê) | 3,459 | 3,191 | ||||
Series 2006-SA4 Class 2A1 | Series 2007-HY1 Class 4A1 | ||||||
3.660% due 11/25/36 (Ê) | 437 | 379 | 2.379% due 02/25/37 (Ê) | 2 | 2 | ||
Rialto Capital Management LLC | Series 2007-HY2 Class 2A3 | ||||||
Series 2014-LT5 Class A | 1.755% due 04/25/37 (Ê) | 3,619 | 2,668 | ||||
2.850% due 05/15/24 (Þ) | 206 | 205 | Series 2007-HY5 Class 3A1 | ||||
RREF LLC | 4.591% due 05/25/37 (Ê) | 4,215 | 3,930 | ||||
Series 2014-LT6 Class A | Series 2007-OA2 Class 1A | ||||||
2.750% due 09/15/24 (Þ) | 360 | 359 | 0.858% due 03/25/47 (Ê) | 4,862 | 3,814 | ||
Series 2015-LT7 Class A | Wells Fargo Commercial Mortgage Trust | ||||||
3.000% due 12/25/32 (Þ) | 4,129 | 4,129 | Series 2015-C29 Class D | ||||
SFAVE Commercial Mortgage Securities | 4.365% due 06/15/48 | 125 | 100 | ||||
Trust | Series 2015-LC22 Class A4 | ||||||
Series 2015-5AVE Class A1 | 3.839% due 09/15/58 | 155 | 162 | ||||
3.872% due 01/05/35 (Þ) | 215 | 212 | Series 2015-NXS1 Class D | ||||
Series 2015-5AVE Class A2B | 4.105% due 05/15/48 | 40 | 33 | ||||
4.144% due 01/05/35 (Þ) | 400 | 395 | Wells Fargo Mortgage Backed Securities | ||||
Structured Adjustable Rate Mortgage | Trust | ||||||
Loan Trust | Series 2004-CC Class A1 | ||||||
Series 2004-12 Class 2A | 2.665% due 01/25/35 (Ê) | 589 | 595 | ||||
2.421% due 09/25/34 (Ê) | 5,488 | 5,444 | Series 2005-18 Class 2A10 | ||||
Series 2004-18 Class 5A | 21.923% due 01/25/36 (Å)(Ê) | 221 | 266 | ||||
2.586% due 12/25/34 | 68 | 66 | Series 2005-AR7 Class 2A1 | ||||
Structured Asset Mortgage Investments | 2.740% due 05/25/35 (Ê) | 1,561 | 1,547 | ||||
II Trust | |||||||
Series 2004-AR7 Class A1B | Series 2005-AR8 Class 1A1 | ||||||
0.564% due 04/19/35 (Ê) | 658 | 624 | 2.722% due 06/25/35 (Ê) | 4,322 | 4,399 | ||
Series 2006-2 Class 2A3 | |||||||
Towd Point Mortgage Trust | 5.500% due 03/25/36 | 641 | 615 | ||||
Series 2015-2 Class 2A1 | |||||||
3.750% due 11/25/57 (Þ) | 2,956 | 3,060 | Series 2006-6 Class 1A8 | ||||
UBS-Barclays Commercial Mortgage | 5.750% due 05/25/36 | 995 | 975 | ||||
Trust | Series 2006-8 Class A15 | ||||||
Series 2012-C3 Class A4 | 6.000% due 07/25/36 | 2,123 | 2,142 | ||||
3.091% due 08/10/49 | 315 | 321 | Series 2006-11 Class A9 | ||||
Series 2013-C5 Class A4 | 6.500% due 09/25/36 | 946 | 919 | ||||
3.185% due 03/10/46 | 530 | 540 | Series 2006-AR1 Class 2A5 | ||||
Wachovia Bank Commercial Mortgage | 5.552% due 03/25/36 (Ê) | 801 | 779 | ||||
Trust | Series 2006-AR2 Class 2A1 | ||||||
Series 2005-C17 Class G | 2.698% due 03/25/36 | 915 | 910 | ||||
5.797% due 03/15/42 (Þ) | 105 | 105 | Series 2006-AR4 Class 2A1 | ||||
Series 2005-C22 Class AM | 5.724% due 04/25/36 (Ê) | 4,936 | 4,816 | ||||
5.546% due 12/15/44 | 428 | 428 | Series 2006-AR10 Class 4A1 | ||||
Series 2006-C23 Class A4 | 2.626% due 07/25/36 (Ê) | 1,759 | 1,652 | ||||
5.418% due 01/15/45 | 15 | 14 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 377
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
Series 2006-AR17 Class A1 | 6.650% due 03/01/22 | 945 | 1,141 | |||||
2.733% due 10/25/36 (Ê) | 4,968 | 4,710 | University of California Revenue Bonds | |||||
Series 2007-11 Class A81 | 4.601% due 05/15/31 | 3,085 | 3,276 | |||||
6.000% due 08/25/37 | 2,067 | 2,048 | 36,000 | |||||
Series 2007-13 Class A7 | Non-US Bonds - 3.9% | |||||||
6.000% due 09/25/37 | 408 | 410 | Achmea BV | |||||
WFRBS Commercial Mortgage Trust | 2.500% due 11/19/20 | EUR | 2,800 | 3,261 | ||||
Series 2011-C4 Class A4 | Australia Government Bond | |||||||
4.902% due 06/15/44 (Þ) | 600 | 670 | Series 120 | |||||
Series 2012-C6 Class D | 6.000% due 02/15/17 | AUD | 2,689 | 2,020 | ||||
5.747% due 04/15/45 (Þ) | 415 | 431 | Series 126 | |||||
Series 2012-C8 Class A1 | 4.500% due 04/15/20 | AUD | 12,350 | 9,758 | ||||
0.864% due 08/15/45 | 5,557 | 5,547 | Series 133 | |||||
Series 2012-C8 Class A3 | 5.500% due 04/21/23 | AUD | 1,340 | 1,156 | ||||
3.001% due 08/15/45 | 3,910 | 3,972 | Series 140 | |||||
Series 2012-C9 Class A1 | 4.500% due 04/21/33 | AUD | 10,020 | 8,484 | ||||
0.673% due 11/15/45 | 396 | 395 | Barclays Bank PLC | |||||
Series 2012-C9 Class A3 | 6.000% due 01/14/21 | EUR | 1,225 | 1,615 | ||||
2.870% due 11/15/45 | 110 | 111 | Brazil Notas do Tesouro Nacional | |||||
Series 2013-C14 Class A1 | Series NTNB | |||||||
0.836% due 06/15/46 | 1,320 | 1,313 | 6.000% due 05/15/45 | BRL | 5,401 | 3,378 | ||
Series 2013-C14 Class A5 | 6.000% due 08/15/50 | BRL | 8,580 | 5,275 | ||||
3.337% due 06/15/46 | 3,434 | 3,525 | Series NTNF | |||||
Series 2013-C15 Class A3 | 10.000% due 01/01/17 | BRL | 7,370 | 1,874 | ||||
3.881% due 08/15/46 | 125 | 133 | 10.000% due 01/01/21 | BRL | 12,510 | 2,731 | ||
Series 2014-C19 Class A3 | 10.000% due 01/01/23 | BRL | 23,181 | 4,803 | ||||
3.660% due 03/15/47 | 1,780 | 1,866 | 10.000% due 01/01/25 | BRL | 26,060 | 5,181 | ||
Series 2014-C19 Class A5 | Bundesrepublik Deutschland | |||||||
4.101% due 03/15/47 | 285 | 307 | 1.000% due 08/15/25 | EUR | 1,300 | 1,493 | ||
Series 2014-C21 Class A2 | Colombian TES | |||||||
2.917% due 08/15/47 | 380 | 392 | Series B | |||||
Series 2014-C21 Class A5 | 10.000% due 07/24/24 | COP | 38,578,500 | 15,130 | ||||
3.678% due 08/15/47 | 50 | 52 | CRH Finland Services OYJ | |||||
Series 2014-LC14 Class XA | 2.750% due 10/15/20 | EUR | 725 | 853 | ||||
1.602% due 03/15/47 | 2,578 | 191 | Danske Bank A/S | |||||
1,589,470 | 2.750% due 05/19/26 | EUR | 2,100 | 2,391 | ||||
Municipal Bonds - 0.6% | Electricite de France SA | |||||||
Brazos Higher Education Authority | 4.250% due 12/29/49 (ƒ) | EUR | 800 | 906 | ||||
Revenue Bonds | European Financial Stability Facility | |||||||
0.336% due 12/26/24 (Ê) | 1,471 | 1,422 | 1.625% due 07/17/20 | EUR | 7,550 | 8,935 | ||
City of New York New York General | European Investment Bank | |||||||
Obligation Unlimited | Series EmtN | |||||||
5.047% due 10/01/24 | 2,200 | 2,536 | 1.375% due 09/15/21 | EUR | 5,725 | 6,733 | ||
6.646% due 12/01/31 | 1,500 | 1,748 | FADE - Fondo de Amortizacion del | |||||
Metropolitan Transportation Authority | Deficit Electrico | |||||||
Revenue Bonds | 2.250% due 12/17/16 | EUR | 5,600 | 6,298 | ||||
6.089% due 11/15/40 | 2,800 | 3,521 | ||||||
Municipal Electric Authority of Georgia | FCA Capital Ireland PLC | |||||||
Revenue Bonds | 2.875% due 01/26/18 | EUR | 2,620 | 2,983 | ||||
6.637% due 04/01/57 | 4,755 | 5,656 | Housing Financing Fund | |||||
7.055% due 04/01/57 | 4,445 | 4,800 | Series 2 | |||||
New York City Water & Sewer System | 3.750% due 04/15/34 | ISK | 362,241 | 3,176 | ||||
Revenue Bonds | Series 3 | |||||||
5.375% due 06/15/43 | 5,075 | 5,952 | 3.750% due 06/15/44 | ISK | 780,269 | 7,128 | ||
North Texas Tollway Authority Revenue | Intesa Sanpaolo SpA | |||||||
Bonds | 2.000% due 06/18/21 | EUR | 2,025 | 2,298 | ||||
6.718% due 01/01/49 | 1,100 | 1,481 | Ireland Government Bond | |||||
Port Authority of New York & New | 5.400% due 03/13/25 | EUR | 7,190 | 10,888 | ||||
Jersey Revenue Bonds | Kerry Group Financial Services | |||||||
4.458% due 10/01/62 | 4,175 | 4,048 | 2.375% due 09/10/25 | EUR | 850 | 976 | ||
South Carolina Student Loan Corp. | Malaysia Government Bond | |||||||
Revenue Bonds | Series 0111 | |||||||
0.356% due 12/01/20 (Ê) | 421 | 419 | 4.160% due 07/15/21 | MYR | 1,680 | 394 | ||
State of California General Obligation | ||||||||
Unlimited |
See accompanying notes which are an integral part of the financial statements.
378 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Series 0114 | Series 1 | ||||||||
4.181% due 07/15/24 | MYR | 17,700 | 4,124 | 1.000% due 07/28/17 | 7,000 | 7,029 | |||
Series 0215 | Federal National Mortgage Association | ||||||||
3.795% due 09/30/22 | MYR | 2,720 | 622 | Series 2 | |||||
Series 0314 | 0.214% due 07/20/17 (Ê) | 11,740 | 11,739 | ||||||
4.048% due 09/30/21 | MYR | 6,770 | 1,575 | United States Small Business | |||||
Series 0414 | Administration | ||||||||
3.654% due 10/31/19 | MYR | 11,660 | 2,706 | Series 97-D Class 1 | |||||
Series 0512 | 7.500% due 04/01/17 | 57 | 59 | ||||||
3.314% due 10/31/17 | MYR | 4,630 | 1,084 | United States Treasury Inflation Indexed | |||||
Mexican Bonos | Bonds | ||||||||
Series M 10 | 0.375% due 07/15/25 | 719 | 701 | ||||||
8.500% due 12/13/18 | MXN | 43,460 | 2,918 | United States Treasury Notes | |||||
Series M 20 | 1.375% due 08/31/20 | 102,525 | 101,961 | ||||||
10.000% due 12/05/24 | MXN | 102,650 | 7,955 | 139,048 | |||||
7.500% due 06/03/27 | MXN | 59,743 | 3,985 | United States Government Treasuries - 15.6% | |||||
Series M 30 | United States Treasury Inflation Indexed | ||||||||
10.000% due 11/20/36 | MXN | 74,210 | 6,190 | Bonds | |||||
0.125% due 04/15/17 | 6,117 | 6,114 | |||||||
Series M | 0.125% due 07/15/24 | 12,396 | 11,867 | ||||||
8.000% due 06/11/20 | MXN | 81,530 | 5,511 | ||||||
7.750% due 05/29/31 | MXN | 37,000 | 2,518 | 0.250% due 01/15/25 | 11,627 | 11,171 | |||
7.750% due 11/13/42 | MXN | 182,600 | 12,405 | 0.625% due 02/15/43 | 3,867 | 3,329 | |||
New Zealand Government Bond | 1.375% due 02/15/44 | 19,312 | 20,010 | ||||||
2.000% due 09/20/25 (Å) | NZD | 3,830 | 2,675 | 0.750% due 02/15/45 | 4,524 | 4,013 | |||
Series 0427 | United States Treasury Notes | ||||||||
4.500% due 04/15/27 | NZD | 7,500 | 5,645 | 0.625% due 08/31/17 | 5,500 | 5,491 | |||
Series 423 | 0.625% due 09/30/17 | 22,245 | 22,196 | ||||||
5.500% due 04/15/23 | NZD | 2,090 | 1,647 | 0.750% due 12/31/17 | 9,175 | 9,160 | |||
Series 521 | 1.000% due 08/15/18 | 13,615 | 13,612 | ||||||
6.000% due 05/15/21 | NZD | 22,255 | 17,496 | 1.500% due 08/31/18 | 80,895 | 81,999 | |||
Norway Government Bond | 0.875% due 10/15/18 | 12,310 | 12,252 | ||||||
Series 472 | 1.000% due 09/30/19 | 8,755 | 8,641 | ||||||
4.250% due 05/19/17 (Þ) | NOK | 65,926 | 8,185 | 1.625% due 07/31/20 | 38,515 | 38,730 | |||
Series 476 | 1.375% due 09/30/20 | 124,600 | 123,747 | ||||||
3.000% due 03/14/24 (Þ) | NOK | 11,730 | 1,542 | 1.375% due 10/31/20 | 52,435 | 52,051 | |||
Series 477 | 1.750% due 09/30/22 | 88,330 | 87,543 | ||||||
1.750% due 03/13/25 (Þ) | NOK | 24,430 | 2,916 | 2.250% due 11/15/24 | 13,640 | 13,786 | |||
Peru Government Bond | 2.000% due 02/15/25 | 14,600 | 14,431 | ||||||
5.700% due 08/12/24 | PEN | 19,820 | 5,586 | 2.000% due 08/15/25 | 205,052 | 202,325 | |||
6.900% due 08/12/37 | PEN | 18,750 | 5,350 | 3.140% due 11/15/27 | 12,295 | 9,069 | |||
Royal Bank of Scotland PLC (The) | 2.750% due 08/15/42 | 21,490 | 20,815 | ||||||
6.934% due 04/09/18 | EUR | 1,625 | 2,006 | 2.875% due 05/15/43 | 6,985 | 6,907 | |||
Scottish Widows PLC | 3.750% due 11/15/43 | 5,550 | 6,486 | ||||||
5.500% due 06/16/23 | GBP | 1,150 | 1,833 | 3.625% due 02/15/44 | 22,700 | 25,913 | |||
South Africa Government Bond | 3.000% due 11/15/44 | 1,425 | 1,441 | ||||||
Series R203 | |||||||||
8.250% due 09/15/17 | ZAR | 34,050 | 2,512 | 3.000% due 05/15/45 | 30,055 | 30,410 | |||
Series R209 | 2.875% due 08/15/45 | 123,395 | 121,924 | ||||||
6.250% due 03/31/36 | ZAR | 27,870 | 1,508 | 965,433 | |||||
Series R214 | Total Long-Term Investments | ||||||||
6.500% due 02/28/41 | ZAR | 111,850 | 6,065 | (cost $5,364,146) | 5,356,767 | ||||
Telefonica Emisiones SAU | |||||||||
1.477% due 09/14/21 | EUR | 1,600 | 1,752 | ||||||
Titulos De Tesoreria B Bonds | Common Stocks - 0.0% | ||||||||
Series B | Financial Services - 0.0% | ||||||||
6.000% due 04/28/28 | COP | 5,555,100 | 1,585 | Escrow GM Corp.(Å)(Ø) | 420,000 | — | |||
240,014 | Total Common Stocks | ||||||||
United States Government Agencies - 2.2% | (cost $—) | — | |||||||
Federal Home Loan Banks | |||||||||
3.150% due 06/28/17 | 5,830 | 5,831 | Preferred Stocks - 0.2% | ||||||
Federal Home Loan Mortgage Corp. | |||||||||
0.199% due 04/20/17 (Ê) | 11,730 | 11,728 | Financial Services - 0.1% | ||||||
XLIT, Ltd. | 3,685 | 3,040 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 379
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
1.116% due 04/01/16 (Ê) | 9,474 | 9,485 | |||||||
Technology - 0.1% | 3.953% due 06/15/16 | 600 | 609 | ||||||
Verizon Communications, Inc. | 260,200 | 6,921 | Coca-Cola Enterprises, Inc. | ||||||
Total Preferred Stocks | 2.000% due 08/19/16 | 858 | 865 | ||||||
(cost $9,619) | 9,961 | Commonwealth Bank of Australia | |||||||
0.622% due 06/03/16 (Ê)(Þ) | 9,980 | 9,980 | |||||||
Continental Airlines Pass-Through Trust | |||||||||
Options Purchased - 0.0% | Series 2009-1 | ||||||||
(Number of Contracts) | 9.000% due 07/08/16 | 2,390 | 2,500 | ||||||
Swaptions | Cooperatieve Centrale Raiffeisen- | ||||||||
(Fund Receives/Fund Pays) | Boerenleenbank BA | ||||||||
USD 5.000%/USD 3 Month LIBOR | Series YCD | ||||||||
Jan 2019 0.00 Put (1) | 39,375 | (ÿ) | 200 | 0.383% due 03/22/16 (Ê)(~) | 2,000 | 2,000 | |||
Total Options Purchased | Deutsche Telekom International Finance | ||||||||
(cost $529) | 200 | BV | |||||||
3.125% due 04/11/16 (Þ) | 4,050 | 4,088 | |||||||
Drive Auto Receivables Trust | |||||||||
Short-Term Investments - 21.0% | Series 2015-CA Class A1 | ||||||||
AbbVie, Inc. | 0.480% due 08/15/16 (Þ) | 3,000 | 3,000 | ||||||
1.200% due 11/06/15 | 7,300 | 7,300 | Series 2015-DA Class A1 | ||||||
ABN Amro Bank NV | 0.520% due 10/17/16 (Þ) | 3,811 | 3,811 | ||||||
1.123% due 10/28/16 (Ê)(Þ) | 2,320 | 2,327 | ENI Finance USA, Inc. | ||||||
Adam Aircraft Term Loan | Zero coupon due 12/18/15 (ç)(Þ)(~) | 6,350 | 6,344 | ||||||
3.188% due 05/23/16 (Å) | 760 | 8 | Fannie Mae | ||||||
Air Lease Corp. | 8.000% due 10/01/16 | — | — | ||||||
4.500% due 01/15/16 | 2,700 | 2,714 | Federal Farm Credit Banks | ||||||
Ally Auto Receivables Trust | 0.214% due 09/14/16 (Ê) | 6,330 | 6,331 | ||||||
Series 2015-1 Class A1 | Federal Home Loan Bank Discount | ||||||||
0.390% due 08/15/16 | 2,855 | 2,855 | Notes | ||||||
American Express Credit Corp. | Zero coupon due 11/06/15 (ç)(~) | 12,710 | 12,709 | ||||||
0.010% due 01/04/16 (~) | 2,500 | 2,499 | Zero coupon due 11/09/15 (ç)(~) | 6,210 | 6,210 | ||||
0.834% due 07/29/16 (Ê) | 6,600 | 6,604 | Federal Home Loan Banks | ||||||
AmeriCredit Automobile Receivables | 0.375% due 06/24/16 | 6,850 | 6,848 | ||||||
Trust | Federal Home Loan Mortgage Corp. | ||||||||
Series 2015-3 Class A1 | Multifamily Structured Pass-Through | ||||||||
0.500% due 08/08/16 | 9,795 | 9,794 | Certificates | ||||||
Anheuser-Busch InBev Worldwide, Inc. | Series 2012-K501 Class X1A | ||||||||
2.875% due 02/15/16 | 2,150 | 2,164 | Interest Only STRIP | ||||||
AT&T, Inc. | 1.606% due 08/25/16 | 30,705 | 222 | ||||||
2.950% due 05/15/16 | 5,375 | 5,430 | Freddie Mac | ||||||
Series FRN | 11.000% due 11/01/15 | — | — | ||||||
0.741% due 02/12/16 (Ê) | 5,403 | 5,401 | 11.000% due 12/01/15 | — | — | ||||
AWAS Aviation Capital, Ltd. | Freddie Mac Discount Notes | ||||||||
7.000% due 10/17/16 (Þ) | 785 | 785 | Series RB | ||||||
Bank of America Corp. | Zero coupon due 01/05/16 (~) | 19,785 | 19,782 | ||||||
3.625% due 03/17/16 | 875 | 885 | GE Capital International Funding Co. | ||||||
5.625% due 10/14/16 | 1,680 | 1,752 | 0.964% due 04/15/16 (Å) | 25,290 | 25,285 | ||||
Bank of America NA | General Electric Capital Corp. | ||||||||
Series BKNT | 1.111% due 02/08/16 (Ê) | 2,550 | 2,554 | ||||||
0.617% due 06/15/16 (Ê) | 3,100 | 3,094 | General Mills, Inc. | ||||||
Banque PSA Finance SA | 0.523% due 01/28/16 (Ê) | 5,915 | 5,915 | ||||||
4.250% due 02/25/16 | EUR | 5,200 | 5,780 | Series FRN | |||||
BBVA Bancomer SA | 0.624% due 01/29/16 (Ê) | 5,675 | 5,674 | ||||||
4.500% due 03/10/16 (Þ) | 600 | 606 | Goldman Sachs Group, Inc. (The) | ||||||
BioMed Realty, LP | 5.350% due 01/15/16 | 1,000 | 1,010 | ||||||
3.850% due 04/15/16 | 2,000 | 2,017 | 0.769% due 03/22/16 (Ê) | 4,200 | 4,200 | ||||
Citigroup, Inc. | 5.750% due 10/01/16 | 1,338 | 1,396 | ||||||
5.300% due 01/07/16 | 1,325 | 1,335 | Google, Inc. |
See accompanying notes which are an integral part of the financial statements.
380 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
2.125% due 05/19/16 | 3,405 | 3,438 | 0.400% due 03/14/16 | 55 | 55 | |||||
HCP, Inc. | Sumitomo Mitsui Banking Corp. | |||||||||
6.300% due 09/15/16 | 2,700 | 2,810 | Series YCD | |||||||
Historic TW, Inc. | 0.373% due 01/28/16 (Ê)(~) | 4,000 | 4,000 | |||||||
8.050% due 01/15/16 | 2,900 | 2,940 | Tennessee Gas Pipeline Co. LLC | |||||||
Huntington Auto Trust | 8.000% due 02/01/16 | 2,050 | 2,084 | |||||||
Series 2015-1 Class A1 | Toronto-Dominion Bank (The) | |||||||||
0.350% due 06/15/16 | 147 | 147 | 0.793% due 09/09/16 (Ê) | 10,885 | 10,908 | |||||
Hyundai Auto Receivables Trust | Total Capital International SA | |||||||||
Series 2015-C Class A1 | 1.000% due 08/12/16 | 10,485 | 10,520 | |||||||
0.390% due 09/15/16 | 5,607 | 5,607 | Unilever Capital Corp. | |||||||
International Business Machines Corp. | 2.750% due 02/10/16 | 1,300 | 1,308 | |||||||
0.374% due 02/05/16 (Ê) | 400 | 400 | United States Treasury Bills | |||||||
Japan Treasury Discount Bill | 0.040% due 12/10/15 | 22,380 | 22,379 | |||||||
Series 537 | 0.050% due 12/10/15 | 30,100 | 30,100 | |||||||
Zero coupon due 12/10/15 (~) | JPY | 730,000 | 6,050 | |||||||
John Deere Capital Corp. | 0.090% due 01/07/16 (~) | 400 | 400 | |||||||
0.386% due 04/12/16 (Ê) | 9,550 | 9,553 | 0.180% due 02/04/16 | 3,500 | 3,499 | |||||
JPMorgan Chase & Co. | 0.230% due 03/03/16 | 3,200 | 3,198 | |||||||
1.125% due 02/26/16 | 9,000 | 9,017 | 0.020% due 03/03/16 | 4,100 | 4,099 | |||||
JPMorgan Chase Bank NA | United States Treasury Inflation Indexed | |||||||||
Series BKNT | Bonds | |||||||||
5.875% due 06/13/16 | 240 | 247 | 0.125% due 04/15/16 | 8,978 | 8,921 | |||||
LMA Americas LLC | 2.500% due 07/15/16 | 5,287 | 5,388 | |||||||
1.000% due 11/03/15 (Å)(ç)(~) | 350 | 350 | United States Treasury Notes | |||||||
Marathon Oil Corp. | 0.250% due 04/15/16 | 23,755 | 23,754 | |||||||
0.900% due 11/01/15 (ç) | 6,300 | 6,300 | 0.500% due 06/15/16 | 43,000 | 43,041 | |||||
Mercedes-Benz Auto Receivables Trust | Verizon Communications, Inc. | |||||||||
Series 2015-1 Class A1 | 2.500% due 09/15/16 | 514 | 521 | |||||||
0.390% due 08/15/16 | 6,367 | 6,365 | Series FRN | |||||||
Morgan Stanley | 1.867% due 09/15/16 (Ê) | 11,840 | 11,951 | |||||||
5.750% due 10/18/16 | 1,500 | 1,568 | Vodafone Group PLC | |||||||
Nissan Auto Receivables Owner Trust | Series FRN | |||||||||
Series 2015-B Class A1 | 0.752% due 02/19/16 (Ê) | 7,000 | 6,997 | |||||||
0.380% due 08/15/16 | 6,637 | 6,637 | Wells Fargo & Co. | |||||||
Nomura Holdings Inc. | 1.250% due 07/20/16 | 2,000 | 2,009 | |||||||
2.000% due 09/13/16 | 4,385 | 4,411 | Willis Group Holdings PLC | |||||||
PACCAR Financial Corp. | 4.125% due 03/15/16 | 1,935 | 1,954 | |||||||
0.581% due 02/08/16 (Ê) | 2,760 | 2,761 | Total Short-Term Investments | |||||||
Procter & Gamble Co. (The) | (cost $1,300,920) | 1,300,606 | ||||||||
4.850% due 12/15/15 | 2,938 | 2,953 | ||||||||
1.450% due 08/15/16 | 250 | 252 | Total Investments 107.6% | |||||||
Province of Quebec Canada | (identified cost $6,675,214) | 6,667,534 | ||||||||
5.000% due 03/01/16 | 7,600 | 7,709 | ||||||||
Realty Income Corp. | ||||||||||
5.950% due 09/15/16 | 1,515 | 1,573 | Other Assets and Liabilities, | |||||||
Russell U.S. Cash Management Fund | 792,928,950 | (8) | 792,929 | Net - (7.6%) | (469,164 | ) | ||||
Ryder System, Inc. | Net Assets - 100.0% | 6,198,370 | ||||||||
3.600% due 03/01/16 | 4,750 | 4,787 | ||||||||
Sanofi | ||||||||||
2.625% due 03/29/16 | 12,110 | 12,219 | ||||||||
Santander Drive Auto Receivables Trust | ||||||||||
Series 2015-3 Class A1 | ||||||||||
0.480% due 06/15/16 | 2,053 | 2,053 | ||||||||
Series 2015-4 Class A1 | ||||||||||
0.500% due 09/15/16 | 6,277 | 6,276 | ||||||||
SMART Trust | ||||||||||
Series 2015-1US Class A1 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 381
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Restricted Securities | |||||||||||
Amounts in thousands (except share and cost per unit amounts) | |||||||||||
Principal | Cost per | Cost | Fair Value | ||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | ||||
Securities | Date | or shares | $ | $ | $ | ||||||
1.8% | |||||||||||
Adam Aircraft Term Loan | 03/28/08 | 760,489 | 99.87 | 760 | 8 | ||||||
Bear Stearns Second Lien Trust | 10/22/15 | 1,878,301 | 96.38 | 1,810 | 1,817 | ||||||
BHP Billiton Finance USA, Ltd. | 10/14/15 | 3,350,000 | 100.00 | 3,350 | 3,421 | ||||||
Commercial Mortgage Pass-Through Certificates | 10/20/15 | 235,000 | 74.11 | 174 | 174 | ||||||
Endo, Ltd. / Endo Finance LLC / Endo Finco, Inc. | 10/02/15 | 550,000 | 98.51 | 542 | 550 | ||||||
Escrow GM Corp. | 04/21/11 | 420,000 | — | — | — | ||||||
Fannie Mae | 10/27/00 | 18,321 | 24.42 | 4 | 4 | ||||||
Fannie Mae | 02/12/01 | 18,840 | 26.00 | 5 | 5 | ||||||
Fannie Mae | 08/14/02 | 8,008 | 26.42 | 2 | 2 | ||||||
Fannie Mae | 04/27/10 | 27,186 | 21.35 | 6 | 6 | ||||||
Fannie Mae REMICS | 09/15/00 | 26,058 | 21.76 | 6 | 6 | ||||||
Fannie Mae REMICS | 06/12/01 | 9,050 | 4.56 | — | — | ||||||
Fannie Mae REMICS | 04/02/03 | 353,818 | 17.58 | 62 | 62 | ||||||
Fannie Mae REMICS | 05/28/03 | 73,509 | 19.01 | 14 | 14 | ||||||
Fannie Mae REMICS | 01/07/04 | 54,219 | 23.95 | 13 | 13 | ||||||
Fannie Mae REMICS | 04/25/05 | 78,307 | 20.21 | 16 | 16 | ||||||
Fannie Mae REMICS | 04/25/05 | 66,027 | 23.11 | 15 | 15 | ||||||
Fannie Mae REMICS | 04/25/05 | 43,874 | 24.56 | 11 | 11 | ||||||
Fannie Mae REMICS | 02/28/07 | 68,546 | 99.93 | 69 | 67 | ||||||
Fannie Mae REMICS | 08/17/07 | 711,927 | 99.14 | 706 | 670 | ||||||
Freddie Mac REMICS | 04/14/03 | 44,874 | 28.24 | 13 | 13 | ||||||
Freddie Mac REMICS | 06/11/03 | 11,820 | 17.87 | 2 | 2 | ||||||
Freddie Mac REMICS | 03/05/04 | 92,776 | 23.85 | 22 | 22 | ||||||
Freddie Mac REMICS | 03/15/04 | 15,588 | 19.61 | 3 | 3 | ||||||
Freddie Mac REMICS | 04/22/05 | 492,857 | 18.09 | 89 | 89 | ||||||
Freddie Mac Strips | 12/12/00 | 16,912 | 23.73 | 4 | 4 | ||||||
Freddie Mac Strips | 05/29/03 | 42,882 | 21.42 | 9 | 9 | ||||||
Freddie Mac Strips | 08/19/03 | 43,460 | 21.36 | 9 | 9 | ||||||
Freddie Mac Strips | 02/13/04 | 43,510 | 25.19 | 11 | 11 | ||||||
GE Capital International Funding Co. | 09/26/11 | 1,923,000 | 102.86 | 1,978 | 1,996 | ||||||
GE Capital International Funding Co. | 06/04/12 | 3,936,000 | 100.38 | 3,951 | 3,947 | ||||||
GE Capital International Funding Co. | 11/30/12 | 2,939,000 | 102.86 | 3,023 | 3,050 | ||||||
GE Capital International Funding Co. | 01/10/13 | 1,766,000 | 100.05 | 1,767 | 1,785 | ||||||
GE Capital International Funding Co. | 10/19/15 | 25,290,000 | 100.00 | 25,290 | 25,285 | ||||||
Ginnie Mae | 11/13/02 | 14,233 | 23.29 | 4 | 3 | ||||||
Government National Mortgage Association | 01/20/10 | 65,139 | 28.74 | 19 | 19 | ||||||
GSAA Trust | 10/21/15 | 3,968,328 | 85.01 | 3,373 | 3,330 | ||||||
Hertz Vehicle Financing LLC | 09/30/15 | 5,305,000 | 99.98 | 5,304 | 5,265 | ||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 6,100,000 | 99.73 | 6,083 | 6,028 | ||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 10,475,000 | 99.80 | 10,454 | 10,562 | ||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 6,175,000 | 99.94 | 6,172 | 6,024 | ||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 9,000,000 | 99.95 | 8,995 | 9,026 | ||||||
Hilton USA Trust | 11/22/13 | 206,948 | 100.00 | 207 | 207 | ||||||
Hilton USA Trust | 07/11/14 | 5,000,000 | 103.47 | 5,173 | 5,034 | ||||||
Hutchison Whampoa International 14, Ltd. | 10/28/14 | 2,475,000 | 99.89 | 2,472 | 2,492 | ||||||
ING Bank NV | 06/04/12 | 2,125,000 | 99.29 | 2,110 | 2,190 | ||||||
JPMBB Commercial Mortgage Securities Trust | 10/23/15 | 175,000 | 78.13 | 137 | 136 | ||||||
JPMorgan Chase Commercial Mortgage Securities Trust | 10/29/15 | 2,095,000 | 99.99 | 2,095 | 2,095 | ||||||
LMA Americas LLC | 10/27/15 | 350,000 | 100.00 | 350 | 350 | ||||||
Mastr Asset Backed Securities Trust | 11/02/12 | 1,106,726 | 56.01 | 620 | 696 | ||||||
New Zealand Government Bond | 11/04/13 | NZD | 3,830,000 | 85.86 | 3,289 | 2,675 | |||||
Nomura Resecuritization Trust | 10/23/15 | 1,272,000 | 92.00 | 1,170 | 1,170 | ||||||
Reliance Standard Life Global Funding II | 10/13/15 | 2,345,000 | 99.93 | 2,343 | 2,342 | ||||||
Rolls-Royce PLC | 10/06/15 | 5,830,000 | 99.90 | 5,824 | 5,909 | ||||||
Volkswagen Group of America Finance LLC | 10/07/15 | 3,785,000 | 94.51 | 3,577 | 3,614 | ||||||
Wells Fargo Mortgage Backed Securities Trust | 04/20/10 | 221,195 | 109.67 | 243 | 266 | ||||||
112,519 |
For a description of restricted securities see note 8 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
382 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
Australia Government 3 Year Treasury Bond Futures | 163 | AUD | 18,306 | 12/15 | 2 | ||
Japan Government Mini 10 Year Bond Futures | 5 | JPY | 74,270 | 12/15 | 3 | ||
Long Gilt Futures | 36 | GBP | 4,239 | 12/15 | (44 | ) | |
United States 2 Year Treasury Note Futures | 989 | USD | 216,251 | 12/15 | (265 | ) | |
United States 5 Year Treasury Note Futures | 1,994 | USD | 238,828 | 12/15 | (405 | ) | |
United States 10 Year Treasury Note Futures | 1,498 | USD | 191,276 | 12/15 | (137 | ) | |
United States Treasury Long Bond Futures | 966 | USD | 151,119 | 12/15 | 440 | ||
United States Treasury Ultra Bond Futures | 268 | USD | 42,813 | 12/15 | (55 | ) | |
Short Positions | |||||||
Australia Government 10 Year Treasury Bond Futures | 17 | AUD | 2,199 | 12/15 | (4 | ) | |
Canada 10 Year Bond Futures | 48 | CAD | 6,744 | 12/15 | 53 | ||
Euro-Bobl Futures | 381 | EUR | 49,309 | 12/15 | (347 | ) | |
Euro-BTP Futures | 111 | EUR | 15,422 | 12/15 | (593 | ) | |
Euro-Bund Futures | 143 | EUR | 22,481 | 12/15 | (363 | ) | |
Euro-BUXL 30 Year Bond Futures | 2 | EUR | 316 | 12/15 | (5 | ) | |
Euro-OAT Futures | 105 | EUR | 16,091 | 12/15 | (378 | ) | |
Euro-Schatz Futures | 29 | EUR | 3,233 | 12/15 | (7 | ) | |
Japan Government 10 Year Bond Futures | 31 | JPY | 4,605,360 | 12/15 | (175 | ) | |
Long Gilt Futures | 163 | GBP | 19,193 | 12/15 | 27 | ||
United States 5 Year Treasury Note Futures | 960 | USD | 114,983 | 12/15 | 201 | ||
United States 10 Year Treasury Note Futures | 208 | USD | 26,559 | 12/15 | (104 | ) | |
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | (2,156 | ) |
Options Written | ||||||||
Amounts in thousands (except contract amounts) | ||||||||
Number of | Strike | Notional | Expiration | Fair Value | ||||
Call/Put | Contracts | Price | Amount | Date | $ | |||
Swaptions | ||||||||
(Fund Receives/Fund Pays) | ||||||||
USD 5.000%/USD 3 Month LIBOR | Put | 1 | 0.00 | 148,550 | 01/14/19 | (229 | ) | |
Total Liability for Options Written (premiums received $769) | (229 | ) |
Transactions in options written contracts for the period ended October 31, 2015 were as follows: | ||||||
Number of | Premiums | |||||
Contracts | Received | |||||
Outstanding October 31, 2014 | 2 | $ | 867 | |||
Opened | — | — | ||||
Closed | (1 | ) | (98 | ) | ||
Expired | — | — | ||||
Outstanding October 31, 2015 | 1 | $ | 769 |
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Bank of America | USD | 860 | AUD | 1,226 | 11/06/15 | 15 | ||
Bank of America | USD | 7,239 | AUD | 10,158 | 11/12/15 | 2 | ||
Bank of America | USD | 991 | CAD | 1,310 | 11/30/15 | 11 | ||
Bank of America | USD | 1,476 | GBP | 958 | 11/30/15 | 1 | ||
Bank of America | USD | 1,043 | NOK | 8,901 | 11/06/15 | 5 | ||
Bank of America | USD | 25,224 | NOK | 214,475 | 11/06/15 | 16 | ||
Bank of America | USD | 809 | NZD | 1,267 | 11/06/15 | 49 | ||
Bank of America | CAD | 52,418 | USD | 39,087 | 11/06/15 | (999 | ) | |
Bank of America | CHF | 642 | USD | 657 | 11/06/15 | 8 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 383
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Bank of America | CHF | 24,846 | USD | 25,537 | 11/06/15 | 399 | |
Bank of America | CHF | 62,114 | USD | 63,843 | 11/06/15 | 997 | |
Bank of America | EUR | 4,355 | USD | 4,826 | 11/25/15 | 36 | |
Bank of America | JPY | 3,133,550 | USD | 26,172 | 11/06/15 | 204 | |
Bank of America | NOK | 536,188 | USD | 63,061 | 11/06/15 | (41 | ) |
Bank of America | PLN | 425 | USD | 111 | 11/30/15 | 1 | |
Bank of America | SEK | 1,543 | USD | 184 | 11/06/15 | 3 | |
Bank of America | SGD | 1,380 | USD | 982 | 11/30/15 | (3 | ) |
Bank of Montreal | USD | 4,544 | CAD | 5,975 | 11/30/15 | 25 | |
Bank of Montreal | USD | 64,866 | JPY | 7,788,996 | 11/06/15 | (318 | ) |
Barclays | AUD | 10,811 | JPY | 934,196 | 11/12/15 | 36 | |
Barclays | JPY | 870,919 | NOK | 61,242 | 11/12/15 | (11 | ) |
Barclays | JPY | 730,000 | USD | 5,853 | 12/10/15 | (199 | ) |
Barclays | MXN | 3,120 | USD | 188 | 11/30/15 | (1 | ) |
BNP Paribas | USD | 65,799 | CAD | 86,085 | 11/06/15 | 33 | |
BNP Paribas | USD | 491 | CAD | 650 | 11/30/15 | 6 | |
BNP Paribas | USD | 491 | CAD | 650 | 11/30/15 | 6 | |
BNP Paribas | USD | 39,067 | EUR | 34,978 | 11/06/15 | (602 | ) |
BNP Paribas | USD | 64,474 | EUR | 57,540 | 11/06/15 | (1,197 | ) |
BNP Paribas | USD | 441 | EUR | 400 | 11/30/15 | (1 | ) |
BNP Paribas | USD | 980 | GBP | 647 | 11/06/15 | 17 | |
BNP Paribas | USD | 38,211 | GBP | 25,184 | 11/06/15 | 612 | |
BNP Paribas | USD | 25,969 | JPY | 3,133,550 | 11/06/15 | — | |
BNP Paribas | USD | 39,248 | JPY | 4,735,876 | 11/06/15 | (1 | ) |
BNP Paribas | USD | 1,208 | JPY | 146,401 | 11/30/15 | 5 | |
BNP Paribas | USD | 65,818 | NZD | 103,145 | 11/06/15 | 4,011 | |
BNP Paribas | USD | 38,970 | SEK | 330,855 | 11/06/15 | (242 | ) |
BNP Paribas | AUD | 1,839 | USD | 1,289 | 11/06/15 | (22 | ) |
BNP Paribas | AUD | 91,677 | USD | 65,392 | 11/06/15 | 28 | |
BNP Paribas | CHF | 482 | USD | 490 | 11/30/15 | 2 | |
BNP Paribas | CHF | 483 | USD | 491 | 11/30/15 | 2 | |
BNP Paribas | GBP | 43,052 | USD | 65,205 | 11/06/15 | (1,162 | ) |
BNP Paribas | NZD | 1,901 | USD | 1,213 | 11/06/15 | (74 | ) |
BNP Paribas | NZD | 103,145 | USD | 69,767 | 11/06/15 | (62 | ) |
BNP Paribas | PEN | 45 | USD | 14 | 11/30/15 | — | |
Citigroup | USD | 14,490 | AUD | 20,316 | 11/12/15 | (9 | ) |
Citigroup | USD | 7,242 | EUR | 6,476 | 11/12/15 | (120 | ) |
Citigroup | USD | 12,800 | EUR | 11,720 | 11/12/15 | 89 | |
Citigroup | USD | 1,209 | JPY | 146,400 | 11/30/15 | 5 | |
Citigroup | AUD | 43,904 | USD | 31,165 | 11/12/15 | (128 | ) |
Citigroup | EUR | 13,278 | USD | 14,509 | 11/12/15 | (93 | ) |
Citigroup | EUR | 695 | USD | 768 | 11/30/15 | 3 | |
Citigroup | GBP | 3,625 | USD | 5,567 | 11/30/15 | (21 | ) |
Citigroup | NZD | 787 | USD | 528 | 11/30/15 | (4 | ) |
Citigroup | SGD | 2,766 | USD | 1,991 | 11/30/15 | 18 | |
Commonwealth Bank of Australia | USD | 25,317 | AUD | 36,134 | 11/06/15 | 445 | |
Commonwealth Bank of Australia | USD | 845 | EUR | 757 | 11/06/15 | (13 | ) |
Commonwealth Bank of Australia | USD | 375 | JPY | 44,879 | 11/06/15 | (3 | ) |
Commonwealth Bank of Australia | USD | 25,396 | NZD | 39,990 | 11/06/15 | 1,678 | |
Commonwealth Bank of Australia | AUD | 54,200 | USD | 37,976 | 11/06/15 | (668 | ) |
Commonwealth Bank of Australia | CHF | 1,604 | USD | 1,643 | 11/06/15 | 20 | |
Commonwealth Bank of Australia | NOK | 22,252 | USD | 2,608 | 11/06/15 | (11 | ) |
Commonwealth Bank of Australia | NZD | 59,986 | USD | 38,094 | 11/06/15 | (2,516 | ) |
Credit Suisse | HUF | 103,000 | USD | 370 | 11/30/15 | 6 | |
Deutsche Bank | USD | 270 | CAD | 355 | 11/30/15 | 1 | |
Deutsche Bank | USD | 299 | EUR | 270 | 11/30/15 | (1 | ) |
Deutsche Bank | CHF | 270 | USD | 274 | 11/30/15 | 1 | |
Goldman Sachs | USD | 808 | CAD | 1,059 | 11/12/15 | 2 | |
Goldman Sachs | USD | 2,494 | EUR | 2,234 | 11/12/15 | (37 | ) |
Goldman Sachs | USD | 248 | HUF | 69,100 | 11/30/15 | (4 | ) |
Goldman Sachs | USD | 251 | SEK | 2,130 | 11/30/15 | (1 | ) |
Goldman Sachs | USD | 559 | SEK | 4,720 | 11/30/15 | (6 | ) |
Goldman Sachs | USD | 750 | SEK | 6,388 | 11/30/15 | (2 | ) |
See accompanying notes which are an integral part of the financial statements.
384 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Goldman Sachs | AUD | 21,623 | USD | 15,593 | 11/12/15 | 181 | |
Goldman Sachs | CHF | 1,231 | NOK | 10,491 | 11/12/15 | (11 | ) |
Goldman Sachs | CHF | 4,395 | USD | 4,485 | 11/12/15 | 38 | |
Goldman Sachs | EUR | 892 | USD | 982 | 11/30/15 | 1 | |
Goldman Sachs | EUR | 60,976 | USD | 67,394 | 11/30/15 | 319 | |
Goldman Sachs | GBP | 170 | USD | 260 | 11/30/15 | (2 | ) |
Goldman Sachs | GBP | 510 | USD | 780 | 11/30/15 | (6 | ) |
Goldman Sachs | JPY | 292,055 | AUD | 3,363 | 11/12/15 | (23 | ) |
Goldman Sachs | JPY | 1,838,191 | USD | 15,561 | 11/12/15 | 326 | |
Goldman Sachs | JPY | 119,000 | USD | 986 | 11/30/15 | (1 | ) |
Goldman Sachs | JPY | 138,100 | USD | 1,148 | 11/30/15 | 3 | |
HSBC | USD | 223 | GBP | 145 | 11/30/15 | 1 | |
HSBC | USD | 1,475 | GBP | 957 | 11/30/15 | — | |
HSBC | USD | 1,209 | JPY | 146,400 | 11/30/15 | 5 | |
HSBC | USD | 6,664 | NZD | 9,930 | 11/25/15 | 50 | |
HSBC | USD | 145 | NZD | 218 | 11/30/15 | 3 | |
HSBC | USD | 242 | NZD | 364 | 11/30/15 | 4 | |
HSBC | AUD | 205 | USD | 145 | 11/30/15 | (1 | ) |
HSBC | AUD | 342 | USD | 242 | 11/30/15 | (1 | ) |
HSBC | KRW | 2,506,867 | USD | 2,221 | 11/30/15 | 27 | |
HSBC | MXN | 40,204 | USD | 2,430 | 11/25/15 | (1 | ) |
JPMorgan Chase | USD | 768 | AUD | 1,084 | 11/30/15 | 4 | |
JPMorgan Chase | USD | 24,701 | CAD | 32,088 | 01/15/16 | (171 | ) |
JPMorgan Chase | USD | 6,111 | CLP | 4,215,854 | 01/15/16 | (56 | ) |
JPMorgan Chase | USD | 145 | DKK | 951 | 01/15/16 | (4 | ) |
JPMorgan Chase | USD | 281 | EUR | 254 | 11/30/15 | (1 | ) |
JPMorgan Chase | USD | 405 | EUR | 357 | 12/15/15 | (12 | ) |
JPMorgan Chase | USD | 23,174 | JPY | 2,788,883 | 11/12/15 | (61 | ) |
JPMorgan Chase | USD | 15,174 | JPY | 1,824,209 | 12/15/15 | (48 | ) |
JPMorgan Chase | USD | 8,161 | MYR | 36,047 | 01/15/16 | 203 | |
JPMorgan Chase | USD | 17,806 | NOK | 144,387 | 01/15/16 | (831 | ) |
JPMorgan Chase | USD | 779 | NZD | 1,163 | 11/30/15 | 7 | |
JPMorgan Chase | USD | 7,245 | PLN | 27,046 | 01/15/16 | (259 | ) |
JPMorgan Chase | USD | 501 | SEK | 4,257 | 11/30/15 | (2 | ) |
JPMorgan Chase | USD | 1,925 | SEK | 16,369 | 11/30/15 | (7 | ) |
JPMorgan Chase | USD | 16,993 | SEK | 138,378 | 01/15/16 | (766 | ) |
JPMorgan Chase | AUD | 46,334 | USD | 33,801 | 12/15/15 | 831 | |
JPMorgan Chase | BRL | 2,140 | USD | 539 | 01/15/16 | (3 | ) |
JPMorgan Chase | BRL | 8,636 | USD | 2,174 | 01/15/16 | (14 | ) |
JPMorgan Chase | BRL | 10,712 | USD | 2,705 | 01/15/16 | (9 | ) |
JPMorgan Chase | BRL | 41,098 | USD | 10,131 | 01/15/16 | (280 | ) |
JPMorgan Chase | CAD | 1,022 | USD | 776 | 11/30/15 | (6 | ) |
JPMorgan Chase | CHF | 14,345 | USD | 14,707 | 11/12/15 | 191 | |
JPMorgan Chase | CHF | 16,773 | USD | 17,119 | 11/12/15 | 145 | |
JPMorgan Chase | CHF | 24,036 | USD | 25,068 | 01/15/16 | 686 | |
JPMorgan Chase | CNY | 5,191 | USD | 793 | 10/21/16 | (6 | ) |
JPMorgan Chase | COP | 53,916,774 | USD | 17,892 | 01/15/16 | (555 | ) |
JPMorgan Chase | CZK | 191,394 | USD | 8,030 | 01/15/16 | 245 | |
JPMorgan Chase | DKK | 760 | USD | 116 | 01/15/16 | 4 | |
JPMorgan Chase | EUR | 458 | USD | 506 | 11/30/15 | 2 | |
JPMorgan Chase | EUR | 893 | USD | 979 | 11/30/15 | (3 | ) |
JPMorgan Chase | GBP | 14,454 | USD | 22,147 | 12/15/15 | (131 | ) |
JPMorgan Chase | IDR | 167,012,094 | USD | 11,006 | 01/15/16 | (862 | ) |
JPMorgan Chase | MXN | 218,123 | USD | 13,181 | 01/15/16 | 43 | |
JPMorgan Chase | NOK | 131,283 | USD | 15,747 | 11/12/15 | 298 | |
JPMorgan Chase | NZD | 96,980 | USD | 64,581 | 12/15/15 | (887 | ) |
JPMorgan Chase | PEN | 85,653 | USD | 25,799 | 01/15/16 | 10 | |
JPMorgan Chase | SGD | 18,105 | USD | 12,964 | 01/15/16 | 71 | |
JPMorgan Chase | TRY | 32,016 | USD | 10,729 | 01/15/16 | (22 | ) |
JPMorgan Chase | ZAR | 5,864 | USD | 434 | 01/15/16 | 16 | |
Royal Bank of Canada | USD | 737 | AUD | 1,033 | 11/06/15 | — | |
Royal Bank of Canada | USD | 586 | CAD | 767 | 11/06/15 | — | |
Royal Bank of Canada | USD | 579 | EUR | 525 | 11/06/15 | (3 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 385
Russell Investment Company
Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Royal Bank of Canada | USD | 966 | EUR | 874 | 11/06/15 | (4 | ) |
Royal Bank of Canada | USD | 66,488 | GBP | 43,052 | 11/06/15 | (121 | ) |
Royal Bank of Canada | USD | 491 | JPY | 59,250 | 11/06/15 | — | |
Royal Bank of Canada | USD | 188 | MXN | 3,120 | 11/30/15 | — | |
Royal Bank of Canada | USD | 585 | NOK | 4,949 | 11/06/15 | (2 | ) |
Royal Bank of Canada | USD | 2,312 | NZD | 3,417 | 11/06/15 | 2 | |
Royal Bank of Canada | USD | 55 | SEK | 471 | 11/06/15 | — | |
Royal Bank of Canada | AUD | 689 | USD | 491 | 11/06/15 | — | |
Royal Bank of Canada | CHF | 313 | USD | 317 | 11/06/15 | 1 | |
Royal Bank of Canada | CHF | 782 | USD | 793 | 11/06/15 | 2 | |
Royal Bank of Canada | EUR | 23,669 | USD | 26,145 | 11/06/15 | 117 | |
Royal Bank of Canada | GBP | 25,831 | USD | 39,893 | 11/06/15 | 72 | |
Royal Bank of Canada | NOK | 1,980 | USD | 234 | 11/06/15 | 1 | |
Royal Bank of Canada | NZD | 2,278 | USD | 1,541 | 11/06/15 | (1 | ) |
Standard Chartered | USD | 37 | BRL | 150 | 11/04/15 | 2 | |
Standard Chartered | USD | 994 | JPY | 119,500 | 11/30/15 | (3 | ) |
Standard Chartered | BRL | 150 | USD | 40 | 11/04/15 | 1 | |
Standard Chartered | EUR | 20,431 | CHF | 22,307 | 11/12/15 | 105 | |
Standard Chartered | EUR | 98 | USD | 108 | 11/25/15 | — | |
Standard Chartered | JPY | 842,007 | NOK | 59,550 | 11/12/15 | 29 | |
Standard Chartered | NZD | 23,822 | AUD | 22,045 | 11/12/15 | (409 | ) |
Standard Chartered | SGD | 1,375 | USD | 986 | 11/30/15 | 6 | |
State Street | USD | 1,208 | JPY | 146,400 | 11/30/15 | 5 | |
State Street | USD | 92 | NOK | 770 | 11/30/15 | (1 | ) |
State Street | GBP | 15,243 | USD | 23,117 | 11/12/15 | (381 | ) |
State Street | SEK | 219,497 | USD | 26,113 | 11/06/15 | 420 | |
Toronto Dominion Bank | EUR | 1,012 | USD | 1,119 | 11/30/15 | 6 | |
UBS | USD | 23,185 | JPY | 2,788,883 | 11/12/15 | (72 | ) |
UBS | USD | 15,589 | NZD | 24,087 | 11/12/15 | 712 | |
UBS | CAD | 20,561 | USD | 15,695 | 11/12/15 | (28 | ) |
UBS | EUR | 20,695 | GBP | 15,224 | 11/12/15 | 708 | |
UBS | EUR | 5,447 | USD | 6,116 | 11/12/15 | 125 | |
Westpac | AUD | 4,058 | USD | 2,930 | 11/30/15 | 40 | |
Westpac | NZD | 5,508 | USD | 3,725 | 11/30/15 | 3 | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 230 |
Total Return Swap Contracts (*) | |||||||
Amounts in thousands | |||||||
Fund Receives/(Pays) | Notional | Termination | Fair Value | ||||
Underlying Reference Entity | Counterparty | Amount | Date | $ | |||
Long Reference Entity | |||||||
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 21,260 | 11/30/15 | (6 | ) | |
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 71,879 | 11/30/15 | (20 | ) | |
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 30,371 | 11/30/15 | (8 | ) | |
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 40,960 | 04/29/16 | (15 | ) | |
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 101,901 | 04/29/16 | (36 | ) | |
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 5,062 | 06/30/16 | (1 | ) | |
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 39,487 | 06/30/16 | (12 | ) | |
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 14,160 | 12/31/15 | (4 | ) | |
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 25,286 | 12/31/15 | (7 | ) | |
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 10,114 | 12/31/15 | (3 | ) | |
Barclays U.S. Aggregate Total Return Value Unhedged | |||||||
USD Index | Barclays | USD | 10,114 | 12/31/15 | (3 | ) |
See accompanying notes which are an integral part of the financial statements.
386 Russell Strategic Bond Fund
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Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||
Amounts in thousands | ||||||
Fund Receives/(Pays) | Notional | Termination | Fair Value | |||
Underlying Reference Entity | Counterparty | Amount | Date | $ | ||
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 21,240 | 12/31/15 | (6 | ) |
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 50,572 | 12/31/15 | (14 | ) |
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 75,013 | 09/30/16 | (2 | ) |
Total Fair Value of Open Total Return Swap Contracts Premiums Paid (Received) - $— (å) | (137 | ) | ||||
(*) Total return swaps (which includes index swaps) are agreements between counterparties to exchange cash flows, one based on a market-linked | ||||||
returns of an individual asset or a basket of assets (i.e. an index), and the other on a fixed or floating rate. The floating rate fees were all based | ||||||
on 1 month LIBOR rate plus a fee ranging from 0.08% to 0.19%. |
Interest Rate Swap Contracts | ||||||||||
Amounts in thousands | ||||||||||
Termination | Fair Value | |||||||||
Counterparty | Notional Amount | Fund Receives | Fund Pays | Date | $ | |||||
Barclays | USD | 3,845 | Three Month LIBOR | 2.481 | % | 11/15/27 | (325 | ) | ||
Barclays | USD | 3,860 | Three Month LIBOR | 2.417 | % | 11/15/27 | (284 | ) | ||
Citigroup | USD | 7,680 | Three Month LIBOR | 2.714 | % | 08/15/42 | (344 | ) | ||
Citigroup | USD | 5,110 | Three Month LIBOR | 3.676 | % | 11/15/43 | (1,322 | ) | ||
JPMorgan Chase | KRW | 8,820,000 | 1.730 | % | Three Month Korean Won Repo Rate | 09/21/18 | 14 | |||
JPMorgan Chase | DKK | 89,900 | Six Month CIBOR | 0.943 | % | 05/05/25 | 258 | |||
JPMorgan Chase | HKD | 103,000 | Three Month HIBOR | 2.160 | % | 05/14/25 | (387 | ) | ||
JPMorgan Chase | CZK | 322,000 | Six Month PRIBOR | 1.280 | % | 06/19/25 | (633 | ) | ||
Total Fair Value on Open Interest Rate Swap Contracts Premiums Paid (Received) - $— (å) | (3,023 | ) |
Credit Default Swap Contracts | |||||||||
Amounts in thousands | |||||||||
Credit Indices | |||||||||
Fund (Pays)/ | |||||||||
Receives | Termination | Fair Value | |||||||
Reference Entity | Counterparty | Notional Amount | Fixed Rate | Date | $ | ||||
CMBX NA Index | Bank of America | USD | 775 | 0.500 | % | 01/17/47 | (24 | ) | |
CMBX NA Index | Credit Suisse | USD | 170 | 0.500 | % | 01/17/47 | (5 | ) | |
CMBX NA Index | Credit Suisse | USD | 360 | 0.500 | % | 10/17/57 | (17 | ) | |
CMBX NA Index | Credit Suisse | USD | 465 | 0.500 | % | 01/17/47 | (15 | ) | |
CMBX NA Index | Credit Suisse | USD | 1,365 | 0.500 | % | 10/17/57 | (62 | ) | |
CMBX NA Index | Goldman Sachs | USD | 325 | 2.000 | % | 05/11/63 | (4 | ) | |
Total Fair Value on Open Credit Indices Premiums Paid (Received) - ($101) | (127 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 387
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Russell Strategic Bond Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fair Value | ||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||||
Long-Term Investments | ||||||||||||||
Asset-Backed Securities | $ | — | $ | 572,323 | $ | — | $ | 572,323 | 9.2 | |||||
Corporate Bonds and Notes | — | 1,362,212 | — | 1,362,212 | 22.0 | |||||||||
International Debt | — | 417,167 | 999 | 418,166 | 6.7 | |||||||||
Loan Agreements | — | 34,101 | — | 34,101 | 0.6 | |||||||||
Mortgage-Backed Securities | — | 1,572,810 | 16,660 | 1,589,470 | 25.6 | |||||||||
Municipal Bonds | — | 36,000 | — | 36,000 | 0.6 | |||||||||
Non-US Bonds | — | 240,014 | — | 240,014 | 3.9 | |||||||||
United States Government Agencies | — | 139,048 | — | 139,048 | 2.2 | |||||||||
United States Government Treasuries | — | 965,433 | — | 965,433 | 15.6 | |||||||||
Common Stocks | — | — | — | — | — | |||||||||
Preferred Stocks | 9,961 | — | — | 9,961 | 0.2 | |||||||||
Options Purchased | — | 200 | — | 200 | —* | |||||||||
Short-Term Investments | — | 1,300,598 | 8 | 1,300,606 | 21.0 | |||||||||
Total Investments | 9,961 | 6,639,906 | 17,667 | 6,667,534 | 107.6 | |||||||||
Other Assets and Liabilities, Net | (7.6 | ) | ||||||||||||
100.0 | ||||||||||||||
Other Financial Instruments | ||||||||||||||
Futures Contracts | (2,156 | ) | — | — | (2,156 | ) | (—)* | |||||||
Options Written | — | (229 | ) | — | (229 | ) | (—)* | |||||||
Foreign Currency Exchange Contracts | — | 230 | — | 230 | —* | |||||||||
Total Return Swap Contracts | — | (137 | ) | — | (137 | ) | (—)* | |||||||
Interest Rate Swap Contracts | — | (3,023 | ) | — | (3,023 | ) | (—)* | |||||||
Credit Default Swap Contracts | — | (127 | ) | — | (127 | ) | (—)* | |||||||
Total Other Financial Instruments** | $ | (2,156 | ) | $ | (3,286 | ) | $ | — | $ | (5,442 | ) |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining fair value for the period ended October
31,2015 were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
388 Russell Strategic Bond Fund
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Russell Strategic Bond Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||||
Foreign | ||||||||
Credit | Currency | Interest Rate | ||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | |||||
Location: Statement of Assets and Liabilities - Assets | ||||||||
Investments, at fair value* | $ | — | $ | — | $ | 200 | ||
Unrealized appreciation on foreign currency exchange contracts | — | 14,869 | — | |||||
Variation margin on futures contracts** | — | — | 726 | |||||
Interest rate swap contracts, at fair value | — | — | 272 | |||||
Total | $ | — | $ | 14,869 | $ | 1,198 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||||
Variation margin on futures contracts** | $ | — | $ | — | $ | 2,882 | ||
Unrealized depreciation on foreign currency exchange contracts | — | 14,639 | — | |||||
Options written, at fair value | — | — | 229 | |||||
Total return swap contracts, at fair value | — | — | 137 | |||||
Interest rate swap contracts, at fair value | — | — | 3,295 | |||||
Credit default swap contracts, at fair value | 127 | — | — | |||||
Total | $ | 127 | $ | 14,639 | $ | 6,543 | ||
Foreign | ||||||||
Credit | Currency | Interest Rate | ||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | |||||
Location: Statement of Operations - Net realized gain (loss) | ||||||||
Investments*** | $ | — | $ | — | $ | (1,588 | ) | |
Futures contracts | — | — | 19,088 | |||||
Options written | — | — | 93 | |||||
Total return swap contracts | — | — | 11,069 | |||||
Interest rate swap contracts | — | — | (289 | ) | ||||
Credit default swap contracts | 4,823 | — | — | |||||
Foreign currency-related transactions**** | — | 81,550 | — | |||||
Total | $ | 4,823 | $ | 81,550 | $ | 28,373 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||||
Investments***** | $ | — | $ | — | $ | 933 | ||
Futures contracts | — | — | (4,706 | ) | ||||
Options written | — | — | 65 | |||||
Total return swap contracts | — | — | 892 | |||||
Interest rate swap contracts | — | — | (2,005 | ) | ||||
Credit default swap contracts | 25 | — | — | |||||
Foreign currency-related transactions****** | — | (1,116 | ) | — | ||||
Total | $ | 25 | $ | (1,116 | ) | $ | (4,821 | ) |
* Fair value of purchased options.
** Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
*** Includes net realized gain (loss) on purchased options as reported in the Statement of Operations.
**** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
***** Includes net unrealized gain (loss) on purchased options as reported in the Schedule of Investments.
****** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 389
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Consolidated Balance Sheet Offsetting of Financial and Derivative Instruments —
October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Options Purchased Contracts | Investments, at fair value | $ | 200 | $ | — $ | 200 | |||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 14,869 | — | 14,869 | |||||
Futures Contracts | Variation margin on futures contracts | 7,769 | — | 7,769 | |||||
Total Return Swap Contracts | Total return swap contracts, at fair value | — | — | — | |||||
Interest Rate Swap Contracts | Interest rate swap contracts, at fair value | 272 | — | 272 | |||||
Total Financial and Derivative Assets | 23,110 | — | 23,110 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (7,777) | — | (7,777 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 15,333 | $ | — $ | 15,333 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Assets | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||
Bank of America | $ | 1,747 | $ | 1,053 | $ | — | $ | 694 | |||
Bank of Montreal | 25 | — | — | 25 | |||||||
Barclays | 236 | 236 | — | — | |||||||
BNP Paribas | 4,722 | 3,364 | — | 1,358 | |||||||
Citigroup | 115 | 114 | — | 1 | |||||||
Commonwealth Bank of Australia | 2,144 | 2,144 | — | — | |||||||
Credit Suisse | 6 | 6 | — | — | |||||||
Deutsche Bank | 2 | 2 | — | — | |||||||
Goldman Sachs | 870 | 97 | — | 773 | |||||||
HSBC | 89 | 2 | — | 87 | |||||||
JPMorgan Chase | 3,026 | 2,453 | 573 | — | |||||||
Royal Bank of Canada | 196 | 132 | — | 64 | |||||||
Standard Chartered | 134 | 134 | — | — | |||||||
State Street | 426 | 1 | — | 425 | |||||||
Toronto Dominion Bank | 6 | — | — | 6 | |||||||
UBS | 1,545 | 100 | — | 1,445 | |||||||
Westpac | 44 | — | — | 44 | |||||||
Total | $ | 15,333 | $ | 9,838 | $ | 573 | $ | 4,922 |
See accompanying notes which are an integral part of the financial statements.
390 Russell Strategic Bond Fund
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Russell Strategic Bond Fund
Consolidated Balance Sheet Offsetting of Financial and Derivative Instruments, continued
— October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized Assets and | of Assets and | ||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 48 | $ | — $ | 48 | |||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 14,639 | — | 14,639 | |||||
Options Written Contracts | Options written, at fair value | 229 | — | 229 | |||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 137 | — | 137 | |||||
Interest Rate Swap Contracts | Interest rate swap contracts, at fair value | 3,295 | — | 3,295 | |||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 127 | — | 127 | |||||
Total Financial and Derivative Liabilities | 18,475 | — | 18,475 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (1,373 | ) | — | (1,373 | ) | ||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 17,102 | $ | — $ | 17,102 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Liabilities | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||
Bank of America | $ | 1,067 | $ | 1,053 | $ | — | $ | 14 | |||
Bank of Montreal | 317 | — | — | 317 | |||||||
Barclays | 1,187 | 236 | 951 | — | |||||||
BNP Paribas | 3,364 | 3,364 | — | — | |||||||
Citigroup | 720 | 114 | — | 606 | |||||||
Commonwealth Bank of Australia | 3,210 | 2,144 | — | 1,066 | |||||||
Credit Suisse | 99 | 6 | 93 | — | |||||||
Deutsche Bank | 2 | 2 | — | — | |||||||
Goldman Sachs | 97 | 97 | — | — | |||||||
HSBC | 2 | 2 | — | — | |||||||
JPMorgan Chase | 6,015 | 2,453 | 3,562 | — | |||||||
Royal Bank of Canada | 132 | 132 | — | — | |||||||
Standard Chartered | 408 | 134 | — | 274 | |||||||
State Street | 382 | 1 | — | 381 | |||||||
UBS | 100 | 100 | — | — | |||||||
Total | $ | 17,102 | $ | 9,838 | $ | 4,606 | $ | 2,658 |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 391
Russell Investment Company
Russell Strategic Bond Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 6,675,214 |
Investments, at fair value(>) | 6,667,534 | |
Cash | 19,353 | |
Cash (restricted)(a)(b)(c) | 8,679 | |
Foreign currency holdings(^) | 10,724 | |
Unrealized appreciation on foreign currency exchange contracts | 14,869 | |
Receivables: | ||
Dividends and interest | 31,719 | |
Dividends from affiliated Russell funds | 89 | |
Investments sold | 300,222 | |
Fund shares sold | 6,275 | |
Variation margin on futures contracts | 7,769 | |
Other receivable | 163 | |
Interest rate swap contracts, at fair value(•) | 272 | |
Total assets | 7,067,668 | |
Liabilities | ||
Payables: | ||
Due to broker (d)(e)(f) | 5,072 | |
Investments purchased | 837,572 | |
Fund shares redeemed | 4,072 | |
Accrued fees to affiliates | 3,460 | |
Other accrued expenses | 476 | |
Variation margin on futures contracts | 48 | |
Other payable | 171 | |
Unrealized depreciation on foreign currency exchange contracts | 14,639 | |
Options written, at fair value(x) | 229 | |
Total return swap contracts, at fair value(8) | 137 | |
Interest rate swap contracts, at fair value(•) | 3,295 | |
Credit default swap contracts, at fair value(+) | 127 | |
Total liabilities | 869,298 | |
Net Assets | $ | 6,198,370 |
See accompanying notes which are an integral part of the financial statements.
392 Russell Strategic Bond Fund
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Russell Strategic Bond Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 33,571 | |
Accumulated net realized gain (loss) | 85,912 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | (7,680 | ) | |
Futures contracts | (2,156 | ) | |
Options written | 540 | ||
Total return swap contracts | (137 | ) | |
Interest rate swap contracts | (3,023 | ) | |
Credit default swap contracts | (26 | ) | |
Foreign currency-related transactions | (146 | ) | |
Other investments | (1,782 | ) | |
Shares of beneficial interest | 5,633 | ||
Additional paid-in capital | 6,087,664 | ||
Net Assets | $ | 6,198,370 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 11.04 | |
Maximum offering price per share (Net asset value plus sales charge of 3.75%): Class A | $ | 11.47 | |
Class A — Net assets | $ | 54,123,453 | |
Class A — Shares outstanding ($.01 par value) | 4,904,270 | ||
Net asset value per share: Class C(#) | $ | 11.02 | |
Class C — Net assets | $ | 62,412,245 | |
Class C — Shares outstanding ($.01 par value) | 5,662,093 | ||
Net asset value per share: Class E(#) | $ | 10.95 | |
Class E — Net assets | $ | 120,285,997 | |
Class E — Shares outstanding ($.01 par value) | 10,981,666 | ||
Net asset value per share: Class I(#) | $ | 10.92 | |
Class I — Net assets | $ | 1,169,756,802 | |
Class I — Shares outstanding ($.01 par value) | 107,141,450 | ||
Net asset value per share: Class S(#) | $ | 11.07 | |
Class S — Net assets | $ | 3,325,522,218 | |
Class S — Shares outstanding ($.01 par value) | 300,445,829 | ||
Net asset value per share: Class Y(#) | $ | 10.93 | |
Class Y — Net assets | $ | 1,466,269,481 | |
Class Y — Shares outstanding ($.01 par value) | 134,133,463 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 10,965 | |
(x) Premiums received on options written | $ | 769 | |
(+) Credit default swap contracts - premiums paid (received) | $ | (101 | ) |
(•) Interest rate swap contracts - premiums paid (received) | $ | — | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 792,929 | |
(8) Total return swap contracts - premiums paid (received) | $ | — | |
(a) Cash Collateral for Futures | $ | 2,830 | |
(b) Cash Collateral for Swaps | $ | 5,274 | |
(c) Cash Collateral for TBAs | $ | 575 | |
(d) Due to Broker for Futures | $ | 2,014 | |
(e) Due to Broker for Swaps | $ | 2,148 | |
(f) Due to Broker for TBAs | $ | 910 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 393
Russell Investment Company
Russell Strategic Bond Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 547 | |
Dividends from affiliated Russell funds | 986 | ||
Interest | 153,467 | ||
Total investment income | 155,000 | ||
Expenses | |||
Advisory fees | 34,224 | ||
Administrative fees | 3,261 | ||
Custodian fees | 1,330 | ||
Distribution fees - Class A | 143 | ||
Distribution fees - Class C | 506 | ||
Transfer agent fees - Class A | 115 | ||
Transfer agent fees - Class C | 135 | ||
Transfer agent fees - Class E | 274 | ||
Transfer agent fees - Class I | 1,460 | ||
Transfer agent fees - Class S | 7,359 | ||
Transfer agent fees - Class Y | 74 | ||
Professional fees | 363 | ||
Registration fees | 256 | ||
Shareholder servicing fees - Class C | 169 | ||
Shareholder servicing fees - Class E | 342 | ||
Trustees’ fees | 167 | ||
Printing fees | 357 | ||
Miscellaneous | 195 | ||
Expenses before reductions | 50,730 | ||
Expense reductions | (3,084 | ) | |
Net expenses | 47,646 | ||
Net investment income (loss) | 107,354 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 18,464 | ||
Futures contracts | 19,088 | ||
Options written | 93 | ||
Total return swap contracts | 11,069 | ||
Interest rate swap contracts | (289 | ) | |
Credit default swap contracts | 4,823 | ||
Foreign currency-related transactions | 78,198 | ||
Net realized gain (loss) | 131,446 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (101,537 | ) | |
Futures contracts | (4,706 | ) | |
Options written | 65 | ||
Total return swap contracts | 892 | ||
Interest rate swap contracts | (2,005 | ) | |
Credit default swap contracts | 25 | ||
Foreign currency-related transactions | (1,065 | ) | |
Other investments | (26 | ) | |
Net change in unrealized appreciation (depreciation) | (108,357 | ) | |
Net realized and unrealized gain (loss) | 23,089 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 130,443 |
See accompanying notes which are an integral part of the financial statements.
394 Russell Strategic Bond Fund
Russell Investment Company
Russell Strategic Bond Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 107,354 | $ | 121,819 | ||
Net realized gain (loss) | 131,446 | 195,925 | ||||
Net change in unrealized appreciation (depreciation) | (108,357 | ) | (15,362 | ) | ||
Net increase (decrease) in net assets from operations | 130,443 | 302,382 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (893 | ) | (817 | ) | ||
Class C | (572 | ) | (388 | ) | ||
Class E | (2,136 | ) | (2,057 | ) | ||
Class I | (22,492 | ) | (19,251 | ) | ||
Class S | (65,820 | ) | (60,800 | ) | ||
Class Y | (33,141 | ) | (35,186 | ) | ||
From net realized gain | ||||||
Class A | (1,283 | ) | (267 | ) | ||
Class C | (1,354 | ) | (326 | ) | ||
Class E | (2,908 | ) | (762 | ) | ||
Class I | (24,276 | ) | (5,216 | ) | ||
Class S | (80,024 | ) | (17,438 | ) | ||
Class Y | (34,970 | ) | (10,492 | ) | ||
Net decrease in net assets from distributions | (269,869 | ) | (153,000 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (987,593 | ) | (1,099,296 | ) | ||
Total Net Increase (Decrease) in Net Assets | (1,127,019 | ) | (949,914 | ) | ||
Net Assets | ||||||
Beginning of period | 7,325,389 | 8,275,303 | ||||
End of period | $ | 6,198,370 | $ | 7,325,389 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 33,571 | $ | 13,662 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 395
Russell Investment Company
Russell Strategic Bond Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 1,460 | $ | 16,262 | 1,254 | $ | 13,901 | ||||||
Proceeds from reinvestment of distributions | 195 | 2,160 | 98 | 1,075 | ||||||||
Payments for shares redeemed | (2,508 | ) | (27,827 | ) | (1,433 | ) | (15,855 | ) | ||||
Net increase (decrease) | (853 | ) | (9,405 | ) | (81 | ) | (879 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 812 | 9,052 | 1,026 | 11,337 | ||||||||
Proceeds from reinvestment of distributions | 173 | 1,913 | 64 | 705 | ||||||||
Payments for shares redeemed | (1,493 | ) | (16,575 | ) | (2,280 | ) | (25,183 | ) | ||||
Net increase (decrease) | (508 | ) | (5,610 | ) | (1,190 | ) | (13,141 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 927 | 10,243 | 1,986 | 21,847 | ||||||||
Proceeds from reinvestment of distributions | 422 | 4,633 | 240 | 2,622 | ||||||||
Payments for shares redeemed | (3,445 | ) | (37,876 | ) | (5,809 | ) | (63,626 | ) | ||||
Net increase (decrease) | (2,096 | ) | (23,000 | ) | (3,583 | ) | (39,157 | ) | ||||
Class I | ||||||||||||
Proceeds from shares sold | 18,967 | 208,936 | 22,733 | 249,278 | ||||||||
Proceeds from reinvestment of distributions | 4,225 | 46,261 | 2,218 | 24,188 | ||||||||
Payments for shares redeemed | (25,013 | ) | (274,838 | ) | (32,665 | ) | (356,739 | ) | ||||
Net increase (decrease) | (1,821 | ) | (19,641 | ) | (7,714 | ) | (83,273 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 68,318 | 761,817 | 99,685 | 1,106,890 | ||||||||
Proceeds from reinvestment of distributions | 13,031 | 144,624 | 7,023 | 77,580 | ||||||||
Payments for shares redeemed | (139,848 | ) | (1,558,632 | ) | (123,689 | ) | (1,365,779 | ) | ||||
Net increase (decrease) | (58,499 | ) | (652,191 | ) | (16,981 | ) | (181,309 | ) | ||||
Class Y | ||||||||||||
Proceeds from shares sold | 10,527 | 116,057 | 6,036 | 66,065 | ||||||||
Proceeds from reinvestment of distributions | 6,210 | 68,112 | 4,189 | 45,678 | ||||||||
Payments for shares redeemed | (42,052 | ) | (461,915 | ) | (81,852 | ) | (893,280 | ) | ||||
Net increase (decrease) | (25,315 | ) | (277,746 | ) | (71,627 | ) | (781,537 | ) | ||||
Total increase (decrease) | (89,092 | ) | $ | (987,593 | ) | (101,176 | ) | $ | (1,099,296 | ) |
See accompanying notes which are an integral part of the financial statements.
396 Russell Strategic Bond Fund
(This page intentionally left blank)
Russell Investment Company
Russell Strategic Bond Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class A | ||||||||||||||||
October 31, 2015 | 11.26 | .14 | .03 | .17 | (.17 | ) | (.22 | ) | ||||||||
October 31, 2014 | 11.01 | .15 | .29 | .44 | (.14 | ) | (.05 | ) | ||||||||
October 31, 2013 | 11.50 | .17 | (.24 | ) | (.07 | ) | (.18 | ) | (.24 | ) | ||||||
October 31, 2012 | 10.95 | .26 | .64 | .90 | (.25 | ) | (.10 | ) | ||||||||
October 31, 2011 | 11.24 | .32 | (.02 | ) | .30 | (.33 | ) | (.26 | ) | |||||||
Class C | ||||||||||||||||
October 31, 2015 | 11.25 | .06 | .03 | .09 | (.10 | ) | (.22 | ) | ||||||||
October 31, 2014 | 11.01 | .07 | .27 | .34 | (.05 | ) | (.05 | ) | ||||||||
October 31, 2013 | 11.49 | .08 | (.23 | ) | (.15 | ) | (.09 | ) | (.24 | ) | ||||||
October 31, 2012 | 10.95 | .17 | .64 | .81 | (.17 | ) | (.10 | ) | ||||||||
October 31, 2011 | 11.24 | .24 | (.03 | ) | .21 | (.24 | ) | (.26 | ) | |||||||
Class E | ||||||||||||||||
October 31, 2015 | 11.18 | .14 | .02 | .16 | (.17 | ) | (.22 | ) | ||||||||
October 31, 2014 | 10.94 | .15 | .28 | .43 | (.14 | ) | (.05 | ) | ||||||||
October 31, 2013 | 11.42 | .16 | (.22 | ) | (.06 | ) | (.18 | ) | (.24 | ) | ||||||
October 31, 2012 | 10.88 | .26 | .64 | .90 | (.26 | ) | (.10 | ) | ||||||||
October 31, 2011 | 11.17 | .33 | (.02 | ) | .31 | (.34 | ) | (.26 | ) | |||||||
Class I | ||||||||||||||||
October 31, 2015 | 11.14 | .17 | .04 | .21 | (.21 | ) | (.22 | ) | ||||||||
October 31, 2014 | 10.91 | .18 | .28 | .46 | (.18 | ) | (.05 | ) | ||||||||
October 31, 2013 | 11.39 | .20 | (.23 | ) | (.03 | ) | (.21 | ) | (.24 | ) | ||||||
October 31, 2012 | 10.85 | .29 | .64 | .93 | (.29 | ) | (.10 | ) | ||||||||
October 31, 2011 | 11.14 | .35 | (.02 | ) | .33 | (.36 | ) | (.26 | ) | |||||||
Class S | ||||||||||||||||
October 31, 2015 | 11.29 | .17 | .03 | .20 | (.20 | ) | (.22 | ) | ||||||||
October 31, 2014 | 11.05 | .18 | .28 | .46 | (.17 | ) | (.05 | ) | ||||||||
October 31, 2013 | 11.53 | .19 | (.22 | ) | (.03 | ) | (.21 | ) | (.24 | ) | ||||||
October 31, 2012 | 10.98 | .28 | .65 | .93 | (.28 | ) | (.10 | ) | ||||||||
October 31, 2011 | 11.27 | .35 | (.03 | ) | .32 | (.35 | ) | (.26 | ) | |||||||
Class Y | ||||||||||||||||
October 31, 2015 | 11.15 | .19 | .03 | .22 | (.22 | ) | (.22 | ) | ||||||||
October 31, 2014 | 10.92 | .19 | .27 | .46 | (.18 | ) | (.05 | ) | ||||||||
October 31, 2013 | 11.40 | .21 | (.22 | ) | (.01 | ) | (.23 | ) | (.24 | ) | ||||||
October 31, 2012 | 10.86 | .30 | .64 | .94 | (.30 | ) | (.10 | ) | ||||||||
October 31, 2011 | 11.15 | .37 | (.03 | ) | .34 | (.37 | ) | (.26 | ) | |||||||
See accompanying notes which are an integral part of the financial statements.
398 Russell Strategic Bond Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||||
(.39 | ) | 11.04 | 1.57 | 54,123 | 1.04 | .98 | 1.29 | 159 | |||||||||
(.19 | ) | 11.26 | 4.03 | 64,810 | 1.03 | 1.00 | 1.35 | 133 | |||||||||
(.42 | ) | 11.01 | (.62 | ) | 64,310 | 1.03 | 1.01 | 1.50 | 104 | ||||||||
(.35 | ) | 11.50 | 8.44 | 101,799 | 1.02 | 1.00 | 2.32 | 186 | |||||||||
(.59 | ) | 10.95 | 2.92 | 100,094 | 1.03 | 1.00 | 2.92 | 233 | |||||||||
(.32 | ) | 11.02 | .78 | 62,412 | 1.79 | 1.73 | .54 | 159 | |||||||||
(.10 | ) | 11.25 | 3.15 | 69,413 | 1.78 | 1.75 | .60 | 133 | |||||||||
(.33 | ) | 11.01 | (1.34 | ) | 81,015 | 1.78 | 1.76 | .74 | 104 | ||||||||
(.27 | ) | 11.49 | 7.56 | 107,160 | 1.77 | 1.75 | 1.56 | 186 | |||||||||
(.50 | ) | 10.95 | 1.95 | 100,729 | 1.78 | 1.75 | 2.22 | 233 | |||||||||
(.39 | ) | 10.95 | 1.50 | 120,286 | 1.04 | .98 | 1.29 | 159 | |||||||||
(.19 | ) | 11.18 | 3.96 | 146,158 | 1.03 | 1.00 | 1.34 | 133 | |||||||||
(.42 | ) | 10.94 | (.59 | ) | 182,211 | 1.03 | 1.02 | 1.46 | 104 | ||||||||
(.36 | ) | 11.42 | 8.46 | 164,834 | 1.02 | .97 | 2.33 | 186 | |||||||||
(.60 | ) | 10.88 | 2.91 | 150,015 | 1.03 | .94 | 3.02 | 233 | |||||||||
(.43 | ) | 10.92 | 1.89 | 1,169,757 | .71 | .69 | 1.58 | 159 | |||||||||
(.23 | ) | 11.14 | 4.20 | 1,214,059 | .70 | .70 | 1.64 | 133 | |||||||||
(.45 | ) | 10.91 | (.24 | ) | 1,272,388 | .70 | .70 | 1.79 | 104 | ||||||||
(.39 | ) | 11.39 | 8.78 | 1,312,829 | .69 | .69 | 2.63 | 186 | |||||||||
(.62 | ) | 10.85 | 3.27 | 1,318,893 | .70 | .69 | 3.27 | 233 | |||||||||
(.42 | ) | 11.07 | 1.82 | 3,325,522 | .79 | .73 | 1.54 | 159 | |||||||||
(.22 | ) | 11.29 | 4.19 | 4,052,322 | .78 | .75 | 1.60 | 133 | |||||||||
(.45 | ) | 11.05 | (.34 | ) | 4,152,586 | .78 | .76 | 1.72 | 104 | ||||||||
(.38 | ) | 11.53 | 8.71 | 3,773,716 | .77 | .75 | 2.55 | 186 | |||||||||
(.61 | ) | 10.98 | 3.15 | 3,220,163 | .78 | .75 | 3.19 | 233 | |||||||||
(.44 | ) | 10.93 | 2.00 | 1,466,270 | .59 | .57 | 1.70 | 159 | |||||||||
(.23 | ) | 11.15 | 4.31 | 1,778,627 | .59 | .59 | 1.75 | 133 | |||||||||
(.47 | ) | 10.92 | (.15 | ) | 2,522,793 | .58 | .58 | 1.90 | 104 | ||||||||
(.40 | ) | 11.40 | 8.89 | 2,585,753 | .59 | .59 | 2.73 | 186 | |||||||||
(.63 | ) | 10.86 | 3.36 | 2,756,966 | .60 | .59 | 3.38 | 233 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Bond Fund 399
Russell Investment Company
Russell Investment Grade Bond Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Investment Grade Bond Fund - Class A‡ | Russell Investment Grade Bond Fund - Class S‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (2.10 | )% | 1 Year | 2.03 | % | ||
5 Years | 1.96 | %§ | 5 Years | 3.01 | %§ | ||
10 Years | 4.16 | %§ | 10 Years | 4.78 | %§ | ||
Russell Investment Grade Bond Fund - Class C‡‡ | Russell Investment Grade Bond Fund - Class Y | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.99 | % | 1 Year | 2.18 | % | ||
5 Years | 1.97 | %§ | 5 Years | 3.19 | %§ | ||
10 Years | 3.88 | %§ | 10 Years | 4.94 | %§ | ||
Russell Investment Grade Bond Fund - Class E | Barclays U.S. Aggregate Bond Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 1.77 | % | 1 Year | 1.96 | % | ||
5 Years | 2.77 | %§ | 5 Years | 3.03 | %§ | ||
10 Years | 4.58 | %§ | 10 Years | 4.72 | %§ | ||
Russell Investment Grade Bond Fund - Class I | |||||||
Total | |||||||
Return | |||||||
1 Year | 2.11 | % | |||||
5 Years | 3.09 | %§ | |||||
10 Years | 4.86 | %§ |
400 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Investment Grade Bond Fund (the “Fund”) employs | How did the investment strategies and techniques employed |
a multi-manager approach whereby portions of the Fund are | by the Fund and its money managers affect its benchmark- |
allocated to different money manager strategies. Fund assets not | relative performance? |
allocated to money managers are managed by Russell Investment | The Fund employs discretionary money managers. The Fund’s |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | discretionary money managers select the individual portfolio |
may change the allocation of the Fund’s assets among money | securities for the assets assigned to them. Fund assets not |
managers at any time. An exemptive order from the Securities | allocated to discretionary money managers include the Fund’s |
and Exchange Commission (“SEC”) permits RIMCo to engage | liquidity reserves and assets which may be managed directly |
or terminate a money manager at any time, subject to approval | by RIMCo to effect the Fund’s investment strategies and/or to |
by the Fund’s Board, without a shareholder vote. Pursuant to the | actively manage the Fund’s overall exposures by investing in |
terms of the exemptive order, the Fund is required to notify its | securities or other instruments that RIMCo believes will achieve |
shareholders within 90 days of when a money manager begins | the desired risk/return profile for the Fund. |
providing services. As of October 31, 2015, the Fund had five | |
money managers. | With respect to certain of the Fund’s money managers, Macro |
Currency Group, the Fund’s currency specialist, was the best | |
What is the Fund’s investment objective? | performing manager for the period and outperformed the Fund’s |
The Fund seeks to provide current income and the preservation | benchmark, due primarily to a long U.S. dollar position, against |
of capital. | short positions among a basket of other developed market |
currencies. | |
How did the Fund perform relative to its benchmark for the | |
fiscal year ended October 31, 2015? | Metropolitan West Asset Management, LLC was the worst |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | performing manager for the period and marginally underperformed |
Class C, Class E, Class I, Class S and Class Y Shares gained 1.73%, | the Fund’s benchmark, primarily due to issue selection and |
0.99%, 1.77%, 2.11%, 2.03%, and 2.18%, respectively. This is | a short duration position. Issue selection was most negative |
compared to the Fund’s benchmark, the Barclays U.S. Aggregate | among the asset-backed security sector, where the portfolio had |
Bond Index, which gained 1.96% during the same period. The | a significant holding of student debt as the sector was challenged |
Fund’s performance includes operating expenses, whereas index | by downgrade fears. |
returns are unmanaged and do not include expenses of any kind. | During the period, RIMCo utilized futures and swaps to seek to |
For the fiscal year ended October 31, 2015, the Morningstar® | achieve the Fund benchmark’s duration exposures with respect to |
Intermediate-Term Bond, a group of funds that Morningstar | the portion of the Fund allocated to cash reserves. This performed |
considers to have investment strategies similar to those of the | as intended and was positive in terms of absolute return |
Fund, gained 0.98%. This return serves as a peer comparison | contribution and benchmark-relative performance. |
and is expressed net of operating expenses. | RIMCo also managed a three-pronged strategy to seek to generate |
active returns through currency positioning by supplementing the | |
How did the market conditions described in the Market | Fund’s existing active currency mandate with a more mechanistic |
Summary report affect the Fund’s performance? | strategy and to further reduce the Fund’s reliance on traditional |
The fiscal year ended October 31, 2015 saw slowing global growth | fixed income market risks. This approach incorporates a currency |
and commodity price weakness. Overall, this was modestly | overlay, an index replication and an enhanced cash strategy. The |
positive for fixed income assets, as yields fell, particularly among | currency overlay utilizes currency forward contracts to take long |
sovereign bonds. On the other hand, credit sectors, primarily | and short positions in global foreign exchange markets. Because |
within the U.S., were challenged in this environment. Corporate | the currency overlay is an out-of-benchmark position, RIMCo |
bonds saw the largest drawdowns as sharply reduced commodity | managed an index replication strategy in connection with the |
prices (oil in particular), weakening earnings growth and elevated | currency overlay to provide benchmark-like exposure to its overall |
new issuance weighed on returns. In this environment, the Fund’s | strategy. The enhanced cash strategy is designed to provide for |
strategic overweight to credit detracted. | modest returns on the cash held in connection with the currency |
The Fund’s currency positioning, on the other hand, added value, | overlay and index replication strategies. Over the fiscal year, the |
as the Fund benefited from a strong U.S. dollar rally, particularly | currency overlay strategy was positive for the Fund’s benchmark- |
against European currencies, as the U.S. economy continued to | relative performance, as was the underlying index replication |
lead the global recovery. | strategy, due to its interest rate sensitivity as yields fell. |
Russell Investment Grade Bond Fund 401
Russell Investment Company
Russell Investment Grade Bond Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Throughout the period, RIMCo also implemented tactical ‘tilts’ | ||
based on its judgments regarding shorter-term opportunities to | *Principal Global Investors LLC is the asset management arm of the Principal | |
seek to generate returns and/or mitigate risk by purchasing and | Financial Group® (The Principal® ), which includes various member | |
shorting U.S. Treasury futures and currency forward contracts. | companies including Principal Global Investors LLC, Principal Global | |
Investors (Europe) Limited, and others. The Macro Currency Group is the | ||
These tilts had a modestly positive benchmark-relative | specialist currency investment group within Principal Global Investors. Where | |
contribution during the period due to RIMCo’s U.S. Treasury | used herein, Macro Currency Group means Principal Global Investors LLC. | |
futures selections. | ||
Describe any changes to the Fund’s structure or the money | The views expressed in this report reflect those of the portfolio | |
manager line-up. | managers only through the end of the period covered by | |
There were no changes to the Fund’s structure or money manager | the report. These views do not necessarily represent the | |
line-up during the fiscal year. | views of RIMCo or any other person in RIMCo or any other | |
affiliated organization. These views are subject to change | ||
Money Managers as of October 31, | at any time based upon market conditions or other events, | |
2015 | Styles | and RIMCo disclaims any responsibility to update the views |
Logan Circle Partners, L.P. | Fully Discretionary | contained herein. These views should not be relied on as |
Loomis, Sayles & Company, L.P. | Fully Discretionary | investment advice and, because investment decisions for |
Neuberger Berman Fixed Income LLC | Enhanced Core | a Russell Investment Company (“RIC”) Fund are based on |
Metropolitan West Asset Management, LLC. Fully Discretionary | numerous factors, should not be relied on as an indication | |
Macro Currency Group – an investment | ||
group within Principal Global Investors | of investment decisions of any RIC Fund. | |
LLC* | Fully Discretionary |
* Assumes initial investment on November 1, 2005.
** The Barclays U.S. Aggregate Bond Index is an index, with income reinvested, generally representative of intermediate-term government bonds, investment-grade
corporate debt securities and mortgage-backed securities.
‡ The Fund first issued Class A Shares on June 1, 2010. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 3.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
‡‡ The Fund first issued Class C Shares on October 22, 2007. The returns shown for Class C Shares prior to that date are the returns of the Fund’s Class E Shares
and do not reflect deduction of Rule 12b-1 distribution fees that apply to Class C Shares. Had they done so, the returns shown for those periods would have
been lower. However, the returns for Class C Shares would be substantially similar to those of Class E Shares because they are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class C Shares do not have the same expenses as the Class E Shares.
‡‡‡ The Fund first issued Class S Shares on October 22, 2007. The returns shown for Class S Shares prior to that date are the returns of the Fund’s Class I
Shares. However, the returns for Class S Shares would be substantially similar to those of Class I Shares because they are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class S Shares do not have the same expenses as the Class I Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
402 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 997.20 | $ | 1,021.17 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 4.03 | $ | 4.08 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.80% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). | |||||
and actual expenses. You may use the information in this column, | ||||||
together with the amount you invested, to estimate the expenses | Hypothetical | |||||
Performance (5% | ||||||
that you paid over the period. Simply divide your account value by | Actual | return before | ||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Class C | Performance | expenses) | |||
= 8.6), then multiply the result by the number in the first column | Beginning Account Value | |||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
the expenses you paid on your account during this period. | October 31, 2015 | $ | 993.40 | $ | 1,017.39 | |
Expenses Paid During Period* | $ | 7.79 | $ | 7.88 | ||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | * Expenses are equal to the Fund's annualized expense ratio of 1.55% | |||||
Performance (5% return before expenses)” provides information | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
about hypothetical account values and hypothetical expenses | year period). | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | Hypothetical | |||||
actual return. The hypothetical account values and expenses | Performance (5% | |||||
Actual | return before | |||||
may not be used to estimate the actual ending account balance or | Class E | Performance | expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
to compare the ongoing costs of investing in the Fund and other | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
funds. To do so, compare this 5% hypothetical example with the | Ending Account Value | |||||
October 31, 2015 | $ | 997.60 | $ | 1,021.17 | ||
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 4.03 | $ | 4.08 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 0.80% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
Russell Investment Grade Bond Fund 403
Russell Investment Company
Russell Investment Grade Bond Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class I | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 999.30 | $ | 1,022.84 | |
Expenses Paid During Period* | $ | 2.37 | $ | 2.40 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.47% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 998.90 | $ | 1,022.43 | |
Expenses Paid During Period* | $ | 2.77 | $ | 2.80 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.55% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class Y | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 999.50 | $ | 1,023.49 | |
Expenses Paid During Period* | $ | 1.71 | $ | 1.73 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.34% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
404 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Long-Term Investments - 91.0% | Series 2010-1 Class A2 | ||||||
1.433% due 02/25/35 (Ê) | 1,100 | 1,098 | |||||
Asset-Backed Securities - 8.0% | California Republic Auto Receivables | ||||||
ABFC Trust | Trust | ||||||
Series 2005-WMC1 Class M1 | Series 2014-2 Class A4 | ||||||
0.830% due 06/25/35 (Ê) | 239 | 238 | 1.570% due 12/16/19 | 894 | 893 | ||
Access Group, Inc. | Series 2015-2 Class A3 | ||||||
Series 2004-2 Class A3 | 1.310% due 08/15/19 | 998 | 993 | ||||
0.424% due 10/25/24 (Ê) | 700 | 653 | Series 2015-3 Class A3 | ||||
Accredited Mortgage Loan Trust | 1.620% due 11/15/19 | 445 | 445 | ||||
Series 2007-1 Class A4 | Capital Auto Receivables Asset Trust | ||||||
0.390% due 02/25/37 (Ê) | 2,583 | 2,066 | Series 2013-1 Class B | ||||
Ally Auto Receivables Trust | 1.290% due 04/20/18 | 1,450 | 1,448 | ||||
Series 2012-5 Class A3 | Capital One Multi-Asset Execution Trust | ||||||
0.620% due 03/15/17 | 134 | 135 | Series 2007-A5 Class A5 | ||||
Series 2013-1 Class A3 | 0.238% due 07/15/20 (Ê) | 743 | 737 | ||||
0.630% due 05/15/17 | 216 | 216 | Series 2014-A4 Class A4 | ||||
Series 2015-1 Class A3 | 0.534% due 06/15/22 (Ê) | 282 | 279 | ||||
1.390% due 09/16/19 | 485 | 483 | Series 2015-A7 Class A7 | ||||
Series 2015-2 Class A3 | 1.450% due 08/16/21 | 652 | 649 | ||||
1.490% due 11/15/19 | 199 | 199 | CarFinance Capital Auto Trust | ||||
Series 2015-2 Class A4 | Series 2014-1A Class A | ||||||
1.840% due 06/15/20 | 208 | 209 | 1.460% due 12/17/18 (Þ) | 329 | 330 | ||
Ally Master Owner Trust | Series 2015-1A Class A | ||||||
Series 2013-1 Class A2 | 1.750% due 06/15/21 (Þ) | 408 | 405 | ||||
1.000% due 02/15/18 | 2,330 | 2,332 | |||||
AmeriCredit Automobile Receivables | CarMax Auto Owner Trust | ||||||
Series 2013-1 Class A3 | |||||||
Trust | 0.600% due 10/16/17 | 326 | 326 | ||||
Series 2014-2 Class A2A | |||||||
0.540% due 10/10/17 | 176 | 175 | Series 2015-2 Class A4 | ||||
Series 2014-2 Class A2B | 1.800% due 03/15/21 | 599 | 598 | ||||
0.448% due 10/10/17 (Ê) | 599 | 599 | Series 2015-4 Class A3 | ||||
Series 2014-3 Class B | 1.560% due 11/16/20 | 716 | 716 | ||||
1.920% due 11/08/19 | 240 | 241 | Carnow Auto Receivables Trust | ||||
Series 2014-1A Class A | |||||||
Series 2015-1 Class A3 | 0.960% due 01/17/17 (Þ) | 80 | 79 | ||||
1.260% due 11/08/19 | 1,103 | 1,098 | |||||
Series 2015-2 Class A2A | Carrington Mortgage Loan Trust | ||||||
0.830% due 09/10/18 | 910 | 910 | Series 2005-NC3 Class M1 | ||||
0.610% due 06/25/35 (Ê) | 444 | 444 | |||||
Series 2015-2 Class B | |||||||
1.820% due 07/08/20 | 193 | 192 | Series 2005-NC5 Class A2 | ||||
Ameriquest Mortgage Securities, | 0.507% due 10/25/35 (Ê) | — | — | ||||
Inc. Asset-Backed Pass-Through | CCG Receivables Trust | ||||||
Certificates | Series 2013-1 Class A2 | ||||||
Series 2005-R5 Class M1 | 1.050% due 08/14/20 (Þ) | 150 | 150 | ||||
0.600% due 07/25/35 (Ê) | 838 | 837 | Series 2014-1 Class A2 | ||||
BA Credit Card Trust | 1.060% due 11/15/21 (Þ) | 503 | 502 | ||||
Series 2007-A1 Class A1 | Centex Home Equity Loan Trust | ||||||
5.170% due 06/15/19 | 2,300 | 2,414 | Series 2003-B Class AF4 | ||||
Series 2015-A2 Class A | 3.735% due 02/25/32 | 2,253 | 2,263 | ||||
1.360% due 09/15/20 | 536 | 535 | Series 2005-D Class M1 | ||||
Bayview Financial Acquisition Trust | 0.600% due 10/25/35 (Ê) | 904 | 901 | ||||
Series 2006-A Class 1A3 | Chase Issuance Trust | ||||||
5.865% due 02/28/41 | 410 | 427 | Series 2007-A2 Class A2 | ||||
Bear Stearns Asset Backed Securities | 0.217% due 04/15/19 (Ê) | 620 | 618 | ||||
I Trust | Series 2014-A8 Class A8 | ||||||
Series 2005-TC2 Class A3 | 0.436% due 11/15/18 (Ê) | 600 | 599 | ||||
0.555% due 08/25/35 (Ê) | 24 | 24 | Series 2015-A2 Class A2 | ||||
BMW Vehicle Owner Trust | 1.590% due 02/18/20 | 840 | 843 | ||||
Series 2013-A Class A3 | Chesapeake Funding LLC | ||||||
0.670% due 11/27/17 | 1,380 | 1,379 | Series 2014-1A Class C | ||||
Brazos Higher Education Authority | 1.368% due 03/07/26 (Ê)(Þ) | 365 | 365 | ||||
Series 2011-2 Class A3 | CIT Education Loan Trust | ||||||
1.234% due 10/27/36 (Ê) | 725 | 709 | Series 2007-1 Class A | ||||
Brazos Higher Education Authority, Inc. | 0.345% due 03/25/42 (Ê)(Þ) | 758 | 703 | ||||
Citibank Credit Card Issuance Trust |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 405
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2006-A7 Class A7 | Series 2015-3 Class A | ||||||
0.301% due 12/17/18 (Ê) | 2,060 | 2,054 | 2.380% due 10/15/20 (Å) | 152 | 152 | ||
Series 2014-A3 Class A3 | Ford Credit Auto Owner Trust | ||||||
0.367% due 05/09/18 (Ê) | 625 | 625 | Series 2012-D Class A3 | ||||
CountryPlace Manufactured Housing | 0.510% due 04/15/17 | 72 | 72 | ||||
Contract Trust | Series 2013-A Class A3 | ||||||
Series 2005-1 Class A4 | 0.550% due 07/15/17 | 174 | 174 | ||||
5.200% due 12/15/35 (Þ) | 675 | 706 | Series 2013-C Class A3 | ||||
Countrywide Asset-Backed Certificates | 0.820% due 12/15/17 | 487 | 487 | ||||
Series 2006-BC1 Class 1A | Series 2014-A Class A3 | ||||||
0.370% due 04/25/36 (Ê) | 377 | 361 | 0.790% due 05/15/18 | 1,499 | 1,499 | ||
Series 2006-BC4 Class 2A2 | Series 2015-5 Class A1 | ||||||
0.330% due 11/25/36 (Ê) | 993 | 946 | 2.390% due 08/15/22 | 289 | 291 | ||
CPS Auto Receivables Trust | Series 2015-B Class A4 | ||||||
Series 2015-C Class A | 1.580% due 08/15/20 | 979 | 979 | ||||
1.770% due 06/17/19 (Þ) | 569 | 569 | Series 2015-C Class A3 | ||||
Credit-Based Asset Servicing and | 1.410% due 02/15/20 | 169 | 169 | ||||
Securitization LLC | Series 2015-C Class A4 | ||||||
Series 2004-CB7 Class AF5 | 1.740% due 02/15/21 | 421 | 422 | ||||
4.866% due 10/25/34 | 286 | 296 | |||||
GM Financial Automobile Leasing Trust | |||||||
Discover Card Execution Note Trust | Series 2015-3 Class A3 | ||||||
Series 2015-A2 Class A | 1.690% due 03/20/19 | 620 | 619 | ||||
1.900% due 10/17/22 | 504 | 504 | |||||
Higher Education Funding I | |||||||
Drive Auto Receivables Trust | Series 2014-1 Class A | ||||||
Series 2015-BA Class A2A | 1.283% due 05/25/34 (Ê)(Þ) | 667 | 658 | ||||
0.930% due 12/15/17 (Þ) | 651 | 650 | |||||
Honda Auto Receivables Owner Trust | |||||||
Series 2015-CA Class A2B | Series 2012-3 Class A4 | ||||||
0.850% due 02/15/18 (Ê)(Þ) | 652 | 652 | 0.740% due 10/15/18 | 316 | 316 | ||
Series 2015-DA Class A2A | Series 2013-2 Class A3 | ||||||
1.230% due 06/15/18 (Þ) | 588 | 588 | 0.530% due 02/16/17 | 741 | 740 | ||
DT Auto Owner Trust | Series 2015-3 Class A2 | ||||||
Series 2015-3A Class A | 0.920% due 11/20/17 | 625 | 625 | ||||
1.660% due 03/15/19 (Å) | 708 | 708 | |||||
Series 2015-3 Class A4 | |||||||
Education Loan Asset-Backed Trust I | 1.560% due 10/18/21 | 408 | 409 | ||||
Series 2013-1 Class B1 | |||||||
1.169% due 11/25/33 (Ê)(Þ) | 1,560 | 1,450 | Series 2015-4 Class A2 | ||||
0.820% due 07/23/18 | 625 | 624 | |||||
Educational Funding of the South, Inc. | Series 2015-4 Class A3 | ||||||
Series 2011-1 Class A2 | |||||||
0.927% due 04/25/35 (Ê) | 624 | 606 | 1.230% due 09/23/19 | 448 | 446 | ||
EFS Volunteer No. 3 LLC | Hyundai Auto Receivables Trust | ||||||
Series 2012-1 Class A3 | Series 2011-C Class A4 | ||||||
1.156% due 04/25/33 (Ê)(Þ) | 775 | 771 | 1.300% due 02/15/18 | 469 | 470 | ||
Exeter Automobile Receivables Trust | Series 2013-A Class A3 | ||||||
Series 2013-1A Class A | 0.560% due 07/17/17 | 679 | 678 | ||||
1.290% due 10/16/17 (Þ) | 1 | 1 | Series 2013-C Class A3 | ||||
Series 2014-3A Class A | 1.010% due 02/15/18 | 918 | 919 | ||||
1.320% due 01/15/19 (Þ) | 568 | 566 | Series 2014-A Class A3 | ||||
Fannie Mae Grantor Trust | 0.790% due 07/16/18 | 396 | 396 | ||||
Series 2003-T4 Class 1A | Series 2015-A Class A3 | ||||||
0.390% due 09/26/33 (Ê) | 107 | 107 | 1.050% due 04/15/19 | 777 | 775 | ||
Series 2003-T4 Class 2A5 | Series 2015-B Class A2A | ||||||
5.224% due 09/26/33 | 692 | 755 | 0.690% due 04/16/18 | 1,351 | 1,350 | ||
Fannie Mae REMICS | Series 2015-C Class A3 | ||||||
Series 1999-56 Class Z | 1.460% due 02/18/20 | 57 | 57 | ||||
7.000% due 12/18/29 | 78 | 89 | JGWPT XXX LLC | ||||
Fannie Mae Whole Loan | Series 2013-3A Class A | ||||||
Series 2003-W5 Class A | 4.080% due 01/17/73 (Þ) | 434 | 459 | ||||
0.390% due 04/25/33 (Ê) | 38 | 37 | JGWPT XXXII LLC | ||||
Series 2003-W9 Class A | Series 2014-2A Class A | ||||||
0.423% due 06/25/33 (Ê) | 52 | 50 | 3.610% due 01/17/73 (Þ) | 590 | 600 | ||
Lehman ABS Manufactured Housing | |||||||
Flagship Credit Auto Trust | Contract Trust | ||||||
Series 2015-2 Class A | |||||||
1.980% due 10/15/20 (Þ) | 504 | 504 | Series 2001-B Class A4 | ||||
5.270% due 04/15/40 | 328 | 342 | |||||
Mercedes-Benz Auto Receivables Trust |
See accompanying notes which are an integral part of the financial statements.
406 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2014-1 Class A2 | Series 2013-1 Class B | ||||||
0.430% due 02/15/17 | 1,031 | 1,030 | 1.160% due 01/15/19 | 764 | 764 | ||
Morgan Stanley ABS Capital I, Inc. Trust | Series 2014-3 Class A2A | ||||||
Series 2003-NC6 Class M1 | 0.540% due 08/15/17 | 242 | 242 | ||||
1.387% due 06/25/33 (Ê) | 230 | 224 | Series 2014-4 Class A2B | ||||
Series 2003-NC7 Class M1 | 0.487% due 01/16/18 (Ê) | 291 | 291 | ||||
1.237% due 06/25/33 (Ê) | 192 | 181 | Series 2014-4 Class B | ||||
Navient Private Education Loan Trust | 1.820% due 05/15/19 | 700 | 702 | ||||
Series 2014-AA Class A2A | Series 2015-2 Class B | ||||||
2.740% due 02/15/29 (Þ) | 1,285 | 1,283 | 1.830% due 01/15/20 | 629 | 629 | ||
Navient Student Loan Trust | Series 2015-2 Class C | ||||||
Series 2014-2 Class A | 2.440% due 04/15/21 | 205 | 203 | ||||
0.806% due 03/25/43 (Ê) | 1,352 | 1,272 | Series 2015-3 Class B | ||||
Series 2014-3 Class A | 2.290% due 03/16/20 | 493 | 494 | ||||
0.786% due 03/25/43 (Ê) | 1,761 | 1,660 | Series 2015-4 Class A2A | ||||
Nelnet Student Loan Trust | 1.200% due 12/17/18 | 816 | 816 | ||||
Series 2011-1A Class A | Series 2015-4 Class A3 | ||||||
1.020% due 02/25/43 (Ê)(Þ) | 1,142 | 1,128 | 1.580% due 09/16/19 | 585 | 584 | ||
Series 2014-4A Class A2 | Series 2015-4 Class C | ||||||
1.119% due 11/25/43 (Ê)(Þ) | 725 | 658 | 2.970% due 03/15/21 | 273 | 274 | ||
Series 2015-2A Class A2 | Series 2015-5 Class A2B | ||||||
0.821% due 09/25/42 (Ê)(Þ) | 1,340 | 1,307 | 0.947% due 11/15/18 (Ê) | 107 | 107 | ||
New Century Home Equity Loan Trust | Series 2015-5 Class C | ||||||
Series 2005-2 Class M1 | 2.740% due 12/15/21 | 105 | 104 | ||||
0.617% due 06/25/35 (Ê) | 1,255 | 1,250 | Saxon Asset Securities Trust | ||||
Nissan Auto Receivables Owner Trust | Series 2004-1 Class A | ||||||
Series 2014-A Class A3 | 0.695% due 03/25/35 (Ê) | 57 | 52 | ||||
0.720% due 08/15/18 | 284 | 283 | SLM Private Education Loan Trust | ||||
Series 2014-B Class A3 | Series 2010-A Class 2A | ||||||
1.110% due 05/15/19 | 657 | 657 | 3.436% due 05/16/44 (Ê)(Þ) | 2,454 | 2,552 | ||
Series 2015-C Class A2A | SLM Student Loan Trust | ||||||
0.870% due 11/15/18 | 625 | 624 | Series 2005-8 Class A4 | ||||
Series 2015-C Class A3 | 0.984% due 01/25/28 (Ê) | 1,660 | 1,642 | ||||
1.370% due 05/15/20 | 410 | 409 | Series 2006-2 Class A6 | ||||
North Carolina State Education | 0.404% due 01/25/41 (Ê) | 950 | 839 | ||||
Assistance Authority | Series 2006-8 Class A6 | ||||||
Series 2011-2 Class A2 | 0.394% due 01/25/41 (Ê) | 950 | 828 | ||||
1.034% due 07/25/25 (Ê) | 695 | 690 | |||||
Oak Hill Advisors Residential Loan | Series 2007-6 Class B | ||||||
1.084% due 04/27/43 (Ê) | 137 | 114 | |||||
Trust | Series 2007-7 Class B | ||||||
Series 2015-NPL2 Class A1 | |||||||
3.721% due 07/25/55 (Þ) | 353 | 352 | 0.984% due 10/25/28 (Ê) | 320 | 253 | ||
Park Place Securities, Inc. | Series 2007-8 Class B | ||||||
Series 2005-WCH1 Class M2 | 1.234% due 04/27/43 (Ê) | 275 | 235 | ||||
0.690% due 01/25/36 (Ê) | 700 | 695 | Series 2008-2 Class B | ||||
Prestige Auto Receivables Trust | 1.434% due 01/25/29 (Ê) | 160 | 128 | ||||
Series 2014-1A Class A3 | Series 2008-3 Class B | ||||||
1.520% due 04/15/20 (Þ) | 900 | 899 | 1.434% due 04/25/29 (Ê) | 160 | 131 | ||
RAMP Trust | Series 2008-4 Class A4 | ||||||
Series 2003-RS2 Class AII | 1.927% due 07/25/22 (Ê) | 2,400 | 2,415 | ||||
0.850% due 03/25/33 (Ê) | 42 | 38 | Series 2008-4 Class B | ||||
Series 2003-RS11 Class AI6A | 2.084% due 04/25/29 (Ê) | 160 | 145 | ||||
5.980% due 12/25/33 | 159 | 171 | Series 2008-5 Class B | ||||
RASC Trust | 2.127% due 07/25/29 (Ê) | 230 | 213 | ||||
Series 2001-KS3 Class AII | Series 2008-6 Class B | ||||||
0.647% due 09/25/31 (Ê) | 22 | 20 | 2.084% due 07/25/29 (Ê) | 160 | 147 | ||
Series 2003-KS4 Class AIIB | Series 2008-7 Class B | ||||||
0.767% due 06/25/33 (Ê) | 88 | 75 | 2.084% due 07/25/29 (Ê) | 160 | 139 | ||
Renaissance Home Equity Loan Trust | Series 2008-8 Class B | ||||||
Series 2005-2 Class AF4 | 2.484% due 10/25/29 (Ê) | 160 | 152 | ||||
4.934% due 08/25/35 | 585 | 587 | Series 2008-9 Class A | ||||
Series 2006-1 Class AF6 | 1.777% due 04/25/23 (Ê) | 265 | 266 | ||||
5.746% due 05/25/36 | 200 | 139 | Series 2008-9 Class B | ||||
Santander Drive Auto Receivables Trust | 2.527% due 10/25/29 (Ê) | 230 | 221 |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 407
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2013-4 Class A | ACE INA Holdings, Inc. | ||||||
0.720% due 06/25/27 (Ê) | 551 | 534 | 2.300% due 11/03/20 | 595 | 595 | ||
SMB Private Education Loan Trust | 2.875% due 11/03/22 | 440 | 441 | ||||
Series 2015-A Class A3 | 4.350% due 11/03/45 | 181 | 183 | ||||
1.697% due 02/17/32 (Ê)(Þ) | 1,345 | 1,318 | Alcoa, Inc. | ||||
SoFi Professional Loan Program LLC | 6.150% due 08/15/20 | 617 | 651 | ||||
Series 2014-B Class A2 | Allstate Corp. (The) | ||||||
2.550% due 08/27/29 (Þ) | 981 | 983 | 5.750% due 08/15/53 | 980 | 1,020 | ||
Specialty Underwriting & Residential | Altria Group, Inc. | ||||||
Finance Trust | 10.200% due 02/06/39 | 474 | 784 | ||||
Series 2003-BC1 Class A | Amazon.com, Inc. | ||||||
0.850% due 01/25/34 (Ê) | 25 | 22 | 4.950% due 12/05/44 | 425 | 443 | ||
Synchrony Credit Card Master Note Trust | American Airlines Pass-Through Trust | ||||||
Series 2015-3 Class A | Series 2013-2 Class A | ||||||
1.740% due 09/15/21 | 168 | 168 | 4.950% due 01/15/23 | 1,085 | 1,162 | ||
Tidewater Auto Receivables Trust | American Campus Communities | ||||||
Series 2014-AA Class A3 | Operating Partnership, LP | ||||||
1.400% due 07/15/18 (Þ) | 1,414 | 1,415 | 4.125% due 07/01/24 | 340 | 340 | ||
Toyota Auto Receivables Owner Trust | American Electric Power Co., Inc. | ||||||
Series 2013-A Class A3 | 1.650% due 12/15/17 | 440 | 439 | ||||
0.550% due 01/17/17 | 183 | 183 | American Express Co. | ||||
Series 2015-B Class A2B | 3.625% due 12/05/24 | 765 | 765 | ||||
0.398% due 11/15/17 (Ê) | 1,000 | 999 | American Express Credit Corp. | ||||
US Residential Opportunity Fund III | Series F | ||||||
Trust | 2.600% due 09/14/20 | 680 | 685 | ||||
Series 2015-1A Class A | |||||||
3.721% due 01/27/35 (Þ) | 221 | 221 | American Honda Finance Corp. | ||||
2.250% due 08/15/19 | 855 | 857 | |||||
US Residential Opportunity Fund Trust | |||||||
Series 2015-1IV Class A | American International Group, Inc. | ||||||
3.721% due 02/27/35 (Þ) | 289 | 289 | 4.800% due 07/10/45 | 151 | 156 | ||
USAA Auto Owner Trust | 4.375% due 01/15/55 | 765 | 704 | ||||
Series 2015-1 Class A3 | American Tower Trust I | ||||||
1.200% due 06/17/19 | 358 | 359 | 3.070% due 03/15/23 (Þ) | 710 | 692 | ||
Vericrest Opportunity Loan Trust | Amgen, Inc. | ||||||
Series 2015-NP12 Class A1 | 4.400% due 05/01/45 | 251 | 232 | ||||
3.875% due 09/25/45 (Å) | 99 | 99 | Anadarko Petroleum Corp. | ||||
Series 2015-NPL2 Class A1 | 6.450% due 09/15/36 | 572 | 644 | ||||
3.500% due 02/25/55 (Þ) | 353 | 351 | 4.500% due 07/15/44 | 200 | 185 | ||
Series 2015-NPL4 Class A1 | Anheuser-Busch InBev Finance, Inc. | ||||||
3.500% due 02/25/55 (Þ) | 202 | 200 | 0.513% due 01/27/17 (Ê) | 800 | 797 | ||
Volkswagen Auto Loan Enhanced Trust | Anheuser-Busch InBev Worldwide, Inc. | ||||||
Series 2012-2 Class A3 | 1.375% due 07/15/17 | 1,935 | 1,928 | ||||
0.460% due 01/20/17 | 158 | 158 | Apollo Management Holdings, LP | ||||
World Financial Network Credit Card | 4.000% due 05/30/24 (Þ) | 940 | 945 | ||||
Master Trust | Apple, Inc. | ||||||
Series 2015-A Class A | 0.584% due 05/03/18 (Ê) | 1,875 | 1,876 | ||||
0.666% due 02/15/22 (Ê) | 259 | 258 | 4.375% due 05/13/45 | 590 | 588 | ||
World Omni Auto Receivables Trust | AT&T, Inc. | ||||||
Series 2014-A Class A2 | 3.000% due 06/30/22 | 2,150 | 2,109 | ||||
0.430% due 05/15/17 | 257 | 257 | 4.500% due 05/15/35 | 2,703 | 2,528 | ||
Series 2014-B Class A4 | 4.300% due 12/15/42 | 169 | 147 | ||||
1.680% due 12/15/20 | 722 | 722 | 4.750% due 05/15/46 | 560 | 514 | ||
100,628 | AutoNation, Inc. | ||||||
Corporate Bonds and Notes - 23.4% | 4.500% due 10/01/25 | 920 | 942 | ||||
21st Century Fox America, Inc. | Bank of America Corp. | ||||||
6.150% due 02/15/41 | 775 | 905 | 2.000% due 01/11/18 | 1,170 | 1,175 | ||
8.250% due 10/17/96 | 65 | 84 | 2.625% due 10/19/20 | 1,089 | 1,085 | ||
Series WI | 4.200% due 08/26/24 | 95 | 96 | ||||
4.750% due 09/15/44 | 370 | 372 | 4.000% due 01/22/25 | 1,010 | 996 | ||
AbbVie, Inc. | 3.875% due 08/01/25 | 775 | 788 | ||||
1.800% due 05/14/18 | 1,014 | 1,015 | 4.875% due 04/01/44 | 150 | 157 | ||
3.600% due 05/14/25 | 540 | 531 | Series L | ||||
4.500% due 05/14/35 | 1,328 | 1,267 | 1.950% due 05/12/18 | 639 | 641 | ||
4.700% due 05/14/45 | 100 | 95 | 3.950% due 04/21/25 | 930 | 915 |
See accompanying notes which are an integral part of the financial statements.
408 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
4.750% due 04/21/45 | 310 | 303 | 5.000% due 08/15/45 | 375 | 376 | ||
Bank of America NA | CenterPoint Energy Houston Electric | ||||||
Series BKNT | LLC | ||||||
5.300% due 03/15/17 | 400 | 420 | 4.500% due 04/01/44 | 600 | 630 | ||
0.637% due 06/15/17 (Ê) | 1,340 | 1,331 | CenterPoint Energy Resources Corp. | ||||
6.100% due 06/15/17 | 1,900 | 2,028 | 6.125% due 11/01/17 | 125 | 136 | ||
6.000% due 10/15/36 | 1,300 | 1,566 | Chevron Corp. | ||||
Bank of New York Mellon Corp. (The) | 2.411% due 03/03/22 | 555 | 550 | ||||
1.969% due 06/20/17 | 765 | 774 | Chevron Phillips Chemical Co. LLC / | ||||
Series G | Chevron Phillips Chemical Co, LP | ||||||
2.200% due 05/15/19 | 640 | 650 | 1.700% due 05/01/18 (Þ) | 531 | 529 | ||
Bank of Nova Scotia (The) | Citigroup, Inc. | ||||||
Series YCD | 1.350% due 03/10/17 | 800 | 799 | ||||
0.491% due 11/07/16 (Ê)(~) | 1,170 | 1,170 | 6.000% due 08/15/17 | 475 | 511 | ||
Baxalta, Inc. | 6.125% due 11/21/17 | 1,980 | 2,153 | ||||
3.600% due 06/23/22 (Þ) | 391 | 395 | 1.700% due 04/27/18 | 1,115 | 1,110 | ||
Baylor Scott & White Holdings | 2.500% due 09/26/18 | 2,025 | 2,050 | ||||
4.185% due 11/15/45 | 460 | 435 | 5.375% due 08/09/20 | 500 | 562 | ||
Bear Stearns Cos. LLC (The) | 2.650% due 10/26/20 | 646 | 645 | ||||
5.550% due 01/22/17 | 890 | 933 | 3.875% due 03/26/25 | 645 | 629 | ||
7.250% due 02/01/18 | 425 | 475 | 4.400% due 06/10/25 | 431 | 436 | ||
Becton Dickinson and Co. | 4.450% due 09/29/27 | 827 | 826 | ||||
2.675% due 12/15/19 | 660 | 668 | 4.650% due 07/30/45 | 650 | 660 | ||
Bellsouth Capital Funding Corp. | City of Hope | ||||||
7.875% due 02/15/30 | 635 | 765 | Series 2013 | ||||
Berkshire Hathaway Energy Co. | 5.623% due 11/15/43 | 215 | 241 | ||||
Series WI | Cleveland Clinic Foundation (The) | ||||||
4.500% due 02/01/45 | 495 | 495 | 4.858% due 01/01/14 | 290 | 275 | ||
Berkshire Hathaway Finance Corp. | Coca-Cola Co. (The) | ||||||
4.400% due 05/15/42 | 400 | 398 | 0.875% due 10/27/17 | 490 | 489 | ||
Biogen, Inc. | 2.875% due 10/27/25 | 54 | 53 | ||||
2.900% due 09/15/20 | 1,230 | 1,241 | Columbia Property Trust Operating | ||||
3.625% due 09/15/22 | 790 | 803 | Partnership, LP | ||||
5.200% due 09/15/45 | 1,030 | 1,039 | 4.150% due 04/01/25 | 815 | 811 | ||
BMW US Capital LLC | Comcast Corp. | ||||||
0.669% due 06/02/17 (Ê) | 1,600 | 1,583 | 4.200% due 08/15/34 | 729 | 724 | ||
Burlington Northern and Santa Fe | Commonwealth Edison Co. | ||||||
Railway Co. Pass-Through Trust | 5.800% due 03/15/18 | 565 | 619 | ||||
Series 2005-4 | ConAgra Foods, Inc. | ||||||
4.967% due 04/01/23 | 105 | 114 | 4.950% due 08/15/20 | 825 | 879 | ||
Burlington Northern Santa Fe LLC | Continental Airlines Pass-Through Trust | ||||||
6.875% due 12/01/27 | 90 | 112 | Series 071A Class A | ||||
5.150% due 09/01/43 | 607 | 652 | 5.983% due 04/19/22 | 1,304 | 1,448 | ||
4.900% due 04/01/44 | 125 | 130 | Continental Resources, Inc. | ||||
Capital One Financial Corp. | 4.900% due 06/01/44 | 200 | 152 | ||||
2.450% due 04/24/19 | 730 | 731 | Corporate Office Properties, LP | ||||
Capital One NA | 3.700% due 06/15/21 | 815 | 794 | ||||
Series BKNT | Credit Suisse AG NY | ||||||
1.650% due 02/05/18 | 1,102 | 1,096 | 1.750% due 01/29/18 | 910 | 912 | ||
Cardinal Health, Inc. | 6.000% due 02/15/18 | 250 | 271 | ||||
1.950% due 06/15/18 | 1,070 | 1,075 | 1.700% due 04/27/18 | 489 | 487 | ||
Cargill, Inc. | 3.625% due 09/09/24 | 1,010 | 1,018 | ||||
6.000% due 11/27/17 (Þ) | 1,200 | 1,303 | Crown Castle Towers LLC | ||||
CBS Corp. | 4.174% due 08/15/17 (Þ) | 1,550 | 1,586 | ||||
4.300% due 02/15/21 | 955 | 1,007 | 3.222% due 05/15/22 (Þ) | 760 | 747 | ||
4.600% due 01/15/45 | 675 | 606 | CVS Health Corp. | ||||
CCO Safari II LLC | 3.875% due 07/20/25 | 1,100 | 1,131 | ||||
3.579% due 07/23/20 (Þ) | 411 | 413 | 4.875% due 07/20/35 | 395 | 416 | ||
4.464% due 07/23/22 (Þ) | 2,015 | 2,044 | 5.125% due 07/20/45 | 1,238 | 1,327 | ||
4.908% due 07/23/25 (Þ) | 760 | 772 | Delta Air Lines Pass-Through Trust | ||||
6.384% due 10/23/35 (Þ) | 787 | 811 | Series 2010-1 Class A | ||||
Celgene Corp. | 6.200% due 07/02/18 | 229 | 248 | ||||
2.875% due 08/15/20 | 1,600 | 1,610 | Devon Energy Corp. |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 409
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
3.250% due 05/15/22 | 430 | 414 | Series GMTN | ||||
5.000% due 06/15/45 | 202 | 187 | 2.200% due 01/09/20 | 199 | 201 | ||
Dignity Health | 3.100% due 01/09/23 | 685 | 693 | ||||
5.267% due 11/01/64 | 202 | 210 | 6.150% due 08/07/37 | 192 | 244 | ||
DIRECTV Holdings LLC / DIRECTV | General Electric Co. | ||||||
Financing Co., Inc. | 5.250% due 12/06/17 | 815 | 880 | ||||
5.000% due 03/01/21 | 1,595 | 1,743 | 4.500% due 03/11/44 | 1,595 | 1,654 | ||
4.450% due 04/01/24 | 538 | 555 | General Mills, Inc. | ||||
5.150% due 03/15/42 | 89 | 85 | 5.650% due 02/15/19 | 195 | 217 | ||
Discover Bank | General Motors Co. | ||||||
2.000% due 02/21/18 | 250 | 248 | 6.250% due 10/02/43 | 276 | 305 | ||
Dominion Gas Holdings LLC | General Motors Financial Co., Inc. | ||||||
2.500% due 12/15/19 | 345 | 348 | 4.750% due 08/15/17 | 500 | 520 | ||
4.600% due 12/15/44 | 105 | 99 | 3.100% due 01/15/19 | 732 | 734 | ||
Dominion Resources, Inc. | 3.200% due 07/13/20 | 1,200 | 1,191 | ||||
1.900% due 06/15/18 | 949 | 949 | 3.450% due 04/10/22 | 460 | 449 | ||
Duke Energy Carolinas LLC | George Washington University (The) | ||||||
4.250% due 12/15/41 | 500 | 510 | 4.868% due 09/15/45 | 367 | 385 | ||
Duke Energy Progress LLC | Georgia Power Co. | ||||||
3.000% due 09/15/21 | 1,020 | 1,049 | 4.300% due 03/15/42 | 445 | 411 | ||
eBay, Inc. | Georgia-Pacific LLC | ||||||
0.523% due 07/28/17 (Ê) | 935 | 923 | 2.539% due 11/15/19 (Þ) | 975 | 978 | ||
0.809% due 08/01/19 (Ê) | 775 | 753 | 8.875% due 05/15/31 | 695 | 995 | ||
Enbridge Energy Partners, LP | Gilead Sciences, Inc. | ||||||
5.875% due 10/15/25 | 150 | 151 | 2.550% due 09/01/20 | 1,345 | 1,358 | ||
Energy Transfer Partners, LP | 3.650% due 03/01/26 | 820 | 829 | ||||
6.050% due 06/01/41 | 680 | 606 | 4.500% due 02/01/45 | 200 | 194 | ||
Enterprise Products Operating LLC | 4.750% due 03/01/46 | 832 | 841 | ||||
5.250% due 01/31/20 | 760 | 832 | Goldman Sachs Capital I | ||||
5.100% due 02/15/45 | 630 | 592 | 6.345% due 02/15/34 | 1,095 | 1,282 | ||
ERAC USA Finance LLC | Goldman Sachs Group, Inc. (The) | ||||||
2.350% due 10/15/19 (Þ) | 1,777 | 1,767 | 6.250% due 09/01/17 | 1,025 | 1,113 | ||
Exelon Corp. | 2.900% due 07/19/18 | 640 | 658 | ||||
1.550% due 06/09/17 | 476 | 476 | 2.625% due 01/31/19 | 535 | 544 | ||
2.850% due 06/15/20 | 1,650 | 1,651 | 2.550% due 10/23/19 | 785 | 791 | ||
5.625% due 06/15/35 | 107 | 117 | 5.750% due 01/24/22 | 640 | 733 | ||
Exxon Mobil Corp. | 3.625% due 01/22/23 | 366 | 374 | ||||
0.377% due 03/15/17 (Ê) | 1,750 | 1,748 | 1.925% due 11/29/23 (Ê) | 490 | 494 | ||
Farmers Exchange Capital | 3.750% due 05/22/25 | 465 | 468 | ||||
7.200% due 07/15/48 (Þ) | 700 | 881 | |||||
Farmers Exchange Capital II | 4.250% due 10/21/25 | 1,380 | 1,379 | ||||
6.151% due 11/01/53 (Þ) | 700 | 745 | 6.750% due 10/01/37 | 325 | 392 | ||
FedEx Corp. | 4.800% due 07/08/44 | 320 | 323 | ||||
4.750% due 11/15/45 | 403 | 398 | 4.750% due 10/21/45 | 856 | 868 | ||
Fifth Third Bank | Series 10YR | ||||||
2.375% due 04/25/19 | 605 | 610 | 3.500% due 01/23/25 | 1,245 | 1,231 | ||
FirstEnergy Transmission LLC | HCP, Inc. | ||||||
5.450% due 07/15/44 (Þ) | 306 | 314 | 4.250% due 11/15/23 | 1,085 | 1,090 | ||
Ford Motor Credit Co. LLC | Hess Corp. | ||||||
1.461% due 03/27/17 | 1,442 | 1,432 | 5.600% due 02/15/41 | 356 | 349 | ||
1.259% due 01/09/18 (Ê) | 500 | 497 | Hewlett Packard Enterprise Co. | ||||
Series FXD | 2.450% due 10/05/17 (Å) | 1,830 | 1,835 | ||||
2.145% due 01/09/18 | 965 | 965 | 3.600% due 10/15/20 (Å) | 346 | 349 | ||
Forest Laboratories LLC | 4.400% due 10/15/22 (Å) | 5,101 | 5,143 | ||||
4.875% due 02/15/21 (Þ) | 595 | 644 | 4.900% due 10/15/25 (Å) | 1,929 | 1,906 | ||
Freeport-McMoRan, Inc. | 6.200% due 10/15/35 (Å) | 1,255 | 1,224 | ||||
2.300% due 11/14/17 | 1,125 | 1,057 | Hewlett-Packard Co. | ||||
4.000% due 11/14/21 | 595 | 500 | 3.750% due 12/01/20 | 141 | 144 | ||
General Electric Capital Corp. | Hyundai Capital America | ||||||
0.491% due 02/15/17 (Ê) | 800 | 800 | 3.000% due 10/30/20 (Å) | 842 | 841 | ||
0.684% due 05/05/26 (Ê) | 735 | 688 | Intel Corp. | ||||
5.875% due 01/14/38 | 105 | 129 | 3.700% due 07/29/25 | 565 | 587 | ||
4.900% due 07/29/45 | 931 | 968 |
See accompanying notes which are an integral part of the financial statements.
410 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
International Business Machines Corp. | 2.700% due 06/01/20 | 597 | 580 | ||||
0.491% due 02/06/18 (Ê) | 830 | 827 | 5.200% due 06/01/45 | 185 | 160 | ||
0.684% due 02/12/19 (Ê) | 500 | 496 | McGraw Hill Financial, Inc. | ||||
ITC Holdings Corp. | 3.300% due 08/14/20 (Þ) | 1,020 | 1,038 | ||||
5.300% due 07/01/43 | 390 | 405 | McKesson Corp. | ||||
Jersey Central Power & Light Co. | 2.284% due 03/15/19 | 1,415 | 1,412 | ||||
4.300% due 01/15/26 (Þ) | 528 | 532 | Mead Johnson Nutrition Co. | ||||
6.400% due 05/15/36 | 383 | 428 | 3.000% due 11/15/20 | 269 | 270 | ||
Johnson & Johnson | 4.125% due 11/15/25 | 987 | 997 | ||||
0.395% due 11/28/16 (Ê) | 1,550 | 1,551 | Medco Health Solutions, Inc. | ||||
JPMorgan Chase & Co. | 4.125% due 09/15/20 | 675 | 717 | ||||
1.350% due 02/15/17 | 590 | 591 | Medtronic, Inc. | ||||
2.250% due 01/23/20 | 1,775 | 1,761 | Series WI | ||||
3.875% due 09/10/24 | 1,285 | 1,284 | 4.375% due 03/15/35 | 387 | 401 | ||
3.900% due 07/15/25 | 342 | 350 | 4.625% due 03/15/45 | 238 | 250 | ||
4.125% due 12/15/26 | 205 | 206 | Merck & Co., Inc. | ||||
4.250% due 10/01/27 | 1,046 | 1,050 | 0.685% due 05/18/18 (Ê) | 1,870 | 1,872 | ||
JPMorgan Chase Bank NA | MetLife, Inc. | ||||||
Series BKNT | 10.750% due 08/01/39 | 1,080 | 1,701 | ||||
6.000% due 10/01/17 | 1,800 | 1,948 | Metropolitan Life Global Funding I | ||||
JPMorgan Chase Capital XXIII | 1.300% due 04/10/17 (Þ) | 1,437 | 1,442 | ||||
1.321% due 05/15/47 (Ê) | 3,495 | 2,595 | 3.875% due 04/11/22 (Þ) | 900 | 948 | ||
KCP&L Greater Missouri Operations Co. | Microsoft Corp. | ||||||
8.270% due 11/15/21 | 425 | 530 | 2.000% due 11/03/20 | 636 | 637 | ||
Kellogg Co. | 2.650% due 11/03/22 | 1,165 | 1,172 | ||||
1.875% due 11/17/16 | 1,000 | 1,008 | 3.125% due 11/03/25 | 1,759 | 1,780 | ||
Kinder Morgan Energy Partners, LP | 4.200% due 11/03/35 | 300 | 302 | ||||
6.500% due 02/01/37 | 205 | 193 | 3.750% due 02/12/45 | 450 | 415 | ||
5.500% due 03/01/44 | 465 | 390 | 4.450% due 11/03/45 | 841 | 853 | ||
Kinder Morgan, Inc. | MidAmerican Energy Co. | ||||||
5.000% due 02/15/21 (Þ) | 253 | 256 | 4.250% due 05/01/46 | 255 | 258 | ||
5.300% due 12/01/34 | 1,049 | 883 | Morgan Stanley | ||||
5.550% due 06/01/45 | 290 | 244 | 5.550% due 04/27/17 | 410 | 434 | ||
KKR Group Finance Co. III LLC | 1.875% due 01/05/18 | 530 | 533 | ||||
5.125% due 06/01/44 (Þ) | 1,405 | 1,388 | 2.125% due 04/25/18 | 2,290 | 2,308 | ||
KKR Group Finance Co. LLC | 3.950% due 04/23/27 | 1,249 | 1,215 | ||||
6.375% due 09/29/20 (Þ) | 620 | 725 | 4.300% due 01/27/45 | 1,250 | 1,198 | ||
Kohl's Corp. | Series F | ||||||
4.250% due 07/17/25 | 500 | 496 | 3.875% due 04/29/24 | 820 | 844 | ||
5.550% due 07/17/45 | 505 | 488 | Series GMTN | ||||
Kraft Foods Group, Inc. | 5.450% due 01/09/17 | 600 | 628 | ||||
6.875% due 01/26/39 | 108 | 135 | 5.500% due 07/24/20 | 535 | 601 | ||
Kraft Heinz Foods Co. | 4.000% due 07/23/25 | 1,124 | 1,156 | ||||
1.600% due 06/30/17 (Þ) | 1,163 | 1,164 | MUFG Americas Holdings Corp. | ||||
3.500% due 07/15/22 (Þ) | 675 | 688 | 2.250% due 02/10/20 | 1,630 | 1,617 | ||
4.875% due 02/15/25 (Å) | 1,090 | 1,172 | Mutual of Omaha Insurance Co. | ||||
5.000% due 07/15/35 (Þ) | 238 | 248 | 4.297% due 07/15/54 (Þ) | 650 | 639 | ||
5.200% due 07/15/45 (Þ) | 214 | 227 | Mylan, Inc. | ||||
Kroger Co. (The) | 2.550% due 03/28/19 | 790 | 774 | ||||
2.300% due 01/15/19 | 765 | 772 | National City Bank | ||||
Lehman Brothers Holdings Capital Trust | Series BKNT | ||||||
VII | 0.702% due 06/07/17 (Ê) | 900 | 895 | ||||
5.857% due 11/29/49 (ƒ)(Ø) | 1,450 | — | Nationwide Mutual Insurance Co. | ||||
Lehman Brothers Holdings, Inc. | Series 144a | ||||||
6.500% due 07/19/17 (Ø) | 390 | — | 2.627% due 12/15/24 (Ê)(Þ) | 700 | 671 | ||
6.750% due 12/28/17 (Ø) | 990 | — | NextEra Energy Capital Holdings, Inc. | ||||
Lockheed Martin Corp. | 1.586% due 06/01/17 | 783 | 783 | ||||
2.900% due 03/01/25 | 955 | 922 | 2.700% due 09/15/19 | 542 | 544 | ||
Lowe's Cos., Inc. | Series F | ||||||
3.375% due 09/15/25 | 495 | 503 | 2.056% due 09/01/17 | 846 | 850 | ||
Manufacturers & Traders Trust Co. | NIKE, Inc. | ||||||
5.585% due 12/28/20 | 180 | 179 | 3.875% due 11/01/45 | 360 | 353 | ||
Marathon Oil Corp. | NiSource Finance Corp. |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 411
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
6.400% due 03/15/18 | 100 | 111 | Sempra Energy | ||||
Noble Energy, Inc. | 9.800% due 02/15/19 | 2,014 | 2,473 | ||||
3.900% due 11/15/24 | 230 | 219 | 3.550% due 06/15/24 | 550 | 557 | ||
Norfolk Southern Corp. | SL Green Realty Corp. / SL Green | ||||||
4.650% due 01/15/46 | 345 | 344 | Operating Partnership / Reckson | ||||
North Shore-Long Island Jewish Health | Operating Partnership | ||||||
Care, Inc. | 7.750% due 03/15/20 | 550 | 651 | ||||
4.800% due 11/01/42 | 575 | 551 | South Carolina Electric & Gas Co. | ||||
NYU Hospitals Center | 5.100% due 06/01/65 | 1,165 | 1,231 | ||||
Series 13-A | Southern California Edison Co. | ||||||
5.750% due 07/01/43 | 159 | 186 | Series C | ||||
Occidental Petroleum Corp. | 3.600% due 02/01/45 | 565 | 521 | ||||
3.500% due 06/15/25 | 315 | 319 | Southern Co. (The) | ||||
Oncor Electric Delivery Co. LLC | 1.300% due 08/15/17 | 536 | 533 | ||||
6.800% due 09/01/18 | 1,350 | 1,525 | 2.150% due 09/01/19 | 1,492 | 1,473 | ||
4.550% due 12/01/41 | 424 | 419 | Southern Power Co. | ||||
Oracle Corp. | 5.250% due 07/15/43 | 290 | 291 | ||||
2.500% due 05/15/22 | 656 | 648 | Spectra Energy Partners, LP | ||||
2.950% due 05/15/25 | 1,695 | 1,658 | 4.500% due 03/15/45 | 400 | 335 | ||
PACCAR Financial Corp. | Stryker Corp. | ||||||
0.522% due 06/06/17 (Ê) | 50 | 50 | 3.375% due 11/01/25 | 705 | 705 | ||
0.932% due 12/06/18 (Ê) | 510 | 512 | Sysco Corp. | ||||
Pacific Gas & Electric Co. | 2.600% due 10/01/20 | 1,025 | 1,036 | ||||
3.500% due 06/15/25 | 407 | 411 | 3.750% due 10/01/25 | 525 | 534 | ||
PacifiCorp | Thermo Fisher Scientific, Inc. | ||||||
2.950% due 02/01/22 | 945 | 954 | 2.400% due 02/01/19 | 620 | 625 | ||
Panhandle Eastern Pipe Line Co., LP | Thomson Reuters Corp. | ||||||
8.125% due 06/01/19 | 1,725 | 1,991 | 5.650% due 11/23/43 | 605 | 648 | ||
PepsiCo, Inc. | TIAA Asset Management Finance Co. | ||||||
2.150% due 10/14/20 | 730 | 729 | LLC | ||||
4.450% due 04/14/46 | 451 | 462 | 2.950% due 11/01/19 (Þ) | 383 | 388 | ||
Pfizer, Inc. | 4.125% due 11/01/24 (Þ) | 137 | 139 | ||||
0.471% due 05/15/17 (Ê) | 1,380 | 1,378 | Time Warner Cable, Inc. | ||||
Plains All American Pipeline, LP / PAA | 7.300% due 07/01/38 | 119 | 129 | ||||
Finance Corp. | Time Warner Cos., Inc. | ||||||
4.650% due 10/15/25 | 260 | 259 | 7.570% due 02/01/24 | 537 | 666 | ||
PNC Bank NA | Time Warner, Inc. | ||||||
2.450% due 11/05/20 | 300 | 300 | 3.600% due 07/15/25 | 423 | 419 | ||
Precision Castparts Corp. | 6.500% due 11/15/36 | 550 | 645 | ||||
2.500% due 01/15/23 | 435 | 421 | 4.850% due 07/15/45 | 270 | 268 | ||
Pricoa Global Funding I | Toyota Motor Credit Corp. | ||||||
1.900% due 09/21/18 (Þ) | 249 | 250 | 1.450% due 01/12/18 | 1,020 | 1,022 | ||
Procter & Gamble Co. (The) | Series MTn | ||||||
0.414% due 11/04/16 (Ê) | 1,500 | 1,500 | 0.706% due 03/12/20 (Ê) | 1,820 | 1,790 | ||
Progress Energy, Inc. | U.S. Bank NA | ||||||
7.750% due 03/01/31 | 602 | 816 | Series BKNT | ||||
Public Service Co. of New Mexico | 0.533% due 09/11/17 (Ê) | 800 | 798 | ||||
7.950% due 05/15/18 | 675 | 764 | 1.375% due 09/11/17 | 455 | 456 | ||
Qwest Corp. | UBS AG | ||||||
6.750% due 12/01/21 | 315 | 338 | 1.375% due 06/01/17 | 802 | 801 | ||
Regency Energy Partners, LP / Regency | 1.800% due 03/26/18 | 615 | 616 | ||||
Energy Finance Corp. | 2.375% due 08/14/19 | 1,385 | 1,392 | ||||
4.500% due 11/01/23 | 592 | 543 | UDR, Inc. | ||||
Reynolds American, Inc. | Series 0001 | ||||||
2.300% due 06/12/18 | 1,047 | 1,062 | 4.625% due 01/10/22 | 590 | 633 | ||
4.450% due 06/12/25 | 404 | 422 | Union Pacific Corp. | ||||
5.700% due 08/15/35 | 567 | 620 | 4.050% due 11/15/45 | 395 | 388 | ||
4.750% due 11/01/42 | 625 | 601 | 4.375% due 11/15/65 | 397 | 378 | ||
5.850% due 08/15/45 | 990 | 1,098 | United Technologies Corp. | ||||
SABMiller Holdings, Inc. | Zero coupon due 05/04/18 | 1,743 | 1,737 | ||||
3.750% due 01/15/22 (Þ) | 1,820 | 1,861 | UnitedHealth Group, Inc. | ||||
Samsung Electronics America, Inc. | 6.000% due 06/15/17 | 4 | 4 | ||||
1.750% due 04/10/17 (Þ) | 765 | 765 | 1.400% due 10/15/17 | 590 | 591 |
See accompanying notes which are an integral part of the financial statements.
412 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
2.700% due 07/15/20 | 635 | 648 | Series WI | ||||
3.875% due 10/15/20 | 100 | 107 | 2.450% due 06/15/19 | 500 | 497 | ||
3.750% due 07/15/25 | 320 | 334 | AMMC CLO XIV, Ltd. | ||||
4.750% due 07/15/45 | 643 | 684 | Series 2014-14A Class A1L | ||||
US Bancorp | 1.727% due 07/27/26 (µ)(Ê)(Þ) | 750 | 744 | ||||
2.200% due 04/25/19 | 1,185 | 1,201 | Arbor Realty Collateralized Loan | ||||
2.950% due 07/15/22 | 570 | 570 | Obligation, Ltd. | ||||
Series 2014-1A Class A | |||||||
Ventas Realty, LP / Ventas Capital Corp. | 1.917% due 05/15/24 (Ê)(Þ) | 1,275 | 1,273 | ||||
2.700% due 04/01/20 | 1,050 | 1,041 | |||||
Bank of Montreal | |||||||
Vereit Operating Partnership, LP | Series 3FRN | ||||||
2.000% due 02/06/17 | 750 | 739 | 0.681% due 04/10/18 (Ê) | 500 | 497 | ||
Verizon Communications, Inc. | |||||||
3.000% due 11/01/21 | 780 | 786 | Bank of Nova Scotia (The) | ||||
2.350% due 10/21/20 | 1,915 | 1,903 | |||||
5.050% due 03/15/34 | 1,895 | 1,911 | Barrick Gold Corp. | ||||
4.750% due 11/01/41 | 665 | 623 | 4.100% due 05/01/23 | 1,395 | 1,296 | ||
Series WI | Barrick PD Australia Finance Pty, Ltd. | ||||||
4.272% due 01/15/36 | 2,426 | 2,224 | 5.950% due 10/15/39 | 404 | 348 | ||
4.522% due 09/15/48 | 403 | 362 | BHP Billiton Finance USA, Ltd. | ||||
4.672% due 03/15/55 | 937 | 823 | 6.750% due 10/19/75 (Å) | 685 | 700 | ||
Viacom, Inc. | BNP Paribas SA | ||||||
2.500% due 12/15/16 | 740 | 749 | 1.375% due 03/17/17 | 890 | 892 | ||
5.850% due 09/01/43 | 1,165 | 1,097 | BP Capital Markets PLC | ||||
Volkswagen Group of America Finance | 3.062% due 03/17/22 | 720 | 723 | ||||
LLC | 3.994% due 09/26/23 | 630 | 661 | ||||
0.773% due 11/20/17 (Å)(Ê) | 730 | 697 | British Telecommunications PLC | ||||
Wachovia Corp. | 2.350% due 02/14/19 | 670 | 673 | ||||
0.607% due 06/15/17 (Ê) | 990 | 987 | Caisse CentraleDesjardins | ||||
Walgreens Boots Alliance, Inc. | 0.726% due 03/27/17 (Ê)(Þ) | 1,930 | 1,925 | ||||
4.800% due 11/18/44 | 265 | 245 | Canadian Natural Resources, Ltd. | ||||
Wal-Mart Stores, Inc. | 1.750% due 01/15/18 | 740 | 729 | ||||
6.500% due 08/15/37 | 860 | 1,122 | |||||
WEA Finance LLC / Westfield UK & | 6.750% due 02/01/39 | 52 | 56 | ||||
Europe Finance PLC | Canadian Pacific Railway Co. | ||||||
2.700% due 09/17/19 (Þ) | 460 | 458 | 4.800% due 09/15/35 | 260 | 268 | ||
3.250% due 10/05/20 (Þ) | 1,234 | 1,246 | 6.125% due 09/15/15 | 222 | 239 | ||
WEC Energy Group, Inc. | CDP Financial, Inc. | ||||||
1.650% due 06/15/18 | 440 | 440 | 5.600% due 11/25/39 (Þ) | 545 | 658 | ||
Wells Fargo & Co. | Cenovus Energy, Inc. | ||||||
2.125% due 04/22/19 | 1,485 | 1,493 | 3.000% due 08/15/22 | 1,147 | 1,058 | ||
3.550% due 09/29/25 | 674 | 675 | Colombia Government International | ||||
Bond | |||||||
4.650% due 11/04/44 | 460 | 454 | 4.500% due 01/28/26 | 871 | 862 | ||
Series GMTN | Cooperatieve Centrale Raiffeisen- | ||||||
4.300% due 07/22/27 | 615 | 635 | Boerenleenbank BA | ||||
Welltower, Inc. | 4.375% due 08/04/25 | 815 | 831 | ||||
6.125% due 04/15/20 | 585 | 665 | 5.250% due 08/04/45 | 365 | 382 | ||
4.950% due 01/15/21 | 245 | 265 | 11.000% due 06/29/49 (ƒ)(Þ) | 1,108 | 1,378 | ||
Williams Partners, LP | Corp. Nacional del Cobre de Chile | ||||||
3.600% due 03/15/22 | 625 | 564 | 4.875% due 11/04/44 (Þ) | 54 | 48 | ||
3.900% due 01/15/25 | 685 | 582 | Credit Suisse AG NY | ||||
4.000% due 09/15/25 | 280 | 238 | Series GMTN | ||||
6.300% due 04/15/40 | 298 | 265 | 1.375% due 05/26/17 | 1,835 | 1,834 | ||
Xcel Energy, Inc. | Deutsche Bank AG | ||||||
1.200% due 06/01/17 | 611 | 609 | Series 3FXD | ||||
ZFS Finance USA Trust II | 1.400% due 02/13/17 | 1,055 | 1,052 | ||||
6.450% due 12/15/65 (Þ) | 3,695 | 3,749 | DP World, Ltd. | ||||
ZFS Finance USA Trust V | 6.850% due 07/02/37 (Þ) | 290 | 306 | ||||
6.500% due 05/09/37 (Þ) | 1,825 | 1,866 | Dryden Senior Loan Fund | ||||
294,487 | Series 2015-37A Class A | ||||||
International Debt - 5.0% | 1.816% due 04/15/27 (Ê)(Þ) | 810 | 805 | ||||
Actavis Funding SCS | Encana Corp. | ||||||
3.000% due 03/12/20 | 730 | 732 | 6.625% due 08/15/37 | 270 | 246 | ||
3.800% due 03/15/25 | 380 | 377 | European Investment Bank | ||||
4.550% due 03/15/35 | 139 | 133 | 0.875% due 04/18/17 | 835 | 836 |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 413
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
1.625% due 03/16/20 | 1,346 | 1,344 | Shell International Finance BV | ||||
Flagship CLO VIII, Ltd. | 0.531% due 11/15/16 (Ê) | 1,825 | 1,826 | ||||
Series 2014-8A Class A | 2.125% due 05/11/20 | 340 | 341 | ||||
1.757% due 01/16/26 (Ê)(Þ) | 620 | 614 | 4.375% due 05/11/45 | 250 | 250 | ||
Flatiron CLO, Ltd. | Siemens Financieringsmaatschappij NV | ||||||
Series 2014-1A Class A1 | 1.450% due 05/25/18 (Þ) | 798 | 796 | ||||
1.616% due 07/17/26 (Ê)(Þ) | 730 | 722 | Silverstone Master Issuer PLC | ||||
Fosse Master Issuer PLC | Series 2015-1A Class 2A2 | ||||||
Series 2015-1A Class A2 | 0.842% due 01/21/70 (Ê)(Þ) | 587 | 583 | ||||
0.587% due 10/18/54 (Ê)(Þ) | 543 | 541 | Sky PLC | ||||
GE Capital International Funding Co. | 6.100% due 02/15/18 (Þ) | 600 | 653 | ||||
2.342% due 11/15/20 (Å) | 511 | 512 | SMART Trust | ||||
4.418% due 11/15/35 (Å) | 335 | 348 | Series 2012-1USA Class A4A | ||||
4.418% due 11/15/35 (Å) | 633 | 657 | 2.010% due 12/14/17 (Þ) | 1,969 | 1,985 | ||
Global SC Finance II SRL | Series 2015-3US Class A3A | ||||||
Series 2014-1A Class A2 | 1.660% due 08/14/19 | 730 | 729 | ||||
3.090% due 07/17/29 (Þ) | 398 | 394 | Suncor Energy, Inc. | ||||
Grupo Bimbo SAB de CV | 5.950% due 12/01/34 | 435 | 489 | ||||
4.875% due 06/27/44 (Þ) | 565 | 506 | Toronto-Dominion Bank (The) | ||||
HBOS PLC | 1.950% due 04/02/20 (Þ) | 317 | 315 | ||||
Series GMTN | Total Capital Canada, Ltd. | ||||||
6.750% due 05/21/18 (Þ) | 2,425 | 2,672 | 2.750% due 07/15/23 | 455 | 446 | ||
HSBC Bank PLC | Total Capital SA | ||||||
7.650% due 05/01/25 | 850 | 1,069 | 2.125% due 08/10/18 | 510 | 519 | ||
HSBC Holdings PLC | Trade MAPS 1, Ltd. | ||||||
4.250% due 03/14/24 | 475 | 480 | Series 2013-1A Class A | ||||
Intesa Sanpaolo SpA | 0.866% due 12/10/18 (Ê)(Þ) | 1,645 | 1,641 | ||||
2.375% due 01/13/17 | 886 | 891 | Tyco Electronics Group SA | ||||
5.017% due 06/26/24 (Þ) | 610 | 611 | 6.550% due 10/01/17 | 705 | 771 | ||
KFW | Tyco International Finance SA | ||||||
4.875% due 01/17/17 | 761 | 799 | 3.900% due 02/14/26 | 555 | 564 | ||
2.500% due 11/20/24 | 1,245 | 1,265 | UBS Group Funding Jersey, Ltd. | ||||
Korea Electric Power Corp. | 2.950% due 09/24/20 (Þ) | 740 | 740 | ||||
5.125% due 04/23/34 (Þ) | 155 | 175 | Uruguay Government International Bond | ||||
Limerock CLO II, Ltd. | 5.100% due 06/18/50 | 293 | 263 | ||||
Series 2014-2A Class A | Vale Overseas, Ltd. | ||||||
1.757% due 04/18/26 (Ê)(Þ) | 810 | 805 | 6.875% due 11/21/36 | 120 | 98 | ||
Macquarie Bank, Ltd. | Validus Holdings, Ltd. | ||||||
0.953% due 10/27/17 (Ê)(Þ) | 430 | 428 | 8.875% due 01/26/40 | 605 | 778 | ||
Magnetite XI, Ltd. | 63,292 | ||||||
Series 2014-11A Class A1 | Mortgage-Backed Securities - 31.4% | ||||||
1.693% due 01/18/27 (Ê)(Þ) | 600 | 596 | 1211 Avenue of the Americas Trust | ||||
Ooredoo International Finance, Ltd. | Series 2015-1211 Class A1A2 | ||||||
3.875% due 01/31/28 (Þ) | 340 | 330 | 3.901% due 08/10/35 (Þ) | 1,775 | 1,843 | ||
Pernod Ricard SA | Alternative Loan Trust | ||||||
5.500% due 01/15/42 (Þ) | 272 | 281 | Series 2003-20CB Class 2A1 | ||||
Petroleos Mexicanos | 5.750% due 10/25/33 | 75 | 78 | ||||
4.875% due 01/24/22 | 540 | 551 | American Home Mortgage Investment | ||||
5.625% due 01/23/46 (Þ) | 238 | 205 | Trust | ||||
Rio Tinto Finance USA, Ltd. | Series 2004-4 Class 4A | ||||||
3.750% due 06/15/25 | 780 | 767 | 2.423% due 02/25/45 (Ê) | 76 | 76 | ||
Royal Bank of Canada | Banc of America Funding Corp. | ||||||
2.350% due 10/30/20 | 1,563 | 1,557 | Series 2005-5 Class 1A11 | ||||
Series GMTn | 5.500% due 09/25/35 | 172 | 178 | ||||
0.581% due 10/13/17 (Ê) | 560 | 558 | Series 2005-D Class A1 | ||||
Royal Bank of Scotland Group PLC | 2.699% due 05/25/35 (Ê) | 87 | 89 | ||||
1.875% due 03/31/17 | 2,790 | 2,780 | Banc of America Funding Trust | ||||
5.125% due 05/28/24 | 495 | 508 | Series 2005-4 Class 1A3 | ||||
Santander UK Group Holdings PLC | 5.500% due 08/25/35 | 55 | 56 | ||||
5.625% due 09/15/45 (Þ) | 279 | 282 | Banc of America Merrill Lynch | ||||
Seagate HDD Cayman | Commercial Mortgage, Inc. | ||||||
4.875% due 06/01/27 (Þ) | 730 | 635 | Series 2005-5 Class B | ||||
5.750% due 12/01/34 (Þ) | 780 | 660 | 5.243% due 10/10/45 | 320 | 320 |
See accompanying notes which are an integral part of the financial statements.
414 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2006-3 Class A4 | Citigroup Mortgage Loan Trust, Inc. | ||||||
5.889% due 07/10/44 | 1,208 | 1,223 | Series 2004-UST1 Class A5 | ||||
Series 2006-6 Class A4 | 1.934% due 08/25/34 (Ê) | 1,107 | 1,089 | ||||
5.356% due 10/10/45 | 1,925 | 1,959 | Series 2005-3 Class 2A2B | ||||
Series 2007-1 Class A4 | 2.585% due 08/25/35 (Ê) | 171 | 126 | ||||
5.451% due 01/15/49 | 881 | 914 | Series 2005-11 Class A2A | ||||
Series 2007-2 Class AAB | 2.730% due 10/25/35 (Ê) | 101 | 100 | ||||
5.570% due 04/10/49 | 76 | 76 | Series 2007-AR8 Class 2A1A | ||||
Series 2008-1 Class A4 | 2.685% due 07/25/37 (Ê) | 171 | 160 | ||||
6.225% due 02/10/51 | 547 | 587 | Series 2015-2 Class 1A1 | ||||
Banc of America Mortgage Securities, | 0.371% due 06/25/47 (Ê)(Þ) | 394 | 365 | ||||
Inc. | Commercial Mortgage Pass-Through | ||||||
Series 2004-1 Class 5A1 | Certificates | ||||||
6.500% due 09/25/33 | 8 | 8 | Series 2013-CR12 Class A4 | ||||
Series 2004-2 Class 5A1 | 4.046% due 10/10/46 | 965 | 1,036 | ||||
6.500% due 10/25/31 | 8 | 8 | Series 2014-CR14 Class A2 | ||||
Series 2004-11 Class 2A1 | 3.147% due 02/10/47 | 339 | 351 | ||||
5.750% due 01/25/35 | 87 | 89 | Series 2015-CR27 Class A4 | ||||
Series 2005-H Class 2A5 | 3.612% due 10/10/48 | 121 | 124 | ||||
2.691% due 09/25/35 (Ê) | 309 | 283 | Commercial Mortgage Trust | ||||
Series 2006-2 Class A15 | Series 2001-J2A Class E | ||||||
6.000% due 07/25/46 | 5 | 4 | 6.922% due 07/16/34 (Þ) | 670 | 695 | ||
Series 2006-B Class 1A1 | Series 2005-LP5 Class D | ||||||
2.497% due 10/20/46 (Ê) | 64 | 39 | 4.776% due 05/10/43 | 402 | 401 | ||
BCAP LLC Trust | Series 2012-9W57 Class A | ||||||
Series 2011-R11 Class 15A1 | 2.365% due 02/10/29 (Þ) | 706 | 714 | ||||
2.589% due 10/26/33 (Ê)(Þ) | 1,280 | 1,298 | Series 2013-CR11 Class A3 | ||||
Series 2011-R11 Class 20A5 | 3.983% due 10/10/46 | 353 | 379 | ||||
2.601% due 03/26/35 (Ê)(Þ) | 326 | 329 | Series 2013-CR11 Class A4 | ||||
Bear Stearns Adjustable Rate Mortgage | 4.258% due 10/10/46 | 288 | 313 | ||||
Trust | Series 2014-CR19 Class A5 | ||||||
Series 2004-8 Class 2A1 | 3.796% due 08/10/47 | 330 | 346 | ||||
2.605% due 11/25/34 (Ê) | 213 | 205 | Series 2014-UBS5 Class A3 | ||||
Series 2004-9 Class 22A1 | 3.565% due 09/10/47 | 231 | 239 | ||||
3.034% due 11/25/34 (Ê) | 46 | 47 | Series 2014-UBS6 Class A5 | ||||
Series 2004-10 Class 22A1 | 3.644% due 12/10/47 | 745 | 771 | ||||
2.522% due 01/25/35 (Ê) | 45 | 43 | Series 2015-3BP Class A | ||||
Series 2005-2 Class A1 | 3.178% due 02/10/35 (Þ) | 229 | 229 | ||||
2.680% due 03/25/35 (Ê) | 656 | 658 | Series 2015-CR26 Class A4 | ||||
Series 2005-12 Class 13A1 | 3.630% due 10/10/48 | 124 | 128 | ||||
5.708% due 02/25/36 (Ê) | 35 | 33 | Series 2015-PC1 Class A4 | ||||
Bear Stearns Alt-A Trust | 3.620% due 07/10/50 | 169 | 174 | ||||
Series 2004-13 Class A1 | Countrywide Home Loan Mortgage Pass- | ||||||
0.910% due 11/25/34 (Ê) | 907 | 894 | Through Trust | ||||
Bear Stearns Structured Products, Inc. | Series 2004-22 Class A3 | ||||||
Series 2007-R6 Class 1A1 | 2.429% due 11/25/34 (Ê) | 149 | 141 | ||||
2.106% due 01/26/36 (Ê) | 258 | 211 | Series 2004-HYB9 Class 1A1 | ||||
Series 2007-R6 Class 2A1 | 2.468% due 02/20/35 (Ê) | 282 | 280 | ||||
3.068% due 12/26/46 (Ê) | 133 | 99 | Series 2005-3 Class 1A2 | ||||
CD Commercial Mortgage Trust | 0.475% due 04/25/35 (Ê) | 574 | 500 | ||||
Series 2005-CD1 Class AJ | Credit Suisse Commercial Mortgage | ||||||
5.226% due 07/15/44 | 14 | 14 | Trust | ||||
Series 2005-CD1 Class C | Series 2006-C4 Class A3 | ||||||
5.226% due 07/15/44 | 290 | 290 | 5.467% due 09/15/39 | 536 | 546 | ||
CD Mortgage Trust | Series 2007-C2 Class A3 | ||||||
Series 2006-CD2 Class A1B | 5.542% due 01/15/49 | 310 | 320 | ||||
5.300% due 01/15/46 | 908 | 909 | Series 2007-C5 Class A4 | ||||
Series 2006-CD2 Class AM | 5.695% due 09/15/40 | 1,160 | 1,210 | ||||
5.535% due 01/15/46 | 240 | 241 | Series 2008-C1 Class A2FL | ||||
Citigroup Commercial Mortgage Trust | 2.567% due 02/15/41 (Ê)(Þ) | 276 | 278 | ||||
Series 2014-GC19 Class A4 | Credit Suisse First Boston Mortgage | ||||||
4.023% due 03/10/47 | 825 | 882 | Securities Corp. | ||||
Series 2014-GC25 Class AAB | Series 2001-CP4 Class D | ||||||
3.371% due 10/10/47 | 1,015 | 1,048 | 6.610% due 12/15/35 | 58 | 58 |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 415
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2005-9 Class 2A1 | 7.000% due 2025 | 4 | 4 | ||||
5.500% due 10/25/35 | 415 | 394 | 8.500% due 2025 | 10 | 11 | ||
Series 2005-C6 Class B | 3.000% due 2026 | 210 | 218 | ||||
5.230% due 12/15/40 | 630 | 629 | 3.500% due 2026 | 860 | 910 | ||
CSAIL Commercial Mortgage Trust | 4.000% due 2026 | 244 | 260 | ||||
Series 2015-C1 Class A4 | 5.000% due 2026 | 257 | 283 | ||||
3.505% due 04/15/50 | 227 | 233 | 7.000% due 2026 | 9 | 10 | ||
Series 2015-C2 Class A4 | 9.000% due 2026 | 2 | 2 | ||||
3.504% due 06/15/57 | 175 | 179 | 2.500% due 2027 | 36 | 37 | ||
Series 2015-C2 Class XA | 2.966% due 2027 | 922 | 922 | ||||
Interest Only STRIP | |||||||
0.907% due 06/15/57 | 9,955 | 584 | 3.000% due 2027 | 920 | 960 | ||
CSMC Trust | 3.500% due 2027 | 395 | 417 | ||||
Series 2014-USA Class A2 | 5.500% due 2027 | 144 | 161 | ||||
3.953% due 09/15/37 (Þ) | 645 | 672 | 7.000% due 2027 | 1 | 1 | ||
3.953% due 09/15/37 (Å) | 121 | 126 | 2.500% due 2028 | 2,800 | 2,873 | ||
CW Capital Cobalt, Ltd. | 3.380% due 2028 | 407 | 421 | ||||
Series 2007-C3 Class A4 | 5.000% due 2028 | 130 | 143 | ||||
5.959% due 05/15/46 | 1,473 | 1,554 | 3.000% due 2029 | 704 | 734 | ||
DBRR Trust | 3.500% due 2029 | 152 | 160 | ||||
Series 2011-LC2 Class A4A | 7.000% due 2029 | 236 | 251 | ||||
4.537% due 07/12/44 (Þ) | 690 | 763 | 2.500% due 2030 | 535 | 546 | ||
Downey Savings & Loan Association | 3.000% due 2030 | 241 | 251 | ||||
Mortgage Loan Trust | 3.500% due 2030 | 871 | 922 | ||||
Series 2004-AR3 Class 1A1B | 8.000% due 2030 | 27 | 34 | ||||
2.456% due 07/19/44 (Ê) | 60 | 59 | 8.000% due 2031 | 30 | 35 | ||
Fannie Mae | |||||||
5.000% due 2017 | 25 | 26 | 3.500% due 2032 | 1,710 | 1,803 | ||
5.500% due 2017 | 16 | 16 | 8.000% due 2032 | 2 | 2 | ||
6.500% due 2017 | 14 | 15 | 3.000% due 2033 | 2,720 | 2,818 | ||
7.500% due 2017 | — | — | 4.500% due 2033 | 914 | 1,005 | ||
8.500% due 2017 | — | — | 5.000% due 2033 | 342 | 377 | ||
5.000% due 2018 | 59 | 61 | 5.500% due 2033 | 411 | 464 | ||
5.500% due 2018 | 145 | 149 | 6.150% due 2033(Ê) | 246 | 276 | ||
6.500% due 2018 | 23 | 26 | 3.500% due 2034 | 1,734 | 1,821 | ||
5.000% due 2019 | 56 | 59 | 4.500% due 2034 | 32 | 35 | ||
6.500% due 2019 | 14 | 16 | 5.000% due 2034 | 63 | 70 | ||
3.375% due 2020 | 1,335 | 1,422 | 5.500% due 2034 | 812 | 916 | ||
3.478% due 2020 | 1,147 | 1,227 | 6.000% due 2034 | 117 | 134 | ||
5.000% due 2020 | 77 | 80 | 5.000% due 2035 | 460 | 507 | ||
5.500% due 2020 | 564 | 590 | 5.500% due 2035 | 143 | 161 | ||
6.500% due 2020 | 8 | 10 | 6.000% due 2035 | 431 | 491 | ||
3.881% due 2021 | 1,285 | 1,399 | 5.000% due 2036 | 149 | 164 | ||
4.000% due 2021 | 36 | 38 | 5.500% due 2036 | 922 | 1,038 | ||
4.410% due 2021 | 574 | 637 | 6.500% due 2036 | 10 | 12 | ||
4.640% due 2021 | 1,301 | 1,452 | 5.000% due 2037 | 122 | 135 | ||
5.500% due 2021 | 17 | 18 | 5.500% due 2037 | 2,287 | 2,580 | ||
4.500% due 2022 | 89 | 93 | 6.000% due 2037 | 550 | 624 | ||
5.000% due 2022 | 79 | 84 | 6.500% due 2037 | 54 | 64 | ||
5.500% due 2022 | 92 | 100 | 5.000% due 2038 | 7 | 7 | ||
3.800% due 2023 | 413 | 434 | 5.500% due 2038 | 1,210 | 1,363 | ||
4.500% due 2023 | 64 | 68 | 4.500% due 2039 | 741 | 805 | ||
5.000% due 2023 | 125 | 132 | 5.000% due 2039 | 3 | 3 | ||
4.000% due 2024 | 182 | 193 | 6.000% due 2039 | 127 | 144 | ||
4.500% due 2024 | 135 | 143 | 4.000% due 2040 | 347 | 370 | ||
5.000% due 2024 | 20 | 22 | 4.500% due 2040 | 3,117 | 3,400 | ||
8.000% due 2024 | 20 | 22 | 5.000% due 2040 | 499 | 553 | ||
8.500% due 2024 | 5 | 5 | 5.500% due 2040 | 139 | 155 | ||
9.000% due 2024 | 1 | 1 | 3.500% due 2041 | 2,320 | 2,428 | ||
3.500% due 2025 | 121 | 128 | 4.000% due 2041 | 856 | 919 | ||
4.000% due 2025 | 263 | 278 | 4.500% due 2041 | 1,769 | 1,930 | ||
4.500% due 2025 | 98 | 104 | 5.000% due 2041 | 1,026 | 1,137 |
See accompanying notes which are an integral part of the financial statements.
416 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
5.500% due 2041 | 227 | 254 | FDIC Guaranteed Notes Trust | ||||
3.000% due 2042 | 1,482 | 1,503 | Series 2010-S1 Class 1A | ||||
3.500% due 2042 | 1,389 | 1,449 | 0.720% due 02/25/48 (Ê)(Þ) | 100 | 100 | ||
4.000% due 2042 | 1,008 | 1,077 | FDIC Trust | ||||
4.500% due 2042 | 178 | 195 | Series 2010-R1 Class A | ||||
3.000% due 2043 | 7,162 | 7,260 | 2.184% due 05/25/50 (Þ) | 584 | 588 | ||
3.500% due 2043 | 5,232 | 5,494 | Federal Home Loan Mortgage Corp. | ||||
Multifamily Structured Pass-Through | |||||||
4.000% due 2043 | 1,877 | 2,009 | Certificates | ||||
4.500% due 2043 | 296 | 321 | Series 2010-KSCT Class A2 | ||||
3.000% due 2044 | 219 | 222 | 4.285% due 01/25/20 | 450 | 497 | ||
4.000% due 2044 | 363 | 387 | Series 2011-K702 Class X1 | ||||
4.500% due 2044 | 2,487 | 2,710 | Interest Only STRIP | ||||
3.000% due 2045 | 444 | 450 | 1.525% due 02/25/18 | 4,536 | 134 | ||
3.500% due 2045 | 5,713 | 5,969 | Series 2012-K706 Class X1 | ||||
4.000% due 2045 | 10,565 | 11,285 | Interest Only STRIP | ||||
15 Year TBA(Ï) | 1.712% due 10/25/18 | 8,584 | 349 | ||||
2.500% | 4,685 | 4,769 | Series 2014-K040 Class A2 | ||||
3.000% | 3,545 | 3,688 | 3.241% due 09/25/24 | 301 | 314 | ||
30 Year TBA(Ï) | Series 2015-K048 Class A2 | ||||||
3.000% | 13,115 | 13,249 | 3.284% due 06/25/25 | 453 | 472 | ||
3.500% | 39,405 | 40,998 | Series 2015-K049 Class A2 | ||||
4.000% | 13,285 | 14,141 | 3.010% due 08/25/25 | 146 | 149 | ||
4.500% | 7,445 | 8,063 | Series 2015-KS03 Class A4 | ||||
5.000% | 2,950 | 3,250 | 3.161% due 05/25/25 | 245 | 249 | ||
Series 2003-343 Class 6 | Federal Housing Authority Trust | ||||||
Interest Only STRIP | 7.430% due 06/27/21 | 22 | 22 | ||||
5.000% due 10/25/33 | 144 | 27 | Freddie Mac | ||||
Series 2003-345 Class 18 | 9.000% due 2016 | 1 | 1 | ||||
Interest Only STRIP | 6.000% due 2017 | 32 | 33 | ||||
4.500% due 12/25/18 | 137 | 6 | 8.000% due 2017 | — | — | ||
Series 2003-345 Class 19 | 4.500% due 2018 | 70 | 73 | ||||
Interest Only STRIP | 5.000% due 2018 | 13 | 13 | ||||
4.500% due 01/25/19 | 149 | 7 | 4.500% due 2019 | 22 | 22 | ||
Series 2005-365 Class 12 | 5.000% due 2019 | 61 | 64 | ||||
Interest Only STRIP | 6.000% due 2022 | 4 | 4 | ||||
5.500% due 12/25/35 | 288 | 50 | 5.500% due 2024 | 72 | 77 | ||
Series 2006-369 Class 8 | 9.000% due 2024 | 4 | 4 | ||||
Interest Only STRIP | 6.500% due 2025 | 3 | 3 | ||||
5.500% due 04/25/36 | 60 | 12 | 8.000% due 2025 | 3 | 4 | ||
Fannie Mae Grantor Trust | 9.000% due 2025 | 3 | 3 | ||||
Series 2002-T5 Class A1 | |||||||
0.410% due 05/25/32 (Ê) | 247 | 241 | 3.000% due 2026 | 129 | 135 | ||
Fannie Mae REMIC Trust | 5.000% due 2027 | 2 | 2 | ||||
Series 2004-W12 Class 1A3 | 6.500% due 2027 | — | — | ||||
7.000% due 07/25/44 | 985 | 1,153 | 5.000% due 2028 | 129 | 141 | ||
Fannie Mae REMICS | 6.000% due 2028 | 143 | 162 | ||||
Series 2003-35 Class FY | 6.500% due 2028 | 9 | 10 | ||||
0.570% due 05/25/18 (Ê) | 68 | 68 | 6.500% due 2029 | 7 | 9 | ||
Series 2005-117 Class LC | 2.500% due 2030 | 2,138 | 2,179 | ||||
5.500% due 11/25/35 | 502 | 546 | 3.000% due 2030 | 818 | 851 | ||
Series 2009-70 Class PS | 3.500% due 2030 | 328 | 347 | ||||
Interest Only STRIP | 5.500% due 2032 | 153 | 171 | ||||
6.581% due 01/25/37 (Ê) | 2,695 | 427 | 6.000% due 2032 | 17 | 19 | ||
Series 2009-96 Class DB | 7.000% due 2032 | 102 | 116 | ||||
4.000% due 11/25/29 | 775 | 827 | 7.500% due 2032 | 15 | 19 | ||
Series 2013-111 Class PL | 5.500% due 2033 | 206 | 229 | ||||
2.000% due 12/25/42 | 955 | 868 | 4.500% due 2034 | 47 | 51 | ||
Fannie Mae Whole Loan | 5.000% due 2034 | 436 | 485 | ||||
Series 2004-W12 Class 1A1 | 5.500% due 2034 | 66 | 74 | ||||
6.000% due 07/25/44 | 425 | 486 | |||||
6.500% due 2034 | — | 1 | |||||
Fannie Mae-Aces | 5.000% due 2035 | 66 | 73 | ||||
Series 2014-M13 Class A2 | |||||||
3.021% due 08/25/24 | 660 | 676 | 5.500% due 2035 | 98 | 109 |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 417
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
5.500% due 2036 | 96 | 106 | 10.500% due 2020 | 1 | 1 | ||
6.000% due 2036 | 37 | 42 | 8.000% due 2022 | 4 | 4 | ||
5.000% due 2037 | 7 | 7 | 8.500% due 2022 | 6 | 6 | ||
5.500% due 2037 | 63 | 70 | 8.500% due 2024 | 2 | 2 | ||
6.000% due 2037 | 125 | 141 | 8.000% due 2025 | 11 | 11 | ||
5.000% due 2038 | 3 | 3 | 9.000% due 2025 | 6 | 6 | ||
5.500% due 2038 | 627 | 699 | 8.000% due 2026 | 26 | 29 | ||
6.000% due 2038 | 454 | 519 | 7.000% due 2029 | 1 | 1 | ||
4.500% due 2039 | 237 | 258 | 8.000% due 2029 | 1 | 2 | ||
5.500% due 2039 | 19 | 21 | 8.500% due 2029 | 15 | 15 | ||
4.000% due 2040 | 1,828 | 1,968 | 8.000% due 2030 | 13 | 13 | ||
4.500% due 2040 | 1,967 | 2,153 | 7.000% due 2031 | 93 | 111 | ||
5.000% due 2040 | 100 | 111 | 7.000% due 2032 | 27 | 29 | ||
5.500% due 2040 | 12 | 14 | 7.000% due 2033 | 12 | 12 | ||
6.000% due 2040 | 44 | 50 | 3.000% due 2042 | 452 | 463 | ||
4.000% due 2041 | 1,903 | 2,045 | 3.000% due 2043 | 620 | 635 | ||
4.500% due 2041 | 1,464 | 1,589 | 3.500% due 2043 | 194 | 203 | ||
5.000% due 2041 | 409 | 451 | Ginnie Mae II | ||||
5.500% due 2041 | 593 | 667 | 7.500% due 2032 | 2 | 2 | ||
3.000% due 2042 | 1,216 | 1,227 | 5.500% due 2039 | 143 | 159 | ||
3.500% due 2042 | 1,120 | 1,168 | 3.500% due 2040(Ê) | 2,163 | 2,255 | ||
4.000% due 2042 | 799 | 855 | 4.000% due 2040(Ê) | 729 | 763 | ||
3.000% due 2043 | 3,491 | 3,530 | 4.000% due 2041 | 324 | 347 | ||
3.500% due 2043 | 3,259 | 3,407 | 4.500% due 2041 | 1,716 | 1,871 | ||
4.000% due 2043 | 2,415 | 2,602 | 5.500% due 2041 | 19 | 22 | ||
4.500% due 2043 | 806 | 886 | 3.000% due 2042 | 214 | 220 | ||
3.500% due 2044 | 2,125 | 2,217 | 3.500% due 2042 | 764 | 803 | ||
4.000% due 2044 | 1,902 | 2,039 | 4.000% due 2042 | 1,202 | 1,287 | ||
4.500% due 2044 | 80 | 87 | 4.500% due 2042 | 484 | 527 | ||
3.000% due 2045 | 2,194 | 2,213 | 3.000% due 2043 | 763 | 784 | ||
3.500% due 2045 | 7,488 | 7,800 | 3.500% due 2043 | 1,589 | 1,670 | ||
4.000% due 2045 | 6,124 | 6,530 | 4.000% due 2043 | 396 | 423 | ||
15 Year TBA(Ï) | 5.500% due 2043 | 507 | 565 | ||||
3.000% | 1,125 | 1,169 | 3.500% due 2044 | 636 | 668 | ||
30 Year TBA(Ï) | 4.000% due 2044 | 795 | 847 | ||||
3.000% | 2,865 | 2,887 | 4.500% due 2044 | 422 | 454 | ||
3.500% | 6,175 | 6,411 | 3.000% due 2045 | 2,068 | 2,115 | ||
4.000% | 2,500 | 2,656 | 3.500% due 2045 | 3,248 | 3,409 | ||
Freddie Mac Reference REMIC | 4.000% due 2045 | 5,746 | 6,130 | ||||
Series 2006-R007 Class ZA | 4.500% due 2045 | 2,530 | 2,730 | ||||
6.000% due 05/15/36 | 748 | 845 | 5.390% due 2059 | 407 | 423 | ||
Freddie Mac REMICS | 4.700% due 2061 | 1,156 | 1,217 | ||||
Series 2002-2533 Class Z | 4.810% due 2061 | 2,515 | 2,660 | ||||
5.500% due 12/15/32 | 1,546 | 1,733 | 5.245% due 2061 | 720 | 779 | ||
Series 2006-3123 Class HT | 4.564% due 2062 | 2,552 | 2,757 | ||||
5.000% due 03/15/26 | 526 | 570 | 4.845% due 2062 | 359 | 382 | ||
Series 2006-R006 Class ZA | |||||||
6.000% due 04/15/36 | 1,262 | 1,435 | 4.652% due 2063 | 295 | 320 | ||
Series 2010-3653 Class B | 4.661% due 2063 | 134 | 146 | ||||
4.500% due 04/15/30 | 1,170 | 1,263 | 4.732% due 2063 | 246 | 265 | ||
Series 2012-3989 Class BW | 30 Year TBA(Ï) | ||||||
3.500% due 01/15/27 | 3,180 | 3,416 | 3.000% | 4,550 | 4,647 | ||
Series 2012-4019 Class JD | 3.500% | 12,225 | 12,809 | ||||
3.000% due 05/15/41 | 504 | 522 | 4.000% | 655 | 697 | ||
FREMF Mortgage Trust | Government National Mortgage | ||||||
Series 2013-K24 Class B | Association | ||||||
3.502% due 11/25/45 (Þ) | 1,565 | 1,547 | Series 2004-93 Class PC | ||||
GAHR Commericial Mortgage Trust | 5.000% due 04/16/34 | 1,249 | 1,305 | ||||
Series 2015-NRF Class AFX | Series 2007-26 Class SD | ||||||
3.235% due 12/15/19 (Þ) | 645 | 662 | Interest Only STRIP | ||||
Ginnie Mae I | 6.639% due 05/16/37 (Ê) | 2,393 | 486 | ||||
8.000% due 2017 | 1 | 1 |
See accompanying notes which are an integral part of the financial statements.
418 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2010-H04 Class BI | Series 2014-C26 Class C | ||||||
Interest Only STRIP | 4.427% due 01/15/48 | 500 | 485 | ||||
1.390% due 04/20/60 | 4,041 | 192 | Series 2015-C29 Class A4 | ||||
Series 2010-H12 Class PT | 3.611% due 05/15/48 | 783 | 806 | ||||
5.470% due 11/20/59 | 2,187 | 2,274 | Series 2015-C30 Class A5 | ||||
Series 2010-H22 Class JI | 3.822% due 07/15/48 | 231 | 241 | ||||
Interest Only STRIP | Series 2015-C32 Class A5 | ||||||
2.499% due 11/20/60 | 6,726 | 496 | 3.598% due 11/15/48 | 121 | 124 | ||
Series 2011-H02 Class BI | JPMorgan Chase Commercial Mortgage | ||||||
Interest Only STRIP | Securities Trust | ||||||
0.412% due 02/20/61 | 16,240 | 216 | Series 2004-LN2 Class B | ||||
Series 2012-H11 Class CI | 5.201% due 07/15/41 | 500 | 500 | ||||
Interest Only STRIP | Series 2005-CB12 Class AJ | ||||||
2.906% due 04/20/62 | 4,754 | 353 | 4.987% due 09/12/37 | 241 | 242 | ||
Series 2012-H23 Class FI | Series 2007-CB20 Class ASB | ||||||
Interest Only STRIP | 5.688% due 02/12/51 | 346 | 356 | ||||
0.794% due 10/20/62 | 5,972 | 128 | Series 2007-LDPX Class AM | ||||
Series 2013-H03 Class HI | 5.464% due 01/15/49 | 880 | 902 | ||||
Interest Only STRIP | Series 2011-C3 Class A2 | ||||||
2.595% due 12/20/62 | 4,372 | 403 | 3.673% due 02/15/46 (Þ) | 197 | 199 | ||
Series 2013-H06 Class HI | Series 2011-C3 Class A3 | ||||||
Interest Only STRIP | 4.388% due 02/15/46 (Þ) | 1,325 | 1,399 | ||||
2.932% due 01/20/63 | 9,586 | 698 | Series 2011-C4 Class A3 | ||||
Series 2013-H07 Class JL | 4.106% due 07/15/46 (Þ) | 1,405 | 1,476 | ||||
Interest Only STRIP | Series 2014-FBLU Class A | ||||||
2.635% due 03/20/63 | 10,408 | 901 | 1.146% due 12/15/28 (Å)(Ê) | 415 | 415 | ||
GS Mortgage Securities Corp. II | Series 2014-FBLU Class C | ||||||
Series 2012-ALOH Class A | 2.161% due 12/15/28 (Ê)(Þ) | 675 | 675 | ||||
3.551% due 04/10/34 (Þ) | 230 | 240 | JPMorgan Mortgage Trust | ||||
GS Mortgage Securities Corp. Trust | Series 2003-A2 Class 3A1 | ||||||
Series 2012-SHOP Class A | 1.990% due 11/25/33 (Ê) | 211 | 211 | ||||
2.933% due 06/05/31 (Þ) | 477 | 490 | Series 2004-A2 Class 3A1 | ||||
GS Mortgage Securities Trust | 2.470% due 05/25/34 (Ê) | 322 | 311 | ||||
3.621% due 10/10/35 | 194 | 200 | Series 2005-A1 Class 6T1 | ||||
Series 2014-GC18 Class A4 | 2.594% due 02/25/35 (Ê) | 423 | 422 | ||||
4.074% due 01/10/47 | 625 | 669 | Series 2005-A3 Class 4A1 | ||||
Series 2015-GC28 Class A5 | 2.658% due 06/25/35 (Ê) | 144 | 146 | ||||
3.396% due 02/10/48 | 595 | 603 | LB Commercial Mortgage Trust | ||||
GSMPS Mortgage Loan Trust | Series 2007-C3 Class AM | ||||||
Series 2004-4 Class 1AF | 6.097% due 07/15/44 | 395 | 419 | ||||
0.570% due 06/25/34 (Ê)(Þ) | 385 | 336 | LB-UBS Commercial Mortgage Trust | ||||
GSR Mortgage Loan Trust | Series 2007-C6 Class A4 | ||||||
Series 2005-AR7 Class 6A1 | 5.858% due 07/15/40 | 918 | 951 | ||||
4.965% due 11/25/35 (Ê) | 573 | 549 | Mastr Alternative Loan Trust | ||||
HarborView Mortgage Loan Trust | Series 2003-4 Class B1 | ||||||
Series 2004-4 Class 3A | 5.941% due 06/25/33 | 127 | 119 | ||||
1.281% due 06/19/34 (Ê) | 55 | 54 | Series 2004-10 Class 5A6 | ||||
Series 2005-4 Class 3A1 | 5.750% due 09/25/34 | 162 | 167 | ||||
2.670% due 07/19/35 (Ê) | 173 | 153 | Merrill Lynch Mortgage Investors Trust | ||||
Homestar Mortgage Acceptance Corp. | Series 2005-A10 Class A | ||||||
Series 2004-5 Class A1 | 0.397% due 02/25/36 (Ê) | 134 | 123 | ||||
0.620% due 10/25/34 (Ê) | 1,394 | 1,395 | ML-CFC Commercial Mortgage Trust | ||||
Impac CMB Trust | Series 2007-5 Class A4 | ||||||
Series 2004-5 Class 1A1 | 5.378% due 08/12/48 | 446 | 459 | ||||
0.907% due 10/25/34 (Ê) | 187 | 177 | Series 2007-7 Class A4 | ||||
IndyMac INDX Mortgage Loan Trust | 5.747% due 06/12/50 | 594 | 623 | ||||
Series 2004-AR6 Class 5A1 | Series 2007-8 Class ASB | ||||||
2.519% due 10/25/34 (Ê) | 980 | 940 | 5.819% due 08/12/49 | 158 | 159 | ||
Series 2005-AR15 Class A2 | Morgan Stanley Bank of America Merrill | ||||||
4.534% due 09/25/35 (Ê) | 114 | 97 | Lynch Trust | ||||
JPMBB Commercial Mortgage Securities | Series 2014-C14 Class A4 | ||||||
Trust | 3.787% due 02/15/47 | 165 | 175 | ||||
Series 2014-C22 Class A4 | Series 2015-C23 Class A3 | ||||||
3.801% due 09/15/47 | 249 | 260 | 3.451% due 07/15/50 | 244 | 249 |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 419
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2015-C24 Class A4 | Structured Asset Securities Corp. | ||||||
3.732% due 05/15/48 | 959 | 998 | Mortgage Pass-Through Certificates | ||||
Series 2015-C24 Class C | Series 2003-34A Class 5A4 | ||||||
4.500% due 08/15/47 | 85 | 78 | 2.455% due 11/25/33 (Ê) | 909 | 921 | ||
Series 2015-C26 Class A5 | Wachovia Bank Commercial Mortgage | ||||||
3.531% due 11/15/48 | 134 | 138 | Trust | ||||
Morgan Stanley Capital I Trust | Series 2006-C26 Class AM | ||||||
Series 2005-IQ9 Class B | 5.969% due 06/15/45 | 865 | 884 | ||||
4.860% due 07/15/56 | 415 | 423 | Series 2007-C33 Class A4 | ||||
6.150% due 02/15/51 | 324 | 337 | |||||
Series 2014-CPT Class A | WaMu Mortgage Pass-Through | ||||||
3.350% due 07/13/29 (Þ) | 456 | 472 | Certificates Trust | ||||
Morgan Stanley Mortgage Loan Trust | Series 2003-AR9 Class 1A7 | ||||||
Series 2004-6AR Class 1A | 2.409% due 09/25/33 (Ê) | 40 | 40 | ||||
0.620% due 07/25/34 (Ê) | 1,059 | 1,037 | Series 2003-AR10 Class A7 | ||||
Mortgage Pass-Through Certificates | 2.420% due 10/25/33 (Ê) | 348 | 356 | ||||
Series 2001-CIB2 Class D | |||||||
6.802% due 04/15/35 | 66 | 66 | Series 2004-AR1 Class A | ||||
2.419% due 03/25/34 (Ê) | 1,537 | 1,540 | |||||
MortgageIT Trust | Series 2005-AR13 Class A1A1 | ||||||
Series 2005-2 Class 2A | 0.484% due 10/25/45 (Ê) | 1,361 | 1,259 | ||||
1.805% due 05/25/35 (Ê) | 562 | 553 | |||||
Wells Fargo Commercial Mortgage Trust | |||||||
Motel 6 Trust | Series 2015-NXS3 Class A4 | ||||||
Series 2015-MTL6 Class A2A2 | 3.617% due 09/15/57 | 67 | 69 | ||||
2.605% due 02/05/30 (Þ) | 815 | 816 | |||||
Series 2015-SG1 Class A4 | |||||||
MSCG Trust | 3.789% due 12/15/47 | 171 | 179 | ||||
Series 2015-ALDR Class A2 | Wells Fargo Mortgage Backed Securities | ||||||
3.577% due 06/07/35 (Þ) | 310 | 315 | Trust | ||||
NCUA Guaranteed Notes Trust | Series 2003-J Class 1A9 | ||||||
Series 2010-R1 Class 2A | 2.612% due 10/25/33 (Ê) | 917 | 922 | ||||
1.840% due 10/07/20 | 469 | 470 | Series 2004-CC Class A1 | ||||
OBP Depositor LLC Trust | 2.616% due 01/25/35 (Ê) | 103 | 104 | ||||
Series 2010-OBP Class A | Series 2005-AR10 Class 2A2 | ||||||
4.646% due 07/15/45 (Þ) | 230 | 253 | 2.614% due 06/25/35 (Ê) | 199 | 204 | ||
Prime Mortgage Trust | Series 2005-AR10 Class 2A4 | ||||||
Series 2004-CL1 Class 1A2 | 2.652% due 06/25/35 (Ê) | 47 | 47 | ||||
0.581% due 02/25/34 (Ê) | 24 | 23 | |||||
Series 2006-2 Class 2A3 | |||||||
Provident Funding Mortgage Loan Trust | 5.500% due 03/25/36 | 148 | 142 | ||||
Series 2005-2 Class 1A1A | |||||||
2.530% due 10/25/35 (Ê) | 273 | 267 | Series 2006-AR2 Class 2A1 | ||||
2.621% due 03/25/36 | 188 | 187 | |||||
RALI Trust | |||||||
Series 2005-QA10 Class A41 | Series 2006-AR8 Class 1A3 | ||||||
3.406% due 09/25/35 (Ê) | 335 | 270 | 2.634% due 04/25/36 (Ê) | 794 | 789 | ||
Series 2005-QO3 Class A1 | WFRBS Commercial Mortgage Trust | ||||||
0.587% due 10/25/45 (Ê) | 446 | 343 | Series 2012-C7 Class A2 | ||||
3.431% due 06/15/45 | 1,630 | 1,693 | |||||
RBS Commercial Funding, Inc. Trust | |||||||
Series 2013-GSP Class A | Series 2014-C19 Class A3 | ||||||
3.961% due 01/13/32 (Å) | 235 | 248 | 3.660% due 03/15/47 | 480 | 503 | ||
3.961% due 01/13/32 (Þ) | 300 | 316 | Series 2014-C20 Class A5 | ||||
3.995% due 05/15/47 | 52 | 55 | |||||
RBSCF Trust | |||||||
Series 2010-RR4 Class CMLA | Series 2014-C21 Class XA | ||||||
6.040% due 12/16/49 (Þ) | 256 | 264 | Interest Only STRIP | ||||
1.339% due 08/15/47 | 7,906 | 559 | |||||
RBSSP Resecuritization Trust | |||||||
Series 2010-3 Class 9A1 | Series 2014-LC14 Class A5 | ||||||
5.500% due 02/26/35 (Þ) | 807 | 824 | 4.045% due 03/15/47 | 440 | 471 | ||
Structured Adjustable Rate Mortgage | 395,432 | ||||||
Loan Trust | Municipal Bonds - 0.7% | ||||||
Series 2004-6 Class 1A | Brazos Higher Education Authority | ||||||
2.358% due 06/25/34 (Ê) | 396 | 385 | Revenue Bonds | ||||
Series 2004-12 Class 7A3 | 0.336% due 12/26/24 (Ê) | 330 | 319 | ||||
2.694% due 09/25/34 (Ê) | 134 | 133 | City of New York New York General | ||||
Structured Asset Mortgage Investments | Obligation Unlimited | ||||||
II Trust | 6.646% due 12/01/31 | 200 | 233 | ||||
Series 2005-AR5 Class A2 | Metropolitan Transportation Authority | ||||||
0.414% due 07/19/35 (Ê) | 108 | 105 | Revenue Bonds | ||||
6.814% due 11/15/40 | 355 | 462 |
See accompanying notes which are an integral part of the financial statements.
420 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Municipal Electric Authority of Georgia | United States Treasury Inflation Indexed | ||||||
Revenue Bonds | Bonds | ||||||
6.637% due 04/01/57 | 990 | 1,178 | 0.125% due 04/15/17 | 1,437 | 1,437 | ||
7.055% due 04/01/57 | 1,410 | 1,522 | 0.125% due 07/15/24 | 2,921 | 2,796 | ||
New Jersey Transportation Trust Fund | 0.375% due 01/15/25 | 2,616 | 2,514 | ||||
Authority Revenue Bonds | 0.625% due 02/15/43 | 933 | 803 | ||||
5.754% due 12/15/28 | 440 | 457 | 1.375% due 02/15/44 | 4,648 | 4,816 | ||
New York City Water & Sewer System | 0.750% due 02/15/45 | 769 | 682 | ||||
Revenue Bonds | |||||||
6.491% due 06/15/42 | 1,700 | 1,939 | United States Treasury Notes | ||||
New York State Dormitory Authority | 3.250% due 12/31/16 | 250 | 258 | ||||
Revenue Bonds | 0.875% due 02/28/17 | 250 | 251 | ||||
5.628% due 03/15/39 | 450 | 542 | 0.750% due 03/15/17 | 500 | 501 | ||
San Diego Tobacco Settlement Revenue | 1.000% due 03/31/17 | 1,500 | 1,509 | ||||
Funding Corp. Revenue Bonds | 0.625% due 06/30/17 | 1,250 | 1,249 | ||||
7.125% due 06/01/32 | 220 | 246 | 0.750% due 06/30/17 | 1,000 | 1,001 | ||
South Carolina Student Loan Corp. | 0.875% due 07/15/17 | 1,250 | 1,254 | ||||
Revenue Bonds | 0.625% due 07/31/17 | 6,195 | 6,190 | ||||
0.356% due 12/01/20 (Ê) | 84 | 84 | 0.625% due 08/31/17 | 8,863 | 8,849 | ||
State of California General Obligation | |||||||
Unlimited | 1.875% due 08/31/17 | 500 | 510 | ||||
6.650% due 03/01/22 | 425 | 513 | 0.625% due 09/30/17 | 6,103 | 6,090 | ||
7.300% due 10/01/39 | 391 | 555 | 1.875% due 09/30/17 | 430 | 439 | ||
State of Illinois General Obligation | 0.875% due 11/15/17 | 2,500 | 2,504 | ||||
Unlimited | 0.625% due 11/30/17 | 500 | 498 | ||||
5.877% due 03/01/19 | 335 | 359 | 1.000% due 12/15/17 | 1,250 | 1,255 | ||
5.100% due 06/01/33 | 458 | 423 | 0.750% due 12/31/17 | 2,700 | 2,696 | ||
University of California Revenue Bonds | 0.875% due 01/31/18 | 450 | 450 | ||||
4.767% due 05/15/15 | 227 | 213 | 0.750% due 02/28/18 | 600 | 598 | ||
9,045 | 0.750% due 03/31/18 | 750 | 747 | ||||
United States Government Agencies - 1.1% | 0.625% due 04/30/18 | 2,500 | 2,481 | ||||
Federal Home Loan Banks | 2.625% due 04/30/18 | 1,200 | 1,251 | ||||
0.625% due 11/23/16 | 360 | 360 | 1.375% due 06/30/18 | 250 | 253 | ||
0.625% due 05/30/17 | 225 | 225 | 1.000% due 08/15/18 | 8,634 | 8,632 | ||
3.150% due 06/28/17 | 1,315 | 1,315 | 1.500% due 08/31/18 | 250 | 253 | ||
1.125% due 04/25/18 | 175 | 176 | 0.875% due 10/15/18 | 8,831 | 8,790 | ||
2.875% due 09/11/20 | 875 | 927 | 2.750% due 02/15/19 | 750 | 789 | ||
Federal Home Loan Mortgage Corp. | 1.375% due 02/28/19 | 1,000 | 1,007 | ||||
0.500% due 01/27/17 | 105 | 105 | 1.500% due 02/28/19 | 2,500 | 2,527 | ||
1.250% due 10/02/19 | 1,000 | 993 | 1.500% due 03/31/19 | 1,250 | 1,263 | ||
2.375% due 01/13/22 | 210 | 215 | 3.125% due 05/15/19 | 300 | 320 | ||
6.250% due 07/15/32 | 624 | 886 | 1.000% due 06/30/19 | 1,350 | 1,337 | ||
Federal National Mortgage Association | 1.625% due 06/30/19 | 1,000 | 1,012 | ||||
2.000% due 09/26/17 | 350 | 354 | 0.875% due 07/31/19 | 685 | 674 | ||
0.204% due 10/05/17 (Ê) | 2,495 | 2,491 | 3.625% due 08/15/19 | 365 | 396 | ||
1.125% due 10/19/18 | 280 | 280 | 1.000% due 08/31/19 | 2,000 | 1,976 | ||
1.125% due 12/14/18 | 300 | 300 | 1.500% due 10/31/19 | 3,840 | 3,860 | ||
1.875% due 02/19/19 | 200 | 204 | 1.125% due 12/31/19 | 1,000 | 989 | ||
1.750% due 06/20/19 | 1,000 | 1,015 | 1.375% due 02/29/20 | 4,998 | 4,987 | ||
1.625% due 01/21/20 | 240 | 241 | 1.125% due 03/31/20 | 3,200 | 3,155 | ||
1.600% due 12/24/20 | 1,205 | 1,188 | 1.125% due 04/30/20 | 3,200 | 3,154 | ||
2.625% due 09/06/24 | 749 | 767 | 1.375% due 04/30/20 | 3,891 | 3,875 | ||
7.125% due 01/15/30 | 100 | 149 | 8.750% due 05/15/20 | 2,500 | 3,298 | ||
7.250% due 05/15/30 | 230 | 344 | 1.375% due 07/31/20 | 1,731 | 1,741 | ||
6.625% due 11/15/30 | 100 | 144 | 1.375% due 09/30/20 | 44,177 | 43,874 | ||
6.000% due 04/18/36 | 95 | 97 | 2.000% due 09/30/20 | 450 | 460 | ||
Tennessee Valley Authority | 1.375% due 10/31/20 | 11,185 | 11,103 | ||||
6.150% due 01/15/38 | 345 | 474 | 1.750% due 10/31/20 | 500 | 505 | ||
3.500% due 12/15/42 | 564 | 537 | 3.625% due 02/15/21 | 1,000 | 1,101 | ||
4.250% due 09/15/65 | 412 | 409 | 2.000% due 02/28/21 | 150 | 153 | ||
14,196 | 2.250% due 03/31/21 | 500 | 516 | ||||
United States Government Treasuries - 21.4% | 3.125% due 05/15/21 | 100 | 108 | ||||
8.125% due 05/15/21 | 300 | 403 |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 421
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Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
2.125% due 06/30/21 | 750 | 768 | AmeriCredit Automobile Receivables | �� | |||||
2.125% due 08/15/21 | 4,380 | 4,476 | Trust | ||||||
2.000% due 08/31/21 | 250 | 254 | Series 2015-3 Class A1 | ||||||
2.000% due 10/31/21 | 750 | 760 | 0.500% due 08/08/16 | 2,381 | 2,380 | ||||
8.000% due 11/15/21 | 1,250 | 1,698 | Anheuser-Busch InBev Worldwide, Inc. | ||||||
1.500% due 01/31/22 | 1,750 | 1,717 | 2.875% due 02/15/16 | 390 | 393 | ||||
1.750% due 02/28/22 | 4,075 | 4,056 | AT&T, Inc. | ||||||
1.875% due 05/31/22 | 790 | 791 | 2.950% due 05/15/16 | 965 | 975 | ||||
1.750% due 09/30/22 | 3,095 | 3,067 | Series FRN | ||||||
1.625% due 11/15/22 | 1,750 | 1,719 | 0.699% due 02/12/16 (Ê) | 1,072 | 1,071 | ||||
1.750% due 05/15/23 | 3,080 | 3,031 | Citigroup, Inc. | ||||||
2.750% due 02/15/24 | 1,010 | 1,065 | 1.116% due 04/01/16 (Ê) | 500 | 501 | ||||
2.375% due 08/15/24 | 865 | 884 | Coca-Cola Enterprises, Inc. | ||||||
2.000% due 02/15/25 | 1,285 | 1,270 | 2.000% due 08/19/16 | 500 | 504 | ||||
2.000% due 08/15/25(§) | 35,279 | 34,810 | Commonwealth Bank of Australia | ||||||
Zero coupon due 11/15/27 | 2,215 | 1,634 | 0.534% due 06/03/16 (Ê)(Þ) | 1,795 | 1,795 | ||||
5.500% due 08/15/28 | 1,600 | 2,156 | |||||||
5.250% due 02/15/29 | 500 | 663 | Continental Airlines Pass-Through Trust | ||||||
Series 09-1 | |||||||||
5.375% due 02/15/31 | 1,100 | 1,511 | Cooperatieve Centrale Raiffeisen- | ||||||
4.500% due 02/15/36 | 750 | 975 | 9.000% due 07/08/16 | 341 | 357 | ||||
4.750% due 02/15/37 | 2,949 | 3,966 | Boerenleenbank BA | ||||||
4.500% due 05/15/38 | 500 | 651 | Series FRN | ||||||
3.500% due 02/15/39 | 150 | 168 | 0.820% due 03/18/16 (Ê) | 200 | 200 | ||||
4.250% due 05/15/39 | 200 | 251 | Series YCD | ||||||
4.375% due 05/15/40 | 1,980 | 2,524 | 0.367% due 03/22/16 (Ê)(~) | 550 | 550 | ||||
3.875% due 08/15/40 | 700 | 828 | Drive Auto Receivables Trust | ||||||
3.125% due 02/15/42 | 2,735 | 2,862 | Series 2015-CA Class A1 | ||||||
2.750% due 08/15/42 | 3,055 | 2,959 | 0.480% due 08/15/16 (Þ) | 652 | 652 | ||||
2.750% due 11/15/42 | 1,850 | 1,788 | |||||||
3.125% due 02/15/43 | 985 | 1,024 | Series 2015-DA Class A1 | ||||||
2.875% due 05/15/43 | 905 | 895 | 0.520% due 10/17/16 (Þ) | 869 | 870 | ||||
3.750% due 11/15/43 | 1,375 | 1,607 | Fannie Mae | ||||||
3.000% due 05/15/45 | 9,528 | 9,641 | 6.500% due 03/01/16 | 1 | 1 | ||||
2.875% due 08/15/45 | 7,815 | 7,722 | 5.500% due 05/01/16 | 9 | 9 | ||||
270,331 | 6.500% due 06/01/16 | 1 | 1 | ||||||
Total Long-Term Investments | Fannie Mae Discount Notes | ||||||||
(cost $1,144,146) | 1,147,411 | 0.010% due 01/05/16 (~) | 7,440 | 7,439 | |||||
Series BB | |||||||||
Preferred Stocks - 0.2% | 0.010% due 01/07/16 (~) | 4,700 | 4,699 | ||||||
Federal Farm Credit Banks | |||||||||
Technology - 0.2% | 5.125% due 08/25/16 | 310 | 322 | ||||||
Verizon Communications, Inc. | 82,000 | 2,181 | Federal Home Loan Mortgage Corp. | ||||||
Total Preferred Stocks | 2.000% due 08/25/16 | 1,275 | 1,291 | ||||||
(cost $2,063) | 2,181 | 0.875% due 10/14/16 | 200 | 201 | |||||
Federal Home Loan Mortgage Corp. | |||||||||
Multifamily Structured Pass-Through | |||||||||
Certificates | |||||||||
Options Purchased - 0.0% | Series 2012-K501 Class X1A | ||||||||
(Number of Contracts) | Interest Only STRIP | ||||||||
Swaptions | 1.606% due 08/25/16 | 14,484 | 105 | ||||||
(Fund Receives/Fund Pays) | |||||||||
USD 5.000%/USD Three Month LIBOR | Ford Motor Credit Co. LLC | ||||||||
Jan 2019 0.00 Put (1) | 8,150 | (ÿ) | 41 | 1.700% due 05/09/16 | 1,000 | 1,002 | |||
Total Options Purchased | Freddie Mac | ||||||||
(cost $109) | 41 | 9.000% due 05/01/16 | — | — | |||||
9.000% due 06/01/16 | 1 | 1 | |||||||
Short-Term Investments - 20.0% | 9.000% due 08/01/16 | — | — | ||||||
Ally Auto Receivables Trust | 9.000% due 10/01/16 | 1 | 1 | ||||||
Series 2015-1 Class A1 | GE Capital International Funding Co. | ||||||||
0.390% due 08/15/16 | 639 | 639 | 0.964% due 04/15/16 (Å) | 1,192 | 1,192 |
See accompanying notes which are an integral part of the financial statements.
422 Russell Investment Grade Bond Fund
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Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
General Mills, Inc. | Series FRN | ||||||||
0.523% due 01/28/16 (Ê) | 700 | 700 | 1.867% due 09/15/16 (Ê) | 1,090 | 1,100 | ||||
Series FRN | Vodafone Group PLC | ||||||||
0.624% due 01/29/16 (Ê) | 1,020 | 1,020 | Series FRN | ||||||
HCP, Inc. | 0.718% due 02/19/16 (Ê) | 1,200 | 1,199 | ||||||
6.300% due 09/15/16 | 135 | 140 | Walgreens Boots Alliance, Inc. | ||||||
Historic TW, Inc. | 0.775% due 05/18/16 (Ê) | 1,300 | 1,298 | ||||||
8.050% due 01/15/16 | 565 | 573 | Wells Fargo Bank NA | ||||||
Hyundai Auto Receivables Trust | Series BKNT | ||||||||
Series 2015-C Class A1 | 0.479% due 06/02/16 (Ê) | 750 | 750 | ||||||
0.390% due 09/15/16 | 1,304 | 1,304 | Willis Group Holdings PLC | ||||||
JPMorgan Chase Bank NA | 4.125% due 03/15/16 | 840 | 848 | ||||||
Series BKNT | Total Short-Term Investments | ||||||||
5.875% due 06/13/16 | 85 | 87 | (cost $253,670) | 252,293 | |||||
JPMorgan Securities LLC | |||||||||
0.416% due 03/21/16 (Ê)(~) | 1,000 | 1,000 | Total Investments 111.2% | ||||||
Juniper Networks, Inc. | (identified cost $1,399,988) | 1,401,926 | |||||||
3.100% due 03/15/16 | 815 | 821 | |||||||
Kaupthing Bank Hf | Other Assets and Liabilities, | ||||||||
7.125% due 05/19/16 (Ø)(Þ) | 1,480 | — | Net - (11.2%) | (141,204 | ) | ||||
Mercedes-Benz Auto Receivables Trust | |||||||||
Series 2015-1 Class A1 | Net Assets - 100.0% | 1,260,722 | |||||||
0.390% due 08/15/16 | 1,425 | 1,425 | |||||||
Morgan Stanley | |||||||||
0.765% due 10/18/16 (Ê) | 545 | 544 | |||||||
Nissan Auto Receivables Owner Trust | |||||||||
Series 2015-B Class A1 | |||||||||
0.380% due 08/15/16 | 1,485 | 1,485 | |||||||
Nomura Holdings, Inc. | |||||||||
2.000% due 09/13/16 | 825 | 830 | |||||||
PACCAR Financial Corp. | |||||||||
0.581% due 02/08/16 (Ê) | 560 | 560 | |||||||
Rio Tinto Finance USA PLC | |||||||||
1.375% due 06/17/16 | 620 | 621 | |||||||
Russell U.S. Cash Management Fund | 186,706,795 | (8) | 186,707 | ||||||
Santander Drive Auto Receivables Trust | |||||||||
Series 2015-3 Class A1 | |||||||||
0.450% due 06/15/16 | 588 | 587 | |||||||
Series 2015-4 Class A1 | |||||||||
0.500% due 09/15/16 | 541 | 541 | |||||||
Tennessee Gas Pipeline Co. LLC | |||||||||
8.000% due 02/01/16 | 805 | 818 | |||||||
Toronto-Dominion Bank (The) | |||||||||
0.793% due 09/09/16 (Ê) | 1,750 | 1,754 | |||||||
Total Capital International SA | |||||||||
1.000% due 08/12/16 | 885 | 888 | |||||||
Toyota Motor Credit Corp. | |||||||||
0.426% due 09/23/16 (Ê) | 65 | 65 | |||||||
United States Treasury Bills | |||||||||
0.090% due 01/07/16 (~) (§) | 80 | 80 | |||||||
0.010% due 02/25/16 (~) | 10 | 10 | |||||||
United States Treasury Inflation Indexed | |||||||||
Bonds | |||||||||
0.125% due 04/15/16 | 2,057 | 2,044 | |||||||
2.500% due 07/15/16 | 1,310 | 1,335 | |||||||
United States Treasury Notes | |||||||||
0.375% due 03/31/16 | 14,000 | 14,008 | |||||||
Verizon Communications, Inc. |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 423
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Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Restricted Securities | |||||||||||
Amounts in thousands (except share and cost per unit amounts) | |||||||||||
Principal | Cost per | Cost | Fair Value | ||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | ||||
Securities | Date | or shares | $ | $ | $ | ||||||
1.5% | |||||||||||
BHP Billiton Finance USA, Ltd. | 10/14/15 | 685,000 | 100.00 | 685 | 700 | ||||||
CSMC Trust | 10/15/15 | 121,000 | 106.10 | 128 | 126 | ||||||
DT Auto Owner Trust | 10/07/15 | 708,000 | 99.99 | 708 | 708 | ||||||
Flagship Credit Auto Trust | 10/28/15 | 152,000 | 100.00 | 152 | 152 | ||||||
GE Capital International Funding Co. | 07/14/09 | 335,000 | 85.24 | 285 | 348 | ||||||
GE Capital International Funding Co. | 12/15/11 | 633,000 | 102.86 | 651 | 657 | ||||||
GE Capital International Funding Co. | 01/06/15 | 511,000 | 99.96 | 511 | 512 | ||||||
GE Capital International Funding Co. | 10/19/15 | 1,192,000 | 100.00 | 1,192 | 1,192 | ||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 1,929,000 | 99.69 | 1,924 | 1,906 | ||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 5,100,500 | 99.80 | 5,090 | 5,143 | ||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 1,255,000 | 99.94 | 1,254 | 1,224 | ||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 1,830,000 | 99.95 | 1,829 | 1,835 | ||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 346,000 | 99.97 | 346 | 349 | ||||||
Hyundai Capital America | 10/27/15 | 842,000 | 99.94 | 841 | 841 | ||||||
JPMorgan Chase Commercial Mortgage Securities Trust | 10/29/15 | 415,000 | 99.99 | 415 | 415 | ||||||
Kraft Heinz Foods Co. | 10/07/15 | 1,090,000 | 106.97 | 1,166 | 1,172 | ||||||
RBS Commercial Funding, Inc. Trust | 10/27/15 | 235,000 | 105.99 | 249 | 248 | ||||||
Vericrest Opportunity Loan Trust | 09/10/15 | 98,575 | 99.92 | 98 | 99 | ||||||
Volkswagen Group of America Finance LLC | 10/07/15 | 730,000 | 94.51 | 690 | 697 | ||||||
18,324 | |||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
United States 2 Year Treasury Note Futures | 55 | USD | 12,026 | 12/15 | (18 | ) | |
United States 5 Year Treasury Note Futures | 127 | USD | 15,211 | 12/15 | (37 | ) | |
United States 10 Year Treasury Note Futures | 157 | USD | 20,047 | 12/15 | 36 | ||
United States Treasury Long Bond Futures | 43 | USD | 6,727 | 12/15 | 4 | ||
United States Treasury Ultra Bond Futures | 27 | USD | 4,313 | 12/15 | 15 | ||
Short Positions | |||||||
United States 5 Year Treasury Note Futures | 74 | USD | 8,863 | 12/15 | 17 | ||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 17 |
Options Written | ||||||||
Amounts in thousands (except contract amounts) | ||||||||
Number of | Strike | Notional | Expiration | Fair Value | ||||
Call/Put | Contracts | Price | Amount | Date | $ | |||
Swaptions | ||||||||
(Fund Receives/Fund Pays) | ||||||||
USD 5.000%/USD Three Month LIBOR | Put | 1 | 0.00 | 30,725 | 01/14/19 | (47 | ) | |
Total Liability for Options Written (premiums received $159) | (47 | ) |
Transactions in options written contracts for the period ended October 31, 2015 were as follows: | ||||||
Number of | Premiums | |||||
Contracts | Received | |||||
Outstanding October 31, 2014 | 2 | $ | 181 | |||
Opened | — | — | ||||
Closed | (1 | ) | (22 | ) | ||
Expired | — | — | ||||
Outstanding October 31, 2015 | 1 | $ | 159 |
See accompanying notes which are an integral part of the financial statements.
424 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Bank of America | USD | 176 | AUD | 251 | 11/06/15 | 3 | |
Bank of America | USD | 1,496 | AUD | 2,099 | 11/12/15 | — | |
Bank of America | USD | 220 | NOK | 1,873 | 11/06/15 | 1 | |
Bank of America | USD | 6,001 | NOK | 51,023 | 11/06/15 | 4 | |
Bank of America | USD | 164 | NZD | 256 | 11/06/15 | 10 | |
Bank of America | CHF | 125 | USD | 128 | 11/06/15 | 2 | |
Bank of America | CHF | 5,911 | USD | 6,075 | 11/06/15 | 95 | |
Bank of America | CHF | 7,600 | USD | 7,811 | 11/06/15 | 122 | |
Bank of America | EUR | 1,005 | USD | 1,113 | 11/25/15 | 8 | |
Bank of America | NOK | 65,601 | USD | 7,715 | 11/06/15 | (5 | ) |
Bank of America | SEK | 126 | USD | 15 | 11/06/15 | — | |
Bank of Montreal | USD | 7,936 | JPY | 952,959 | 11/06/15 | (39 | ) |
Barclays | AUD | 2,092 | JPY | 180,773 | 11/12/15 | 7 | |
Barclays | JPY | 179,966 | NOK | 12,655 | 11/12/15 | (2 | ) |
BNP Paribas | USD | 3,524 | EUR | 3,155 | 11/06/15 | (54 | ) |
BNP Paribas | USD | 7,888 | EUR | 7,040 | 11/06/15 | (147 | ) |
BNP Paribas | USD | 73 | GBP | 48 | 11/06/15 | 1 | |
BNP Paribas | USD | 3,463 | GBP | 2,282 | 11/06/15 | 55 | |
BNP Paribas | USD | 8,016 | NZD | 12,561 | 11/06/15 | 490 | |
BNP Paribas | AUD | 143 | USD | 100 | 11/06/15 | (2 | ) |
BNP Paribas | CAD | 4,729 | USD | 3,526 | 11/06/15 | (90 | ) |
BNP Paribas | NZD | 147 | USD | 94 | 11/06/15 | (6 | ) |
Citigroup | USD | 2,994 | AUD | 4,198 | 11/12/15 | (2 | ) |
Citigroup | USD | 1,496 | EUR | 1,338 | 11/12/15 | (25 | ) |
Citigroup | USD | 2,600 | EUR | 2,380 | 11/12/15 | 18 | |
Citigroup | AUD | 8,570 | USD | 6,083 | 11/12/15 | (25 | ) |
Citigroup | EUR | 2,744 | USD | 2,998 | 11/12/15 | (19 | ) |
Commonwealth Bank of Australia | USD | 6,023 | AUD | 8,596 | 11/06/15 | 106 | |
Commonwealth Bank of Australia | USD | 67 | EUR | 60 | 11/06/15 | (1 | ) |
Commonwealth Bank of Australia | USD | 9 | JPY | 1,086 | 11/06/15 | — | |
Commonwealth Bank of Australia | USD | 6,042 | NZD | 9,514 | 11/06/15 | 400 | |
Commonwealth Bank of Australia | AUD | 4,912 | USD | 3,442 | 11/06/15 | (61 | ) |
Commonwealth Bank of Australia | CHF | 160 | USD | 164 | 11/06/15 | 2 | |
Commonwealth Bank of Australia | GBP | 5,243 | USD | 7,942 | 11/06/15 | (141 | ) |
Commonwealth Bank of Australia | JPY | 742,036 | USD | 6,198 | 11/06/15 | 48 | |
Commonwealth Bank of Australia | NOK | 2,408 | USD | 282 | 11/06/15 | (1 | ) |
Commonwealth Bank of Australia | NZD | 5,436 | USD | 3,452 | 11/06/15 | (228 | ) |
Goldman Sachs | AUD | 4,183 | USD | 3,016 | 11/12/15 | 35 | |
Goldman Sachs | CHF | 909 | USD | 927 | 11/12/15 | 8 | |
Goldman Sachs | JPY | 359,022 | USD | 3,039 | 11/12/15 | 64 | |
JPMorgan Chase | USD | 4,498 | JPY | 541,289 | 11/12/15 | (12 | ) |
JPMorgan Chase | CHF | 2,964 | USD | 3,039 | 11/12/15 | 39 | |
JPMorgan Chase | CHF | 3,468 | USD | 3,540 | 11/12/15 | 30 | |
JPMorgan Chase | NOK | 25,628 | USD | 3,074 | 11/12/15 | 59 | |
Royal Bank of Canada | USD | 36 | AUD | 50 | 11/06/15 | — | |
Royal Bank of Canada | USD | 22 | CAD | 29 | 11/06/15 | — | |
Royal Bank of Canada | USD | 8,083 | CAD | 10,575 | 11/06/15 | 4 | |
Royal Bank of Canada | USD | 83 | EUR | 75 | 11/06/15 | — | |
Royal Bank of Canada | USD | 187 | EUR | 169 | 11/06/15 | (1 | ) |
Royal Bank of Canada | USD | 8,097 | GBP | 5,243 | 11/06/15 | (15 | ) |
Royal Bank of Canada | USD | 129 | JPY | 15,548 | 11/06/15 | — | |
Royal Bank of Canada | USD | 3,571 | JPY | 430,930 | 11/06/15 | — | |
Royal Bank of Canada | USD | 6,149 | JPY | 742,036 | 11/06/15 | — | |
Royal Bank of Canada | USD | 2 | NOK | 19 | 11/06/15 | — | |
Royal Bank of Canada | USD | 178 | NZD | 263 | 11/06/15 | — | |
Royal Bank of Canada | USD | 3,546 | SEK | 30,105 | 11/06/15 | (22 | ) |
Royal Bank of Canada | AUD | 88 | USD | 63 | 11/06/15 | — | |
Royal Bank of Canada | AUD | 11,262 | USD | 8,033 | 11/06/15 | 3 | |
Royal Bank of Canada | CHF | 127 | USD | 129 | 11/06/15 | — | |
Royal Bank of Canada | CHF | 163 | USD | 166 | 11/06/15 | — | |
Royal Bank of Canada | EUR | 5,653 | USD | 6,245 | 11/06/15 | 29 | |
Royal Bank of Canada | GBP | 2,330 | USD | 3,599 | 11/06/15 | 7 | |
Royal Bank of Canada | NOK | 14 | USD | 2 | 11/06/15 | — |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 425
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Royal Bank of Canada | NZD | 460 | USD | 311 | 11/06/15 | — | |
Royal Bank of Canada | NZD | 12,561 | USD | 8,497 | 11/06/15 | (7 | ) |
Royal Bank of Canada | SEK | 341 | USD | 40 | 11/06/15 | — | |
Standard Chartered | EUR | 3,991 | CHF | 4,358 | 11/12/15 | 20 | |
Standard Chartered | JPY | 183,435 | NOK | 12,973 | 11/12/15 | 6 | |
Standard Chartered | NZD | 4,670 | AUD | 4,322 | 11/12/15 | (79 | ) |
State Street | GBP | 2,976 | USD | 4,514 | 11/12/15 | (74 | ) |
State Street | SEK | 52,218 | USD | 6,212 | 11/06/15 | 100 | |
UBS | USD | 4,500 | JPY | 541,289 | 11/12/15 | (14 | ) |
UBS | USD | 3,056 | NZD | 4,722 | 11/12/15 | 139 | |
UBS | CAD | 4,031 | USD | 3,077 | 11/12/15 | (6 | ) |
UBS | EUR | 4,041 | GBP | 2,973 | 11/12/15 | 138 | |
UBS | EUR | 1,088 | USD | 1,222 | 11/12/15 | 25 | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 1,000 |
Total Return Swap Contracts (*) | ||||||
Amounts in thousands | ||||||
Fund Receives/(Pays) | Notional | Termination | Fair Value | |||
Underlying Reference Entity | Counterparty | Amount | Date | $ | ||
Long Reference Entity | ||||||
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 13,161 | 11/30/15 | (4 | ) |
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 15,186 | 11/30/15 | (4 | ) |
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 10,114 | 12/31/15 | (3 | ) |
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 10,114 | 12/31/15 | (3 | ) |
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 10,002 | 04/29/16 | (4 | ) |
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 18,981 | 04/29/16 | (7 | ) |
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 10,002 | 09/30/16 | — | |
Barclays U.S. Aggregate Total Return Value Unhedged | ||||||
USD Index | Barclays | USD | 13,002 | 09/30/16 | (1 | ) |
Total Fair Value of Open Total Return Swap Contracts Premiums Paid (Received) - $— (å) | (26 | ) |
(*) Total return swaps (which includes index swaps) are agreements between counterparties to exchange cash flows, one based on a market-linked
returns of an individual asset or a basket of assets (i.e. an index), and the other on a fixed or floating rate. The floating rate fees were all based
on the 1 Month LIBOR rate plus fee ranging from 0.08% to 0.19%.
Interest Rate Swap Contracts | ||||||||||
Amounts in thousands | ||||||||||
Termination | Fair Value | |||||||||
Counterparty | Notional Amount | Fund Receives | Fund Pays | Date | $ | |||||
Barclays | USD | 695 | Three Month LIBOR | 2.481 | % | 11/15/27 | (59 | ) | ||
Barclays | USD | 695 | Three Month LIBOR | 2.417 | % | 11/15/27 | (51 | ) | ||
Citigroup | USD | 1,390 | Three Month LIBOR | 2.714 | % | 08/15/42 | (63 | ) | ||
Citigroup | USD | 1,060 | Three Month LIBOR | 3.676 | % | 11/15/43 | (274 | ) | ||
Total Fair Value on Open Interest Rate Swap Contracts Premiums Paid (Received) - $— (å) | (447 | ) |
See accompanying notes which are an integral part of the financial statements.
426 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | |||||||||||||
Amounts in thousands | |||||||||||||
Fair Value | |||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||
Long-Term Investments | |||||||||||||
Asset-Backed Securities | $ | — | $ | 100,628 | $ | — | $ | 100,628 | 8.0 | ||||
Corporate Bonds and Notes | — | 294,487 | — | 294,487 | 23.4 | ||||||||
International Debt | — | 62,019 | 1,273 | 63,292 | 5.0 | ||||||||
Mortgage-Backed Securities | — | 391,586 | 3,846 | 395,432 | 31.4 | ||||||||
Municipal Bonds | — | 9,045 | — | 9,045 | 0.7 | ||||||||
United States Government Agencies | — | 14,196 | — | 14,196 | 1.1 | ||||||||
United States Government Treasuries | — | 270,331 | — | 270,331 | 21.4 | ||||||||
Preferred Stocks | 2,181 | — | — | 2,181 | 0.2 | ||||||||
Options Purchased | — | 41 | — | 41 | —* | ||||||||
Short-Term Investments | — | 252,293 | — | 252,293 | 20.0 | ||||||||
Total Investments | 2,181 | 1,394,626 | 5,119 | 1,401,926 | 111.2 | ||||||||
Other Assets and Liabilities, Net | (11.2 | ) | |||||||||||
100.0 | |||||||||||||
Other Financial Instruments | |||||||||||||
Futures Contracts | 17 | — | — | 17 | —* | ||||||||
Options Written | — | (47 | ) | — | (47 | ) | (—)* | ||||||
Foreign Currency Exchange Contracts | — | 1,000 | — | 1,000 | 0.1 | ||||||||
Interest Rate Swap Contracts | — | (447 | ) | — | (447 | ) | (—)* | ||||||
Total Return Swap Contracts | — | (26 | ) | — | (26 | ) | (—)* | ||||||
Total Other Financial Instruments** | $ | 17 | $ | 480 | $ | — | $ | 497 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining fair value for the period ended October 31,
2015 were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 427
Russell Investment Company
Russell Investment Grade Bond Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||
Foreign | ||||
Currency | Interest Rate | |||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||
Location: Statement of Assets and Liabilities - Assets | ||||
Investments, at fair value* | $ | — | $ | 41 |
Unrealized appreciation on foreign currency exchange contracts | 2,078 | — | ||
Variation margin on futures contracts** | — | 72 | ||
Total | $ | 2,078 | $ | 113 |
Location: Statement of Assets and Liabilities - Liabilities | ||||
Variation margin on futures contracts** | $ | — | $ | 55 |
Unrealized depreciation on foreign currency exchange contracts | 1,078 | — | ||
Options written, at fair value | — | 47 | ||
Total return swap contracts, at fair value | — | 26 | ||
Interest rate swap contracts, at fair value | — | 447 | ||
Total | $ | 1,078 | $ | 575 |
Foreign | |||||||
Credit | Currency | Interest Rate | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | |||||||
Investments*** | $ | — | $ | — | $ | (342 | ) |
Futures contracts | — | — | 3,313 | ||||
Options written | — | — | 21 | ||||
Total return swap contracts | — | — | 1,251 | ||||
Interest rate swap contracts | — | — | (183 | ) | |||
Credit default swap contracts | 126 | — | — | ||||
Foreign currency-related transactions**** | — | 2,532 | — | ||||
Total | $ | 126 | $ | 2,532 | $ | 4,060 | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||||||
Investments***** | $ | — | $ | — | $ | 191 | |
Futures contracts | — | — | (756 | ) | |||
Options written | — | — | 12 | ||||
Total return swap contracts | — | — | (7 | ) | |||
Interest rate swap contracts | — | — | (334 | ) | |||
Foreign currency-related transactions****** | — | 1,512 | — | ||||
Total | $ | — | $ | 1,512 | $ | (894 | ) |
* Fair value of purchased options.
** Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
*** Includes net realized gain (loss) on purchased options as reported in the Statement of Operations.
**** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
***** Includes net unrealized gain (loss) on purchased options as reported in the Schedule of Investments.
****** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
428 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Options Purchased Contracts | Investments, at fair value | $ | 41 | $ | — $ | 41 | |||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 2,078 | — | 2,078 | |||||
Futures Contracts | Variation margin on futures contracts | 67 | — | 67 | |||||
Total Financial and Derivative Assets | 2,186 | — | 2,186 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (67) | — | (67 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 2,119 | $ | — $ | 2,119 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Assets | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||
Bank of America | $ | 245 | $ | 5 | $ | — | $ 240 | ||
Barclays | 48 | 48 | — | — | |||||
BNP Paribas | 545 | 298 | — | 247 | |||||
Citigroup | 18 | 18 | — | — | |||||
Commonwealth Bank of Australia | 555 | 432 | — | 123 | |||||
Goldman Sachs | 107 | — | — | 107 | |||||
JPMorgan Chase | 128 | 12 | — | 116 | |||||
Royal Bank of Canada | 43 | 43 | — | — | |||||
Standard Chartered | 27 | 27 | — | — | |||||
State Street | 100 | — | — | 100 | |||||
UBS | 303 | 19 | — | 284 | |||||
Total | $ | 2,119 | $ | 902 | $ | — | $ 1,217 |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 429
Russell Investment Company
Russell Investment Grade Bond Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 5 | $ | — | $ | 5 | ||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 1,078 | — | 1,078 | |||||
Options Written Contracts | Options written, at fair value | 47 | — | 47 | |||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 26 | — | 26 | |||||
Interest Rate Swap Contracts | Interest rate swap contracts, at fair value | 447 | — | 447 | |||||
Total Financial and Derivative Liabilities | 1,603 | — | 1,603 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (279) | — | (279 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 1,324 | $ | — | $ | 1,324 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Liabilities | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||
Bank of America | $ | 5 | $ | 5 | $ | — | $ — | ||
Bank of Montreal | 39 | — | — | 39 | |||||
Barclays | 186 | 48 | — | 138 | |||||
BNP Paribas | 298 | 298 | — | — | |||||
Citigroup | 133 | 18 | — | 115 | |||||
Commonwealth Bank of Australia | 432 | 432 | — | — | |||||
JPMorgan Chase | 12 | 12 | — | — | |||||
Royal Bank of Canada | 46 | 43 | — | 3 | |||||
Standard Chartered | 80 | 27 | — | 53 | |||||
State Street | 74 | — | — | 74 | |||||
UBS | 19 | 19 | — | — | |||||
Total | $ | 1,324 | $ | 902 | $ | — | $ 422 |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
430 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 1,399,988 |
Investments, at fair value(>) | 1,401,926 | |
Cash | 356 | |
Cash (restricted)(a)(b) | 1,377 | |
Foreign currency holdings(^) | 1 | |
Unrealized appreciation on foreign currency exchange contracts | 2,078 | |
Receivables: | ||
Dividends and interest | 5,942 | |
Dividends from affiliated Russell funds | 20 | |
Investments sold | 90,430 | |
Fund shares sold | 882 | |
Investments matured(†) | 493 | |
Variation margin on futures contracts | 67 | |
Total assets | 1,503,572 | |
Liabilities | ||
Payables: | ||
Investments purchased | 239,508 | |
Fund shares redeemed | 1,030 | |
Accrued fees to affiliates | 513 | |
Other accrued expenses | 196 | |
Variation margin on futures contracts | 5 | |
Unrealized depreciation on foreign currency exchange contracts | 1,078 | |
Options written, at fair value(x) | 47 | |
Total return swap contracts, at fair value(8) | 26 | |
Interest rate swap contracts, at fair value | 447 | |
Total liabilities | 242,850 | |
Net Assets | $ | 1,260,722 |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 431
Russell Investment Company
Russell Investment Grade Bond Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 4,927 | |
Accumulated net realized gain (loss) | 23,427 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | 1,938 | ||
Futures contracts | 17 | ||
Options written | 112 | ||
Total return swap contracts | (26 | ) | |
Interest rate swap contracts | (447 | ) | |
Investments matured | (1,280 | ) | |
Foreign currency-related transactions | 1,000 | ||
Shares of beneficial interest | 568 | ||
Additional paid-in capital | 1,230,486 | ||
Net Assets | $ | 1,260,722 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 22.21 | |
Maximum offering price per share (Net asset value plus sales charge of 3.75%): Class A | $ | 23.08 | |
Class A — Net assets | $ | 9,210,466 | |
Class A — Shares outstanding ($.01 par value) | 414,629 | ||
Net asset value per share: Class C(#) | $ | 22.03 | |
Class C — Net assets | $ | 17,869,242 | |
Class C — Shares outstanding ($.01 par value) | 811,091 | ||
Net asset value per share: Class E(#) | $ | 22.20 | |
Class E — Net assets | $ | 24,429,956 | |
Class E — Shares outstanding ($.01 par value) | 1,100,575 | ||
Net asset value per share: Class I(#) | $ | 22.21 | |
Class I — Net assets | $ | 279,817,887 | |
Class I — Shares outstanding ($.01 par value) | 12,600,928 | ||
Net asset value per share: Class S(#) | $ | 22.19 | |
Class S — Net assets | $ | 718,080,769 | |
Class S — Shares outstanding ($.01 par value) | 32,367,213 | ||
Net asset value per share: Class Y(#) | $ | 22.22 | |
Class Y — Net assets | $ | 211,313,918 | |
Class Y — Shares outstanding ($.01 par value) | 9,508,116 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 1 | |
(x) Premiums received on options written | $ | 159 | |
(<) Investments matured - cost | $ | 1,773 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 186,707 | |
(8) Total return swap contracts – premiums paid (received) | $ | — | |
(•) Interest rate swap contracts – premiums paid (received) | $ | — | |
(a) Cash Collateral for Futures | $ | 1,026 | |
(b) Cash Collateral for Swaps | $ | 351 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
432 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 215 | |
Dividends from affiliated Russell funds | 228 | ||
Interest | 28,492 | ||
Total investment income | 28,935 | ||
Expenses | |||
Advisory fees | 3,553 | ||
Administrative fees | 677 | ||
Custodian fees | 341 | ||
Distribution fees - Class A | 22 | ||
Distribution fees - Class C | 146 | ||
Transfer agent fees - Class A | 17 | ||
Transfer agent fees - Class C | 39 | ||
Transfer agent fees - Class E | 60 | ||
Transfer agent fees - Class I | 347 | ||
Transfer agent fees - Class S | 1,571 | ||
Transfer agent fees - Class Y | 13 | ||
Professional fees | 123 | ||
Registration fees | 124 | ||
Shareholder servicing fees - Class C | 49 | ||
Shareholder servicing fees - Class E | 75 | ||
Trustees’ fees | 35 | ||
Printing fees | 88 | ||
Miscellaneous | 64 | ||
Total expenses | 7,344 | ||
Net investment income (loss) | 21,591 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 20,327 | ||
Futures contracts | 3,313 | ||
Options written | 21 | ||
Total return swap contracts | 1,251 | ||
Interest rate swap contracts | (183 | ) | |
Credit default swap contracts | 126 | ||
Foreign currency-related transactions | 2,234 | ||
Net realized gain (loss) | 27,089 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (16,783 | ) | |
Futures contracts | (756 | ) | |
Options written | 12 | ||
Total return swap contracts | (7 | ) | |
Interest rate swap contracts | (334 | ) | |
Investment matured | (743 | ) | |
Foreign currency-related transactions | 1,512 | ||
Net change in unrealized appreciation (depreciation) | (17,099 | ) | |
Net realized and unrealized gain (loss) | 9,990 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 31,581 |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 433
Russell Investment Company
Russell Investment Grade Bond Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 21,591 | $ | 26,203 | ||
Net realized gain (loss) | 27,089 | 34,791 | ||||
Net change in unrealized appreciation (depreciation) | (17,099 | ) | 3,018 | |||
Net increase (decrease) in net assets from operations | 31,581 | 64,012 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (91 | ) | (89 | ) | ||
Class C | (84 | ) | (80 | ) | ||
Class E | (306 | ) | (387 | ) | ||
Class I | (3,949 | ) | (4,542 | ) | ||
Class S | (10,020 | ) | (11,025 | ) | ||
Class Y | (4,203 | ) | (6,490 | ) | ||
From net realized gain | ||||||
Class A | (149 | ) | — | |||
Class C | (392 | ) | — | |||
Class E | (648 | ) | — | |||
Class I | (5,533 | ) | — | |||
Class S | (15,849 | ) | — | |||
Class Y | (6,747 | ) | — | |||
Net decrease in net assets from distributions | (47,971 | ) | (22,613 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (296,345 | ) | (310,764 | ) | ||
Total Net Increase (Decrease) in Net Assets | (312,735 | ) | (269,365 | ) | ||
Net Assets | ||||||
Beginning of period | 1,573,457 | 1,842,822 | ||||
End of period | $ | 1,260,722 | $ | 1,573,457 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 4,927 | $ | 921 |
See accompanying notes which are an integral part of the financial statements.
434 Russell Investment Grade Bond Fund
Russell Investment Company
Russell Investment Grade Bond Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 115 | $ | 2,576 | 70 | $ | 1,552 | ||||||
Proceeds from reinvestment of distributions | 11 | 233 | 4 | 86 | ||||||||
Payments for shares redeemed | (69 | ) | (1,531 | ) | (178 | ) | (3,900 | ) | ||||
Net increase (decrease) | 57 | 1,278 | (104 | ) | (2,262 | ) | ||||||
Class C | ||||||||||||
Proceeds from shares sold | 86 | 1,902 | 73 | 1,598 | ||||||||
Proceeds from reinvestment of distributions | 21 | 472 | 3 | 80 | ||||||||
Payments for shares redeemed | (235 | ) | (5,216 | ) | (298 | ) | (6,543 | ) | ||||
Net increase (decrease) | (128 | ) | (2,842 | ) | (222 | ) | (4,865 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 126 | 2,816 | 241 | 5,319 | ||||||||
Proceeds from reinvestment of distributions | 40 | 877 | 16 | 355 | ||||||||
Payments for shares redeemed | (596 | ) | (13,251 | ) | (628 | ) | (13,792 | ) | ||||
Net increase (decrease) | (430 | ) | (9,558 | ) | (371 | ) | (8,118 | ) | ||||
Class I | ||||||||||||
Proceeds from shares sold | 2,254 | 50,450 | 2,448 | 53,989 | ||||||||
Proceeds from reinvestment of distributions | 418 | 9,276 | 202 | 4,451 | ||||||||
Payments for shares redeemed | (3,328 | ) | (74,386 | ) | (4,914 | ) | (108,541 | ) | ||||
Net increase (decrease) | (656 | ) | (14,660 | ) | (2,264 | ) | (50,101 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 6,501 | 144,894 | 13,652 | 299,938 | ||||||||
Proceeds from reinvestment of distributions | 1,159 | 25,712 | 495 | 10,919 | ||||||||
Payments for shares redeemed | (13,033 | ) | (290,280 | ) | (13,765 | ) | (303,095 | ) | ||||
Net increase (decrease) | (5,373 | ) | (119,674 | ) | 382 | 7,762 | ||||||
Class Y | ||||||||||||
Proceeds from shares sold | 1,019 | 22,828 | 2,228 | 49,137 | ||||||||
Proceeds from reinvestment of distributions | 493 | 10,950 | 294 | 6,490 | ||||||||
Payments for shares redeemed | (8,230 | ) | (184,667 | ) | (14,064 | ) | (308,807 | ) | ||||
Net increase (decrease) | (6,718 | ) | (150,889 | ) | (11,542 | ) | (253,180 | ) | ||||
Total increase (decrease) | (13,248 | ) | $ | (296,345 | ) | (14,121 | ) | $ | (310,764 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 435
Russell Investment Company
Russell Investment Grade Bond Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | ||||||||||||
Period | Income (Loss)(a) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||||
Class A | |||||||||||||||||
October 31, 2015 | 22.48 | .28 | .10 | .38 | (.23 | ) | (.42 | ) | |||||||||
October 31, 2014 | 21.91 | .28 | .53 | .81 | (.24 | ) | — | ||||||||||
October 31, 2013 | 23.15 | .25 | (.58 | ) | (.33 | ) | (.21 | ) | (.70 | ) | |||||||
October 31, 2012 | 22.31 | .36 | 1.10 | 1.46 | (.38 | ) | (.24 | ) | |||||||||
October 31, 2011 | 22.85 | .47 | .21 | .68 | (.53 | ) | (.69 | ) | |||||||||
Class C | |||||||||||||||||
October 31, 2015 | 22.33 | .11 | .11 | .22 | (.10 | ) | (.42 | ) | |||||||||
October 31, 2014 | 21.77 | .12 | .52 | .64 | (.08 | ) | — | ||||||||||
October 31, 2013 | 23.03 | .09 | (.59 | ) | (.50 | ) | (.06 | ) | (.70 | ) | |||||||
October 31, 2012 | 22.20 | .21 | 1.08 | 1.29 | (.22 | ) | (.24 | ) | |||||||||
October 31, 2011 | 22.74 | .32 | .19 | .51 | (.36 | ) | (.69 | ) | |||||||||
Class E | |||||||||||||||||
October 31, 2015 | 22.46 | .27 | .12 | .39 | (.23 | ) | (.42 | ) | |||||||||
October 31, 2014 | 21.89 | .28 | .53 | .81 | (.24 | ) | — | ||||||||||
October 31, 2013 | 23.13 | .25 | (.58 | ) | (.33 | ) | (.21 | ) | (.70 | ) | |||||||
October 31, 2012 | 22.28 | .39 | 1.09 | 1.48 | (.39 | ) | (.24 | ) | |||||||||
October 31, 2011 | 22.82 | .51 | .18 | .69 | (.54 | ) | (.69 | ) | |||||||||
Class I | |||||||||||||||||
October 31, 2015 | 22.47 | .35 | .12 | .47 | (.31 | ) | (.42 | ) | |||||||||
October 31, 2014 | 21.90 | .36 | .52 | .88 | (.31 | ) | — | ||||||||||
October 31, 2013 | 23.14 | .33 | (.59 | ) | (.26 | ) | (.28 | ) | (.70 | ) | |||||||
October 31, 2012 | 22.29 | .45 | 1.09 | 1.54 | (.45 | ) | (.24 | ) | |||||||||
October 31, 2011 | 22.83 | .56 | .19 | .75 | (.60 | ) | (.69 | ) | |||||||||
Class S | |||||||||||||||||
October 31, 2015 | 22.45 | .33 | .12 | .45 | (.29 | ) | (.42 | ) | |||||||||
October 31, 2014 | 21.88 | .34 | .52 | .86 | (.29 | ) | — | ||||||||||
October 31, 2013 | 23.12 | .31 | (.58 | ) | (.27 | ) | (.27 | ) | (.70 | ) | |||||||
October 31, 2012 | 22.27 | .43 | 1.09 | 1.52 | (.43 | ) | (.24 | ) | |||||||||
October 31, 2011 | 22.81 | .54 | .19 | .73 | (.58 | ) | (.69 | ) | |||||||||
Class Y | |||||||||||||||||
October 31, 2015 | 22.49 | .37 | .11 | .48 | (.33 | ) | (.42 | ) | |||||||||
October 31, 2014 | 21.91 | .38 | .54 | .92 | (.34 | ) | — | ||||||||||
October 31, 2013 | 23.15 | .35 | (.58 | ) | (.23 | ) | (.31 | ) | (.70 | ) | |||||||
October 31, 2012 | 22.30 | .48 | 1.08 | 1.56 | (.47 | ) | (.24 | ) | |||||||||
October 31, 2011 | 22.84 | .59 | .18 | .77 | (.62 | ) | (.69 | ) | |||||||||
See accompanying notes which are an integral part of the financial statements.
436 Russell Investment Grade Bond Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||||
(.65 | ) | 22.21 | 1.73 | 9,210 | .80 | .80 | 1.25 | 187 | |||||||||
(.24 | ) | 22.48 | 3.70 | 8,036 | .81 | .81 | 1.27 | 178 | |||||||||
(.91 | ) | 21.91 | (1.48 | ) | 10,114 | .79 | .79 | 1.15 | 136 | ||||||||
(.62 | ) | 23.15 | 6.68 | 11,983 | .79 | .79 | 1.59 | 159 | |||||||||
(1.22 | ) | 22.31 | 3.27 | 3,966 | .80 | .80 | 2.14 | 187 | |||||||||
(.52 | ) | 22.03 | .99 | 17,869 | 1.55 | 1.55 | .49 | 187 | |||||||||
(.08 | ) | 22.33 | 2.94 | 20,978 | 1.56 | 1.56 | .54 | 178 | |||||||||
(.76 | ) | 21.77 | (2.23 | ) | 25,285 | 1.54 | 1.54 | .39 | 136 | ||||||||
(.46 | ) | 23.03 | 5.92 | 36,340 | 1.54 | 1.54 | .92 | 159 | |||||||||
(1.05 | ) | 22.20 | 2.42 | 32,369 | 1.55 | 1.55 | 1.48 | 187 | |||||||||
(.65 | ) | 22.20 | 1.77 | 24,430 | .80 | .80 | 1.23 | 187 | |||||||||
(.24 | ) | 22.46 | 3.71 | 34,378 | .81 | .81 | 1.28 | 178 | |||||||||
(.91 | ) | 21.89 | (1.46 | ) | 41,621 | .79 | .78 | 1.15 | 136 | ||||||||
(.63 | ) | 23.13 | 6.76 | 43,762 | .79 | .74 | 1.74 | 159 | |||||||||
(1.23 | ) | 22.28 | 3.31 | 45,365 | .80 | .72 | 2.32 | 187 | |||||||||
(.73 | ) | 22.21 | 2.11 | 279,818 | .47 | .47 | 1.57 | 187 | |||||||||
(.31 | ) | 22.47 | 4.05 | 297,900 | .48 | .48 | 1.62 | 178 | |||||||||
(.98 | ) | 21.90 | (1.15 | ) | 339,903 | .46 | .46 | 1.47 | 136 | ||||||||
(.69 | ) | 23.14 | 7.05 | 410,807 | .46 | .46 | 2.01 | 159 | |||||||||
(1.29 | ) | 22.29 | 3.57 | 380,063 | .47 | .47 | 2.57 | 187 | |||||||||
(.71 | ) | 22.19 | 2.03 | 718,081 | .55 | .55 | 1.49 | 187 | |||||||||
(.29 | ) | 22.45 | 3.97 | 847,289 | .56 | .56 | 1.54 | 178 | |||||||||
(.97 | ) | 21.88 | (1.23 | ) | 817,400 | .54 | .54 | 1.38 | 136 | ||||||||
(.67 | ) | 23.12 | 6.93 | 805,089 | .54 | .54 | 1.92 | 159 | |||||||||
(1.27 | ) | 22.27 | 3.50 | 657,013 | .55 | .55 | 2.44 | 187 | |||||||||
(.75 | ) | 22.22 | 2.18 | 211,314 | .35 | .35 | 1.67 | 187 | |||||||||
(.34 | ) | 22.49 | 4.21 | 364,876 | .36 | .36 | 1.71 | 178 | |||||||||
(1.01 | ) | 21.91 | (.99 | ) | 608,499 | .34 | .34 | 1.59 | 136 | ||||||||
(.71 | ) | 23.15 | 7.15 | 609,301 | .36 | .36 | 2.11 | 159 | |||||||||
(1.31 | ) | 22.30 | 3.67 | 600,991 | .37 | .37 | 2.66 | 187 |
See accompanying notes which are an integral part of the financial statements.
Russell Investment Grade Bond Fund 437
Russell Investment Company
Russell Short Duration Bond Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Short Duration Bond Fund - Class A‡ | Russell Short Duration Bond Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (3.32 | )% | 1 Year | 0.67 | % | ||
5 Years | 0.51 | %§ | 5 Years | 1.52 | %§ | ||
10 Years | 2.51 | %§ | 10 Years | 3.17 | %§ | ||
Russell Short Duration Bond Fund - Class C | Russell Short Duration Bond Fund - Class Y‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.29 | )% | 1 Year | 0.80 | % | ||
5 Years | 0.52 | %§ | 5 Years | 1.62 | %§ | ||
10 Years | 2.14 | %§ | 10 Years | 3.24 | %§ | ||
Russell Short Duration Bond Fund - Class E | BofA Merrill Lynch 1-3 Yr U.S. Treasuries Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.47 | % | 1 Year | 0.78 | % | ||
5 Years | 1.28 | %§ | 5 Years | 0.69 | %§ | ||
10 Years | 2.91 | %§ | 10 Years | 2.53 | %§ |
438 Russell Short Duration Bond Fund
Russell Investment Company
Russell Short Duration Bond Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Short Duration Bond Fund (the “Fund”) employs | down their debt burden. This may also be generalized as a “risk |
a multi-manager approach whereby portions of the Fund are | on” market where investors are generally bullish about the |
allocated to different money manager strategies. Fund assets not | economy. However, the Fund may also perform well versus U.S. |
allocated to money managers are managed by Russell Investment | treasuries in a “risk off” flight-to-quality environment given that |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | a majority of the Fund’s holdings consist of high-grade, short- |
may change the allocation of the Fund’s assets among money | duration securities, which are securities that investors may find |
managers at any time. An exemptive order from the Securities | as a reasonable alternative to U.S. treasuries. Environments |
and Exchange Commission (“SEC”) permits RIMCo to engage | that feature sharp rises in interest rates or mass sell-offs in fixed |
or terminate a money manager at any time, subject to approval | income risk assets (e.g., the recent global financial crisis) will |
by the Fund’s Board, without a shareholder vote. Pursuant to the | tend to be unfavorable for Fund performance. |
terms of the exemptive order, the Fund is required to notify its | Market conditions during the fiscal year ended October 31, 2015 |
shareholders within 90 days of when a money manager begins | provided a mixed environment for the Fund. Among non-Treasury |
providing services. As of October 31, 2015, the Fund had three | allocations, the Fund’s allocation to U.S. securitized asset |
money managers. | classes, such as agency residential and commercial mortgages, |
What is the Fund’s investment objective? | were beneficial to performance given improving housing market |
The Fund seeks to provide current income and preservation of | conditions. However, the Fund’s exposure to U.S. corporate bonds |
capital with a focus on short duration securities. | were challenged by deteriorating fundamentals (with respect to |
investment grade) and weaker commodity prices (with respect | |
How did the Fund perform relative to its benchmark for the | to high yield). Weaker commodity prices, in addition to slowing |
fiscal year ended October 31, 2015? | global growth, further challenged the Fund’s currency selections |
For the fiscal year ended October 31, 2015, the Fund’s Class | and emerging market exposures, which were the largest detractors |
A, Class E, Class S and Class Y Shares gained 0.42%, 0.47%, | during the fiscal year. A favorable bank loan environment |
0.67%, and 0.80%, respectively, and the Fund’s Class C shares | benefited the Fund’s allocation to bank loans, which slightly offset |
lost 0.29%. This is compared to the Fund’s benchmark, the BofA | losses. |
Merrill Lynch 1-3 Year U.S. Treasuries Index, which gained | |
0.78% during the same period. The Fund’s performance includes | How did the investment strategies and techniques employed |
operating expenses, whereas index returns are unmanaged and do | by the Fund and its money managers affect its benchmark- |
not include expenses of any kind. | relative performance? |
The Fund underperformed its benchmark for the fiscal year. | |
For the fiscal year ended October 31, 2015, the Morningstar® | Emerging market exposures were most challenging to performance |
Short-Term Bond, a group of funds that Morningstar considers to | throughout the fiscal year, followed by adverse currency selections |
have investment strategies similar to those of the Fund, gained | mid-period. The Fund’s out-of-benchmark allocation to bank |
0.46%. This return serves as a peer comparison and is expressed | loans and security selection within agency mortgages were the |
net of operating expenses. | most positive contributors to the Fund’s benchmark-relative |
How did the market conditions described in the Market | performance and helped to offset the detractors. To smaller |
Summary report affect the Fund’s performance? | extents, security selection within commercial mortgages and |
The fiscal year ended October 31, 2015 saw slowing global growth | asset-backed securities also contributed positively. |
and commodity price weakness. Overall, this was modestly | The Fund employs discretionary money managers. The Fund’s |
positive for fixed income assets, as yields fell, particularly among | discretionary money managers select the individual portfolio |
sovereign bonds. On the other hand, credit sectors, primarily | securities for the assets assigned to them. Fund assets not |
within the U.S., were challenged in this environment. Corporate | allocated to discretionary money managers include the Fund’s |
bonds saw the largest draw downs as sharply reduced commodity | liquidity reserves and assets which may be managed directly |
prices (oil in particular), weakening earnings growth and elevated | by RIMCo to effect the Fund’s investment strategies and/or to |
new issuance weighed on returns. In this environment, the Fund’s | actively manage the Fund’s overall exposures by investing in |
strategic overweight to credit detracted. | securities or other instruments that RIMCo believes will achieve |
The Fund will tend to perform well in markets where non-treasury | the desired risk/return profile for the Fund. |
sectors lead. These are generally environments where the economy | Logan Circle Partners, L.P. was the worst performing manager |
is stable and a higher coupon can be collected, or environments | for the period though outperformed the Fund’s benchmark. Ex- |
where corporate profits are increasing, enabling issuers to pay | benchmark exposures were most beneficial to performance, |
Russell Short Duration Bond Fund 439
Russell Investment Company
Russell Short Duration Bond Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
specifically securitized bonds among commercials and agency | typically holds ten to twenty optimally chosen index constituents, | |
residential mortgages, and asset-backed securities. Emerging | and had a slightly positive impact on benchmark-relative | |
market exposures were the greatest detractor to performance | performance. | |
for the one-year period largely due to challenges within local | ||
emerging markets. | Describe any changes to the Fund’s structure or the money | |
manager line-up. | ||
THL Credit Advisors LLC, the Fund’s bank loan specialist, was | There were no changes to the Fund’s structure or money manager | |
the best performing manager for the period and outperformed the | line-up during the fiscal year. | |
Fund’s benchmark as a result of positive security selection amid | ||
a favorable market environment for bank loans. | Money Managers as of October 31, | |
During the period, RIMCo utilized futures contracts to seek to | 2015 | Styles |
achieve the Fund benchmark’s duration exposures with respect to | Logan Circle Partners, L.P. | Fully Discretionary |
the portion of the Fund allocated to cash reserves. The exposure, | Scout Investments, Inc. | Fully Discretionary |
THL Credit Advisors LLC | Sector Specialist | |
which consisted of a curve-flattening strategy between 2-year and | The views expressed in this report reflect those of the portfolio | |
5-year U.S. Treasury yields, contributed positively to benchmark- | ||
relative performance. RIMCo also implemented tactical ‘tilts’ | managers only through the end of the period covered by | |
based on its judgments regarding shorter-term opportunities to | the report. These views do not necessarily represent the | |
seek to generate returns and/or mitigate risk during the period by | views of RIMCo, or any other person in RIMCo or any other | |
investing in derivative instruments such as U.S. Treasury futures | affiliated organization. These views are subject to change | |
and currency forward contracts. These tilts had a neutral impact | at any time based upon market conditions or other events, | |
on performance during the period due to RIMCo’s U.S. Treasury | and RIMCo disclaims any responsibility to update the views | |
futures selections. | contained herein. These views should not be relied on as | |
investment advice and, because investment decisions for | ||
RIMCo also managed a strategy designed to replicate the | a Russell Investment Company (“RIC”) Fund are based on | |
performance of the Fund’s benchmark in order to provide the | numerous factors, should not be relied on as an indication | |
Fund additional diversification and help balance the credit risk | of investment decisions of any RIC Fund. | |
associated with THL’s bank loan investments. This strategy |
* Assumes initial investment on November 1, 2005.
** BofA Merrill Lynch 1-3 Yr U.S. Treasuries Index is an index composed of approximately 160 issues in the form of publicly placed, coupon-bearing U.S. Treasury
debt. Issues must carry a term of maturity of at least one year, and par amounts outstanding must be no less than $10 million at the start and at the close of the
performance measurement periods.
‡ The Fund first issued Class A Shares on March 1, 2007. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 3.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
‡‡ The Fund first issued Class Y Shares on September 29, 2008. The returns shown for Class Y Shares prior to that date are the returns of the Fund’s Class S
Shares. Class Y Shares will have substantially similar annual returns as the Class S Shares because the Shares of each Class are invested in the same portfolio of
securities. Annual returns for each Class will differ only to the extent that the Class Y Shares do not have the same expenses as the Class S Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
440 Russell Short Duration Bond Fund
Russell Investment Company
Russell Short Duration Bond Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 999.40 | $ | 1,021.12 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 4.08 | $ | 4.13 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.81% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 995.50 | $ | 1,017.34 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 7.85 | $ | 7.93 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.56% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 999.40 | $ | 1,021.12 | |
Expenses Paid During Period* | $ | 4.08 | $ | 4.13 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.81% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell Short Duration Bond Fund 441
Russell Investment Company
Russell Short Duration Bond Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 1,000.10 | $ | 1,022.38 | ||
Expenses Paid During Period* | $ | 2.82 | $ | 2.85 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.56% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class Y | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 1,001.10 | $ | 1,022.79 | ||
Expenses Paid During Period* | $ | 2.42 | $ | 2.45 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.48% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
442 Russell Short Duration Bond Fund
Russell Investment Company
Russell Short Duration Bond Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Long-Term Investments - 94.3% | Series 2013-1 Class B1 | ||||||
Asset-Backed Securities - 10.4% | 1.169% due 11/25/33 (Ê)(Þ) | 2,683 | 2,494 | ||||
Ally Auto Receivables Trust | Equity One Mortgage Pass-Through Trust | ||||||
Series 2003-4 Class M1 | |||||||
Series 2014-2 Class A2 | 5.243% due 10/25/34 | 233 | 225 | ||||
0.680% due 07/17/17 | 1,280 | 1,280 | |||||
Ally Master Owner Trust | Exeter Automobile Receivables Trust | ||||||
Series 2013-1A Class A | |||||||
Series 2013-1 Class A2 | 1.290% due 10/16/17 (Þ) | 1 | 1 | ||||
1.000% due 02/15/18 | 615 | 615 | |||||
AmeriCredit Automobile Receivables | Series 2014-1A Class A | ||||||
Trust | 1.290% due 05/15/18 (Þ) | 564 | 563 | ||||
Series 2013-1 Class B | Series 2014-3A Class A | ||||||
1.070% due 03/08/18 | 2,920 | 2,919 | 1.320% due 01/15/19 (Þ) | 2,120 | 2,113 | ||
Series 2013-2 Class B | Federal Home Loan Mortgage Corp. | ||||||
1.190% due 05/08/18 | 2,325 | 2,322 | Structured Pass Through Securities | ||||
Series 2000-30 Class A5 | |||||||
Series 2015-1 Class A2A | 7.602% due 12/25/30 | 2,028 | 2,126 | ||||
0.770% due 04/09/18 | 874 | 873 | |||||
Series 2015-2 Class A2A | Ford Credit Auto Owner Trust | ||||||
0.830% due 09/10/18 | 3,126 | 3,125 | Series 2012-B Class A4 | ||||
1.000% due 09/15/17 | 385 | 386 | |||||
ARI Fleet Lease Trust | |||||||
Series 2013-A Class A3 | Series 2015-A Class A3 | ||||||
0.920% due 07/15/21 (Þ) | 2,088 | 2,087 | 1.280% due 09/15/19 | 1,135 | 1,136 | ||
Bank of The West Auto Trust | GM Financial Automobile Leasing Trust | ||||||
Series 2015-3 Class A3 | |||||||
Series 2014-1 Class A3 | 1.690% due 03/20/19 | 1,950 | 1,946 | ||||
1.090% due 03/15/19 (Þ) | 2,175 | 2,172 | |||||
Series 2015-1 Class A3 | Hertz Fleet Lease Funding, LP | ||||||
1.310% due 10/15/19 (Þ) | 2,545 | 2,539 | Series 2013-3 Class C | ||||
1.616% due 12/10/27 (Ê)(Þ) | 2,240 | 2,240 | |||||
Capital Auto Receivables Asset Trust | |||||||
Series 2013-1 Class B | Series 2014-1 Class C | ||||||
1.290% due 04/20/18 | 1,665 | 1,663 | 1.316% due 04/10/28 (Ê)(Þ) | 1,475 | 1,471 | ||
Series 2014-1 Class A2 | Honda Auto Receivables Owner Trust | ||||||
0.960% due 04/20/17 | 974 | 974 | Series 2012-4 Class A4 | ||||
0.660% due 12/18/18 | 1,500 | 1,500 | |||||
CarFinance Capital Auto Trust | |||||||
Series 2013-2A Class A | Series 2014-4 Class A3 | ||||||
1.750% due 11/15/17 (Þ) | 206 | 206 | 0.990% due 09/17/18 | 2,950 | 2,947 | ||
Series 2014-1A Class A | Huntington Auto Trust | ||||||
1.460% due 12/17/18 (Þ) | 609 | 610 | Series 2015-1 Class A3 | ||||
1.240% due 09/16/19 | 1,920 | 1,915 | |||||
CCG Receivables Trust | |||||||
Series 2013-1 Class A2 | Hyundai Auto Receivables Trust | ||||||
1.050% due 08/14/20 (Þ) | 169 | 169 | Series 2015-A Class A2 | ||||
0.680% due 10/16/17 | 896 | 896 | |||||
Series 2014-1 Class A2 | |||||||
1.060% due 11/15/21 (Þ) | 816 | 814 | IndyMac Home Equity Loan Trust | ||||
Series 2004-2 Class A | |||||||
Chase Education Loan Trust | 0.290% due 09/28/36 (Ê) | 228 | 226 | ||||
Series 2007-A Class B | |||||||
0.475% due 06/28/40 (Ê) | 2,610 | 2,105 | JCP&L Transition Funding LLC | ||||
Series 2002-A Class A4 | |||||||
Chesapeake Funding LLC | 6.160% due 06/05/19 | 89 | 93 | ||||
Series 2012-1A Class A | |||||||
0.944% due 11/07/23 (Ê)(Þ) | 61 | 61 | John Deere Owner Trust | ||||
Series 2015-B Class A3 | |||||||
Series 2012-2A Class A | 1.440% due 10/15/19 | 1,440 | 1,441 | ||||
0.649% due 05/07/24 (Ê)(Þ) | 2,129 | 2,128 | MSCC Heloc Trust | ||||
Series 2012-2A Class C | Series 2007-1 Class A | ||||||
1.749% due 05/07/24 (Ê)(Þ) | 2,695 | 2,695 | 0.270% due 12/25/31 (Ê) | 728 | 701 | ||
Countrywide Asset-Backed Certificates | Nissan Auto Receivables Owner Trust | ||||||
Series 2006-S10 Class A2 | Series 2014-A Class A3 | ||||||
0.407% due 10/25/36 (Ê) | 618 | 612 | 0.720% due 08/15/18 | 1,995 | 1,994 | ||
Series 2007-4 Class A2 | Prestige Auto Receivables Trust | ||||||
5.530% due 04/25/47 | 165 | 178 | Series 2014-1A Class A3 | ||||
CPS Auto Receivables Trust | 1.520% due 04/15/20 (Þ) | 1,300 | 1,299 | ||||
Series 2014-D Class A | Renaissance Home Equity Loan Trust | ||||||
1.490% due 04/15/19 (Þ) | 2,331 | 2,321 | Series 2005-4 Class A3 | ||||
Drive Auto Receivables Trust | 5.565% due 02/25/36 | 66 | 66 | ||||
Series 2015-DA Class A2B | Santander Drive Auto Receivables Trust | ||||||
1.066% due 06/15/18 (Ê)(Þ) | 1,500 | 1,500 | Series 2012-5 Class C | ||||
Education Loan Asset-Backed Trust I | 2.700% due 08/15/18 | 4,484 | 4,515 |
See accompanying notes which are an integral part of the financial statements.
Russell Short Duration Bond Fund 443
Russell Investment Company
Russell Short Duration Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2013-1 Class B | American Honda Finance Corp. | ||||||
1.160% due 01/15/19 | 1,198 | 1,198 | 1.500% due 09/11/17 (Þ) | 1,400 | 1,405 | ||
Series 2013-2 Class B | 1.500% due 03/13/18 | 725 | 724 | ||||
1.330% due 03/15/18 | 3,062 | 3,064 | American International Group, Inc. | ||||
Series 2014-1 Class A3 | 5.850% due 01/16/18 | 2,830 | 3,085 | ||||
0.870% due 01/16/18 | 1,404 | 1,404 | American Tower Trust I | ||||
Series 2014-4 Class B | Series 2013-13 Class 1A | ||||||
1.820% due 05/15/19 | 1,020 | 1,023 | 1.551% due 03/15/18 (Þ) | 1,165 | 1,152 | ||
Series 2015-4 Class A3 | Anheuser-Busch InBev Worldwide, Inc. | ||||||
1.580% due 09/16/19 | 710 | 708 | 1.375% due 07/15/17 | 1,487 | 1,482 | ||
SLM Private Education Loan Trust | 7.750% due 01/15/19 | 735 | 858 | ||||
Series 2010-A Class 2A | AT&T, Inc. | ||||||
3.436% due 05/16/44 (Ê)(Þ) | 2,140 | 2,226 | 1.700% due 06/01/17 | 1,485 | 1,492 | ||
Series 2011-A Class A1 | 5.500% due 02/01/18 | 3,262 | 3,530 | ||||
1.167% due 10/15/24 (Ê)(Þ) | 605 | 605 | Bank of America Corp. | ||||
Series 2012-B Class A1 | 1.700% due 08/25/17 | 2,560 | 2,568 | ||||
1.267% due 12/15/21 (Ê)(Þ) | 11 | 11 | 2.000% due 01/11/18 | 2,230 | 2,240 | ||
SLM Student Loan Trust | Bank of New York Mellon Corp. (The) | ||||||
Series 2014-A Class A1 | Series G | ||||||
0.761% due 07/15/22 (Ê)(Þ) | 1,614 | 1,609 | 2.200% due 05/15/19 | 575 | 583 | ||
SMART Trust | BB&T Corp. | ||||||
Series 2012-1USA Class A4A | 2.250% due 02/01/19 | 1,070 | 1,081 | ||||
2.010% due 12/14/17 (Þ) | 2,757 | 2,779 | Bear Stearns Cos. LLC (The) | ||||
SMB Private Education Loan Trust | 5.550% due 01/22/17 | 2,920 | 3,059 | ||||
Series 2015-A Class A3 | Biogen, Inc. | ||||||
1.697% due 02/17/32 (Ê)(Þ) | 1,995 | 1,954 | 2.900% due 09/15/20 | 1,690 | 1,705 | ||
SoFi Professional Loan Program LLC | Capital One Bank USA NA | ||||||
Series 2014-B Class A2 | Series BKNT | ||||||
2.550% due 08/27/29 (Þ) | 1,516 | 1,520 | 1.300% due 06/05/17 | 950 | 944 | ||
SunTrust Auto Receivables Trust | Capital One Financial Corp. | ||||||
Series 2015-1A Class A2 | 2.450% due 04/24/19 | 1,530 | 1,531 | ||||
0.990% due 06/15/18 (Þ) | 2,325 | 2,327 | Capital One NA | ||||
Tidewater Auto Receivables Trust | Series BKNT | ||||||
Series 2014-AA Class A3 | 1.650% due 02/05/18 | 1,380 | 1,372 | ||||
1.400% due 07/15/18 (Þ) | 2,282 | 2,284 | Cardinal Health, Inc. | ||||
Toyota Auto Receivables Owner Trust | 1.950% due 06/15/18 | 1,465 | 1,472 | ||||
Series 2014-B Class A2 | Caterpillar Financial Services Corp. | ||||||
0.400% due 12/15/16 | 1,014 | 1,014 | Series GMTN | ||||
Series 2015-A Class A2 | 1.700% due 06/16/18 | 1,300 | 1,306 | ||||
0.710% due 07/17/17 | 800 | 800 | CCO Safari II LLC | ||||
Westlake Automobile Receivables Trust | 4.464% due 07/23/22 (Þ) | 1,080 | 1,096 | ||||
Series 2014-1A Class A2 | Chevron Corp. | ||||||
0.700% due 05/15/17 (Þ) | 486 | 486 | 1.718% due 06/24/18 | 615 | 621 | ||
91,274 | Citigroup, Inc. | ||||||
Corporate Bonds and Notes - 19.1% | 4.450% due 01/10/17 | 2,260 | 2,345 | ||||
AbbVie, Inc. | 1.850% due 11/24/17 | 2,890 | 2,899 | ||||
1.750% due 11/06/17 | 1,878 | 1,896 | Compass Bank | ||||
2.500% due 05/14/20 | 1,260 | 1,246 | Series BKNT | ||||
Aflac, Inc. | 6.400% due 10/01/17 | 1,615 | 1,728 | ||||
2.650% due 02/15/17 | 1,120 | 1,141 | ConocoPhillips Co. | ||||
Air Lease Corp. | 1.500% due 05/15/18 | 1,115 | 1,114 | ||||
2.125% due 01/15/18 | 1,095 | 1,082 | Coventry Health Care, Inc. | ||||
Albemarle Corp. | 5.950% due 03/15/17 | 775 | 822 | ||||
Series 5YR | Crown Castle Towers LLC | ||||||
3.000% due 12/01/19 | 845 | 844 | 6.113% due 01/15/20 (Þ) | 1,410 | 1,557 | ||
Ally Financial, Inc. | CVS Health Corp. | ||||||
5.500% due 02/15/17 | 2,595 | 2,692 | 2.800% due 07/20/20 | 1,335 | 1,358 | ||
Amazon.com, Inc. | Daimler Finance NA LLC | ||||||
2.600% due 12/05/19 | 2,210 | 2,263 | 1.375% due 08/01/17 (Þ) | 1,165 | 1,157 | ||
American Express Co. | DCP Midstream Operating, LP | ||||||
6.150% due 08/28/17 | 1,200 | 1,297 | 2.500% due 12/01/17 | 2,100 | 1,957 | ||
American Express Credit Corp. | Devon Energy Corp. | ||||||
1.125% due 06/05/17 | 2,335 | 2,327 | 2.250% due 12/15/18 | 590 | 590 |
See accompanying notes which are an integral part of the financial statements.
444 Russell Short Duration Bond Fund
Russell Investment Company
Russell Short Duration Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Ecolab, Inc. | 3.300% due 08/14/20 (Þ) | 805 | 819 | ||||
4.350% due 12/08/21 | 2,075 | 2,242 | Mead Johnson Nutrition Co. | ||||
EnLink Midstream Partners, LP | 3.000% due 11/15/20 | 1,955 | 1,963 | ||||
2.700% due 04/01/19 | 2,325 | 2,274 | Medtronic, Inc. | ||||
ERAC USA Finance LLC | Series WI | ||||||
2.800% due 11/01/18 (Þ) | 2,075 | 2,115 | 2.500% due 03/15/20 | 1,525 | 1,549 | ||
Exelon Corp. | Merck & Co., Inc. | ||||||
2.850% due 06/15/20 | 1,120 | 1,121 | 3.875% due 01/15/21 | 835 | 900 | ||
Ford Motor Credit Co. LLC | MetLife, Inc. | ||||||
8.000% due 12/15/16 | 1,000 | 1,070 | 1.756% due 12/15/17 | 1,130 | 1,136 | ||
4.250% due 02/03/17 | 2,460 | 2,532 | Microsoft Corp. | ||||
1.724% due 12/06/17 | 400 | 397 | 2.650% due 11/03/22 | 1,205 | 1,212 | ||
Forest Laboratories LLC | Morgan Stanley | ||||||
4.875% due 02/15/21 (Þ) | 1,095 | 1,185 | 2.200% due 12/07/18 | 2,795 | 2,816 | ||
Freeport-McMoRan, Inc. | 2.650% due 01/27/20 | 790 | 795 | ||||
4.000% due 11/14/21 | 580 | 487 | 2.800% due 06/16/20 | 1,160 | 1,170 | ||
General Electric Co. | MUFG Americas Holdings Corp. | ||||||
5.250% due 12/06/17 | 1,385 | 1,495 | 2.250% due 02/10/20 | 1,040 | 1,032 | ||
General Mills, Inc. | Mylan, Inc. | ||||||
1.400% due 10/20/17 | 2,670 | 2,665 | 2.550% due 03/28/19 | 985 | 965 | ||
5.650% due 02/15/19 | 985 | 1,097 | New York Life Global Funding | ||||
General Motors Financial Co., Inc. | 1.450% due 12/15/17 (Þ) | 1,630 | 1,633 | ||||
2.400% due 04/10/18 | 1,280 | 1,268 | PepsiCo, Inc. | ||||
Gilead Sciences, Inc. | 5.000% due 06/01/18 | 1,050 | 1,146 | ||||
2.550% due 09/01/20 | 1,665 | 1,681 | Pharmaceutical Product Development | ||||
Goldman Sachs Group, Inc. (The) | LLC | ||||||
2.625% due 01/31/19 | 875 | 890 | 4.250% due 08/18/22 (Ê) | 998 | 982 | ||
2.600% due 04/23/20 | 2,220 | 2,229 | Phillips 66 Partners, LP | ||||
Hewlett Packard Enterprise Co. | 2.646% due 02/15/20 | 1,175 | 1,147 | ||||
2.450% due 10/05/17 (Å) | 2,245 | 2,251 | PNC Bank NA | ||||
4.400% due 10/15/22 (Å) | 5,005 | 5,047 | Series BKNT | ||||
HSBC USA, Inc. | 1.850% due 07/20/18 | 1,360 | 1,363 | ||||
2.000% due 08/07/18 | 955 | 956 | Pricoa Global Funding I | ||||
Intel Corp. | 1.350% due 08/18/17 (Þ) | 3,600 | 3,601 | ||||
1.350% due 12/15/17 | 685 | 688 | Principal Life Global Funding II | ||||
International Bank for Reconstruction & | 1.500% due 09/11/17 (Þ) | 1,175 | 1,177 | ||||
Development | Private Export Funding Corp. | ||||||
Series GDIF | Series FF | ||||||
0.625% due 05/02/17 | 1,510 | 1,502 | 1.375% due 02/15/17 | 1,460 | 1,467 | ||
International Business Machines Corp. | PSEG Power LLC | ||||||
5.700% due 09/14/17 | 560 | 607 | 2.450% due 11/15/18 | 1,150 | 1,155 | ||
International Lease Finance Corp. | Quebecor World Capital Corp. | ||||||
3.875% due 04/15/18 | 800 | 812 | 4.875% due 01/02/49 (Þ)(Ø) | 205 | — | ||
IPALCO Enterprises, Inc. | 6.125% due 11/15/49 (Ø) | 70 | — | ||||
5.000% due 05/01/18 | 300 | 317 | QVC, Inc. | ||||
JPMorgan Chase & Co. | 3.125% due 04/01/19 | 2,925 | 2,904 | ||||
1.350% due 02/15/17 | 1,740 | 1,743 | Reynolds American, Inc. | ||||
1.625% due 05/15/18 | 700 | 698 | 3.250% due 06/12/20 | 2,720 | 2,787 | ||
Kellogg Co. | Samsung Electronics America, Inc. | ||||||
1.875% due 11/17/16 | 985 | 993 | 1.750% due 04/10/17 (Þ) | 895 | 895 | ||
Kinder Morgan Energy Partners, LP | SBA Tower Trust | ||||||
3.500% due 03/01/21 | 760 | 720 | Series 2014-1A Class C | ||||
Kraft Heinz Foods Co. | 2.898% due 10/15/19 (Þ) | 1,415 | 1,407 | ||||
2.800% due 07/02/20 (Þ) | 1,610 | 1,616 | Southern Co. (The) | ||||
4.875% due 02/15/25 (Å) | 1,955 | 2,102 | 2.150% due 09/01/19 | 520 | 513 | ||
Lehman Brothers Holdings Capital Trust | Southern Power Co. | ||||||
VII | Series 15A | ||||||
5.857% due 11/29/49 (ƒ)(Ø) | 270 | — | 1.500% due 06/01/18 | 1,075 | 1,059 | ||
Liberty Property, LP | Sysco Corp. | ||||||
5.500% due 12/15/16 | 880 | 917 | 2.600% due 10/01/20 | 1,435 | 1,450 | ||
Marathon Oil Corp. | Thermo Fisher Scientific, Inc. | ||||||
2.700% due 06/01/20 | 985 | 956 | 1.300% due 02/01/17 | 1,040 | 1,039 | ||
McGraw Hill Financial, Inc. | Toyota Motor Credit Corp. |
See accompanying notes which are an integral part of the financial statements.
Russell Short Duration Bond Fund 445
Russell Investment Company
Russell Short Duration Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series GMTN | Deutsche Telekom International Finance | ||||||
0.781% due 07/13/18 (Ê) | 3,075 | 3,076 | BV | ||||
UnitedHealth Group, Inc. | 2.250% due 03/06/17 (Þ) | 2,295 | 2,316 | ||||
1.900% due 07/16/18 | 1,155 | 1,169 | Ensco PLC | ||||
2.700% due 07/15/20 | 865 | 883 | 4.700% due 03/15/21 | 585 | 526 | ||
Verizon Communications, Inc. | Expro Financial Services SARL Term | ||||||
2.086% due 09/14/18 (Ê) | 100 | 103 | Loan B | ||||
3.650% due 09/14/18 | 365 | 385 | 5.750% due 09/02/21 (Ê) | 792 | 651 | ||
Hutchison Whampoa International 11, | |||||||
4.500% due 09/15/20 | 3,715 | 4,028 | Ltd. | ||||
Volkswagen Group of America Finance | 3.500% due 01/13/17 (Þ) | 940 | 962 | ||||
LLC | |||||||
0.773% due 11/20/17 (Å)(Ê) | 890 | 850 | ING Bank NV | ||||
3.750% due 03/07/17 (Þ) | 2,220 | 2,288 | |||||
Wachovia Corp. | |||||||
5.750% due 06/15/17 | 1,410 | 1,509 | Intesa Sanpaolo SpA | ||||
2.375% due 01/13/17 | 2,875 | 2,890 | |||||
Williams Partners, LP | Mallinckrodt International Finance SA | ||||||
4.125% due 11/15/20 | 1,262 | 1,260 | Covenant-Lite Term Loan B | ||||
XTO Energy, Inc. | 3.250% due 03/19/21 | 1,238 | 1,174 | ||||
6.250% due 08/01/17 | 900 | 981 | Mood Media Corp. Term Loan | ||||
ZFS Finance USA Trust II | 7.000% due 05/01/19 (Ê) | 985 | 958 | ||||
6.450% due 12/15/65 (Þ) | 2,135 | 2,166 | Noble Holding International, Ltd. | ||||
ZFS Finance USA Trust V | 2.500% due 03/15/17 | 610 | 573 | ||||
6.500% due 05/09/37 (Þ) | 1,035 | 1,058 | 4.000% due 03/16/18 | 595 | 547 | ||
167,844 | Rio Tinto Finance USA PLC | ||||||
International Debt - 5.4% | 2.250% due 12/14/18 | 770 | 768 | ||||
AP NMT Acquisition BV 1st Lien Term | Royal Bank of Scotland Group PLC | ||||||
Loan | 1.875% due 03/31/17 | 3,075 | 3,064 | ||||
6.750% due 08/13/21 (Ê) | 495 | 471 | 4.700% due 07/03/18 | 1,855 | 1,927 | ||
Arbor Realty Collateralized Loan | |||||||
Obligation, Ltd. | Shell International Finance BV | ||||||
2.125% due 05/11/20 | 2,050 | 2,054 | |||||
Series 2014-1A Class A | SkillsSoft Corp. Covenant-Lite Term | ||||||
1.917% due 05/15/24 (Ê)(Þ) | 1,915 | 1,912 | |||||
Series 2014-1A Class B | 5.750% Loan due 04/28/21 (Ê) | 741 | 626 | ||||
4.667% due 05/15/24 (Ê)(Þ) | 1,240 | 1,240 | |||||
ArcelorMittal | Sky 6.100% PLC due 02/15/18 (Þ) | 875 | 952 | ||||
6.125% due 06/01/18 | 660 | 662 | |||||
Avago Technologies Cayman, Ltd. | SMART Trust | ||||||
Covenant-Lite Term Loan B | Series 2015-3US Class A3A | ||||||
3.750% due 05/06/21 | 1,397 | 1,397 | 1.660% due 08/14/19 | 865 | 864 | ||
Bank of Nova Scotia (The) | Teck Resources, Ltd. | ||||||
2.350% due 10/21/20 | 1,040 | 1,034 | 3.000% due 03/01/19 | 180 | 138 | ||
Barclays PLC | 4.500% due 01/15/21 | 445 | 302 | ||||
2.000% due 03/16/18 | 1,155 | 1,153 | Thomson Reuters Corp. | ||||
Braskem Finance, Ltd. | 6.500% due 07/15/18 | 685 | 764 | ||||
7.000% due 05/07/20 (Þ) | 1,200 | 1,206 | Trade MAPS 1, Ltd. | ||||
British Telecommunications PLC | Series 2013-1A Class A | ||||||
5.950% due 01/15/18 | 545 | 595 | 0.866% due 12/10/18 (Ê)(Þ) | 2,190 | 2,185 | ||
Burger King | Transocean, Inc. | ||||||
3.750% due 12/12/21 (Ê) | 1,325 | 1,327 | 6.500% due 11/15/20 | 670 | 536 | ||
Canadian Imperial Bank of Commerce/ | UBS AG | ||||||
Canada | Series BKNT | ||||||
1.550% due 01/23/18 | 1,499 | 1,500 | 5.875% due 12/20/17 | 1,040 | 1,127 | ||
Credit Suisse AG NY | Vale Overseas, Ltd. | ||||||
Series GMTN | 4.625% due 09/15/20 | 540 | 525 | ||||
1.375% due 05/26/17 | 2,320 | 2,318 | Virgin Media Investment Holdings, Ltd. | ||||
Delta 2 Lux Sarl Covenant-Lite Lien | Term Loan F | ||||||
Term Loan B | 3.500% due 06/30/23 (Ê) | 505 | 502 | ||||
7.750% due 07/29/22 (Ê) | 250 | 238 | 47,778 | ||||
Delta 2 Lux Sarl Covenant-Lite Term | Loan Agreements - 12.7% | ||||||
Loan B3 | ABG Intermediate Holdings 2, LLC 1st | ||||||
4.750% due 07/30/21 (Ê) | 1,250 | 1,224 | Lien Term Loan | ||||
Deutsche Bank AG | 5.500% due 05/27/21 (Ê) | 465 | 462 | ||||
6.000% due 09/01/17 | 1,290 | 1,386 | ABG Intermediate Holdings 2, LLC | ||||
1.875% due 02/13/18 | 900 | 896 | Incremental Covenant-Lite Term Loan | ||||
1.000% due 05/27/21 (Ê)(v) | 35 | 34 |
See accompanying notes which are an integral part of the financial statements.
446 Russell Short Duration Bond Fund
Russell Investment Company
Russell Short Duration Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Ability Network, Inc. 1st Lien Term Loan | 4.000% due 01/27/21 (Ê) | 1,119 | 1,115 | ||||
6.000% due 05/14/21 (Ê) | 988 | 983 | Cincinnati Bell, Inc. 1st Lien Term | ||||
Accudyne Industries Borrower SCA Term | Loan B | ||||||
Loan | 4.000% due 09/10/20 (Ê) | 239 | 236 | ||||
4.000% due 12/13/19 (Ê) | 947 | 865 | Commercial Barge Line Co. 2nd Lien | ||||
Affinion Group, Inc. Term Loan B | Term Loan | ||||||
6.750% due 04/30/18 (Ê) | 985 | 944 | 10.750% due 03/22/20 (Ê) | 1,000 | 1,015 | ||
Albertson's Holdings LLC Covenant-Lite | Communications Sales & Leasing, Inc. | ||||||
Term Loan B4 | Covenant-Lite Term Loan B | ||||||
5.500% due 08/25/21 (Ê) | 1,241 | 1,240 | 5.000% due 10/16/22 (Ê) | 1,496 | 1,410 | ||
Alvogen Pharmaceutical US, Inc. Term | Compuware Corp. 1st Lien Term Loan B1 | ||||||
Loan | 6.250% due 12/15/19 (Ê) | 962 | 917 | ||||
6.000% due 04/02/22 (Ê) | 750 | 735 | Consolidated Communications, Inc. Term | ||||
American Airlines, Inc. Term Loan | Loan B | ||||||
3.250% due 05/21/20 (Ê) | 1,490 | 1,475 | 4.250% due 12/23/20 (Ê) | 985 | 980 | ||
American Pacific Corp. 1st Lien Term | ConvergeOne Holdings Corp. Covenant- | ||||||
Loan B | Lite 1st Lien Term Loan | ||||||
7.000% due 02/27/19 (Ê) | 625 | 619 | 6.000% due 06/17/20 (Ê) | 988 | 978 | ||
Ancestry.com Inc. Term Loan B | CPI Card Group, Inc. Covenant-Lite | ||||||
5.000% due 08/17/22 | 1,980 | 1,975 | Term Loan B | ||||
AP Gaming I LLC 1st Lien Term Loan B | 6.750% due 08/17/22 (Ê) | 741 | 738 | ||||
9.250% due 12/20/20 (Ê) | 497 | 485 | Creative Artists Agency LLC Covenant- | ||||
Arctic Glacier USA, Inc. Covenant-Lite | Lite Term Loan B | ||||||
Term Loan | 5.500% due 12/12/21 (Ê) | 994 | 994 | ||||
6.000% due 05/13/19 (Ê) | 497 | 470 | Crowne Group LLC 1st Lien Term Loan | ||||
AssuredPartners Capital, Inc. 1st Lien | 6.000% due 09/29/20 | 495 | 491 | ||||
Term Loan | CSC Holdings LLC Term Loan | ||||||
5.750% due 10/06/22 | 357 | 357 | 5.000% due 09/21/22 | 500 | 501 | ||
Asurion LLC Covenant-Lite 2nd Lien | Dell International LLC Term Loan B2 | ||||||
Term Loan | 4.000% due 04/29/20 (Ê) | 498 | 497 | ||||
8.500% due 03/03/21 (Ê) | 500 | 449 | Delta Air Lines, Inc. Term Loan B | ||||
Asurion LLC Covenant-Lite Term Loan | 3.250% due 08/12/22 | 1,000 | 1,000 | ||||
B1 | Dollar Tree, Inc. 1st Lien Term Loan B1 | ||||||
5.000% due 05/24/19 (Ê) | 486 | 463 | 3.500% due 03/09/22 (Ê) | 499 | 499 | ||
Asurion LLC Covenant-Lite Term Loan | Eastman Kodak Co.1st Lien Term Loan | ||||||
B2 | 7.250% due 09/03/19 (Ê) | 985 | 936 | ||||
4.250% due 07/08/20 (Ê) | 985 | 916 | Eco Services Operations LLC 1st Lien | ||||
Asurion LLC Covenant-Lite Term Loan | Term Loan B | ||||||
B4 | 4.750% due 12/01/21 (Ê) | 496 | 486 | ||||
5.000% due 08/04/22 (Ê) | 499 | 471 | Emerald Performance Materials LLC | ||||
Avaya, Inc. Term Loan | Covenant-Lite 2nd Lien Term Loan | ||||||
6.250% due 05/29/20 (Ê) | 994 | 761 | 7.750% due 08/01/22 (Ê) | 250 | 246 | ||
B&G Foods Inc. Term Loan B | Emerald US, Inc. Term Loan B1 | ||||||
1.000% due 10/07/22 (v) | 1,000 | 1,000 | 5.000% due 05/09/21 | 1,000 | 995 | ||
BMC Software Finance, Inc. Term Loan | EMI Music Publishing, Ltd. Term Loan | ||||||
5.000% due 09/10/20 (Ê) | 1,000 | 899 | 4.000% due 07/03/22 | 1,000 | 998 | ||
BWAY Holding Co. Covenant-Lite Term | EnergySolutions LLC Term Loan | ||||||
Loan B | 6.750% due 05/29/20 (Ê) | 938 | 910 | ||||
5.500% due 08/14/20 (Ê) | 1,481 | 1,484 | |||||
Camping World, Inc. Covenant-Lite 1st | Entegris, Inc. 1st Lien Term Loan B | ||||||
Lien Term Loan B | 3.500% due 04/30/21 (Ê) | 356 | 355 | ||||
5.250% due 02/20/20 (Ê) | 943 | 939 | First Data Corp. Term Loan | ||||
Cengage Learning Acquisitions, Inc. | 3.947% due 06/23/22 | 1,000 | 997 | ||||
Covenant-Lite 1st Lien Term Loan | Fitness International LLC Covenant-Lite | ||||||
7.000% due 03/31/20 (Ê) | 960 | 953 | Term Loan B | ||||
Checkout Holding Corp. Covenant-Lite | 5.500% due 07/01/20 (Ê) | 494 | 467 | ||||
1st Lien Term Loan B | FPC Holdings, Inc. 1st Lien Term Loan | ||||||
4.500% due 04/09/21 (Ê) | 988 | 854 | 5.250% due 11/27/19 (Ê) | 497 | 471 | ||
Chrysler Group LLC 1st Lien Term | FULLBEAUTY Brands, Inc. 1st Lien | ||||||
Loan B | Term Loan | ||||||
3.250% due 12/31/18 (Ê) | 1,974 | 1,966 | 5.750% due 09/22/22 | 500 | 474 | ||
CHS/Community Health Systems, Inc. | GCI Holdings, Inc. Term B Loan | ||||||
1st Lien Term Loan G | 4.000% due 02/02/22 (Ê) | 995 | 992 | ||||
3.750% due 12/31/19 (Ê) | 608 | 605 | GENEX Holdings, Inc. 1st Lien Term | ||||
CHS/Community Health Systems, Inc. | Loan | ||||||
1st Lien Term Loan H | 5.250% due 05/30/21 (Ê) | 990 | 981 |
See accompanying notes which are an integral part of the financial statements.
Russell Short Duration Bond Fund 447
Russell Investment Company
Russell Short Duration Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
GENEX Holdings, Inc. 2nd Lien Term | Millennium Laboratories, Inc. Term | ||||||
Loan | Loan B | ||||||
8.750% due 05/30/22 (Ê) | 250 | 239 | 5.250% due 04/16/21 (Ê) | 1,486 | 524 | ||
Getty Images, Inc. Covenant-Lite Term | Minerals Technologies, Inc. Term Loan B | ||||||
Loan B | 3.750% due 05/09/21 (Ê) | 664 | 660 | ||||
4.750% due 10/18/19 (Ê) | 990 | 661 | MRI Software LLC Term Loan | ||||
Global Healthcare Exchange LLC Term | 5.250% due 06/18/21 | 499 | 497 | ||||
Loan B | MSC.Software Corp. 1st Lien Term Loan | ||||||
5.500% due 08/05/22 | 1,000 | 996 | 5.000% due 05/29/20 (Ê) | 988 | 970 | ||
Go Daddy Operating Co. LLC Term Loan | Navistar, Inc. 1st Lien Term Loan B | ||||||
4.250% due 05/13/21 (Ê) | 988 | 989 | 6.500% due 08/07/20 (Ê) | 500 | 470 | ||
GOBP Holdings, Inc. Covenant-Lite | |||||||
Term Loan B | Novitex Acquisition LLC Term Loan B2 | ||||||
4.750% due 10/21/21 (Ê) | 993 | 983 | 7.500% due 07/07/20 (Ê) | 247 | 232 | ||
nTelos, Inc. Term Loan B | |||||||
Gray Television, Inc. Term Loan B | 5.750% due 11/09/19 (Ê) | 611 | 606 | ||||
3.750% due 06/13/21 (Ê) | 890 | 887 | Numericable US LLC 1st Lien Term | ||||
GTCR Valor Cos., Inc. 1st Lien Term | |||||||
Loan | Loan B1 | ||||||
4.500% due 05/21/20 (Ê) | 798 | 787 | |||||
6.000% due 05/30/21 (Ê) | 990 | 965 | Numericable US LLC 1st Lien Term | ||||
Harland Clarke Holdings Corp. | |||||||
Covenant-Lite Term Loan B4 | Loan B2 | ||||||
6.000% due 08/04/19 (Ê) | 1,443 | 1,435 | 4.500% due 05/21/20 (Ê) | 691 | 681 | ||
Hawaiian Telcom Communications, Inc. | NVA Holdings, Inc. 1st Lien Term Loan | ||||||
Term Loan B | 4.750% due 08/14/21 (Ê) | 1,489 | 1,487 | ||||
5.000% due 06/06/19 (Ê) | 1,241 | 1,236 | NVA Holdings, Inc. 2nd Lien Term Loan | ||||
Hertz Corp. Term Loan B1 | 8.000% due 08/14/22 (Ê) | 250 | 247 | ||||
3.750% due 03/11/18 (Ê) | 985 | 984 | Ocwen Loan Servicing LLC Term Loan B | ||||
Hilton Worldwide Finance LLC Term | 5.500% due 02/15/18 (Ê) | 1,037 | 1,038 | ||||
Loan | P2 Newco Acquisition Inc. Covenant- | ||||||
3.500% due 10/25/20 (Ê) | 251 | 251 | Lite 2nd Lien Term Loan | ||||
Indigo Merger Sub I, Inc. 1st Lien Term | 9.500% due 10/22/21 (Ê) | 250 | 247 | ||||
Loan | PetSmart, Inc. Term Loan B | ||||||
4.750% due 07/08/21 (Ê) | 988 | 977 | 4.250% due 03/10/22 (Ê) | 998 | 997 | ||
Interactive Data Corp. Term Loan | PGX Holdings, Inc. Covenant-Lite 1st | ||||||
4.750% due 05/02/21 (Ê) | 1,484 | 1,483 | Lien Term Loan | ||||
Intrawest Operations Group, LLC Term | 5.750% due 08/21/20 (Ê) | 479 | 476 | ||||
Loan | Pinnacle Foods Finance LLC Term Loan | ||||||
4.750% due 12/09/20 (Ê) | 737 | 737 | H | ||||
IPC Corp. 2nd Lien Term Loan | 3.000% due 04/29/20 (Ê) | 997 | 994 | ||||
10.500% due 02/06/22 (Ê) | 500 | 463 | PowerTeam Services, LLC Covenant-Lite | ||||
2nd Lien Term Loan | |||||||
Italics Merger Sub, Inc. Term Loan | 8.250% due 11/06/20 (Ê) | 500 | 475 | ||||
4.500% due 05/29/22 | 1,000 | 986 | Pre-Paid Legal Services, Inc. 2nd Lien | ||||
J Crew Group, Inc. Covenant-Lite Term | |||||||
Loan B | Term Loan | ||||||
10.250% due 07/01/20 (Ê) | 500 | 493 | |||||
4.000% due 03/05/21 (Ê) | 497 | 365 | Prolampac Intermediate, Inc. 1st Lien | ||||
Las Vegas Sands LLC 1st Lien Term | |||||||
Loan B | Term Loan | ||||||
3.250% due 12/19/20 (Ê) | 997 | 983 | 5.000% due 06/30/22 (Ê) | 1,000 | 990 | ||
Quincy Newspapers, Inc. Term Loan B | |||||||
Level 3 Financing, Inc. Term Loan B2 | 1.000% due 10/13/22 (v) | 1,000 | 990 | ||||
3.500% due 05/31/22 (Ê) | 750 | 748 | |||||
Renaissance Learning, Inc. Term Loan | |||||||
LTS Buyer LLC Term Loan | 4.500% due 04/09/21 (Ê) | 985 | 951 | ||||
4.000% due 04/13/20 (Ê) | 997 | 981 | RentPath, Inc. Covenant-Lite 1st Lien | ||||
MacDermid, Inc. 1st Lien Term Loan | Term Loan | ||||||
4.500% due 06/07/20 (Ê) | 2,004 | 1,940 | 6.250% due 12/17/21 (Ê) | 1,985 | 1,760 | ||
MCC Iowa LLC Term Loan H | RHP Hotel Properties LP Term Loan B | ||||||
3.250% due 01/29/21 (Ê) | 995 | 978 | 3.500% due 01/15/21 (Ê) | 988 | 988 | ||
Media General, Inc. 1st Lien Term Loan | Roundy's Supermarkets, Inc. Covenant- | ||||||
B | Lite 1st Lien Term Loan B | ||||||
4.000% due 07/31/20 (Ê) | 915 | 914 | 5.750% due 03/03/21 (Ê) | 967 | 789 | ||
Mergermarket USA, Inc. 1st Lien Term | Rovi Solutions Corp. Syndicated Loans | ||||||
Loan | Covenant-Lite Term Loan B | ||||||
4.500% due 02/04/21 (Ê) | 985 | 959 | 3.750% due 07/02/21 (Ê) | 988 | 922 | ||
MGM Resorts International Term Loan A | RP Crown Parent LLC Term Loan | ||||||
2.938% due 12/20/17 (Ê) | 499 | 497 | 6.000% due 12/21/18 (Ê) | 985 | 901 | ||
MGM Resorts International Term Loan B | RPI Finance Trust Term Loan B4 | ||||||
3.500% due 12/20/19 (Ê) | 499 | 498 |
See accompanying notes which are an integral part of the financial statements.
448 Russell Short Duration Bond Fund
Russell Investment Company
Russell Short Duration Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
3.500% due 12/11/20 | 995 | 992 | 4.250% due 08/16/19 | 939 | 911 | ||
Scientific Games International, Inc. | Zebra Technologies Corp. Term Loan | ||||||
Covenant-Lite Term Loan B1 | 4.750% due 10/27/21 (Ê) | 2,150 | 2,161 | ||||
6.000% due 10/18/20 (Ê) | 1,730 | 1,688 | 111,697 | ||||
Scientific Games International, Inc. Term | Mortgage-Backed Securities - 20.9% | ||||||
Loan B2 | Banc of America Commercial Mortgage | ||||||
6.000% due 10/01/21 (Ê) | 695 | 678 | |||||
Signode Industrial Group US, Inc. | Trust | ||||||
Series 2006-1 Class A4 | |||||||
Covenant-Lite 1st Lien Term Loan B | 5.372% due 09/10/45 | 28 | 28 | ||||
3.750% due 05/01/21 (Ê) | 726 | 711 | |||||
Sirius Computer Solutions, Inc. 1st Lien | Series 2007-2 Class AM | ||||||
Term Loan | 5.638% due 04/10/49 | 1,245 | 1,303 | ||||
1.000% due 10/08/22 (v) | 1,000 | 986 | Banc of America Funding Trust | ||||
SIRVA Worldwide, Inc. Term Loan | Series 2006-A Class 1A1 | ||||||
7.500% due 03/27/19 (Ê) | 483 | 461 | 2.699% due 02/20/36 (Ê) | 451 | 447 | ||
SourceHOV LLC 1st Lien Term Loan B | Series 2006-F Class 1A2 | ||||||
7.750% due 10/31/19 (Ê) | 491 | 442 | 2.606% due 07/20/36 (Ê) | 38 | 29 | ||
Stena International SA Covenant-Lite | Banc of America Merrill Lynch | ||||||
Term Loan B | Commercial Mortgage, Inc. | ||||||
4.000% due 03/03/21 (Ê) | 985 | 832 | Series 2005-3 Class AM | ||||
Sungard Availability Services Capital, | 4.727% due 07/10/43 | 327 | 327 | ||||
Inc. Covenant-Lite 1st Lien Term | Series 2005-5 Class B | ||||||
Loan B | 5.243% due 10/10/45 | 805 | 806 | ||||
6.000% due 03/31/19 (Ê) | 2,074 | 1,808 | Series 2005-6 Class B | ||||
TCH-2 Holdings LLC Covenant-Lite 1st | 5.153% due 09/10/47 | 695 | 695 | ||||
Lien Term Loan | Banc of America Mortgage Securities, | ||||||
5.500% due 05/12/21 (Ê) | 993 | 984 | Inc. | ||||
Terraform Private Warehouse Term Loan | Series 2004-I Class 2A2 | ||||||
B | 2.730% due 10/25/34 (Ê) | 721 | 703 | ||||
5.000% due 07/29/22 | 998 | 973 | Banc of America Re-REMIC Trust | ||||
The Active Network, Inc. 1st Lien Term | Series 2010-UB5 Class A4A | ||||||
Loan | 5.649% due 02/17/51 (Þ) | 1,266 | 1,303 | ||||
5.500% due 11/15/20 (Ê) | 985 | 974 | BCAP LLC Trust | ||||
Total Safety U.S., Inc. 1st Lien Term | Series 2011-R11 Class 15A1 | ||||||
Loan B | 2.589% due 10/26/33 (Ê)(Þ) | 999 | 1,014 | ||||
5.750% due 03/01/20 (Ê) | 985 | 817 | Series 2011-R11 Class 20A5 | ||||
Travelport Finance Sarl Term Loan B | 2.601% due 03/26/35 (Ê)(Þ) | 489 | 493 | ||||
5.750% due 09/02/21 | 993 | 984 | Bear Stearns ARM Trust | ||||
Tribune Media Co. Term Loan | Series 2004-5 Class 2A | ||||||
3.750% due 12/27/20 (Ê) | 840 | 837 | 2.957% due 07/25/34 (Ê) | 529 | 530 | ||
TWCC Holding Corp. 2nd Lien | Bear Stearns Commercial Mortgage | ||||||
Covenant-Lite Term Loan | Securities Trust | ||||||
7.000% due 06/26/20 (Ê) | 500 | 499 | Series 2002-TOP6 Class G | ||||
TWCC Holding Corp. Extended Term | 6.000% due 10/15/36 (Þ) | 1,168 | 1,176 | ||||
Loan | Series 2005-PW10 Class AM | ||||||
5.750% due 02/13/20 (Ê) | 909 | 910 | 5.449% due 12/11/40 | 1,161 | 1,161 | ||
United Airlines, Inc. Term Loan B1 | BHMS Mortgage Trust | ||||||
3.500% due 09/15/21 (Ê) | 990 | 985 | Series 2014-ATLS Class AFL | ||||
Utility Services Associates, Inc. 1st Lien | 1.671% due 07/05/33 (Ê)(Þ) | 2,400 | 2,397 | ||||
Term Loan B | Capmark Mortgage Securities, Inc. | ||||||
8.000% due 10/18/19 (Ê) | 744 | 742 | Series 1997-C2 Class G | ||||
Varsity Brands, Inc. 1st Lien Term Loan | 6.750% due 04/15/29 | 606 | 648 | ||||
5.000% due 12/11/21 | 124 | 124 | CD Commercial Mortgage Trust | ||||
Verdesion Life Sciences LLC Term Loan | Series 2005-CD1 Class C | ||||||
6.000% due 07/01/20 (Ê) | 962 | 954 | 5.226% due 07/15/44 | 450 | 450 | ||
Visant Corp. Covenant-Lite Term Loan | Citigroup Commercial Mortgage Trust | ||||||
7.000% due 09/23/21 (Ê) | 932 | 928 | Series 2005-CD1 Class AJ | ||||
William Morris Endeavor Entertainment | 5.226% due 07/15/44 | 105 | 105 | ||||
LLC Covenant-Lite Term Loan | Series 2014-GC19 Class A1 | ||||||
5.250% due 05/06/21 (Ê) | 988 | 985 | 1.199% due 03/10/47 | 532 | 523 | ||
WMG Acquisition Corp. Term Loan B | Citigroup Mortgage Loan Trust, Inc. | ||||||
3.750% due 07/01/20 (Ê) | 985 | 957 | Series 2004-UST1 Class A5 | ||||
World Endurance Holdings Term Loan | 1.934% due 08/25/34 (Ê) | 1,084 | 1,066 | ||||
5.250% due 06/26/21 (Ê) | 992 | 984 | Commercial Mortgage Trust | ||||
Yonkers Racing Corp. 1st Lien Term | |||||||
Loan |
See accompanying notes which are an integral part of the financial statements.
Russell Short Duration Bond Fund 449
Russell Investment Company
Russell Short Duration Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2001-J2A Class E | Series 2002-57 Class PG | ||||||
6.922% due 07/16/34 (Þ) | 905 | 939 | 5.500% due 09/25/17 | 92 | 94 | ||
Series 2005-GG3 Class E | Series 2004-70 Class EB | ||||||
5.087% due 08/10/42 | 905 | 905 | 5.000% due 10/25/24 | 91 | 98 | ||
Series 2005-LP5 Class D | Series 2007-73 Class A1 | ||||||
4.776% due 05/10/43 | 971 | 970 | 0.247% due 07/25/37 (Å)(Ê) | 70 | 66 | ||
Series 2006-CD2 Class A1B | Series 2009-96 Class DB | ||||||
5.300% due 01/15/46 | 227 | 227 | 4.000% due 11/25/29 | 160 | 171 | ||
Series 2007-GG9 Class A4 | Series 2009-97 Class PG | ||||||
5.444% due 03/10/39 | 592 | 613 | 4.000% due 11/25/39 | 1,293 | 1,370 | ||
Series 2013-LC13 Class A1 | Series 2010-141 Class MD | ||||||
1.309% due 08/10/46 | 436 | 434 | 2.000% due 10/25/40 | 241 | 242 | ||
Series 2014-CR15 Class A1 | Series 2010-150 Class PC | ||||||
1.218% due 02/10/47 | 489 | 488 | 3.000% due 10/25/40 | 511 | 527 | ||
Series 2014-CR16 Class A1 | Series 2011-88 Class AB | ||||||
1.445% due 04/10/47 | 408 | 408 | 2.500% due 09/25/26 | 819 | 831 | ||
Series 2014-SAVA Class C | Series 2013-21 Class BA | ||||||
2.561% due 06/15/34 (Ê)(Þ) | 582 | 578 | 1.000% due 03/25/23 | 2,965 | 2,944 | ||
Credit Suisse Commercial Mortgage | Series 2013-136 Class KA | ||||||
Trust | 2.000% due 05/25/25 | 656 | 665 | ||||
Series 2006-C1 Class AJ | Fannie Mae Whole Loan | ||||||
5.469% due 02/15/39 | 1,170 | 1,175 | Series 2004-W9 Class 2A1 | ||||
Series 2006-C2 Class A1A | 6.500% due 02/25/44 | 24 | 27 | ||||
5.860% due 03/15/39 | 2,635 | 2,658 | Series 2004-W12 Class 1A1 | ||||
Series 2006-C3 Class A1A | 6.000% due 07/25/44 | 2,333 | 2,671 | ||||
5.806% due 06/15/38 | 282 | 287 | Series 2005-W1 Class 1A2 | ||||
Series 2006-C5 Class A1A | 6.500% due 10/25/44 | 97 | 113 | ||||
5.297% due 12/15/39 | 523 | 539 | Fannie Mae-Aces | ||||
Series 2007-C1 Class A3 | Series 2012-M2 Class A1 | ||||||
5.383% due 02/15/40 | 78 | 80 | 1.824% due 02/25/22 | 433 | 437 | ||
Credit Suisse First Boston Mortgage | Series 2012-M8 Class ASQ2 | ||||||
Securities Corp. | 1.520% due 12/25/19 | 2,299 | 2,317 | ||||
Series 1998-C1 Class F | Series 2012-M9 Class ASQ2 | ||||||
6.000% due 05/17/40 (Å) | 266 | 277 | 1.513% due 12/25/17 | 528 | 531 | ||
Series 2005-C3 Class AJ | Series 2012-M13 Class ASQ2 | ||||||
4.771% due 07/15/37 | 61 | 61 | 1.246% due 08/25/17 | 1,761 | 1,767 | ||
Series 2005-C6 Class B | Series 2012-M14 Class ASQ2 | ||||||
5.230% due 12/15/40 | 925 | 924 | 1.114% due 02/25/17 | 290 | 291 | ||
Series 2005-C6 Class D | Series 2013-M1 Class ASQ2 | ||||||
5.230% due 12/15/40 | 975 | 974 | 1.074% due 11/25/16 | 734 | 735 | ||
DBRR Trust | Series 2013-M7 Class ASQ2 | ||||||
Series 2013-EZ2 Class A | 1.233% due 03/26/18 | 475 | 477 | ||||
0.853% due 02/25/45 (Þ) | 1 | 1 | Series 2014-M9 Class ASQ2 | ||||
Fannie Mae | 1.462% due 04/25/17 | 674 | 678 | ||||
7.000% due 2017 | 8 | 9 | Series 2014-M13 Class ASQ2 | ||||
4.500% due 2019 | 38 | 40 | 1.637% due 11/25/17 | 7,590 | 7,676 | ||
5.700% due 2019 | 892 | 995 | Series 2015-M1 Class ASQ1 | ||||
4.500% due 2020 | 894 | 936 | 0.782% due 02/25/18 | 1,878 | 1,876 | ||
4.500% due 2021 | 43 | 45 | Series 2015-M1 Class ASQ2 | ||||
7.000% due 2022 | 60 | 63 | 1.626% due 02/25/18 | 2,445 | 2,467 | ||
2.500% due 2024 | 7,499 | 7,703 | Series 2015-M7 Class ASQ1 | ||||
4.500% due 2025 | 494 | 527 | 0.882% due 04/25/18 | 1,416 | 1,417 | ||
3.500% due 2030 | 3,685 | 3,901 | Series 2015-M7 Class ASQ2 | ||||
2.229% due 2033(Ê) | 29 | 30 | 1.550% due 04/25/18 | 835 | 840 | ||
30 Year TBA(Ï) | Series 2015-M13 Class ASQ1 | ||||||
3.500% | 1,755 | 1,853 | 0.856% due 09/25/19 | 1,975 | 1,968 | ||
Fannie Mae Grantor Trust | FDIC Guaranteed Notes Trust | ||||||
Series 2001-T4 Class A1 | Series 2010-S1 Class 1A | ||||||
7.500% due 07/25/41 | 580 | 706 | 0.720% due 02/25/48 (Ê)(Þ) | 100 | 100 | ||
Series 2004-T2 Class 1A3 | FDIC Trust | ||||||
7.000% due 11/25/43 | 540 | 615 | Series 2010-R1 Class A | ||||
Fannie Mae REMICS | 2.184% due 05/25/50 (Þ) | 1,922 | 1,936 |
See accompanying notes which are an integral part of the financial statements.
450 Russell Short Duration Bond Fund
Russell Investment Company
Russell Short Duration Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2011-R1 Class A | 5.508% due 2059 | 1,702 | 1,766 | ||||
2.672% due 07/25/26 (Þ) | 759 | 775 | 5.500% due 2060 | 2,407 | 2,567 | ||
Federal Home Loan Mortgage Corp. | 4.672% due 2062 | 723 | 765 | ||||
Multifamily Structured Pass Through | 4.816% due 2062 | 1,586 | 1,689 | ||||
Certificates | 4.856% due 2062 | 2,340 | 2,479 | ||||
Series 2011-K702 Class X1 | 4.732% due 2063 | 1,498 | 1,611 | ||||
Interest Only STRIP | Government National Mortgage | ||||||
1.525% due 02/25/18 | 27,558 | 815 | Association | ||||
Series 2011-K703 Class A1 | Series 2010-14 Class A | ||||||
1.873% due 01/25/18 | 46 | 46 | 4.500% due 06/16/39 | 182 | 195 | ||
Series 2012-K019 Class A1 | Series 2010-H04 Class BI | ||||||
1.459% due 09/25/21 | 2,935 | 2,921 | Interest Only STRIP | ||||
Series 2012-K501 Class A2 | 1.390% due 04/20/60 | 4,782 | 228 | ||||
1.655% due 11/25/16 | 1,546 | 1,555 | Series 2010-H12 Class PT | ||||
Series 2012-K706 Class A1 | 5.470% due 11/20/59 | 774 | 805 | ||||
1.691% due 06/25/18 | 7,521 | 7,582 | Series 2010-H22 Class JI | ||||
Series 2012-K706 Class X1 | Interest Only STRIP | ||||||
Interest Only STRIP | 2.499% due 11/20/60 | 3,968 | 293 | ||||
1.712% due 10/25/18 | 10,956 | 445 | Series 2012-H11 Class CI | ||||
Series 2013-K502 Class A2 | Interest Only STRIP | ||||||
1.426% due 08/25/17 | 3,380 | 3,393 | 2.906% due 04/20/62 | 5,855 | 434 | ||
Federal Home Loan Mortgage Corp. | Series 2013-H03 Class HI | ||||||
Structured Pass Through Securities | Interest Only STRIP | ||||||
Series 2003-58 Class 2A | 2.595% due 12/20/62 | 5,073 | 467 | ||||
6.500% due 09/25/43 | 32 | 36 | Series 2013-H06 Class HI | ||||
Freddie Mac | Interest Only STRIP | ||||||
6.000% due 2018 | 12 | 12 | 2.932% due 01/20/63 | 11,088 | 807 | ||
5.500% due 2019 | 411 | 436 | Series 2013-H07 Class JL | ||||
5.500% due 2022 | 259 | 280 | Interest Only STRIP | ||||
5.500% due 2029 | 135 | 151 | 2.635% due 03/20/63 | 12,040 | 1,043 | ||
3.500% due 2030 | 1,474 | 1,562 | GS Mortgage Securities Corp. II | ||||
Freddie Mac REMICS | Series 2013-GC10 Class A1 | ||||||
Series 2003-2559 Class PB | 0.696% due 02/10/46 | 19 | 19 | ||||
5.500% due 08/15/30 | 1 | 1 | GS Mortgage Securities Trust | ||||
Series 2003-2632 Class AB | Series 2010-C1 Class A1 | ||||||
4.500% due 06/15/18 | 740 | 766 | 3.679% due 08/10/43 (Þ) | 783 | 809 | ||
Series 2003-2657 Class WT | Series 2012-GCJ7 Class A1 | ||||||
4.500% due 08/15/18 | 177 | 183 | 1.144% due 05/10/45 | 381 | 380 | ||
Series 2005-2922 Class JN | Series 2013-GC12 Class A1 | ||||||
4.500% due 02/15/20 | 1,286 | 1,331 | 0.742% due 06/10/46 | 309 | 308 | ||
Series 2010-3704 Class DC | Series 2014-GC18 Class A1 | ||||||
4.000% due 11/15/36 | 313 | 332 | 1.298% due 01/10/47 | 306 | 306 | ||
Series 2010-3728 Class EL | GSMPS Mortgage Loan Trust | ||||||
1.500% due 09/15/20 | 1,795 | 1,798 | Series 1998-1 Class A | ||||
Series 2011-3816 Class D | 8.000% due 09/19/27 (Þ) | 34 | 35 | ||||
3.500% due 08/15/28 | 964 | 996 | Series 1998-2 Class A | ||||
Series 2014-4315 Class CA | 7.587% due 05/19/27 (Þ) | 149 | 159 | ||||
2.000% due 01/15/23 | 2,091 | 2,117 | Series 1998-3 Class A | ||||
Series 2014-4350 Class CA | 7.750% due 09/19/27 (Þ) | 7 | 7 | ||||
2.000% due 10/15/19 | 1,206 | 1,225 | Series 1999-3 Class A | ||||
Series 2014-4383 Class JC | 8.000% due 08/19/29 (Þ) | 15 | 14 | ||||
2.000% due 05/15/23 | 1,718 | 1,740 | Series 2005-RP1 Class 1A4 | ||||
Series 2014-4399 Class A | 8.500% due 01/25/35 (Þ) | 156 | 168 | ||||
2.500% due 07/15/24 | 2,747 | 2,792 | Series 2006-RP1 Class 1A2 | ||||
GE Capital Commercial Mortgage Corp. | 7.500% due 01/25/36 (Þ) | 328 | 343 | ||||
Series 2005-C3 Class H | Series 2006-RP1 Class 1A3 | ||||||
5.439% due 07/10/45 (Þ) | 1,277 | 1,274 | 8.000% due 01/25/36 (Þ) | 83 | 88 | ||
GE Commercial Mortgage Corp. | Hilton USA Trust | ||||||
Series 2007-C1 Class A1A | Series 2013-HLT Class CFX | ||||||
5.483% due 12/10/49 | 1,503 | 1,569 | 3.714% due 11/05/30 (Þ) | 200 | 200 | ||
Ginnie Mae II | JPMorgan Chase Commercial Mortgage | ||||||
3.500% due 2040(Ê) | 3,101 | 3,231 | Securities Trust | ||||
4.000% due 2040(Ê) | 421 | 439 | Series 2001-CIB2 Class D | ||||
5.390% due 2059 | 2,227 | 2,315 | 6.802% due 04/15/35 | 118 | 118 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2002-C2 Class E | Series 2015-C26 Class A1 | ||||||
5.758% due 12/12/34 | 131 | 133 | 1.591% due 11/15/48 | 1,065 | 1,057 | ||
Series 2004-LN2 Class A2 | Morgan Stanley Capital I Trust | ||||||
5.115% due 07/15/41 | 92 | 92 | Series 2005-IQ10 Class B | ||||
Series 2004-LN2 Class B | 5.519% due 09/15/42 | 155 | 155 | ||||
5.201% due 07/15/41 | 150 | 150 | Series 2006-HQ8 Class A4 | ||||
Series 2005-CB12 Class AJ | 5.408% due 03/12/44 | 77 | 77 | ||||
4.987% due 09/12/37 | 1,147 | 1,149 | Series 2006-HQ8 Class AJ | ||||
Series 2005-LDP2 Class C | 5.495% due 03/12/44 | 610 | 612 | ||||
4.911% due 07/15/42 | 460 | 461 | Series 2006-IQ12 Class AM | ||||
Series 2005-LDP5 Class AJ | 5.370% due 12/15/43 | 665 | 687 | ||||
5.360% due 12/15/44 | 650 | 651 | Series 2006-T21 Class C | ||||
Series 2006-LDP9 Class A1A | 5.494% due 10/12/52 (Þ) | 1,270 | 1,283 | ||||
5.257% due 05/15/47 | 848 | 869 | Morgan Stanley Re-REMIC Trust | ||||
Series 2007-CB20 Class AM | Series 2010-GG10 Class A4A | ||||||
6.082% due 02/12/51 | 160 | 171 | 5.795% due 08/15/45 (Þ) | 3,849 | 4,023 | ||
Series 2007-LDPX Class AM | Motel 6 Trust | ||||||
5.464% due 01/15/49 | 1,275 | 1,307 | Series 2015-MTL6 Class A2A2 | ||||
Series 2014-CBM Class A | 2.605% due 02/05/30 (Þ) | 1,145 | 1,147 | ||||
1.067% due 10/15/29 (Ê)(Þ) | 2,580 | 2,562 | NCUA Guaranteed Notes Trust | ||||
Series 2014-FBLU Class A | Series 2010-R1 Class 2A | ||||||
1.146% due 12/15/28 (Å)(Ê) | 3,575 | 3,575 | 1.840% due 10/07/20 | 168 | 168 | ||
Series 2014-FBLU Class C | Series 2010-R3 Class 3A | ||||||
2.161% due 12/15/28 (Ê)(Þ) | 2,300 | 2,301 | 2.400% due 12/08/20 | 399 | 404 | ||
JPMorgan Commercial Mortgage Finance | Nomura Asset Acceptance Corp. | ||||||
Corp. | Alternative Loan Trust | ||||||
Series 2000-C10 Class F | Series 2004-AR4 Class 1A1 | ||||||
8.559% due 08/15/32 | 754 | 809 | 2.658% due 12/25/34 | 162 | 162 | ||
JPMorgan Mortgage Trust | Series 2005-WF1 Class 2A2 | ||||||
Series 2004-A2 Class 1A1 | 4.786% due 03/25/35 | 2 | 2 | ||||
2.609% due 05/25/34 (Ê) | 143 | 140 | RBSCF Trust | ||||
Series 2005-A4 Class 1A1 | Series 2010-RR3 Class MSCA | ||||||
2.498% due 07/25/35 (Ê) | 41 | 40 | 5.907% due 06/16/49 (Þ) | 312 | 322 | ||
Series 2006-A6 Class 1A2 | Series 2010-RR4 Class CMLA | ||||||
2.537% due 10/25/36 (Ê) | 22 | 20 | 6.040% due 12/16/49 (Þ) | 439 | 452 | ||
LB Commercial Mortgage Trust | Series 2010-RR4 Class WBCA | ||||||
Series 2007-C3 Class AM | 5.509% due 04/16/47 (Þ) | 2,500 | 2,536 | ||||
6.097% due 07/15/44 | 687 | 728 | RBSSP Resecuritization Trust | ||||
LB-UBS Commercial Mortgage Trust | Series 2010-3 Class 9A1 | ||||||
Series 2005-C7 Class B | 5.500% due 02/26/35 (Þ) | 683 | 698 | ||||
5.350% due 11/15/40 | 360 | 360 | Reperforming Loan REMIC Trust | ||||
Series 2005-C7 Class F | Series 2005-R2 Class 2A4 | ||||||
5.350% due 11/15/40 | 330 | 321 | 8.500% due 06/25/35 (Þ) | 72 | 76 | ||
Mastr Adjustable Rate Mortgages Trust | Rialto Capital Management LLC | ||||||
Series 2005-1 Class B1 | Series 2014-LT5 Class A | ||||||
Interest Only STRIP | 2.850% due 05/15/24 (Þ) | 206 | 206 | ||||
2.724% due 03/25/35 (Ê) | 198 | 60 | RREF LLC | ||||
Mastr Reperforming Loan Trust | Series 2014-LT6 Class A | ||||||
Series 2005-1 Class 1A3 | 2.750% due 09/15/24 (Þ) | 138 | 138 | ||||
7.000% due 08/25/34 (Þ) | 404 | 420 | Structured Asset Securities Corp. | ||||
Series 2005-2 Class 1A4 | Mortgage Pass Through Certificates | ||||||
8.000% due 05/25/35 (Þ) | 311 | 332 | Series 2003-34A Class 6A | ||||
2.595% due 11/25/33 (Ê) | 184 | 181 | |||||
Merrill Lynch Mortgage Investors Trust | Wachovia Bank Commercial Mortgage | ||||||
Series 1998-C1 Class A3 | |||||||
6.720% due 11/15/26 | 1,571 | 1,594 | Trust | ||||
Series 2004-C12 Class F | |||||||
Series 1998-C3 Class IO | 5.428% due 07/15/41 (Å) | 616 | 617 | ||||
Interest Only STRIP | |||||||
0.898% due 12/15/30 | 967 | 14 | Series 2004-C15 Class B | ||||
4.892% due 10/15/41 | 160 | 160 | |||||
Series 2005-A10 Class A | |||||||
0.397% due 02/25/36 (Ê) | 33 | 30 | Series 2005-C22 Class AJ | ||||
5.398% due 12/15/44 | 206 | 206 | |||||
Morgan Stanley BAML Trust | |||||||
Series 2013-C7 Class A1 | Series 2005-C22 Class AM | ||||||
0.738% due 02/15/46 | 200 | 200 | 5.319% due 12/15/44 | 146 | 146 |
See accompanying notes which are an integral part of the financial statements.
452 Russell Short Duration Bond Fund
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
Series 2006-C26 Class AM | 3.250% due 03/31/17 | 4,565 | 4,735 | |||||
5.969% due 06/15/45 | 1,355 | 1,384 | 8.750% due 05/15/17 | 2,650 | 2,978 | |||
Series 2006-C27 Class AM | 0.875% due 07/15/17 | 378 | 379 | |||||
5.795% due 07/15/45 | 340 | 348 | 2.375% due 07/31/17 | 5,386 | 5,543 | |||
Series 2007-C30 Class AM | 4.750% due 08/15/17 | 4,955 | 5,310 | |||||
5.383% due 12/15/43 | 245 | 254 | 1.875% due 08/31/17 | 6,330 | 6,463 | |||
Series 2007-C31 Class A4 | 1.000% due 09/15/17 | 5,637 | 5,665 | |||||
5.509% due 04/15/47 | 1,380 | 1,441 | 0.625% due 09/30/17 | 4,845 | 4,834 | |||
Series 2007-C31 Class AM | 0.875% due 10/15/17 | 2,245 | 2,250 | |||||
5.591% due 04/15/47 | 1,090 | 1,141 | 0.750% due 10/31/17 | 4,550 | 4,549 | |||
Series 2007-C32 Class A2 | 0.875% due 11/15/17 | 4,565 | 4,572 | |||||
5.711% due 06/15/49 | 102 | 102 | 2.250% due 11/30/17 | 5,655 | 5,824 | |||
Series 2007-C33 Class A4 | ||||||||
6.150% due 02/15/51 | 95 | 99 | 0.750% due 12/31/17 | 1,475 | 1,473 | |||
Washington Mutual Mortgage Pass- | 1.000% due 02/15/18 | 3,472 | 3,482 | |||||
Through Certificates Trust | 3.500% due 02/15/18 | 4,653 | 4,930 | |||||
Series 2003-AR7 Class A7 | 0.750% due 02/28/18 | 3,404 | 3,394 | |||||
2.299% due 08/25/33 (Ê) | 77 | 77 | 2.750% due 02/28/18 | 6,750 | 7,040 | |||
Series 2004-AR1 Class A | 0.625% due 04/30/18 | 8,009 | 7,947 | |||||
2.419% due 03/25/34 (Ê) | 693 | 694 | 1.000% due 05/15/18 | 2,952 | 2,956 | |||
Wells Fargo Commercial Mortgage Trust | 3.875% due 05/15/18 | 1,659 | 1,783 | |||||
Series 2015-C31 Class A1 | 2.375% due 05/31/18 | 5,197 | 5,387 | |||||
1.679% due 11/15/48 | 1,155 | 1,155 | 1.375% due 06/30/18 | 7,770 | 7,852 | |||
Wells Fargo Mortgage Backed Securities | 1.000% due 08/15/18 | 40 | 40 | |||||
Trust | 1.500% due 08/31/18 | 4,663 | 4,727 | |||||
Series 2005-AR2 Class 2A1 | ||||||||
2.615% due 03/25/35 (Ê) | 149 | 149 | 1.000% due 09/15/18 | 1,000 | 999 | |||
WF-RBS Commercial Mortgage Trust | 0.875% due 10/15/18 | 44,500 | 44,292 | |||||
Series 2012-C9 Class A1 | 1.375% due 09/30/20 | 7,110 | 7,061 | |||||
0.673% due 11/15/45 | 1,437 | 1,431 | 1.375% due 10/31/20 | 3,715 | 3,688 | |||
Series 2012-C10 Class A1 | 1.750% due 09/30/22 | 5,215 | 5,169 | |||||
0.734% due 12/15/45 | 293 | 291 | 220,600 | |||||
Series 2013-C14 Class A1 | Total Long-Term Investments | |||||||
0.836% due 06/15/46 | 354 | 352 | (cost $836,883) | 829,403 | ||||
Series 2014-C19 Class A3 | ||||||||
3.660% due 03/15/47 | 340 | 357 | ||||||
183,997 | Short-Term Investments - 6.8% | |||||||
Non-US Bonds - 0.1% | 21st Century Fox America, Inc. | |||||||
Mexican Bonos | 8.000% due 10/17/16 | 420 | 447 | |||||
Series M | Amgen, Inc. | |||||||
6.500% due 06/10/21 | MXN | 17,192 | 1,096 | 2.300% due 06/15/16 | 300 | 303 | ||
Norske Skog Holding AS | Anadarko Petroleum Corp. | |||||||
8.000% due 02/24/21 (Þ) | EUR | 225 | 104 | 5.950% due 09/15/16 | 2,170 | 2,250 | ||
1,200 | Bank of America Corp. | |||||||
United States Government Agencies - 0.6% | 6.500% due 08/01/16 | 1,800 | 1,873 | |||||
Federal Home Loan Banks | ||||||||
0.625% due 11/23/16 | 2,730 | 2,732 | Dayton Power & Light Co. (The) | |||||
Federal National Mortgage Association | 1.875% due 09/15/16 | 325 | 326 | |||||
1.125% due 07/20/18 | 2,274 | 2,281 | Fannie Mae-Aces | |||||
5,013 | Series 2014-M3 Class ASQ2 | |||||||
United States Government Treasuries - 25.1% | 0.558% due 03/25/16 | 119 | 119 | |||||
United States Treasury Inflation Indexed | Federal Home Loan Mortgage Corp. | |||||||
Bonds | Multifamily Structured Pass Through | |||||||
0.125% due 04/15/17 | 3,861 | 3,859 | Certificates | |||||
United States Treasury Notes | Series 2012-K501 Class X1A | |||||||
7.500% due 11/15/16 | 3,347 | 3,588 | Interest Only STRIP | |||||
0.875% due 11/30/16 | 3,787 | 3,803 | 1.606% due 08/25/16 | 8,468 | 61 | |||
0.625% due 12/15/16 | 6,948 | 6,958 | Ford Motor Credit Co. LLC | |||||
0.875% due 12/31/16 | 16,305 | 16,376 | 3.984% due 06/15/16 | 500 | 508 | |||
3.250% due 12/31/16 | 3,865 | 3,988 | Goldman Sachs Group, Inc. (The) | |||||
0.875% due 01/31/17 | 10,409 | 10,455 | 3.625% due 02/07/16 | 1,270 | 1,280 | |||
3.125% due 01/31/17 | 2,390 | 2,467 | Hartford Financial Services Group, Inc. | |||||
0.625% due 02/15/17 | 3,780 | 3,784 | (The) |
See accompanying notes which are an integral part of the financial statements.
Russell Short Duration Bond Fund 453
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Russell Short Duration Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | |||||
Principal | Fair | ||||
Amount ($) | Value | ||||
or Shares | $ | ||||
5.500% due 10/15/16 | 2,635 | 2,745 | |||
International Lease Finance Corp. | |||||
2.287% due 06/15/16 (Ê) | 2,290 | 2,286 | |||
Nomura Holdings, Inc. | |||||
2.000% due 09/13/16 | 1,680 | 1,690 | |||
PACCAR Financial Corp. | |||||
1.150% due 08/16/16 | 1,495 | 1,501 | |||
Petrobras Global Finance BV | |||||
1.953% due 05/20/16 (Ê) | 1,400 | 1,370 | |||
Russell U.S. Cash Management Fund | 33,027,474 | (8) | 33,027 | ||
Total Capital International SA | |||||
1.000% due 08/12/16 | 1,060 | 1,064 | |||
United States Treasury Notes | |||||
1.000% due 09/30/16 | 2,190 | 2,201 | |||
1.000% due 10/31/16 | 2,405 | 2,418 | |||
Westlake Automobile Receivables Trust | |||||
Series 2015-3A Class A1 | |||||
0.640% due 10/17/16 (Å) | 3,910 | 3,910 | |||
Willis Group Holdings PLC | |||||
4.125% due 03/15/16 | 535 | 540 | |||
Total Short-Term Investments | |||||
(cost $59,946) | 59,919 | ||||
Total Investments 101.1% | |||||
(identified cost $896,829) | 889,322 | ||||
Other Assets and Liabilities, | |||||
Net - (1.1%) | (9,527 | ) | |||
Net Assets - 100.0% | 879,795 |
See accompanying notes which are an integral part of the financial statements.
454 Russell Short Duration Bond Fund
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Russell Short Duration Bond Fund
Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
2.1% | ||||||||||||
Credit Suisse First Boston Mortgage Securities Corp. | 10/20/15 | 265,985 | 104.00 | 277 | 277 | |||||||
Fannie Mae REMICS | 08/17/07 | 69,797 | 99.11 | 69 | 66 | |||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 5,005,000 | 99.80 | 4,995 | 5,047 | |||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 2,245,000 | 99.95 | 2,244 | 2,251 | |||||||
JPMorgan Chase Commercial Mortgage Securities Trust | 10/29/15 | 3,575,000 | 99.99 | 3,575 | 3,575 | |||||||
Kraft Heinz Foods Co. | 10/07/15 | 1,955,000 | 106.97 | 2,091 | 2,102 | |||||||
Volkswagen Group of America Finance LLC | 10/07/15 | 890,000 | 94.51 | 841 | 850 | |||||||
Wachovia Bank Commercial Mortgage Trust | 10/20/15 | 615,671 | 100.28 | 617 | 617 | |||||||
Westlake Automobile Receivables Trust | 10/09/15 | 3,910,000 | 100.00 | 3,910 | 3,910 | |||||||
18,695 | ||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
United States 2 Year Treasury Note Futures | 435 | USD | 95,116 | 12/15 | (30 | ) | |
Short Positions | |||||||
United States 5 Year Treasury Note Futures | 136 | USD | 16,289 | 12/15 | (23 | ) | |
United States 10 Year Treasury Note Futures | 193 | USD | 24,644 | 12/15 | (131 | ) | |
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | (184 | ) |
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Bank of America | CHF | 3,502 | USD | 3,600 | 11/06/15 | 57 | |
Bank of America | EUR | 1,689 | USD | 1,871 | 11/25/15 | 14 | |
Royal Bank of Canada | USD | 3,737 | CAD | 4,889 | 11/06/15 | 2 | |
Royal Bank of Canada | USD | 7,288 | EUR | 6,525 | 11/06/15 | (112 | ) |
Royal Bank of Canada | USD | 7,327 | JPY | 884,110 | 11/06/15 | — | |
Royal Bank of Canada | USD | 3,684 | NZD | 5,773 | 11/06/15 | 224 | |
Royal Bank of Canada | USD | 2 | SEK | 14 | 11/06/15 | — | |
Royal Bank of Canada | USD | 3,643 | SEK | 30,927 | 11/06/15 | (23 | ) |
Royal Bank of Canada | AUD | 5,134 | USD | 3,662 | 11/06/15 | 2 | |
Royal Bank of Canada | CAD | 4,889 | USD | 3,646 | 11/06/15 | (93 | ) |
Royal Bank of Canada | CHF | 93 | USD | 94 | 11/06/15 | — | |
Royal Bank of Canada | CHF | 3,630 | USD | 3,719 | 11/06/15 | 46 | |
Royal Bank of Canada | EUR | 3,211 | USD | 3,547 | 11/06/15 | 16 | |
Royal Bank of Canada | NZD | 5,773 | USD | 3,905 | 11/06/15 | (3 | ) |
State Street | SEK | 30,941 | USD | 3,681 | 11/06/15 | 59 | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 189 |
See accompanying notes which are an integral part of the financial statements.
Russell Short Duration Bond Fund 455
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Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | |||||||||||||
Amounts in thousands | |||||||||||||
Fair Value | |||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||
Long-Term Investments | |||||||||||||
Asset-Backed Securities | $ | — | $ | 91,274 | $ | — | $ | 91,274 | 10.4 | ||||
Corporate Bonds and Notes | — | 167,844 | — | 167,844 | 19.1 | ||||||||
International Debt | — | 44,626 | 3,152 | 47,778 | 5.4 | ||||||||
Loan Agreements | — | 111,697 | — | 111,697 | 12.7 | ||||||||
Mortgage-Backed Securities | — | 178,513 | 5,484 | 183,997 | 20.9 | ||||||||
Non-US Bonds | — | 1,200 | — | 1,200 | 0.1 | ||||||||
United States Government Agencies | — | 5,013 | — | 5,013 | 0.6 | ||||||||
United States Government Treasuries | — | 220,600 | — | 220,600 | 25.1 | ||||||||
Short-Term Investments | — | 59,919 | — | 59,919 | 6.8 | ||||||||
Total Investments | — | 880,686 | 8,636 | 889,322 | 101.1 | ||||||||
Other Assets and Liabilities, Net | (1.1 | ) | |||||||||||
100.0 | |||||||||||||
Other Financial Instruments | |||||||||||||
Futures Contracts | (184 | ) | — | — | (184 | ) | (—)* | ||||||
Foreign Currency Exchange Contracts | — | 189 | — | 189 | —* | ||||||||
Total Other Financial Instruments** | $ | (184 | ) | $ | 189 | $ | — | $ | 5 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining fair value for the period ended October 31,
2015 were less than 1% of net assets
See accompanying notes which are an integral part of the financial statements.
456 Russell Short Duration Bond Fund
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Russell Short Duration Bond Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||
Foreign | ||||
Currency | Interest Rate | |||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||
Location: Statement of Assets and Liabilities - Assets | ||||
Unrealized appreciation on foreign currency exchange contracts | $ | 420 | $ | — |
Location: Statement of Assets and Liabilities - Liabilities | ||||
Variation margin on futures contracts* | $ | — | $ | 184 |
Unrealized depreciation on foreign currency exchange contracts | 231 | — | ||
Total | $ | 231 | $ | 184 |
Foreign | ||||||||
Credit | Currency | Interest Rate | ||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | |||||
Location: Statement of Operations - Net realized gain (loss) | ||||||||
Futures contracts | $ | — | $ | — | $ | (1,151 | ) | |
Credit default swap contracts | 207 | — | — | |||||
Foreign currency-related transactions** | — | 184 | — | |||||
Total | $ | 207 | $ | 184 | $ | (1,151 | ) | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||||
Futures contracts | $ | — | $ | (56 | ) | |||
Foreign currency-related transactions*** | (533 | ) | — | |||||
Total | $ | (533 | ) | $ | (56 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
*** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | $ | 420 | $ | — | $ | 420 | ||
Futures Contracts | Variation margin on futures contracts | 1 | — | 1 | |||||
Total Financial and Derivative Assets | 421 | — | 421 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (1) | — | (1 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 420 | $ | — | $ | 420 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Assets | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||
Bank of America | $ | 70 | $ | — | $ | — | $ 70 | ||
Royal Bank of Canada | 291 | 231 | — | 60 | |||||
State Street | 59 | — | — | 59 | |||||
Total | $ | 420 | $ | 231 | $ | — | $ 189 |
See accompanying notes which are an integral part of the financial statements.
458 Russell Short Duration Bond Fund
Russell Investment Company
Russell Short Duration Bond Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 47 | $ | — | $ | 47 | ||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 231 | — | 231 | |||||
Total Financial and Derivative Liabilities | 278 | — | 278 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (47) | — | (47 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 231 | $ | — | $ | 231 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Liabilities | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||
Royal Bank of Canada | $ | 231 | $ | 231 | $ | — | $ — | ||
Total | $ | 231 | $ | 231 | $ | — | $ — |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Short Duration Bond Fund 459
Russell Investment Company
Russell Short Duration Bond Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 896,829 |
Investments, at fair value(>) | 889,322 | |
Cash | 183 | |
Cash (restricted)(a) | 149 | |
Foreign currency holdings(^) | 37 | |
Unrealized appreciation on foreign currency exchange contracts | 420 | |
Receivables: | ||
Dividends and interest | 3,865 | |
Dividends from affiliated Russell funds | 5 | |
Investments sold | 11,421 | |
Fund shares sold | 916 | |
Variation margin on futures contracts | 1 | |
Total assets | 906,319 | |
Liabilities | ||
Payables: | ||
Investments purchased | 24,310 | |
Fund shares redeemed | 1,333 | |
Accrued fees to affiliates | 431 | |
Other accrued expenses | 172 | |
Variation margin on futures contracts | 47 | |
Unrealized depreciation on foreign currency exchange contracts | 231 | |
Total liabilities | 26,524 | |
Net Assets | $ | 879,795 |
See accompanying notes which are an integral part of the financial statements.
460 Russell Short Duration Bond Fund
Russell Investment Company
Russell Short Duration Bond Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 460 | |
Accumulated net realized gain (loss) | 342 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | (7,507 | ) | |
Futures contracts | (184 | ) | |
Foreign currency-related transactions | 189 | ||
Shares of beneficial interest | 461 | ||
Additional paid-in capital | 886,034 | ||
Net Assets | $ | 879,795 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 19.09 | |
Maximum offering price per share (Net asset value plus sales charge of 3.75%): Class A | $ | 19.83 | |
Class A — Net assets | $ | 24,913,633 | |
Class A — Shares outstanding ($.01 par value) | 1,305,077 | ||
Net asset value per share: Class C(#) | $ | 18.94 | |
Class C — Net assets | $ | 56,537,778 | |
Class C — Shares outstanding ($.01 par value) | 2,984,888 | ||
Net asset value per share: Class E(#) | $ | 19.13 | |
Class E — Net assets | $ | 26,633,308 | |
Class E — Shares outstanding ($.01 par value) | 1,392,425 | ||
Net asset value per share: Class S(#) | $ | 19.10 | |
Class S — Net assets | $ | 610,783,808 | |
Class S — Shares outstanding ($.01 par value) | 31,972,944 | ||
Net asset value per share: Class Y(#) | $ | 19.11 | |
Class Y — Net assets | $ | 160,926,111 | |
Class Y — Shares outstanding ($.01 par value) | 8,420,908 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 37 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 33,027 | |
(a) Cash Collateral for Futures | $ | 149 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Russell Short Duration Bond Fund 461
Russell Investment Company
Russell Short Duration Bond Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends from affiliated Russell funds | $ | 55 | |
Interest | 20,721 | ||
Total investment income | 20,776 | ||
Expenses | |||
Advisory fees | 4,757 | ||
Administrative fees | 503 | ||
Custodian fees | 262 | ||
Distribution fees - Class A | 73 | ||
Distribution fees - Class C | 507 | ||
Transfer agent fees - Class A | 58 | ||
Transfer agent fees - Class C | 135 | ||
Transfer agent fees - Class E | 65 | ||
Transfer agent fees - Class S | 1,431 | ||
Transfer agent fees - Class Y | 9 | ||
Professional fees | 125 | ||
Registration fees | 130 | ||
Shareholder servicing fees - Class C | 169 | ||
Shareholder servicing fees - Class E | 81 | ||
Trustees’ fees | 26 | ||
Printing fees | 61 | ||
Miscellaneous | 53 | ||
Expenses before reductions | 8,445 | ||
Expense reductions | (1,758 | ) | |
Net expenses | 6,687 | ||
Net investment income (loss) | 14,089 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (1,115 | ) | |
Futures contracts | (1,151 | ) | |
Credit default swap contracts | 207 | ||
Foreign currency-related transactions | 621 | ||
Net realized gain (loss) | (1,438 | ) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (4,729 | ) | |
Futures contracts | (56 | ) | |
Foreign currency-related transactions | (528 | ) | |
Net change in unrealized appreciation (depreciation) | (5,313 | ) | |
Net realized and unrealized gain (loss) | (6,751 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | 7,338 |
See accompanying notes which are an integral part of the financial statements.
462 Russell Short Duration Bond Fund
Russell Investment Company
Russell Short Duration Bond Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 14,089 | $ | 16,342 | ||
Net realized gain (loss) | (1,438 | ) | 6,845 | |||
Net change in unrealized appreciation (depreciation) | (5,313 | ) | (7,865 | ) | ||
Net increase (decrease) in net assets from operations | 7,338 | 15,322 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (338 | ) | (283 | ) | ||
Class C | (306 | ) | (262 | ) | ||
Class E | (376 | ) | (364 | ) | ||
Class S | (10,139 | ) | (9,093 | ) | ||
Class Y | (3,263 | ) | (3,419 | ) | ||
From net realized gain | ||||||
Class A | (185 | ) | (47 | ) | ||
Class C | (489 | ) | (150 | ) | ||
Class E | (223 | ) | (53 | ) | ||
Class S | (4,718 | ) | (1,108 | ) | ||
Class Y | (1,635 | ) | (339 | ) | ||
Net decrease in net assets from distributions | (21,672 | ) | (15,118 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (289,403 | ) | (136,954 | ) | ||
Total Net Increase (Decrease) in Net Assets | (303,737 | ) | (136,750 | ) | ||
Net Assets | ||||||
Beginning of period | 1,183,532 | 1,320,282 | ||||
End of period | $ | 879,795 | $ | 1,183,532 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 460 | $ | 2,557 |
See accompanying notes which are an integral part of the financial statements.
Russell Short Duration Bond Fund 463
Russell Investment Company
Russell Short Duration Bond Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 310 | $ | 5,939 | 571 | $ | 11,076 | ||||||
Proceeds from reinvestment of distributions | 23 | 447 | 16 | 301 | ||||||||
Payments for shares redeemed | (560 | ) | (10,713 | ) | (965 | ) | (18,717 | ) | ||||
Net increase (decrease) | (227 | ) | (4,327 | ) | (378 | ) | (7,340 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 461 | 8,780 | 1,029 | 19,814 | ||||||||
Proceeds from reinvestment of distributions | 41 | 779 | 20 | 397 | ||||||||
Payments for shares redeemed | (1,822 | ) | (34,708 | ) | (2,990 | ) | (57,581 | ) | ||||
Net increase (decrease) | (1,320 | ) | (25,149 | ) | (1,941 | ) | (37,370 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 66 | 1,259 | 325 | 6,303 | ||||||||
Proceeds from reinvestment of distributions | 27 | 518 | 19 | 367 | ||||||||
Payments for shares redeemed | (562 | ) | (10,772 | ) | (612 | ) | (11,879 | ) | ||||
Net increase (decrease) | (469 | ) | (8,995 | ) | (268 | ) | (5,209 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 14,434 | 276,916 | 13,457 | 261,049 | ||||||||
Proceeds from reinvestment of distributions | 769 | 14,738 | 521 | 10,092 | ||||||||
Payments for shares redeemed | (23,067 | ) | (442,522 | ) | (18,841 | ) | (365,325 | ) | ||||
Net increase (decrease) | (7,864 | ) | (150,868 | ) | (4,863 | ) | (94,184 | ) | ||||
Class Y | ||||||||||||
Proceeds from shares sold | 864 | 16,598 | 4,157 | 80,655 | ||||||||
Proceeds from reinvestment of distributions | 255 | 4,898 | 194 | 3,758 | ||||||||
Payments for shares redeemed | (6,327 | ) | (121,560 | ) | (3,978 | ) | (77,264 | ) | ||||
Net increase (decrease) | (5,208 | ) | (100,064 | ) | 373 | 7,149 | ||||||
Total increase (decrease) | (15,088 | ) | $ | (289,403 | ) | (7,077 | ) | $ | (136,954 | ) |
See accompanying notes which are an integral part of the financial statements.
464 Russell Short Duration Bond Fund
(This page intentionally left blank)
Russell Investment Company
Russell Short Duration Bond Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class A | ||||||||||||||||
October 31, 2015 | 19.35 | .22 | (.14 | ) | .08 | (.22 | ) | (.12 | ) | |||||||
October 31, 2014 | 19.35 | .22 | (.01 | ) | .21 | (.18 | ) | (.03 | ) | |||||||
October 31, 2013 | 19.70 | .19 | (.11 | ) | .08 | (.23 | ) | (.20 | ) | |||||||
October 31, 2012 | 19.15 | .26 | .57 | .83 | (.28 | ) | — | |||||||||
October 31, 2011 | 19.48 | .34 | (.31 | ) | .03 | (.36 | ) | — | ||||||||
Class C | ||||||||||||||||
October 31, 2015 | 19.21 | .08 | (.15 | ) | (.07 | ) | (.08 | ) | (.12 | ) | ||||||
October 31, 2014 | 19.23 | .08 | (.02 | ) | .06 | (.05 | ) | (.03 | ) | |||||||
October 31, 2013 | 19.59 | .05 | (.11 | ) | (.06 | ) | (.10 | ) | (.20 | ) | ||||||
October 31, 2012 | 19.06 | .11 | .57 | .68 | (.15 | ) | — | |||||||||
October 31, 2011 | 19.41 | .19 | (.31 | ) | (.12 | ) | (.23 | ) | — | |||||||
Class E | ||||||||||||||||
October 31, 2015 | 19.38 | .22 | (.13 | ) | .09 | (.22 | ) | (.12 | ) | |||||||
October 31, 2014 | 19.38 | .22 | (.01 | ) | .21 | (.18 | ) | (.03 | ) | |||||||
October 31, 2013 | 19.73 | .17 | (.08 | ) | .09 | (.24 | ) | (.20 | ) | |||||||
October 31, 2012 | 19.18 | .26 | .57 | .83 | (.28 | ) | — | |||||||||
October 31, 2011 | 19.52 | .34 | (.32 | ) | .02 | (.36 | ) | — | ||||||||
Class S | ||||||||||||||||
October 31, 2015 | 19.36 | .27 | (.14 | ) | .13 | (.27 | ) | (.12 | ) | |||||||
October 31, 2014 | 19.36 | .27 | (.01 | ) | .26 | (.23 | ) | (.03 | ) | |||||||
October 31, 2013 | 19.71 | .24 | (.11 | ) | .13 | (.28 | ) | (.20 | ) | |||||||
October 31, 2012 | 19.15 | .30 | .58 | .88 | (.32 | ) | — | |||||||||
October 31, 2011 | 19.49 | .39 | (.32 | ) | .07 | (.41 | ) | — | ||||||||
Class Y | ||||||||||||||||
October 31, 2015 | 19.37 | .28 | (.14 | ) | .14 | (.28 | ) | (.12 | ) | |||||||
October 31, 2014 | 19.36 | .29 | (.01 | ) | .28 | (.24 | ) | (.03 | ) | |||||||
October 31, 2013 | 19.71 | .26 | (.11 | ) | .15 | (.30 | ) | (.20 | ) | |||||||
October 31, 2012 | 19.15 | .33 | .57 | .90 | (.34 | ) | — | |||||||||
October 31, 2011 | 19.49 | .41 | (.32 | ) | .09 | (.43 | ) | — | ||||||||
See accompanying notes which are an integral part of the financial statements.
466 Russell Short Duration Bond Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||||
(.34 | ) | 19.09 | .42 | 24,914 | 1.01 | .82 | 1.15 | 183 | |||||||||
(.21 | ) | 19.35 | 1.04 | 29,639 | 1.01 | .85 | 1.14 | 220 | |||||||||
(.43 | ) | 19.35 | .42 | 36,961 | 1.00 | .87 | .99 | 180 | |||||||||
(.28 | ) | 19.70 | 4.37 | 37,994 | 1.00 | .86 | 1.33 | 245 | |||||||||
(.36 | ) | 19.15 | .18 | 29,061 | 1.01 | .88 | 1.75 | 339 | |||||||||
(.20 | ) | 18.94 | (.34 | ) | 56,538 | 1.76 | 1.57 | .40 | 183 | ||||||||
(.08 | ) | 19.21 | .28 | 82,676 | 1.76 | 1.60 | .39 | 220 | |||||||||
(.30 | ) | 19.23 | (.32 | ) | 120,088 | 1.75 | 1.62 | .24 | 180 | ||||||||
(.15 | ) | 19.59 | 3.59 | 132,292 | 1.75 | 1.61 | .56 | 245 | |||||||||
(.23 | ) | 19.06 | (.60 | ) | 112,900 | 1.76 | 1.63 | 1.01 | 339 | ||||||||
(.34 | ) | 19.13 | .47 | 26,633 | 1.01 | .82 | 1.15 | 183 | |||||||||
(.21 | ) | 19.38 | 1.08 | 36,083 | 1.01 | .85 | 1.15 | 220 | |||||||||
(.44 | ) | 19.38 | .42 | 41,281 | 1.00 | .87 | .93 | 180 | |||||||||
(.28 | ) | 19.73 | 4.36 | 20,230 | 1.00 | .86 | 1.33 | 245 | |||||||||
(.36 | ) | 19.18 | .13 | 21,347 | 1.01 | .88 | 1.76 | 339 | |||||||||
(.39 | ) | 19.10 | .67 | 610,784 | .76 | .57 | 1.40 | 183 | |||||||||
(.26 | ) | 19.36 | 1.30 | 771,202 | .76 | .60 | 1.40 | 220 | |||||||||
(.48 | ) | 19.36 | .67 | 865,268 | .75 | .62 | 1.23 | 180 | |||||||||
(.32 | ) | 19.71 | 4.66 | 801,758 | .75 | .62 | 1.56 | 245 | |||||||||
(.41 | ) | 19.15 | .37 | 631,819 | .76 | .63 | 2.00 | 339 | |||||||||
(.40 | ) | 19.11 | .75 | 160,926 | .56 | .49 | 1.46 | 183 | |||||||||
(.27 | ) | 19.37 | 1.41 | 263,932 | .56 | .51 | 1.49 | 220 | |||||||||
(.50 | ) | 19.36 | .78 | 256,684 | .56 | .51 | 1.36 | 180 | |||||||||
(.34 | ) | 19.71 | 4.75 | 266,289 | .56 | .51 | 1.70 | 245 | |||||||||
(.43 | ) | 19.15 | .46 | 298,724 | .59 | .53 | 2.10 | 339 |
See accompanying notes which are an integral part of the financial statements.
Russell Short Duration Bond Fund 467
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Tax Exempt High Yield Bond Fund - Class A‡ | Russell Tax Exempt High Yield Bond Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
Inception* | (3.77 | )% | Inception* | 2.20 | % | ||
Russell Tax Exempt High Yield Bond Fund - Class C | Barclays 60% Muni High Yield Bond/40% Muni Bond | ||||||
Total | Index (USD)** | ||||||
Return | Total | ||||||
Inception* | 1.82 | % | Return | ||||
Inception* | 0.46 | % | |||||
Russell Tax Exempt High Yield Bond Fund - Class E | |||||||
Total | |||||||
Return | |||||||
Inception* | 2.13 | % |
468 Russell Tax Exempt High Yield Bond Fund
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Tax Exempt High Yield Fund (the “Fund”) employs | Over the period from the Fund’s inception to October 31, 2015, | |
a multi-manager approach whereby portions of the Fund are | investment grade municipal bonds significantly outperformed | |
allocated to different money manager strategies. Fund assets not | high yield municipal bonds. Specifically, investment grade | |
allocated to money managers are managed by Russell Investment | municipal revenue and industrial development sectors performed | |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | well, and the municipal yield curve flattened, which provided | |
may change the allocation of the Fund’s assets among money | a favorable environment for Fund performance. However, the | |
managers at any time. An exemptive order from the Securities | Fund’s exposure to particular high yield municipals, such as | |
and Exchange Commission (“SEC”) permits RIMCo to engage | Puerto Rican bonds, significantly detracted over the period. | |
or terminate a money manager at any time, subject to approval | ||
by the Fund’s Board, without a shareholder vote. Pursuant to the | How did the investment strategies and techniques employed | |
terms of the exemptive order, the Fund is required to notify its | by the Fund and its money managers affect its benchmark- | |
shareholders within 90 days of when a money manager begins | relative performance? | |
providing services. As of October 31, 2015, the Fund had two | The Fund outperformed its benchmark for the period. Despite | |
money managers. | Puerto Rican exposure holding back performance near the start of | |
the period, the Fund’s overweight duration contributed positively | ||
What is the Fund’s investment objective? | due to the municipal yield curve flattening during the period. | |
The Fund seeks to provide a high level of current income that | The Fund employs discretionary money managers. The Fund’s | |
is exempt from federal tax, and as a secondary objective, total | discretionary money managers select the individual portfolio | |
return. | securities for the assets assigned to them. Fund assets not | |
How did the Fund perform relative to its benchmark for the | allocated to discretionary money managers include the Fund’s | |
fiscal year ended October 31, 2015? | liquidity reserves and assets which may be managed directly | |
For the period of June 1, 2015 (inception of the Fund) through | by RIMCo to effect the Fund’s investment strategies and/or to | |
October 31, 2015, the Fund’s Class A, Class C, Class E and Class | actively manage the Fund’s overall exposures by investing in | |
S Shares gained 2.11%, 1.82%, 2.13%, and 2.20%, respectively. | securities or other instruments that RIMCo believes will achieve | |
This is compared to the Fund’s benchmark, the 60% Barclays | the desired risk/return profile for the Fund. | |
U.S. Municipal High Yield Index / 40% Barclays Municipal Bond | Goldman Sachs Asset Management, L.P. was the worst performing | |
Index, which gained 0.46% during the same period. The Fund’s | manager for the period and underperformed the Fund’s | |
performance includes operating expenses, whereas index returns | benchmark. Results were largely due to Puerto Rican sales tax | |
are unmanaged and do not include expenses of any kind. | and insured highway bonds, and Chicago debt. Moderate positive | |
For the period of June 1, 2015 (inception of the Fund) through | contributors included selection within general obligation bonds | |
October 31, 2015, the Morningstar® High Yield Muni, a group of | and tobacco settlement revenue bonds. | |
funds that Morningstar considers to have investment strategies | MacKay Shield LLC was the best performing manager for the | |
similar to those of the Fund, gained 1.45%. This result serves as | period and outperformed the Fund’s benchmark. Yield curve | |
a peer comparison and is expressed net of operating expenses. | positioning and positive security selection across a handful | |
of sectors (including special tax, transportation, leasing and | ||
How did the market conditions described in the Market | healthcare) were most beneficial to results. Underweight exposure | |
Summary report affect the Fund’s performance? | to, and security selection within, state general obligation bonds | |
The Fund will tend to perform well in markets where investment | and electric revenue sectors modestly detracted. | |
grade revenue and industrial development sectors lead. This is | ||
generally an environment where the economy is stable and a | Describe any changes to the Fund’s structure or the money | |
higher coupon can be clipped or an environment where municipal | manager line-up. | |
tax receipts are stable or increasing, providing a better ability for | There were no changes to the Fund’s structure or money manager | |
issuers to pay their debt burden. This may also be generalized as | line-up during the fiscal year. | |
a “risk on” market where investors are generally bullish about the | ||
economy. Environments that feature sharp rises in interest rates | Money Managers as of October 31, | |
or mass sell offs in fixed income risk assets (e.g., the recent global | 2015 | Styles |
financial crisis) will tend to be unfavorable for Fund. | Goldman Sachs Asset Management, L.P | Sector Specialist |
MacKay Shields LLC | Sector Specialist |
Russell Tax Exempt High Yield Bond Fund 469
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The views expressed in this report reflect those of the portfolio |
managers only through the end of the period covered by |
the report. These views do not necessarily represent the |
views of RIMCo, or any other person in RIMCo or any other |
affiliated organization. These views are subject to change |
at any time based upon market conditions or other events, |
and RIMCo disclaims any responsibility to update the views |
contained herein. These views should not be relied on as |
investment advice and, because investment decisions for |
a Russell Investment Company (“RIC”) Fund are based on |
numerous factors, should not be relied on as an indication |
of investment decisions of any RIC Fund. |
* Assumes initial investment on June 1, 2015.
** The Barclays 60% Muni High Yield Bond/40% Muni Bond Index (USD) is a custom blend of 60% Barclays Municipal High Yield Bond Index / 40% Barclays
Municipal Bond Index, created and maintained by Barclays.
‡ The performance has been adjusted to reflect the deduction of the maximum Class A sales charge of 3.75%.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
470 Russell Tax Exempt High Yield Bond Fund
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | ||||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | ||||||
and other Fund expenses. The Example is intended to help | Performance (5% | ||||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | |||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | ||||
Beginning Account Value | |||||||
investing in other mutual funds. The Example is based on an | June 2, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
investment of $1,000 invested at the beginning of the period and | Ending Account Value | ||||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 1,021.10 | $ | 1,020.72 | ||
June 2, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 3.75 | $ | 4.53 | ||
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.89% | ||||||
(representing the 152-day period annualized), multiplied by the average | |||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 152/365 (to reflect the period | ||||||
Performance” provides information about actual account values | since commencement of operations). May reflect amounts waived and/or | ||||||
and actual expenses. You may use the information in this column, | reimbursed. Without any waivers and/or reimbursements, expenses would have | ||||||
together with the amount you invested, to estimate the expenses | been higher. Hypothetical expenses are equal to the Fund’s annualized expense | ||||||
ratio of 0.89% (representing the six-month period annualized), multiplied by | |||||||
that you paid over the period. Simply divide your account value by | the average account value over the period, multiplied by 184/365 (to reflect the | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | one-half year period). | ||||||
= 8.6), then multiply the result by the number in the first column | |||||||
in the row entitled “Expenses Paid During Period” to estimate | Hypothetical | ||||||
Performance (5% | |||||||
the expenses you paid on your account during this period. | Actual | return before | |||||
Class C | Performance | expenses) | |||||
Hypothetical Example for Comparison Purposes | Beginning Account Value | ||||||
The information in the table under the heading “Hypothetical | June 2, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Performance (5% return before expenses)” provides information | Ending Account Value | ||||||
October 31, 2015 | $ | 1,018.20 | $ | 1,016.94 | |||
about hypothetical account values and hypothetical expenses | Expenses Paid During Period* | $ | 6.89 | $ | 8.34 | ||
based on the Fund’s actual expense ratio and an assumed rate of | |||||||
return of 5% per year before expenses, which is not the Fund’s | * Expenses are equal to the Fund's annualized expense ratio of 1.64% | ||||||
actual return. The hypothetical account values and expenses | (representing the 152-day period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 152/365 (to reflect the period | |||||||
may not be used to estimate the actual ending account balance or | since commencement of operations). May reflect amounts waived and/or | ||||||
expenses you paid for the period. You may use this information | reimbursed. Without any waivers and/or reimbursements, expenses would have | ||||||
to compare the ongoing costs of investing in the Fund and other | been higher. Hypothetical expenses are equal to the Fund’s annualized expense | ||||||
funds. To do so, compare this 5% hypothetical example with the | ratio of 1.64% (representing the six-month period annualized), multiplied by | ||||||
the average account value over the period, multiplied by 184/365 (to reflect the | |||||||
5% hypothetical examples that appear in the shareholder reports | one-half year period). | ||||||
of other funds. |
Russell Tax Exempt High Yield Bond Fund 471
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class E | Performance | expenses) | |||
Beginning Account Value | |||||
June 2, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 1,021.30 | $ | 1,020.72 | |
Expenses Paid During Period* | $ | 3.75 | $ | 4.53 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.89% | |||||
(representing the 152-day period annualized), multiplied by the average | |||||
account value over the period, multiplied by 152/365 (to reflect the period | |||||
since commencement of operations). May reflect amounts waived and/or | |||||
reimbursed. Without any waivers and/or reimbursements, expenses would have | |||||
been higher. Hypothetical expenses are equal to the Fund’s annualized expense | |||||
ratio of 0.89% (representing the six-month period annualized), multiplied by | |||||
the average account value over the period, multiplied by 184/365 (to reflect the | |||||
on-half year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
June 2, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 1,022.00 | $ | 1,021.98 | |
Expenses Paid During Period* | $ | 2.69 | $ | 3.26 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.64% | |||||
(representing the 152-day period annualized), multiplied by the average | |||||
account value over the period, multiplied by 152/365 (to reflect the period | |||||
since commencement of operations). May reflect amounts waived and/or | |||||
reimbursed. Without any waivers and/or reimbursements, expenses would have | |||||
been higher. Hypothetical expenses are equal to the Fund’s annualized expense | |||||
ratio of 0.64% (representing the six-month period annualized), multiplied by | |||||
the average account value over the period, multiplied by 184/365 (to reflect the | |||||
on-half year period). |
472 Russell Tax Exempt High Yield Bond Fund
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Municipal Bonds - 94.9% | ||||||||
Alabama - 2.1% | ||||||||
Alabama Industrial Development Authority Revenue Bonds | 500 | 6.450 | 12/01/23 | 501 | ||||
County of Jefferson Alabama General Obligation Limited(µ) | 425 | 5.000 | 04/01/23 | 426 | ||||
County of Jefferson Alabama General Obligation Unlimited(µ) | 1,590 | 5.000 | 04/01/20 | 1,593 | ||||
County of Jefferson Alabama Revenue Bonds | 150 | 4.750 | 01/01/25 | 151 | ||||
County of Jefferson Alabama Sewer Revenue Bonds | 1,220 | 7.000 | 10/01/51 | 1,455 | ||||
County of Jefferson Alabama Sewer Revenue Bonds | 1,000 | 6.500 | 10/01/53 | 1,142 | ||||
5,268 | ||||||||
Alaska - 0.8% | ||||||||
Northern Tobacco Securitization Corp. Revenue Bonds | 2,340 | 5.000 | 06/01/46 | 1,949 | ||||
Arizona - 1.7% | ||||||||
Arizona Health Facilities Authority Revenue Bonds(Ê) | 1,000 | 0.994 | 01/01/37 | 885 | ||||
Industrial Development Authority of the County of Pima (The) Revenue Bonds | 250 | 4.500 | 06/01/30 | 268 | ||||
Industrial Development Authority of the County of Pima (The) Revenue Bonds | 800 | 5.125 | 12/01/40 | 831 | ||||
Salt Verde Financial Corp. Revenue Bonds | 2,100 | 5.000 | 12/01/37 | 2,343 | ||||
4,327 | ||||||||
California - 12.9% | ||||||||
California County Tobacco Securitization Agency Revenue Bonds | 300 | 5.700 | 06/01/46 | 285 | ||||
California Municipal Finance Authority Revenue Bonds | 1,000 | 4.250 | 02/01/40 | 1,016 | ||||
California Municipal Finance Authority Revenue Bonds | 1,000 | 5.375 | 11/01/40 | 1,001 | ||||
California Municipal Finance Authority Revenue Bonds | 3,700 | 5.000 | 06/01/50 | 3,946 | ||||
California Pollution Control Financing Authority Revenue Bonds | 1,000 | 3.375 | 07/01/25 | 1,017 | ||||
California Pollution Control Financing Authority Revenue Bonds(Å) | 1,000 | 5.000 | 11/21/45 | 1,055 | ||||
California Pollution Control Financing Authority Revenue Bonds | 1,720 | 5.000 | 11/21/45 | 1,815 | ||||
California Statewide Communities Development Authority Revenue Bonds | 460 | 5.000 | 05/15/32 | 495 | ||||
California Statewide Communities Development Authority Revenue Bonds | 1,000 | 5.000 | 10/01/43 | 1,060 | ||||
California Statewide Communities Development Authority Special Tax | 500 | 4.000 | 09/01/19 | 524 | ||||
California Statewide Communities Development Authority Special Tax | 1,085 | 4.000 | 09/01/20 | 1,137 | ||||
California Statewide Communities Development Authority Special Tax | 500 | 4.250 | 09/01/22 | 526 | ||||
City of Long Beach California Marina System Revenue Bonds | 225 | 5.000 | 05/15/40 | 241 | ||||
City of Long Beach California Marina System Revenue Bonds | 1,185 | 5.000 | 05/15/45 | 1,261 | ||||
Foothill-Eastern Transportation Corridor Agency Revenue Bonds | 100 | 6.000 | 01/15/49 | 116 | ||||
Fremont Community Facilities District No. 1 Special Tax | 1,255 | 5.000 | 09/01/26 | 1,418 | ||||
Golden State Tobacco Securitization Corp. Revenue Bonds | 500 | 5.000 | 06/01/33 | 445 | ||||
Golden State Tobacco Securitization Corp. Revenue Bonds | 1,870 | 5.300 | 06/01/37 | 1,660 | ||||
Golden State Tobacco Securitization Corp. Revenue Bonds | 1,200 | 5.125 | 06/01/47 | 1,012 | ||||
Golden State Tobacco Securitization Corp. Revenue Bonds | 885 | 5.750 | 06/01/47 | 808 | ||||
Jurupa Public Financing Authority Special Tax | 1,000 | 5.000 | 09/01/43 | 1,086 | ||||
M-S-R Energy Authority Revenue Bonds | 1,000 | 6.500 | 11/01/39 | 1,353 | ||||
Oakland Unified School District/Alameda County General Obligation Unlimited | 1,000 | 5.000 | 08/01/19 | 1,119 | ||||
Palomar Pomerado California Health Care Certificate of Participation | 450 | 6.750 | 11/01/39 | 498 | ||||
Palomar Pomerado California Health Care Certificate of Participation | 500 | 6.000 | 11/01/41 | 529 | ||||
Regents of the University of California Medical Center Pooled Revenue Bonds(µ)(Ê) | 1,000 | 0.924 | 05/15/43 | 867 | ||||
River Islands Public Financing Authority Special Tax | 750 | 5.500 | 09/01/45 | 778 | ||||
Sacramento County Sanitation Districts Financing Authority Revenue Bonds(µ)(Ê) | 1,000 | 0.719 | 12/01/35 | 909 | ||||
San Joaquin Hills Transportation Corridor Agency Revenue Bonds | 1,000 | 5.000 | 01/15/29 | 1,104 | ||||
San Joaquin Hills Transportation Corridor Agency Revenue Bonds | 180 | 5.250 | 01/15/49 | 189 | ||||
San Joaquin Hills Transportation Corridor Agency Revenue Bonds | 2,000 | 5.000 | 01/15/50 | 2,102 | ||||
Tobacco Securitization Authority of Northern California Revenue Bonds | 800 | 5.500 | 06/01/45 | 718 | ||||
32,090 | ||||||||
Colorado - 1.8% | ||||||||
Denver Health & Hospital Authority Revenue Bonds(Ê) | 1,000 | 1.289 | 12/01/33 | 926 | ||||
Denver Health & Hospital Authority Revenue Bonds | 1,500 | 5.250 | 12/01/45 | 1,627 | ||||
Eaton Area Park & Recreation District General Obligation Limited | 725 | 5.250 | 12/01/34 | 749 | ||||
Eaton Area Park & Recreation District General Obligation Limited | 525 | 5.500 | 12/01/38 | 554 | ||||
Foothills Metropolitan District Special Assessment | 500 | 6.000 | 12/01/38 | 532 | ||||
4,388 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt High Yield Bond Fund 473
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Connecticut - 0.0% | ||||||||
Mohegan Tribal Finance Authority Revenue Bonds(Å) | 100 | 7.000 | 02/01/45 | 85 | ||||
District of Columbia - 1.0% | ||||||||
Metropolitan Washington Airports Authority Dulles Toll Road Revenue Bonds | 2,475 | 5.000 | 10/01/53 | 2,601 | ||||
Florida - 8.9% | ||||||||
Bartram Park Community Development District Special Assessment | 770 | 4.500 | 05/01/25 | 772 | ||||
Bartram Park Community Development District Special Assessment | 500 | 4.250 | 05/01/29 | 498 | ||||
Bartram Park Community Development District Special Assessment | 500 | 4.500 | 05/01/35 | 502 | ||||
City of Atlantic Beach Florida Revenue Bonds | 1,000 | 5.000 | 11/15/37 | 1,030 | ||||
City of Cape Coral Florida Water & Sewer Revenue Bonds | 2,000 | 4.000 | 10/01/36 | 2,039 | ||||
City of Tampa Florida Revenue Bonds | 960 | 5.000 | 04/01/45 | 1,030 | ||||
County of Osceola Florida Revenue Bonds | 3,700 | 6.000 | 10/01/24 | 2,570 | ||||
Escambia County Health Facilities Authority Revenue Bonds | 1,000 | 6.000 | 08/15/36 | 1,152 | ||||
Greater Orlando Aviation Authority Revenue Bonds | 750 | 5.000 | 11/15/36 | 767 | ||||
Lakewood Ranch Stewardship District Special Assessment | 1,000 | 4.875 | 05/01/35 | 1,013 | ||||
Lee County Florida Industrial Development Authority Revenue Bonds | 750 | 5.000 | 11/15/29 | 776 | ||||
Miami Beach Health Facilities Authority Revenue Bonds | 2,250 | 5.000 | 11/15/39 | 2,425 | ||||
Mid-Bay Bridge Authority Revenue Bonds | 1,000 | 5.000 | 10/01/40 | 1,075 | ||||
Orchid Grove Community Development District Special Assessment | 1,145 | 3.625 | 05/01/21 | 1,139 | ||||
Orchid Grove Community Development District Special Assessment | 1,250 | 5.000 | 05/01/36 | 1,244 | ||||
Reunion East Community Development District Special Assessment | 750 | 5.000 | 05/01/25 | 779 | ||||
Reunion East Community Development District Special Assessment | 750 | 5.000 | 05/01/33 | 750 | ||||
South-Dade Venture Community Development District Special Assessment | 1,000 | 5.125 | 05/01/33 | 1,053 | ||||
Venetian Community Development District Special Assessment | 535 | 5.000 | 05/01/23 | 566 | ||||
Verano 1 Community Development Distrtict Special Assessment | 250 | 4.750 | 11/01/25 | 249 | ||||
Verano 1 Community Development Distrtict Special Assessment | 250 | 5.125 | 11/01/35 | 250 | ||||
Verano 1 Community Development Distrtict Special Assessment | 250 | 5.250 | 11/01/46 | 250 | ||||
Volusia County Educational Facility Authority Revenue Bonds | 240 | 5.000 | 06/01/45 | 260 | ||||
22,189 | ||||||||
Georgia - 1.4% | ||||||||
Heard County Development Authority Revenue Bonds(Ê) | 500 | 0.200 | 12/01/37 | 500 | ||||
Milledgeville & Baldwin County Development Authority Revenue Bonds(µ)(Ê) | 1,000 | 0.784 | 10/01/24 | 973 | ||||
Milledgeville & Baldwin County Development Authority Revenue Bonds(µ)(Ê) | 1,000 | 0.834 | 10/01/33 | 892 | ||||
Private Colleges & Universities Authority Revenue Bonds | 1,000 | 5.000 | 10/01/40 | 1,062 | ||||
3,427 | ||||||||
Guam - 1.8% | ||||||||
Guam Government Waterworks Authority Revenue Bonds | 1,000 | 5.500 | 07/01/43 | 1,113 | ||||
Territory of Guam Revenue Bonds | 1,000 | 5.000 | 11/15/19 | 1,121 | ||||
Territory of Guam Revenue Bonds | 500 | 5.000 | 11/15/29 | 564 | ||||
Territory of Guam Revenue Bonds | 1,500 | 5.000 | 11/15/35 | 1,653 | ||||
4,451 | ||||||||
Illinois - 8.8% | ||||||||
Chicago Board of Education General Obligation Unlimited | 300 | 5.000 | 12/01/15 | 301 | ||||
Chicago Board of Education General Obligation Unlimited | 145 | 4.250 | 12/01/18 | 142 | ||||
Chicago Board of Education General Obligation Unlimited(µ) | 1,000 | 5.000 | 12/01/27 | 1,017 | ||||
Chicago Board of Education General Obligation Unlimited | 620 | 5.000 | 12/01/28 | 575 | ||||
Chicago O'Hare International Airport Revenue Bonds | 1,000 | 5.000 | 01/01/46 | 1,056 | ||||
City of Chicago Illinois General Obligation Unlimited(µ) | 2,445 | 5.000 | 01/01/29 | 2,477 | ||||
City of Chicago Illinois General Obligation Unlimited | 3,100 | 5.500 | 01/01/42 | 3,151 | ||||
City of Chicago Illinois Revenue Bonds | 900 | 5.000 | 01/01/34 | 922 | ||||
City of Chicago Illinois Revenue Bonds | 3,000 | 5.250 | 01/01/38 | 3,115 | ||||
Illinois Finance Authority Revenue Bonds | 500 | 5.000 | 04/01/31 | 500 | ||||
Illinois Finance Authority Revenue Bonds | 200 | 5.000 | 04/01/36 | 191 | ||||
Illinois Finance Authority Revenue Bonds | 400 | 5.000 | 12/01/36 | 401 | ||||
Illinois Finance Authority Revenue Bonds | 875 | 6.000 | 05/15/39 | 1,004 | ||||
Metropolitan Pier & Exposition Authority Revenue Bonds | 1,000 | 5.000 | 12/15/28 | 1,088 | ||||
Metropolitan Pier & Exposition Authority Revenue Bonds | 1,000 | 5.000 | 06/15/52 | 1,021 |
See accompanying notes which are an integral part of the financial statements.
474 Russell Tax Exempt High Yield Bond Fund
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Springfield Metropolitan Sanitation District General Obligation Limited | 1,000 | 5.750 | 01/01/53 | 1,138 | ||||
State of Illinois General Obligation Unlimited | 2,400 | 5.000 | 05/01/29 | 2,524 | ||||
State of Illinois General Obligation Unlimited(µ) | 400 | 5.000 | 03/01/34 | 400 | ||||
Village of Bourbonnais Illinois Revenue Bonds | 1,000 | 5.000 | 11/01/44 | 1,009 | ||||
22,032 | ||||||||
Indiana - 1.3% | ||||||||
Hammond Local Public Improvement Bond Bank Revenue Bonds | 260 | 6.500 | 08/15/30 | 261 | ||||
Hammond Local Public Improvement Bond Bank Revenue Bonds | 290 | 6.750 | 08/15/35 | 291 | ||||
Indiana Finance Authority Revenue Bonds | 185 | 5.500 | 08/15/40 | 202 | ||||
Indiana Finance Authority Revenue Bonds | 2,000 | 5.000 | 10/01/44 | 2,069 | ||||
Indiana Finance Authority Revenue Bonds | 270 | 5.500 | 08/15/45 | 291 | ||||
3,114 | ||||||||
Iowa - 0.2% | ||||||||
Iowa Tobacco Settlement Authority Revenue Bonds | 110 | 5.375 | 06/01/38 | 102 | ||||
Iowa Tobacco Settlement Authority Revenue Bonds | 530 | 5.500 | 06/01/42 | 496 | ||||
598 | ||||||||
Kentucky - 1.4% | ||||||||
County of Ohio Kentucky Revenue Bonds | 2,705 | 6.000 | 07/15/31 | 2,735 | ||||
Kentucky Economic Development Finance Authority Revenue Bonds | 750 | 6.500 | 03/01/45 | 860 | ||||
3,595 | ||||||||
Louisiana - 1.0% | ||||||||
Louisiana Local Government Environmental Facilities & Community Development | ||||||||
Authority Revenue Bonds | 750 | 6.000 | 10/01/44 | 871 | ||||
Louisiana Public Facilities Authority Revenue Bonds | 250 | 4.000 | 05/15/19 | 270 | ||||
Louisiana Public Facilities Authority Revenue Bonds | 300 | 4.000 | 05/15/20 | 327 | ||||
New Orleans Aviation Board Revenue Bonds | 1,000 | 5.000 | 01/01/45 | 1,071 | ||||
2,539 | ||||||||
Maryland - 1.3% | ||||||||
City of Baltimore Maryland Revenue Bonds(µ) | 175 | 5.250 | 09/01/39 | 177 | ||||
Maryland Health & Higher Educational Facilities Authority Revenue Bonds | 730 | 4.000 | 07/01/20 | 787 | ||||
Maryland Health & Higher Educational Facilities Authority Revenue Bonds | 600 | 5.250 | 01/01/37 | 655 | ||||
Maryland Health & Higher Educational Facilities Authority Revenue Bonds | 530 | 5.500 | 07/01/42 | 554 | ||||
Maryland Health & Higher Educational Facilities Authority Revenue Bonds | 1,000 | 5.000 | 07/01/45 | 1,070 | ||||
3,243 | ||||||||
Massachusetts - 2.6% | ||||||||
Commonwealth of Massachusetts General Obligation Limited(Ê) | 445 | 0.020 | 03/01/26 | 445 | ||||
Massachusetts Development Finance Agency Revenue Bonds | 2,000 | 4.875 | 11/01/42 | 1,972 | ||||
Massachusetts Development Finance Agency Revenue Bonds | 1,845 | 5.000 | 07/01/44 | 1,985 | ||||
Massachusetts Port Authority Revenue Bonds(µ) | 2,000 | 5.000 | 01/01/27 | 2,008 | ||||
6,410 | ||||||||
Michigan - 4.9% | ||||||||
City of Detroit Michigan Sewage Disposal System Revenue Bonds | 2,010 | 5.250 | 07/01/39 | 2,179 | ||||
City of Detroit Michigan Water Supply System Revenue Bonds | 1,275 | 5.000 | 07/01/41 | 1,339 | ||||
Flint Hospital Building Authority Revenue Bonds | 100 | 5.250 | 07/01/39 | 100 | ||||
Michigan Finance Authority Revenue Bonds | 1,000 | 3.875 | 10/01/23 | 1,033 | ||||
Michigan Finance Authority Revenue Bonds(µ) | 1,000 | 5.000 | 07/01/36 | 1,072 | ||||
Michigan Finance Authority Revenue Bonds | 1,815 | 5.500 | 11/15/45 | 1,853 | ||||
Michigan Finance Authority Revenue Notes(Å) | 1,000 | 4.750 | 06/01/16 | 1,009 | ||||
Michigan Finance Authority Revenue Notes(Å) | 700 | 5.750 | 08/22/16 | 700 | ||||
Michigan Higher Education Facilities Authority Revenue Bonds | 270 | 6.125 | 12/01/37 | 271 | ||||
Michigan Tobacco Settlement Finance Authority Revenue Bonds | 155 | 5.125 | 06/01/22 | 141 | ||||
Michigan Tobacco Settlement Finance Authority Revenue Bonds | 2,500 | 6.000 | 06/01/34 | 2,300 | ||||
Michigan Tobacco Settlement Finance Authority Revenue Bonds | 270 | 6.000 | 06/01/48 | 240 | ||||
12,237 | ||||||||
Minnesota - 1.7% | ||||||||
City of Blaine Minnesota Revenue Bonds | 2,000 | 6.125 | 07/01/45 | 2,078 | ||||
St. Paul Housing & Redevelopment Authority Revenue Bonds | 2,000 | 5.250 | 11/15/35 | 2,150 | ||||
4,228 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt High Yield Bond Fund 475
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Mississippi - 0.2% | ||||||||
Mississippi Business Finance Corp. Revenue Bonds(Ê) | 500 | 0.010 | 12/01/30 | 500 | ||||
Missouri - 0.6% | ||||||||
Branson Industrial Development Authority Tax Allocation | 110 | 5.500 | 06/01/29 | 108 | ||||
Health & Educational Facilities Authority of the State of Missouri Revenue Bonds | 1,410 | 5.000 | 05/01/40 | 1,474 | ||||
1,582 | ||||||||
Nevada - 0.1% | ||||||||
Las Vegas Special Improvement District 607 Special Assessment | 290 | 5.000 | 06/01/24 | 311 | ||||
New Jersey - 5.9% | ||||||||
New Jersey Economic Development Authority Revenue Bonds | 1,900 | 5.000 | 07/01/38 | 1,885 | ||||
New Jersey Economic Development Authority Revenue Bonds | 1,500 | 5.375 | 01/01/43 | 1,614 | ||||
New Jersey Health Care Facilities Revenue Bonds | 500 | 6.625 | 07/01/38 | 553 | ||||
New Jersey Transportation Trust Fund Authority Revenue Bonds | 2,695 | 5.000 | 06/15/42 | 2,736 | ||||
South Jersey Transportation Authority LLC Revenue Bonds | 315 | 5.000 | 11/01/26 | 347 | ||||
South Jersey Transportation Authority LLC Revenue Bonds | 1,945 | 5.000 | 11/01/39 | 2,052 | ||||
Tobacco Settlement Financing Corp. Revenue Bonds | 750 | 4.625 | 06/01/26 | 733 | ||||
Tobacco Settlement Financing Corp. Revenue Bonds | 1,000 | 5.000 | 06/01/29 | 877 | ||||
Tobacco Settlement Financing Corp. Revenue Bonds | 1,430 | 4.750 | 06/01/34 | 1,154 | ||||
Tobacco Settlement Financing Corp. Revenue Bonds | 3,450 | 5.000 | 06/01/41 | 2,775 | ||||
14,726 | ||||||||
New York - 3.4% | ||||||||
Dutchess County Industrial Development Agency Revenue Bonds | 2,200 | 4.500 | 08/01/36 | 2,053 | ||||
New York City Industrial Development Agency Revenue Bonds(Ê) | 1,000 | 2.000 | 08/01/28 | 1,002 | ||||
New York City Transitional Finance Authority Revenue Bonds | 750 | 0.010 | 11/01/22 | 750 | ||||
New York Liberty Development Corp. Revenue Bonds(Å) | 1,000 | 5.000 | 11/15/44 | 1,010 | ||||
New York Liberty Development Corp. Revenue Bonds | 1,000 | 5.000 | 11/15/44 | 1,010 | ||||
New York Liberty Development Corp. Revenue Bonds | 500 | 7.250 | 11/15/44 | 592 | ||||
New York State Dormitory Authority Revenue Bonds | 400 | 5.000 | 12/01/35 | 420 | ||||
Onondaga Civic Development Corp. Revenue Bonds | 910 | 5.000 | 07/01/42 | 945 | ||||
Otsego County Capital Resource Corp. Revenue Bonds | 620 | 5.000 | 10/01/35 | 667 | ||||
8,449 | ||||||||
Ohio - 2.3% | ||||||||
Buckeye Tobacco Settlement Financing Authority Revenue Bonds | 1,375 | 5.125 | 06/01/24 | 1,228 | ||||
Buckeye Tobacco Settlement Financing Authority Revenue Bonds | 100 | 5.375 | 06/01/24 | 91 | ||||
Buckeye Tobacco Settlement Financing Authority Revenue Bonds | 1,375 | 5.875 | 06/01/30 | 1,223 | ||||
Buckeye Tobacco Settlement Financing Authority Revenue Bonds | 2,095 | 5.750 | 06/01/34 | 1,822 | ||||
Hamilton County Ohio Health Care Revenue Bonds | 750 | 5.000 | 01/01/37 | 759 | ||||
Lorain County Port Authority Revenue Bonds | 510 | 6.750 | 12/01/40 | 512 | ||||
5,635 | ||||||||
Oklahoma - 0.4% | ||||||||
Tulsa Airports Improvement Trust Revenue Bonds(Ê) | 1,000 | 5.000 | 06/01/35 | 1,099 | ||||
Oregon - 1.4% | ||||||||
Oregon State Facilities Authority Revenue Bonds | 750 | 6.375 | 09/01/40 | 800 | ||||
Oregon State Facilities Authority Revenue Bonds | 2,500 | 5.000 | 04/01/45 | 2,739 | ||||
3,539 | ||||||||
Pennsylvania - 4.5% | ||||||||
Allentown Neighborhood Improvement Zone Development Authority Revenue Bonds | 1,000 | 5.000 | 05/01/42 | 1,025 | ||||
City of Harrisburg Pennsylvania General Obligation Unlimited(µ) | 285 | Zero coupon | 09/15/22 | 208 | ||||
Clairton Municipal Authority Revenue Bonds | 180 | 5.000 | 12/01/42 | 189 | ||||
East Hempfield Township Industrial Development Authority Revenue Bonds | 600 | 5.000 | 07/01/45 | 621 | ||||
Geisinger Authority Revenue Bonds(Ê) | 100 | 0.956 | 05/01/37 | 85 | ||||
Latrobe Industrial Development Authority Revenue Bonds | 1,375 | 5.000 | 05/01/43 | 1,423 | ||||
Montgomery County Industrial Development Authority Revenue Bonds | 1,700 | 5.250 | 01/15/46 | 1,815 | ||||
Pennsylvania Economic Development Financing Authority Revenue Bonds | 1,000 | 5.000 | 06/30/42 | 1,060 | ||||
Pennsylvania Higher Educational Facilities Authority Revenue Bonds | 155 | 6.250 | 09/01/33 | 164 | ||||
Pennsylvania Higher Educational Facilities Authority Revenue Bonds(µ) | 140 | 5.000 | 07/01/37 | 140 | ||||
Pennsylvania Higher Educational Facilities Authority Revenue Bonds | 950 | 5.500 | 07/15/43 | 1,028 |
See accompanying notes which are an integral part of the financial statements.
476 Russell Tax Exempt High Yield Bond Fund
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Pennsylvania Turnpike Commission Revenue Bonds | 1,250 | 5.000 | 12/01/40 | 1,379 | ||||
Scranton Parking Authority Revenue Bonds(µ) | 2,020 | 5.250 | 06/01/39 | 2,027 | ||||
11,164 | ||||||||
Puerto Rico - 8.0% | ||||||||
Children's Trust Fund Revenue Bonds | 12,000 | Zero coupon | 05/15/50 | 1,057 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited(µ) | 310 | 5.500 | 07/01/19 | 304 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited | 110 | 5.000 | 07/01/21 | 71 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited(µ) | 100 | 5.000 | 07/01/31 | 98 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited | 130 | 5.125 | 07/01/31 | 82 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited | 1,235 | 5.000 | 07/01/35 | 1,107 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited | 1,000 | 8.000 | 07/01/35 | 726 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited | 530 | 6.000 | 07/01/39 | 338 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited | 180 | 6.000 | 07/01/40 | 115 | ||||
Government Development Bank for Puerto Rico Revenue Bonds(µ) | 1,255 | 4.750 | 12/01/15 | 1,257 | ||||
Puerto Rico Commonwealth Aqueduct & Sewer Authority Revenue Bonds(µ) | 265 | 5.000 | 07/01/28 | 260 | ||||
Puerto Rico Commonwealth Aqueduct & Sewer Authority Revenue Bonds | 20 | 5.000 | 07/01/30 | 14 | ||||
Puerto Rico Commonwealth Aqueduct & Sewer Authority Revenue Bonds | 50 | 5.000 | 07/01/33 | 34 | ||||
Puerto Rico Commonwealth Aqueduct & Sewer Authority Revenue Bonds | 1,670 | 5.250 | 07/01/42 | 1,140 | ||||
Puerto Rico Commonwealth Aqueduct & Sewer Authority Revenue Bonds | 75 | 6.000 | 07/01/44 | 53 | ||||
Puerto Rico Commonwealth Aqueduct & Sewer Authority Revenue Bonds | 140 | 6.000 | 07/01/47 | 98 | ||||
Puerto Rico Convention Center District Authority Revenue Bonds(µ) | 100 | 5.000 | 07/01/17 | 99 | ||||
Puerto Rico Convention Center District Authority Revenue Bonds(µ) | 2,050 | 5.000 | 07/01/31 | 1,709 | ||||
Puerto Rico Convention Center District Authority Revenue Bonds(µ) | 125 | 4.500 | 07/01/36 | 93 | ||||
Puerto Rico Electric Power Authority Revenue Bonds(µ) | 270 | 5.000 | 07/01/22 | 267 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds(µ) | 100 | 5.000 | 07/01/16 | 99 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds | 60 | 5.000 | 07/01/28 | 22 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds | 205 | 5.000 | 07/01/32 | 76 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds(µ) | 160 | 4.750 | 07/01/38 | 136 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds(µ) | 4,200 | 5.250 | 07/01/38 | 3,570 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds | 180 | 5.000 | 07/01/42 | 67 | ||||
Puerto Rico Infrastructure Financing Authority Revenue Bonds(µ) | 115 | 5.500 | 07/01/16 | 115 | ||||
Puerto Rico Infrastructure Financing Authority Revenue Bonds(µ) | 2,230 | 5.500 | 07/01/23 | 2,134 | ||||
Puerto Rico Public Buildings Authority Revenue Bonds(µ) | 1,500 | 5.250 | 07/01/21 | 1,413 | ||||
Puerto Rico Sales Tax Financing Corp. Revenue Bonds | 115 | 6.750 | 08/01/16 | 49 | ||||
Puerto Rico Sales Tax Financing Corp. Revenue Bonds | 155 | 6.250 | 08/01/19 | 48 | ||||
Puerto Rico Sales Tax Financing Corp. Revenue Bonds | 280 | 5.750 | 08/01/37 | 128 | ||||
Puerto Rico Sales Tax Financing Corp. Revenue Bonds | 75 | 5.375 | 08/01/39 | 34 | ||||
Puerto Rico Sales Tax Financing Corp. Revenue Bonds | 500 | 6.375 | 08/01/39 | 234 | ||||
Puerto Rico Sales Tax Financing Corp. Revenue Bonds | 1,300 | 5.250 | 08/01/41 | 583 | ||||
Puerto Rico Sales Tax Financing Corp. Revenue Bonds(µ) | 14,125 | Zero coupon | 08/01/45 | 2,215 | ||||
19,845 | ||||||||
Tennessee - 1.3% | ||||||||
Chattanooga-Hamilton County Hospital Authority Revenue Bonds | 2,000 | 5.000 | 10/01/44 | 2,113 | ||||
Johnson City Health & Educational Facilities Board Revenue Bonds | 1,000 | 5.000 | 08/15/42 | 1,069 | ||||
3,182 | ||||||||
Texas - 5.8% | ||||||||
Austin Convention Enterprises, Inc. Revenue Bonds(µ) | 1,690 | 4.300 | 01/01/33 | 1,693 | ||||
Austin Convention Enterprises, Inc. Revenue Bonds(µ) | 760 | 5.000 | 01/01/34 | 769 | ||||
Central Texas Turnpike System Revenue Bonds | 3,000 | 5.000 | 08/15/42 | 3,229 | ||||
City of Houston Texas Airport System Revenue Bonds | 500 | 5.000 | 07/01/29 | 528 | ||||
City of Houston Texas Airport System Revenue Bonds | 1,000 | 5.000 | 07/15/30 | 1,067 | ||||
City of Houston Texas Airport System Revenue Bonds | 1,000 | 5.000 | 07/15/35 | 1,046 | ||||
Grand Parkway Transportation Corp. Revenue Bonds | 2,500 | 5.500 | 04/01/53 | 2,728 | ||||
New Hope Cultural Education Facilities Corp. Revenue Bonds | 1,500 | 4.750 | 04/01/46 | 1,488 | ||||
Tarrant County Cultural Education Facilities Finance Corp. Revenue Bonds | 875 | 5.000 | 10/01/44 | 907 | ||||
Texas City Industrial Development Corp. Revenue Bonds | 1,000 | 4.125 | 12/01/45 | 908 | ||||
14,363 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Vermont - 0.6% | ||||||||
Vermont Educational & Health Buildings Financing Agency Revenue Bonds | 1,400 | 5.000 | 10/01/42 | 1,506 | ||||
Virgin Islands - 1.5% | ||||||||
Virgin Islands Public Finance Authority Revenue Bonds(µ) | 2,000 | 4.000 | 10/01/22 | 2,152 | ||||
Virgin Islands Water & Power Authority - Electric System Revenue Bonds | 615 | 4.000 | 07/01/21 | 651 | ||||
Virgin Islands Water & Power Authority - Electric System Revenue Bonds | 1,020 | 5.000 | 07/01/31 | 1,027 | ||||
3,830 | ||||||||
Virginia - 0.9% | ||||||||
Tobacco Settlement Financing Corp. Revenue Bonds | 1,000 | 5.200 | 06/01/46 | 779 | ||||
Tobacco Settlement Financing Corp. Revenue Bonds | 290 | 5.000 | 06/01/47 | 218 | ||||
Virginia College Building Authority Revenue Bonds | 1,000 | 5.000 | 07/01/45 | 1,005 | ||||
Virginia Small Business Financing Authority Revenue Bonds | 180 | 5.000 | 01/01/40 | 186 | ||||
2,188 | ||||||||
Washington - 1.6% | ||||||||
Washington Health Care Facilities Authority Revenue Bonds | 2,315 | 5.000 | 07/01/39 | 2,489 | ||||
Whidbey Island Public Hospital District General Obligation Unlimited | 1,500 | 5.500 | 12/01/33 | 1,595 | ||||
4,084 | ||||||||
Wisconsin - 0.8% | ||||||||
Public Finance Authority Revenue Bonds | 500 | 5.000 | 07/01/42 | 517 | ||||
Public Finance Authority Revenue Bonds | 1,000 | 5.875 | 04/01/45 | 1,029 | ||||
Public Finance Authority Revenue Bonds | 340 | 5.250 | 07/01/47 | 353 | ||||
1,899 | ||||||||
Total Municipal Bonds (cost $234,688) | 236,673 | |||||||
Short-Term Investments - 3.6% | ||||||||
Russell U.S. Cash Management Fund | 8,959,708 | (8) | 8,960 | |||||
Total Short-Term Investments (cost $8,960) | 8,960 | |||||||
Total Investments 98.5% (identified cost $243,648) | 245,633 | |||||||
Other Assets and Liabilities, Net - 1.5% | 3,652 | |||||||
Net Assets - 100.0% | 249,285 |
See accompanying notes which are an integral part of the financial statements.
478 Russell Tax Exempt High Yield Bond Fund
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Russell Tax Exempt High Yield Bond Fund
Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
1.5% | ||||||||||||
California Pollution Control Financing Authority Revenue Bonds | 06/02/15 | 1,000,000 | 104.73 | 1,047 | 1,055 | |||||||
Michigan Finance Authority Revenue Notes | 06/16/15 | 1,000,000 | 100.85 | 1,009 | 1,009 | |||||||
Michigan Finance Authority Revenue Notes | 09/11/15 | 700,000 | 100.00 | 700 | 700 | |||||||
Mohegan Tribal Finance Authority Revenue Bonds | 10/06/15 | 100,000 | 83.88 | 84 | 85 | |||||||
New York Liberty Development Corp. Revenue Bonds | 06/16/15 | 1,000,000 | 101.26 | 1,013 | 1,010 | |||||||
3,859 | ||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
Interest Rate Swap Contracts | |||||||||
Amounts in thousands | |||||||||
Termination | Fair Value | ||||||||
Counterparty | Notional Amount | Fund Receives | Fund Pays | Date | $ | ||||
Morgan Stanley | USD | 5,100 | Three Month LIBOR | 2.500 | % | 12/16/25 | (188 | ) | |
Morgan Stanley | USD | 2,300 | Three Month LIBOR | 2.750 | % | 12/16/45 | 100 | ||
Total Fair Value on Open Interest Rate Swap Contracts Premiums Paid (Received) - $(27) (å) | (88 | ) |
Presentation of Portfolio Holdings | ||||||||||||
Amount in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Municipal Bonds | ||||||||||||
Alabama | $ | — | $ | 5,268 | $ | — | $ | 5,268 | 2.1 | |||
Alaska | — | 1,949 | — | 1,949 | 0.8 | |||||||
Arizona | — | 4,327 | — | 4,327 | 1.7 | |||||||
California | — | 32,090 | — | 32,090 | 12.9 | |||||||
Colorado | — | 4,388 | — | 4,388 | 1.8 | |||||||
Connecticut | — | 85 | — | 85 | —* | |||||||
District of Columbia | — | 2,601 | — | 2,601 | 1.0 | |||||||
Florida | — | 22,189 | — | 22,189 | 8.9 | |||||||
Georgia | — | 3,427 | — | 3,427 | 1.4 | |||||||
Guam | — | 4,451 | — | 4,451 | 1.8 | |||||||
Illinois | — | 22,032 | — | 22,032 | 8.8 | |||||||
Indiana | — | 3,114 | — | 3,114 | 1.3 | |||||||
Iowa | — | 598 | — | 598 | 0.2 | |||||||
Kentucky | — | 3,595 | — | 3,595 | 1.4 | |||||||
Louisiana | — | 2,539 | — | 2,539 | 1.0 | |||||||
Maryland | — | 3,243 | — | 3,243 | 1.3 | |||||||
Massachusetts | — | 6,410 | — | 6,410 | 2.6 | |||||||
Michigan | — | 12,237 | — | 12,237 | 4.9 | |||||||
Minnesota | — | 4,228 | — | 4,228 | 1.7 | |||||||
Mississippi | — | 500 | — | 500 | 0.2 | |||||||
Missouri | — | 1,582 | — | 1,582 | 0.6 | |||||||
Nevada | — | 311 | — | 311 | 0.1 | |||||||
New Jersey | — | 14,726 | — | 14,726 | 5.9 | |||||||
New York | — | 8,449 | — | 8,449 | 3.4 | |||||||
Ohio | — | 5,635 | — | 5,635 | 2.3 | |||||||
Oklahoma | — | 1,099 | — | 1,099 | 0.4 | |||||||
Oregon | — | 3,539 | — | 3,539 | 1.4 | |||||||
Pennsylvania | — | 11,164 | — | 11,164 | 4.5 | |||||||
Puerto Rico | — | 19,845 | — | 19,845 | 8.0 | |||||||
Tennessee | — | 3,182 | — | 3,182 | 1.3 | |||||||
Texas | — | 14,363 | — | 14,363 | 5.8 | |||||||
Vermont | — | 1,506 | — | 1,506 | 0.6 | |||||||
Virgin Islands | — | 3,830 | — | 3,830 | 1.5 | |||||||
Virginia | — | 2,188 | — | 2,188 | 0.9 | |||||||
Washington | — | 4,084 | — | 4,084 | 1.6 | |||||||
Wisconsin | — | 1,899 | — | 1,899 | 0.8 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt High Yield Bond Fund 479
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Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | ||||||||||||||
Amount in thousands | ||||||||||||||
Fair Value | ||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||||
Short-Term Investments | — | 8,960 | — | 8,960 | 3.6 | |||||||||
Total Investments | $ | — | $ | 245,633 | $ | — | $ | 245,633 | 98.5 | |||||
Other Assets and Liabilities, Net | 1.5 | |||||||||||||
100.0 | ||||||||||||||
Other Financial Instruments | ||||||||||||||
Interest Rate Swap Contracts | — | (88 | ) | — | (88 | ) | (—)* | |||||||
Total Other Financial Instruments** | $ | — | $ | (88 | ) | $ | — | $ | (88 | ) |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation/depreciation on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
480 Russell Tax Exempt High Yield Bond Fund
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Russell Tax Exempt High Yield Bond Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | |||
Interest Rate | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Assets and Liabilities - Assets | |||
Interest rate swap contracts, at fair value | $ | 100 | |
Location: Statement of Assets and Liabilities - Liabilities | |||
Interest rate swap contracts, at fair value | $ | 188 | |
Interest Rate | |||
Derivatives not accounted for as hedging instruments | Contracts | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||
Interest rate swap contracts | $ | (61 | ) |
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt High Yield Bond Fund 481
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||||||
Offsetting of Financial Assets and Derivative Assets | ||||||||||
Gross | Net Amounts | |||||||||
Amounts | of Assets | |||||||||
Gross | Offset in the | Presented in | ||||||||
Amounts of | Statement of | the Statement | ||||||||
Recognized | Assets and | of Assets and | ||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||||
Interest Rate Swap Contracts | Interest rate swap contracts, at fair value | $ | 100 | $ | — | $ | 100 | |||
Total Financial and Derivative Assets | 100 | — | 100 | |||||||
Financial and Derivative Assets not subject to a netting agreement | (100) | — | (100 | ) | ||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | — | $ | — | $ | — | ||||
Offsetting of Financial Liabilities and Derivative Liabilities |
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Interest Rate Swap Contracts | Interest rate swap contracts, at fair value | $ | 188 | $ | — | $ | 188 | ||
Total Financial and Derivative Liabilities | 188 | — | 188 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (188) | — | (188 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | — | $ | — | $ | — | |||
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance | |||||||||
Sheet collateral and adjustments made to exclude overcollateralization. |
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
482 Russell Tax Exempt High Yield Bond Fund
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 243,648 |
Investments, at fair value(>) | 245,633 | |
Cash | 12 | |
Cash (restricted)(a) | 898 | |
Receivables: | ||
Dividends and interest | 3,569 | |
Dividends from affiliated Russell funds | 1 | |
Investments sold | 16 | |
Fund shares sold | 1,283 | |
Prepaid expenses | 57 | |
Interest rate swap contracts, at fair value(•) | 100 | |
Total assets | 251,569 | |
Liabilities | ||
Payables: | ||
Investments purchased | 1,704 | |
Fund shares redeemed | 241 | |
Accrued fees to affiliates | 92 | |
Other accrued expenses | 59 | |
Interest rate swap contracts, at fair value(•) | 188 | |
Total liabilities | 2,284 | |
Net Assets | $ | 249,285 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt High Yield Bond Fund 483
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Russell Tax Exempt High Yield Bond Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 879 | |
Accumulated net realized gain (loss) | 203 | ||
Unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | 1,985 | ||
Interest rate swap contracts | (61 | ) | |
Shares of beneficial interest | 246 | ||
Additional paid-in capital | 246,033 | ||
Net Assets | $ | 249,285 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 10.11 | |
Maximum offering price per share (Net asset value plus sales charge of 3.75%): Class A | $ | 10.50 | |
Class A — Net assets | $ | 1,155,340 | |
Class A — Shares outstanding ($.01 par value) | 114,262 | ||
Net asset value per share: Class C(#) | $ | 10.10 | |
Class C — Net assets | $ | 497,492 | |
Class C — Shares outstanding ($.01 par value) | 49,247 | ||
Net asset value per share: Class E(#) | $ | 10.11 | |
Class E — Net assets | $ | 16,539,406 | |
Class E — Shares outstanding ($.01 par value) | 1,635,416 | ||
Net asset value per share: Class S(#) | $ | 10.11 | |
Class S — Net assets | $ | 231,093,216 | |
Class S — Shares outstanding ($.01 par value) | 22,849,384 | ||
Amounts in thousands | |||
(•) Interest rate swap contracts - premiums paid (received) | $ | (27 | ) |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 8,960 | |
(a) Cash Collateral for Swaps | $ | 898 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
484 Russell Tax Exempt High Yield Bond Fund
Russell Investment Company
Russell Tax Exempt High Yield Bond Fund
Statement of Operations — For the Period Ended October 31, 2015(1)
Amounts in thousands | |||
Investment Income | |||
Dividends from affiliated Russell funds | $ | 10 | |
Interest | 3,793 | ||
Total investment income | 3,803 | ||
Expenses | |||
Advisory fees | 451 | ||
Administrative fees | 43 | ||
Custodian fees | 16 | ||
Distribution fees - Class A | 1 | ||
Distribution fees - Class C | 1 | ||
Transfer agent fees - Class A | 1 | ||
Transfer agent fees - Class C | —** | ||
Transfer agent fees - Class E | 4 | ||
Transfer agent fees - Class S | 175 | ||
Professional fees | 94 | ||
Registration fees | 17 | ||
Shareholder servicing fees - Class C | —** | ||
Shareholder servicing fees - Class E | 5 | ||
Trustees’ fees | 3 | ||
Printing fees | 9 | ||
Offering fees | 28 | ||
Miscellaneous | 4 | ||
Expenses before reductions | 852 | ||
Expense reductions | (267 | ) | |
Net expenses | 585 | ||
Net investment income (loss) | 3,218 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investments | 204 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | 1,985 | ||
Interest rate swap contracts | (61 | ) | |
Net change in unrealized appreciation (depreciation) | 1,924 | ||
Net realized and unrealized gain (loss) | 2,128 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 5,346 |
** Less than $500.
(1) For the period June 2, 2015 (commencement of operations) to October 31, 2015.
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt High Yield Bond Fund 485
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Statement of Changes in Net Assets
For the Periods Ended | |||
Amounts in thousands | 2015 | (1) | |
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $ | 3,218 | |
Net realized gain (loss) | 204 | ||
Net change in unrealized appreciation (depreciation) | 1,924 | ||
Net increase (decrease) in net assets from operations | 5,346 | ||
Distributions | |||
From net investment income | |||
Class A | (10 | ) | |
Class C | (2 | ) | |
Class E | (49 | ) | |
Class S | (2,306 | ) | |
Net decrease in net assets from distributions | (2,367 | ) | |
Share Transactions* | |||
Net increase (decrease) in net assets from share transactions | 246,306 | ||
Total Net Increase (Decrease) in Net Assets | 249,285 | ||
Net Assets | |||
Beginning of period | — | ||
End of period | $ | 249,285 | |
Undistributed (overdistributed) net investment income included in net assets | $ | 879 |
(1) For the period June 2, 2015 (commencement of operations) to October 31, 2015.
See accompanying notes which are an integral part of the financial statements.
486 Russell Tax Exempt High Yield Bond Fund
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Russell Tax Exempt High Yield Bond Fund
Statement of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the period ended October 31, 2015 were as follows: | |||||||
2015 | (1) | ||||||
Shares | Dollars | ||||||
Class A | |||||||
Proceeds from shares sold | 140 | $ | 1,402 | ||||
Proceeds from reinvestment of distributions | 1 | 10 | |||||
Payments for shares redeemed | (27 | ) | (265 | ) | |||
Net increase (decrease) | 114 | 1,147 | |||||
Class C | |||||||
Proceeds from shares sold | 52 | 524 | |||||
Proceeds from reinvestment of distributions | —** | 2 | |||||
Payments for shares redeemed | (3 | ) | (34 | ) | |||
Net increase (decrease) | 49 | 492 | |||||
Class E | |||||||
Proceeds from shares sold | 1,657 | 16,479 | |||||
Proceeds from reinvestment of distributions | 5 | 49 | |||||
Payments for shares redeemed | (26 | ) | (270 | ) | |||
Net increase (decrease) | 1,636 | 16,258 | |||||
Class S | |||||||
Proceeds from shares sold | 24,486 | 244,766 | |||||
Proceeds from reinvestment of distributions | 231 | 2,297 | |||||
Payments for shares redeemed | (1,868 | ) | (18,654 | ) | |||
Net increase (decrease) | 22,849 | 228,409 | |||||
Total increase (decrease) | 24,648 | $ | 246,306 |
** Less than $500 shares.
(1) For the period June 2, 2015 (commencement of operations) to October 31, 2015.
See accompanying notes which are an integral part of the financial statements.
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Financial Highlights — For the Period Ended
For a Share Outstanding Throughout the Period. | ||||||||||||||
$ | $ | $ | $ | $ | ||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | ||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | $ | |||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Total Distributions | |||||||||
Class A | ||||||||||||||
October 31, 2015(7) | 10.00 | .13 | .08 | .21 | (.10 | ) | (.10 | ) | ||||||
Class C | ||||||||||||||
October 31, 2015(7) | 10.00 | .12 | .06 | .18 | (.08 | ) | (.08 | ) | ||||||
Class E | ||||||||||||||
October 31, 2015(7) | 10.00 | .16 | .05 | .21 | (.10 | ) | (.10 | ) | ||||||
Class S | ||||||||||||||
October 31, 2015(7) | 10.00 | .15 | .07 | .22 | (.11 | ) | (.11 | ) | ||||||
See accompanying notes which are an integral part of the financial statements.
488 Russell Tax Exempt High Yield Bond Fund
% | % | % | |||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||
End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||
Period | Return(b)(c) | (000 | ) | Gross(e) | Net(d)(e) | Net Assets(d)(e) | Turnover Rate(b) | ||||||
10.11 | 2.11 | 1,155 | 1.12 | .89 | 3.16 | 23 | |||||||
10.10 | 1.82 | 498 | 1.88 | 1.64 | 2.82 | 23 | |||||||
10.11 | 2.13 | 16,539 | 1.15 | .89 | 3.81 | 23 | |||||||
10.11 | 2.20 | 231,093 | .88 | .64 | 3.57 | 23 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt High Yield Bond Fund 489
Russell Investment Company
Russell Tax Exempt Bond Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Tax Exempt Bond Fund - Class A‡ | Barclays Municipal 1-15 Year Blend (1-17) Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.68 | )% | 1 Year | 2.46 | % | ||
5 Years | 2.09 | %§ | 5 Years | 3.62 | %§ | ||
10 Years | 3.22 | %§ | 10 Years | 4.46 | %§ | ||
Russell Tax Exempt Bond Fund - Class C | Tax Exempt Bond Linked Benchmark*** | ||||||
Total | |||||||
Total | Return | ||||||
Return | 1 Year | 2.46 | % | ||||
1 Year | 1.45 | % | 5 Years | 3.41 | %§ | ||
5 Years | 2.14 | %§ | 10 Years | 4.30 | %§ | ||
10 Years | 2.87 | %§ | |||||
Russell Tax Exempt Bond Fund - Class E | |||||||
Total | |||||||
Return | |||||||
1 Year | 2.21 | % | |||||
5 Years | 2.90 | %§ | |||||
10 Years | 3.64 | %§ | |||||
Russell Tax Exempt Bond Fund - Class S | |||||||
Total | |||||||
Return | |||||||
1 Year | 2.47 | % | |||||
5 Years | 3.17 | %§ | |||||
10 Years | 3.90 | %§ |
490 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Tax Exempt Bond Fund (the “Fund”) employs | are stable or increasing, providing a better ability for issuers to | |||||
a multi-manager approach whereby portions of the Fund are | pay their debt burden. This may also be generalized as a “risk on” | |||||
allocated to different money manager strategies. Fund assets not | market where investors are generally bullish about the economy. | |||||
allocated to money managers are managed by Russell Investment | Environments that feature sharp rises in interest rates or mass sell | |||||
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | offs in fixed income risk assets (e.g., the recent global financial | |||||
may change the allocation of the Fund’s assets among money | crisis) will tend to be unfavorable for the Fund. | |||||
managers at any time. An exemptive order from the Securities | For the fiscal year ended October 31, 2015, investment grade | |||||
and Exchange Commission (“SEC”) permits RIMCo to engage | municipal revenue and industrial development sectors performed | |||||
or terminate a money manager at any time, subject to approval | well, and the municipal yield curve flattened, which provided a | |||||
by the Fund’s Board, without a shareholder vote. Pursuant to the | seemingly favorable environment for Fund performance. However, | |||||
terms of the exemptive order, the Fund is required to notify its | selection within state general obligation bonds and adverse states | |||||
shareholders within 90 days of when a money manager begins | selection, such as Illinois and Puerto Rico, negatively impacted | |||||
providing services. As of October 31, 2015, the Fund had two | performance. | |||||
money managers. | ||||||
What is the Fund’s investment objective? | How did the investment strategies and techniques employed | |||||
by the Fund and its money managers affect its benchmark- | ||||||
The Fund seeks to provide federal tax-exempt current income | relative performance? | |||||
consistent with the preservation of capital. The Fund will invest, | With the exception of Class S Shares, the Fund underperformed its | |||||
under normal circumstances, at least 80% of the value of its | benchmark for the fiscal year. Although an overweight to revenue | |||||
assets in investments the income from which is exempt from | bonds was beneficial, allocation to state general obligation bonds | |||||
federal income tax. | and adverse security selection (Illinois, Puerto Rico) challenged | |||||
How did the Fund perform relative to its benchmark for the | performance. | |||||
fiscal year ended October 31, 2015? | The Fund employs discretionary money managers. The Fund’s | |||||
For the fiscal year ended October 31, 2015, the Fund’s Class | discretionary money managers select the individual portfolio | |||||
A, Class C, Class E and Class S Shares gained 2.17%, 1.45%, | securities for the assets assigned to them. Fund assets not | |||||
2.21% and 2.47%, respectively. This is compared to the Fund’s | allocated to discretionary money managers include the Fund’s | |||||
benchmark, the Barclays Municipal 1-15 Year Blend (1-17) | liquidity reserves and assets which may be managed directly | |||||
Index, which gained 2.46% during the same period. The Fund’s | by RIMCo to effect the Fund’s investment strategies and/or to | |||||
performance includes operating expenses, whereas index returns | actively manage the Fund’s overall exposures by investing in | |||||
are unmanaged and do not include expenses of any kind. | securities or other instruments that RIMCo believes will achieve | |||||
For the fiscal year ended October 31, 2015, the Morningstar® | the desired risk/return profile for the Fund. | |||||
Muni National Intermediate, a group of funds that Morningstar | Alliance Bernstein, L.P. slightly outperformed the Fund’s | |||||
considers to have investment strategies similar to those of the | benchmark over the one-year period. Despite challenging security | |||||
Fund, gained 1.91%. This result serves as a peer comparison and | selection in late 2014 (Chicago), generally positive yield curve | |||||
is expressed net of operating expenses. | positioning throughout the one-year period led to results. | |||||
How did the market conditions described in the Market | MacKay Shields LLC outperformed the Fund’s benchmark for | |||||
Summary report affect the Fund’s performance? | the one-year period primarily due to an overweight to maturities | |||||
For the fiscal year ended October 31, 2015, yield changes across | beyond 10-years, and sector and quality selection. Revenue | |||||
the municipal yield curve had different results: 7-15 year yields | bonds especially drove results, particularly transportation, | |||||
decreased while all other yields increased. Revenue bonds led | industrial development and pollution control (industrial | |||||
performance among municipal sectors, as did BBB-rated cohorts | development revenue/pollution control revenue), as did hospital | |||||
among quality. New Jersey and Illinois bonds fared worst among | bonds. State general obligation bonds (Puerto Rico) detracted | |||||
regional municipals. | from performance. | |||||
The Fund will tend to perform well in markets where revenue | Describe any changes to the Fund’s structure or the money | |||||
and industrial development sectors lead. This is generally an | manager line-up. | |||||
environment where the economy is stable and a higher coupon | There were no changes to the Fund’s structure or money manager | |||||
can be clipped or an environment where municipal tax receipts | line-up during the fiscal year. |
Russell Tax Exempt Bond Fund 491
Russell Investment Company
Russell Tax Exempt Bond Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Money Managers as of October 31, | The views expressed in this report reflect those of the portfolio | |
2015 | Styles | managers only through the end of the period covered by |
the report. These views do not necessarily represent the | ||
AllianceBernstein, L.P. | Sector Specialist | views of RIMCo or any other person in RIMCo or any other |
MacKay Shields LLC | Sector Specialist | affiliated organization. These views are subject to change |
at any time based upon market conditions or other events, | ||
and RIMCo disclaims any responsibility to update the views | ||
contained herein. These views should not be relied on as | ||
investment advice and, because investment decisions for | ||
a Russell Investment Company (“RIC”) Fund are based on | ||
numerous factors, should not be relied on as an indication | ||
of investment decisions of any RIC Fund. |
* Assumes initial investment on November 1, 2005.
** The Barclays Municipal 1-15 Yr Blend (1-17) Index is an index, with income reinvested, representative of municipal bonds with maturities ranging from 1-15
years.
*** The Tax Exempt Bond Linked Benchmark provides a means to compare the Fund’s average annual returns to a secondary benchmark that takes into account
historical changes in the Fund’s primary benchmark. The Tax Exempt Bond Linked Benchmark represents the returns of the Barclays Municipal 1-10 Yr Blend
(1-12) Index through June 30, 2013 and the returns of the Barclays Municipal 1-15 Yr Blend (1-17) Index thereafter.
‡ The Fund first issued Class A Shares on June 1, 2010. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 3.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
492 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 1,012.90 | $ | 1,021.07 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 4.16 | $ | 4.18 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.82% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 1,009.40 | $ | 1,017.49 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 7.75 | $ | 7.78 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.53% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 1,013.60 | $ | 1,021.27 | |
Expenses Paid During Period* | $ | 3.96 | $ | 3.97 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.78% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell Tax Exempt Bond Fund 493
Russell Investment Company
Russell Tax Exempt Bond Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 1,014.50 | $ | 1,022.53 | ||
Expenses Paid During Period* | $ | 2.69 | $ | 2.70 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.53% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
494 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Municipal Bonds - 95.4% | ||||||||
Alabama - 1.5% | ||||||||
Alabama 21st Century Authority Revenue Bonds | 1,120 | 5.000 | 06/01/18 | 1,229 | ||||
Alabama 21st Century Authority Revenue Bonds | 545 | 5.000 | 06/01/20 | 623 | ||||
Alabama Public School & College Authority Revenue Bonds | 3,385 | 5.000 | 05/01/23 | 4,091 | ||||
Alabama Special Care Facilities Financing Authority Revenue Bonds(µ) | 500 | 6.000 | 06/01/34 | 584 | ||||
Birmingham Water Works Board Revenue Bonds(µ) | 1,275 | 5.000 | 01/01/17 | 1,341 | ||||
County of Jefferson Alabama General Obligation Limited(µ) | 4,100 | 5.000 | 04/01/22 | 4,102 | ||||
County of Jefferson Alabama Sewer Revenue Bonds | 2,230 | 5.000 | 10/01/22 | 2,438 | ||||
Homewood Educational Building Authority Revenue Bonds(µ) | 485 | 5.000 | 12/01/26 | 560 | ||||
Limestone County Board of Education Special Tax(µ) | 1,000 | 5.000 | 11/01/30 | 1,139 | ||||
Limestone County Board of Education Special Tax(µ) | 1,000 | 5.000 | 11/01/31 | 1,132 | ||||
Mobile County Board of School Commissioners Revenue Bonds | 1,445 | 5.000 | 03/01/32 | 1,619 | ||||
Montgomery Medical Clinic Board Revenue Bonds | 320 | 5.250 | 03/01/36 | 321 | ||||
19,179 | ||||||||
Alaska - 0.1% | ||||||||
City of Valdez Alaska Revenue Bonds | 750 | 5.000 | 01/01/21 | 861 | ||||
Northern Tobacco Securitization Corp. Revenue Bonds | 350 | 5.000 | 06/01/32 | 320 | ||||
1,181 | ||||||||
Arizona - 2.7% | ||||||||
Apache County Industrial Development Authority Revenue Bonds | 3,000 | 4.500 | 03/01/30 | 3,213 | ||||
Arizona Health Facilities Authority Revenue Bonds | 2,000 | 5.250 | 01/01/18 | 2,193 | ||||
Arizona Health Facilities Authority Revenue Bonds | 2,000 | 5.000 | 02/01/18 | 2,149 | ||||
Arizona Health Facilities Authority Revenue Bonds | 2,000 | 5.250 | 01/01/22 | 2,182 | ||||
Arizona Health Facilities Authority Revenue Bonds | 2,255 | 5.000 | 02/01/34 | 2,423 | ||||
Arizona Transportation Board Revenue Bonds | 2,685 | 5.000 | 07/01/25 | 3,301 | ||||
Arizona Water Infrastructure Finance Authority Revenue Bonds | 1,000 | 5.000 | 10/01/18 | 1,120 | ||||
County of Pinal Arizona Revenue Bonds | 2,455 | 5.000 | 08/01/21 | 2,884 | ||||
County of Pinal Arizona Revenue Bonds | 1,775 | 5.000 | 08/01/25 | 2,134 | ||||
Maricopa County Pollution Control Corp. Revenue Bonds(Ê) | 2,310 | 5.200 | 06/01/43 | 2,549 | ||||
Navajo County Pollution Control Corp. Revenue Bonds(Ê) | 2,000 | 0.450 | 06/01/34 | 2,000 | ||||
Salt River Project Agricultural Improvement & Power District Revenue Bonds | 1,635 | 5.000 | 01/01/25 | 1,835 | ||||
Salt Verde Financial Corp. Revenue Bonds | 1,045 | 5.250 | 12/01/24 | 1,220 | ||||
Student & Academic Services LLC Revenue Bonds(µ) | 200 | 5.000 | 06/01/26 | 234 | ||||
Student & Academic Services LLC Revenue Bonds(µ) | 425 | 5.000 | 06/01/27 | 492 | ||||
Student & Academic Services LLC Revenue Bonds(µ) | 390 | 5.000 | 06/01/28 | 447 | ||||
Town of Marana Arizona Revenue Bonds | 2,240 | 5.000 | 07/01/26 | 2,671 | ||||
Town of Marana Arizona Revenue Bonds | 800 | 5.000 | 07/01/27 | 947 | ||||
Town of Marana Arizona Revenue Bonds | 1,735 | 5.000 | 07/01/28 | 2,034 | ||||
36,028 | ||||||||
Arkansas - 0.1% | ||||||||
Henderson State University Revenue Bonds(µ) | 850 | 2.000 | 11/01/16 | 862 | ||||
Henderson State University Revenue Bonds(µ) | 220 | 3.000 | 11/01/18 | 231 | ||||
Pulaski County Public Facilities Board Revenue Bonds | 440 | 5.000 | 12/01/22 | 519 | ||||
1,612 | ||||||||
California - 8.7% | ||||||||
Abag Finance Authority for Nonprofit Corps. Revenue Bonds | 1,340 | 6.000 | 08/01/30 | 1,627 | ||||
Alum Rock Union Elementary School District General Obligation Unlimited(µ) | 400 | 5.000 | 08/01/20 | 468 | ||||
Alum Rock Union Elementary School District General Obligation Unlimited(µ) | 600 | 5.000 | 08/01/21 | 715 | ||||
Alum Rock Union Elementary School District General Obligation Unlimited(µ) | 2,855 | 5.000 | 08/01/32 | 3,295 | ||||
Brentwood Infrastructure Financing Authority Special Assessment(µ) | 1,000 | 5.000 | 09/02/29 | 1,138 | ||||
California Health Facilities Financing Authority Revenue Bonds | 1,550 | 5.000 | 07/01/16 | 1,596 | ||||
California Health Facilities Financing Authority Revenue Bonds | 1,000 | 5.000 | 11/15/29 | 1,096 | ||||
California State Public Works Board Revenue Bonds | 1,100 | 5.000 | 12/01/16 | 1,154 | ||||
California Statewide Communities Development Authority Revenue Bonds | 885 | 3.500 | 11/01/18 | 888 | ||||
California Statewide Communities Development Authority Revenue Bonds | 2,260 | 5.000 | 04/01/19 | 2,564 | ||||
California Statewide Communities Development Authority Revenue Bonds | 1,405 | 6.000 | 05/15/23 | 1,545 | ||||
California Statewide Communities Development Authority Revenue Bonds | 1,565 | 6.125 | 11/01/33 | 1,697 | ||||
California Statewide Communities Development Authority Revenue Bonds | 1,000 | 5.000 | 08/01/34 | 1,167 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 495
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Centinela Valley Union High School District General Obligation Unlimited | 500 | 5.750 | 08/01/27 | 611 | ||||
Centinela Valley Union High School District General Obligation Unlimited | 1,000 | 5.750 | 08/01/28 | 1,215 | ||||
Centinela Valley Union High School District General Obligation Unlimited | 650 | 5.750 | 08/01/29 | 785 | ||||
City of Fresno California Airport Revenue Bonds(µ) | 225 | 5.000 | 07/01/22 | 262 | ||||
City of Los Angeles Department of Airports Revenue Bonds | 1,655 | 5.000 | 05/15/29 | 1,900 | ||||
City of Vallejo California Water Revenue Bonds | 2,755 | 5.250 | 05/01/27 | 3,276 | ||||
City of Vallejo California Water Revenue Bonds | 3,105 | 5.250 | 05/01/29 | 3,634 | ||||
County of Los Angeles California Certificate Of Participation | 200 | 5.000 | 09/01/20 | 234 | ||||
County of Los Angeles California Certificate Of Participation | 500 | 5.000 | 03/01/21 | 590 | ||||
County of Los Angeles California Certificate Of Participation | 125 | 5.000 | 09/01/21 | 149 | ||||
County of Los Angeles California Certificate Of Participation | 430 | 5.000 | 09/01/22 | 517 | ||||
County of Sacramento California Airport System Revenue Bonds | 2,000 | 5.000 | 07/01/22 | 2,199 | ||||
Dinuba Redevelopment Agency Tax Allocation(µ) | 590 | 5.000 | 09/01/33 | 662 | ||||
El Monte Union High School District General Obligation Unlimited(µ) | 4,750 | 5.500 | 06/01/34 | 5,430 | ||||
Emeryville Redevelopment Agency Successor Agency Tax Allocation | 1,980 | 5.000 | 09/01/20 | 2,306 | ||||
Florin Resource Conservation District Revenue Bonds(µ) | 300 | 4.000 | 09/01/17 | 315 | ||||
Florin Resource Conservation District Revenue Bonds(µ) | 455 | 4.000 | 09/01/18 | 486 | ||||
Florin Resource Conservation District Revenue Bonds(µ) | 100 | 5.000 | 09/01/23 | 117 | ||||
Florin Resource Conservation District Revenue Bonds(µ) | 450 | 5.000 | 09/01/24 | 528 | ||||
Golden State Tobacco Securitization Corp. Revenue Bonds(µ) | 750 | 4.600 | 06/01/23 | 802 | ||||
Golden State Tobacco Securitization Corp. Revenue Bonds | 3,955 | 4.500 | 06/01/27 | 3,854 | ||||
Jurupa California Public Authority Special Tax Revenue Bonds | 425 | 3.500 | 09/01/17 | 445 | ||||
Modesto Irrigation District Revenue Bonds | 1,425 | 5.000 | 07/01/17 | 1,526 | ||||
Oxnard Financing Authority Revenue Bonds(µ) | 740 | 5.000 | 06/01/21 | 866 | ||||
Oxnard Financing Authority Revenue Bonds(µ) | 775 | 5.000 | 06/01/34 | 859 | ||||
Oxnard School District General Obligation Unlimited(µ) | 165 | 5.250 | 08/01/26 | 202 | ||||
Oxnard School District General Obligation Unlimited(µ) | 810 | 5.250 | 08/01/28 | 977 | ||||
Oxnard School District General Obligation Unlimited(µ) | 325 | 5.250 | 08/01/29 | 387 | ||||
Pajaro Valley Water Management Agency Revenue Bonds(µ) | 775 | 4.000 | 03/01/18 | 827 | ||||
Sacramento Unified School District General Obligation Unlimited(µ) | 4,000 | 5.000 | 07/01/31 | 4,464 | ||||
San Francisco City & County Public Utilities Commission Water Revenue Bonds | 2,685 | 5.000 | 11/01/27 | 3,205 | ||||
San Joaquin Hills Transportation Corridor Agency Revenue Bonds | 5,000 | 5.000 | 01/15/29 | 5,519 | ||||
San Ysidro School District Certificate Of Participation(µ) | 1,175 | 5.000 | 09/01/28 | 1,333 | ||||
South Orange County Public Financing Authority Special Tax | 900 | 5.000 | 08/15/29 | 1,009 | ||||
Southern California Public Power Authority Revenue Bonds | 1,500 | 5.000 | 07/01/18 | 1,671 | ||||
Southern California Public Power Authority Revenue Bonds | 1,000 | 5.000 | 07/01/23 | 1,175 | ||||
State of California Department of Water Resources Power Supply Revenue Bonds | 1,000 | 5.000 | 05/01/16 | 1,024 | ||||
State of California Department of Water Resources Power Supply Revenue Bonds | 1,000 | 5.000 | 05/01/17 | 1,068 | ||||
State of California Department of Water Resources Revenue Bonds(ae) | 860 | 5.000 | 06/01/18 | 955 | ||||
State of California Department of Water Resources Revenue Bonds | 140 | 5.000 | 12/01/21 | 155 | ||||
State of California General Obligation Unlimited(µ)(ae) | 1,865 | 4.500 | 03/01/16 | 1,892 | ||||
State of California General Obligation Unlimited(µ) | 1,000 | 6.000 | 02/01/17 | 1,070 | ||||
State of California General Obligation Unlimited(ae) | 1,000 | 5.000 | 07/01/19 | 1,148 | ||||
State of California General Obligation Unlimited(ae) | 635 | 5.250 | 07/01/19 | 735 | ||||
State of California General Obligation Unlimited | 2,000 | 5.000 | 02/01/20 | 2,325 | ||||
State of California General Obligation Unlimited | 2,500 | 5.500 | 04/01/21 | 2,882 | ||||
State of California General Obligation Unlimited | 365 | 5.250 | 07/01/21 | 423 | ||||
State of California General Obligation Unlimited | 1,000 | 5.250 | 03/01/22 | 1,166 | ||||
State of California General Obligation Unlimited | 7,095 | 5.000 | 11/01/25 | 8,613 | ||||
State of California General Obligation Unlimited | 5,760 | 5.000 | 03/01/26 | 7,010 | ||||
State of California General Obligation Unlimited | 2,500 | 5.250 | 09/01/28 | 2,955 | ||||
State of California General Obligation Unlimited | 2,685 | 5.000 | 10/01/29 | 2,934 | ||||
State of California General Obligation Unlimited | 450 | 5.000 | 02/01/31 | 517 | ||||
Tuolumne Wind Project Authority Revenue Bonds | 1,500 | 5.000 | 01/01/18 | 1,634 | ||||
Watereuse Finance Authority Revenue Bonds | 1,230 | 5.500 | 05/01/36 | 1,443 | ||||
West Kern Community College District Certificate Of Participation(µ) | 470 | 3.000 | 11/01/16 | 481 | ||||
113,717 | ||||||||
Colorado - 2.2% |
See accompanying notes which are an integral part of the financial statements.
496 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
City & County of Denver Colorado Airport System Revenue Bonds | 1,965 | 5.000 | 11/15/25 | 2,334 | ||||
City of Colorado Springs Colorado Utilities System Revenue Bonds | 4,000 | 5.000 | 11/15/18 | 4,485 | ||||
Colorado Educational & Cultural Facilities Authority Revenue Bonds | 250 | 2.000 | 12/01/15 | 250 | ||||
Colorado Educational & Cultural Facilities Authority Revenue Bonds | 300 | 2.000 | 12/01/16 | 304 | ||||
Colorado Educational & Cultural Facilities Authority Revenue Bonds | 2,000 | 5.000 | 04/01/18 | 2,193 | ||||
Colorado Educational & Cultural Facilities Authority Revenue Bonds | 1,000 | 5.000 | 08/15/30 | 1,089 | ||||
Colorado Health Facilities Authority Revenue Bonds(ae) | 745 | 5.250 | 06/01/16 | 766 | ||||
Colorado Health Facilities Authority Revenue Bonds | 255 | 5.250 | 06/01/23 | 262 | ||||
Colorado Health Facilities Authority Revenue Bonds | 1,500 | 5.000 | 09/01/30 | 1,667 | ||||
Colorado Health Facilities Authority Revenue Bonds | 685 | 5.250 | 02/01/31 | 758 | ||||
Denver Convention Center Hotel Authority Revenue Bonds(µ) | 1,265 | 5.000 | 12/01/35 | 1,286 | ||||
Denver Urban Renewal Authority Tax Allocation | 1,575 | 5.000 | 12/01/21 | 1,839 | ||||
E-470 Public Highway Authority Revenue Bonds(µ) | 850 | 5.000 | 09/01/17 | 878 | ||||
E-470 Public Highway Authority Revenue Bonds | 2,250 | 5.375 | 09/01/26 | 2,516 | ||||
Eaton Area Park & Recreation District General Obligation Limited | 470 | 5.500 | 12/01/30 | 497 | ||||
Regional Transportation District Certificate Of Participation | 6,725 | 5.000 | 06/01/27 | 7,828 | ||||
28,952 | ||||||||
Connecticut - 1.3% | ||||||||
City of Bridgeport Connecticut General Obligation Unlimited(µ) | 965 | 5.000 | 07/01/29 | 1,102 | ||||
City of Hartford Connecticut General Obligation Unlimited(µ) | 375 | 5.000 | 10/01/18 | 420 | ||||
City of New Haven Connecticut General Obligation Unlimited(µ) | 2,000 | 5.000 | 08/01/21 | 2,317 | ||||
City of New Haven Connecticut General Obligation Unlimited(µ) | 1,915 | 5.000 | 09/01/30 | 2,186 | ||||
Connecticut State Health & Educational Facility Authority Revenue Bonds | 2,500 | 5.000 | 07/01/25 | 2,769 | ||||
State of Connecticut General Obligation Unlimited | 2,490 | 5.000 | 01/01/16 | 2,510 | ||||
State of Connecticut Special Tax Revenue Bonds | 4,470 | 5.000 | 10/01/25 | 5,313 | ||||
16,617 | ||||||||
Delaware - 0.1% | ||||||||
Delaware Transportation Authority Revenue Bonds | 1,000 | 5.000 | 07/01/17 | 1,074 | ||||
District of Columbia - 0.2% | ||||||||
District of Columbia Water & Sewer Authority Revenue Bonds(µ) | 500 | 5.000 | 10/01/34 | 547 | ||||
Metropolitan Washington Airports Authority Revenue Bonds | 1,500 | 5.000 | 10/01/35 | 1,684 | ||||
2,231 | ||||||||
Florida - 8.8% | ||||||||
Capital Projects Finance Authority Revenue Bonds(µ) | 220 | 5.125 | 10/01/21 | 220 | ||||
Citizens Property Insurance Corp. Revenue Bonds | 2,500 | 5.000 | 06/01/18 | 2,749 | ||||
Citizens Property Insurance Corp. Revenue Bonds | 2,495 | 5.000 | 06/01/19 | 2,820 | ||||
Citizens Property Insurance Corp. Revenue Bonds | 2,500 | 5.000 | 06/01/20 | 2,888 | ||||
Citizens Property Insurance Corp. Revenue Bonds | 7,385 | 5.000 | 06/01/22 | 8,744 | ||||
City of Lakeland Florida Department of Electric Utilities Revenue Bonds(µ) | 2,000 | 5.000 | 10/01/17 | 2,163 | ||||
City of North Port Florida Special Assessment(µ) | 715 | 5.000 | 07/01/25 | 843 | ||||
City of North Port Florida Special Assessment(µ) | 1,135 | 5.000 | 07/01/26 | 1,330 | ||||
City of Pembroke Pines Florida Revenue Bonds(µ) | 1,000 | 5.000 | 10/01/16 | 1,042 | ||||
City of Tampa Florida Revenue Bonds | 500 | 5.000 | 11/15/15 | 501 | ||||
City of Tampa Florida Revenue Bonds | 1,000 | 4.000 | 09/01/33 | 1,027 | ||||
Collier County Health Facilities Authority Revenue Bonds | 150 | 2.000 | 05/01/16 | 151 | ||||
Collier County Health Facilities Authority Revenue Bonds | 350 | 2.000 | 05/01/17 | 355 | ||||
Collier County Industrial Development Authority Revenue Bonds | 1,695 | 5.500 | 10/01/26 | 1,977 | ||||
County of Miami-Dade Florida Aviation Revenue Bonds | 1,235 | 5.250 | 10/01/30 | 1,415 | ||||
County of Miami-Dade Florida Revenue Bonds | 3,000 | 5.000 | 10/01/28 | 3,442 | ||||
County of Miami-Dade Florida Revenue Bonds | 3,600 | 5.000 | 10/01/29 | 4,109 | ||||
County of Miami-Dade Florida Revenue Bonds(µ) | 4,310 | Zero coupon | 10/01/35 | 1,667 | ||||
County of Miami-Dade Florida Water & Sewer System Revenue Bonds(µ) | 1,500 | 5.250 | 10/01/19 | 1,735 | ||||
County of Orange Florida Sales Tax Revenue Bonds | 8,885 | 5.000 | 01/01/20 | 10,282 | ||||
Escambia County Health Facilities Authority Revenue Bonds | 2,345 | 6.000 | 08/15/36 | 2,702 | ||||
JEA Electric System Revenue Bonds | 1,000 | 5.000 | 10/01/17 | 1,082 | ||||
JEA Electric System Revenue Bonds | 645 | 5.000 | 10/01/20 | 756 | ||||
Kissimmee Utility Authority Revenue Bonds(µ) | 1,000 | 5.000 | 10/01/17 | 1,080 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 497
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Miami Beach Health Facilities Authority Revenue Bonds | 200 | 4.000 | 11/15/16 | 207 | ||||
Miami Beach Health Facilities Authority Revenue Bonds | 125 | 4.000 | 11/15/18 | 134 | ||||
Miami Beach Health Facilities Authority Revenue Bonds | 5,930 | 5.000 | 11/15/29 | 6,570 | ||||
Miami-Dade County Expressway Authority Revenue Bonds | 350 | 5.000 | 07/01/18 | 388 | ||||
Mid-Bay Bridge Authority Revenue Bonds | 455 | 5.000 | 10/01/23 | 523 | ||||
Mid-Bay Bridge Authority Revenue Bonds | 2,500 | 7.250 | 10/01/34 | 3,318 | ||||
Orlando Utilities Commission Revenue Bonds | 3,000 | 5.000 | 10/01/19 | 3,445 | ||||
Orlando-Orange County Expressway Authority Revenue Bonds | 4,145 | 5.000 | 07/01/20 | 4,826 | ||||
Palm Beach County Health Facilities Authority Revenue Bonds | 1,000 | 3.000 | 12/01/17 | 1,036 | ||||
Reedy Creek Improvement District General Obligation Limited | 850 | 5.000 | 06/01/20 | 991 | ||||
Reedy Creek Improvement District General Obligation Limited | 5,000 | 5.000 | 06/01/25 | 5,941 | ||||
Reedy Creek Improvement District General Obligation Limited | 4,870 | 5.000 | 06/01/26 | 5,735 | ||||
South Miami Health Facilities Authority Revenue Bonds | 750 | 5.000 | 08/15/18 | 808 | ||||
State of Florida General Obligation Unlimited | 11,000 | 5.000 | 06/01/21 | 13,123 | ||||
State of Florida General Obligation Unlimited | 2,990 | 5.000 | 06/01/22 | 3,614 | ||||
State of Florida Revenue Bonds | 1,300 | 5.000 | 07/01/16 | 1,341 | ||||
Tampa Sports Authority Revenue Bonds | 6,790 | 5.000 | 01/01/22 | 8,095 | ||||
115,175 | ||||||||
Georgia - 1.7% | ||||||||
City of Atlanta Department of Aviation Revenue Bonds | 2,500 | 5.000 | 01/01/20 | 2,891 | ||||
City of Atlanta Department of Aviation Revenue Bonds | 825 | 5.250 | 01/01/30 | 947 | ||||
City of Atlanta Georgia General Obligation Limited | 3,415 | 5.000 | 12/01/21 | 4,098 | ||||
City of Atlanta Georgia Water & Wastewater Revenue Bonds | 1,000 | 6.000 | 11/01/20 | 1,197 | ||||
City of Atlanta Georgia Water & Wastewater Revenue Bonds(µ) | 2,000 | 5.500 | 11/01/23 | 2,341 | ||||
City of Atlanta Georgia Water & Wastewater Revenue Bonds | 1,300 | 6.000 | 11/01/25 | 1,555 | ||||
Glynn-Brunswick Memorial Hospital Authority Revenue Bonds | 1,000 | 5.000 | 08/01/21 | 1,167 | ||||
Glynn-Brunswick Memorial Hospital Authority Revenue Bonds | 1,220 | 5.000 | 08/01/22 | 1,433 | ||||
Municipal Electric Authority of Georgia Revenue Bonds(µ) | 850 | 6.250 | 01/01/17 | 907 | ||||
Private Colleges & Universities Authority Revenue Bonds | 1,500 | 5.000 | 09/01/16 | 1,558 | ||||
Private Colleges & Universities Authority Revenue Bonds | 565 | 5.000 | 04/01/17 | 593 | ||||
Private Colleges & Universities Authority Revenue Bonds | 1,190 | 5.000 | 04/01/27 | 1,347 | ||||
Savannah Hospital Authority Revenue Bonds | 1,000 | 5.500 | 07/01/28 | 1,175 | ||||
State of Georgia General Obligation Unlimited | 1,240 | 5.000 | 07/01/17 | 1,332 | ||||
22,541 | ||||||||
Guam - 0.9% | ||||||||
Guam Government Waterworks Authority Revenue Bonds | 1,240 | 5.000 | 07/01/28 | 1,378 | ||||
Guam Government Waterworks Authority Revenue Bonds | 5,200 | 5.000 | 07/01/29 | 5,732 | ||||
Guam Power Authority Revenue Bonds | 2,500 | 5.500 | 10/01/30 | 2,771 | ||||
Guam Power Authority Revenue Bonds | 1,000 | 5.000 | 10/01/34 | 1,075 | ||||
Territory of Guam Revenue Bonds | 500 | 5.375 | 12/01/24 | 558 | ||||
Territory of Guam Revenue Bonds | 785 | 5.000 | 01/01/32 | 848 | ||||
12,362 | ||||||||
Hawaii - 0.1% | ||||||||
City & County Honolulu Hawaii Wastewater System Revenue Bonds(µ) | 1,500 | 5.000 | 07/01/19 | 1,666 | ||||
Idaho - 0.6% | ||||||||
Idaho Health Facilities Authority Revenue Bonds | 1,500 | 5.000 | 12/01/30 | 1,673 | ||||
Idaho Housing & Finance Association Revenue Bonds(µ) | 1,330 | 5.250 | 07/15/21 | 1,488 | ||||
Idaho Housing & Finance Association Revenue Bonds(µ) | 1,665 | 5.250 | 07/15/26 | 1,863 | ||||
Idaho Housing & Finance Association Revenue Bonds | 1,670 | 5.000 | 07/15/31 | 1,879 | ||||
Idaho State Building Authority Revenue Bonds | 940 | 5.000 | 09/01/23 | 1,098 | ||||
8,001 | ||||||||
Illinois - 7.1% | ||||||||
Chicago Board of Education General Obligation Unlimited(µ) | 500 | 5.000 | 12/01/16 | 501 | ||||
Chicago Board of Education General Obligation Unlimited(µ) | 1,075 | 5.000 | 12/01/19 | 1,086 | ||||
Chicago Board of Education General Obligation Unlimited(µ) | 4,000 | 5.000 | 12/01/27 | 4,068 | ||||
Chicago Midway International Airport Revenue Bonds | 4,160 | 5.000 | 01/01/34 | 4,562 | ||||
Chicago O'Hare International Airport Revenue Bonds(µ) | 1,000 | 5.000 | 01/01/19 | 1,008 | ||||
Chicago Public Building Commission Revenue Bonds(µ) | 1,580 | 5.250 | 12/01/18 | 1,665 |
See accompanying notes which are an integral part of the financial statements.
498 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
City of Chicago Illinois General Obligation Unlimited(µ) | 3,050 | 5.000 | 01/01/17 | 3,077 | ||||
City of Chicago Illinois General Obligation Unlimited | 1,115 | 5.000 | 01/01/19 | 1,147 | ||||
City of Chicago Illinois General Obligation Unlimited(µ) | 380 | 5.000 | 01/01/20 | 386 | ||||
City of Chicago Illinois General Obligation Unlimited(µ) | 2,535 | 4.250 | 12/01/21 | 2,487 | ||||
City of Chicago Illinois General Obligation Unlimited | 1,500 | 5.000 | 01/01/24 | 1,510 | ||||
City of Chicago Illinois General Obligation Unlimited(µ) | 2,825 | 5.250 | 01/01/24 | 2,901 | ||||
City of Chicago Illinois Midway Airport Revenue Bonds | 940 | 5.000 | 01/01/30 | 1,047 | ||||
City of Chicago Illinois Motor Fuel Tax Revenue Bonds | 1,560 | 5.000 | 01/01/28 | 1,609 | ||||
City of Chicago Illinois Motor Fuel Tax Revenue Bonds | 725 | 5.000 | 01/01/29 | 747 | ||||
City of Chicago Illinois Wastewater Transmission Revenue Bonds | 600 | 5.000 | 01/01/18 | 642 | ||||
City of Chicago Illinois Wastewater Transmission Revenue Bonds | 505 | 5.000 | 01/01/29 | 543 | ||||
City of Chicago Illinois Wastewater Transmission Revenue Bonds | 1,310 | 5.000 | 01/01/35 | 1,387 | ||||
City of Chicago Illinois Waterworks Revenue Bonds | 1,000 | 5.000 | 11/01/34 | 1,062 | ||||
City of Freeport Illinois General Obligation Unlimited(µ) | 435 | 2.000 | 12/01/17 | 442 | ||||
City of Freeport Illinois General Obligation Unlimited(µ) | 650 | 2.000 | 12/01/18 | 659 | ||||
City of Peoria Illinois General Obligation Unlimited | 625 | 5.000 | 01/01/22 | 679 | ||||
Cook County Community College District No. 508 General Obligation Unlimited | 1,500 | 5.250 | 12/01/28 | 1,697 | ||||
Illinois Finance Authority Revenue Bonds | 1,000 | 5.000 | 11/15/18 | 1,110 | ||||
Illinois Finance Authority Revenue Bonds | 1,000 | 5.375 | 10/01/23 | 1,099 | ||||
Illinois Finance Authority Revenue Bonds | 1,000 | 5.375 | 10/01/24 | 1,096 | ||||
Illinois Finance Authority Revenue Bonds | 1,000 | 6.000 | 10/01/28 | 1,091 | ||||
Illinois Finance Authority Revenue Bonds | 2,500 | 5.750 | 08/15/29 | 2,769 | ||||
Illinois Sports Facilities Authority Revenue Bonds(µ) | 1,000 | 5.250 | 06/15/31 | 1,089 | ||||
Metropolitan Pier & Exposition Authority Revenue Bonds(µ) | 1,500 | 5.000 | 12/15/22 | 1,578 | ||||
Northern Illinois Municipal Power Agency Revenue Bonds(µ) | 4,025 | 5.000 | 01/01/23 | 4,329 | ||||
Railsplitter Tobacco Settlement Authority Revenue Bonds | 1,000 | 5.000 | 06/01/18 | 1,087 | ||||
Railsplitter Tobacco Settlement Authority Revenue Bonds | 1,000 | 5.000 | 06/01/19 | 1,110 | ||||
Southern Illinois University Revenue Bonds(µ) | 1,470 | 5.000 | 04/01/27 | 1,683 | ||||
Southern Illinois University Revenue Bonds(µ) | 850 | 5.000 | 04/01/28 | 966 | ||||
State of Illinois General Obligation Unlimited | 2,000 | 5.000 | 04/01/21 | 2,192 | ||||
State of Illinois General Obligation Unlimited | 3,000 | 5.000 | 07/01/21 | 3,290 | ||||
State of Illinois General Obligation Unlimited | 1,000 | 5.000 | 08/01/22 | 1,096 | ||||
State of Illinois General Obligation Unlimited | 2,290 | 5.000 | 08/01/25 | 2,452 | ||||
State of Illinois General Obligation Unlimited | 2,175 | 5.000 | 05/01/30 | 2,277 | ||||
State of Illinois Revenue Bonds(µ) | 1,000 | 5.000 | 06/15/16 | 1,028 | ||||
State of Illinois Revenue Bonds | 12,500 | 5.000 | 06/15/21 | 14,576 | ||||
State of Illinois Sports Facilities Authority Revenue Bonds | 1,125 | 5.000 | 06/15/18 | 1,212 | ||||
State of Illinois Sports Facilities Authority Revenue Bonds | 500 | 5.000 | 06/15/19 | 549 | ||||
University of Illinois Revenue Bonds | 1,115 | 5.000 | 04/01/20 | 1,273 | ||||
University of Illinois Revenue Bonds | 1,470 | 5.500 | 04/01/31 | 1,689 | ||||
Village of Bellwood Illinois General Obligation Unlimited | 1,000 | 5.875 | 12/01/27 | 1,193 | ||||
Village of Bellwood Illinois General Obligation Unlimited(µ) | 2,220 | 5.000 | 12/01/32 | 2,403 | ||||
Village of Franklin Park Illinois General Obligation Unlimited(µ) | 295 | 5.000 | 07/01/18 | 323 | ||||
Village of Melrose Park Illinois General Obligation Unlimited(µ) | 530 | 2.000 | 12/15/17 | 539 | ||||
West Chicago Park District General Obligation Unlimited(µ) | 795 | 5.250 | 12/01/29 | 862 | ||||
Western Illinois Economic Development Authority Revenue Bonds(µ) | 1,140 | 5.000 | 01/01/27 | 1,300 | ||||
Western Illinois Economic Development Authority Revenue Bonds(µ) | 725 | 5.000 | 01/01/28 | 820 | ||||
92,993 | ||||||||
Indiana - 0.4% | ||||||||
Ball State University Revenue Bonds(µ) | 1,000 | 5.000 | 07/01/16 | 1,031 | ||||
City of Indianapolis Indiana Gas Utility Revenue Bonds(µ) | 1,000 | 5.000 | 08/15/23 | 1,158 | ||||
Indiana Finance Authority Revenue Bonds | 1,000 | 4.900 | 01/01/16 | 1,007 | ||||
Indianapolis Local Public Improvement Bond Bank Revenue Bonds | 1,150 | 5.000 | 06/01/16 | 1,181 | ||||
Indianapolis Local Public Improvement Bond Bank Revenue Bonds | 1,000 | 5.000 | 02/01/18 | 1,093 | ||||
5,470 | ||||||||
Iowa - 0.5% | ||||||||
Iowa Finance Authority Revenue Bonds | 4,000 | 5.000 | 07/01/28 | 4,564 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 499
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Iowa Higher Education Loan Authority Revenue Bonds | 1,625 | 5.000 | 12/01/18 | 1,826 | ||||
6,390 | ||||||||
Kansas - 0.4% | ||||||||
City of Wichita Kansas Revenue Bonds | 250 | 3.375 | 11/15/20 | 249 | ||||
Seward County Unified School District No. 480 Liberal General Obligation Unlimited | 4,000 | 5.000 | 09/01/30 | 4,540 | ||||
4,789 | ||||||||
Kentucky - 0.2% | ||||||||
Commonwealth of Kentucky Certificate Of Participation | 275 | 2.000 | 06/15/17 | 280 | ||||
Kenton County School District Finance Corp. Revenue Bonds | 330 | 2.000 | 10/01/16 | 335 | ||||
Kentucky Municipal Power Agency Revenue Bonds(µ) | 1,500 | 5.000 | 09/01/19 | 1,695 | ||||
2,310 | ||||||||
Louisiana - 1.5% | ||||||||
Lafayette Consolidated Government Revenue Bonds(µ) | 805 | 5.000 | 11/01/20 | 929 | ||||
Lafayette Consolidated Government Revenue Bonds(µ) | 700 | 5.000 | 11/01/29 | 804 | ||||
Louisiana Local Government Environmental Facilities & Community Development | ||||||||
Authority Revenue Bonds | 300 | 5.000 | 11/01/19 | 344 | ||||
Louisiana Local Government Environmental Facilities & Community Development | ||||||||
Authority Revenue Bonds(µ) | 1,160 | 5.000 | 08/01/22 | 1,353 | ||||
Louisiana Public Facilities Authority Revenue Bonds | 1,000 | 5.000 | 07/01/19 | 1,125 | ||||
Louisiana Public Facilities Authority Revenue Bonds(µ) | 1,615 | 5.000 | 09/01/29 | 1,841 | ||||
Louisiana State Citizens Property Insurance Corp. Revenue Bonds(µ) | 2,460 | 6.750 | 06/01/26 | 2,802 | ||||
Louisiana State University & Agricultural & Mechanical College Revenue Bonds | 1,000 | 5.000 | 07/01/16 | 1,031 | ||||
State of Louisiana Gasoline & Fuels Tax Revenue Bonds | 7,000 | 5.000 | 05/01/21 | 8,299 | ||||
State of Louisiana Revenue Bonds | 1,300 | 5.000 | 06/15/28 | 1,537 | ||||
20,065 | ||||||||
Maryland - 0.3% | ||||||||
County of Montgomery Maryland General Obligation Unlimited | 1,350 | 5.000 | 07/01/19 | 1,549 | ||||
Maryland Economic Development Corp. Revenue Bonds | 1,250 | 5.125 | 06/01/20 | 1,359 | ||||
Maryland Economic Development Corp. Revenue Bonds | 885 | 6.200 | 09/01/22 | 1,025 | ||||
3,933 | ||||||||
Massachusetts - 0.6% | ||||||||
Commonwealth of Massachusetts General Obligation Limited | 930 | 5.500 | 11/01/15 | 930 | ||||
Commonwealth of Massachusetts General Obligation Limited | 1,000 | 5.500 | 10/01/16 | 1,048 | ||||
Commonwealth of Massachusetts Revenue Bonds | 4,000 | 5.000 | 06/15/20 | 4,692 | ||||
Massachusetts Clean Water Trust (The) Revenue Bonds | 1,090 | 5.000 | 08/01/16 | 1,128 | ||||
7,798 | ||||||||
Michigan - 3.5% | ||||||||
Brighton Area School District General Obligation Unlimited(µ) | 1,525 | 5.000 | 05/01/26 | 1,757 | ||||
City of Detroit Michigan Sewage Disposal System Revenue Bonds | 3,500 | 5.000 | 07/01/32 | 3,768 | ||||
City of Detroit Michigan Water Supply System Revenue Bonds(µ) | 1,015 | 5.000 | 07/01/18 | 1,037 | ||||
City of Detroit Michigan Water Supply System Revenue Bonds(µ) | 170 | 4.500 | 07/01/25 | 171 | ||||
County of Wayne Michigan General Obligation Limited(µ) | 750 | 5.000 | 12/01/30 | 753 | ||||
County of Wayne Michigan General Obligation Limited(µ) | 3,000 | 5.000 | 02/01/34 | 3,061 | ||||
Detroit City School District General Obligation Unlimited(µ) | 1,000 | 6.000 | 05/01/19 | 1,150 | ||||
Kent Hospital Finance Authority Revenue Bonds | 1,505 | 5.000 | 11/15/19 | 1,721 | ||||
Michigan Finance Authority Revenue Bonds | 3,625 | 5.000 | 07/01/16 | 3,725 | ||||
Michigan Finance Authority Revenue Bonds | 1,000 | 5.000 | 11/01/27 | 1,144 | ||||
Michigan Finance Authority Revenue Bonds | 4,655 | 5.000 | 07/01/28 | 5,187 | ||||
Michigan Finance Authority Revenue Bonds | 1,375 | 5.000 | 07/01/29 | 1,522 | ||||
Michigan Finance Authority Revenue Bonds | 3,000 | 5.000 | 11/15/29 | 3,422 | ||||
Michigan Finance Authority Revenue Bonds | 1,000 | 5.000 | 07/01/30 | 1,099 | ||||
Michigan Strategic Fund Revenue Bonds | 1,015 | 5.250 | 06/01/32 | 1,061 | ||||
Michigan Strategic Fund Tax Allocation(Ê) | 5,000 | 4.125 | 07/01/45 | 5,054 | ||||
Michigan Tobacco Settlement Finance Authority Revenue Bonds | 3,225 | 5.125 | 06/01/22 | 2,939 | ||||
Royal Oak School District General Obligation Unlimited | 1,435 | 5.000 | 05/01/18 | 1,579 | ||||
Saline Economic Development Corp. Revenue Bonds | 485 | 5.250 | 06/01/32 | 504 | ||||
Wayne County Airport Authority Revenue Bonds | 2,000 | 5.000 | 12/01/17 | 2,163 | ||||
Wayne County Airport Authority Revenue Bonds(µ) | 2,500 | 4.500 | 12/01/24 | 2,672 |
See accompanying notes which are an integral part of the financial statements.
500 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Wayne County Airport Authority Revenue Bonds | 435 | 5.000 | 12/01/29 | 496 | ||||
45,985 | ||||||||
Minnesota - 0.9% | ||||||||
City of Minneapolis Minnesota Revenue Bonds | 1,250 | 5.000 | 08/01/17 | 1,345 | ||||
City of Minneapolis Minnesota Revenue Bonds | 1,855 | 6.375 | 11/15/23 | 2,150 | ||||
City of Rochester Minnesota Revenue Bonds(Ê) | 1,125 | 4.000 | 11/15/30 | 1,226 | ||||
City of Saint Louis Park Minnesota Revenue Bonds | 1,165 | 5.500 | 07/01/17 | 1,259 | ||||
City of Saint Louis Park Minnesota Revenue Bonds | 725 | 5.500 | 07/01/18 | 814 | ||||
State Paul Housing & Redevelopment Authority Revenue Bonds | 2,145 | 5.000 | 11/15/25 | 2,343 | ||||
State Paul Housing & Redevelopment Authority Revenue Bonds | 2,250 | 5.000 | 11/15/26 | 2,454 | ||||
11,591 | ||||||||
Mississippi - 0.2% | ||||||||
Mississippi Development Bank Revenue Bonds(µ) | 1,000 | 5.000 | 04/01/28 | 1,148 | ||||
Mississippi Hospital Equipment & Facilities Authority Revenue Bonds | 1,555 | 5.000 | 10/01/17 | 1,680 | ||||
2,828 | ||||||||
Missouri - 1.0% | ||||||||
Bi-State Development Agency of the Missouri-Illinois Metropolitan District Revenue | ||||||||
Bonds | 810 | 5.000 | 10/01/28 | 899 | ||||
Bi-State Development Agency of the Missouri-Illinois Metropolitan District Revenue | ||||||||
Bonds | 1,775 | 5.000 | 10/01/33 | 2,021 | ||||
City of Kansas City Missouri Revenue Bonds | 1,185 | 5.000 | 09/01/26 | 1,341 | ||||
City of Kansas City Missouri Revenue Bonds | 500 | 5.000 | 09/01/27 | 564 | ||||
City of Kansas City Missouri Revenue Bonds | 1,000 | 5.000 | 09/01/28 | 1,127 | ||||
City of Kansas City Missouri Revenue Bonds | 1,000 | 5.000 | 09/01/29 | 1,125 | ||||
City of Saint Louis Missouri Airport Revenue Bonds | 1,680 | 6.125 | 07/01/24 | 1,957 | ||||
Missouri Highway & Transportation Commission Revenue Bonds(ae) | 2,500 | 5.250 | 05/01/17 | 2,676 | ||||
Nixa Public Schools General Obligation Unlimited | 500 | 5.000 | 03/01/33 | 563 | ||||
Poplar Bluff R-I School District Certificate Of Participation(µ) | 100 | 3.000 | 03/01/17 | 103 | ||||
Poplar Bluff R-I School District Certificate Of Participation(µ) | 100 | 3.000 | 03/01/18 | 104 | ||||
12,480 | ||||||||
Nebraska - 0.7% | ||||||||
Central Plains Energy Project Revenue Bonds | 1,565 | 5.000 | 09/01/32 | 1,718 | ||||
Central Plains Energy Project Revenue Bonds | 3,505 | 5.250 | 09/01/37 | 3,868 | ||||
Nebraska Public Power District Revenue Bonds | 2,000 | 4.000 | 01/01/21 | 2,246 | ||||
Nebraska Public Power District Revenue Bonds | 1,000 | 5.000 | 01/01/29 | 1,149 | ||||
8,981 | ||||||||
Nevada - 1.0% | ||||||||
City of Reno Nevada General Obligation Limited | 1,100 | 5.000 | 06/01/18 | 1,211 | ||||
City of Reno Nevada General Obligation Limited | 1,000 | 5.000 | 06/01/22 | 1,169 | ||||
Clark County Department of Aviation Revenue Bonds(µ) | 2,500 | 5.000 | 07/01/22 | 2,840 | ||||
County of Clark Nevada Revenue Bonds | 1,000 | 5.000 | 07/01/16 | 1,031 | ||||
County of Clark Nevada Revenue Bonds | 2,965 | 5.000 | 07/01/29 | 3,397 | ||||
State of Nevada General Obligation Limited | 2,590 | 5.000 | 04/01/21 | 3,074 | ||||
12,722 | ||||||||
New Hampshire - 0.3% | ||||||||
New Hampshire Health and Education Facilities Authority Act Revenue Bonds(ae) | 2,535 | 5.000 | 07/01/16 | 2,614 | ||||
New Hampshire Health and Education Facilities Authority Act Revenue Bonds | 1,145 | 5.000 | 07/01/32 | 1,165 | ||||
3,779 | ||||||||
New Jersey - 4.8% | ||||||||
Camden County Improvement Authority Revenue Bonds | 1,000 | 5.000 | 02/15/18 | 1,082 | ||||
Camden County Improvement Authority Revenue Bonds | 1,000 | 5.000 | 02/15/19 | 1,101 | ||||
Camden County Improvement Authority Revenue Bonds | 2,000 | 5.000 | 02/15/28 | 2,208 | ||||
Camden County Improvement Authority Revenue Bonds | 2,000 | 5.000 | 02/15/30 | 2,173 | ||||
Camden County Improvement Authority Revenue Bonds | 2,000 | 5.000 | 02/15/31 | 2,161 | ||||
Camden County Improvement Authority Revenue Bonds | 300 | 5.000 | 02/15/32 | 323 | ||||
Casino Reinvestment Development Authority Revenue Bonds | 600 | 5.000 | 11/01/18 | 640 | ||||
Casino Reinvestment Development Authority Revenue Bonds | 1,000 | 4.000 | 11/01/19 | 1,041 | ||||
New Jersey Economic Development Authority Revenue Bonds(µ) | 1,500 | 5.500 | 06/15/16 | 1,549 | ||||
New Jersey Economic Development Authority Revenue Bonds | 2,500 | 5.000 | 09/01/18 | 2,756 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 501
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
New Jersey Economic Development Authority Revenue Bonds | 6,435 | 5.000 | 06/15/19 | 6,934 | ||||
New Jersey Economic Development Authority Revenue Bonds | 2,765 | 5.000 | 06/15/20 | 3,030 | ||||
New Jersey Economic Development Authority Revenue Bonds | 75 | 5.000 | 06/15/21 | 83 | ||||
New Jersey Economic Development Authority Revenue Bonds | 2,000 | 5.000 | 06/15/22 | 2,198 | ||||
New Jersey Economic Development Authority Revenue Bonds | 2,045 | 5.000 | 06/15/23 | 2,226 | ||||
New Jersey Economic Development Authority Revenue Bonds | 750 | 5.000 | 07/01/29 | 789 | ||||
New Jersey Educational Facilities Authority Revenue Bonds | 2,000 | 5.000 | 07/01/16 | 2,063 | ||||
New Jersey Health Care Facilities Financing Authority Revenue Bonds(µ) | 1,000 | 5.000 | 09/15/17 | 1,082 | ||||
New Jersey Health Care Facilities Financing Authority Revenue Bonds | 1,355 | 3.600 | 07/01/19 | 1,406 | ||||
New Jersey Health Care Facilities Financing Authority Revenue Bonds | 900 | 3.850 | 07/01/20 | 942 | ||||
New Jersey State Turnpike Authority Revenue Bonds | 5,540 | 5.000 | 01/01/22 | 6,562 | ||||
New Jersey State Turnpike Authority Revenue Bonds | 3,485 | 5.000 | 01/01/23 | 4,156 | ||||
New Jersey State Turnpike Authority Revenue Bonds | 3,080 | 5.000 | 01/01/24 | 3,650 | ||||
New Jersey State Turnpike Authority Revenue Bonds | 2,500 | 5.000 | 01/01/27 | 2,878 | ||||
New Jersey Transportation Trust Fund Authority Revenue Bonds | 1,000 | 5.000 | 12/15/18 | 1,074 | ||||
New Jersey Transportation Trust Fund Authority Revenue Bonds(µ) | 830 | 5.500 | 12/15/18 | 916 | ||||
New Jersey Transportation Trust Fund Authority Revenue Bonds | 1,120 | 5.250 | 06/15/30 | 1,177 | ||||
State of New Jersey General Obligation Unlimited(µ) | 2,080 | 5.500 | 07/15/18 | 2,304 | ||||
Tobacco Settlement Financing Corp. Revenue Bonds | 60 | 4.500 | 06/01/23 | 60 | ||||
Tobacco Settlement Financing Corp. Revenue Bonds | 1,245 | 5.000 | 06/01/29 | 1,093 | ||||
Tobacco Settlement Financing Corp. Revenue Bonds | 3,250 | 4.750 | 06/01/34 | 2,624 | ||||
62,281 | ||||||||
New Mexico - 0.3% | ||||||||
City of Albuquerque New Mexico General Obligation Unlimited | 2,320 | 5.000 | 07/01/17 | 2,490 | ||||
County of Taos New Mexico Revenue Bonds(µ) | 750 | 3.000 | 04/01/17 | 768 | ||||
New Mexico Hospital Equipment Loan Council Revenue Bonds | 555 | 5.000 | 08/01/25 | 675 | ||||
3,933 | ||||||||
New York - 9.3% | ||||||||
Albany Industrial Development Agency Revenue Bonds | 2,380 | 5.250 | 11/15/32 | 2,602 | ||||
Buffalo & Erie County Industrial Land Development Corp. Revenue Bonds | 385 | 5.000 | 07/01/20 | 436 | ||||
Buffalo & Erie County Industrial Land Development Corp. Revenue Bonds | 1,350 | 5.750 | 10/01/26 | 1,616 | ||||
Build NYC Resource Corp. Revenue Bonds(µ) | 930 | 5.000 | 12/15/18 | 1,030 | ||||
Build NYC Resource Corp. Revenue Bonds | 1,445 | 5.000 | 08/01/19 | 1,621 | ||||
Chautauqua Tobacco Asset Securitization Corp. Revenue Bonds | 1,560 | 3.125 | 06/01/22 | 1,560 | ||||
City of New York New York General Obligation Unlimited | 2,170 | 5.000 | 08/01/16 | 2,247 | ||||
City of New York New York General Obligation Unlimited | 1,500 | 5.000 | 08/01/19 | 1,714 | ||||
City of New York New York General Obligation Unlimited | 2,105 | 5.000 | 08/01/20 | 2,459 | ||||
City of New York New York General Obligation Unlimited | 2,550 | 5.000 | 08/01/21 | 3,025 | ||||
City of New York New York General Obligation Unlimited | 2,445 | 5.000 | 08/01/22 | 2,926 | ||||
City of New York New York General Obligation Unlimited | 6,420 | 5.000 | 08/01/23 | 7,739 | ||||
City of Yonkers New York General Obligation Limited(µ) | 615 | 5.000 | 03/15/25 | 704 | ||||
Metropolitan Transportation Authority Revenue Bonds | 1,000 | 5.000 | 11/15/17 | 1,087 | ||||
Metropolitan Transportation Authority Revenue Bonds | 1,410 | 5.000 | 11/15/24 | 1,684 | ||||
Metropolitan Transportation Authority Revenue Bonds | 8,320 | 5.000 | 11/15/25 | 9,859 | ||||
Metropolitan Transportation Authority Revenue Bonds | 2,075 | 5.000 | 11/15/27 | 2,444 | ||||
Metropolitan Transportation Authority Revenue Bonds | 4,015 | 5.000 | 11/15/28 | 4,677 | ||||
Metropolitan Transportation Authority Revenue Bonds | 1,430 | 6.500 | 11/15/28 | 1,668 | ||||
New York City Health & Hospital Corp. Revenue Bonds | 1,500 | 5.000 | 02/15/17 | 1,586 | ||||
New York City Industrial Development Agency Revenue Bonds(µ) | 1,535 | 5.000 | 01/01/31 | 1,589 | ||||
New York City Transitional Finance Authority Future Tax Secured Revenue Bonds | 1,000 | 5.000 | 11/01/18 | 1,121 | ||||
New York City Transitional Finance Authority Future Tax Secured Revenue Bonds | 890 | 5.000 | 11/01/20 | 1,048 | ||||
New York City Transitional Finance Authority Future Tax Secured Revenue Bonds | 2,175 | 5.000 | 05/01/21 | 2,580 | ||||
New York City Transitional Finance Authority Future Tax Secured Revenue Bonds | 2,180 | 5.000 | 11/01/21 | 2,606 | ||||
New York City Trust for Cultural Resources Revenue Bonds | 940 | 5.000 | 07/01/21 | 1,095 | ||||
New York State Dormitory Authority Revenue Bonds | 1,625 | 5.000 | 07/01/16 | 1,674 | ||||
New York State Dormitory Authority Revenue Bonds | 1,755 | 5.000 | 07/01/17 | 1,881 | ||||
New York State Dormitory Authority Revenue Bonds(ae) | 5 | 5.250 | 02/15/19 | 6 | ||||
New York State Dormitory Authority Revenue Bonds | 1,000 | 5.000 | 10/01/19 | 1,155 |
See accompanying notes which are an integral part of the financial statements.
502 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
New York State Dormitory Authority Revenue Bonds | 995 | 5.250 | 02/15/21 | 1,132 | ||||
New York State Dormitory Authority Revenue Bonds | 180 | 5.000 | 07/01/21 | 213 | ||||
New York State Dormitory Authority Revenue Bonds | 2,400 | 5.000 | 05/01/22 | 2,790 | ||||
New York State Dormitory Authority Revenue Bonds | 725 | 5.000 | 05/15/23 | 866 | ||||
New York State Dormitory Authority Revenue Bonds | 6,700 | 5.000 | 12/15/23 | 8,096 | ||||
New York State Dormitory Authority Revenue Bonds | 700 | 5.000 | 07/01/24 | 825 | ||||
New York State Dormitory Authority Revenue Bonds | 6,790 | 5.000 | 07/01/26 | 7,992 | ||||
New York State Dormitory Authority Revenue Bonds | 2,500 | 5.250 | 07/01/29 | 2,877 | ||||
New York State Energy Research & Development Authority Revenue Bonds(µ)(Ê) | 3,190 | 0.433 | 03/01/27 | 3,031 | ||||
New York State Environmental Facilities Corp. Revenue Bonds | 770 | 5.000 | 06/15/22 | 852 | ||||
New York State Environmental Facilities Corp. Revenue Bonds | 1,640 | 5.000 | 09/15/23 | 1,778 | ||||
New York State Thruway Authority Revenue Bonds | 12,485 | 5.000 | 05/01/19 | 14,103 | ||||
New York State Thruway Authority Revenue Bonds | 3,000 | 5.000 | 03/15/27 | 3,530 | ||||
Triborough Bridge & Tunnel Authority Revenue Bonds | 950 | 5.000 | 11/15/17 | 1,034 | ||||
Triborough Bridge & Tunnel Authority Revenue Bonds(µ) | 1,000 | 5.500 | 11/15/20 | 1,197 | ||||
Triborough Bridge & Tunnel Authority Revenue Bonds(Ê) | 900 | 5.000 | 11/15/38 | 901 | ||||
Troy Capital Resource Corp. Revenue Bonds | 1,000 | 5.000 | 09/01/20 | 1,162 | ||||
Westchester County Local Development Corp. Revenue Bonds | 1,350 | 5.000 | 05/01/34 | 1,453 | ||||
121,271 | ||||||||
North Carolina - 0.6% | ||||||||
North Carolina Capital Facilities Finance Agency Revenue Bonds | 750 | 5.000 | 04/01/19 | 842 | ||||
North Carolina Eastern Municipal Power Agency Revenue Bonds | 650 | 5.000 | 01/01/16 | 655 | ||||
North Carolina Medical Care Commission Revenue Bonds | 400 | 3.000 | 06/01/17 | 415 | ||||
State of North Carolina General Obligation Unlimited | 2,500 | 5.000 | 05/01/20 | 2,930 | ||||
State of North Carolina Revenue Bonds | 1,000 | 5.000 | 05/01/19 | 1,138 | ||||
University of North Carolina at Chapel Hill Revenue Bonds | 1,205 | 5.000 | 12/01/31 | 1,302 | ||||
7,282 | ||||||||
North Dakota - 0.3% | ||||||||
City of Bowman North Dakota Revenue Notes | 1,000 | 2.500 | 02/15/17 | 1,000 | ||||
City of Williston North Dakota Revenue Bonds(µ) | 1,425 | 4.000 | 11/01/20 | 1,491 | ||||
County of Burleigh North Dakota Revenue Bonds | 460 | 5.000 | 07/01/29 | 549 | ||||
County of Burleigh North Dakota Revenue Bonds | 500 | 5.000 | 07/01/31 | 596 | ||||
3,636 | ||||||||
Ohio - 4.8% | ||||||||
Buckeye Tobacco Settlement Financing Authority Revenue Bonds | 5,700 | 5.125 | 06/01/24 | 5,091 | ||||
Buckeye Tobacco Settlement Financing Authority Revenue Bonds | 1,000 | 5.375 | 06/01/24 | 911 | ||||
Buckeye Tobacco Settlement Financing Authority Revenue Bonds | 2,400 | 5.875 | 06/01/30 | 2,136 | ||||
City of Akron Ohio Revenue Bonds | 1,000 | 5.000 | 12/01/24 | 1,186 | ||||
City of Cincinnati Ohio General Obligation Unlimited | 1,815 | 5.000 | 12/01/30 | 2,062 | ||||
City of Cincinnati Ohio General Obligation Unlimited | 1,575 | 5.000 | 12/01/31 | 1,783 | ||||
City of Cleveland Ohio Airport System Revenue Bonds(µ) | 3,000 | 5.000 | 01/01/30 | 3,319 | ||||
Clermont County Port Authority Revenue Bonds(µ) | 200 | 5.000 | 12/01/23 | 237 | ||||
Cleveland Municipal School District General Obligation Unlimited | 1,100 | 5.000 | 12/01/27 | 1,286 | ||||
County of Cuyahoga Ohio Certificate Of Participation | 14,065 | 5.000 | 12/01/27 | 16,316 | ||||
County of Cuyahoga Ohio Certificate Of Participation | 1,990 | 5.000 | 12/01/28 | 2,292 | ||||
County of Hamilton Ohio Revenue Bonds | 2,065 | 5.250 | 06/01/32 | 2,296 | ||||
County of Montgomery Ohio Revenue Bonds | 1,100 | 5.750 | 11/15/22 | 1,313 | ||||
Kent State University Revenue Bonds(µ) | 2,000 | 5.000 | 05/01/16 | 2,046 | ||||
Lakewood City School District General Obligation Unlimited | 260 | 5.000 | 11/01/29 | 303 | ||||
Lakewood City School District General Obligation Unlimited | 875 | 5.000 | 11/01/30 | 1,007 | ||||
Middletown City School District General Obligation Unlimited(µ) | 1,435 | 5.250 | 12/01/34 | 1,652 | ||||
North Olmsted City School District General Obligation Unlimited(Ê) | 420 | 1.750 | 12/01/19 | 428 | ||||
Ohio State Water Development Authority Revenue Bonds | 6,085 | 5.000 | 06/01/21 | 7,256 | ||||
State of Ohio Revenue Bonds | 3,500 | 5.000 | 12/15/22 | 4,171 | ||||
State of Ohio Revenue Bonds | 2,815 | 5.000 | 12/15/23 | 3,357 | ||||
Toledo-Lucas County Port Authority Revenue Bonds | 1,965 | 5.000 | 07/01/29 | 2,102 | ||||
62,550 | ||||||||
Oklahoma - 0.3% |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 503
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Oklahoma County Finance Authority Revenue Bonds | 1,000 | 5.000 | 09/01/21 | 1,161 | ||||
Oklahoma Development Finance Authority Revenue Bonds | 2,000 | 5.000 | 08/15/28 | 2,357 | ||||
3,518 | ||||||||
Oregon - 0.4% | ||||||||
City of Portland Oregon Sewer System Revenue Bonds | 2,000 | 5.000 | 06/15/18 | 2,220 | ||||
Hospital Facilities Authority of Multnomah County Oregon Revenue Bonds | 535 | 5.000 | 10/01/19 | 568 | ||||
Morrow County School District No. 1 General Obligation Unlimited(µ) | 1,955 | 5.500 | 06/15/21 | 2,384 | ||||
5,172 | ||||||||
Pennsylvania - 4.2% | ||||||||
Allegheny County Hospital Development Authority Revenue Bonds | 2,000 | 5.000 | 09/01/16 | 2,078 | ||||
Allegheny County Industrial Development Authority Revenue Bonds | 920 | 6.500 | 05/01/17 | 942 | ||||
Berks County Municipal Authority Revenue Bonds | 1,960 | 5.250 | 11/01/24 | 2,238 | ||||
Bethlehem Authority Revenue Bonds(µ) | 1,000 | 4.000 | 11/15/16 | 1,033 | ||||
Bethlehem Authority Revenue Bonds(µ) | 1,000 | 5.000 | 11/15/17 | 1,076 | ||||
City of Philadelphia Pennsylvania General Obligation Unlimited(µ) | 1,000 | 5.000 | 08/01/24 | 1,129 | ||||
City of Philadelphia Pennsylvania General Obligation Unlimited | 3,210 | 5.250 | 07/15/27 | 3,722 | ||||
Commonwealth of Pennsylvania General Obligation Unlimited(µ) | 1,300 | 5.375 | 07/01/17 | 1,401 | ||||
Dallas Area Municipal Authority Revenue Bonds | 430 | 4.000 | 05/01/18 | 446 | ||||
Delaware County Vocational & Technical School Authority Revenue Bonds(µ) | 665 | 5.000 | 11/01/25 | 772 | ||||
Delaware County Vocational & Technical School Authority Revenue Bonds(µ) | 970 | 5.000 | 11/01/26 | 1,116 | ||||
Delaware County Vocational & Technical School Authority Revenue Bonds(µ) | 1,120 | 5.000 | 11/01/27 | 1,280 | ||||
Delaware County Vocational & Technical School Authority Revenue Bonds(µ) | 1,140 | 5.000 | 11/01/28 | 1,294 | ||||
Delaware County Vocational & Technical School Authority Revenue Bonds(µ) | 1,500 | 5.250 | 11/01/33 | 1,697 | ||||
Indiana County Hospital Authority Revenue Bonds | 550 | 5.500 | 06/01/29 | 596 | ||||
Montgomery County Industrial Development Authority Revenue Bonds | 1,000 | 5.000 | 11/15/17 | 1,041 | ||||
North Penn Water Authority Revenue Bonds | 1,190 | 5.000 | 11/01/30 | 1,352 | ||||
Pennsylvania Economic Development Financing Authority Revenue Bonds | 2,270 | 5.000 | 01/01/22 | 2,435 | ||||
Pennsylvania Economic Development Financing Authority Revenue Bonds | 2,000 | 5.000 | 07/01/22 | 2,062 | ||||
Pennsylvania Economic Development Financing Authority Revenue Bonds | 4,460 | 5.000 | 01/01/23 | 4,493 | ||||
Pennsylvania Economic Development Financing Authority Revenue Bonds(Ê) | 1,000 | 3.750 | 12/01/40 | 1,025 | ||||
Pennsylvania Higher Educational Facilities Authority Revenue Bonds | 1,000 | 5.000 | 09/01/17 | 1,081 | ||||
Pennsylvania Higher Educational Facilities Authority Revenue Bonds | 1,940 | 5.250 | 05/01/24 | 2,242 | ||||
Philadelphia Authority for Industrial Development Revenue Bonds | 1,000 | 5.875 | 06/15/22 | 1,064 | ||||
Philadelphia Authority for Industrial Development Revenue Bonds | 2,000 | 8.000 | 01/01/33 | 2,149 | ||||
State Public School Building Authority Revenue Bonds | 2,000 | 5.000 | 04/01/20 | 2,240 | ||||
State Public School Building Authority Revenue Bonds | 3,030 | 5.000 | 04/01/25 | 3,373 | ||||
State Public School Building Authority Revenue Bonds(µ) | 1,000 | 5.000 | 06/15/28 | 1,139 | ||||
State Public School Building Authority Revenue Bonds(µ) | 1,000 | 5.000 | 06/15/29 | 1,128 | ||||
State Public School Building Authority Revenue Bonds | 3,000 | 5.000 | 04/01/32 | 3,228 | ||||
Township of Bensalem Pennsylvania General Obligation Unlimited | 1,380 | 5.250 | 06/01/29 | 1,633 | ||||
University of Pittsburgh-of the Commonwealth System of Higher Education Revenue | ||||||||
Bonds | 1,000 | 5.500 | 09/15/21 | 1,152 | ||||
West Mifflin Sanitary Sewer Municipal Authority Revenue Bonds(µ) | 250 | 3.000 | 08/01/17 | 260 | ||||
West Mifflin Sanitary Sewer Municipal Authority Revenue Bonds(µ) | 225 | 4.000 | 08/01/18 | 241 | ||||
Western Wayne School District General Obligation Unlimited(µ) | 565 | 5.000 | 04/01/21 | 652 | ||||
54,810 | ||||||||
Puerto Rico - 3.3% | ||||||||
Commonwealth of Puerto Rico General Obligation Unlimited(ae) | 620 | 5.250 | 07/01/16 | 641 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited(µ) | 2,015 | 5.500 | 07/01/16 | 2,054 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited(µ) | 760 | 6.000 | 07/01/16 | 777 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited(µ) | 285 | 5.500 | 07/01/18 | 296 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited(µ) | 640 | 5.500 | 07/01/19 | 660 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited(µ) | 1,000 | 5.250 | 07/01/21 | 995 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited(µ) | 950 | 5.250 | 07/01/27 | 950 | ||||
Commonwealth of Puerto Rico General Obligation Unlimited(µ) | 2,340 | 5.000 | 07/01/35 | 2,250 | ||||
Government Development Bank for Puerto Rico Revenue Bonds(µ) | 2,830 | 4.750 | 12/01/15 | 2,834 | ||||
Puerto Rico Commonwealth Aqueduct and Sewer Authority Revenue Bonds(µ) | 3,050 | 5.000 | 07/01/28 | 2,994 | ||||
Puerto Rico Convention Center District Authority Revenue Bonds(µ) | 1,400 | 5.000 | 07/01/18 | 1,381 |
See accompanying notes which are an integral part of the financial statements.
504 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Puerto Rico Electric Power Authority Revenue Bonds(µ) | 2,105 | 5.500 | 07/01/16 | 2,146 | ||||
Puerto Rico Electric Power Authority Revenue Bonds(µ) | 1,000 | 5.000 | 07/01/19 | 1,001 | ||||
Puerto Rico Electric Power Authority Revenue Bonds(µ) | 1,615 | 5.000 | 07/01/21 | 1,615 | ||||
Puerto Rico Electric Power Authority Revenue Bonds(µ) | 215 | 4.000 | 07/01/23 | 201 | ||||
Puerto Rico Electric Power Authority Revenue Bonds(µ) | 1,350 | 5.000 | 07/01/26 | 1,314 | ||||
Puerto Rico Electric Power Authority Revenue Bonds(µ) | 205 | 4.375 | 07/01/30 | 180 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds(µ) | 25 | 5.000 | 07/01/16 | 25 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds(µ) | 300 | 4.125 | 07/01/18 | 293 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds(µ) | 715 | 5.500 | 07/01/26 | 719 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds(µ) | 190 | 5.000 | 07/01/27 | 189 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds(µ) | 700 | 5.500 | 07/01/28 | 673 | ||||
Puerto Rico Highways & Transportation Authority Revenue Bonds(µ) | 360 | 5.500 | 07/01/29 | 328 | ||||
Puerto Rico Housing Finance Authority Revenue Bonds | 180 | 5.500 | 12/01/15 | 180 | ||||
Puerto Rico Housing Finance Authority Revenue Bonds | 1,830 | 5.500 | 12/01/16 | 1,906 | ||||
Puerto Rico Infrastructure Financing Authority Revenue Bonds(µ) | 1,185 | 5.500 | 07/01/17 | 1,185 | ||||
Puerto Rico Infrastructure Financing Authority Revenue Bonds(µ) | 1,600 | 5.500 | 07/01/23 | 1,531 | ||||
Puerto Rico Infrastructure Financing Authority Revenue Bonds(µ) | 535 | 5.500 | 07/01/24 | 508 | ||||
Puerto Rico Infrastructure Financing Authority Revenue Bonds(µ) | 475 | 5.500 | 07/01/25 | 447 | ||||
Puerto Rico Infrastructure Financing Authority Revenue Bonds(µ) | 1,500 | 5.500 | 07/01/26 | 1,395 | ||||
Puerto Rico Infrastructure Financing Authority Revenue Bonds(µ) | 2,225 | 5.500 | 07/01/27 | 2,048 | ||||
Puerto Rico Municipal Finance Agency General Obligation Unlimited(µ) | 3,090 | 5.000 | 08/01/27 | 2,989 | ||||
Puerto Rico Municipal Finance Agency Revenue Bonds(µ) | 115 | 5.250 | 08/01/22 | 115 | ||||
Puerto Rico Public Buildings Authority Revenue Bonds(µ) | 3,130 | 5.500 | 07/01/16 | 3,149 | ||||
Puerto Rico Public Buildings Authority Revenue Bonds(µ) | 2,480 | 5.500 | 07/01/17 | 2,507 | ||||
University of Puerto Rico Revenue Bonds(µ) | 435 | 5.000 | 06/01/23 | 419 | ||||
42,895 | ||||||||
Rhode Island - 0.0% | ||||||||
Providence Public Buildings Authority Revenue Bonds(µ) | 500 | 5.875 | 06/15/26 | 574 | ||||
South Carolina - 0.6% | ||||||||
County of Greenwood South Carolina Revenue Bonds(µ)(Ê) | 150 | 0.396 | 10/01/34 | 138 | ||||
Piedmont Municipal Power Agency Revenue Bonds | 1,000 | 5.000 | 01/01/20 | 1,141 | ||||
South Carolina State Public Service Authority Revenue Bonds | 1,000 | 5.000 | 12/01/16 | 1,049 | ||||
Spartanburg Regional Health Services District Revenue Bonds | 5,560 | 5.000 | 04/15/32 | 6,139 | ||||
8,467 | ||||||||
South Dakota - 0.2% | ||||||||
Harrisburg School District No. 41-2 General Obligation Unlimited | 1,100 | 5.000 | 07/15/33 | 1,234 | ||||
South Dakota Health & Educational Facilities Authority Revenue Bonds | 1,000 | 5.000 | 11/01/35 | 1,119 | ||||
2,353 | ||||||||
Tennessee - 0.6% | ||||||||
Chattanooga Health Educational & Housing Facility Board Revenue Bonds | 1,800 | 5.000 | 10/01/25 | 1,804 | ||||
Chattanooga Health Educational & Housing Facility Board Revenue Bonds | 600 | 5.000 | 10/01/26 | 683 | ||||
Chattanooga Industrial Development Board Revenue Bonds(µ) | 4,000 | 5.000 | 10/01/30 | 4,282 | ||||
Chattanooga-Hamilton County Hospital Authority Revenue Bonds | 630 | 5.000 | 10/01/23 | 720 | ||||
7,489 | ||||||||
Texas - 9.8% | ||||||||
Arlington Higher Education Finance Corp. Revenue Bonds | 200 | 5.875 | 03/01/24 | 206 | ||||
Arlington Higher Education Finance Corp. Revenue Bonds | 1,000 | 5.000 | 08/15/26 | 1,178 | ||||
Arlington Higher Education Finance Corp. Revenue Bonds | 525 | 6.625 | 03/01/29 | 543 | ||||
Austin Community College District Public Facility Corp. Revenue Bonds | 1,000 | 5.000 | 08/01/23 | 1,189 | ||||
Austin Community College District Public Facility Corp. Revenue Bonds | 1,000 | 5.000 | 08/01/24 | 1,199 | ||||
Canadian River Municipal Water Authority Corp. Revenue Bonds(µ)(ae) | 1,215 | 5.000 | 02/15/16 | 1,232 | ||||
Central Texas Turnpike System Revenue Bonds | 500 | 5.000 | 08/15/23 | 582 | ||||
City of Beaumont Texas Waterworks & Sewer System Revenue Bonds(µ) | 425 | 4.000 | 09/01/18 | 460 | ||||
City of Corpus Christi Texas Utility System Revenue Bonds | 1,660 | 5.000 | 07/15/22 | 1,974 | ||||
City of El Paso Texas Water & Sewer Revenue Bonds | 2,890 | 5.000 | 03/01/25 | 3,478 | ||||
City of Fort Worth Texas Water & Sewer System Revenue Bonds | 1,340 | 5.000 | 02/15/17 | 1,419 | ||||
City of Houston Texas Airport System Revenue Bonds | 1,500 | 5.000 | 07/01/17 | 1,610 | ||||
City of Houston Texas Airport System Revenue Bonds | 560 | 5.000 | 07/01/25 | 648 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 505
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | |||||||
Principal | Fair | ||||||
Amount ($) | Rate | Date of | Value | ||||
or Shares | % | Maturity | $ | ||||
City of Houston Texas Airport System Revenue Bonds | 900 | 5.000 | 07/01/29 | 1,016 | |||
City of Houston Texas Revenue Bonds | 1,890 | 5.000 | 09/01/20 | 2,180 | |||
City of Lubbock Texas General Obligation Limited | 5,000 | 5.000 | 02/15/19 | 5,642 | |||
City of San Antonio Texas Water System Revenue Bonds | 2,250 | 5.000 | 05/15/24 | 2,616 | |||
City Public Service Board of San Antonio Texas Revenue Bonds | 1,000 | 5.000 | 02/01/18 | 1,095 | |||
Clifton Higher Education Finance Corp. Revenue Bonds | 300 | 2.350 | 08/15/16 | 302 | |||
Clifton Higher Education Finance Corp. Revenue Bonds | 425 | 3.000 | 08/15/17 | 442 | |||
Clifton Higher Education Finance Corp. Revenue Bonds | 400 | 4.000 | 08/15/18 | 432 | |||
Conroe Independent School District General Obligation Unlimited | 1,085 | 5.000 | 02/15/25 | 1,253 | |||
County of Fort Bend Texas General Obligation Limited(µ) | 1,000 | 5.000 | 03/01/16 | 1,016 | |||
County of Fort Bend Texas General Obligation Limited | 3,740 | 5.000 | 03/01/23 | 4,515 | |||
Dallas/Fort Worth International Airport Revenue Bonds | 280 | 5.000 | 11/01/22 | 293 | |||
Dallas/Fort Worth International Airport Revenue Bonds | 200 | 5.000 | 11/01/23 | 209 | |||
Dallas/Fort Worth International Airport Revenue Bonds | 250 | 5.000 | 11/01/24 | 261 | |||
Dallas/Fort Worth International Airport Revenue Bonds | 3,395 | 5.000 | 11/01/27 | 3,925 | |||
Dallas/Fort Worth International Airport Revenue Bonds | 1,000 | 5.250 | 11/01/28 | 1,191 | |||
Dallas/Fort Worth International Airport Revenue Bonds | 1,340 | 5.000 | 11/01/29 | 1,537 | |||
Dallas/Fort Worth International Airport Revenue Bonds | 2,000 | 5.250 | 11/01/29 | 2,366 | |||
Dallas/Fort Worth International Airport Revenue Bonds | 1,825 | 5.000 | 11/01/30 | 2,077 | |||
Dallas/Fort Worth International Airport Revenue Bonds | 1,500 | 5.250 | 11/01/30 | 1,764 | |||
Decatur Hospital Authority Revenue Bonds | 1,250 | 5.250 | 09/01/29 | 1,368 | |||
Goose Creek Consolidated Independent School District General Obligation Unlimited(µ) | 915 | 5.000 | 02/15/24 | 1,065 | |||
Grand Prairie Independent School District General Obligation Unlimited | 750 | 5.000 | 02/15/19 | 794 | |||
Harris County Cultural Education Facilities Finance Corp. Revenue Bonds | 1,385 | 6.375 | 01/01/33 | 1,580 | |||
Harris County-Houston Sports Authority Revenue Bonds | 1,000 | 5.000 | 11/15/26 | 1,146 | |||
Harris County-Houston Sports Authority Revenue Bonds | 750 | 5.000 | 11/15/27 | 857 | |||
Harris County-Houston Sports Authority Revenue Bonds | 2,265 | 5.000 | 11/15/29 | 2,562 | |||
Houston Higher Education Finance Corp. Revenue Bonds(ae) | 650 | 6.500 | 05/15/21 | 828 | |||
Houston Higher Education Finance Corp. Revenue Bonds | 1,600 | 5.000 | 08/15/28 | 1,881 | |||
Houston Higher Education Finance Corp. Revenue Bonds | 555 | 6.500 | 05/15/31 | 654 | |||
Karnes County Hospital District Revenue Bonds | 1,100 | 4.000 | 02/01/19 | 1,145 | |||
Karnes County Hospital District Revenue Bonds | 2,020 | 5.000 | 02/01/29 | 2,203 | |||
Lower Colorado River Authority Revenue Bonds | 5 | 5.000 | 05/15/16 | 5 | |||
Lower Colorado River Authority Revenue Bonds | 3,585 | 5.500 | 05/15/31 | 4,164 | |||
New Hope Cultural Education Facilities Corp. Revenue Bonds | 565 | 5.000 | 04/01/21 | 627 | |||
New Hope Cultural Education Facilities Corp. Revenue Bonds | 650 | 5.000 | 04/01/22 | 718 | |||
New Hope Cultural Education Facilities Corp. Revenue Bonds | 180 | 4.625 | 04/01/23 | 195 | |||
New Hope Cultural Education Facilities Corp. Revenue Bonds | 500 | 5.000 | 04/01/29 | 533 | |||
North Texas Tollway Authority Revenue Bonds(ae)(Ê) | 1,235 | 5.750 | 01/01/16 | 1,246 | |||
North Texas Tollway Authority Revenue Bonds(ae) | 840 | 6.000 | 01/01/18 | 934 | |||
North Texas Tollway Authority Revenue Bonds | 120 | 6.000 | 01/01/24 | 132 | |||
North Texas Tollway Authority Revenue Bonds | 3,840 | 5.000 | 01/01/29 | 4,424 | |||
Reagan Hospital District of Reagan County General Obligation Limited | 860 | 2.500 | 02/01/19 | 860 | |||
Reagan Hospital District of Reagan County General Obligation Limited | 910 | 3.250 | 02/01/21 | 917 | |||
Reagan Hospital District of Reagan County General Obligation Limited | 485 | 3.750 | 02/01/23 | 494 | |||
Reagan Hospital District of Reagan County General Obligation Limited | 500 | 5.000 | 02/01/29 | 530 | |||
Reagan Hospital District of Reagan County General Obligation Limited | 3,000 | 5.000 | 02/01/34 | 3,113 | |||
State of Texas General Obligation Unlimited | 2,910 | 5.000 | 04/01/22 | 3,499 | |||
Tarrant County Cultural Education Facilities Finance Corp. Revenue Bonds | 1,500 | 5.000 | 11/15/16 | 1,571 | |||
Tarrant County Cultural Education Facilities Finance Corp. Revenue Bonds | 2,500 | 2.500 | 12/01/18 | 2,525 | |||
Tarrant Regional Water District Revenue Bonds | 6,000 | 5.000 | 03/01/21 | 7,081 | |||
Tarrant Regional Water District Revenue Bonds | 1,150 | 5.000 | 03/01/22 | 1,377 | |||
Texas Municipal Gas Acquisition & Supply Corp. I Revenue Bonds | 3,775 | 6.250 | 12/15/26 | 4,573 | |||
Texas Municipal Gas Acquisition & Supply Corp. III Revenue Bonds | 900 | 5.000 | 12/15/24 | 1,031 | |||
Texas Municipal Gas Acquisition & Supply Corp. III Revenue Bonds | 3,515 | 5.000 | 12/15/27 | 3,907 | |||
Texas Private Activity Bond Surface Transportation Corp. Revenue Bonds | 1,445 | 7.500 | 12/31/31 | 1,728 | |||
Texas Private Activity Bond Surface Transportation Corp. Revenue Bonds | 1,250 | 7.500 | 06/30/33 | 1,511 | |||
Texas Public Finance Authority Revenue Bonds | 10,985 | 4.000 | 07/01/17 | 11,436 |
See accompanying notes which are an integral part of the financial statements.
506 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Texas State Public Finance Authority Charter School Finance Corp. Revenue Bonds | 400 | 4.000 | 08/15/16 | 411 | ||||
Texas State Public Finance Authority Charter School Finance Corp. Revenue Bonds | 445 | 4.000 | 08/15/17 | 472 | ||||
Texas State Public Finance Authority Charter School Finance Corp. Revenue Bonds | 300 | 4.000 | 08/15/18 | 325 | ||||
Texas Transportation Commission State Highway Fund Revenue Bonds(ae) | 2,500 | 5.000 | 04/01/16 | 2,550 | ||||
128,822 | ||||||||
Utah - 0.3% | ||||||||
County of Salt Lake Utah Revenue Bonds(Ê) | 2,000 | 5.000 | 12/01/33 | 2,113 | ||||
Utah State Charter School Finance Authority Revenue Bonds | 465 | 5.250 | 10/15/28 | 538 | ||||
Utah State Charter School Finance Authority Revenue Bonds | 1,215 | 5.000 | 10/15/33 | 1,346 | ||||
3,997 | ||||||||
Vermont - 0.0% | ||||||||
City of Burlington Vermont Airport Revenue Bonds(µ) | 540 | 5.000 | 07/01/24 | 630 | ||||
Virgin Islands - 1.3% | ||||||||
Virgin Islands Public Finance Authority Revenue Bonds | 4,455 | 5.000 | 10/01/18 | 4,748 | ||||
Virgin Islands Public Finance Authority Revenue Bonds | 1,000 | 4.000 | 10/01/22 | 1,041 | ||||
Virgin Islands Public Finance Authority Revenue Bonds(µ) | 7,400 | 5.000 | 10/01/29 | 8,377 | ||||
Virgin Islands Public Finance Authority Revenue Bonds | 670 | 5.250 | 10/01/29 | 740 | ||||
Virgin Islands Public Finance Authority Revenue Bonds | 2,110 | 6.750 | 10/01/37 | 2,438 | ||||
17,344 | ||||||||
Virginia - 1.3% | ||||||||
Chesterfield County Economic Development Authority Revenue Bonds | 650 | 5.000 | 05/01/23 | 729 | ||||
Commonwealth of Virginia General Obligation Unlimited | 1,000 | 5.000 | 06/01/23 | 1,107 | ||||
County of Fairfax Virginia General Obligation Unlimited | 1,000 | 5.000 | 04/01/18 | 1,102 | ||||
Henrico County Economic Development Authority Revenue Bonds | 1,490 | 5.000 | 11/01/30 | 1,662 | ||||
Virginia College Building Authority Revenue Bonds | 530 | 5.000 | 07/01/19 | 570 | ||||
Virginia College Building Authority Revenue Bonds | 585 | 5.000 | 07/01/20 | 633 | ||||
Virginia College Building Authority Revenue Bonds | 2,350 | 5.000 | 02/01/22 | 2,818 | ||||
Virginia College Building Authority Revenue Bonds | 710 | 5.250 | 07/01/30 | 755 | ||||
Virginia Commonwealth Transportation Board Revenue Bonds | 1,950 | 5.000 | 03/15/18 | 2,140 | ||||
Virginia Public School Authority Revenue Bonds | 1,000 | 5.000 | 08/01/17 | 1,078 | ||||
Virginia Resources Authority Revenue Bonds | 3,795 | 5.000 | 11/01/21 | 4,570 | ||||
17,164 | ||||||||
Washington - 3.5% | ||||||||
City of Seattle Washington Municipal Light & Power Revenue Bonds | 5,760 | 5.000 | 05/01/20 | 6,698 | ||||
City of Seattle Washington Municipal Light & Power Revenue Bonds | 5,545 | 5.000 | 05/01/21 | 6,574 | ||||
City of Seattle Washington Municipal Light & Power Revenue Bonds | 2,820 | 5.000 | 05/01/22 | 3,386 | ||||
County of King Washington Sewer Revenue Bonds | 3,085 | 5.000 | 01/01/28 | 3,592 | ||||
Energy Northwest Revenue Bonds | 1,000 | 7.125 | 07/01/16 | 1,046 | ||||
Energy Northwest Revenue Bonds | 2,000 | 5.000 | 07/01/19 | 2,290 | ||||
Greater Wenatchee Regional Events Center Public Facilities Dist Revenue Bonds | 1,060 | 3.750 | 09/01/19 | 1,087 | ||||
Greater Wenatchee Regional Events Center Public Facilities Dist Revenue Bonds | 1,000 | 4.500 | 09/01/22 | 1,053 | ||||
Mason County School District No. 309 Shelton General Obligation Unlimited(µ) | 1,115 | 5.000 | 12/01/18 | 1,223 | ||||
Pierce County School District No. 3 Puyallup General Obligation Unlimited(µ)(ae) | 1,000 | 5.000 | 12/01/15 | 1,004 | ||||
Port of Seattle Washington Revenue Bonds | 1,000 | 5.000 | 06/01/22 | 1,155 | ||||
Port of Seattle Washington Revenue Bonds | 1,285 | 5.000 | 03/01/23 | 1,533 | ||||
Snohomish County School District No. 15 Edmonds General Obligation Unlimited(µ)(ae) | 2,000 | 5.000 | 06/01/16 | 2,055 | ||||
State of Washington General Obligation Unlimited | 1,000 | 5.000 | 07/01/17 | 1,073 | ||||
State of Washington Revenue Bonds | 8,000 | 5.000 | 09/01/20 | 9,286 | ||||
Washington Health Care Facilities Authority Revenue Bonds | 270 | 5.000 | 03/01/18 | 293 | ||||
Washington Health Care Facilities Authority Revenue Bonds | 700 | 5.000 | 07/01/30 | 788 | ||||
Washington State Housing Finance Commission Revenue Bonds | 1,400 | 4.375 | 01/01/21 | 1,418 | ||||
45,554 | ||||||||
West Virginia - 0.2% | ||||||||
County of Mason West Virginia Revenue Bonds(Ê) | 1,000 | 1.625 | 10/01/22 | 1,001 | ||||
West Virginia University Revenue Bonds | 1,350 | 5.000 | 10/01/21 | 1,593 | ||||
2,594 | ||||||||
Wisconsin - 1.5% | ||||||||
City of Marshfield Wisconsin Electric System Revenue Bonds | 4,000 | 5.500 | 12/01/30 | 4,768 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 507
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | |||||||
Amount ($) | Rate | Date of | Value | |||||
or Shares | % | Maturity | $ | |||||
Public Finance Authority Revenue Bonds | 1,250 | 5.125 | 11/15/29 | 1,293 | ||||
State of Wisconsin General Obligation Unlimited | 4,250 | 5.000 | 11/01/20 | 5,024 | ||||
Wisconsin Department of Transportation Revenue Bonds(µ) | 1,500 | 5.000 | 07/01/19 | 1,717 | ||||
Wisconsin Department of Transportation Revenue Bonds | 5,950 | 5.000 | 07/01/22 | 7,177 | ||||
19,979 | ||||||||
Wyoming - 0.2% | ||||||||
County of Laramie Wyoming Revenue Bonds | 1,000 | 4.000 | 05/01/22 | 1,102 | ||||
County of Sweetwater Wyoming Revenue Bonds | 1,000 | 5.000 | 12/15/16 | 1,048 | ||||
County of Sweetwater Wyoming Revenue Bonds | 1,000 | 5.000 | 12/15/18 | 1,082 | ||||
3,232 | ||||||||
Total Municipal Bonds (cost $1,204,731) | 1,247,997 | |||||||
Short-Term Investments - 3.1% | ||||||||
Russell U.S. Cash Management Fund | 40,825,015 | (8) | 40,825 | |||||
Total Short-Term Investments (cost $40,825) | 40,825 | |||||||
Total Investments 98.5% (identified cost $1,245,556) | 1,288,822 | |||||||
Other Assets and Liabilities, Net - 1.5% | 19,736 | |||||||
Net Assets - 100.0% | 1,308,558 |
See accompanying notes which are an integral part of the financial statements.
508 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | ||||||||||||
Amount in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Municipal Bonds | ||||||||||||
Alabama | $ | — | $ | 19,179 | $ | — | $ | 19,179 | 1.5 | |||
Alaska | — | 1,181 | — | 1,181 | 0.1 | |||||||
Arizona | — | 36,028 | — | 36,028 | 2.7 | |||||||
Arkansas | — | 1,612 | — | 1,612 | 0.1 | |||||||
California | — | 113,717 | — | 113,717 | 8.7 | |||||||
Colorado | — | 28,952 | — | 28,952 | 2.2 | |||||||
Connecticut | — | 16,617 | — | 16,617 | 1.3 | |||||||
Delaware | — | 1,074 | — | 1,074 | 0.1 | |||||||
District of Columbia | — | 2,231 | — | 2,231 | 0.2 | |||||||
Florida | — | 115,175 | — | 115,175 | 8.8 | |||||||
Georgia | — | 22,541 | — | 22,541 | 1.7 | |||||||
Guam | — | 12,362 | — | 12,362 | 0.9 | |||||||
Hawaii | — | 1,666 | — | 1,666 | 0.1 | |||||||
Idaho | — | 8,001 | — | 8,001 | 0.6 | |||||||
Illinois | — | 92,993 | — | 92,993 | 7.1 | |||||||
Indiana | — | 5,470 | — | 5,470 | 0.4 | |||||||
Iowa | — | 6,390 | — | 6,390 | 0.5 | |||||||
Kansas | — | 4,789 | — | 4,789 | 0.4 | |||||||
Kentucky | — | 2,310 | — | 2,310 | 0.2 | |||||||
Louisiana | — | 20,065 | — | 20,065 | 1.5 | |||||||
Maryland | — | 3,933 | — | 3,933 | 0.3 | |||||||
Massachusetts | — | 7,798 | — | 7,798 | 0.6 | |||||||
Michigan | — | 45,985 | — | 45,985 | 3.5 | |||||||
Minnesota | — | 11,591 | — | 11,591 | 0.9 | |||||||
Mississippi | — | 2,828 | — | 2,828 | 0.2 | |||||||
Missouri | — | 12,480 | — | 12,480 | 1.0 | |||||||
Nebraska | — | 8,981 | — | 8,981 | 0.7 | |||||||
Nevada | — | 12,722 | — | 12,722 | 1.0 | |||||||
New Hampshire | — | 3,779 | — | 3,779 | 0.3 | |||||||
New Jersey | — | 62,281 | — | 62,281 | 4.8 | |||||||
New Mexico | — | 3,933 | — | 3,933 | 0.3 | |||||||
New York | — | 121,271 | — | 121,271 | 9.3 | |||||||
North Carolina | — | 7,282 | — | 7,282 | 0.6 | |||||||
North Dakota | — | 3,636 | — | 3,636 | 0.3 | |||||||
Ohio | — | 62,550 | — | 62,550 | 4.8 | |||||||
Oklahoma | — | 3,518 | — | 3,518 | 0.3 | |||||||
Oregon | — | 5,172 | — | 5,172 | 0.4 | |||||||
Pennsylvania | — | 54,810 | — | 54,810 | 4.2 | |||||||
Puerto Rico | — | 42,895 | — | 42,895 | 3.3 | |||||||
Rhode Island | — | 574 | — | 574 | —* | |||||||
South Carolina | — | 8,467 | — | 8,467 | 0.6 | |||||||
South Dakota | — | 2,353 | — | 2,353 | 0.2 | |||||||
Tennessee | — | 7,489 | — | 7,489 | 0.6 | |||||||
Texas | — | 128,822 | — | 128,822 | 9.8 | |||||||
Utah | — | 3,997 | — | 3,997 | 0.3 | |||||||
Vermont | — | 630 | — | 630 | —* | |||||||
Virgin Islands | — | 17,344 | — | 17,344 | 1.3 | |||||||
Virginia | — | 17,164 | — | 17,164 | 1.3 | |||||||
Washington | — | 45,554 | — | 45,554 | 3.5 | |||||||
West Virginia | — | 2,594 | — | 2,594 | 0.2 | |||||||
Wisconsin | — | 19,979 | — | 19,979 | 1.5 | |||||||
Wyoming | — | 3,232 | — | 3,232 | 0.2 | |||||||
Short-Term Investments | — | 40,825 | — | 40,825 | 3.1 | |||||||
Total Investments | $ | — | $ | 1,288,822 | $ | — | $ | 1,288,822 | 98.5 | |||
Other Assets and Liabilities, Net | 1.5 | |||||||||||
100.0 |
* Less than .05% of net assets
For a description of the Levels see note 2 in the Notes to Financial Statements
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 509
Russell Investment Company
Russell Tax Exempt Bond Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 1,245,556 |
Investments, at fair value(>) | 1,288,822 | |
Receivables: | ||
Dividends and interest | 17,654 | |
Dividends from affiliated Russell funds | 3 | |
Fund shares sold | 4,917 | |
Total assets | 1,311,396 | |
Liabilities | ||
Payables: | ||
Investments purchased | 681 | |
Fund shares redeemed | 1,478 | |
Accrued fees to affiliates | 581 | |
Other accrued expenses | 98 | |
Total liabilities | 2,838 | |
Net Assets | $ | 1,308,558 |
See accompanying notes which are an integral part of the financial statements.
510 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 2,983 | |
Accumulated net realized gain (loss) | (717 | ) | |
Unrealized appreciation (depreciation) on investments | 43,266 | ||
Shares of beneficial interest | 565 | ||
Additional paid-in capital | 1,262,461 | ||
Net Assets | $ | 1,308,558 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 23.23 | |
Maximum offering price per share (Net asset value plus sales charge of 3.75%): Class A | $ | 24.14 | |
Class A — Net assets | $ | 19,472,282 | |
Class A — Shares outstanding ($.01 par value) | 838,314 | ||
Net asset value per share: Class C(#) | $ | 23.10 | |
Class C — Net assets | $ | 26,214,566 | |
Class C — Shares outstanding ($.01 par value) | 1,134,797 | ||
Net asset value per share: Class E(#) | $ | 23.19 | |
Class E — Net assets | $ | 50,598,439 | |
Class E — Shares outstanding ($.01 par value) | 2,182,221 | ||
Net asset value per share: Class S(#) | $ | 23.15 | |
Class S — Net assets | $ 1,212,272,800 | ||
Class S — Shares outstanding ($.01 par value) | 52,369,968 | ||
Amounts in thousands | |||
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 40,825 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 511
Russell Investment Company
Russell Tax Exempt Bond Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends from affiliated Russell funds | $ | 57 | |
Interest | 42,271 | ||
Total investment income | 42,328 | ||
Expenses | |||
Advisory fees | 4,017 | ||
Administrative fees | 638 | ||
Custodian fees | 154 | ||
Distribution fees - Class A | 46 | ||
Distribution fees - Class C | 206 | ||
Transfer agent fees - Class A | 37 | ||
Transfer agent fees - Class C | 55 | ||
Transfer agent fees - Class E | 126 | ||
Transfer agent fees - Class S | 2,460 | ||
Professional fees | 79 | ||
Registration fees | 131 | ||
Shareholder servicing fees - Class C | 69 | ||
Shareholder servicing fees - Class E | 157 | ||
Trustees’ fees | 34 | ||
Printing fees | 48 | ||
Miscellaneous | 33 | ||
Expenses before reductions | 8,290 | ||
Expense reductions | (770 | ) | |
Net expenses | 7,520 | ||
Net investment income (loss) | 34,808 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on investments | 2,000 | ||
Net change in unrealized appreciation (depreciation) on investments | (6,291 | ) | |
Net realized and unrealized gain (loss) | (4,291 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | 30,517 |
See accompanying notes which are an integral part of the financial statements.
512 Russell Tax Exempt Bond Fund
Russell Investment Company
Russell Tax Exempt Bond Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 34,808 | $ | 25,550 | ||
Net realized gain (loss) | 2,000 | (1,752 | ) | |||
Net change in unrealized appreciation (depreciation) | (6,291 | ) | 31,378 | |||
Net increase (decrease) in net assets from operations | 30,517 | 55,176 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (423 | ) | (334 | ) | ||
Class C | (445 | ) | (385 | ) | ||
Class E | (1,494 | ) | (1,199 | ) | ||
Class S | (31,925 | ) | (22,836 | ) | ||
Net decrease in net assets from distributions | (34,287 | ) | (24,754 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 53,719 | 349,263 | ||||
Total Net Increase (Decrease) in Net Assets | 49,949 | 379,685 | ||||
Net Assets | ||||||
Beginning of period | 1,258,609 | 878,924 | ||||
End of period | $ | 1,308,558 | $ | 1,258,609 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 2,983 | $ | 2,462 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 513
Russell Investment Company
Russell Tax Exempt Bond Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 398 | $ | 9,221 | 301 | $ | 6,894 | ||||||
Proceeds from reinvestment of distributions | 18 | 418 | 14 | 330 | ||||||||
Payments for shares redeemed | (326 | ) | (7,550 | ) | (312 | ) | (7,098 | ) | ||||
Net increase (decrease) | 90 | 2,089 | 3 | 126 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 381 | 8,803 | 361 | 8,250 | ||||||||
Proceeds from reinvestment of distributions | 19 | 432 | 17 | 375 | ||||||||
Payments for shares redeemed | (430 | ) | (9,916 | ) | (464 | ) | (10,554 | ) | ||||
Net increase (decrease) | (30 | ) | (681 | ) | (86 | ) | (1,929 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 604 | 13,992 | 681 | 15,554 | ||||||||
Proceeds from reinvestment of distributions | 64 | 1,470 | 52 | 1,172 | ||||||||
Payments for shares redeemed | (1,088 | ) | (25,010 | ) | (393 | ) | (8,939 | ) | ||||
Net increase (decrease) | (420 | ) | (9,548 | ) | 340 | 7,787 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 21,136 | 488,569 | 22,545 | 514,118 | ||||||||
Proceeds from reinvestment of distributions | 1,360 | 31,388 | 988 | 22,507 | ||||||||
Payments for shares redeemed | (19,881 | ) | (458,098 | ) | (8,498 | ) | (193,346 | ) | ||||
Net increase (decrease) | 2,615 | 61,859 | 15,035 | 343,279 | ||||||||
Total increase (decrease) | 2,255 | $ | 53,719 | 15,292 | $ | 349,263 |
See accompanying notes which are an integral part of the financial statements.
514 Russell Tax Exempt Bond Fund
(This page intentionally left blank)
Russell Investment Company
Russell Tax Exempt Bond Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | $ | |||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Total Distributions | |||||||||||
Class A | ||||||||||||||||
October 31, 2015 | 23.27 | .54 | (.04 | ) | .50 | (.54 | ) | (.54 | ) | |||||||
October 31, 2014 | 22.62 | .50 | .64 | 1.14 | (.49 | ) | (.49 | ) | ||||||||
October 31, 2013 | 23.24 | .45 | (.63 | ) | (.18 | ) | (.44 | ) | (.44 | ) | ||||||
October 31, 2012 | 22.48 | .52 | .79 | 1.31 | (.55 | ) | (.55 | ) | ||||||||
October 31, 2011 | 22.64 | .62 | (.16 | ) | .46 | (.62 | ) | (.62 | ) | |||||||
Class C | ||||||||||||||||
October 31, 2015 | 23.14 | .38 | (.05 | ) | .33 | (.37 | ) | (.37 | ) | |||||||
October 31, 2014 | 22.50 | .34 | .62 | .96 | (.32 | ) | (.32 | ) | ||||||||
October 31, 2013 | 23.11 | .28 | (.61 | ) | (.33 | ) | (.28 | ) | (.28 | ) | ||||||
October 31, 2012 | 22.36 | .37 | .77 | 1.14 | (.39 | ) | (.39 | ) | ||||||||
October 31, 2011 | 22.53 | .47 | (.18 | ) | .29 | (.46 | ) | (.46 | ) | |||||||
Class E | ||||||||||||||||
October 31, 2015 | 23.23 | .55 | (.05 | ) | .50 | (.54 | ) | (.54 | ) | |||||||
October 31, 2014 | 22.58 | .51 | .64 | 1.15 | (.50 | ) | (.50 | ) | ||||||||
October 31, 2013 | 23.19 | .45 | (.61 | ) | (.16 | ) | (.45 | ) | (.45 | ) | ||||||
October 31, 2012 | 22.44 | .54 | .76 | 1.30 | (.55 | ) | (.55 | ) | ||||||||
October 31, 2011 | 22.61 | .63 | (.17 | ) | .46 | (.63 | ) | (.63 | ) | |||||||
Class S | ||||||||||||||||
October 31, 2015 | 23.19 | .61 | (.05 | ) | .56 | (.60 | ) | (.60 | ) | |||||||
October 31, 2014 | 22.55 | .56 | .63 | 1.19 | (.55 | ) | (.55 | ) | ||||||||
October 31, 2013 | 23.16 | .51 | (.61 | ) | (.10 | ) | (.51 | ) | (.51 | ) | ||||||
October 31, 2012 | 22.41 | .60 | .76 | 1.36 | (.61 | ) | (.61 | ) | ||||||||
October 31, 2011 | 22.57 | .69 | (.16 | ) | .53 | (.69 | ) | (.69 | ) | |||||||
See accompanying notes which are an integral part of the financial statements.
516 Russell Tax Exempt Bond Fund
% | % | % | ||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||
End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||
Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||
23.23 | 2.17 | 19,472 | .83 | .82 | 2.35 | 28 | ||||||||
23.27 | 5.09 | 17,406 | .84 | .82 | 2.18 | 15 | ||||||||
22.62 | (.77 | ) | 16,851 | .84 | .82 | 1.95 | 23 | |||||||
23.24 | 5.89 | 14,649 | .84 | .83 | 2.28 | 29 | ||||||||
22.48 | 2.11 | 2,918 | .83 | .83 | 2.80 | 29 | ||||||||
23.10 | 1.45 | 26,215 | 1.58 | 1.53 | 1.64 | 28 | ||||||||
23.14 | 4.32 | 26,956 | 1.59 | 1.53 | 1.47 | 15 | ||||||||
22.50 | (1.44 | ) | 28,147 | 1.59 | 1.53 | 1.24 | 23 | |||||||
23.11 | 5.12 | 31,628 | 1.58 | 1.54 | 1.62 | 29 | ||||||||
22.36 | 1.35 | 22,694 | 1.59 | 1.54 | 2.12 | 29 | ||||||||
23.19 | 2.21 | 50,598 | .83 | .78 | 2.38 | 28 | ||||||||
23.23 | 5.14 | 60,440 | .84 | .78 | 2.22 | 15 | ||||||||
22.58 | (.68 | ) | 51,073 | .84 | .78 | 1.99 | 23 | |||||||
23.19 | 5.87 | 39,034 | .83 | .79 | 2.37 | 29 | ||||||||
22.44 | 2.12 | 29,512 | .84 | .79 | 2.86 | 29 | ||||||||
23.15 | 2.47 | 1,212,273 | .58 | .53 | 2.64 | 28 | ||||||||
23.19 | 5.37 | 1,153,807 | .59 | .53 | 2.47 | 15 | ||||||||
22.55 | (.44 | ) | 782,853 | .59 | .53 | 2.24 | 23 | |||||||
23.16 | 6.14 | 613,006 | .58 | .54 | 2.63 | 29 | ||||||||
22.41 | 2.43 | 540,458 | .59 | .54 | 3.11 | 29 |
See accompanying notes which are an integral part of the financial statements.
Russell Tax Exempt Bond Fund 517
Russell Investment Company
Russell Commodity Strategies Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Commodity Strategies Fund - Class A‡ | Russell Commodity Strategies Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (31.11 | )% | 1 Year | (26.56 | )% | ||
5 Years | (11.80 | )%§ | 5 Years | (10.51 | )%§ | ||
Inception* | (8.52 | )%§ | Inception* | (7.27 | )%§ | ||
Russell Commodity Strategies Fund - Class C | Russell Commodity Strategies Fund - Class Y | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (27.32 | )% | 1 Year | (26.42 | )% | ||
5 Years | (11.40 | )%§ | 5 Years | (10.34 | )%§ | ||
Inception* | (8.19 | )%§ | Inception* | (7.10 | )%§ | ||
Russell Commodity Strategies Fund - Class E | Bloomberg Commodity Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (26.77 | )% | 1 Year | (25.72 | )% | ||
5 Years | (10.75 | )%§ | 5 Years | (9.85 | )%§ | ||
Inception* | (7.51 | )%§ | Inception* | (6.52 | )%§ |
518 Russell Commodity Strategies Fund
Russell Investment Company
Russell Commodity Strategies Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Commodity Strategies Fund (the “Fund”) employs | mining companies announced production cuts amidst the multi- |
a multi-manager approach whereby portions of the Fund are | year bear market for base metals prices. |
allocated to different money manager strategies. Fund assets not | While the general trend was one of falling prices, the period was |
allocated to money managers are managed by Russell Investment | not without volatility as market forces drove periodic rallies for |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | many commodities. This was most evident in the energy space, |
may change the allocation of the Fund’s assets among money | where signs of slowing production and considerable investment |
managers at any time. An exemptive order from the Securities | demand led to a sharp rally in oil prices in the early months of |
and Exchange Commission (“SEC”) permits RIMCo to engage | 2015, only to see a reversal during the third quarter of 2015. |
or terminate a money manager at any time, subject to approval | Volatility was also present in the metals and agriculture markets, |
by the Fund’s Board, without a shareholder vote. Pursuant to the | where signs of potential supply disruptions temporarily drove |
terms of the exemptive order, the Fund is required to notify its | prices higher before ultimately descending again at the end of |
shareholders within 90 days of when a money manager begins | the period. |
providing services. As of October 31, 2015, the Fund had three | |
money managers. | This environment proved difficult for active managers, where |
research and investment strategy was often trumped by technical | |
What is the Fund’s investment objective? | or macro-driven price action. Investment flows, global monetary |
The Fund seeks to provide long term total return. | policy expectations and currency movements each appeared to |
play a strong role in commodity markets during the period, often | |
How did the Fund perform relative to its benchmark for the | causing and extending price trends that seemed at odds with |
fiscal year ended October 31, 2015? | market fundamentals. Increased volatility led to varied returns |
For the fiscal year ended October 31, 2015, the Fund’s Class | for the Fund’s money managers from quarter to quarter. |
A, Class C, Class E, Class S, and Class Y Shares lost 26.87%, | |
27.32%, 26.77%, 26.56%, and 26.42%, respectively. This is | How did the investment strategies and techniques employed |
compared to the Fund’s benchmark, the Bloomberg Commodity | by the Fund and its money managers affect its benchmark- |
Index Total Return, which lost 25.72% during the same period. | relative performance? |
The Fund’s performance includes operating expenses, whereas | The Fund employs discretionary money managers. The Fund’s |
index returns are unmanaged and do not include expenses of any | discretionary money managers select the individual portfolio |
kind. | securities for the assets assigned to them. Fund assets not |
For the fiscal year ended October 31, 2015, the Morningstar® | allocated to discretionary money managers include the Fund’s |
Commodities Broad Basket, a group of funds that Morningstar | liquidity reserves and assets which may be managed directly |
considers to have investment strategies similar to those of the | by RIMCo to effect the Fund’s investment strategies and/or to |
Fund, lost 25.36%. This result serves as a peer comparison and is | actively manage the Fund’s overall exposures by investing in |
expressed net of operating expenses. | securities or other instruments that RIMCo believes will achieve |
the desired risk/return profile for the Fund. | |
How did the market conditions described in the Market | The Fund generally pursues its investment objective by investing |
Summary report affect the Fund’s performance? | throughawholly-ownedsubsidiaryincommodity-linkedderivative |
Commodity markets declined during the one year period ending | instruments (including swap agreements, futures and options |
October 31, 2015. Each of the subsectors that comprise the | contracts with respect to indexes or individual commodities |
Bloomberg Commodity Index Total Return experienced negative | and options on futures contracts) that provide exposure to the |
returns, and no individual commodity posted a positive return | performance of the collateralized commodity futures market. |
during the period. The overarching theme was one of oversupply, | |
with most commodities exhibiting price behavior that was | CoreCommodity Management, LLC (“CoreCommodity”) |
indicative of ample inventories relative to demand. While the | outperformed the Fund’s benchmark for the fiscal year. |
period was disappointing with respect to investment returns, | CoreCommodity generated a small amount of excess returns |
the low price environment led to signs of important supply | relative to the benchmark through its quantitative and qualitative |
curtailments across sectors. One of the more noticeable examples | approach to contract maturity selection. The manager was |
of supply reduction occurred in the energy sector, where sharply | relatively conservative in deploying risk during the period, as |
lower oil prices forced U.S. producers to cut capital expenditures | opportunities to add value through its yield enhancement strategy |
and reduce production. Supply curtailment was also evident in | were limited. Key positions for the manager were generally |
the industrial metals sector, where several of the world’s largest | concentrated in the energy and agriculture sectors. |
Russell Commodity Strategies Fund 519
Russell Investment Company
Russell Commodity Strategies Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Credit Suisse Asset Management, LLC (“Credit Suisse”) | Fund’s benchmark over the period due to active positions across | |
outperformed the Fund’s benchmark for the fiscal year. Credit | sectors. Persistent overweight positions in metals commodities | |
Suisse was successful in adding value through contract selection | detracted from excess returns, while underweight positions to | |
over the course of the year, primarily by tactically buying deferred | both WTI and Brent crude oil were beneficial. | |
commodity contracts within the energy and agriculture sectors. | The Cargill total return swap strategy seeks to benefit from the | |
Credit Suisse continued to serve as a solid core strategy in the | trading expertise of global food giant Cargill. The total return | |
Fund, deploying active strategies with lower benchmark-relative | swap strategy underperformed the Fund’s benchmark during the | |
volatility when compared with the other strategies in the Fund. | period due to active positions across agricultural commodities. In | |
Goldman Sachs Asset Management, L.P. (“GSAM”) outperformed | particular, positions in grains and oilseeds were profitable, while | |
the Fund’s benchmark for the fiscal year. GSAM added a small | trading in the livestock and softs sectors detracted. The swap’s | |
amount of excess returns during the period through its strategy | returns reflected active trading in sugar and cattle throughout the | |
of over and underweighting specific commodities relative to | period, which contributed to benchmark-relative losses. | |
their respective weights in the benchmark. The manager relies | ||
on extensive fundamental research to evaluate the relative | Describe any changes to the Fund’s structure or the money | |
attractiveness of benchmark and non-benchmark commodities | manager line-up. | |
and takes positions according to these views. The manager actively | There were no changes to the Fund’s structure or money manager | |
traded commodities across the index during the period, moving | line up during the fiscal year. | |
from overweight positions in energy commodities at the beginning | Money Managers as of October 31, | |
of the period, to sizable underweight positions throughout most | 2015 | Styles |
of 2015. Energy trading was profitable for the strategy, with | ||
Credit Suisse Asset Management, LLC | Enhanced Index | |
benchmark-relative gains coming from active positions in natural | Goldman Sachs Asset Management, L.P. | Fully Active Commodity |
gas and WTI crude oil. The manager was also active in the | CoreCommodity Management, LLC | Fully Active Commodity |
agriculture and metals sectors during the period. Positions in | The views expressed in this report reflect those of the portfolio | |
corn and wheat were beneficial, while out of benchmark positions | managers only through the end of the period covered by | |
in platinum and palladium detracted from benchmark relative | the report. These views do not necessarily represent the | |
performance. | views of RIMCo or any other person in RIMCo or any other | |
Strategies employed by RIMCo in the Fund include an | affiliated organization. These views are subject to change | |
allocation to a RIMCo-developed backwardation strategy and the | at any time based upon market conditions or other events, | |
implementation of a total return swap with Cargill, Inc. (“Cargill”). | and RIMCo disclaims any responsibility to update the views | |
RIMCo’s backwardation strategy seeks to achieve excess return | contained herein. These views should not be relied on as | |
through the use of a quantitative model that selects and weights | investment advice and, because investment decisions for | |
exposure to individual commodities based upon their relative | a Russell Investment Company (“RIC”) Fund are based on | |
attractiveness. The backwardation strategy underperformed the | numerous factors, should not be relied on as an indication | |
of investment decisions of any RIC Fund. |
* Assumes initial investment on June 30, 2010.
** The Bloomberg Commodity Index is made up of 22 exchange-traded futures on physical commodities. The index currently represents 20 commodities, which are
weighted to account for economic significance and market liquidity.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
520 Russell Commodity Strategies Fund
Russell Investment Company
Russell Commodity Strategies Fund
Shareholder Expense Example — October 31, 2015
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 837.80 | $ | 1,017.80 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 6.81 | $ | 7.48 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.47% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 834.60 | $ | 1,014.01 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 10.27 | $ | 11.27 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 2.22% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 837.80 | $ | 1,017.80 | |
Expenses Paid During Period* | $ | 6.81 | $ | 7.48 | ||
* Expenses are equal to the Fund's annualized expense ratio of 1.47% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell Commodity Strategies Fund 521
Russell Investment Company
Russell Commodity Strategies Fund
Shareholder Expense Example, continued — October 31, 2015
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 839.30 | $ | 1,019.06 | ||
Expenses Paid During Period* | $ | 5.66 | $ | 6.21 | ||
* Expenses are equal to the Fund's annualized expense ratio of 1.22% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class Y | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 840.20 | $ | 1,020.01 | ||
Expenses Paid During Period* | $ | 4.78 | $ | 5.24 | ||
* Expenses are equal to the Fund's annualized expense ratio of 1.03% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
522 Russell Commodity Strategies Fund
Russell Investment Company
Russell Commodity Strategies Fund
Consolidated Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||
Principal | Fair | Principal | Fair | |||
Amount ($) | Value | Amount ($) | Value | |||
or Shares | $ | or Shares | $ | |||
Short-Term Investments - 94.4% | ||||||
Russell U.S. Cash Management Fund (a) | 705,734,953 | (8) | 705,735 | Total Investments 94.4% | ||
United States Treasury Bills | (identified cost $735,733) | 735,733 | ||||
0.080% due 11/19/15(~)(ç)(§) | 25,500 | 25,499 | ||||
-0.020% due 11/19/15(~)(ç)(§) | 1,500 | 1,500 | Other Assets and Liabilities, | |||
-0.010% due 01/14/16(~)(§) | 3,000 | 2,999 | Net - 5.6% | 43,972 | ||
Total Short-Term Investments | ||||||
(cost $735,733) | 735,733 | Net Assets - 100.0% | 779,705 |
(a) Russell U.S. Cash Management Fund is an investment fund which is valued daily and allows redemptions on a daily basis. The fund exists
primarily for the investment and reinvestment of cash balances held by Russell Investment Company and Russell Investment Funds. Russell
Commodity Strategies Fund’s ownership in the Russell U.S. Cash Management Fund includes proportional ownership in United States Treasury
Notes and Federal Home Loan Discount Notes with approximate aggregate values of $79,032,787 and $98,565,194, respectively which represents
10.14% and 12.64%, respectively of Russell Commodity Strategies Fund’s net assets.
See accompanying notes which are an integral part of the financial statements.
Russell Commodity Strategies Fund 523
Russell Investment Company
Russell Commodity Strategies Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
Natural Gas Futures | 50 | USD | 1,225 | 03/16 | (169 | ) | |
Short Positions | |||||||
Natural Gas Futures | 50 | USD | 1,251 | 02/16 | 212 | ||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 43 |
Total Return Swap Contracts (*) | ||||||
Amounts in thousands | ||||||
Fund Receives/(Pays) | Notional | Termination | Fair Value | |||
Underlying Reference Entity | Counterparty | Amount | Date | $ | ||
Long Reference Entity | ||||||
Bloomberg Aluminum Subindex | Merrill Lynch | USD | 5,110 | 04/04/16 | (1 | ) |
Bloomberg Aluminum Subindex | UBS | USD | 1,212 | 03/10/16 | — | |
Bloomberg Brent Crude Subindex | Merrill Lynch | USD | 5,100 | 04/04/16 | (1 | ) |
Bloomberg Coffee Subindex | Merrill Lynch | USD | 522 | 04/04/16 | — | |
Bloomberg Coffee Subindex | UBS | USD | 1,937 | 02/16/16 | — | |
Bloomberg Commodity Index | UBS | USD | 131,139 | 03/08/16 | (15 | ) |
Bloomberg Commodity Index 2 Month Forward Total | ||||||
Return | BNP Paribas | USD | 35 | 11/30/15 | (37 | ) |
Bloomberg Commodity Index 2 Month Forward Total | ||||||
Return | Morgan Stanley | USD | 55 | 11/30/15 | (58 | ) |
Bloomberg Commodity Index 2 Month Forward Total | ||||||
Return | Societe Generale | USD | 60 | 11/30/15 | (64 | ) |
Bloomberg Commodity Index 2 Month Forward Total | ||||||
Return | UBS | USD | 34 | 11/30/15 | (36 | ) |
Bloomberg Commodity Index Total Return | BNP Paribas | USD | 13,535 | 11/30/15 | (33 | ) |
Bloomberg Commodity Index Total Return | Morgan Stanley | USD | 4,841 | 11/30/15 | (12 | ) |
Bloomberg Commodity Index Total Return | Societe Generale | USD | 10,339 | 11/30/15 | (25 | ) |
Bloomberg Commodity Index Total Return | UBS | USD | 15,708 | 11/30/15 | (39 | ) |
Bloomberg Cotton Subindex | Merrill Lynch | USD | 1,974 | 04/04/16 | — | |
Bloomberg Gold Subindex | Merrill Lynch | USD | 4,818 | 01/15/16 | (1 | ) |
Bloomberg Gold Subindex | UBS | USD | 1,483 | 03/10/16 | — | |
Bloomberg Heating Oil Subindex | Merrill Lynch | USD | 5,221 | 01/15/16 | (1 | ) |
Bloomberg Lean Hogs Subindex | Merrill Lynch | USD | 1,502 | 04/04/16 | — | |
Bloomberg Lean Hogs Subindex | UBS | USD | 1,481 | 03/10/16 | — | |
Bloomberg Live Cattle Subindex | Merrill Lynch | USD | 5,037 | 04/04/16 | (1 | ) |
Bloomberg Natural Gas Subindex | Merrill Lynch | USD | 9,780 | 04/04/16 | (1 | ) |
Bloomberg Natural Gas Subindex | Merrill Lynch | USD | 5,277 | 04/04/16 | — | |
Bloomberg Natural Gas Subindex | UBS | USD | 2,317 | 01/23/16 | (1 | ) |
Bloomberg Natural Gas Subindex | UBS | USD | 3,679 | 03/16/16 | (1 | ) |
Bloomberg Natural Gas Subindex | UBS | USD | 2,323 | 03/16/16 | (1 | ) |
Bloomberg Natural Gas Subindex | UBS | USD | 1,008 | 03/16/16 | — | |
Bloomberg Nickel Subindex | Merrill Lynch | USD | 3,207 | 01/15/16 | (1 | ) |
Bloomberg Platinum Subindex | Merrill Lynch | USD | 10,446 | 04/04/16 | (1 | ) |
Bloomberg Silver Subindex | Merrill Lynch | USD | 2,792 | 01/15/16 | — | |
Bloomberg Soy Meal Subindex | Merrill Lynch | USD | 3,115 | 04/04/16 | (1 | ) |
Bloomberg Soy Meal Subindex | UBS | USD | 794 | 03/21/16 | — | |
Bloomberg Soybean Oil Subindex | Merrill Lynch | USD | 1,536 | 04/04/16 | — | |
Bloomberg Soybean Oil Subindex | UBS | USD | 1,076 | 03/10/16 | — | |
Bloomberg Sugar Subindex | Merrill Lynch | USD | 5,470 | 04/04/16 | (1 | ) |
Bloomberg Sugar Subindex | UBS | USD | 674 | 02/16/16 | — | |
Bloomberg Unleaded Gasonline Subindex | Merrill Lynch | USD | 4,824 | 04/04/16 | (1 | ) |
Bloomberg Unleaded Gasonline Subindex | UBS | USD | 1,373 | 03/16/16 | — | |
Bloomberg WTI Crude Oil Subindex 3 Month Forward | Merrill Lynch | USD | 2,584 | 04/04/16 | — | |
Bloomberg WTI Crude Oil Subindex 3 Month Forward | Merrill Lynch | USD | 3,873 | 04/04/16 | — | |
Bloomberg WTI Crude Oil Subindex 3 Month Forward | Merrill Lynch | USD | 1,566 | 04/04/16 | — | |
Bloomberg WTI Crude Oil Subindex 3 Month Forward | Merrill Lynch | USD | 1,358 | 04/04/16 | — | |
Cargill Custom Index | Cargill | USD | 129,540 | 03/31/16 | — | |
Macquarie Commodity Customized Product | Macquarie Securities | USD | 27,377 | 11/30/15 | (74 | ) |
Merrill Lynch Commodity Index eXtra BIN1 Index | Bank of America | USD | 27,387 | 11/30/15 | — | |
Merrill Lynch Commodity Index eXtra CS2T Index | Bank of America | USD | 50,191 | 11/30/15 | (155 | ) |
Merrill Lynch Commodity Index eXtra(Palladium) Excess | ||||||
Return | Merrill Lynch | USD | 9,602 | 04/04/16 | (1 | ) |
Russell Core Commodity Diversified Index | Newedge | USD | 139,244 | 09/09/16 | 904 | |
Societe Generale Commodity P04T Index | Societe Generale | USD | 17,552 | 11/30/15 | (53 | ) |
See accompanying notes which are an integral part of the financial statements.
524 Russell Commodity Strategies Fund
Russell Investment Company
Russell Commodity Strategies Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||
Amounts in thousands | ||||
Fund Receives/(Pays) | Notional | Termination | Fair Value | |
Underlying Reference Entity | Counterparty | Amount | Date | $ |
Total Fair Value of Open Total Return Swap Contracts Premiums Paid (Received) - $— (å) | 288 |
(*) Total return swaps (which includes index swaps) are agreements between counterparties to exchange cash flows, one based on a market-linked
returns of an individual asset or a basket of assets (i.e. an index), and the other on a fixed or floating rate. The fixed fees embedded in the total
return swaps held as of October 31, 2015 ranged from 0.00% to 0.45%. The floating rate fees were all based on the 3-month Treasury Bill rate
plus a fee ranging from 0.138% to 0.296%. For the period ended October 31, 2015, there were no performance based fees.
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Short-Term Investments | $ | — | $ | 735,733 | $ | — | $ | 735,733 | 94.4 | |||
Total Investments | — | 735,733 | — | 735,733 | 94.4 | |||||||
Other Assets and Liabilities, Net | 5.6 | |||||||||||
100.0 | ||||||||||||
Other Financial Instruments | ||||||||||||
Futures Contracts | 43 | — | — | 43 | —* | |||||||
Total Return Swap Contracts | — | 288 | — | 288 | —* | |||||||
Total Other Financial Instruments** | $ | 43 | $ | 288 | $ | — | $ | 331 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Commodity Strategies Fund 525
Russell Investment Company
Russell Commodity Strategies Fund
Consolidated Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||
Commodity | ||||
Derivatives not accounted for as hedging instruments | Contracts | |||
Location: Statement of Assets and Liabilities - Assets | ||||
Variation margin on futures contracts* | $ | 212 | ||
Total return swap contracts, at fair value | 904 | |||
Total | $ | 1,116 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||
Variation margin on futures contracts* | $ | 169 | ||
Total return swap contracts, at fair value | 616 | |||
Total | $ | 785 | ||
Commodity | ||||
Derivatives not accounted for as hedging instruments | Contracts | |||
Location: Statement of Operations - Net realized gain (loss) | ||||
Futures contracts | $ | (393 | ) | |
Total return swap contracts | (284,803 | ) | ||
Total | $ | (285,196 | ) | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||
Futures contracts | $ | 43 | ||
Total return swap contracts | 3,725 | |||
Total | $ | 3,768 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
526 Russell Commodity Strategies Fund
Russell Investment Company
Russell Commodity Strategies Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 30 | $ | — | $ | 30 | ||
Total Return Swap Contracts | Total return swap contracts, at fair value | 904 | — | 904 | |||||
Total Financial and Derivative Assets | 934 | — | 934 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (30) | — | (30 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 904 | $ | — | $ | 904 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||
Gross Amounts Not Offset in | ||||||||
the Statement of Assets and | ||||||||
Liabilities | ||||||||
Net Amounts | ||||||||
of Assets | ||||||||
Presented in | ||||||||
the Statement | Financial and | |||||||
of Assets and | Derivative | Collateral | ||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | ||||
Newedge | $ | 904 | $ | — | $ — | $ 904 | ||
Total | $ | 904 | $ | — | $ — | $ 904 |
See accompanying notes which are an integral part of the financial statements.
Russell Commodity Strategies Fund 527
Russell Investment Company
Russell Commodity Strategies Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 36 | $ | — | $ | 36 | ||
Total Return Swap Contracts | Total return swap contracts, at fair value | 616 | — | 616 | |||||
Total Financial and Derivative Liabilities | 652 | — | 652 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (36) | — | (36 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 616 | $ | — | $ | 616 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Liabilities | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||
Bank of America | $ | 155 | $ | — | 155 | $ | — | ||
BNP Paribas | 71 | — | 71 | — | |||||
Macquarie | 74 | — | 74 | — | |||||
Merrill Lynch | 11 | — | 11 | — | |||||
Morgan Stanley | 70 | — | 70 | — | |||||
Societe Generale | 142 | — | 142 | — | |||||
UBS | 93 | — | 93 | — | |||||
Total | $ | 616 | $ | — | 616 | $ | — |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
528 Russell Commodity Strategies Fund
Russell Investment Company
Russell Commodity Strategies Fund
Consolidated Statement of Assets and Liabilities(†) — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 735,733 |
Investments, at fair value(>) | 735,733 | |
Cash (restricted)(a)(b) | 51,785 | |
Receivables: | ||
Dividends and interest | 7 | |
Dividends from affiliated Russell funds | 69 | |
Investments sold | 2,828 | |
Fund shares sold | 1,170 | |
Variation margin on futures contracts | 30 | |
Prepaid expenses | 1 | |
Total return swap contracts, at fair value(8) | 904 | |
Total assets | 792,527 | |
Liabilities | ||
Payables: | ||
Due to custodian | 87 | |
Investments purchased | 10,525 | |
Fund shares redeemed | 595 | |
Accrued fees to affiliates | 743 | |
Other accrued expenses | 220 | |
Variation margin on futures contracts | 36 | |
Total return swap contracts, at fair value(8) | 616 | |
Total liabilities | 12,822 | |
Net Assets | $ | 779,705 |
(†) The Statement of Assets and Liabilities is consolidated and includes the balances of Russell Cayman Commodity Strategies Fund Ltd. (wholly owned
subsidiary). Accordingly, all interfund balances and transactions have been eliminated. Refer to note 3 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Commodity Strategies Fund 529
Russell Investment Company
Russell Commodity Strategies Fund
Consolidated Statement of Assets and Liabilities(†) , continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | (6,713 | ) |
Accumulated net realized gain (loss) | (35 | ) | |
Unrealized appreciation (depreciation) on: | |||
Futures contracts | 43 | ||
Total return swap contracts | 288 | ||
Shares of beneficial interest | 1,381 | ||
Additional paid-in capital | 784,741 | ||
Net Assets | $ | 779,705 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 5.58 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 5.92 | |
Class A — Net assets | $ | 7,826,163 | |
Class A — Shares outstanding ($.01 par value) | 1,401,716 | ||
Net asset value per share: Class C(#) | $ | 5.40 | |
Class C — Net assets | $ | 5,029,230 | |
Class C — Shares outstanding ($.01 par value) | 931,553 | ||
Net asset value per share: Class E(#) | $ | 5.58 | |
Class E — Net assets | $ | 12,614,620 | |
Class E — Shares outstanding ($.01 par value) | 2,259,822 | ||
Net asset value per share: Class S(#) | $ | 5.64 | |
Class S — Net assets | $ | 579,005,546 | |
Class S — Shares outstanding ($.01 par value) | 102,666,077 | ||
Net asset value per share: Class Y(#) | $ | 5.68 | |
Class Y — Net assets | $ | 175,229,764 | |
Class Y — Shares outstanding ($.01 par value) | 30,860,940 | ||
Amounts in thousands | |||
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 705,735 | |
(8) Total return swap contracts – premium paid (received) | $ | — | |
(a) Cash Collateral for Swaps | $ | 46,786 | |
(b) Cash Collateral for Futures | $ | 4,999 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding.
(†) The Statement of Assets and Liabilities is consolidated and includes the balances of Russell Cayman Commodity Strategies Fund Ltd. (wholly owned
subsidiary). Accordingly, all interfund balances and transactions have been eliminated. Refer to note 3 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
530 Russell Commodity Strategies Fund
Russell Investment Company
Russell Commodity Strategies Fund
Consolidated Statement of Operations(†) — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 75 | |
Dividends from affiliated Russell funds | 734 | ||
Interest | 25 | ||
Total investment income | 834 | ||
Expenses | |||
Advisory fees | 13,889 | ||
Administrative fees | 533 | ||
Custodian fees | 466 | ||
Distribution fees - Class A | 23 | ||
Distribution fees - Class C | 48 | ||
Transfer agent fees - Class A | 18 | ||
Transfer agent fees - Class C | 13 | ||
Transfer agent fees - Class E | 30 | ||
Transfer agent fees - Class S | 1,368 | ||
Transfer agent fees - Class Y | 10 | ||
Professional fees | 154 | ||
Registration fees | 111 | ||
Shareholder servicing fees - Class C | 16 | ||
Shareholder servicing fees - Class E | 37 | ||
Trustees’ fees | 24 | ||
Printing fees | 166 | ||
Miscellaneous | 126 | ||
Expenses before reductions | 17,032 | ||
Expense reductions | (5,695 | ) | |
Net expenses | 11,337 | ||
Net investment income (loss) | (10,503 | ) | |
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 4 | ||
Futures contracts | (393 | ) | |
Total return swap contracts | (284,803 | ) | |
Net realized gain (loss) | (285,192 | ) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments | 27 | ||
Futures contracts | 43 | ||
Total return swap contracts | 3,725 | ||
Net change in unrealized appreciation (depreciation) | 3,795 | ||
Net realized and unrealized gain (loss) | (281,397 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (291,900 | ) |
(†) The Statement of Operations is consolidated and includes the balances of Russell Cayman Commodity Strategies Fund Ltd. (wholly owned
subsidiary). Accordingly, all interfund balances and transactions have been eliminated. Refer to note 3 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Commodity Strategies Fund 531
Russell Investment Company
Russell Commodity Strategies Fund
Consolidated Statements of Changes in Net Assets(†)
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | (10,503 | ) | $ | (13,271 | ) |
Net realized gain (loss) | (285,192 | ) | (85,411 | ) | ||
Net change in unrealized appreciation (depreciation) | 3,795 | 3,497 | ||||
Net increase (decrease) in net assets from operations | (291,900 | ) | (95,185 | ) | ||
Distributions | ||||||
From net investment income | ||||||
Class A | — | (—)** | ||||
Class C | — | (—)** | ||||
Class E | — | (—)** | ||||
Class S | — | (—)** | ||||
Class Y | — | (—)** | ||||
From net realized gain | ||||||
Class A | — | (1 | ) | |||
Class C | — | (1 | ) | |||
Class E | — | (1 | ) | |||
Class S | — | (39 | ) | |||
Class Y | — | (17 | ) | |||
Net decrease in net assets from distributions | — | (59 | ) | |||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 20,927 | (88,866 | ) | |||
Total Net Increase (Decrease) in Net Assets | (270,973 | ) | (184,110 | ) | ||
Net Assets | ||||||
Beginning of period | 1,050,678 | 1,234,788 | ||||
End of period | $ | 779,705 | $ | 1,050,678 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | (6,713 | ) | $ | (8,713 | ) |
** Less than $500.
(†) The Statements of Changes in Net Assets is consolidated and includes the balances of Russell Cayman Commodity Strategies Fund
Ltd. (wholly owned subsidiary). Accordingly, all interfund balances and transactions have been eliminated.
Refer to note 3 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
532 Russell Commodity Strategies Fund
Russell Investment Company
Russell Commodity Strategies Fund
Consolidated Statements of Changes in Net Assets(†), continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 492 | $ | 3,224 | 656 | $ | 5,522 | ||||||
Proceeds from reinvestment of distributions | — | — | —** | 1 | ||||||||
Payments for shares redeemed | (559 | ) | (3,669 | ) | (1,609 | ) | (13,641 | ) | ||||
Net increase (decrease) | (67 | ) | (445 | ) | (953 | ) | (8,118 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 171 | 1,076 | 182 | 1,506 | ||||||||
Proceeds from reinvestment of distributions | — | — | —** | 1 | ||||||||
Payments for shares redeemed | (376 | ) | (2,393 | ) | (440 | ) | (3,618 | ) | ||||
Net increase (decrease) | (205 | ) | (1,317 | ) | (258 | ) | (2,111 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 646 | 4,107 | 461 | 3,809 | ||||||||
Proceeds from reinvestment of distributions | — | — | —** | 1 | ||||||||
Payments for shares redeemed | (670 | ) | (4,243 | ) | (650 | ) | (5,416 | ) | ||||
Net increase (decrease) | (24 | ) | (136 | ) | (189 | ) | (1,606 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 42,126 | 277,127 | 34,740 | 292,802 | ||||||||
Proceeds from reinvestment of distributions | — | — | 4 | 39 | ||||||||
Payments for shares redeemed | (42,692 | ) | (278,855 | ) | (30,449 | ) | (256,580 | ) | ||||
Net increase (decrease) | (566 | ) | (1,728 | ) | 4,295 | 36,261 | ||||||
Class Y | ||||||||||||
Proceeds from shares sold | 16,705 | 111,513 | 2,572 | 21,636 | ||||||||
Proceeds from reinvestment of distributions | — | — | 2 | 17 | ||||||||
Payments for shares redeemed | (14,243 | ) | (86,960 | ) | (15,938 | ) | (134,945 | ) | ||||
Net increase (decrease) | 2,462 | 24,553 | (13,364 | ) | (113,292 | ) | ||||||
Total increase (decrease) | 1,600 | $ | 20,927 | (10,469 | ) | $ | (88,866 | ) |
** Less than 500 shares.
(†) The Statements of Changes in Net Assets is consolidated and includes the balances of Russell Cayman Commodity Strategies Fund
Ltd. (wholly owned subsidiary). Accordingly, all interfund balances and transactions have been eliminated.
Refer to note 3 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Commodity Strategies Fund 533
Russell Investment Company
Russell Commodity Strategies Fund
Consolidated Financial Highlights — For the Periods Ended(†)
For a Share Outstanding Throughout Each Period. | ||||||||||||||||||||
$ | ||||||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | $ | ||||||||||||||
Beginning of | Income | and Unrealized | Investment | from Net | from Net | Return of | ||||||||||||||
Period | (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | Capital | ||||||||||||||
Class A | ||||||||||||||||||||
October 31, 2015 | 7.64 | (.09 | ) | (1.97 | ) | (2.06 | ) | — | — | — | ||||||||||
October 31, 2014 | 8.35 | (.12 | ) | (.59 | ) | (.71 | ) | —(f) | —(f) | — | ||||||||||
October 31, 2013 | 9.50 | (.12 | ) | (1.03 | ) | (1.15 | ) | — | — | — | ||||||||||
October 31, 2012 | 10.55 | (.13 | ) | (.53 | ) | (.66 | ) | (.15 | ) | (.02 | ) | (.22 | ) | |||||||
October 31, 2011 | 11.65 | (.15 | ) | .53 | .38 | (1.48 | ) | —(f) | — | |||||||||||
Class C | ||||||||||||||||||||
October 31, 2015 | 7.44 | (.13 | ) | (1.91 | ) | (2.04 | ) | — | — | — | ||||||||||
October 31, 2014 | 8.20 | (.18 | ) | (.58 | ) | (.76 | ) | —(f) | —(f) | — | ||||||||||
October 31, 2013 | 9.39 | (.19 | ) | (1.00 | ) | (1.19 | ) | — | — | — | ||||||||||
October 31, 2012 | 10.45 | (.20 | ) | (.53 | ) | (.73 | ) | (.09 | ) | (.02 | ) | (.22 | ) | |||||||
October 31, 2011 | 11.61 | (.23 | ) | .52 | .29 | (1.45 | ) | —(f) | — | |||||||||||
Class E | ||||||||||||||||||||
October 31, 2015 | 7.63 | (.09 | ) | (1.96 | ) | (2.05 | ) | — | — | — | ||||||||||
October 31, 2014 | 8.35 | (.12 | ) | (.60 | ) | (.72 | ) | —(f) | —(f) | — | ||||||||||
October 31, 2013 | 9.50 | (.12 | ) | (1.03 | ) | (1.15 | ) | — | — | — | ||||||||||
October 31, 2012 | 10.54 | (.13 | ) | (.52 | ) | (.65 | ) | (.15 | ) | (.02 | ) | (.22 | ) | |||||||
October 31, 2011 | 11.64 | (.15 | ) | .52 | .37 | (1.47 | ) | —(f) | — | |||||||||||
Class S | ||||||||||||||||||||
October 31, 2015 | 7.69 | (.07 | ) | (1.98 | ) | (2.05 | ) | — | — | — | ||||||||||
October 31, 2014 | 8.40 | (.10 | ) | (.61 | ) | (.71 | ) | —(f) | —(f) | — | ||||||||||
October 31, 2013 | 9.52 | (.10 | ) | (1.02 | ) | (1.12 | ) | — | — | — | ||||||||||
October 31, 2012 | 10.58 | (.11 | ) | (.53 | ) | (.64 | ) | (.18 | ) | (.02 | ) | (.22 | ) | |||||||
October 31, 2011 | 11.65 | (.12 | ) | .53 | .41 | (1.48 | ) | —(f) | — | |||||||||||
Class Y | ||||||||||||||||||||
October 31, 2015 | 7.73 | (.06 | ) | (1.99 | ) | (2.05 | ) | — | — | — | ||||||||||
October 31, 2014 | 8.42 | (.08 | ) | (.61 | ) | (.69 | ) | —(f) | —(f) | — | ||||||||||
October 31, 2013 | 9.54 | (.08 | ) | (1.04 | ) | (1.12 | ) | — | — | — | ||||||||||
October 31, 2012 | 10.59 | (.09 | ) | (.53 | ) | (.62 | ) | (.19 | ) | (.02 | ) | (.22 | ) | |||||||
October 31, 2011 | 11.65 | (.10 | ) | .53 | .43 | (1.49 | ) | —(f) | — | |||||||||||
See accompanying notes which are an integral part of the financial statements.
534 Russell Commodity Strategies Fund
% | % | % | |||||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||||||
— | 5.58 | (26.96 | ) | 7,826 | 2.09 | 1.48 | (1.39 | ) | — | ||||||||||
— (f) | 7.64 | (8.50 | ) | 11,212 | 2.08 | 1.52 | (1.41 | ) | 302 | ||||||||||
— | 8.35 | (12.11 | ) | 20,224 | 2.04 | 1.52 | (1.37 | ) | 145 | ||||||||||
(.39 | ) | 9.50 | (6.28 | ) | 21,301 | 2.08 | 1.55 | (1.39 | ) | 60 | |||||||||
(1.48 | ) | 10.55 | 2.85 | 21,609 | 1.78 | 1.48 | (1.30 | ) | 123 | ||||||||||
— | 5.40 | (27.42 | ) | 5,029 | 2.83 | 2.23 | (2.14 | ) | — | ||||||||||
— (f) | 7.44 | (9.26 | ) | 8,454 | 2.83 | 2.27 | (2.16 | ) | 302 | ||||||||||
— | 8.20 | (12.67 | ) | 11,436 | 2.79 | 2.27 | (2.12 | ) | 145 | ||||||||||
(.33 | ) | 9.39 | (7.01 | ) | 14,104 | 2.83 | 2.30 | (2.15 | ) | 60 | |||||||||
(1.45 | ) | 10.45 | 2.07 | 14,748 | 2.53 | 2.23 | (2.05 | ) | 123 | ||||||||||
— | 5.58 | (26.87 | ) | 12,615 | 2.09 | 1.48 | (1.39 | ) | — | ||||||||||
— (f) | 7.63 | (8.62 | ) | 17,427 | 2.08 | 1.52 | (1.41 | ) | 302 | ||||||||||
— | 8.35 | (12.11 | ) | 20,652 | 2.04 | 1.52 | (1.36 | ) | 145 | ||||||||||
(.39 | ) | 9.50 | (6.23 | ) | 17,078 | 2.08 | 1.54 | (1.38 | ) | 60 | |||||||||
(1.47 | ) | 10.54 | 2.81 | 14,850 | 1.78 | 1.48 | (1.30 | ) | 123 | ||||||||||
— | 5.64 | (26.66 | ) | 579,005 | 1.84 | 1.23 | (1.14 | ) | — | ||||||||||
— (f) | 7.69 | (8.45 | ) | 793,989 | 1.83 | 1.27 | (1.16 | ) | 302 | ||||||||||
— | 8.40 | (11.76 | ) | 830,645 | 1.79 | 1.27 | (1.12 | ) | 145 | ||||||||||
(.42 | ) | 9.52 | (6.10 | ) | 762,582 | 1.83 | 1.30 | (1.14 | ) | 60 | |||||||||
(1.48 | ) | 10.58 | 3.15 | 690,537 | 1.53 | 1.23 | (1.05 | ) | 123 | ||||||||||
— | 5.68 | (26.52 | ) | 175,230 | 1.64 | 1.04 | (.95 | ) | — | ||||||||||
— (f) | 7.73 | (8.19 | ) | 219,596 | 1.63 | 1.08 | (.97 | ) | 302 | ||||||||||
— | 8.42 | (11.74 | ) | 351,831 | 1.60 | 1.08 | (.93 | ) | 145 | ||||||||||
(.43 | ) | 9.54 | (5.82 | ) | 445,434 | 1.65 | 1.11 | (.95 | ) | 60 | |||||||||
(1.49 | ) | 10.59 | 3.31 | 494,246 | 1.35 | 1.05 | (.87 | ) | 123 |
See accompanying notes which are an integral part of the financial statements.
Russell Commodity Strategies Fund 535
Russell Investment Company
Russell Global Infrastructure Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Global Infrastructure Fund - Class A‡ | Russell Global Infrastructure Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (9.05 | )% | 1 Year | (3.25 | )% | ||
5 Years | 6.08 | %§ | 5 Years | 7.62 | %§ | ||
Inception* | 6.85 | %§ | Inception* | 8.36 | %§ | ||
Russell Global Infrastructure Fund - Class C | Russell Global Infrastructure Fund - Class Y | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (4.23 | )% | 1 Year | (3.15 | )% | ||
5 Years | 6.53 | %§ | 5 Years | 7.80 | %§ | ||
Inception* | 7.28 | %§ | Inception* | 8.54 | %§ | ||
Russell Global Infrastructure Fund - Class E | S&P Global Infrastructure Index Net (USD)SM** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (3.50 | )% | 1 Year | (6.29 | )% | ||
5 Years | 7.34 | %§ | 5 Years | 5.71 | %§ | ||
Inception* | 8.09 | %§ | Inception* | 6.56 | %§ |
536 Russell Global Infrastructure Fund
Russell Investment Company
Russell Global Infrastructure Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Global Infrastructure Fund (the “Fund”) employs | How did the investment strategies and techniques employed | |
a multi-manager approach whereby portions of the Fund are | by the Fund and its money managers affect its benchmark- | |
allocated to different money manager strategies. Fund assets not | relative performance? | |
allocated to money managers are managed by Russell Investment | The Fund employs discretionary money managers. The Fund’s | |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | discretionary money managers select the individual portfolio | |
may change the allocation of the Fund’s assets among money | securities for the assets assigned to them. Fund assets not | |
managers at any time. An exemptive order from the Securities | allocated to discretionary money managers include the Fund’s | |
and Exchange Commission (“SEC”) permits RIMCo to engage | liquidity reserves and assets which may be managed directly | |
or terminate a money manager at any time, subject to approval | by RIMCo to effect the Fund’s investment strategies and/or to | |
by the Fund’s Board, without a shareholder vote. Pursuant to the | actively manage the Fund’s overall exposures by investing in | |
terms of the exemptive order, the Fund is required to notify its | securities or other instruments that RIMCo believes will achieve | |
shareholders within 90 days of when a money manager begins | the desired risk/return profile for the Fund. | |
providing services. As of October 31, 2015, the Fund had four | ||
money managers. | Cohen & Steers Capital Management, Inc. (“Cohen”) outperformed | |
the Fund’s benchmark for the fiscal year. Cohen implements a | ||
What is the Fund’s investment objective? | “growth at a reasonable price” strategy incorporating both top- | |
The Fund seeks to provide long term growth of capital and current | down and bottom-up components. The key driver of Cohen’s | |
income. | outperformance was an underweight position in European utilities, | |
which struggled during the period. Out-of-index exposure to the | ||
How did the Fund perform relative to its benchmark for the | wireless towers sector also benefited performance. An overweight | |
fiscal year ended October 31, 2015? | to North American pipelines was a modest detractor from | |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | performance. | |
Class C, Class E, Class S, and Class Y Shares lost 3.49%, 4.23%, | ||
3.50%, 3.25%, and 3.15%, respectively. This is compared to | Colonial First State Asset Management (Australia) Limited | |
the Fund’s benchmark, the S&P Global Infrastructure Index | (“Colonial”) outperformed the Fund’s benchmark for the fiscal | |
(Net), which lost 6.29% during the same period. The Fund’s | year. Colonial utilizes a fundamental relative value strategy that | |
performance includes operating expenses, whereas index returns | features significant ex-benchmark exposure. Stock selection in | |
are unmanaged and do not include expenses of any kind. | the multi-utilities sector and out-of-index exposure to several | |
gas utilities companies drove outperformance. Also contributing | ||
For the fiscal year ended October 31, 2015, the Morningstar® | were an underweight to the oil & gas pipeline sector and out-of- | |
World Stock, a group of funds that Morningstar considers to have | benchmark exposure to Japanese passenger rail. An underweight | |
investment strategies similar to those of the Fund, gained 0.34%. | to the airports sector was the most notable detractor from | |
This return serves as a peer comparison and is expressed net of | performance. | |
operating expenses. | Lazard Asset Management LLC (“Lazard”) outperformed the | |
How did the market conditions described in the Market | Fund’s benchmark for the fiscal year. Outperformance was driven | |
Summary report affect the Fund’s performance? | by a large underweight to commodity-sensitive companies. | |
ForthefiscalyearendedOctober31,2015,theglobalinfrastructure | Lazard’s portfolio did not have any exposure to the oil and | |
market, as measured by the S&P Global Infrastructure Index | gas pipeline sector, which was the weakest area of the listed | |
(Net), delivered a -6.29% return. Within the global infrastructure | infrastructure market. Out-of-index exposure to North American | |
sector, there was a wide dispersion in company performance, as | freight rail companies detracted from performance. | |
owners of transportation infrastructure benefited from generally | Nuveen Asset Management, Inc. (“Nuveen”) outperformed the | |
strong passenger volume growth, while companies with energy- | Fund’s benchmark for the fiscal year. Nuveen utilizes a bottom-up | |
related businesses sold off in response to significant energy | relative value strategy that features a high degree of turnover. The | |
commodity price declines during the period. At the sub-industry | primary drivers of outperformance were underweight positions | |
level, airports and toll roads were the best performers, while | in the German integrated utilities and North American pipelines | |
electric utilities recorded modestly negative performance and | sectors, in addition to out-of-index exposure to wireless towers | |
pipelines experienced the largest share price declines. From a | and stock selection in electric utilities. Emerging markets marine | |
regional perspective, developed Asia and the emerging markets | port exposure detracted from performance during the period. | |
delivered positive returns, outperforming relative to Europe and | RIMCo utilized a strategy during the period to implement sector | |
North America, which declined during the fiscal year. | tilting through the use/purchase of infrastructure stocks. The |
Russell Global Infrastructure Fund 537
Russell Investment Company
Russell Global Infrastructure Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
strategy seeks to position the portfolio to meet RIMCo’s overall | Money Managers as of October 31, | |
preferred positioning objectives, while optimizing the portfolio | 2015 | Styles |
to minimize tracking error relative to the Fund’s money manager | ||
Cohen & Steers Capital Management, Inc | Public Market Equity | |
portfolios. The strategy underperformed relative to the Fund’s | Colonial First State Asset Management | |
benchmark as a result of exposure to the oil & gas pipeline sector. | (Australia) Limited | Public Market Equity |
During the fiscal year, the Fund used index futures contracts | Lazard Asset Management, LLC | Public Market Equity |
to equitize the Fund’s cash. The use of these derivatives had | Nuveen Asset Management, LLC | Public Market Equity |
a modestly positive impact on performance, as equity markets | The views expressed in this report reflect those of the portfolio | |
delivered positive returns ahead of cash. | managers only through the end of the period covered by | |
the report. These views do not necessarily represent the | ||
Fair value pricing adjustments on the last business day of | views of RIMCo or any other person in RIMCo or any other | |
the period detracted from the Fund’s benchmark-relative | affiliated organization. These views are subject to change | |
performance because the Fund’s index does not use fair value | at any time based upon market conditions or other events, | |
pricing adjustments. | and RIMCo disclaims any responsibility to update the views | |
Describe any changes to the Fund’s structure or the money | contained herein. These views should not be relied on as | |
manager line-up. | investment advice and, because investment decisions for | |
a Russell Investment Company (“RIC”) Fund are based on | ||
There were no changes to the Fund’s structure or money manager | numerous factors, should not be relied on as an indication | |
line up during the fiscal year. | of investment decisions of any RIC Fund. |
* Assumes initial investment on September 30, 2010.
** The S&P Global Infrastructure Index Net (USD)SM provides liquid and tradable exposure to 75 companies around the world that represent the listed
infrastructure universe. The index has balanced weights across three distinct infrastructure classes: utilities, transportation and energy.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
538 Russell Global Infrastructure Fund
Russell Investment Company
Russell Global Infrastructure Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 932.60 | $ | 1,017.74 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 7.21 | $ | 7.53 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.48% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 928.50 | $ | 1,013.96 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 10.84 | $ | 11.32 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 2.23% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 932.00 | $ | 1,017.74 | |
Expenses Paid During Period* | $ | 7.21 | $ | 7.53 | ||
* Expenses are equal to the Fund's annualized expense ratio of 1.48% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell Global Infrastructure Fund 539
Russell Investment Company
Russell Global Infrastructure Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 933.10 | $ | 1,019.00 | ||
Expenses Paid During Period* | $ | 5.99 | $ | 6.26 | ||
* Expenses are equal to the Fund's annualized expense ratio of 1.23% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class Y | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 934.00 | $ | 1,019.91 | ||
Expenses Paid During Period* | $ | 5.12 | $ | 5.35 | ||
* Expenses are equal to the Fund's annualized expense ratio of 1.05% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
540 Russell Global Infrastructure Fund
Russell Investment Company
Russell Global Infrastructure Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Common Stocks - 97.5% | Enersis SA - ADR | 154,250 | 2,044 | ||||||||
Australia - 7.9% | 5,263 | ||||||||||
AGL Energy, Ltd. | 105,604 | 1,260 | |||||||||
APA Group | 564,924 | 3,708 | China - 2.1% | ||||||||
Aurizon Holdings, Ltd. | 148,361 | 547 | COSCO Pacific, Ltd.(Þ) | 10,211,135 | 13,210 | ||||||
AusNet Services(Æ) | 2,996,120 | 3,089 | COSCO Pacific, Ltd.(Å) | 1,948,976 | 2,522 | ||||||
DUET Group | 3,613,202 | 6,082 | ENN Energy Holdings, Ltd. | 148,000 | 848 | ||||||
Macquarie Atlas Roads Group | 1,625,298 | 4,689 | Hopewell Highway Infrastructure, Ltd. | 1,081,313 | 497 | ||||||
Spark Infrastructure Group | 4,371,413 | 6,486 | Jiangsu Expressway Co., Ltd. Class H | 8,835,750 | 11,936 | ||||||
Sydney Airport | 2,040,308 | 9,388 | Towngas China Co., Ltd. | 470,743 | 320 | ||||||
Transurban Group - ADR(Æ) | 10,210,743 | 76,043 | Zhejiang Expressway Co., Ltd. Class H | 728,000 | 893 | ||||||
111,292 | 30,226 | ||||||||||
Austria - 0.3% | France - 6.7% | ||||||||||
Flughafen Wien AG | 42,457 | 4,001 | Aeroports de Paris | 111,853 | 14,045 | ||||||
Oesterreichische Post AG | 9,918 | 361 | Engie SA | 26,699 | 468 | ||||||
4,362 | Eutelsat Communications SA | 355,131 | 11,704 | ||||||||
Groupe Eurotunnel SE | 2,530,440 | 35,429 | |||||||||
Belgium - 0.2% | Rubis SCA | 60,982 | 4,888 | ||||||||
bpost SA | 55,387 | 1,385 | Suez Environnement Co. | 187,631 | 3,565 | ||||||
Elia System Operator SA | 19,010 | 919 | Vinci SA | 350,251 | 23,607 | ||||||
2,304 | 93,706 | ||||||||||
Bermuda - 0.1% | Germany - 1.4% | ||||||||||
Brookfield Renewable Energy Partners, | Fraport AG Frankfurt Airport Services | ||||||||||
LP(Æ) | 428 | 11 | Worldwide | 314,458 | 19,947 | ||||||
China Everbright Water, Ltd.(Æ) | 2,530,653 | 1,280 | |||||||||
China Gas Holdings, Ltd.(Æ) | 486,230 | 772 | Hong Kong - 3.1% | ||||||||
2,063 | Beijing Enterprises Holdings, Ltd. | 565,024 | 3,564 | ||||||||
Cheung Kong Infrastructure Holdings, | |||||||||||
Brazil - 1.3% | Ltd. | 152,966 | 1,420 | ||||||||
Alupar Investimento SA | 77,837 | 320 | China Everbright International, Ltd. | 3,033,589 | 4,863 | ||||||
CCR SA | 2,692,340 | 8,461 | China Merchants Holdings International | ||||||||
Cia de Saneamento Basico do Estado de | Co., Ltd. | 7,498,864 | 24,823 | ||||||||
Sao Paulo - ADR(Æ) | 1,535,695 | 6,742 | Hong Kong & China Gas Co., Ltd. | 578,164 | 1,172 | ||||||
CPFL Energias Renovaveis SA(Æ) | 90,789 | 286 | Power Assets Holdings, Ltd. | 773,860 | 7,696 | ||||||
Ultrapar Participacoes SA | 67,424 | 1,171 | 43,538 | ||||||||
Wilson Sons, Ltd. Class BDR | 72,191 | 618 | |||||||||
17,598 | India - 0.2% | ||||||||||
Power Grid Corp. of India, Ltd. | 1,632,942 | 3,212 | |||||||||
Canada - 6.6% | |||||||||||
AltaGas, Ltd. - ADR | 80,145 | 2,069 | Indonesia - 0.1% | ||||||||
Brookfield Infrastructure Partners, LP(Ñ) | 39,011 | 1,641 | Jasa Marga Persero Tbk PT | 1,929,666 | 679 | ||||||
Canadian National Railway Co. | 40,914 | 2,499 | Tower Bersama Infrastructure Tbk PT(Æ) | 2,024,994 | 1,051 | ||||||
Canadian Pacific Railway, Ltd. | 8,908 | 1,252 | 1,730 | ||||||||
Emera, Inc. | 102,842 | 3,369 | |||||||||
Enbridge, Inc. | 967,124 | 41,320 | Italy - 7.7% | ||||||||
Fortis, Inc. | 120,861 | 3,499 | ASTM SpA | 67,798 | 910 | ||||||
Pembina Pipeline Corp. | 34,175 | 859 | Atlantia SpA | 2,254,134 | 62,497 | ||||||
Progressive Waste Solutions, Ltd. | 14,637 | 352 | Ei Towers SpA | 48,047 | 2,915 | ||||||
TransCanada Corp. | 952,891 | 32,051 | Hera SpA | 2,799,287 | 7,356 | ||||||
Veresen, Inc. | 120,345 | 1,047 | Infrastrutture Wireless Italiane SpA(Æ) | ||||||||
Westshore Terminals Investment Corp. | 186,250 | 3,107 | (Þ) | 524,548 | 2,727 | ||||||
93,065 | RAI Way SpA(Þ) | 249,352 | 1,270 | ||||||||
Snam Rete Gas SpA | 3,043,473 | 15,742 | |||||||||
Cayman Islands - 0.1% | Societa Iniziative Autostradali e Servizi | ||||||||||
HKBN, Ltd.(Æ) | 1,278,040 | 1,535 | SpA | 287,038 | 3,288 | ||||||
Terna Rete Elettrica Nazionale SpA(Ñ) | 2,258,106 | 11,478 | |||||||||
Chile - 0.4% | 108,183 | ||||||||||
Aguas Andinas SA Class A | 3,672,932 | 1,931 | |||||||||
Empresa Nacional de Electricidad SA | Japan - 3.3% | ||||||||||
- ADR | 34,085 | 1,288 | Central Japan Railway Co. | 10,600 | 1,925 | ||||||
Chugoku Electric Power Co., Inc. (The) | 89,500 | 1,349 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Infrastructure Fund 541
Russell Investment Company
Russell Global Infrastructure Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
East Japan Railway Co. | 158,879 | 15,081 | Parkway Life Real Estate Investment | ||||||
Electric Power Development Co., Ltd. | 30,500 | 1,002 | Trust(Æ)(ö) | 1,352,487 | 2,227 | ||||
Japan Airport Terminal Co., Ltd.(Ñ) | 102,297 | 5,548 | SATS, Ltd. | 324,283 | 877 | ||||
Kamigumi Co., Ltd. | 1,958,328 | 16,815 | Singapore Post, Ltd. | 1,544,228 | 2,087 | ||||
Tohoku Electric Power Co., Inc. | 97,200 | 1,360 | 17,229 | ||||||
Tokyo Gas Co., Ltd. | 790,000 | 3,901 | |||||||
46,981 | Spain - 5.2% | ||||||||
Abertis Infraestructuras SA(Ñ) | 2,681,421 | 44,503 | |||||||
Luxembourg - 0.9% | Aena SA(Æ)(Þ) | 52,245 | 5,828 | ||||||
SES SA | 423,913 | 12,517 | Aena SA(Å)(Æ) | 4,682 | 522 | ||||
Cellnex Telecom SAU Class X(Æ)(Þ) | 109,916 | 1,905 | |||||||
Malaysia - 0.2% | Enagas SA | 219,360 | 6,642 | ||||||
Petronas Gas BHD | 192,960 | 1,027 | Ferrovial SA | 403,844 | 10,188 | ||||
Westports Holdings BHD | 1,334,206 | 1,331 | Red Electrica Corp. SA | 34,285 | 3,021 | ||||
2,358 | 72,609 | ||||||||
Marshall Islands - 0.2% | Switzerland - 1.0% | ||||||||
Teekay Corp. | 95,400 | 3,065 | Flughafen Zuerich AG | 19,250 | 14,571 | ||||
Mexico - 1.4% | United Kingdom - 6.7% | ||||||||
Grupo Aeroportuario del Centro Norte | BBA Aviation PLC | 3,972,989 | 11,663 | ||||||
Sab de CV - ADR(Æ) | 27,107 | 1,115 | Centrica PLC | 706,531 | 2,459 | ||||
Grupo Aeroportuario del Pacifico SAB de | National Grid PLC | 2,247,579 | 31,989 | ||||||
CV - ADR | 57,562 | 5,242 | National Grid PLC - ADR(Ñ) | 174,010 | 12,459 | ||||
Grupo Aeroportuario del Pacifico SAB de | Pennon Group PLC | 473,038 | 5,902 | ||||||
CV Class B(Æ) | 561,837 | 5,060 | Scottish & Southern Energy PLC | 631,837 | 14,736 | ||||
Grupo Aeroportuario del Sureste SAB de | Severn Trent PLC Class H | 96,292 | 3,326 | ||||||
CV - ADR | 20,447 | 3,164 | Shanks Group PLC | 661,783 | 966 | ||||
Infraestructura Energetica Nova SAB | United Utilities Group PLC | 702,601 | 10,685 | ||||||
de CV | 172,879 | 834 | 94,185 | ||||||
OHL Mexico SAB de CV(Æ) | 668,050 | 879 | |||||||
Promotora y Operadora de | United States - 37.4% | ||||||||
Infraestructura SAB de CV Class | 8Point3 Energy Partners, LP Class A(Æ) | ||||||||
L(Æ) | 252,271 | 2,752 | (Ñ) | 30,063 | 405 | ||||
19,046 | AES Corp. | 692,780 | 7,586 | ||||||
Alliant Energy Corp. | 86,404 | 5,100 | |||||||
Netherlands - 0.1% | Ameren Corp. | 113,417 | 4,954 | ||||||
Koninklijke Vopak NV | 43,497 | 1,745 | American Electric Power Co., Inc. | 111,863 | 6,337 | ||||
American Tower Corp.(ö) | 152,779 | 15,619 | |||||||
New Zealand - 1.3% | American Water Works Co., Inc. | 150,547 | 8,635 | ||||||
Auckland International Airport, Ltd. | 2,852,542 | 10,129 | Atmos Energy Corp. | 133,224 | 8,393 | ||||
Contact Energy, Ltd. | 557,324 | 1,956 | Cheniere Energy, Inc.(Æ) | 64,831 | 3,210 | ||||
Infratil, Ltd. | 1,593,676 | 3,345 | CMS Energy Corp. | 311,689 | 11,243 | ||||
Port of Tauranga, Ltd.(Ñ) | 265,034 | 3,228 | Columbia Pipeline Group, Inc. | 442,284 | 9,186 | ||||
Vector, Ltd. | 18,139 | 40 | Columbia Pipeline Partners, LP | 142,315 | 1,927 | ||||
18,698 | Connecticut Water Service, Inc. | 47,011 | 1,730 | ||||||
Norway - 0.0% | Covanta Holding Corp. | 106,021 | 1,777 | ||||||
Hafslund ASA Class B | 59,283 | 391 | Crown Castle International Corp. | 177,414 | 15,162 | ||||
CSX Corp. | 448,626 | 12,108 | |||||||
Philippines - 0.3% | Digital Realty Trust, Inc.(ö) | 36,765 | 2,719 | ||||||
International Container Terminal | Dominion Midstream Partners, LP(Ñ) | 76,918 | 2,520 | ||||||
Services, Inc. | 2,267,287 | 3,985 | Dominion Resources, Inc. | 153,523 | 10,966 | ||||
DTE Energy Co. | 112,172 | 9,152 | |||||||
Portugal - 0.1% | Duke Energy Corp. | 342,904 | 24,507 | ||||||
REN - Redes Energeticas Nacionais | Edison International | 111,618 | 6,755 | ||||||
SGPS SA | 524,210 | 1,600 | Energy Transfer Equity, LP(Ñ) | 97,911 | 2,110 | ||||
Eversource Energy | 263,212 | 13,408 | |||||||
Singapore - 1.2% | Exelon Corp. | 557,845 | 15,575 | ||||||
CitySpring Infrastructure Trust | 10,364,503 | 3,845 | Genesee & Wyoming, Inc. Class A(Æ) | 28,042 | 1,882 | ||||
ComfortDelGro Corp., Ltd. | 1,020,518 | 2,204 | Great Plains Energy, Inc. | 292,948 | 8,056 | ||||
Hutchison Port Holdings Trust Class U | 10,832,543 | 5,989 | ITC Holdings Corp. | 275,661 | 9,020 |
See accompanying notes which are an integral part of the financial statements.
542 Russell Global Infrastructure Fund
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Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | ||||||
Principal | Fair | |||||
Amount ($) | Value | |||||
or Shares | $ | |||||
Kansas City Southern | 42,918 | 3,552 | ||||
Kinder Morgan, Inc. | 1,337,916 | 36,592 | ||||
Laclede Group, Inc. (The) | 26,323 | 1,542 | ||||
Macquarie Infrastructure Corp. | 37,007 | 2,944 | ||||
Magellan Midstream Partners, LP | 115,564 | 7,374 | ||||
NextEra Energy, Inc. | 500,597 | 51,391 | ||||
NiSource, Inc. | 331,909 | 6,359 | ||||
Norfolk Southern Corp. | 111,000 | 8,883 | ||||
NorthWestern Corp. | 54,070 | 2,930 | ||||
ONE Gas, Inc. | 51,888 | 2,534 | ||||
ONEOK, Inc. | 62,435 | 2,118 | ||||
Pattern Energy Group, Inc. Class A(Ñ) | 94,186 | 2,203 | ||||
PG&E Corp. | 708,803 | 37,850 | ||||
Pinnacle West Capital Corp. | 30,083 | 1,911 | ||||
Portland General Electric Co. | 43,793 | 1,624 | ||||
PPL Corp. | 453,270 | 15,592 | ||||
Republic Services, Inc. Class A | 31,010 | 1,356 | ||||
SBA Communications Corp. Class A(Æ) | 101,891 | 12,127 | ||||
SemGroup Corp. Class A | 38,126 | 1,737 | ||||
Sempra Energy | 225,140 | 23,057 | ||||
SJW Corp. | 37,741 | 1,197 | ||||
Southwest Gas Corp. | 26,869 | 1,651 | ||||
Spectra Energy Corp. | 826,656 | 23,618 | ||||
Tallgrass Energy GP, LP Class A(Ñ) | 75,700 | 1,812 | ||||
Targa Resources Corp. | 15,048 | 860 | ||||
UGI Corp. | 249,650 | 9,155 | ||||
Union Pacific Corp. | 116,841 | 10,440 | ||||
Unitil Corp. | 35,376 | 1,255 | ||||
Waste Connections, Inc. | 9,527 | 519 | ||||
WEC Energy Group, Inc. | 116,214 | 5,992 | ||||
WGL Holdings, Inc. | 8,452 | 526 | ||||
Williams Cos., Inc. (The) | 436,407 | 17,212 | ||||
Xcel Energy, Inc. | 264,971 | 9,441 | ||||
527,396 | ||||||
Total Common Stocks | ||||||
(cost $1,289,811) | 1,374,400 | |||||
Short-Term Investments - 2.0% | ||||||
United States - 2.0% | ||||||
Russell U.S. Cash Management Fund | 27,949,846 | (8) | 27,950 | |||
Total Short-Term Investments | ||||||
(cost $27,950) | 27,950 | |||||
Other Securities - 3.2% | ||||||
Russell U.S. Cash Collateral Fund(×) | 44,279,715 | (8) | 44,280 | |||
Total Other Securities | ||||||
(cost $44,280) | 44,280 | |||||
Total Investments 102.7% | ||||||
(identified cost $1,362,041) | 1,446,630 | |||||
Other Assets and Liabilities, Net | ||||||
- (2.7%) | (37,421 | ) | ||||
Net Assets - 100.0% | 1,409,209 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
0.2% | ||||||||||||
Aena SA | 02/10/15 | EUR | 4,682 | 114.75 | 537 | 522 | ||||||
COSCO Pacific, Ltd. | 09/30/10 | HKD | 1,948,976 | 1.35 | 2,627 | 2,522 | ||||||
3,044 | ||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
CAC 40 Index Futures | 60 | EUR | 2,937 | 11/15 | 182 | ||
DAX Index Futures | 3 | EUR | 811 | 12/15 | 95 | ||
Euro STOXX Index 50 Futures | 37 | EUR | 1,259 | 12/15 | 82 | ||
FTSE 100 Index Futures | 24 | GBP | 1,517 | 12/15 | 37 | ||
Hang Seng Index Futures | 16 | HKD | 18,147 | 11/15 | (44 | ) | |
IBEX 35 Index Futures | 25 | EUR | 2,571 | 11/15 | 86 | ||
S&P E-Mini Utilities Select Sector Index Futures | 171 | USD | 7,521 | 12/15 | (58 | ) | |
S&P Mid 500 E-Mini Index Futures | 49 | USD | 5,081 | 12/15 | 214 | ||
S&P/TSX 60 Index Futures | 18 | CAD | 2,853 | 12/15 | 12 | ||
SPI 200 Index Futures | 33 | AUD | 4,320 | 12/15 | 66 | ||
TOPIX Index Futures | 10 | JPY | 155,850 | 12/15 | 66 | ||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 738 |
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Bank of America | USD | 6 | AUD | 9 | 11/04/15 | — | |||
Bank of America | USD | 142 | AUD | 200 | 12/16/15 | — | |||
Bank of America | USD | 1,088 | AUD | 1,500 | 12/16/15 | (21 | ) | ||
Bank of America | USD | 1,251 | AUD | 1,800 | 12/16/15 | 29 | |||
Bank of America | USD | 77 | CAD | 100 | 12/16/15 | — | |||
Bank of America | USD | 151 | CAD | 200 | 12/16/15 | 2 | |||
Bank of America | USD | 775 | CAD | 1,000 | 12/16/15 | (10 | ) | ||
Bank of America | USD | 1,042 | CAD | 1,400 | 12/16/15 | 28 | |||
Bank of America | USD | 114 | EUR | 100 | 12/16/15 | (4 | ) | ||
Bank of America | USD | 560 | EUR | 500 | 12/16/15 | (10 | ) | ||
Bank of America | USD | 2,726 | EUR | 2,400 | 12/16/15 | (86 | ) | ||
Bank of America | USD | 3,607 | EUR | 3,200 | 12/16/15 | (85 | ) | ||
Bank of America | USD | 155 | GBP | 100 | 12/16/15 | (1 | ) | ||
Bank of America | USD | 772 | GBP | 500 | 12/16/15 | (1 | ) | ||
Bank of America | USD | 1,137 | GBP | 750 | 12/16/15 | 19 | |||
Bank of America | USD | 774 | HKD | 6,000 | 12/16/15 | — | |||
Bank of America | USD | 1,097 | HKD | 8,500 | 12/16/15 | — | |||
Bank of America | USD | 503 | JPY | 60,000 | 12/16/15 | (5 | ) | ||
Bank of America | USD | 586 | JPY | 70,000 | 12/16/15 | (5 | ) | ||
Bank of America | AUD | 100 | USD | 70 | 12/16/15 | (2 | ) | ||
Bank of America | AUD | 250 | USD | 179 | 12/16/15 | 1 | |||
Bank of America | AUD | 300 | USD | 219 | 12/16/15 | 6 | |||
Bank of America | AUD | 400 | USD | 280 | 12/16/15 | (5 | ) | ||
Bank of America | AUD | 400 | USD | 283 | 12/16/15 | (1 | ) | ||
Bank of America | AUD | 500 | USD | 361 | 12/16/15 | 6 | |||
Bank of America | AUD | 800 | USD | 564 | 12/16/15 | (5 | ) | ||
Bank of America | CAD | 100 | USD | 77 | 12/16/15 | 1 | |||
Bank of America | CAD | 100 | USD | 75 | 12/16/15 | (2 | ) | ||
Bank of America | CAD | 250 | USD | 190 | 12/16/15 | (2 | ) |
See accompanying notes which are an integral part of the financial statements.
544 Russell Global Infrastructure Fund
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Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Bank of America | CAD | 250 | USD | 188 | 12/16/15 | (4 | ) | ||
Bank of America | CAD | 300 | USD | 230 | 12/16/15 | 1 | |||
Bank of America | CAD | 300 | USD | 233 | 12/16/15 | 4 | |||
Bank of America | CAD | 600 | USD | 452 | 12/16/15 | (6 | ) | ||
Bank of America | EUR | 100 | USD | 114 | 12/16/15 | 4 | |||
Bank of America | EUR | 350 | USD | 383 | 12/16/15 | (3 | ) | ||
Bank of America | EUR | 400 | USD | 450 | 12/16/15 | 10 | |||
Bank of America | EUR | 600 | USD | 684 | 12/16/15 | 23 | |||
Bank of America | EUR | 700 | USD | 785 | 12/16/15 | 15 | |||
Bank of America | EUR | 700 | USD | 797 | 12/16/15 | 27 | |||
Bank of America | EUR | 700 | USD | 801 | 12/16/15 | 30 | |||
Bank of America | EUR | 1,500 | USD | 1,671 | 12/16/15 | 21 | |||
Bank of America | GBP | 100 | USD | 153 | 12/16/15 | (2 | ) | ||
Bank of America | GBP | 100 | USD | 152 | 12/16/15 | (2 | ) | ||
Bank of America | GBP | 100 | USD | 156 | 12/16/15 | 2 | |||
Bank of America | GBP | 120 | USD | 182 | 12/16/15 | (3 | ) | ||
Bank of America | GBP | 200 | USD | 310 | 12/16/15 | 1 | |||
Bank of America | GBP | 300 | USD | 461 | 12/16/15 | (2 | ) | ||
Bank of America | HKD | 800 | USD | 103 | 12/16/15 | — | |||
Bank of America | HKD | 800 | USD | 103 | 12/16/15 | — | |||
Bank of America | HKD | 800 | USD | 103 | 12/16/15 | — | |||
Bank of America | HKD | 1,600 | USD | 206 | 12/16/15 | — | |||
Bank of America | HKD | 1,700 | USD | 219 | 12/16/15 | — | |||
Bank of America | HKD | 1,900 | USD | 245 | 12/16/15 | — | |||
Bank of America | HKD | 2,500 | USD | 323 | 12/16/15 | — | |||
Bank of America | JPY | 10,000 | USD | 83 | 12/16/15 | 1 | |||
Bank of America | JPY | 10,000 | USD | 83 | 12/16/15 | — | |||
Bank of America | JPY | 15,000 | USD | 125 | 12/16/15 | 1 | |||
Bank of America | JPY | 20,000 | USD | 167 | 12/16/15 | 1 | |||
Bank of America | JPY | 20,000 | USD | 166 | 12/16/15 | — | |||
Bank of America | JPY | 20,000 | USD | 168 | 12/16/15 | 3 | |||
Bank of Montreal | USD | 201 | AUD | 280 | 12/16/15 | (2 | ) | ||
Bank of Montreal | USD | 725 | AUD | 1,038 | 12/16/15 | 13 | |||
Bank of Montreal | USD | 540 | CAD | 715 | 12/16/15 | 6 | |||
Bank of Montreal | USD | 568 | EUR | 500 | 12/16/15 | (17 | ) | ||
Bank of Montreal | USD | 1,834 | EUR | 1,642 | 12/16/15 | (28 | ) | ||
Bank of Montreal | USD | 231 | GBP | 150 | 12/16/15 | — | |||
Bank of Montreal | USD | 547 | GBP | 356 | 12/16/15 | 2 | |||
Bank of Montreal | USD | 589 | HKD | 4,564 | 12/16/15 | — | |||
Bank of Montreal | USD | 311 | JPY | 37,613 | 12/16/15 | 1 | |||
Bank of New York | AUD | 400 | USD | 279 | 12/16/15 | (5 | ) | ||
Bank of New York | CAD | 350 | USD | 264 | 12/16/15 | (4 | ) | ||
Bank of New York | EUR | 700 | USD | 786 | 12/16/15 | 16 | |||
Bank of New York | GBP | 200 | USD | 307 | 12/16/15 | (1 | ) | ||
Bank of New York | HKD | 2,000 | USD | 258 | 12/16/15 | — | |||
Bank of New York | JPY | 20,000 | USD | 166 | 12/16/15 | — | |||
BNP Paribas | USD | 725 | AUD | 1,038 | 12/16/15 | 14 | |||
BNP Paribas | USD | 540 | CAD | 715 | 12/16/15 | 6 | |||
BNP Paribas | USD | 1,836 | EUR | 1,642 | 12/16/15 | (29 | ) | ||
BNP Paribas | USD | 546 | GBP | 356 | 12/16/15 | 2 | |||
BNP Paribas | USD | 589 | HKD | 4,564 | 12/16/15 | — | |||
BNP Paribas | USD | 311 | JPY | 37,613 | 12/16/15 | 1 | |||
Citigroup | USD | 70 | AUD | 100 | 12/16/15 | 2 | |||
Citigroup | USD | 560 | EUR | 500 | 12/16/15 | (10 | ) | ||
Credit Suisse | CHF | 495 | USD | 499 | 11/02/15 | (1 | ) | ||
Credit Suisse | EUR | 170 | USD | 188 | 11/02/15 | 1 | |||
HSBC | USD | 725 | AUD | 1,038 | 12/16/15 | 13 | |||
HSBC | USD | 540 | CAD | 715 | 12/16/15 | 6 | |||
HSBC | USD | 1,834 | EUR | 1,642 | 12/16/15 | (26 | ) | ||
HSBC | USD | 546 | GBP | 356 | 12/16/15 | 2 | |||
HSBC | USD | 589 | HKD | 4,564 | 12/16/15 | — | |||
HSBC | USD | 311 | JPY | 37,613 | 12/16/15 | 1 | |||
Morgan Stanley | AUD | 650 | USD | 455 | 12/16/15 | (7 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Global Infrastructure Fund 545
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Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Morgan Stanley | CAD | 500 | USD | 377 | 12/16/15 | (5 | ) | ||
Morgan Stanley | EUR | 1,000 | USD | 1,119 | 12/16/15 | 18 | |||
Morgan Stanley | GBP | 200 | USD | 302 | 12/16/15 | (6 | ) | ||
Morgan Stanley | HKD | 3,000 | USD | 387 | 12/16/15 | — | |||
Morgan Stanley | JPY | 20,000 | USD | 167 | 12/16/15 | 1 | |||
Royal Bank of Canada | USD | 287 | AUD | 400 | 12/16/15 | (3 | ) | ||
Royal Bank of Canada | USD | 725 | AUD | 1,038 | 12/16/15 | 14 | |||
Royal Bank of Canada | USD | 191 | CAD | 250 | 12/16/15 | — | |||
Royal Bank of Canada | USD | 540 | CAD | 715 | 12/16/15 | 6 | |||
Royal Bank of Canada | USD | 563 | EUR | 500 | 12/16/15 | (13 | ) | ||
Royal Bank of Canada | USD | 1,835 | EUR | 1,642 | 12/16/15 | (27 | ) | ||
Royal Bank of Canada | USD | 153 | GBP | 100 | 12/16/15 | 1 | |||
Royal Bank of Canada | USD | 546 | GBP | 356 | 12/16/15 | 2 | |||
Royal Bank of Canada | USD | 194 | HKD | 1,500 | 12/16/15 | — | |||
Royal Bank of Canada | USD | 589 | HKD | 4,564 | 12/16/15 | — | |||
Royal Bank of Canada | USD | 125 | JPY | 15,000 | 12/16/15 | (1 | ) | ||
Royal Bank of Canada | USD | 311 | JPY | 37,613 | 12/16/15 | 1 | |||
Royal Bank of Canada | AUD | 100 | USD | 70 | 12/16/15 | (1 | ) | ||
Royal Bank of Canada | CAD | 100 | USD | 75 | 12/16/15 | (2 | ) | ||
Royal Bank of Canada | EUR | 400 | USD | 448 | 12/16/15 | 7 | |||
Royal Bank of Canada | GBP | 100 | USD | 151 | 12/16/15 | (3 | ) | ||
Royal Bank of Canada | JPY | 10,000 | USD | 83 | 12/16/15 | 1 | |||
State Street | USD | 25 | AUD | 36 | 11/05/15 | — | |||
State Street | USD | 72 | AUD | 100 | 12/16/15 | (1 | ) | ||
State Street | USD | 142 | AUD | 200 | 12/16/15 | — | |||
State Street | USD | 852 | AUD | 1,200 | 12/16/15 | 1 | |||
State Street | USD | 151 | CAD | 200 | 12/16/15 | 2 | |||
State Street | USD | 267 | CAD | 350 | 12/16/15 | — | |||
State Street | USD | 603 | CAD | 800 | 12/16/15 | 8 | |||
State Street | USD | 167 | EUR | 150 | 12/16/15 | (2 | ) | ||
State Street | USD | 564 | EUR | 500 | 12/16/15 | (14 | ) | ||
State Street | USD | 2,266 | EUR | 2,000 | 12/16/15 | (64 | ) | ||
State Street | USD | 92 | GBP | 60 | 12/16/15 | — | |||
State Street | USD | 153 | GBP | 100 | 12/16/15 | 1 | |||
State Street | USD | 617 | GBP | 400 | 12/16/15 | — | |||
State Street | USD | 258 | HKD | 2,000 | 12/16/15 | — | |||
State Street | USD | 774 | HKD | 6,000 | 12/16/15 | — | |||
State Street | USD | 83 | JPY | 10,000 | 12/16/15 | — | |||
State Street | USD | 83 | JPY | 10,000 | 12/16/15 | — | |||
State Street | USD | 375 | JPY | 45,000 | 12/16/15 | (2 | ) | ||
State Street | AUD | 18 | USD | 13 | 11/02/15 | — | |||
State Street | AUD | 4 | USD | 3 | 11/04/15 | — | |||
State Street | AUD | 900 | USD | 645 | 12/16/15 | 5 | |||
State Street | AUD | 1,400 | USD | 1,013 | 12/16/15 | 16 | |||
State Street | BRL | 722 | USD | 185 | 11/03/15 | (2 | ) | ||
State Street | CAD | 2 | USD | 2 | 11/02/15 | — | |||
State Street | CAD | 7 | USD | 5 | 11/02/15 | — | |||
State Street | CAD | 936 | USD | 711 | 11/03/15 | (5 | ) | ||
State Street | CAD | 550 | USD | 414 | 12/16/15 | (6 | ) | ||
State Street | CAD | 1,300 | USD | 998 | 12/16/15 | 4 | |||
State Street | EUR | 52 | USD | 57 | 11/02/15 | — | |||
State Street | EUR | 1,500 | USD | 1,657 | 12/16/15 | 6 | |||
State Street | EUR | 2,500 | USD | 2,822 | 12/16/15 | 72 | |||
State Street | GBP | 300 | USD | 459 | 12/16/15 | (3 | ) | ||
State Street | GBP | 500 | USD | 767 | 12/16/15 | (4 | ) | ||
State Street | HKD | 337 | USD | 44 | 11/02/15 | — | |||
State Street | HKD | 970 | USD | 125 | 11/03/15 | — | |||
State Street | HKD | 4,000 | USD | 516 | 12/16/15 | — | |||
State Street | HKD | 7,500 | USD | 968 | 12/16/15 | — | |||
State Street | JPY | 46,279 | USD | 385 | 11/02/15 | 1 | |||
State Street | JPY | 47,889 | USD | 396 | 11/04/15 | (1 | ) | ||
State Street | JPY | 11,539 | USD | 96 | 11/05/15 | — | |||
State Street | JPY | 30,000 | USD | 249 | 12/16/15 | — |
See accompanying notes which are an integral part of the financial statements.
546 Russell Global Infrastructure Fund
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Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
State Street | JPY | 60,000 | USD | 501 | 12/16/15 | 3 | ||
State Street | MYR | 210 | USD | 49 | 11/02/15 | — | ||
State Street | NZD | 5 | USD | 3 | 11/02/15 | — | ||
State Street | PHP | 289 | USD | 6 | 11/02/15 | — | ||
State Street | PHP | 1,068 | USD | 23 | 11/02/15 | — | ||
State Street | SGD | 4 | USD | 3 | 11/04/15 | — | ||
UBS | USD | 725 | AUD | 1,038 | 12/16/15 | 13 | ||
UBS | USD | 540 | CAD | 715 | 12/16/15 | 6 | ||
UBS | USD | 1,835 | EUR | 1,642 | 12/16/15 | (28 | ) | |
UBS | USD | 546 | GBP | 356 | 12/16/15 | 2 | ||
UBS | USD | 589 | HKD | 4,564 | 12/16/15 | — | ||
UBS | USD | 311 | JPY | 37,613 | 12/16/15 | 1 | ||
UBS | AUD | 200 | USD | 141 | 12/16/15 | (1 | ) | |
UBS | HKD | 1,000 | USD | 129 | 12/16/15 | — | ||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | (77 | ) |
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Common Stocks | |||||||||||
Australia | $ | — | $ | 111,292 | $ | — | $ | 111,292 | 7.9 | ||
Austria | — | 4,362 | — | 4,362 | 0.3 | ||||||
Belgium | — | 2,304 | — | 2,304 | 0.2 | ||||||
Bermuda | 11 | 2,052 | — | 2,063 | 0.1 | ||||||
Brazil | 17,598 | — | — | 17,598 | 1.3 | ||||||
Canada | 93,065 | — | — | 93,065 | 6.6 | ||||||
Cayman Islands | — | 1,535 | — | 1,535 | 0.1 | ||||||
Chile | 5,263 | — | — | 5,263 | 0.4 | ||||||
China | — | 14,494 | 15,732 | 30,226 | 2.1 | ||||||
France | — | 93,706 | — | 93,706 | 6.7 | ||||||
Germany | — | 19,947 | — | 19,947 | 1.4 | ||||||
Hong Kong | — | 43,538 | — | 43,538 | 3.1 | ||||||
India | — | 3,212 | — | 3,212 | 0.2 | ||||||
Indonesia | — | 1,730 | — | 1,730 | 0.1 | ||||||
Italy | — | 108,183 | — | 108,183 | 7.7 | ||||||
Japan | — | 46,981 | — | 46,981 | 3.3 | ||||||
Luxembourg | — | 12,517 | — | 12,517 | 0.9 | ||||||
Malaysia | — | 2,358 | — | 2,358 | 0.2 | ||||||
Marshall Islands | 3,065 | — | — | 3,065 | 0.2 | ||||||
Mexico | 19,046 | — | — | 19,046 | 1.4 | ||||||
Netherlands | — | 1,745 | — | 1,745 | 0.1 | ||||||
New Zealand | — | 18,698 | — | 18,698 | 1.3 | ||||||
Norway | — | 391 | — | 391 | —* | ||||||
Philippines | — | 3,985 | — | 3,985 | 0.3 | ||||||
Portugal | — | 1,600 | — | 1,600 | 0.1 | ||||||
Singapore | — | 17,229 | — | 17,229 | 1.2 | ||||||
Spain | — | 72,609 | — | 72,609 | 5.2 | ||||||
Switzerland | — | 14,571 | — | 14,571 | 1.0 | ||||||
United Kingdom | 12,459 | 81,726 | — | 94,185 | 6.7 | ||||||
United States | 527,396 | — | — | 527,396 | 37.4 | ||||||
Short-Term Investments | — | 27,950 | — | 27,950 | 2.0 | ||||||
Other Securities | — | 44,280 | — | 44,280 | 3.2 | ||||||
Total Investments | 677,903 | 752,995 | 15,732 | 1,446,630 | 102.7 | ||||||
Other Assets and Liabilities, Net | (2.7 | ) | |||||||||
100.0 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Infrastructure Fund 547
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Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | |||||||||||||||||
Amounts in thousands | |||||||||||||||||
Fair Value | |||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||||||
Other Financial Instruments | |||||||||||||||||
Futures Contracts | 738 | — | — | 738 | 0.1 | ||||||||||||
Foreign Currency Exchange Contracts | (7 | ) | (70 | ) | — | (77 | ) | (—)* | |||||||||
Total Other Financial Instruments** | $ | 731 | $ | (70 | ) | $ | — | $ | 661 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation/depreciation on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Quantitative Information about Level 3 Fair Value Measurements
The significant inputs used in determining the fair value levels of Level 3 securities were as follows:
Fair | ||||
Value | ||||
Category and Subcategory | Valuation Technique | Inputs | ($) | |
Common Stock | ||||
Last trade price = HKD 10.20 | ||||
China | 08/07/2015 last trade price less dividend (ex-date 09/08/2015) | Cash dividend = HKD 0.17 | $ | 15,732 |
Total Investments | $ | 15,732 |
A reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining a value for the
period ended October 31, 2015 were as follows:
Net Change | ||||||||||||||||||||
in Unrealized | ||||||||||||||||||||
Appreciation/ | ||||||||||||||||||||
Net | Net | Net Change | (Depreciation) | |||||||||||||||||
Beginning | Accrued | Transfers | Transfers | in Unrealized | Ending | on Investments | ||||||||||||||
Balance | Gross | Gross | Discounts/ | Realized | into Level | out of | Appreciation/ | Balance of | held as of | |||||||||||
Category and Subcategory | 11/01/2014 | Purchases | Sales | (Premiums) | Gain (Loss) | 3 | Level 3 | (Depreciation) | 10/31/2015 | 10/31/2015 | ||||||||||
Common Stock | ||||||||||||||||||||
China | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 15,732 | $ | — | $ | — | $ | 15,732 | $ | — |
Total Investments | — | — | — | — | — | 15,732 | — | — | 15,732 | — |
See accompanying notes which are an integral part of the financial statements.
548 Russell Global Infrastructure Fund
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Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 514 | ||
Variation margin on futures contracts* | 840 | — | ||||
Total | $ | 840 | $ | 514 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | 102 | $ | — | ||
Unrealized depreciation on foreign currency exchange contracts | — | 591 | ||||
Total | $ | 102 | $ | 591 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Futures contracts | $ | 2,002 | $ | — | ||
Foreign currency-related transactions** | — | (4,433 | ) | |||
Total | $ | 2,002 | $ | (4,433 | ) | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | (612 | ) | $ | — | |
Foreign currency-related transactions*** | — | (816 | ) | |||
Total | $ | (612 | ) | $ | (816 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
*** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Securities on Loan* | Investments, at fair value | $ | 43,053 | $ | — | $ | 43,053 | ||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 514 | — | 514 | |||||
Futures Contracts | Variation margin on futures contracts | 64 | — | 64 | |||||
Total Financial and Derivative Assets | 43,631 | — | 43,631 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (67) | — | (67 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 43,564 | $ | — | $ | 43,564 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Assets | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||
Bank of America | $ | 235 | $ | 235 | $ | — | $ | — | |||
Bank of Montreal | 22 | 22 | — | — | |||||||
Bank of New York | 16 | 10 | — | 6 | |||||||
Barclays | 10,076 | — | 10,076 | — | |||||||
BNP Paribas | 23 | 23 | — | — | |||||||
Citigroup | 3,254 | 2 | 3,252 | — | |||||||
Credit Suisse | 25 | — | 25 | — | |||||||
Deutsche Bank | 5,974 | — | 5,974 | — | |||||||
Goldman Sachs | 3,240 | — | 3,240 | — | |||||||
HSBC | 23 | 23 | — | — | |||||||
JPMorgan Chase | 2,157 | — | 2,157 | — | |||||||
Morgan Stanley | 16,281 | 18 | 16,262 | 1 | |||||||
Royal Bank of Canada | 32 | 32 | — | — | |||||||
State Street | 117 | 98 | — | 19 | |||||||
UBS | 2,089 | 22 | 2,067 | — | |||||||
Total | $ | 43,564 | $ | 485 | $ | 43,053 | $ | 26 |
See accompanying notes which are an integral part of the financial statements.
550 Russell Global Infrastructure Fund
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Russell Global Infrastructure Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 113 | $ | — | $ | 113 | ||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 591 | — | 591 | |||||
Total Financial and Derivative Liabilities | 704 | — | 704 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (122) | — | (122 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 582 | $ | — | $ | 582 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Liabilities | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||
Bank of America | $ | 264 | $ | 235 | $ | — | $ 29 | ||
Bank of Montreal | 47 | 22 | — | 25 | |||||
Bank of New York | 10 | 10 | — | — | |||||
BNP Paribas | 29 | 23 | — | 6 | |||||
Citigroup | 10 | 2 | — | 8 | |||||
HSBC | 27 | 23 | — | 4 | |||||
Morgan Stanley | 18 | 18 | — | — | |||||
Royal Bank of Canada | 50 | 32 | — | 18 | |||||
State Street | 98 | 98 | — | — | |||||
UBS | 29 | 22 | — | 7 | |||||
Total | $ | 582 | $ | 485 | $ | — | $ 97 |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Global Infrastructure Fund 551
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Russell Global Infrastructure Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 1,362,041 |
Investments, at fair value(*)(>) | 1,446,630 | |
Cash | 118 | |
Cash (restricted)(a) | 2,941 | |
Foreign currency holdings(^) | 328 | |
Unrealized appreciation on foreign currency exchange contracts | 514 | |
Receivables: | ||
Dividends and interest | 2,130 | |
Dividends from affiliated Russell funds | 2 | |
Investments sold | 7,520 | |
Fund shares sold | 1,592 | |
Foreign capital gains taxes recoverable | 420 | |
Variation margin on futures contracts | 64 | |
Total assets | 1,462,259 | |
Liabilities | ||
Payables: | ||
Investments purchased | 5,768 | |
Fund shares redeemed | 742 | |
Accrued fees to affiliates | 1,347 | |
Other accrued expenses | 209 | |
Variation margin on futures contracts | 113 | |
Unrealized depreciation on foreign currency exchange contracts | 591 | |
Payable upon return of securities loaned | 44,280 | |
Total liabilities | 53,050 | |
Net Assets | $ | 1,409,209 |
See accompanying notes which are an integral part of the financial statements.
552 Russell Global Infrastructure Fund
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Russell Global Infrastructure Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 67 | |
Accumulated net realized gain (loss) | 10,602 | ||
Unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | 84,589 | ||
Futures contracts | 738 | ||
Foreign currency-related transactions | (257 | ) | |
Shares of beneficial interest | 1,232 | ||
Additional paid-in capital | 1,312,238 | ||
Net Assets | $ | 1,409,209 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 11.43 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 12.13 | |
Class A — Net assets | $ | 8,522,376 | |
Class A — Shares outstanding ($.01 par value) | 745,860 | ||
Net asset value per share: Class C(#) | $ | 11.38 | |
Class C — Net assets | $ | 7,717,883 | |
Class C — Shares outstanding ($.01 par value) | 677,981 | ||
Net asset value per share: Class E(#) | $ | 11.43 | |
Class E — Net assets | $ | 24,683,033 | |
Class E — Shares outstanding ($.01 par value) | 2,159,544 | ||
Net asset value per share: Class S(#) | $ | 11.44 | |
Class S — Net assets | $ 1,019,450,587 | ||
Class S — Shares outstanding ($.01 par value) | 89,090,078 | ||
Net asset value per share: Class Y(#) | $ | 11.45 | |
Class Y — Net assets | $ | 348,835,452 | |
Class Y — Shares outstanding ($.01 par value) | 30,478,749 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 370 | |
(*) Securities on loan included in investments | $ | 43,053 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund and Russell U.S. Cash Collateral Fund | $ | 72,230 | |
(a) Cash Collateral for Futures | $ | 2,941 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Russell Global Infrastructure Fund 553
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Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 52,165 | |
Dividends from affiliated Russell funds | 38 | ||
Securities lending income | 920 | ||
Less foreign taxes withheld | (3,246 | ) | |
Total investment income | 49,877 | ||
Expenses | |||
Advisory fees | 19,669 | ||
Administrative fees | 750 | ||
Custodian fees | 545 | ||
Distribution fees - Class A | 23 | ||
Distribution fees - Class C | 67 | ||
Transfer agent fees - Class A | 19 | ||
Transfer agent fees - Class C | 17 | ||
Transfer agent fees - Class E | 50 | ||
Transfer agent fees - Class S | 2,235 | ||
Transfer agent fees - Class Y | 18 | ||
Professional fees | 130 | ||
Registration fees | 133 | ||
Shareholder servicing fees - Class C | 22 | ||
Shareholder servicing fees - Class E | 62 | ||
Trustees’ fees | 44 | ||
Printing fees | 275 | ||
Miscellaneous | 50 | ||
Expenses before reductions | 24,109 | ||
Expense reductions | (5,425 | ) | |
Net expenses | 18,684 | ||
Net investment income (loss) | 31,193 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | 32,258 | ||
Futures contracts | 2,002 | ||
Foreign currency-related transactions | (5,777 | ) | |
Net realized gain (loss) | 28,483 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | (110,391 | ) | |
Futures contracts | (612 | ) | |
Foreign currency-related transactions | 618 | ||
Net change in unrealized appreciation (depreciation) | (110,385 | ) | |
Net realized and unrealized gain (loss) | (81,902 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (50,709 | ) |
See accompanying notes which are an integral part of the financial statements.
554 Russell Global Infrastructure Fund
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Russell Global Infrastructure Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 31,193 | $ | 34,542 | ||
Net realized gain (loss) | 28,483 | 116,367 | ||||
Net change in unrealized appreciation (depreciation) | (110,385 | ) | 58,902 | |||
Net increase (decrease) in net assets from operations | (50,709 | ) | 209,811 | |||
Distributions | ||||||
From net investment income | ||||||
Class A | (155 | ) | (172 | ) | ||
Class C | (93 | ) | (102 | ) | ||
Class E | (413 | ) | (615 | ) | ||
Class S | (21,486 | ) | (24,417 | ) | ||
Class Y | (8,564 | ) | (11,314 | ) | ||
From net realized gain | ||||||
Class A | (673 | ) | (389 | ) | ||
Class C | (636 | ) | (314 | ) | ||
Class E | (1,948 | ) | (1,138 | ) | ||
Class S | (83,712 | ) | (39,513 | ) | ||
Class Y | (31,985 | ) | (22,036 | ) | ||
Net decrease in net assets from distributions | (149,665 | ) | (100,010 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (162,926 | ) | 444,174 | |||
Total Net Increase (Decrease) in Net Assets | (363,300 | ) | 553,975 | |||
Net Assets | ||||||
Beginning of period | 1,772,509 | 1,218,534 | ||||
End of period | $ | 1,409,209 | $ | 1,772,509 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 67 | $ | 1,853 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Infrastructure Fund 555
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Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 95 | $ | 1,140 | 286 | $ | 3,616 | ||||||
Proceeds from reinvestment of distributions | 68 | 810 | 46 | 549 | ||||||||
Payments for shares redeemed | (183 | ) | (2,165 | ) | (179 | ) | (2,262 | ) | ||||
Net increase (decrease) | (20 | ) | (215 | ) | 153 | 1,903 | ||||||
Class C | ||||||||||||
Proceeds from shares sold | 140 | 1,679 | 306 | 3,837 | ||||||||
Proceeds from reinvestment of distributions | 61 | 727 | 35 | 413 | ||||||||
Payments for shares redeemed | (233 | ) | (2,703 | ) | (112 | ) | (1,392 | ) | ||||
Net increase (decrease) | (32 | ) | (297 | ) | 229 | 2,858 | ||||||
Class E | ||||||||||||
Proceeds from shares sold | 458 | 5,168 | 1,185 | 14,168 | ||||||||
Proceeds from reinvestment of distributions | 186 | 2,205 | 137 | 1,639 | ||||||||
Payments for shares redeemed | (718 | ) | (8,442 | ) | (861 | ) | (11,157 | ) | ||||
Net increase (decrease) | (74 | ) | (1,069 | ) | 461 | 4,650 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 20,377 | 244,604 | 48,590 | 588,704 | ||||||||
Proceeds from reinvestment of distributions | 8,728 | 103,764 | 5,180 | 62,277 | ||||||||
Payments for shares redeemed | (36,114 | ) | (430,506 | ) | (18,904 | ) | (238,015 | ) | ||||
Net increase (decrease) | (7,009 | ) | (82,138 | ) | 34,866 | 412,966 | ||||||
Class Y | ||||||||||||
Proceeds from shares sold | 1,169 | 13,909 | 10,880 | 131,264 | ||||||||
Proceeds from reinvestment of distributions | 3,410 | 40,549 | 2,793 | 33,350 | ||||||||
Payments for shares redeemed | (11,231 | ) | (133,665 | ) | (11,227 | ) | (142,817 | ) | ||||
Net increase (decrease) | (6,652 | ) | (79,207 | ) | 2,446 | 21,797 | ||||||
Total increase (decrease) | (13,787 | ) | $ | (162,926 | ) | 38,155 | $ | 444,174 |
See accompanying notes which are an integral part of the financial statements.
556 Russell Global Infrastructure Fund
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Russell Investment Company
Russell Global Infrastructure Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | ||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||||
Class A | |||||||||||||||||
October 31, 2015 | 12.93 | .20 | (.62 | ) | (.42 | ) | (.21 | ) | (.87 | ) | |||||||
October 31, 2014 | 12.32 | .23 | 1.27 | 1.50 | (.25 | ) | (.64 | ) | |||||||||
October 31, 2013 | 11.18 | .23 | 1.41 | 1.64 | (.24 | ) | (.26 | ) | |||||||||
October 31, 2012 | 10.11 | .25 | 1.07 | 1.32 | (.25 | ) | —(f) | ||||||||||
October 31, 2011 | 10.42 | .25 | (.22 | ) | .03 | (.26 | ) | (.08 | ) | ||||||||
Class C | |||||||||||||||||
October 31, 2015 | 12.89 | .11 | (.62 | ) | (.51 | ) | (.13 | ) | (.87 | ) | |||||||
October 31, 2014 | 12.30 | .13 | 1.26 | 1.39 | (.16 | ) | (.64 | ) | |||||||||
October 31, 2013 | 11.16 | .15 | 1.41 | 1.56 | (.16 | ) | (.26 | ) | |||||||||
October 31, 2012 | 10.09 | .17 | 1.06 | 1.23 | (.16 | ) | —(f) | ||||||||||
October 31, 2011 | 10.42 | .17 | (.22 | ) | (.05 | ) | (.20 | ) | (.08 | ) | |||||||
Class E | |||||||||||||||||
October 31, 2015 | 12.93 | .20 | (.62 | ) | (.42 | ) | (.21 | ) | (.87 | ) | |||||||
October 31, 2014 | 12.32 | .23 | 1.27 | 1.50 | (.25 | ) | (.64 | ) | |||||||||
October 31, 2013 | 11.18 | .23 | 1.41 | 1.64 | (.24 | ) | (.26 | ) | |||||||||
October 31, 2012 | 10.12 | .24 | 1.07 | 1.31 | (.25 | ) | —(f) | ||||||||||
October 31, 2011 | 10.42 | .28 | (.24 | ) | .04 | (.26 | ) | (.08 | ) | ||||||||
Class S | |||||||||||||||||
October 31, 2015 | 12.94 | .23 | (.62 | ) | (.39 | ) | (.24 | ) | (.87 | ) | |||||||
October 31, 2014 | 12.33 | .26 | 1.27 | 1.53 | (.28 | ) | (.64 | ) | |||||||||
October 31, 2013 | 11.19 | .26 | 1.41 | 1.67 | (.27 | ) | (.26 | ) | |||||||||
October 31, 2012 | 10.13 | .27 | 1.07 | 1.34 | (.28 | ) | —(f) | ||||||||||
October 31, 2011 | 10.42 | .26 | (.19 | ) | .07 | (.28 | ) | (.08 | ) | ||||||||
Class Y | |||||||||||||||||
October 31, 2015 | 12.95 | .25 | (.62 | ) | (.37 | ) | (.26 | ) | (.87 | ) | |||||||
October 31, 2014 | 12.34 | .28 | 1.28 | 1.56 | (.31 | ) | (.64 | ) | |||||||||
October 31, 2013 | 11.19 | .27 | 1.43 | 1.70 | (.29 | ) | (.26 | ) | |||||||||
October 31, 2012 | 10.13 | .29 | 1.07 | 1.36 | (.30 | ) | —(f) | ||||||||||
October 31, 2011 | 10.42 | .27 | (.19 | ) | .08 | (.29 | ) | (.08 | ) | ||||||||
See accompanying notes which are an integral part of the financial statements.
558 Russell Global Infrastructure Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||||
(1.08 | ) | 11.43 | (3.49 | ) | 8,522 | 1.82 | 1.47 | 1.70 | 87 | ||||||||
(.89 | ) | 12.93 | 12.95 | 9,903 | 1.81 | 1.47 | 1.83 | 119 | |||||||||
(.50 | ) | 12.32 | 15.24 | 7,556 | 1.82 | 1.49 | 2.02 | 127 | |||||||||
(.25 | ) | 11.18 | 13.07 | 4,819 | 1.83 | 1.47 | 2.35 | 125 | |||||||||
(.34 | ) | 10.11 | .39 | 4,312 | 1.87 | 1.50 | 2.43 | 145 | |||||||||
(1.00 | ) | 11.38 | (4.23 | ) | 7,718 | 2.57 | 2.22 | .96 | 87 | ||||||||
(.80 | ) | 12.89 | 12.00 | 9,145 | 2.56 | 2.22 | 1.07 | 119 | |||||||||
(.42 | ) | 12.30 | 14.41 | 5,900 | 2.58 | 2.24 | 1.26 | 127 | |||||||||
(.16 | ) | 11.16 | 12.32 | 4,514 | 2.58 | 2.22 | 1.62 | 125 | |||||||||
(.28 | ) | 10.09 | (.48 | ) | 4,338 | 2.62 | 2.25 | 1.62 | 145 | ||||||||
(1.08 | ) | 11.43 | (3.50 | ) | 24,683 | 1.82 | 1.47 | 1.67 | 87 | ||||||||
(.89 | ) | 12.93 | 12.92 | 28,885 | 1.81 | 1.47 | 1.87 | 119 | |||||||||
(.50 | ) | 12.32 | 15.23 | 21,848 | 1.83 | 1.49 | 1.99 | 127 | |||||||||
(.25 | ) | 11.18 | 13.08 | 18,444 | 1.83 | 1.47 | 2.32 | 125 | |||||||||
(.34 | ) | 10.12 | .38 | 14,990 | 1.86 | 1.50 | 2.69 | 145 | |||||||||
(1.11 | ) | 11.44 | (3.25 | ) | 1,019,451 | 1.57 | 1.22 | 1.95 | 87 | ||||||||
(.92 | ) | 12.94 | 13.21 | 1,243,852 | 1.56 | 1.22 | 2.06 | 119 | |||||||||
(.53 | ) | 12.33 | 15.59 | 755,311 | 1.57 | 1.24 | 2.24 | 127 | |||||||||
(.28 | ) | 11.19 | 13.38 | 551,759 | 1.58 | 1.22 | 2.60 | 125 | |||||||||
(.36 | ) | 10.13 | .65 | 460,800 | 1.61 | 1.25 | 2.50 | 145 | |||||||||
(1.13 | ) | 11.45 | (3.07 | ) | 348,835 | 1.37 | 1.04 | 2.13 | 87 | ||||||||
(.95 | ) | 12.95 | 13.39 | 480,724 | 1.36 | 1.04 | 2.28 | 119 | |||||||||
(.55 | ) | 12.34 | 15.79 | 427,919 | 1.37 | 1.06 | 2.33 | 127 | |||||||||
(.30 | ) | 11.19 | 13.58 | 308,901 | 1.39 | 1.06 | 2.79 | 125 | |||||||||
(.37 | ) | 10.13 | .79 | 340,308 | 1.43 | 1.09 | 2.55 | 145 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Infrastructure Fund 559
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Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Global Real Estate Securities Fund - Class A‡ | |||||||
Total | Russell Global Real Estate Securities Fund - Class Y‡‡ | ||||||
Return | |||||||
1 Year | (3.66 | )% | Total | ||||
Return | |||||||
5 Years | 6.10 | %§ | 1 Year | 2.69 | % | ||
10 Years | 4.66 | %§ | 5 Years | 7.83 | %§ | ||
10 Years | 5.67 | %§ | |||||
Russell Global Real Estate Securities Fund - Class C | |||||||
Total | FTSE EPRA/NAREIT Developed Real Estate Index (Net)** | ||||||
Return | |||||||
Total | |||||||
1 Year | 1.46 | % | Return | ||||
5 Years | 6.55 | %§ | 1 Year | 1.84 | % | ||
10 Years | 4.48 | %§ | 5 Years | 7.85 | %§ | ||
10 Years | 5.61 | %§ | |||||
Russell Global Real Estate Securities Fund - Class E | |||||||
Total | Russell Developed Index (Net)*** | ||||||
Return | |||||||
1 Year | 2.25 | % | Return Total | ||||
5 Years | 7.36 | %§ | 1 Year | 1.86 | % | ||
10 Years | 5.26 | %§ | 5 Years | 9.29 | %§ | ||
10 Years | 5.99 | %§ | |||||
Russell Global Real Estate Securities Fund - Class S | Global Real Estate Linked Benchmark**** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 2.51 | % | 1 Year | 1.84 | % | ||
5 Years | 7.63 | %§ | 5 Years | 7.85 | %§ | ||
10 Years | 5.54 | %§ | 10 Years | 5.50 | %§ |
560 Russell Global Real Estate Securities Fund
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Russell Global Real Estate Securities Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Global Real Estate Securities Fund (the “Fund”) | stocks, while larger capitalization stocks outperformed relative to |
employs a multi-manager approach whereby portions of the | smaller companies. With respect to geography, Europe’s strongly |
Fund are allocated to different money manager strategies. Fund | positive returns were significantly ahead of the negative Asia- |
assets not allocated to money managers are managed by Russell | Pacific region, while North America posted flatter results closer |
Investment Management Company (“RIMCo”), the Fund’s | to the index average. With respect to property sectors, the shorter |
advisor. RIMCo may change the allocation of the Fund’s assets | lease duration categories, including self storage and residential, |
among money managers at any time. An exemptive order from the | generally delivered the strongest performance, while the lower- |
Securities and Exchange Commission (“SEC”) permits RIMCo | growth, yield-oriented health care and net lease sectors were |
to engage or terminate a money manager at any time, subject | among the weakest-performing property types. |
to approval by the Fund’s Board, without a shareholder vote. | |
Pursuant to the terms of the exemptive order, the Fund is required | How did the investment strategies and techniques employed |
to notify its shareholders within 90 days of when a money manager | by the Fund and its money managers affect its benchmark- |
begins providing services. As of October 31, 2015, the Fund had | relative performance? |
three money managers. | The Fund employs discretionary money managers. The Fund’s |
discretionary money managers select the individual portfolio | |
What is the Fund’s investment objective? | securities for the assets assigned to them. Fund assets not |
The Fund seeks to provide current income and long term capital | allocated to discretionary money managers include the Fund’s |
growth. | liquidity reserves and assets which may be managed directly |
How did the Fund perform relative to its benchmark for the | by RIMCo to effect the Fund’s investment strategies and/or to |
fiscal year ended October 31, 2015? | actively manage the Fund’s overall exposures by investing in |
securities or other instruments that RIMCo believes will achieve | |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | the desired risk/return profile for the Fund. |
Class C, Class E, Class S and Class Y Shares gained 2.22%, 1.46%, | |
2.25%, 2.51%, and 2.69%, respectively. This is compared to the | Cohen & Steers Capital Management, Inc. (“Cohen”) outperformed |
Fund’s benchmark, the FTSE EPRA/NAREIT Developed Real | the Fund’s benchmark for the fiscal year. Cohen seeks to generate |
Estate Index (Net), which gained 1.84% during the same period. | excess returns through a combination of bottom-up stock |
The Fund’s performance includes operating expenses, whereas | selection and top-down regional allocation decisions. The key |
index returns are unmanaged and do not include expenses of any | driver of performance was property sector allocation within the |
kind. | U.S. Overweight positions in the self storage, and residential |
sectors were beneficial. Overweight positioning in Asia detracted | |
For the fiscal year ended October 31, 2015, the Morningstar® | from performance. An underweight to the lodging sector, along |
Global Real Estate, a group of funds that Morningstar considers | with stock selection in that sector, also contributed positively to |
to have investment strategies similar to those of the Fund, gained | performance. |
1.01%. This result serves as a peer comparison and is expressed | |
net of operating expenses. | INVESCO Advisers, Inc. (“Invesco”) outperformed the Fund’s |
benchmark for the fiscal year. Invesco manages a broadly | |
How did the market conditions described in the Market | diversified portfolio with a focus on companies that operate in |
Summary report affect the Fund’s performance? | attractive markets, own top-tier assets, have strong management |
For the fiscal year ended October 31, 2015, the global listed | teams, and maintain sound balance sheets. This focus on asset |
property market, as measured by the FTSE EPRA/NAREIT | and balance sheet strength was beneficial during the fiscal year, |
Developed Real Estate Index (Net), delivered a 1.84% return. | as overweight positioning in the highest-quality U.S. residential |
The sector began the fiscal year with stable, modestly positive | and retail real estate investment trusts (“REITs”) drove |
returns that continued through March. This was followed by | outperformance. An underweight to the health care sector was |
five consecutive months of negative index returns in mid-2015, | also a modest contributor to performance, while an underweight |
as macroeconomic concerns in Europe and China overwhelmed | to Continental Europe detracted. |
generally positive real estate fundamental growth. The period then | Morgan Stanley Investment Management, Inc., Morgan Stanley |
ended on a positive note, as global equities rallied in October, and | Investment Management Limited and Morgan Stanley Investment |
property stocks recovered to finish the fiscal year with a positive | Management Company (together, “Morgan Stanley”) outperformed |
total return. | the Fund’s benchmark for the fiscal year. Overweight positions |
Within the global property securities market, companies with | in the U.S. residential sector and larger capitalization retail |
stronger balance sheets tended to outperform more highly levered | REITs drove outperformance for the fiscal year. However, as a |
Russell Global Real Estate Securities Fund 561
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Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
result of Morgan Stanley’s value-oriented process, the portfolio | There were no changes to the Fund’s structure or money manager | |
was overweight to Hong Kong and China, which detracted from | line up during the fiscal year. | |
performance. | ||
Money Managers as of October 31, | ||
During the period, RIMCo continued to utilize a strategy to | 2015 | Styles |
implement regional tilting through the direct purchase of real | Morgan Stanley Investment Management, | |
estate stocks. Using the output from a quantitative model, the | Inc., Morgan Stanley Investment | |
strategy seeks to position the portfolio to meet RIMCo’s overall | Management Limited and Morgan Stanley | |
preferred positioning with respect to regional exposures, while | Investment Management Company | Value |
optimizing the portfolio to minimize tracking error relative to the | Cohen & Steers Capital Management, Inc. | Market-Oriented |
Fund’s money manager portfolios. The strategy outperformed | INVESCO Advisers, Inc. which acts as a | |
relative to the Fund’s benchmark as a result of underweight | money manager to the Fund | |
positions in Canada, Singapore and the U.S. health care sector. | through its INVESCO Real Estate division | Market-Oriented |
The views expressed in this report reflect those of the portfolio | ||
During the period, the Fund used index futures and swap | managers only through the end of the period covered by | |
contracts to equitize the Fund’s cash. The use of these derivatives | the report. These views do not necessarily represent the | |
had a modestly positive impact on performance, as equity markets | views of RIMCo or any other person in RIMCo or any other | |
delivered positive returns ahead of cash. | affiliated organization. These views are subject to change | |
Fair value pricing adjustments on the last business day of | at any time based upon market conditions or other events, | |
the period detracted from the Fund’s benchmark-relative | and RIMCo disclaims any responsibility to update the views | |
performance because the Fund’s index does not use fair value | contained herein. These views should not be relied on as | |
pricing adjustments. | investment advice and, because investment decisions for | |
a Russell Investment Company (“RIC”) Fund are based on | ||
Describe any changes to the Fund’s structure or the money | numerous factors, should not be relied on as an indication | |
manager line-up. | of investment decisions of any RIC Fund. |
* Assumes initial investment on November 1, 2005.
** FTSE EPRA/NAREIT Developed Real Estate Index (Net) (date of inception February 18, 2005) is an index composed of all the data based on the last closing
price of the month for all tax-qualified REITs listed on the New York Stock Exchange, American Stock Exchange, and the NASDAQ National Market System.
The data is market value-weighted. The total return calculation is based upon whether it is 1-month, 3-months or 12-months. Only those REITs listed for the
entire period are used in the total return calculation.
*** The Russell Developed Index (Net) measures the performance of the investable securities in developed countries globally.
**** The Global Real Estate Linked Benchmark provides a means to compare the Fund’s average annual returns to a secondary benchmark that takes into account
historical changes in the Fund’s primary benchmark. The Global Real Estate Linked Benchmark represents the returns of the FSTE NAREIT Equity REIT
Index through September 30, 2010 and the returns of the FTSE EPRA/NAREIT Developed Real Estate Index (net) thereafter.
‡ The Fund first issued Class A Shares on March 1, 2007. The returns shown for Class A Shares prior to that date are the returns of Class E Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%. Annual returns for each Class will differ only to
the extent that the Class A Shares do not have the same expenses as Class E Shares.
‡‡ The Fund first issued Class Y Shares on September 29, 2008. The returns shown for Class Y Shares prior to that date are the returns of the Fund’s Class S
Shares. Class Y Shares will have substantially similar annual returns as the Class S Shares because the Shares of each Class are invested in the same portfolio
of securities. Annual returns for each Class will differ only to the extent that the Class Y Shares do not have the same expenses as the Class S Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
562 Russell Global Real Estate Securities Fund
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Russell Global Real Estate Securities Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 984.30 | $ | 1,018.25 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 6.90 | $ | 7.02 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.38% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). | |||||
and actual expenses. You may use the information in this column, | ||||||
together with the amount you invested, to estimate the expenses | Hypothetical | |||||
Performance (5% | ||||||
that you paid over the period. Simply divide your account value by | Actual | return before | ||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Class C | Performance | expenses) | |||
= 8.6), then multiply the result by the number in the first column | Beginning Account Value | |||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
the expenses you paid on your account during this period. | October 31, 2015 | $ | 980.90 | $ | 1,014.47 | |
Expenses Paid During Period* | $ | 10.63 | $ | 10.82 | ||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | * Expenses are equal to the Fund's annualized expense ratio of 2.13% | |||||
Performance (5% return before expenses)” provides information | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
about hypothetical account values and hypothetical expenses | year period). | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | Hypothetical | |||||
actual return. The hypothetical account values and expenses | Performance (5% | |||||
Actual | return before | |||||
may not be used to estimate the actual ending account balance or | Class E | Performance | expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
to compare the ongoing costs of investing in the Fund and other | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
funds. To do so, compare this 5% hypothetical example with the | Ending Account Value | |||||
October 31, 2015 | $ | 984.50 | $ | 1,018.25 | ||
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 6.90 | $ | 7.02 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 1.38% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
Russell Global Real Estate Securities Fund 563
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Russell Global Real Estate Securities Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 985.90 | $ | 1,019.51 | |
Expenses Paid During Period* | $ | 5.66 | $ | 5.75 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.13% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class Y | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 986.60 | $ | 1,020.47 | |
Expenses Paid During Period* | $ | 4.71 | $ | 4.79 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.94% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
564 Russell Global Real Estate Securities Fund
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Russell Global Real Estate Securities Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Common Stocks - 97.6% | Mercialys SA(ö) | 118,048 | 2,712 | ||||||||
Australia – 5.0% | Unibail-Rodamco SE(ö) | 66,212 | 18,474 | ||||||||
BGP Holdings PLC(Å)(Æ) | 4,619,419 | — | 58,195 | ||||||||
Dexus Property Group(ö) | 264,155 | 1,459 | |||||||||
Federation Centres(ö) | 7,929,466 | 16,461 | Germany - 2.4% | ||||||||
Goodman Group(ö) | 1,675,893 | 7,257 | alstria office REIT-AG(Æ)(ö) | 279,527 | 3,896 | ||||||
GPT Group (The)(ö) | 777,532 | 2,631 | Deutsche EuroShop AG | 10,636 | 513 | ||||||
Investa Office Fund(ö) | 211,798 | 610 | Deutsche Wohnen AG | 575,488 | 16,227 | ||||||
Mirvac Group(ö) | 1,286,499 | 1,657 | LEG Immobilien AG(Æ) | 93,797 | 7,489 | ||||||
Scentre Group(ö) | 6,525,261 | 19,272 | Vonovia SE | 290,738 | 9,686 | ||||||
Shopping Centres Australasia Property | 37,811 | ||||||||||
Group(ö) | 93,029 | 137 | |||||||||
Stockland(ö) | 2,416,852 | 6,982 | Hong Kong - 9.1% | ||||||||
Westfield Corp.(ö) | 3,083,938 | 22,550 | Champion(Æ)(ö) | 983,012 | 510 | ||||||
79,016 | Cheung Kong Property Holdings, Ltd. | 2,839,000 | 19,828 | ||||||||
China Overseas Land & Investment, Ltd. | 98,000 | 316 | |||||||||
Austria - 0.0% | Hang Lung Properties, Ltd. - ADR | 430,000 | 1,050 | ||||||||
Atrium European Real Estate, Ltd.(Æ) | 145,530 | 604 | Henderson Land Development Co., Ltd. | 728,222 | 4,635 | ||||||
Hongkong Land Holdings, Ltd. | 3,390,867 | 25,386 | |||||||||
Brazil - 0.1% | Hysan Development Co., Ltd. | 1,247,000 | 5,520 | ||||||||
BR Malls Participacoes SA | 194,700 | 565 | Kerry Properties, Ltd. | 688,000 | 2,034 | ||||||
BR Properties SA | 168,000 | 514 | Link Real Estate Investment True (The) | ||||||||
Iguatemi Empresa de Shopping Centers | (ö) | 3,052,797 | 18,135 | ||||||||
SA | 121,400 | 671 | New World Development Co., Ltd. | 12,115,197 | 12,916 | ||||||
1,750 | Sino Land Co., Ltd. | 536,000 | 826 | ||||||||
Sun Hung Kai Properties, Ltd. | 2,722,982 | 36,339 | |||||||||
Canada - 1.3% | Swire Properties, Ltd. | 3,379,800 | 10,124 | ||||||||
Allied Properties Real Estate Investment | Wharf Holdings, Ltd. (The) | 955,000 | 5,670 | ||||||||
Trust(ö) | 168,500 | 4,624 | 143,289 | ||||||||
Boardwalk Real Estate Investment | |||||||||||
Trust(Ñ)(ö) | 28,090 | 1,154 | Ireland - 0.2% | ||||||||
Brookfield Canada Office Properties(Ñ) | Green REIT PLC(ö) | 1,515,206 | 2,620 | ||||||||
(ö) | 48,652 | 1,022 | Hibernia REIT PLC(ö) | 569,262 | 843 | ||||||
Canadian Apartment Properties(ö) | 9,317 | 192 | 3,463 | ||||||||
Canadian Real Estate Investment | |||||||||||
Trust(ö) | 86,500 | 2,817 | Italy - 0.4% | ||||||||
Crombie Real Estate Investment Trust(ö) | 61,534 | 611 | Beni Stabili SpA SIIQ(Ñ)(ö) | 6,903,404 | 5,678 | ||||||
First Capital Realty, Inc. Class A(Ñ) | 222,528 | 3,296 | |||||||||
H&R Real Estate Investment Trust(Ñ)(ö) | 171,500 | 2,752 | Japan - 10.3% | ||||||||
RioCan Real Estate Investment Trust(Ñ) | Activia Properties, Inc.(ö) | 960 | 4,058 | ||||||||
(ö) | 218,844 | 4,268 | Advance Residence Investment Corp.(ö) | 502 | 1,065 | ||||||
Smart Real Estate Investment Trust(ö) | 17,652 | 419 | Aeon Mall Co., Ltd. | 252,500 | 4,216 | ||||||
21,155 | Daiwa House REIT Investment Corp.(ö) | 147 | 589 | ||||||||
Daiwa Office Investment Corp.(ö) | 110 | 558 | |||||||||
China - 0.1% | Frontier Real Estate Investment Corp.(ö) | 52 | 210 | ||||||||
China Overseas Property Holdings, Ltd. | GLP J-Reit(ö) | 4,871 | 4,842 | ||||||||
(Æ) | 32,666 | 6 | Hulic Co., Ltd. | 113,100 | 1,053 | ||||||
China Resources Land, Ltd. | 104,000 | 269 | Hulic Reit, Inc.(ö) | 4,506 | 5,895 | ||||||
Dalian Wanda Commercial Properties | Japan Hotel REIT Investment Corp.(ö) | 5,585 | 3,869 | ||||||||
Co., Ltd. Class H(Þ) | 76,700 | 511 | Japan Logistics Fund, Inc.(ö) | 38 | 70 | ||||||
786 | Japan Real Estate Investment Corp.(ö) | 1,641 | 7,579 | ||||||||
Japan Retail Fund Investment Corp.(ö) | 5,036 | 9,738 | |||||||||
Finland - 0.2% | Kenedix Office Investment Corp. Class | ||||||||||
Citycon OYJ(Æ) | 846,385 | 2,226 | A(ö) | 61 | 278 | ||||||
Sponda OYJ | 256,091 | 1,087 | Kenedix Retail REIT Corp.(ö) | 958 | 1,868 | ||||||
3,313 | Mitsubishi Estate Co., Ltd. | 1,880,000 | 40,193 | ||||||||
Mitsui Fudosan Co., Ltd. | 1,577,350 | 42,758 | |||||||||
France - 3.7% | Mori Hills REIT Investment Corp. Class | ||||||||||
Fonciere Des Regions(ö) | 72,511 | 6,823 | |||||||||
Gecina SA(ö) | 15,047 | 1,922 | A(ö) | 4,086 | 5,050 | ||||||
Icad, Inc.(ö) | 77,933 | 5,765 | Nippon Building Fund, Inc.(ö) | 620 | 2,938 | ||||||
Klepierre - GDR(ö) | 474,818 | 22,499 | Nippon Prologis REIT, Inc.(ö) | 753 | 1,317 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Real Estate Securities Fund 565
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Russell Global Real Estate Securities Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Nomura Real Estate Master Fund, Inc. | British Land Co. PLC (The)(ö) | 554,723 | 7,433 | |||||||
(Æ)(ö) | 2,786 | 3,530 | Capital & Counties Properties PLC | 154,433 | 1,056 | |||||
NTT Urban Development Corp. | 94,200 | 932 | Capital & Regional PLC(ö) | 1,024,624 | 1,105 | |||||
Orix JREIT, Inc.(ö) | 2,601 | 3,494 | Derwent London PLC(ö) | 196,741 | 11,751 | |||||
Premier Investment Corp.(ö) | 135 | 132 | Great Portland Estates PLC(ö) | 794,938 | 10,889 | |||||
Sumitomo Realty & Development Co., | Hammerson PLC(ö) | 1,601,669 | 15,692 | |||||||
Ltd. | 240,000 | 7,869 | Helical Bar PLC | 16,633 | 113 | |||||
Tokyo Tatemono Co., Ltd. | 142,300 | 1,760 | Intu Properties PLC Class H(ö) | 426,366 | 2,269 | |||||
Tokyu Fudosan Holdings Corp. | 351,000 | 2,459 | Kennedy Wilson Europe Real Estate | |||||||
Tokyu REIT, Inc.(ö) | 113 | 137 | PLC | 94,570 | 1,742 | |||||
United Urban Investment Corp.(ö) | 2,177 | 3,014 | Land Securities Group PLC(ö) | 1,725,176 | 35,558 | |||||
161,471 | LXB Retail Properties PLC(Æ) | 809,284 | 1,147 | |||||||
Segro PLC(ö) | 328,778 | 2,275 | ||||||||
Luxembourg - 0.1% | Shaftesbury PLC(ö) | 69,279 | 1,003 | |||||||
ADO Properties SA(Æ)(Þ) | 31,007 | 792 | ST Modwen Properties PLC | 138,582 | 938 | |||||
UNITE Group PLC (The) | 399,483 | 4,088 | ||||||||
Netherlands - 1.8% | Urban & Civic PLC | 287,260 | 1,214 | |||||||
Eurocommercial Properties NV | 39,507 | 1,884 | Workspace Group PLC(ö) | 85,176 | 1,255 | |||||
NSI NV(ö) | 1,130,249 | 4,920 | 106,774 | |||||||
Wereldhave NV(Ñ)(ö) | 333,266 | 20,769 | ||||||||
27,573 | United States - 52.7% | |||||||||
Acadia Realty Trust(ö) | 26,370 | 867 | ||||||||
Norway - 0.1% | Alexandria Real Estate Equities, Inc.(ö) | 5,099 | 458 | |||||||
Entra ASA(Þ) | 202,228 | 1,718 | American Campus Communities, Inc.(ö) | 171,984 | 6,977 | |||||
Norwegian Property ASA(Æ) | 178,585 | 193 | American Homes 4 Rent Class A(ö) | 98,633 | 1,628 | |||||
1,911 | Apartment Investment & Management | |||||||||
Singapore - 1.7% | Co. Class A(ö) | 321,557 | 12,602 | |||||||
Ascendas Real Estate Investment | AvalonBay Communities, Inc.(ö) | 194,894 | 34,073 | |||||||
Trust(Æ)(ö) | 2,690,200 | 4,574 | Belmond, Ltd. Class A(Æ) | 396,513 | 4,259 | |||||
CapitaLand Commercial Trust, Ltd.(Æ) | BioMed Realty Trust, Inc.(ö) | 158,926 | 3,720 | |||||||
(ö) | 776,400 | 779 | Boston Properties, Inc.(ö) | 200,889 | 25,282 | |||||
CapitaLand Mall Trust Class A(Æ)(ö) | 947,500 | 1,338 | Brixmor Property Group, Inc.(ö) | 428,330 | 10,974 | |||||
CapitaLand, Ltd. | 5,014,900 | 11,032 | Brookdale Senior Living, Inc. Class | |||||||
Global Logistic Properties, Ltd. | 3,601,150 | 5,733 | A(Æ) | 143,646 | 3,004 | |||||
Mapletree Industrial Trust(Æ)(ö) | 2,246,400 | 2,444 | Camden Property Trust(ö) | 218,098 | 16,094 | |||||
UOL Group, Ltd. | 296,280 | 1,386 | Care Capital Properties, Inc.(Æ)(ö) | 139,202 | 4,587 | |||||
27,286 | Chesapeake Lodging Trust(ö) | 125,636 | 3,460 | |||||||
CoreSite Realty Corp. Class A(ö) | 19,900 | 1,094 | ||||||||
Spain - 0.5% | Corporate Office Properties Trust(ö) | 95,501 | 2,197 | |||||||
Hispania Activos Inmobiliarios SA(Æ) | 221,759 | 3,333 | Cousins Properties, Inc.(ö) | 778,245 | 7,814 | |||||
Inmobiliaria Colonial SA | 2,865,240 | 2,122 | CubeSmart(ö) | 29,852 | 830 | |||||
Lar Espana Real Estate Socimi SA(ö) | 13,539 | 143 | CyrusOne, Inc.(ö) | 204,101 | 7,201 | |||||
Merlin Properties Socimi SA(Æ)(ö) | 160,181 | 2,052 | DDR Corp.(ö) | 787,233 | 13,225 | |||||
7,650 | DiamondRock Hospitality Co.(ö) | 456,953 | 5,337 | |||||||
Digital Realty Trust, Inc.(ö) | 13,346 | 987 | ||||||||
Sweden - 0.8% | Douglas Emmett, Inc.(ö) | 325,776 | 9,952 | |||||||
Atrium Ljungberg AB Class B | 49,024 | 760 | Duke Realty Corp.(ö) | 129,138 | 2,673 | |||||
Castellum AB | 182,751 | 2,732 | Education Realty Trust, Inc.(ö) | 151,570 | 5,443 | |||||
Fabege AB | 217,461 | 3,452 | Empire State Realty Trust, Inc. Class | |||||||
Hufvudstaden AB Class A | 186,810 | 2,639 | A(ö) | 638,917 | 11,386 | |||||
Wihlborgs Fastigheter AB | 155,182 | 3,027 | Equinix, Inc.(ö) | 16,200 | 4,806 | |||||
12,610 | Equity LifeStyle Properties, Inc. Class | |||||||||
A(ö) | 56,020 | 3,388 | ||||||||
Switzerland - 0.3% | Equity Residential(ö) | 559,094 | 43,229 | |||||||
Mobimo Holding AG(Æ) | 858 | 185 | Essex Property Trust, Inc.(ö) | 34,143 | 7,527 | |||||
PSP Swiss Property AG(Æ) | 40,489 | 3,521 | Extended Stay America, Inc. | 12,049 | 231 | |||||
Swiss Prime Site AG Class A(Æ) | 7,236 | 553 | Extra Space Storage, Inc.(ö) | 213,598 | 16,926 | |||||
4,259 | Federal Realty Investment Trust(ö) | 57,785 | 8,292 | |||||||
First Industrial Realty Trust, Inc.(ö) | 109,722 | 2,379 | ||||||||
United Kingdom – 6.8% | General Growth Properties, Inc.(ö) | 630,805 | 18,262 | |||||||
Big Yellow Group PLC(ö) | 627,785 | 7,246 | Gramercy Property Trust, Inc.(ö) | 153,843 | 3,489 |
See accompanying notes which are an integral part of the financial statements.
566 Russell Global Real Estate Securities Fund
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Russell Global Real Estate Securities Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||||
Principal | Fair | Principal | Fair | |||||||||
Amount ($) | Value | Amount ($) | Value | |||||||||
or Shares | $ | or Shares | $ | |||||||||
HCP, Inc.(ö) | 253,956 | 9,447 | (cost $34,932) | 34,932 | ||||||||
Healthcare Realty Trust, Inc.(ö) | 359,352 | 9,472 | ||||||||||
Healthcare Trust of America, Inc. Class | Other Securities - 2.1% | |||||||||||
A(ö) | 372,855 | 9,810 | Russell U.S. Cash Collateral Fund(×) | 31,895,623 | (8) | 31,896 | ||||||
Hilton Worldwide Holdings, Inc. | 497,064 | 12,422 | Total Other Securities | |||||||||
Host Hotels & Resorts, Inc.(ö) | 1,214,673 | 21,050 | (cost $31,896) | 31,896 | ||||||||
Hudson Pacific Properties, Inc.(ö) | 324,715 | 9,277 | ||||||||||
InfraREIT, Inc.(ö) | 101,548 | 2,425 | Total Investments 101.9% | |||||||||
Kilroy Realty Corp.(ö) | 227,714 | 14,993 | ||||||||||
Kimco Realty Corp.(ö) | 269,573 | 7,216 | (identified cost $1,329,282) | 1,599,290 | ||||||||
La Quinta Holdings, Inc.(Æ) | 37,622 | 570 | ||||||||||
LaSalle Hotel Properties(ö) | 161,460 | 4,748 | Other Assets and Liabilities, Net | |||||||||
Liberty Property Trust(ö) | 99,963 | 3,401 | - | (1.9%) | (29,436 | ) | ||||||
Macerich Co. (The)(ö) | 138,660 | 11,750 | Net Assets - 100.0% | 1,569,854 | ||||||||
Mack-Cali Realty Corp.(ö) | 114,861 | 2,499 | ||||||||||
Mid-America Apartment Communities, | ||||||||||||
Inc.(ö) | 160,951 | 13,711 | ||||||||||
National Health Investors, Inc.(ö) | 600 | 35 | ||||||||||
National Retail Properties, Inc.(ö) | 92,070 | 3,499 | ||||||||||
Omega Healthcare Investors, Inc.(ö) | 334,557 | 11,549 | ||||||||||
Paramount Group, Inc.(ö) | 93,146 | 1,655 | ||||||||||
Prologis, Inc.(ö) | 528,784 | 22,595 | ||||||||||
Public Storage(ö) | 179,665 | 41,226 | ||||||||||
QTS Realty Trust, Inc. Class A(ö) | 126,621 | 5,446 | ||||||||||
Realty Income Corp.(ö) | 135,523 | 6,703 | ||||||||||
Regency Centers Corp.(ö) | 329,627 | 22,401 | ||||||||||
Retail Opportunity Investments Corp.(ö) | 313,732 | 5,688 | ||||||||||
Rexford Industrial Realty, Inc.(ö) | 289,659 | 4,388 | ||||||||||
RLJ Lodging Trust(ö) | 157,137 | 3,943 | ||||||||||
Senior Housing Properties Trust(ö) | 160,417 | 2,437 | ||||||||||
Simon Property Group, Inc.(ö) | 523,494 | 105,463 | ||||||||||
SL Green Realty Corp.(ö) | 78,216 | 9,278 | ||||||||||
Sovran Self Storage, Inc.(ö) | 21,379 | 2,135 | ||||||||||
Spirit Realty Capital, Inc.(ö) | 546,306 | 5,561 | ||||||||||
Starwood Hotels & Resorts Worldwide, | ||||||||||||
Inc. | 101,760 | 8,128 | ||||||||||
Starwood Waypoint Residential Trust(ö) | 147,856 | 3,637 | ||||||||||
STORE Capital Corp.(ö) | 127,747 | 2,896 | ||||||||||
Strategic Hotels & Resorts, Inc.(Æ)(ö) | 33,608 | 474 | ||||||||||
Sun Communities, Inc.(ö) | 133,022 | 8,915 | ||||||||||
Sunstone Hotel Investors, Inc.(ö) | 345,857 | 5,001 | ||||||||||
Tanger Factory Outlet Centers, Inc.(ö) | 172,117 | 6,015 | ||||||||||
Terreno Realty Corp.(ö) | 13,280 | 297 | ||||||||||
UDR, Inc.(ö) | 353,393 | 12,178 | ||||||||||
Ventas, Inc.(ö) | 254,161 | 13,654 | ||||||||||
Vornado Realty Trust(ö) | 400,225 | 40,243 | ||||||||||
Washington Real Estate Investment | ||||||||||||
Trust(Ñ)(ö) | 153,700 | 4,151 | ||||||||||
Weingarten Realty Investors(ö) | 244,819 | 8,755 | ||||||||||
Welltower, Inc.(Æ)(ö) | 251,676 | 16,326 | ||||||||||
WP GLIMCHER, Inc.(ö) | 283,005 | 3,289 | ||||||||||
Xenia Hotels & Resorts, Inc.(Ñ)(ö) | 96,438 | 1,671 | ||||||||||
827,076 | ||||||||||||
Total Common Stocks | ||||||||||||
(cost $1,262,454) | 1,532,462 | |||||||||||
Short-Term Investments - 2.2% | ||||||||||||
United States - 2.2% | ||||||||||||
Russell U.S. Cash Management Fund | 34,931,548 | (8) | 34,932 | |||||||||
Total Short-Term Investments |
See accompanying notes which are an integral part of the financial statements.
Russell Global Real Estate Securities Fund 567
Russell Investment Company
Russell Global Real Estate Securities Fund
Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
0.0% | ||||||||||||
BGP Holdings PLC | 08/06/09 | AUD | 4,619,419 | — | — | — | ||||||
— | ||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
568 Russell Global Real Estate Securities Fund
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Russell Global Real Estate Securities Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
Dow Jones U.S. Real Estate Index Futures | 545 | USD | 16,029 | 12/15 | 612 | ||
FTSE/EPRA Europe Index Futures | 540 | EUR | 12,604 | 12/15 | 1,075 | ||
Hang Seng Index Futures | 17 | HKD | 19,281 | 11/15 | (46 | ) | |
MSCI Singapore Index ETS Futures | 24 | SGD | 805 | 11/15 | (12 | ) | |
S&P/TSX 50 Index Futures | 7 | CAD | 1,109 | 12/15 | (12 | ) | |
SPI 200 Index Futures | 18 | AUD | 2,356 | 12/15 | 35 | ||
TOPIX Index Futures | 28 | JPY | 436,380 | 12/15 | 208 | ||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 1,860 |
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Bank of America | USD | 118 | EUR | 108 | 11/02/15 | 1 | |||
Bank of America | USD | 58 | GBP | 38 | 11/02/15 | — | |||
Bank of America | USD | 58 | HKD | 453 | 11/02/15 | — | |||
Bank of America | AUD | 100 | USD | 70 | 12/16/15 | (2 | ) | ||
Bank of America | AUD | 100 | USD | 70 | 12/16/15 | (1 | ) | ||
Bank of America | AUD | 100 | USD | 70 | 12/16/15 | (1 | ) | ||
Bank of America | AUD | 120 | USD | 85 | 12/16/15 | — | |||
Bank of America | AUD | 150 | USD | 106 | 12/16/15 | (1 | ) | ||
Bank of America | AUD | 500 | USD | 355 | 12/16/15 | (1 | ) | ||
Bank of America | CAD | 80 | USD | 61 | 12/16/15 | — | |||
Bank of America | CAD | 100 | USD | 75 | 12/16/15 | (2 | ) | ||
Bank of America | CAD | 200 | USD | 151 | 12/16/15 | (2 | ) | ||
Bank of America | EUR | 46 | USD | 50 | 11/02/15 | — | |||
Bank of America | EUR | 95 | USD | 104 | 11/02/15 | (1 | ) | ||
Bank of America | EUR | 56 | USD | 62 | 11/03/15 | — | |||
Bank of America | EUR | 150 | USD | 170 | 12/16/15 | 5 | |||
Bank of America | EUR | 200 | USD | 228 | 12/16/15 | 8 | |||
Bank of America | EUR | 300 | USD | 336 | 12/16/15 | 6 | |||
Bank of America | EUR | 500 | USD | 562 | 12/16/15 | 12 | |||
Bank of America | EUR | 600 | USD | 675 | 12/16/15 | 15 | |||
Bank of America | EUR | 650 | USD | 728 | 12/16/15 | 12 | |||
Bank of America | EUR | 800 | USD | 882 | 12/16/15 | 1 | |||
Bank of America | EUR | 1,000 | USD | 1,115 | 12/16/15 | 15 | |||
Bank of America | EUR | 1,300 | USD | 1,457 | 12/16/15 | 27 | |||
Bank of America | HKD | 445 | USD | 57 | 11/02/15 | — | |||
Bank of America | HKD | 800 | USD | 103 | 12/16/15 | — | |||
Bank of America | HKD | 800 | USD | 103 | 12/16/15 | — | |||
Bank of America | HKD | 800 | USD | 103 | 12/16/15 | — | |||
Bank of America | HKD | 2,000 | USD | 258 | 12/16/15 | — | |||
Bank of America | HKD | 2,000 | USD | 258 | 12/16/15 | — | |||
Bank of America | JPY | 10,000 | USD | 83 | 12/16/15 | 1 | |||
Bank of America | JPY | 15,000 | USD | 124 | 12/16/15 | (1 | ) | ||
Bank of America | JPY | 15,000 | USD | 124 | 12/16/15 | — | |||
Bank of America | JPY | 20,000 | USD | 168 | 12/16/15 | 2 | |||
Bank of America | JPY | 20,000 | USD | 167 | 12/16/15 | 1 | |||
Bank of America | JPY | 30,000 | USD | 250 | 12/16/15 | 1 | |||
Bank of America | JPY | 35,000 | USD | 291 | 12/16/15 | 1 | |||
Bank of America | JPY | 60,000 | USD | 499 | 12/16/15 | 1 | |||
Bank of America | SGD | 120 | USD | 84 | 12/16/15 | (2 | ) | ||
Bank of America | SGD | 200 | USD | 140 | 12/16/15 | (2 | ) | ||
Bank of America | SGD | 200 | USD | 141 | 12/16/15 | (2 | ) | ||
Bank of Montreal | USD | 411 | AUD | 588 | 12/16/15 | 8 | |||
Bank of Montreal | USD | 201 | CAD | 266 | 12/16/15 | 2 | |||
Bank of Montreal | USD | 2,774 | EUR | 2,483 | 12/16/15 | (40 | ) | ||
Bank of Montreal | USD | 498 | HKD | 3,861 | 12/16/15 | — | |||
Bank of Montreal | USD | 770 | JPY | 93,089 | 12/16/15 | 2 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Real Estate Securities Fund 569
Russell Investment Company
Russell Global Real Estate Securities Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Bank of Montreal | USD | 190 | SGD | 270 | 12/16/15 | 2 | |||
Bank of New York | USD | 1,704 | EUR | 1,500 | 12/16/15 | (54 | ) | ||
Bank of New York | USD | 258 | HKD | 2,000 | 12/16/15 | — | |||
Bank of New York | USD | 501 | JPY | 60,000 | 12/16/15 | (3 | ) | ||
BNP Paribas | USD | 411 | AUD | 588 | 12/16/15 | 8 | |||
BNP Paribas | USD | 201 | CAD | 266 | 12/16/15 | 2 | |||
BNP Paribas | USD | 2,777 | EUR | 2,483 | 12/16/15 | (43 | ) | ||
BNP Paribas | USD | 498 | HKD | 3,861 | 12/16/15 | — | |||
BNP Paribas | USD | 770 | JPY | 93,089 | 12/16/15 | 1 | |||
BNP Paribas | USD | 190 | SGD | 270 | 12/16/15 | 2 | |||
Citigroup | JPY | 10,000 | USD | 83 | 12/16/15 | — | |||
Commonwealth Bank of Australia | USD | 215 | AUD | 300 | 12/16/15 | (1 | ) | ||
Commonwealth Bank of Australia | USD | 76 | CAD | 100 | 12/16/15 | 1 | |||
Commonwealth Bank of Australia | USD | 1,132 | EUR | 1,000 | 12/16/15 | (32 | ) | ||
Commonwealth Bank of Australia | USD | 155 | HKD | 1,200 | 12/16/15 | — | |||
Commonwealth Bank of Australia | USD | 418 | JPY | 50,000 | 12/16/15 | (3 | ) | ||
Commonwealth Bank of Australia | AUD | 100 | USD | 71 | 12/16/15 | — | |||
Commonwealth Bank of Australia | EUR | 450 | USD | 508 | 12/16/15 | 13 | |||
Commonwealth Bank of Australia | JPY | 10,000 | USD | 83 | 12/16/15 | — | |||
HSBC | USD | 411 | AUD | 588 | 12/16/15 | 8 | |||
HSBC | USD | 201 | CAD | 266 | 12/16/15 | 2 | |||
HSBC | USD | 2,774 | EUR | 2,483 | 12/16/15 | (41 | ) | ||
HSBC | USD | 498 | HKD | 3,861 | 12/16/15 | — | |||
HSBC | USD | 770 | JPY | 93,089 | 12/16/15 | 2 | |||
HSBC | USD | 190 | SGD | 270 | 12/16/15 | 2 | |||
Morgan Stanley | AUD | 150 | USD | 105 | 12/16/15 | (2 | ) | ||
Morgan Stanley | CAD | 100 | USD | 75 | 12/16/15 | (1 | ) | ||
Morgan Stanley | EUR | 200 | USD | 224 | 12/16/15 | 4 | |||
Morgan Stanley | HKD | 1,000 | USD | 129 | 12/16/15 | — | |||
Morgan Stanley | JPY | 25,000 | USD | 209 | 12/16/15 | 1 | |||
Royal Bank of Canada | USD | 411 | AUD | 588 | 12/16/15 | 8 | |||
Royal Bank of Canada | USD | 201 | CAD | 266 | 12/16/15 | 2 | |||
Royal Bank of Canada | USD | 2,775 | EUR | 2,483 | 12/16/15 | (41 | ) | ||
Royal Bank of Canada | USD | 498 | HKD | 3,861 | 12/16/15 | — | |||
Royal Bank of Canada | USD | 770 | JPY | 93,089 | 12/16/15 | 2 | |||
Royal Bank of Canada | USD | 190 | SGD | 270 | 12/16/15 | 2 | |||
Royal Bank of Canada | AUD | 100 | USD | 72 | 12/16/15 | 1 | |||
Royal Bank of Canada | EUR | 400 | USD | 450 | 12/16/15 | 10 | |||
Royal Bank of Canada | EUR | 500 | USD | 559 | 12/16/15 | 9 | |||
Royal Bank of Canada | JPY | 15,000 | USD | 125 | 12/16/15 | 1 | |||
Royal Bank of Canada | SGD | 100 | USD | 71 | 12/16/15 | (1 | ) | ||
State Street | USD | 139 | AUD | 195 | 11/02/15 | — | |||
State Street | USD | 345 | AUD | 485 | 11/02/15 | 1 | |||
State Street | USD | 206 | AUD | 291 | 11/04/15 | 1 | |||
State Street | USD | 415 | AUD | 585 | 11/04/15 | 3 | |||
State Street | USD | 207 | AUD | 290 | 11/05/15 | — | |||
State Street | USD | 415 | AUD | 581 | 11/05/15 | (1 | ) | ||
State Street | USD | 724 | AUD | 1,000 | 12/16/15 | (13 | ) | ||
State Street | USD | 346 | CAD | 450 | 12/16/15 | (2 | ) | ||
State Street | USD | 1,268 | EUR | 1,155 | 11/02/15 | 1 | |||
State Street | USD | 113 | EUR | 103 | 11/03/15 | — | |||
State Street | USD | 746 | EUR | 678 | 11/03/15 | (1 | ) | ||
State Street | USD | 6,004 | EUR | 5,300 | 12/16/15 | (173 | ) | ||
State Street | USD | 36 | HKD | 278 | 11/02/15 | — | |||
State Street | USD | 45 | HKD | 347 | 11/03/15 | — | |||
State Street | USD | 103 | HKD | 799 | 11/03/15 | — | |||
State Street | USD | 135 | HKD | 1,050 | 11/03/15 | — | |||
State Street | USD | 474 | HKD | 3,671 | 11/03/15 | — | |||
State Street | USD | 1,097 | HKD | 8,500 | 12/16/15 | — | |||
State Street | USD | 220 | JPY | 26,559 | 11/02/15 | 1 | |||
State Street | USD | 41 | JPY | 4,996 | 11/04/15 | — | |||
State Street | USD | 77 | JPY | 9,259 | 11/04/15 | — | |||
State Street | USD | 355 | JPY | 42,860 | 11/04/15 | 1 |
See accompanying notes which are an integral part of the financial statements.
570 Russell Global Real Estate Securities Fund
Russell Investment Company
Russell Global Real Estate Securities Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
State Street | USD | 30 | JPY | 3,626 | 11/05/15 | — | |
State Street | USD | 74 | JPY | 8,955 | 11/05/15 | — | |
State Street | USD | 184 | JPY | 22,203 | 11/05/15 | — | |
State Street | USD | 1,504 | JPY | 180,000 | 12/16/15 | (11 | ) |
State Street | USD | 6 | SEK | 50 | 11/02/15 | — | |
State Street | USD | 255 | SGD | 357 | 11/04/15 | — | |
State Street | USD | 284 | SGD | 400 | 12/16/15 | 1 | |
State Street | AUD | 355 | USD | 252 | 11/02/15 | (1 | ) |
State Street | AUD | 563 | USD | 398 | 11/04/15 | (3 | ) |
State Street | AUD | 579 | USD | 414 | 11/05/15 | 1 | |
State Street | EUR | 300 | USD | 339 | 12/16/15 | 9 | |
State Street | EUR | 400 | USD | 442 | 12/16/15 | 2 | |
State Street | EUR | 500 | USD | 549 | 12/16/15 | (1 | ) |
State Street | EUR | 600 | USD | 667 | 12/16/15 | 7 | |
State Street | GBP | 12 | USD | 19 | 11/02/15 | — | |
State Street | HKD | 851 | USD | 110 | 11/03/15 | — | |
State Street | HKD | 2,457 | USD | 317 | 11/03/15 | — | |
State Street | HKD | 1,000 | USD | 129 | 12/16/15 | — | |
State Street | JPY | 2,577 | USD | 21 | 11/02/15 | — | |
State Street | JPY | 6,642 | USD | 55 | 11/02/15 | — | |
State Street | JPY | 2,576 | USD | 21 | 11/04/15 | — | |
State Street | JPY | 3,282 | USD | 27 | 11/04/15 | — | |
State Street | JPY | 8,405 | USD | 70 | 11/04/15 | — | |
State Street | JPY | 9,907 | USD | 82 | 11/04/15 | — | |
State Street | JPY | 9,979 | USD | 83 | 11/04/15 | — | |
State Street | JPY | 2,607 | USD | 22 | 11/05/15 | — | |
State Street | JPY | 3,298 | USD | 27 | 11/05/15 | — | |
State Street | JPY | 7,327 | USD | 61 | 11/05/15 | — | |
State Street | JPY | 7,329 | USD | 61 | 11/05/15 | — | |
State Street | JPY | 11,227 | USD | 93 | 11/05/15 | — | |
State Street | JPY | 10,000 | USD | 83 | 12/16/15 | — | |
State Street | JPY | 18,000 | USD | 149 | 12/16/15 | — | |
State Street | JPY | 20,000 | USD | 166 | 12/16/15 | — | |
State Street | SEK | 594 | USD | 69 | 11/02/15 | — | |
State Street | SEK | 596 | USD | 70 | 11/02/15 | — | |
State Street | SGD | 187 | USD | 134 | 11/04/15 | — | |
UBS | USD | 411 | AUD | 588 | 12/16/15 | 7 | |
UBS | USD | 201 | CAD | 266 | 12/16/15 | 2 | |
UBS | USD | 2,775 | EUR | 2,483 | 12/16/15 | (41 | ) |
UBS | USD | 498 | HKD | 3,861 | 12/16/15 | — | |
UBS | USD | 770 | JPY | 93,089 | 12/16/15 | 2 | |
UBS | USD | 190 | SGD | 270 | 12/16/15 | 2 | |
UBS | AUD | 100 | USD | 70 | 12/16/15 | (1 | ) |
UBS | CAD | 100 | USD | 76 | 12/16/15 | (1 | ) |
UBS | HKD | 1,500 | USD | 194 | 12/16/15 | — | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | (284 | ) |
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Common Stocks | |||||||||||
Australia | $ | — | $ | 79,016 | $ | — | $ | 79,016 | 5.0 | ||
Austria | — | 604 | — | 604 | —* | ||||||
Brazil | 1,750 | — | — | 1,750 | 0.1 | ||||||
Canada | 21,155 | — | — | 21,155 | 1.3 | ||||||
China | 6 | 780 | — | 786 | 0.1 | ||||||
Finland | — | 3,313 | — | 3,313 | 0.2 | ||||||
France | 8,983 | 49,212 | — | 58,195 | 3.7 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Real Estate Securities Fund 571
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Russell Global Real Estate Securities Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fair Value | ||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||||
Germany | — | 37,811 | — | 37,811 | 2.4 | |||||||||
Hong Kong | 102 | 143,187 | — | 143,289 | 9.1 | |||||||||
Ireland | — | 3,463 | — | 3,463 | 0.2 | |||||||||
Italy | — | 5,678 | — | 5,678 | 0.4 | |||||||||
Japan | 3,530 | 157,941 | — | 161,471 | 10.3 | |||||||||
Luxembourg | — | 792 | — | 792 | 0.1 | |||||||||
Netherlands | — | 27,573 | — | 27,573 | 1.8 | |||||||||
Norway | — | 1,911 | — | 1,911 | 0.1 | |||||||||
Singapore | — | 27,286 | — | 27,286 | 1.7 | |||||||||
Spain | — | 7,650 | — | 7,650 | 0.5 | |||||||||
Sweden | — | 12,610 | — | 12,610 | 0.8 | |||||||||
Switzerland | — | 4,259 | — | 4,259 | 0.3 | |||||||||
United Kingdom | — | 106,774 | — | 106,774 | 6.8 | |||||||||
United States | 827,076 | — | — | 827,076 | 52.7 | |||||||||
Short-Term Investments | — | 34,932 | — | 34,932 | 2.2 | |||||||||
Other Securities | — | 31,896 | — | 31,896 | 2.1 | |||||||||
Total Investments | 862,602 | 736,688 | — | 1,599,290 | 101.9 | |||||||||
Other Assets and Liabilities, Net | (1.9 | ) | ||||||||||||
100.0 | ||||||||||||||
Other Financial Instruments | ||||||||||||||
Futures Contracts | 1,860 | — | — | 1,860 | 0.1 | |||||||||
Foreign Currency Exchange Contracts | 3 | (287 | ) | — | (284 | ) | (—)* | |||||||
Total Other Financial Instruments** | $ | 1,863 | $ | (287 | ) | $ | — | $ | 1,576 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation/depreciation on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
See accompanying notes which are an integral part of the financial statements.
572 Russell Global Real Estate Securities Fund
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Russell Global Real Estate Securities Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 245 | ||
Variation margin on futures contracts* | 1,930 | — | ||||
Total | $ | 1,930 | $ | 245 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | 70 | $ | — | ||
Unrealized depreciation on foreign currency exchange contracts | — | 529 | ||||
Total | $ | 70 | $ | 529 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Futures contracts | $ | 1,488 | $ | — | ||
Total return swap contracts | (143 | ) | — | |||
Foreign currency-related transactions** | — | (2,600 | ) | |||
Total | $ | 1,345 | $ | (2,600 | ) | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | 776 | $ | — | ||
Total return swap contracts | (153 | ) | — | |||
Foreign currency-related transactions*** | — | 259 | ||||
Total | $ | 623 | $ | 259 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
*** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Global Real Estate Securities Fund 573
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Russell Global Real Estate Securities Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Securities on Loan* | Investments, at fair value | $ | 30,217 | $ | — | $ | 30,217 | ||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 245 | — | 245 | |||||
Futures Contracts | Variation margin on futures contracts | 37 | — | 37 | |||||
Total Financial and Derivative Assets | 30,499 | — | 30,499 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (48) | — | (48 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 30,451 | $ | — | $ | 30,451 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Assets | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||
Bank of America | $ | 103 | $ | 17 | $ | — | $ | 86 | |||
Bank of Montreal | 15 | 15 | — | — | |||||||
Barclays | 4,700 | — | 4,700 | — | |||||||
BNP Paribas | 14 | 14 | — | — | |||||||
Citigroup | 5,008 | — | 5,008 | — | |||||||
Commonwealth Bank of Australia | 14 | 14 | — | — | |||||||
Goldman Sachs | 68 | — | 68 | — | |||||||
HSBC | 14 | 14 | — | — | |||||||
JPMorgan Chase | 3,451 | — | 3,451 | — | |||||||
Morgan Stanley | 5 | 3 | — | 2 | |||||||
Royal Bank of Canada | 35 | 35 | — | — | |||||||
State Street | 19 | 19 | — | — | |||||||
UBS | 17,005 | 14 | 16,991 | — | |||||||
Total | $ | 30,451 | $ | 145 | $ | 30,218 | $ | 88 |
See accompanying notes which are an integral part of the financial statements.
574 Russell Global Real Estate Securities Fund
Russell Investment Company
Russell Global Real Estate Securities Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 179 | $ | — | $ | 179 | ||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 529 | — | 529 | |||||
Total Financial and Derivative Liabilities | 708 | — | 708 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (187) | — | (187 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 521 | $ | — | $ | 521 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Liabilities | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||
Bank of America | $ | 17 | $ | 17 | $ | — | $ — | ||
Bank of Montreal | 41 | 15 | — | 26 | |||||
Bank of New York | 57 | — | — | 57 | |||||
BNP Paribas | 44 | 14 | — | 30 | |||||
Commonwealth Bank of Australia | 36 | 14 | — | 22 | |||||
HSBC | 41 | 14 | — | 27 | |||||
Morgan Stanley | 3 | 3 | — | — | |||||
Royal Bank of Canada | 43 | 35 | — | 8 | |||||
State Street | 195 | 19 | — | 176 | |||||
UBS | 44 | 14 | — | 30 | |||||
Total | $ | 521 | $ | 145 | $ | — | $ 376 |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Russell Global Real Estate Securities Fund 575
Russell Investment Company
Russell Global Real Estate Securities Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 1,329,282 |
Investments, at fair value(*)(>) | 1,599,290 | |
Cash (restricted)(a) | 3,000 | |
Foreign currency holdings(^) | 1,342 | |
Unrealized appreciation on foreign currency exchange contracts | 245 | |
Receivables: | ||
Dividends and interest | 2,091 | |
Dividends from affiliated Russell funds | 3 | |
Investments sold | 15,592 | |
Fund shares sold | 1,720 | |
Foreign capital gains taxes recoverable | 430 | |
Variation margin on futures contracts | 37 | |
Total assets | 1,623,750 | |
Liabilities | ||
Payables: | ||
Investments purchased | 17,819 | |
Fund shares redeemed | 1,827 | |
Accrued fees to affiliates | 1,415 | |
Other accrued expenses | 231 | |
Variation margin on futures contracts | 179 | |
Unrealized depreciation on foreign currency exchange contracts | 529 | |
Payable upon return of securities loaned | 31,896 | |
Total liabilities | 53,896 | |
Net Assets | $ | 1,569,854 |
See accompanying notes which are an integral part of the financial statements.
576 Russell Global Real Estate Securities Fund
Russell Investment Company
Russell Global Real Estate Securities Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | (27,899 | ) |
Accumulated net realized gain (loss) | 35,391 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | 270,008 | ||
Futures contracts | 1,860 | ||
Foreign currency-related transactions | (351 | ) | |
Shares of beneficial interest | 409 | ||
Additional paid-in capital | 1,290,436 | ||
Net Assets | $ | 1,569,854 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 37.65 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 39.95 | |
Class A — Net assets | $ | 29,511,178 | |
Class A — Shares outstanding ($.01 par value) | 783,760 | ||
Net asset value per share: Class C(#) | $ | 36.60 | |
Class C — Net assets | $ | 37,474,124 | |
Class C — Shares outstanding ($.01 par value) | 1,023,777 | ||
Net asset value per share: Class E(#) | $ | 37.70 | |
Class E — Net assets | $ | 26,394,158 | |
Class E — Shares outstanding ($.01 par value) | 700,075 | ||
Net asset value per share: Class S(#) | $ | 38.42 | |
Class S — Net assets | $ 1,325,151,919 | ||
Class S — Shares outstanding ($.01 par value) | 34,495,417 | ||
Net asset value per share: Class Y(#) | $ | 38.39 | |
Class Y — Net assets | $ | 151,322,515 | |
Class Y — Shares outstanding ($.01 par value) | 3,941,391 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 1,345 | |
(*) Securities on loan included in investments | $ | 30,217 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund and Russell U.S. Cash Collateral Fund | $ | 66,828 | |
(a) Cash Collateral for Futures | $ | 3,000 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Russell Global Real Estate Securities Fund 577
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Russell Global Real Estate Securities Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 47,591 | |
Dividends from affiliated Russell funds | 31 | ||
Securities lending income | 228 | ||
Less foreign taxes withheld | (2,056 | ) | |
Total investment income | 45,794 | ||
Expenses | |||
Advisory fees | 13,610 | ||
Administrative fees | 810 | ||
Custodian fees | 580 | ||
Distribution fees - Class A | 76 | ||
Distribution fees - Class C | 301 | ||
Transfer agent fees - Class A | 61 | ||
Transfer agent fees - Class C | 80 | ||
Transfer agent fees - Class E | 63 | ||
Transfer agent fees - Class S | 2,875 | ||
Transfer agent fees - Class Y | 7 | ||
Professional fees | 136 | ||
Registration fees | 119 | ||
Shareholder servicing fees - Class C | 101 | ||
Shareholder servicing fees - Class E | 79 | ||
Trustees’ fees | 43 | ||
Printing fees | 324 | ||
Miscellaneous | 52 | ||
Total expenses | 19,317 | ||
Net investment income (loss) | 26,477 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 122,534 | ||
Futures contracts | 1,488 | ||
Total return swap contracts | (143 | ) | |
Foreign currency-related transactions | (2,428 | ) | |
Net realized gain (loss) | 121,451 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (100,915 | ) | |
Futures contracts | 776 | ||
Total return swap contracts | (153 | ) | |
Foreign currency-related transactions | 145 | ||
Net change in unrealized appreciation (depreciation) | (100,147 | ) | |
Net realized and unrealized gain (loss) | 21,304 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 47,781 |
See accompanying notes which are an integral part of the financial statements.
578 Russell Global Real Estate Securities Fund
Russell Investment Company
Russell Global Real Estate Securities Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 26,477 | $ | 28,891 | ||
Net realized gain (loss) | 121,451 | 138,031 | ||||
Net change in unrealized appreciation (depreciation) | (100,147 | ) | 8,369 | |||
Net increase (decrease) in net assets from operations | 47,781 | 175,291 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (767 | ) | (790 | ) | ||
Class C | (755 | ) | (869 | ) | ||
Class E | (798 | ) | (1,056 | ) | ||
Class S | (39,352 | ) | (42,159 | ) | ||
Class Y | (4,706 | ) | (6,667 | ) | ||
From net realized gain | ||||||
Class A | (1,697 | ) | (2,078 | ) | ||
Class C | (2,370 | ) | (3,209 | ) | ||
Class E | (1,998 | ) | (2,783 | ) | ||
Class S | (84,879 | ) | (98,839 | ) | ||
Class Y | (8,992 | ) | (17,188 | ) | ||
Net decrease in net assets from distributions | (146,314 | ) | (175,638 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (165,258 | ) | 113,645 | |||
Total Net Increase (Decrease) in Net Assets | (263,791 | ) | 113,298 | |||
Net Assets | ||||||
Beginning of period | 1,833,645 | 1,720,347 | ||||
End of period | $ | 1,569,854 | $ | 1,833,645 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | (27,899 | ) | $ | (24,484 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Global Real Estate Securities Fund 579
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Russell Global Real Estate Securities Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 85 | $ | 3,237 | 103 | $ | 3,890 | ||||||
Proceeds from reinvestment of distributions | 65 | 2,454 | 79 | 2,851 | ||||||||
Payments for shares redeemed | (124 | ) | (4,706 | ) | (142 | ) | (5,384 | ) | ||||
Net increase (decrease) | 26 | 985 | 40 | 1,357 | ||||||||
Class C | ||||||||||||
Proceeds from shares sold | 61 | 2,270 | 93 | 3,442 | ||||||||
Proceeds from reinvestment of distributions | 82 | 3,062 | 114 | 3,982 | ||||||||
Payments for shares redeemed | (196 | ) | (7,273 | ) | (245 | ) | (9,048 | ) | ||||
Net increase (decrease) | (53 | ) | (1,941 | ) | (38 | ) | (1,624 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 139 | 5,319 | 229 | 8,700 | ||||||||
Proceeds from reinvestment of distributions | 72 | 2,728 | 105 | 3,788 | ||||||||
Payments for shares redeemed | (402 | ) | (15,164 | ) | (396 | ) | (15,293 | ) | ||||
Net increase (decrease) | (191 | ) | (7,117 | ) | (62 | ) | (2,805 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 6,453 | 251,972 | 8,905 | 342,900 | ||||||||
Proceeds from reinvestment of distributions | 3,171 | 122,953 | 3,815 | 139,698 | ||||||||
Payments for shares redeemed | (13,344 | ) | (523,777 | ) | (7,865 | ) | (303,450 | ) | ||||
Net increase (decrease) | (3,720 | ) | (148,852 | ) | 4,855 | 179,148 | ||||||
Class Y | ||||||||||||
Proceeds from shares sold | 1,279 | 50,846 | 494 | 19,122 | ||||||||
Proceeds from reinvestment of distributions | 354 | 13,698 | 653 | 23,855 | ||||||||
Payments for shares redeemed | (1,849 | ) | (72,877 | ) | (2,709 | ) | (105,408 | ) | ||||
Net increase (decrease) | (216 | ) | (8,333 | ) | (1,562 | ) | (62,431 | ) | ||||
Total increase (decrease) | (4,154 | ) | $ | (165,258 | ) | 3,233 | $ | 113,645 |
See accompanying notes which are an integral part of the financial statements.
580 Russell Global Real Estate Securities Fund
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Russell Investment Company
Russell Global Real Estate Securities Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | $ | |||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | In Excess(h) | |||||||||||||
Class A | |||||||||||||||||||
October 31, 2015 | 39.99 | .51 | .37 | .88 | (.98 | ) | (2.24 | ) | — | ||||||||||
October 31, 2014 | 40.49 | .54 | 2.97 | 3.51 | (1.07 | ) | (2.94 | ) | — | ||||||||||
October 31, 2013 | 38.18 | .58 | 3.94 | 4.52 | (2.08 | ) | (.13 | ) | — | ||||||||||
October 31, 2012 | 33.52 | .63 | 4.72 | 5.35 | (.69 | ) | — | — | |||||||||||
October 31, 2011 | 35.24 | .51 | (1.38 | ) | (.87 | ) | (.81 | ) | — | (.04 | ) | ||||||||
Class C | |||||||||||||||||||
October 31, 2015 | 38.96 | .22 | .36 | .58 | (.70 | ) | (2.24 | ) | — | ||||||||||
October 31, 2014 | 39.55 | .24 | 2.90 | 3.14 | (.79 | ) | (2.94 | ) | — | ||||||||||
October 31, 2013 | 37.34 | .28 | 3.85 | 4.13 | (1.79 | ) | (.13 | ) | — | ||||||||||
October 31, 2012 | 32.83 | .36 | 4.60 | 4.96 | (.45 | ) | — | — | |||||||||||
October 31, 2011 | 34.52 | .23 | (1.34 | ) | (1.11 | ) | (.55 | ) | — | (.03 | ) | ||||||||
Class E | |||||||||||||||||||
October 31, 2015 | 40.02 | .50 | .39 | .89 | (.97 | ) | (2.24 | ) | — | ||||||||||
October 31, 2014 | 40.52 | .54 | 2.97 | 3.51 | (1.07 | ) | (2.94 | ) | — | ||||||||||
October 31, 2013 | 38.20 | .58 | 3.95 | 4.53 | (2.08 | ) | (.13 | ) | — | ||||||||||
October 31, 2012 | 33.54 | .63 | 4.72 | 5.35 | (.69 | ) | — | — | |||||||||||
October 31, 2011 | 35.26 | .50 | (1.38 | ) | (.88 | ) | (.80 | ) | — | (.04 | ) | ||||||||
Class S | |||||||||||||||||||
October 31, 2015 | 40.73 | .61 | .39 | 1.00 | (1.07 | ) | (2.24 | ) | — | ||||||||||
October 31, 2014 | 41.16 | .64 | 3.04 | 3.68 | (1.17 | ) | (2.94 | ) | — | ||||||||||
October 31, 2013 | 38.78 | .67 | 4.02 | 4.69 | (2.18 | ) | (.13 | ) | — | ||||||||||
October 31, 2012 | 34.03 | .73 | 4.79 | 5.52 | (.77 | ) | — | — | |||||||||||
October 31, 2011 | 35.77 | .60 | (1.41 | ) | (.81 | ) | (.88 | ) | — | (.05 | ) | ||||||||
Class Y | |||||||||||||||||||
October 31, 2015 | 40.71 | .69 | .38 | 1.07 | (1.15 | ) | (2.24 | ) | — | ||||||||||
October 31, 2014 | 41.15 | .73 | 3.01 | 3.74 | (1.24 | ) | (2.94 | ) | — | ||||||||||
October 31, 2013 | 38.76 | .84 | 3.94 | 4.78 | (2.25 | ) | (.13 | ) | — | ||||||||||
October 31, 2012 | 34.03 | .81 | 4.77 | 5.58 | (.85 | ) | — | — | |||||||||||
October 31, 2011 | 35.76 | .67 | (1.40 | ) | (.73 | ) | (.95 | ) | — | (.05 | ) | ||||||||
See accompanying notes which are an integral part of the financial statements.
582 Russell Global Real Estate Securities Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross | Net(d) | Net Assets(d) | Turnover Rate | |||||||||
(3.22 | ) | 37.65 | 2.22 | 29,511 | 1.37 | 1.37 | 1.33 | 61 | |||||||||
(4.01 | ) | 39.99 | 9.98 | 30,324 | 1.36 | 1.36 | 1.41 | 69 | |||||||||
(2.21 | ) | 40.49 | 12.17 | 29,098 | 1.35 | 1.35 | 1.47 | 78 | |||||||||
(.69 | ) | 38.18 | 16.03 | 27,867 | 1.35 | 1.35 | 1.79 | 64 | |||||||||
(.85 | ) | 33.52 | (2.51 | ) | 25,724 | 1.36 | 1.36 | 1.44 | 69 | ||||||||
(2.94 | ) | 36.60 | 1.46 | 37,474 | 2.12 | 2.12 | .58 | 61 | |||||||||
(3.73 | ) | 38.96 | 9.14 | 41,936 | 2.11 | 2.11 | .66 | 69 | |||||||||
(1.92 | ) | 39.55 | 11.34 | 44,084 | 2.10 | 2.10 | .73 | 78 | |||||||||
(.45 | ) | 37.34 | 15.17 | 42,262 | 2.10 | 2.10 | 1.05 | 64 | |||||||||
(.58 | ) | 32.83 | (3.28 | ) | 43,207 | 2.11 | 2.11 | .67 | 69 | ||||||||
(3.21 | ) | 37.70 | 2.25 | 26,394 | 1.37 | 1.37 | 1.30 | 61 | |||||||||
(4.01 | ) | 40.02 | 9.95 | 35,655 | 1.36 | 1.36 | 1.42 | 69 | |||||||||
(2.21 | ) | 40.52 | 12.18 | 38,596 | 1.35 | 1.35 | 1.46 | 78 | |||||||||
(.69 | ) | 38.20 | 16.01 | 36,250 | 1.35 | 1.35 | 1.79 | 64 | |||||||||
(.84 | ) | 33.54 | (2.51 | ) | 35,132 | 1.36 | 1.36 | 1.43 | 69 | ||||||||
(3.31 | ) | 38.42 | 2.51 | 1,325,152 | 1.12 | 1.12 | 1.57 | 61 | |||||||||
(4.11 | ) | 40.73 | 10.23 | 1,556,497 | 1.11 | 1.11 | 1.65 | 69 | |||||||||
(2.31 | ) | 41.16 | 12.46 | 1,373,266 | 1.10 | 1.10 | 1.68 | 78 | |||||||||
(.77 | ) | 38.78 | 16.32 | 1,174,848 | 1.10 | 1.10 | 2.05 | 64 | |||||||||
(.93 | ) | 34.03 | (2.28 | ) | 1,107,094 | 1.11 | 1.11 | 1.68 | 69 | ||||||||
(3.39 | ) | 38.39 | 2.69 | 151,323 | .92 | .92 | 1.78 | 61 | |||||||||
(4.18 | ) | 40.71 | 10.45 | 169,233 | .91 | .91 | 1.88 | 69 | |||||||||
(2.38 | ) | 41.15 | 12.69 | 235,303 | .90 | .90 | 2.03 | 78 | |||||||||
(.85 | ) | 38.76 | 16.53 | 354,260 | .92 | .92 | 2.26 | 64 | |||||||||
(1.00 | ) | 34.03 | (2.10 | ) | 376,191 | .93 | .93 | 1.86 | 69 |
See accompanying notes which are an integral part of the financial statements.
Russell Global Real Estate Securities Fund 583
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Multi-Strategy Alternative Fund - Class A‡ | HFRX Equal Weighted Strategies Index*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (9.76 | )% | 1 Year | (0.40 | )% | ||
Inception* | (2.99 | )%§ | Inception* | 2.15 | %§ | ||
Russell Multi-Strategy Alternative Fund - Class C | |||||||
Total | |||||||
Return | |||||||
1 Year | (4.95 | )% | |||||
Inception* | (1.91 | )%§ | |||||
Russell Multi-Strategy Alternative Fund - Class E | |||||||
Total | |||||||
Return | |||||||
1 Year | (4.21 | )% | |||||
Inception* | (1.21 | )%§ | |||||
Russell Multi-Strategy Alternative Fund - Class S | |||||||
Total | |||||||
Return | |||||||
1 Year | (3.94 | )% | |||||
Inception* | (0.96 | )%§ | |||||
Barclays U.S. 1-3 Month Treasury Bill Index** | |||||||
Total | |||||||
Return | |||||||
1 Year | 0.01 | % | |||||
Inception* | 0.04 | %§ |
584 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Multi-Strategy Alternative Fund (the “Fund”) employs | and concern over global growth – resulted in whipsawing price |
a multi-manager approach whereby portions of the Fund are | action or declines across most global indices, asset classes, |
allocated to different money manager strategies. Fund assets not | and corresponding hedge fund strategies. Within equity hedge |
allocated to money managers are managed by Russell Investment | strategies, longer biased fundamental equity strategies within |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | select developed economies and emerging markets suffered |
may change the allocation of the Fund’s assets among money | losses, while lower net exposure strategies were better equipped, |
managers at any time. An exemptive order from the Securities | based on short positions, to withstand choppy market conditions. |
and Exchange Commission (“SEC”) permits RIMCo to engage | Quantitative equity strategies posted strong returns as a result of |
or terminate a money manager at any time, subject to approval | market neutral positioning and momentum factor exposures. |
by the Fund’s Board, without a shareholder vote. Pursuant to the | Event driven strategies suffered losses across equity-oriented |
terms of the exemptive order, the Fund is required to notify its | styles, such as special situations and activism, while credit- |
shareholders within 90 days of when a money manager begins | based managers experienced negative performance amid high |
providing services. As of October 31, 2015, the Fund had eight | yield spread widening in the latter part of the year. Similarly, |
money managers. | relative value strategies finished in negative territory, as corporate |
What is the Fund’s investment objective? | spread widening detracted from fixed-income oriented managers. |
The Fund seeks to achieve long term capital growth with low | Lastly, tactical trading strategies generated mixed results for the |
correlation to, and lower volatility than, global equity markets. | year, with systematic macro strategies realizing gains from long |
exposures to interest rates and short exposures to commodities, | |
How did the Fund perform relative to its benchmark for the | while discretionary managers modestly struggled with currency |
fiscal year ended October 31, 2015? | markets. |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | |
Class C, Class E and Class S Shares lost 4.24%, 4.95%, 4.21% and | How did the investment strategies and techniques employed |
3.94%, respectively. This is compared to the Fund’s benchmark, | by the Fund and its money managers affect its benchmark |
the Barclays U.S. 1-3 Month Treasury Bill Index, which gained | relative performance? |
0.01% during the same period. The Fund’s secondary benchmark, | For the fiscal year, heightened market volatility plus equity |
the HFRX Equal Weighted Strategies Index, lost 0.40% during | market drawdowns in the latter part of the year negatively affected |
the same period. The HFRX Equal Weighted Strategies Index | the Fund's bias to long/short equity and event driven equity |
is composed of hedge fund strategies that RIMCo believes are | strategies. On the positive side, the Fund’s weighting to tactical |
representative of the Fund’s investment strategies. The Fund’s | trading strategies as well as the inclusion of a quantitative equity |
performance includes operating expenses, whereas index returns | strategy served as a modest hedge to the portfolio's longer biased |
are unmanaged and do not include expenses of any kind. | equity exposure, with gains primarily originating from systematic |
macro and momentum equity holdings. On a more granular | |
For the fiscal year ended October 31, 2015, the Morningstar® | level, the Fund’s long equity exposures to energy, financials, and |
Multi-Alternative, a group of funds that Morningstar considers | healthcare suffered sharp losses during the latter part of the year, |
to have investment strategies similar to those of the Fund, lost | which more than offset gains from trend-following exposures in |
0.40%. This result serves as a peer comparison and is expressed | interest rates and commodities. |
net of operating expenses. | |
The Fund employs discretionary money managers. The Fund’s | |
RIMCo may assign a money manager a specific benchmark | discretionary money managers select the individual portfolio |
other than the Fund’s index. However, the Fund’s secondary | securities for the assets assigned to them. Fund assets not |
benchmark is generally representative of the aggregate of each | allocated to discretionary money managers include the Fund’s |
money manager’s benchmark index and the Fund’s primary index | liquidity reserves and assets which may be managed directly |
remains the benchmark for the Fund. | by RIMCo to effect the Fund’s investment strategies and/or to |
How did the market conditions described in the Market | actively manage the Fund’s overall exposures by investing in |
Summary report affect the Fund’s performance? | securities or other instruments that RIMCo believes will achieve |
For the fiscal year ending October 31, 2015, global hedge fund | the desired risk/return profile for the Fund. |
strategies, as measured by the HFRX Global Hedge Fund Index, | With respect to certain of the Fund’s money managers, AQR |
lost 2.05%. In general, global hedge fund strategies posted | Capital Management, LLC’s (“AQR”) systematic macro strategy |
losses during the year as heightened macroeconomic volatility | was the best performing manager for the period and outperformed |
– aggravated by events surrounding global economic policies | the HFRX Macro/CTA Index for the fiscal year. The tactical |
Russell Multi-Strategy Alternative Fund 585
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
rebalancing to favor AQR’s managed futures style over risk- | Money Managers as of | |
parity helped boost performance through most of the year. Long | October 31, 2015 | Styles |
exposures to interest rates plus short exposures to commodities | ||
and select currencies contributed to performance. AQR’s equity | AQR Capital Management LLC | Tactical trading – Systematic |
Macro – Managed Futures / | ||
market neutral strategy was implemented in June 2015 and | Quantitative Macro | |
outperformed the HFRX Equity Hedge Index for the portion of | Equity Hedge – Quantitative | |
the fiscal year in which the strategy was implemented. Gains were | Equity – Global | |
primarily generated in equities from momentum-based factor | Brigade Capital Management, LLC Event Driven – Credit | |
exposures. | – Opportunistic | |
DCI, LLC | Relative Value – Fixed Income – | |
Omega Advisors, Inc. (“Omega”) was the worst performing | Credit Long/Short | |
manager for the period and underperformed the HFRX Equity | Omega Advisors, Inc. | Equity Hedge – Fundamental – US |
Hedge Index for the fiscal year. Exposures to healthcare, | – Long Biased | |
financials and energy-specific equity sectors primarily detracted | Pacific Investment Management | Relative Value – Fixed Income |
from performance. | Company | – Diversified |
Passport Capital, LLC | Equity Hedge – Fundamental – | |
RIMCo manages a discretionary positioning strategy for | Global – Variable Net | |
strategic and tactical purposes, including hedging and exposure | TCW/Scoggin, LLC | Event Driven – Equity – Special |
management, utilizing index futures for both equities and | Situations | |
The Cambridge Strategy (Asset | Tactical Trading – Discretionary | |
fixed income exposures. The strategy modestly detracted from | Management) Limited | Macro – Global Diversified |
performance over the fiscal year. In the first part of the fiscal | The views expressed in this report reflect those of the portfolio | |
year, tactical short hedging exposures to large cap U.S. equities | managers only through the end of the period covered by | |
suffered losses as global equity markets rallied. These losses | the report. These views do not necessarily represent the | |
offset gains attributed to both tactical and strategic equity | views of RIMCo, or any other person in RIMCo or any other | |
exposures implemented throughout the year in both Japan and | affiliated organization. These views are subject to change | |
emerging markets. | at any time based upon market conditions or other events, | |
Describe any changes to the Fund’s structure or the money | and RIMCo disclaims any responsibility to update the views | |
manager line-up. | contained herein. These views should not be relied on as | |
In May 2015, RIMCo terminated Lazard Asset Management LLC | investment advice and, because investment decisions for | |
as a money manager for the Fund and changed AQR Capital | a Russell Investment Company (“RIC”) Fund are based on | |
Management LLC’s mandate in the Fund to include a quantitative | numerous factors, should not be relied on as an indication | |
equity market neutral strategy in addition to a systematic macro | of investment decisions of any RIC Fund. | |
strategy. |
* Assumes initial investment on August 6, 2012.
** The Barclays 1-3 Month U.S. Treasury Bill Index includes all publicy issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3
months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value.
*** The HFRX Equal Weighted Strategies Index is designed to be representative of the overall composition of the hedge fund universe. It is comprised of all eligible
hedge fund strategies; including but not limited to convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger
arbitrage, and relative value arbitrage. The HFRX Equal Weighted Strategies Index applies an equal weight to all constituent strategy indices.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
586 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 957.80 | $ | 1,013.36 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 11.60 | $ | 11.93 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 2.35% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 954.40 | $ | 1,009.48 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 15.37 | $ | 15.80 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 3.12% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 958.80 | $ | 1,013.26 | |
Expenses Paid During Period* | $ | 11.70 | $ | 12.03 | ||
* Expenses are equal to the Fund's annualized expense ratio of 2.37% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Russell Multi-Strategy Alternative Fund 587
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 959.90 | $ | 1,014.47 | ||
Expenses Paid During Period* | $ | 10.52 | $ | 10.82 | ||
* Expenses are equal to the Fund's annualized expense ratio of 2.13% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
588 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
Long-Term Investments - 17.5% | Cenveo Corp. | |||||||
Asset-Backed Securities - 0.2% | 6.000% due 08/01/19 (Þ) | 315 | 276 | |||||
Carrington Mortgage Loan Trust | 8.500% due 09/15/22 (Þ) | 400 | 294 | |||||
Series 2006-NC5 Class A5 | Chester Downs & Marina LLC / | |||||||
0.262% due 01/25/37 (Ê) | 479 | 347 | Chester Downs Finance Corp. | |||||
Countrywide Asset-Backed | 9.250% due 02/01/20 (Þ) | 785 | 585 | |||||
Certificates | Citgo Holding, Inc. | |||||||
Series 2004-5 Class M1 | 10.750% due 02/15/20 (Þ) | 545 | 548 | |||||
1.025% due 08/25/34 (Ê) | 224 | 212 | Citigroup, Inc. | |||||
Series 2005-11 Class AF3 | 2.650% due 10/26/20 | 280 | 279 | |||||
4.778% due 02/25/36 | 185 | 189 | Claire's Stores, Inc. | |||||
Series 2006-5 Class 2A2 | 9.000% due 03/15/19 (Þ) | 515 | 421 | |||||
0.350% due 08/25/36 (Ê) | 124 | 121 | Clear Channel Communications, | |||||
OneMain Financial Issuance Trust | Inc. | |||||||
Series 2015-2A Class A | 14.000% due 02/01/21 | 74 | 30 | |||||
2.570% due 07/18/25 (Þ) | 200 | 200 | Cornerstone Chemical Co. | |||||
1,069 | 9.375% due 03/15/18 (Þ) | 935 | 944 | |||||
Corporate Bonds and Notes - 6.8% | Credit Acceptance Co. | |||||||
Advanced Micro Devices, Inc. | 6.125% due 02/15/21 | 200 | 200 | |||||
7.750% due 08/01/20 | 225 | 166 | Credit Acceptance Corp. | |||||
7.500% due 08/15/22 | 140 | 102 | 7.375% due 03/15/23 (Þ) | 65 | 67 | |||
7.000% due 07/01/24 | 500 | 350 | Cumulus Media Holdings, Inc. | |||||
Aegis Merger Sub, Inc. | 7.750% due 05/01/19 | 340 | 226 | |||||
10.250% due 02/15/23 (Þ) | 310 | 316 | Discover Bank | |||||
Albertsons, Inc. | Series BKNT | |||||||
7.450% due 08/01/29 | 455 | 444 | 3.100% due 06/04/20 | 610 | 617 | |||
8.000% due 05/01/31 | 965 | 950 | DISH DBS Corp. | |||||
Ally Financial, Inc. | 5.000% due 03/15/23 | 40 | 37 | |||||
3.600% due 05/21/18 | 400 | 405 | 5.875% due 11/15/24 | 120 | 115 | |||
Alpha Natural Resources, Inc. | Dynegy, Inc. | |||||||
3.750% due 12/15/17 | 265 | 8 | 7.625% due 11/01/24 | 320 | 321 | |||
6.000% due 06/01/19 | 575 | 19 | Energy Transfer Equity, LP | |||||
6.250% due 06/01/21 | 360 | 12 | 5.875% due 01/15/24 | 600 | 581 | |||
Altice US Finance II Corp. | EXCO Resources, Inc. | |||||||
7.750% due 07/15/25 (Þ) | 200 | 193 | 8.500% due 04/15/22 | 305 | 70 | |||
American Express Credit Corp. | Frontier Communications Corp. | |||||||
Series F | 8.875% due 09/15/20 (Þ) | 85 | 88 | |||||
2.600% due 09/14/20 | 1,000 | 1,008 | 10.500% due 09/15/22 (Þ) | 90 | 93 | |||
APX Group, Inc. | 7.625% due 04/15/24 | 300 | 269 | |||||
6.375% due 12/01/19 | 70 | 68 | 11.000% due 09/15/25 (Þ) | 105 | 110 | |||
8.750% due 12/01/20 | 950 | 784 | GenOn Americas Generation LLC | |||||
Aruba Investments, Inc. | 8.500% due 10/01/21 | 45 | 36 | |||||
8.750% due 02/15/23 (Þ) | 180 | 178 | 9.125% due 05/01/31 | 615 | 458 | |||
Aurora Diagnostics Holdings LLC | Genworth Holdings, Inc. | |||||||
/ Aurora Diagnostics Financing, | 7.200% due 02/15/21 | 145 | 138 | |||||
Inc. | 6.500% due 06/15/34 | 170 | 125 | |||||
10.750% due 01/15/18 | 415 | 334 | 6.150% due 11/15/66 | 160 | 71 | |||
Bank of America Corp. | Guitar Center, Inc. | |||||||
2.625% due 10/19/20 | 340 | 339 | 6.500% due 04/15/19 (Þ) | 725 | 679 | |||
Basic Energy Services, Inc. | 9.625% due 04/15/20 (Þ) | 710 | 591 | |||||
7.750% due 02/15/19 | 380 | 153 | Harland Clarke Holdings Corp. | |||||
7.750% due 10/15/22 | 175 | 65 | 9.250% due 03/01/21 (Þ) | 640 | 544 | |||
BMC Software Finance, Inc. | Hexion, Inc. | |||||||
8.125% due 07/15/21 (Þ) | 810 | 627 | 6.625% due 04/15/20 | 310 | 263 | |||
Bon-Ton Department Stores, Inc. | 10.000% due 04/15/20 | 535 | 508 | |||||
(The) | iHeartCommunications, Inc. | |||||||
8.000% due 06/15/21 | 475 | 268 | 10.000% due 01/15/18 | 285 | 151 | |||
Boxer Parent Co., Inc. | 9.000% due 03/01/21 | 215 | 177 | |||||
9.000% due 10/15/19 (Þ) | 480 | 343 | Illinois Power Generating Co. | |||||
Caesars Entertainment Operating | �� | 6.300% due 04/01/20 | 240 | 190 | ||||
Co., Inc. | Series F | |||||||
11.250% due 06/01/17 (Ø) | 120 | 95 | 7.950% due 06/01/32 | 295 | 230 | |||
9.000% due 02/15/20 | 2,045 | 1,646 | JC Penney Corp., Inc. |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 589
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
5.650% due 06/01/20 | 195 | 178 | 7.450% due 08/15/27 | 220 | 225 | |||
Kindred Healthcare, Inc. | Shingle Springs Tribal Gaming | |||||||
8.000% due 01/15/20 | 250 | 250 | Authority | |||||
Lehman Brothers Holdings, Inc. | 9.750% due 09/01/21 (Þ) | 555 | 583 | |||||
5.250% due 01/24/49 (Æ)(Ø) | 5,000 | 377 | Signode Industrial Group Lux SA/ | |||||
Liberty Interactive LLC | Signode Industrial Group US, Inc. | |||||||
4.000% due 11/15/29 | 278 | 166 | 6.375% due 05/01/22 (Þ) | 555 | 520 | |||
3.750% due 02/15/30 | 1,191 | 703 | Sprint Capital Corp. | |||||
McClatchy Co. (The) | 6.875% due 11/15/28 | 195 | 162 | |||||
9.000% due 12/15/22 | 525 | 502 | 8.750% due 03/15/32 | 625 | 562 | |||
Memorial Production Partners, LP | Sprint Corp. | |||||||
/ Memorial Production Finance | 7.875% due 09/15/23 | 410 | 379 | |||||
Corp. | 7.125% due 06/15/24 | 90 | 79 | |||||
7.625% due 05/01/21 | 360 | 241 | 7.625% due 02/15/25 | 185 | 164 | |||
6.875% due 08/01/22 | 445 | 281 | Time Warner Cable, Inc. | |||||
Mohegan Tribal Gaming Authority | 6.750% due 06/15/39 | 80 | 82 | |||||
9.750% due 09/01/21 | 890 | 917 | 5.500% due 09/01/41 | 110 | 101 | |||
9.750% due 09/01/21 (Å) | 175 | 180 | Townsquare Media, Inc. | |||||
Monitronics International, Inc. | 6.500% due 04/01/23 (Å) | 5 | 5 | |||||
9.125% due 04/01/20 | 1,440 | 1,253 | Toys R Us, Inc. | |||||
Murray Energy Corp. | 10.375% due 08/15/17 | 930 | 746 | |||||
11.250% due 04/15/21 (Þ) | 400 | 107 | Walter Energy, Inc. | |||||
Neptune Finco Corp. | 9.875% due 12/15/20 | 760 | 2 | |||||
10.125% due 01/15/23 (Þ) | 385 | 407 | 8.500% due 04/15/21 | 665 | 2 | |||
10.875% due 10/15/25 (Þ) | 255 | 272 | Yum! Brands, Inc. | |||||
New Albertsons, Inc. | 6.875% due 11/15/37 | 135 | 121 | |||||
7.750% due 06/15/26 | 60 | 59 | 5.350% due 11/01/43 | 15 | 12 | |||
8.700% due 05/01/30 | 120 | 123 | 36,028 | |||||
Nine West Holdings, Inc. | International Debt - 3.3% | |||||||
8.250% due 03/15/19 (Þ) | 875 | 481 | Algeco Scotsman Global Finance | |||||
Ocwen Financial Corp. | PLC | |||||||
7.125% due 05/15/19 (Þ) | 235 | 214 | 8.500% due 10/15/18 (Þ) | 670 | 585 | |||
Optimas OE Solutions Holding LLC | Alinta Energy Finance Pty, Ltd. | |||||||
/ Optimas OE Solutions, Inc. | 6.375% due 08/13/19 (Ê) | 286 | 283 | |||||
8.625% due 06/01/21 (Å) | 330 | 314 | 6.375% due 08/13/18 (Ê) | 19 | 19 | |||
Parker Drilling Co. | ALM XII, Ltd. | |||||||
6.750% due 07/15/22 | 500 | 385 | Series 2015-12A Class D | |||||
QUALCOMM, Inc. | 5.757% due 04/16/27 (Ê)(Þ) | 340 | 300 | |||||
3.000% due 05/20/22 | 1,400 | 1,382 | Altice Financing SA | |||||
Radio One, Inc. | 6.500% due 01/15/22 (Þ) | 25 | 25 | |||||
9.250% due 02/15/20 (Þ) | 500 | 413 | 6.625% due 02/15/23 (Þ) | 150 | 151 | |||
Rain CII Carbon LLC / CII Carbon | Altice Finco SA | |||||||
Corp. | 8.125% due 01/15/24 (Þ) | 130 | 129 | |||||
8.000% due 12/01/18 (Þ) | 245 | 213 | 7.625% due 02/15/25 (Þ) | 45 | 43 | |||
8.250% due 01/15/21 (Þ) | 890 | 743 | Altice US Finance SA | |||||
Rite Aid Corp. | 7.750% due 07/15/25 (Å) | 65 | 63 | |||||
7.700% due 02/15/27 | 340 | 431 | AP NMT Acquisition BV 1st Lien | |||||
6.875% due 12/15/28 (Þ) | 20 | 24 | Term Loan | |||||
Rockies Express Pipeline LLC | 6.750% due 08/13/21 (Ê) | 318 | 303 | |||||
6.000% due 01/15/19 (Þ) | 305 | 309 | Banco do Brasil SA | |||||
5.625% due 04/15/20 (Þ) | 230 | 231 | 3.875% due 10/10/22 | 900 | 749 | |||
Roundy's Supermarkets, Inc. | Bluewater Holding BV | |||||||
10.250% due 12/15/20 (Þ) | 395 | 220 | 10.000% due 12/10/19 (Þ) | 500 | 325 | |||
Sabine Pass Liquefaction LLC | Cathedral Lake, Ltd. | |||||||
5.625% due 02/01/21 | 300 | 298 | Series 2014-1A Class C | |||||
6.250% due 03/15/22 | 505 | 501 | 3.903% due 01/15/26 (Ê)(Þ) | 250 | 226 | |||
5.625% due 04/15/23 | 520 | 506 | Concordia Healthcare Corp. | |||||
SandRidge Energy, Inc. | 7.000% due 04/15/23 (Þ) | 270 | 235 | |||||
7.500% due 02/15/23 | 545 | 127 | Cutwater, Ltd. | |||||
Scientific Games International, Inc. | Series 2014-1A Class C | |||||||
10.000% due 12/01/22 | 305 | 270 | 3.931% due 07/15/26 (Ê)(Þ) | 100 | 91 | |||
ServiceMaster Co. LLC (The) | Digicel, Ltd. | |||||||
6.000% due 04/15/21 (Å) | 100 | 90 |
See accompanying notes which are an integral part of the financial statements.
590 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
6.750% due 03/01/23 (Þ) | 145 | 130 | THL Credit Wind River, Ltd. | |||||
Drillships Ocean Ventures, Inc. | Series 2015-3A Class D | |||||||
Term Loan | 4.293% due 01/22/27 (Ê)(Þ) | 250 | 241 | |||||
5.500% due 07/25/21 (Ê) | 607 | 392 | YPF SA | |||||
Dubai World, Ltd. Term Loan B1 | 8.750% due 04/04/24 (Þ) | 315 | 319 | |||||
3.500% due 09/30/18 | 394 | 313 | 17,562 | |||||
Global A&T Electronics, Ltd. | Loan Agreements - 2.6% | |||||||
10.000% due 02/01/19 (Þ) | 435 | 370 | Albertson's LLC Term Loan B2 | |||||
Highbridge Loan Management | 5.375% due 03/21/19 (Ê) | 448 | 448 | |||||
Series 2014-2014 Class D | AMF Bowling Centers, Inc. Term | |||||||
5.275% due 01/18/25 (Ê)(Þ) | 250 | 215 | Loan B | |||||
IAMGOLD Corp. | 7.250% due 09/18/21 (Ê) | 493 | 487 | |||||
6.750% due 10/01/20 (Þ) | 1,060 | 800 | Ascena Retail Group, Inc.Term | |||||
ICICI Bank, Ltd. | Loan B | |||||||
4.750% due 11/25/16 (Þ) | 100 | 103 | 5.250% due 08/21/22 (Ê) | 430 | 411 | |||
Intelsat Luxembourg SA | BMC Software Finance, Inc. Term | |||||||
7.750% due 06/01/21 | 485 | 286 | Loan | |||||
Jupiter Resources, Inc. | 5.000% due 09/10/20 (Ê) | 382 | 343 | |||||
8.500% due 10/01/22 (Þ) | 885 | 460 | Caesars Entertainment Operating | |||||
KCA Deutag Alpha, Ltd. 1st Lien | Co., Inc. Extended Term Loan B6 | |||||||
Term Loan B | 9.000% due 03/01/17 (Ê) | 340 | 311 | |||||
6.250% due 05/16/20 (Ê) | 341 | 269 | Chromaflo Technologies Corp. 2nd | |||||
Kosmos Energy, Ltd. | Lien Term Loan | |||||||
7.875% due 08/01/21 (Þ) | 480 | 418 | 8.250% due 06/02/20 (Ê) | 115 | 109 | |||
Lloyds Bank PLC | Clear Channel Communications, | |||||||
12.000% due 12/29/49 (Å)(ƒ) | 300 | 429 | Inc. 1st Lien Term Loan D | |||||
Lloyds Banking Group PLC | 6.938% due 01/30/19 (Ê) | 1,017 | 850 | |||||
7.500% due 12/31/49 (ƒ) | 240 | 255 | Empire Generating Co. LLC Term | |||||
Magnetite XV, Ltd. | Loan B | |||||||
Series 2015-15A Class D | 5.250% due 03/14/21 (Ê) | 443 | 394 | |||||
4.317% due 10/25/27 (Å)(Ê) | 375 | 356 | Empire Generating Co. LLC Term | |||||
MEG Energy Corp. | Loan C | |||||||
7.000% due 03/31/24 (Þ) | 340 | 294 | 5.250% due 03/14/21 (Ê) | 32 | 29 | |||
Morgan Stanley | GTCR Valor Cos., Inc. 1st Lien | |||||||
Series GMTN | Term Loan | |||||||
0.371% due 01/16/17 (Ê) | EUR | 100 | 110 | 6.000% due 05/30/21 (Ê) | 301 | 294 | ||
Offshore Group Investment, Ltd. | Gymboree Corp. (The) | |||||||
7.500% due 11/01/19 | 2,000 | 587 | 5.000% due 02/23/18 (Ê) | 510 | 327 | |||
Pacific Drilling SA | Hilton Worldwide Finance LLC | |||||||
5.375% due 06/01/20 (Þ) | 90 | 48 | Term Loan | |||||
Palmer Square, Ltd. | 3.500% due 10/25/20 (Ê) | 584 | 585 | |||||
Series 2014-1A Class D | Lantheus Medical Imaging, Inc. | |||||||
5.978% due 10/17/22 (Ê)(Þ) | 250 | 250 | ||||||
Petrobras Global Finance BV | Term Loan | |||||||
7.000% due 10/15/22 | 369 | 340 | ||||||
6.750% due 01/27/41 | 460 | 325 | Mashantucket (Western) Pequot | |||||
PHOTONIS Technologies SAS 1st | ||||||||
Lien Term Loan | Tribe Term Loan A | |||||||
5.000% due 07/01/18 (Ê) | 118 | 88 | ||||||
8.500% due 09/18/19 (Ê) | 271 | 257 | Mashantucket (Western) Pequot | |||||
Provincia De Buenos Aire | ||||||||
9.950% due 06/09/21 (Þ) | 170 | 175 | Tribe Term Loan B | |||||
Republic of Argentina Government | 9.375% due 06/30/20 (Ê) | 821 | 632 | |||||
Millennium Laboratories, Inc. Term | ||||||||
8.280% Bond due 12/31/33 (Å) | 5,524 | 5,298 | Loan B | |||||
SLM Student Loan Trust | 5.250% due 04/16/21 (Ê) | 499 | 176 | |||||
Series 2003-2 Class A5 | MModal LLC Term Loan B | |||||||
0.342% due 12/15/23 (Ê) | EUR | 518 | 537 | 9.000% due 01/31/20 (Ê) | 436 | 397 | ||
Slovenia Government International | Mohegan Tribal Gaming Authority | |||||||
Bond | Term Loan B | |||||||
5.500% due 06/15/18 (Ê) | 481 | 475 | ||||||
Series REGS | Mount Airy Lodge LLC 1st Lien | |||||||
5.250% due 02/18/24 | 400 | 448 | ||||||
Sound Point CLO II, Ltd. | Term Loan | |||||||
Series 2013-1A Class B1L | 13.500% due 04/01/18 | 392 | 402 | |||||
3.984% due 04/26/25 (Ê)(Þ) | 280 | 260 | Moxie Liberty LLC Term Loan B1 | |||||
7.500% due 08/21/20 (Ê) | 50 | 47 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 591
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Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
Moxie Patriot LLC Term Loan B1 | Series 2007-R6 Class 1A1 | |||||||
6.750% due 12/19/20 (Ê) | 475 | 449 | 2.106% due 01/26/36 (Ê) | 817 | 670 | |||
Murray Energy Corp. Term Loan B | CHL Mortgage Pass-Through Trust | |||||||
7.500% due 03/19/21 | 249 | 161 | Series 2004-12 Class 11A1 | |||||
Nine West Group, Inc. Term Loan | 3.026% due 08/25/34 (Ê) | 305 | 270 | |||||
6.250% due 01/08/20 (Ê) | 175 | 110 | Series 2004-16 Class 1A4A | |||||
Nine West Holdings, Inc. Term Loan | 0.962% due 09/25/34 (Ê) | 108 | 100 | |||||
4.750% due 10/08/19 (Ê) | 269 | 228 | Series 2004-25 Class 1A1 | |||||
Onex Carestream Finance LP 2nd | 0.532% due 02/25/35 (Ê) | 108 | 99 | |||||
Lien Term Loan | Series 2004-25 Class 2A1 | |||||||
9.500% due 12/07/19 (Ê) | 621 | 576 | 0.542% due 02/25/34 (Ê) | 134 | 117 | |||
Panda Sherman Power LLC Term | DSLA Mortgage Loan Trust | |||||||
Loan | Series 2004-AR3 Class 2A1 | |||||||
9.000% due 09/14/18 (Ê) | 668 | 602 | 2.498% due 07/19/44 (Ê) | 106 | 105 | |||
Preferred Proppants LLC Term Loan | Fannie Mae-Aces | |||||||
6.750% due 08/12/20 | 375 | 213 | Series 2012-M16 Class X | |||||
Red Lobster Management LLC Term | Interest Only STRIP | |||||||
Loan | 0.998% due 09/25/22 | 18,308 | 922 | |||||
6.250% due 07/28/21 (Ê) | 308 | 307 | GE Commercial Mortgage Corp. | |||||
Stallion Oilfield Holdings, Inc. Term | Series 2007-C1 Class A1A | |||||||
Loan B | 5.483% due 12/10/49 | 824 | 860 | |||||
8.000% due 06/19/18 (Ê) | 163 | 104 | HarborView Mortgage Loan | |||||
Styrolution Group GmbH Term | Series 2005-14 Class 4A1A | |||||||
Loan B | 2.597% due 12/19/35 (Ê) | 328 | 249 | |||||
6.500% due 09/30/19 (Ê) | 316 | 316 | Merrill Lynch Mortgage Investors | |||||
Texas Competitive Electric Holdings | Trust | |||||||
Co. LLC Extended Term Loan | Series 2003-A2 Class 2A3 | |||||||
4.677% due 10/10/17 (Ê) | 2,902 | 980 | 2.006% due 03/25/33 (Ê) | 342 | 339 | |||
The Talbots, Inc. 2nd Lien Term | Morgan Stanley Capital I, Inc. | |||||||
Loan | Series 2010-IQ14 Class A2FX | |||||||
9.500% due 03/17/21 (Ê) | 340 | 332 | 5.610% due 04/15/49 | 290 | 290 | |||
Toys "R" Us Delaware, Inc. Term | Sequoia Mortgage Trust | |||||||
Loan B | Series 2003-4 Class 2A1 | |||||||
5.250% due 05/25/18 (Ê) | 44 | 35 | 0.553% due 07/20/33 (Ê) | 179 | 169 | |||
Toys "R" Us Delaware, Inc. Term | Wells Fargo Mortgage Backed | |||||||
Loan B3 | Securities | |||||||
5.250% due 05/25/18 (Ê) | 7 | 5 | Series 2004-DD Class 2A6 | |||||
Toys R Us - Delaware, Inc. Term | 2.617% due 01/25/33 (Ê) | 531 | 529 | |||||
Loan | 6,285 | |||||||
8.250% due 10/24/19 (Ê) | 415 | 413 | Municipal Bonds - 0.4% | |||||
9.750% due 04/24/20 (Ê) | 440 | 384 | Commonwealth of Puerto Rico | |||||
Toys R Us Canada, Ltd. Term Loan | General Obligation Unlimited | |||||||
8.250% due 10/24/19 (Ê) | 334 | 333 | 8.000% due 07/01/35 | 650 | 472 | |||
Tribune Publishing Co. Term Loan | 5.125% due 07/01/37 | 20 | 12 | |||||
5.750% due 08/04/21 (Ê) | 212 | 201 | 5.250% due 07/01/37 | 20 | 13 | |||
Walter Investment Management | 5.000% due 07/01/41 | 85 | 53 | |||||
Corp. 1st Lien Term Loan | Puerto Rico Sales Tax Financing | |||||||
4.750% due 12/18/20 (Ê) | 519 | 472 | Corp. Revenue Bonds | |||||
Wilton Brands LLC Term Loan | Zero coupon due 08/01/54 (µ) | 2,975 | 196 | |||||
8.500% due 08/30/18 (Ê) | 550 | 531 | Puerto Rico Sales Tax Revenue | |||||
13,897 | Bonds | |||||||
Mortgage-Backed Securities - 1.2% | 5.250% due 08/01/57 | 420 | 260 | |||||
Adjustable Rate Mortgage Trust | Texas Public Finance Authority | |||||||
Series 2005-5 Class 2A1 | Revenue Bonds | |||||||
2.758% due 09/25/35 (Ê) | 696 | 581 | 8.250% due 07/01/24 | 555 | 550 | |||
Bear Stearns ALT-A Trust | Tobacco Settlement Financing Corp. | |||||||
Series 2005-10 Class 24A1 | Revenue Bonds | |||||||
2.460% due 01/25/36 (Ê) | 647 | 530 | 5.000% due 06/01/41 | 445 | 358 | |||
Series 2006-3 Class 31A1 | 1,914 | |||||||
2.799% due 05/25/36 (Ê) | 665 | 455 | Non-US Bonds - 1.3% | |||||
Bear Stearns Structured Products, | Autonomous Community of | |||||||
Inc. | Catalonia | |||||||
4.750% due 06/04/18 | EUR | 400 | 464 |
See accompanying notes which are an integral part of the financial statements.
592 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
Barclays Bank PLC | 1.875% due 08/31/22 | 700 | 700 | |||||
Series RCI | 2.500% due 08/15/23 | 1,600 | 1,660 | |||||
14.000% due 12/31/49 (ƒ) | GBP | 300 | 599 | 2.000% due 08/15/25 | 1,650 | 1,628 | ||
Deutsche Bundesrepublik Inflation | 9,060 | |||||||
Linked Bond | Total Long-Term Investments | |||||||
Series I/L | ||||||||
1.750% due 04/15/20 | EUR | 437 | 537 | (cost $102,171) | 92,699 | |||
0.100% due 04/15/23 | EUR | 362 | 425 | |||||
Deutscheland Government Bonds | Common Stocks - 23.4% | |||||||
Series I/L | Consumer Discretionary - 4.2% | |||||||
0.100% due 04/15/26 | EUR | 201 | 239 | Advance Auto Parts, Inc.(Û) | 7,641 | 1,516 | ||
France Government Bond OAT | Amazon.com, Inc.(Æ) | 300 | 188 | |||||
Series OATe | Caesars Entertainment Corp.(Æ) | 15,000 | 121 | |||||
0.250% due 07/25/18 | EUR | 363 | 414 | Cie Generale des Etablissements | ||||
1.100% due 07/25/22 | EUR | 54 | 67 | Michelin Class B | 7,544 | 751 | ||
0.250% due 07/25/24 | EUR | 51 | 60 | Diamond Resorts International, Inc.(Æ) | 47,250 | 1,344 | ||
Series OATi | DISH Network Corp. Class A(Æ) | 14,500 | 913 | |||||
1.300% due 07/25/19 | EUR | 749 | 891 | Dollar Tree, Inc.(Æ)(Û) | 26,408 | 1,730 | ||
2.100% due 07/25/23 | EUR | 55 | 74 | Elior(Þ) | 26,273 | 499 | ||
France Government Bonds | Hilton Worldwide Holdings, Inc. | 30,300 | 757 | |||||
Series OATi | Home Depot, Inc.(Û) | 5,697 | 704 | |||||
0.100% due 03/01/25 | EUR | 101 | 116 | Liberty Global PLC Class C(Æ)(Û) | 44,839 | 1,912 | ||
Hellenic Republic Bonds | Macy's, Inc. | 6,300 | 321 | |||||
Principal Only STRIP | MGM Resorts International(Æ) | 33,900 | 786 | |||||
Zero coupon due 10/15/42 | EUR | 39,250 | 177 | New Media Investment Group, Inc. | 29,839 | 480 | ||
Hellenic Republic Government | Nike, Inc. Class B(Û) | 10,729 | 1,406 | |||||
International Bond | Priceline Group, Inc. (The)(Æ) | 870 | 1,265 | |||||
4.500% due 07/03/17 | JPY | 110,000 | 784 | Service Corp. International | 5,000 | 141 | ||
Hema Bondco I BV | Sirius XM Holdings, Inc.(Æ) | 321,400 | 1,311 | |||||
5.212% due 06/15/19 (Ê)(Þ) | EUR | 360 | 269 | Sportsman's Warehouse Holdings, Inc. | ||||
Keystone Financing PLC | (Æ) | 1,200 | 13 | |||||
9.500% due 10/15/19 (Þ) | GBP | 160 | 259 | Starbucks Corp.(Û) | 18,767 | 1,174 | ||
LightPoint Pan-European CLO PLC | Starwood Hotels & Resorts Worldwide, | |||||||
Series 2006-1 Class A | Inc. | 15,500 | 1,238 | |||||
0.476% due 01/31/22 (Ê) | EUR | 47 | 51 | |||||
Rapid Holding GmbH | Time Warner Cable, Inc. | 6,750 | 1,278 | |||||
6.625% due 11/15/20 (Þ) | EUR | 325 | 363 | Time Warner, Inc. | 9,000 | 678 | ||
SK Spice SARL Term Loan B | Tribune Media Co. Class A | 33,400 | 1,347 | |||||
0.000% due 06/12/21 (v) | EUR | 205 | 224 | Yum! Brands, Inc. | 3,000 | 213 | ||
United Kingdom Gilt Inflation | 22,086 | |||||||
Linked | ||||||||
Series 3MO | Consumer Staples - 1.7% | |||||||
1.875% due 11/22/22 | GBP | 253 | 465 | Anheuser-Busch InBev SA - ADR(Û) | 16,220 | 1,936 | ||
0.125% due 03/22/24 | GBP | 107 | 178 | Blue Buffalo Pet Products, Inc.(Æ) | 4,100 | 74 | ||
WFS Global Holding SAS | Coca-Cola Co. (The)(Û) | 17,225 | 729 | |||||
9.500% due 07/15/22 (Þ) | EUR | 200 | 228 | CVS Health Corp.(Û) | 6,501 | 642 | ||
6,884 | Mondelez International, Inc. Class A(Û) | 31,510 | 1,454 | |||||
Nomad Foods, Ltd.(Æ) | 5,000 | 71 | ||||||
United States Government Treasuries - 1.7% | PepsiCo, Inc.(Û) | 7,172 | 733 | |||||
United States Treasury Inflation | Procter & Gamble Co. (The)(Û) | 18,339 | 1,401 | |||||
Indexed Bonds | SABMiller PLC - ADR | 8,500 | 523 | |||||
0.125% due 04/15/18 | 722 | 723 | Walgreens Boots Alliance, Inc.(Û) | 18,106 | 1,533 | |||
2.125% due 01/15/19 | 111 | 118 | 9,096 | |||||
0.125% due 04/15/19 | 661 | 660 | ||||||
0.375% due 07/15/23 | 256 | 252 | Energy - 1.6% | |||||
0.625% due 01/15/24 | 204 | 204 | Anadarko Petroleum Corp. | 8,400 | 562 | |||
0.125% due 07/15/24 | 273 | 239 | Atlas Energy Group LLC(Æ) | 42,888 | 89 | |||
0.375% due 01/15/25 | 302 | 290 | Atlas Resource Partners, LP | 30,815 | 88 | |||
1.375% due 02/15/44 | 716 | 742 | Black Stone Minerals, LP | 6,100 | 84 | |||
0.750% due 02/15/45 | 304 | 269 | CONSOL Energy, Inc. | 22,500 | 150 | |||
United States Treasury Notes | Enviva Partners, LP | 3,800 | 58 | |||||
1.750% due 05/15/23 | 1,600 | 1,575 | Gulf Coast Ultra Deep Royalty Trust(Æ) | 133,875 | 33 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 593
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Gulfport Energy Corp.(Æ) | 37,000 | 1,127 | Pfizer, Inc.(Û) | 104,104 | 3,521 | ||||
Kinder Morgan, Inc. | 29,138 | 797 | SIGA Technologies, Inc.(Æ) | 100,000 | 75 | ||||
Marathon Petroleum Corp.(Û) | 25,536 | 1,323 | UnitedHealth Group, Inc.(Û) | 17,059 | 2,009 | ||||
Nordic American Offshore, Ltd. | 27,500 | 166 | VCA, Inc.(Æ) | 10,500 | 575 | ||||
Phillips 66(Æ) | 8,586 | 765 | 18,337 | ||||||
Sunrun, Inc.(Æ) | 1,800 | 13 | |||||||
Targa Resources Corp. | 15,050 | 860 | Materials and Processing - 1.8% | ||||||
Targa Resources Partners, LP | 10,266 | 308 | Ashland, Inc. | 17,400 | 1,909 | ||||
TerraForm Global, Inc. Class A(Æ) | 37,900 | 289 | CF Industries Holdings, Inc.(Û) | 73,458 | 3,729 | ||||
Transocean Partners LLC | 13,600 | 154 | Dow Chemical Co. (The) | 27,879 | 1,440 | ||||
YPF SA - ADR | 78,000 | 1,666 | Eastman Chemical Co. | 6,937 | 501 | ||||
8,532 | Graphic Packaging Holding Co. | 60,000 | 850 | ||||||
LyondellBasell Industries NV Class A | 2,900 | 269 | |||||||
Financial Services - 4.6% | Orion Engineered Carbons SA | 6,900 | 90 | ||||||
AIA Group, Ltd. | 123,900 | 724 | Sealed Air Corp. | 8,750 | 430 | ||||
Alpha Bank AE(Æ) | 1,050,000 | 132 | Summit Materials, Inc. Class A(Æ) | 8,200 | 173 | ||||
Altisource Portfolio Solutions SA(Æ) | 12,107 | 325 | 9,391 | ||||||
American International Group, Inc. | 27,900 | 1,759 | |||||||
Barclays PLC | 160,600 | 572 | Producer Durables - 1.7% | ||||||
BGC Partners, Inc. Class A | 52,500 | 454 | AerCap Holdings NV(Æ) | 46,300 | 1,921 | ||||
Chimera Investment Corp.(ö) | 98,500 | 1,387 | AMR Corp.(Æ)(Å) | 75,000 | — | ||||
Citigroup, Inc. | 37,900 | 2,015 | Delta Air Lines, Inc.(Û) | 59,255 | 3,013 | ||||
Citizens Financial Group, Inc. | 3,900 | 92 | Eagle Bulk Shipping, Inc.(Æ) | 8,337 | 51 | ||||
Colony Capital, Inc. Class A(ö) | 33,500 | 681 | General Electric Co. | 59,000 | 1,706 | ||||
E*Trade Financial Corp.(Æ) | 33,300 | 949 | Milacron Holdings Corp.(Æ) | 3,200 | 55 | ||||
Federal National Mortgage | Nomad Foods, Ltd.(Æ) | 61,000 | 890 | ||||||
Association(Æ) | 175,000 | 394 | United Continental Holdings, Inc.(Æ) | 24,254 | 1,463 | ||||
Fiserv, Inc.(Æ) | 7,616 | 735 | 9,099 | ||||||
HRG Group, Inc.(Æ) | 85,100 | 1,145 | |||||||
JPMorgan Chase & Co. | 17,000 | 1,092 | Technology - 3.4% | ||||||
KKR & Co., LP | 22,174 | 380 | Alphabet, Inc. Class A(Æ)(Û) | 8,520 | 6,283 | ||||
McGraw Hill Financial, Inc.(Û) | 6,501 | 602 | Amadeus IT Holding SA Class A | 5,100 | 217 | ||||
Moody's Corp.(Û) | 6,300 | 606 | Facebook, Inc. Class A(Æ)(Û) | 34,247 | 3,492 | ||||
Navient Corp. | 128,650 | 1,697 | First Data Corp. Class A(Æ) | 1,400 | 22 | ||||
New Residential Investment Corp.(ö) | 73,124 | 887 | LinkedIn Corp. Class A(Æ)(Û) | 3,686 | 888 | ||||
New Senior Investment Group, Inc.(ö) | 61,800 | 619 | Loral Space & Communications, Inc.(Æ) | 12,400 | 554 | ||||
PennyMac Financial Services, Inc. Class | Microsoft Corp. | 29,826 | 1,570 | ||||||
A(Æ) | 48,800 | 807 | MModal(Å)(Æ) | 13,683 | 214 | ||||
PennyMac Mortgage Investment Trust(ö) | 6,500 | 95 | Motorola Solutions, Inc. | 19,500 | 1,365 | ||||
Piraeus Bank SA(Æ) | 405,000 | 41 | NII Holdings, Inc.(Æ) | 40,000 | 281 | ||||
Public Storage(ö) | 3,117 | 715 | Qihoo 360 Technology Co., Ltd. | ||||||
RCS Capital Corp. Class A(Æ) | 81,500 | 62 | - ADR(Æ) | 8,500 | 485 | ||||
Realogy Holdings Corp.(Æ) | 21,800 | 852 | SunEdison, Inc.(Æ) | 88,800 | 648 | ||||
Spirit Realty Capital, Inc.(ö) | 53,500 | 545 | Tencent Holdings, Ltd. | 118,370 | 2,222 | ||||
Springleaf Holdings, Inc. Class A(Æ) | 20,600 | 966 | 18,241 | ||||||
Tetragon Financial Group, Ltd. | 127,240 | 1,229 | |||||||
Visa, Inc. Class A | 20,375 | 1,581 | Utilities - 0.9% | ||||||
24,140 | Abengoa Yield PLC | 4,700 | 87 | ||||||
NextEra Energy, Inc. | 20,287 | 2,083 | |||||||
Health Care - 3.5% | Sempra Energy(Û) | 27,281 | 2,794 | ||||||
Allergan PLC(Æ) | 11,333 | 3,496 | 4,964 | ||||||
Bristol-Myers Squibb Co.(Û) | 27,857 | 1,837 | |||||||
Carbylan Therapeutics, Inc.(Æ) | 700 | 3 | Total Common Stocks | ||||||
Celgene Corp.(Æ)(Û) | 6,098 | 748 | (cost $121,416) | 123,886 | |||||
Cigna Corp.(Û) | 8,578 | 1,150 | |||||||
Depomed, Inc.(Æ) | 40,000 | 700 | Investments in Other Funds – 0.2% | ||||||
GlaxoSmithKline PLC - ADR(Æ) | 17,156 | 739 | SPDR S&P 500 ETF Trust | 28,577 | 1,269 | ||||
Humana, Inc.(Û) | 6,778 | 1,211 | SPDR S&P Oil & Gas Exploration & | ||||||
Johnson & Johnson(Û) | 10,600 | 1,071 | Production ETF | 900 | 33 | ||||
Paratek Pharmaceuticals, Inc.(Æ) | 1,100 | 19 | |||||||
Perrigo Co. PLC | 7,500 | 1,183 |
See accompanying notes which are an integral part of the financial statements.
594 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||||
Principal | Fair | Principal | Fair | |||||||||
Amount ($) | Value | Amount ($) | Value | |||||||||
or Shares | $ | or Shares | $ | |||||||||
Total Investments in Other Funds | SPDR S&P 500 ETF Trust | |||||||||||
(cost $1,243) | 1,302 | Nov 2015 190.00 Put (641) | USD | 12,179 | (ÿ) | 14 | ||||||
Nov 2015 207.50 Put (200) | USD | 4,150 | (ÿ) | 25 | ||||||||
Preferred Stocks - 0.1% | Swaptions | |||||||||||
Energy - 0.1% | (Fund Receives/Fund Pays) | |||||||||||
SunEdison, Inc.(Æ) | 400 | 270 | USD 3 Month LIBOR/USD 2.000% | |||||||||
Dec 2015 0.00 Call (1) | 25,000 | (ÿ) | 43 | |||||||||
Total Preferred Stocks | May 2016 0.00 Put (1) | 1,290 | (ÿ) | 5 | ||||||||
(cost $400) | 270 | Tenet Healthcare Corp. | ||||||||||
Nov 2015 40.00 Call (150) | USD | 600 | (ÿ) | 3 | ||||||||
YPF SA | ||||||||||||
Options Purchased - 1.4% | Dec 2015 20.00 Call (120) | USD | 240 | (ÿ) | 30 | |||||||
(Number of Contracts) | Dec 2015 14.00 Put (195) | USD | 273 | (ÿ) | 8 | |||||||
Apple, Inc. | Total Options Purchased | |||||||||||
Nov 2015 100.00 Call (75) | USD | 750 | (ÿ) | 147 | ||||||||
Jan 2016 100.00 Call (120) | USD | 1,200 | (ÿ) | 240 | (cost $5,992) | 7,326 | ||||||
Baxter International, Inc. | ||||||||||||
Jan 2016 30.00 Call (100) | USD | 300 | (ÿ) | 79 | Warrants & Rights - 0.3% | |||||||
Jan 2016 35.00 Call (160) | USD | 560 | (ÿ) | 52 | Alpha Bank (Æ) | |||||||
Cross Currency Options | 2017 | Warrants | 63,200 | 2 | ||||||||
(EUR/USD) | HSBC Bank PLC (Æ) | |||||||||||
Jan 2016 1.01 Put (1) | EUR | 6,894 | (ÿ) | 778 | ||||||||
Cross Currency Options | 2017 | Warrants | 113,934 | 1,617 | ||||||||
(USD/BRL) | MModal (Å)(Æ) | |||||||||||
Feb 2016 4.00 Call (1) | USD | 205,500 | (ÿ) | 2,129 | 2017 | Warrants | 9,579 | 3 | ||||
Cross Currency Options | Total Warrants & Rights | |||||||||||
(USD/CNY) | (cost $2,027) | 1,622 | ||||||||||
Feb 2016 6.13 Call (1) | USD | 419,905 | (ÿ) | 2,778 | ||||||||
Delta Air Lines, Inc. | Short-Term Investments - 40.1% | |||||||||||
Nov 2015 49.00 Call (125) | USD | 613 | (ÿ) | 31 | ||||||||
JET Equipment Trust | ||||||||||||
Depomed, Inc. | Series 94-A | |||||||||||
Nov 2015 18.00 Call (100) | USD | 180 | (ÿ) | 10 | 9.410% due 12/15/15 (Þ) | 229 | 236 | |||||
Dec 2015 22.00 Call (25) | USD | 55 | (ÿ) | 2 | Russell U.S. Cash Management Fund | 155,794,021 | (8) | 155,794 | ||||
Dec 2015 26.00 Call (100) | USD | 260 | (ÿ) | 3 | Texas Competitive Electric Holdings Co., | |||||||
Diamond Resorts | LLC Term Loan | |||||||||||
International, Inc. | 4.677% due 10/10/16 | 1,023 | 327 | |||||||||
Feb 2016 22.50 Call (50) | USD | 113 | (ÿ) | 31 | ||||||||
Eurodollar 1 Year | United States Treasury Bills | |||||||||||
0.030% due 11/05/15 (ç)(~) | 1,000 | 1,000 | ||||||||||
Midcurve Futures | 0.070% due 01/14/16 (~) | 1,000 | 1,000 | |||||||||
Dec 2015 99.00 Put (120) | USD | 28,958 | (ÿ) | 29 | ||||||||
Gold 100 oz. Futures | 0.050% due 11/27/15 (ç)(~)(§) | 19,000 | 18,999 | |||||||||
Jan 2016 2,000.00 (705) | USD | 141,000 | (ÿ) | 7 | 0.066% due 12/03/15 (ç)(~) | 3,828 | 3,828 | |||||
Horizon Pharma Public, | 0.066% due 12/03/15 (ç)(~) | 5,000 | 5,000 | |||||||||
Ltd. Co. | 0.076% due 12/03/15 (ç)(~) | 400 | 400 | |||||||||
Nov 2015 16.00 Call (100) | USD | 160 | (ÿ) | 16 | 0.110% due 12/17/15 (ç)(~)(Û) | 5,000 | 5,000 | |||||
Inflationary Floor Options | Zero coupon due 01/14/16 (~) | 1,552 | 1,552 | |||||||||
Aug 2019 1.60 Call (1) | USD | 24,442 | (ÿ) | 259 | 0.140% due 01/28/16 | 7,041 | 7,039 | |||||
Aug 2019 1.63 Call (1) | USD | 26,163 | (ÿ) | 167 | 0.160% due 02/04/16 | 4,091 | 4,090 | |||||
Aug 2019 1.63 Put (1) | USD | 9,425 | (ÿ) | 60 | 0.160% due 02/04/16 (~) | 260 | 260 | |||||
iShares MSCI Brazil | 0.230% due 03/03/16 (~)(Û) | 5,000 | 4,996 | |||||||||
Capped ETF | United States Treasury Notes | |||||||||||
Nov 2015 25.00 Call (150) | USD | 375 | (ÿ) | 3 | 0.250% due 03/10/16 (~)(Û) | 3,000 | 2,997 | |||||
iShares MSCI South Korea | Total Short-Term Investments | |||||||||||
Capped ETF | ||||||||||||
Dec 2015 53.00 Put (100) | USD | 10 | (ÿ) | 11 | (cost $212,901) | 212,518 | ||||||
Jan 2016 52.00 Put (125) | USD | 650 | (ÿ) | 18 | ||||||||
Medtronic Public, Ltd. Co. | Repurchase Agreements - 6.9% | |||||||||||
Jan 2016 70.00 Call (125) | USD | 875 | (ÿ) | 68 | Agreement with Barclays and State Street | |||||||
Micron Technology, Inc. | Bank (Tri-Party) of $1,200 dated | |||||||||||
Jan 2017 20.00 Call (990) | USD | 1,980 | (ÿ) | 203 | October 30, 2015 at 0.130% to be | |||||||
Mylan NV | repurchased at $1,200 on November | |||||||||||
Nov 2015 42.00 Put (75) | USD | 315 | (ÿ) | 11 | 2, 2015 collateralized by: $1,195 | |||||||
S&P 500 E-Mini Index | par various United States Treasury | |||||||||||
Nov 2015 2,000.00 Put (63) | USD | 6,300 | (ÿ) | 27 | Obligations, valued at $1,222. | 1,200 | 1,200 | |||||
Dec 2015 2,000.00 Put (49) | USD | 5,300 | (ÿ) | 39 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 595
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||||||
Principal | Fair | Principal | Fair | |||||||||||
Amount ($) | Value | Amount ($) | Value | |||||||||||
or Shares | $ | or Shares | $ | |||||||||||
Agreement with Deutsche Bank and | Varian Medical Systems, Inc.(Æ) | (8,941 | ) | (702 | ) | |||||||||
State Street Bank (Tri-Party) of | (2,920 | ) | ||||||||||||
$ | 9,600 dated October 30, 2015 at | Materials and Processing - (1.1)% | ||||||||||||
0.180% to be repurchased at $9,600 | Fastenal Co. | (26,877 | ) | (1,053 | ) | |||||||||
on November 2, 2015 collateralized | First Quantum Minerals, Ltd. | (105,351 | ) | (562 | ) | |||||||||
by: $8,283 par various United States | Glencore PLC(Æ) | (752,151 | ) | (1,295 | ) | |||||||||
Treasury Obligations, valued at | LyondellBasell Industries NV Class A | (15,827 | ) | (1,471 | ) | |||||||||
$ | 9,703 | . | 9,600 | 9,600 | Mosaic Co. (The) | (21,204 | ) | (717 | ) | |||||
Agreement with Goldman Sachs and | Potash Corp. of Saskatchewan, Inc. | (32,100 | ) | (649 | ) | |||||||||
State Street Bank (Tri-Party) of | (5,747 | ) | ||||||||||||
$ | 7,400 dated October 30, 2015 at | Producer Durables - (0.5)% | ||||||||||||
0.180% to be repurchased at $7,400 | Caterpillar, Inc. | (17,761 | ) | (1,297 | ) | |||||||||
on November 2, 2015 collateralized | Cummins, Inc. | (10,523 | ) | (1,089 | ) | |||||||||
by: $7,070 par various United States | ||||||||||||||
Government Agency Obligations, | (2,386 | ) | ||||||||||||
valued at $7,617. | 7,400 | 7,400 | Technology - (0.6)% | |||||||||||
Apple, Inc. | (7,750 | ) | (926 | ) | ||||||||||
Agreement with JP Morgan Chase | International Business Machines Corp. | (6,825 | ) | (956 | ) | |||||||||
and State Street Bank (Tri-Party) of | Motorola Solutions, Inc. | (7,235 | ) | (506 | ) | |||||||||
$ | 18,500 dated October 30, 2015 at | Workday, Inc. Class A(Æ) | (9,580 | ) | (757 | ) | ||||||||
0.190% to be repurchased at $18,500 | ||||||||||||||
on November 2, 2015 collateralized | (3,145 | ) | ||||||||||||
by: $18,897 par various United | Total Common Stocks | |||||||||||||
States Treasury Obligations, valued at | (proceeds $25,183) | (22,621 | ) | |||||||||||
$ | 18,900 | . | 18,500 | 18,500 | ||||||||||
Total Repurchase Agreements | Investments in Other Funds - (1.1)% | |||||||||||||
(cost $36,700) | 36,700 | iShares MSCI Brazil Capped ETF | (48,660 | ) | (1,113 | ) | ||||||||
iShares MSCI Emerging Markets ETF | (59,518 | ) | (2,075 | ) | ||||||||||
Total Investments 89.9% | iShares U.S. Real Estate ETF | (8,500 | ) | (640 | ) | |||||||||
(identified cost $482,850) | 476,323 | iShares Nasdaq Biotechnology ETF | (4,704 | ) | (1,531 | ) | ||||||||
SPDR S&P Retail ETF | (3,500 | ) | (160 | ) | ||||||||||
Consumer Discretionary Select | (3,000 | ) | (191 | ) | ||||||||||
Securities Sold Short - (5.4)% | Total Investments in Other Funds | |||||||||||||
Common Stocks - (4.3)% | ||||||||||||||
Consumer Discretionary - (0.6)% | (proceeds $5,998) | (5,710 | ) | |||||||||||
Autoliv, Inc. | (6,635 | ) | (804 | ) | ||||||||||
Charter Communications, Inc. Class | Total Securities Sold Short | |||||||||||||
A(Æ) | (3,575 | ) | (683 | ) | (proceeds $31,181) | (28,331 | ) | |||||||
Kohl's Corp. | (13,137 | ) | (606 | ) | ||||||||||
Swatch Group AG (The) Class B | (3,220 | ) | (1,257 | ) | Other Assets and Liabilities, | |||||||||
(3,350 | ) | Net - 15.5% | 82,012 | |||||||||||
Consumer Staples – (0.0)% | ||||||||||||||
Molson Coors Brewing Co. Class B | (1,250 | ) | (110 | ) | Net Assets - 100.0% | 530,004 | ||||||||
Energy - (0.4)% | ||||||||||||||
Apache Corp. | (11,662 | ) | (549 | ) | ||||||||||
Chevron Corp. | (8,579 | ) | (780 | ) | ||||||||||
Royal Dutch Shell PLC Class A | ||||||||||||||
- ADR(Æ) | (13,204 | ) | (693 | ) | ||||||||||
(2,022 | ) | |||||||||||||
Financial Services - (0.6)% | ||||||||||||||
Canadian Imperial Bank of Commerce | (14,704 | ) | (1,128 | ) | ||||||||||
Goldman Sachs Group, Inc. (The) | (3,796 | ) | (712 | ) | ||||||||||
PayPal Holdings, Inc.(Æ) | (18,030 | ) | (650 | ) | ||||||||||
Realty Income Corp.(ö) | (9,119 | ) | (451 | ) | ||||||||||
(2,941 | ) | |||||||||||||
Health Care - (0.5)% | ||||||||||||||
Aetna, Inc. | (1,050 | ) | (121 | ) | ||||||||||
Anthem, Inc. | (650 | ) | (90 | ) | ||||||||||
Horizon Pharma PLC(Æ) | (24,375 | ) | (383 | ) | ||||||||||
Intuitive Surgical, Inc.(Æ) | (2,871 | ) | (1,426 | ) | ||||||||||
Mylan NV(Æ) | (4,500 | ) | (198 | ) |
See accompanying notes which are an integral part of the financial statements.
596 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
1.3% | ||||||||||||
Altice US Finance SA | 10/14/15 | 65,000 | 94.26 | 61 | 63 | |||||||
AMR | 10/14/15 | 75,000 | — | — | — | |||||||
Digicel, Ltd. | 10/06/15 | 100,000 | 88.90 | 89 | 90 | |||||||
Lloyds Bank PLC | 01/17/13 | 300,000 | 122.78 | 368 | 429 | |||||||
Magnetite XV, Ltd. | 10/20/15 | 375,000 | 94.94 | 356 | 356 | |||||||
MModal | 07/31/14 | 13,683 | 20.01 | 274 | 214 | |||||||
MModal | 08/28/14 | 5,448 | 25.99 | 1 | 1 | |||||||
MModal | 08/28/14 | 4,131 | 63.01 | 3 | 2 | |||||||
Mohegan Tribal Gaming Authority | 10/21/15 | 175,000 | 102.74 | 180 | 180 | |||||||
Optimas OE Solutions Holding LLC / Optimas OE Solutions, Inc. | 10/21/15 | 330,000 | 96.51 | 318 | 314 | |||||||
Republic of Argentina Government Bond | 05/20/14 | 5,524,030 | 82.69 | 4,568 | 5,298 | |||||||
Townsquare Media, Inc. | 10/22/15 | 5,000 | 96.75 | 5 | 5 | |||||||
6,952 | ||||||||||||
d For a description of restricted securities see note 8 in the Notes to Financial Statements. |
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
Aluminum Futures | 18 | USD | 659 | 12/15 | (46 | ) | |
Aluminum Futures | 9 | USD | 332 | 01/16 | (19 | ) | |
Australia Bank Bill 90 Day Futures | 184 | AUD | 183,102 | 12/15 | 64 | ||
Australia Government 3 Year Treasury Bond Futures | 65 | AUD | 7,300 | 12/15 | 4 | ||
Australia Government 10 Year Treasury Bond Futures | 22 | AUD | 2,846 | 12/15 | 14 | ||
Brent Crude Oil Futures | 5 | USD | 248 | 11/15 | 4 | ||
Brent Crude Oil Futures | 5 | USD | 252 | 12/15 | 1 | ||
CAC40 EURO Index Futures | 5 | EUR | 245 | 11/15 | 11 | ||
Canada 10 Year Bond Futures | 11 | CAD | 1,545 | 12/15 | (15 | ) | |
Cocoa Futures | 11 | USD | 253 | 12/15 | 25 | ||
Coffee Futures | 1 | USD | 45 | 12/15 | (4 | ) | |
Copper Futures | 1 | USD | 128 | 11/15 | 1 | ||
Copper Futures | 13 | USD | 1,244 | 12/15 | (27 | ) | |
Copper Futures | 2 | USD | 256 | 01/16 | (8 | ) | |
Corn Futures | 14 | USD | 268 | 12/15 | (2 | ) | |
Cotton No. 2 Futures | 3 | USD | 95 | 12/15 | (5 | ) | |
Dow Jones Mini Index Futures | 6 | USD | 528 | 12/15 | — | ||
Euribor Interest Rate Futures | 37 | EUR | 9,257 | 06/17 | 7 | ||
Euribor Interest Rate Futures | 27 | EUR | 6,759 | 03/16 | 2 | ||
Euribor Interest Rate Futures | 26 | EUR | 6,510 | 06/16 | 2 | ||
Euribor Interest Rate Futures | 28 | EUR | 7,011 | 09/16 | 3 | ||
Euribor Interest Rate Futures | 32 | EUR | 8,011 | 12/16 | 4 | ||
Euribor Interest Rate Futures | 35 | EUR | 8,760 | 03/17 | 5 | ||
Euribor Interest Rate Futures | 18 | EUR | 4,502 | 09/17 | 4 | ||
Euro STOXX Index 50 Futures | 198 | EUR | 6,738 | 12/15 | 37 | ||
Euro-Bobl Futures | 80 | EUR | 10,354 | 12/15 | 21 | ||
Euro-BTP Futures | 24 | EUR | 3,335 | 12/15 | 67 | ||
Euro-Bund Futures | 40 | EUR | 6,288 | 12/15 | 40 | ||
Euro-Buxl Futures | 4 | EUR | 631 | 12/15 | 9 | ||
Euro-OAT Futures | 15 | EUR | 2,299 | 12/15 | 28 | ||
Euro-Schatz Futures | 104 | EUR | 11,594 | 12/15 | 3 | ||
Eurodollar Futures | 36 | USD | 8,951 | 03/16 | — | ||
Eurodollar Futures | 26 | USD | 6,455 | 06/16 | 2 | ||
Eurodollar Futures | 20 | USD | 4,958 | 09/16 | 2 | ||
Eurodollar Futures | 17 | USD | 4,207 | 12/16 | 4 | ||
Eurodollar Futures | 15 | USD | 3,707 | 03/17 | 3 | ||
Eurodollar Futures | 13 | USD | 3,208 | 06/17 | 4 | ||
Eurodollar Futures | 12 | USD | 2,957 | 09/17 | 2 | ||
FTSE CHINA A50 Index Futures | 22 | USD | 220 | 11/15 | (2 | ) | |
FTSE/JSE Top 40 Index Futures | 29 | ZAR | 14,139 | 12/15 | 12 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 597
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
FTSE/MIB Index Futures | 2 | EUR | 224 | 12/15 | (2 | ) | |
Gas Oil Futures | 1 | USD | 58 | 11/15 | (2 | ) | |
Gold 100 oz. Futures | 76 | USD | 8,675 | 12/15 | (6 | ) | |
H-Shares Index Futures | 3 | HKD | 1,564 | 11/15 | (5 | ) | |
iShares MSCI Taiwan Index Futures | 11 | USD | 348 | 11/15 | (2 | ) | |
Japan Government 10 Year Bond Futures | 1 | JPY | 148,560 | 12/15 | 6 | ||
Japan Government Mini 10 Year Bond Futures | 72 | JPY | 1,069,488 | 12/15 | 23 | ||
KOSPI2 Index Futures | 7 | KRW | 879,200 | 12/15 | 4 | ||
Lead Futures | 3 | USD | 127 | 12/15 | 2 | ||
Lead Futures | 1 | USD | 42 | 01/16 | 2 | ||
Lean Hogs Futures | 5 | USD | 118 | 12/15 | (15 | ) | |
Live Cattle Futures | 3 | USD | 170 | 12/15 | (3 | ) | |
Long Gilt Futures | 27 | GBP | 3,179 | 12/15 | (10 | ) | |
Low Sulphur Gasoil Futures | 4 | USD | 182 | 11/15 | (9 | ) | |
Low Sulphur Gasoil Futures | 4 | USD | 184 | 12/15 | (11 | ) | |
MSCI Emerging Markets Mini Index Futures | 348 | USD | 14,680 | 12/15 | (492 | ) | |
Nasdaq 100 E-Mini Index Futures | 25 | USD | 2,322 | 12/15 | 20 | ||
New York Harbor ULSD Futures | 2 | USD | 127 | 11/15 | (11 | ) | |
Nickel Futures | 2 | USD | 121 | 12/15 | 1 | ||
Nickel Futures | 2 | USD | 121 | 01/16 | 2 | ||
Nikkei 225 Index Futures | 6 | JPY | 114,540 | 12/15 | 13 | ||
OMXS30 Index Futures | 7 | SEK | 1,047 | 11/15 | — | ||
Palladium Futures | 6 | USD | 406 | 12/15 | 19 | ||
Platinum Futures | 4 | USD | 198 | 01/16 | 1 | ||
S&P 500 E-Mini Index Futures | 15 | USD | 1,555 | 12/15 | 54 | ||
S&P Mid 400 E-Mini Index Futures | 1 | USD | 144 | 12/15 | 1 | ||
SGX S&P CNX Nifty Index Futures | 195 | USD | 3,150 | 11/15 | (73 | ) | |
Silver Futures | 12 | USD | 934 | 12/15 | (9 | ) | |
Soybean Futures | 1 | USD | 44 | 01/16 | — | ||
Soybean Meal Futures | 43 | USD | 1,309 | 12/15 | (141 | ) | |
Soybean Oil Futures | 9 | USD | 152 | 12/15 | (19 | ) | |
Sterling Futures | 15 | GBP | 1,853 | 06/17 | 5 | ||
Sterling Interest Rate Futures | 17 | GBP | 2,111 | 03/16 | 3 | ||
Sterling Interest Rate Futures | 271 | GBP | 33,624 | 06/16 | 6 | ||
Sterling Interest Rate Futures | 23 | GBP | 2,851 | 09/16 | 6 | ||
Sterling Interest Rate Futures | 18 | GBP | 2,229 | 12/16 | 6 | ||
Sterling Interest Rate Futures | 16 | GBP | 1,979 | 03/17 | 5 | ||
Sterling Interest Rate Futures | 13 | GBP | 1,605 | 09/17 | 4 | ||
Sugar 11 Futures | 12 | USD | 195 | 02/16 | 3 | ||
TAIEX Index Futures | 1 | TWD | 1,714 | 11/15 | — | ||
TOPIX Index Futures | 83 | JPY | 1,293,555 | 12/15 | 426 | ||
United States 2 Year Treasury Note Futures | 92 | USD | 20,116 | 12/15 | (20 | ) | |
United States 5 Year Treasury Note Futures | 60 | USD | 7,186 | 12/15 | (2 | ) | |
United States 10 Year Treasury Note Futures | 75 | USD | 9,577 | 12/15 | (48 | ) | |
United States Treasury Long Bond Futures | 13 | USD | 2,034 | 12/15 | (5 | ) | |
United States Treasury Ultra Bond Futures | 10 | USD | 1,597 | 12/15 | (3 | ) | |
Wheat Futures | 4 | USD | 104 | 12/15 | 1 | ||
WTI Crude Futures | 6 | USD | 280 | 11/15 | (12 | ) | |
Zinc Futures | 1 | USD | 42 | 11/15 | (5 | ) | |
Zinc Futures | 7 | USD | 298 | 12/15 | (1 | ) | |
Zinc Futures | 6 | USD | 256 | 01/16 | 2 | ||
Short Positions | |||||||
Aluminum Futures | 24 | USD | 879 | 12/15 | 33 | ||
Aluminum Futures | 9 | USD | 332 | 01/16 | 19 | ||
Bankers Acceptance Futures | 16 | CAD | 3,968 | 03/16 | — | ||
Bankers Acceptance Futures | 11 | CAD | 2,728 | 06/16 | — | ||
BIST 30 Index Futures | 946 | TRY | 9,486 | 12/15 | (58 | ) | |
Bovespa Index Futures | 5 | BRL | 232 | 12/15 | 4 | ||
Brent Crude Oil Futures | 5 | USD | 248 | 11/15 | (1 | ) | |
Brent Crude Oil Futures | 19 | USD | 956 | 12/15 | (4 | ) | |
Cocoa Futures | 8 | USD | 187 | 12/15 | (19 | ) | |
Coffee Futures | 10 | USD | 454 | 12/15 | (1 | ) | |
Copper Futures | 1 | USD | 128 | 11/15 | 1 | ||
Copper Futures | 18 | USD | 1,534 | 12/15 | (6 | ) | |
Copper Futures | 2 | USD | 256 | 01/16 | 8 | ||
Corn Futures | 28 | USD | 535 | 12/15 | (1 | ) | |
Cotton No. 2 Futures | 1 | USD | 32 | 12/15 | 1 |
See accompanying notes which are an integral part of the financial statements.
598 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Eurodollar Futures | 202 | USD | 49,990 | 12/16 | 10 | ||
Eurodollar Futures | 116 | USD | 28,550 | 12/17 | 39 | ||
Euroswiss Interest Rate Futures | 7 | CHF | 1,767 | 09/16 | — | ||
EuroSwiss Interest Rate Futures | 7 | CHF | 1,766 | 03/16 | — | ||
EuroSwiss Interest Rate Futures | 7 | CHF | 1,766 | 06/16 | — | ||
Federal Funds 30 Day Futures | 276 | USD | 114,854 | 11/15 | (86 | ) | |
Federal Funds 30 Day Futures | 469 | USD | 194,709 | 04/16 | (50 | ) | |
FTSE 100 Index Futures | 3 | GBP | 190 | 12/15 | — | ||
Gas Oil Futures | 7 | USD | 403 | 11/15 | (3 | ) | |
Gold 100 oz. Futures | 33 | USD | 3,767 | 12/15 | (141 | ) | |
Hang Seng Index Futures | 3 | HKD | 3,403 | 11/15 | 5 | ||
H-Shares Index Futures | 1 | HKD | 521 | 11/15 | — | ||
IBEX 35 Index Futures | 3 | EUR | 308 | 11/15 | (7 | ) | |
Lead Futures | 3 | USD | 127 | 12/15 | 1 | ||
Lead Futures | 1 | USD | 42 | 01/16 | (2 | ) | |
Lean Hogs Futures | 6 | USD | 142 | 12/15 | — | ||
Low Sulphur Gasoil Futures | 4 | USD | 182 | 11/15 | 11 | ||
Low Sulphur Gasoil Futures | 27 | USD | 1,242 | 12/15 | 29 | ||
MSCI EAFE Mini Index Futures | 1 | USD | 88 | 12/15 | (3 | ) | |
MSCI Emerging Markets Mini Index Futures | 11 | USD | 464 | 12/15 | (6 | ) | |
MSCI Singapore Index ETS Futures | 4 | SGD | 134 | 11/15 | 3 | ||
Natural Gas Futures | 16 | USD | 371 | 11/15 | 63 | ||
New York Harbor ULSD Futures | 13 | USD | 828 | 11/15 | 11 | ||
Nickel Futures | 4 | USD | 241 | 12/15 | (4 | ) | |
Nickel Futures | 2 | USD | 121 | 01/16 | (1 | ) | |
Palladium Futures | 6 | USD | 406 | 12/15 | (44 | ) | |
Platinum Futures | 5 | USD | 247 | 01/16 | (4 | ) | |
Russell 2000 Mini Index Futures | 2 | USD | 232 | 12/15 | — | ||
S&P 500 E-Mini Index Futures | 20 | USD | 2,074 | 12/15 | (74 | ) | |
S&P/TSX 50 Index Futures | 4 | CAD | 634 | 12/15 | 2 | ||
Silver Futures | 9 | USD | 701 | 12/15 | (10 | ) | |
Soybean Futures | 34 | USD | 1,506 | 01/16 | 1 | ||
Soybean Meal Futures | 43 | USD | 1,309 | 12/15 | (9 | ) | |
Soybean Meal Futures | 7 | USD | 212 | 01/16 | — | ||
Soybean Oil Futures | 6 | USD | 102 | 12/15 | 14 | ||
Soybean Oil Futures | 13 | USD | 222 | 01/16 | — | ||
SPI 200 Index Futures | 2 | AUD | 262 | 12/15 | — | ||
Sterling Futures | 252 | GBP | 31,134 | 06/17 | (10 | ) | |
Sugar 11 Futures | 13 | USD | 211 | 02/16 | (31 | ) | |
Swiss Market Index Futures | 5 | CHF | 447 | 12/15 | (4 | ) | |
United States 5 Year Treasury Note Futures | 26 | USD | 3,114 | 12/15 | 15 | ||
Wheat Futures | 18 | USD | 457 | 12/15 | (1 | ) | |
WTI Crude Futures | 17 | USD | 792 | 11/15 | (2 | ) | |
Zinc Futures | 1 | USD | 42 | 11/15 | 5 | ||
Zinc Futures | 10 | USD | 425 | 12/15 | (1 | ) | |
Zinc Futures | 6 | USD | 256 | 01/16 | (1 | ) | |
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | (343 | ) |
Options Written | ||||||||
Amounts in thousands (except contract amounts) | ||||||||
Number of | Strike | Notional | Expiration | Fair Value | ||||
Call/Put | Contracts | Price | Amount | Date | $ | |||
Ashland, Inc. | Call | 30 | 100.00 | USD | 300 | 11/20/15 | (30 | ) |
Ashland, Inc. | Call | 50 | 120.00 | USD | 600 | 11/20/15 | (2 | ) |
Cross Currency Options (EUR/MXN) | Call | 1 | 18.30 | EUR | 114,375 | 11/09/15 | (44 | ) |
Cross Currency Options (EUR/USD) | Call | 1 | 1.32 | EUR | 4,528 | 01/12/16 | — | |
Cross Currency Options (USD/BRL) | Put | 1 | 4.00 | USD | 51,375 | 02/11/16 | (2,129 | ) |
Cross Currency Options (USD/JPY) | Put | 1 | 105.00 | USD | 18,007,500 | 11/25/15 | — | |
Cross Currency Options (USD/JPY) | Put | 1 | 105.00 | USD | 17,955,000 | 12/10/15 | — | |
Delta Air Lines, Inc. | Call | 250 | 52.50 | USD | 1,313 | 11/20/15 | (17 | ) |
Eurodollar 1 Year Midcurve Futures | Put | 233 | 98.75 | USD | 57,522 | 12/11/15 | (15 | ) |
Horizon Pharma Public, Ltd. Co. | Call | 200 | 19.00 | USD | 380 | 11/20/15 | (11 | ) |
Inflationary Floor Options | Call | 2 | 1.00 | USD | 62,800 | 08/15/19 | (406 | ) |
Inflationary Floor Options | Put | 1 | 1.00 | USD | 11,600 | 08/15/19 | (60 | ) |
S&P 500 E-Mini Index | Call | 63 | 2,100.00 | USD | 6,615 | 11/20/15 | (41 | ) |
S&P 500 E-Mini Index | Put | 106 | 1,930.00 | USD | 10,229 | 12/04/15 | (37 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 599
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Options Written | ||||||||
Amounts in thousands (except contract amounts) | ||||||||
Number of | Strike | Notional | Expiration | Fair Value | ||||
Call/Put | Contracts | Price | Amount | Date | $ | |||
SanDisk Corp. | Call | 250 | 85.00 | USD | 2,125 | 11/20/15 | (1 | ) |
Service Corp. International | Call | 50 | 25.00 | USD | 125 | 11/20/15 | (17 | ) |
SPDR S&P 500 ETF Trust | Put | 200 | 197.00 | USD | 3,940 | 11/20/15 | (2 | ) |
Swaptions | ||||||||
(Fund Receives/Fund Pays) | ||||||||
USD 3 Month LIBOR/USD 1.500% | Call | 1 | 0.00 | 18,750 | 12/15/15 | (6 | ) | |
USD 3 Month LIBOR/USD 1.750% | Call | 1 | 0.00 | 21,875 | 12/15/15 | (20 | ) | |
USD 2.50%/3 Month LIBOR | Put | 1 | 0.00 | 11,250 | 05/12/16 | (3 | ) | |
YPF Sociedad Anonima | Call | 240 | 23.00 | USD | 552 | 12/18/15 | (26 | ) |
Total Liability for Options Written (premiums received $5,318) | (2,867 | ) |
Transactions in options written contracts for the period ended October 31, 2015 were as follows: | ||||||
Number of | Premiums | |||||
Contracts | Received | |||||
Outstanding October 31, 2014 | 2,488 | $ | 2,516 | |||
Opened | 61,067 | 30,320 | ||||
Closed | (16,754 | ) | (4,174 | ) | ||
Expired | (45,118 | ) | (23,344 | ) | ||
Outstanding October 31, 2015 | 1,683 | $ | 5,318 |
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Bank of America | USD | 8 | EUR | 7 | 12/15/15 | — | |||
Bank of America | USD | 31 | EUR | 28 | 12/15/15 | (1 | ) | ||
Bank of America | USD | 48 | EUR | 43 | 12/15/15 | (1 | ) | ||
Bank of America | USD | 70 | EUR | 62 | 12/15/15 | (2 | ) | ||
Bank of America | USD | 142 | EUR | 126 | 12/15/15 | (3 | ) | ||
Bank of America | USD | 265 | EUR | 234 | 12/15/15 | (8 | ) | ||
Bank of America | USD | 1,264 | EUR | 1,131 | 12/15/15 | (20 | ) | ||
Bank of America | USD | 579 | GBP | 382 | 12/16/15 | 10 | |||
Bank of America | USD | 198 | ILS | 781 | 11/30/15 | 4 | |||
Bank of America | CAD | 34 | USD | 25 | 12/16/15 | (1 | ) | ||
Bank of America | EUR | 6 | USD | 6 | 12/15/15 | — | |||
Bank of America | EUR | 8 | USD | 8 | 12/15/15 | — | |||
Bank of America | EUR | 12 | USD | 13 | 12/15/15 | — | |||
Bank of America | EUR | 19 | USD | 20 | 12/15/15 | — | |||
Bank of America | EUR | 38 | USD | 43 | 12/15/15 | 1 | |||
Bank of America | EUR | 139 | USD | 154 | 12/15/15 | 1 | |||
Bank of America | EUR | 302 | USD | 344 | 12/15/15 | 11 | |||
Bank of America | GBP | 1,082 | USD | 1,645 | 11/03/15 | (23 | ) | ||
Barclays | USD | 30 | EUR | 27 | 12/15/15 | (1 | ) | ||
Barclays | USD | 76 | EUR | 67 | 12/15/15 | (3 | ) | ||
Barclays | USD | 394 | EUR | 348 | 12/15/15 | (10 | ) | ||
Barclays | USD | 1,054 | INR | 69,875 | 01/21/16 | 1 | |||
Barclays | EUR | 49 | USD | 54 | 12/15/15 | — | |||
Citigroup | USD | 104 | AUD | 147 | 11/02/15 | 1 | |||
Citigroup | USD | 3 | AUD | 4 | 12/16/15 | — | |||
Citigroup | USD | 7 | AUD | 10 | 12/16/15 | — | |||
Citigroup | USD | 16 | AUD | 22 | 12/16/15 | — | |||
Citigroup | USD | 22 | AUD | 30 | 12/16/15 | — | |||
Citigroup | USD | 26 | AUD | 36 | 12/16/15 | — | |||
Citigroup | USD | 65 | AUD | 89 | 12/16/15 | (2 | ) | ||
Citigroup | USD | 106 | AUD | 148 | 12/16/15 | — | |||
Citigroup | USD | 119 | AUD | 164 | 12/16/15 | (2 | ) | ||
Citigroup | USD | 135 | AUD | 191 | 12/16/15 | — | |||
Citigroup | USD | 222 | AUD | 311 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 257 | AUD | 361 | 12/16/15 | — | |||
Citigroup | USD | 1,680 | AUD | 2,366 | 12/16/15 | 3 |
See accompanying notes which are an integral part of the financial statements.
600 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Citigroup | USD | 2 | BRL | 10 | 12/16/15 | — | ||
Citigroup | USD | 2 | BRL | 10 | 12/16/15 | — | ||
Citigroup | USD | 3 | BRL | 10 | 12/16/15 | — | ||
Citigroup | USD | 3 | BRL | 10 | 12/16/15 | — | ||
Citigroup | USD | 3 | BRL | 10 | 12/16/15 | — | ||
Citigroup | USD | 3 | BRL | 10 | 12/16/15 | — | ||
Citigroup | USD | 5 | BRL | 20 | 12/16/15 | — | ||
Citigroup | USD | 7 | BRL | 30 | 12/16/15 | — | ||
Citigroup | USD | 8 | BRL | 30 | 12/16/15 | — | ||
Citigroup | USD | 11 | BRL | 40 | 12/16/15 | — | ||
Citigroup | USD | 12 | BRL | 50 | 12/16/15 | 1 | ||
Citigroup | USD | 15 | BRL | 63 | 12/16/15 | 1 | ||
Citigroup | USD | 15 | BRL | 60 | 12/16/15 | — | ||
Citigroup | USD | 16 | BRL | 65 | 12/16/15 | — | ||
Citigroup | USD | 45 | BRL | 180 | 12/16/15 | 1 | ||
Citigroup | USD | 52 | BRL | 210 | 12/16/15 | 2 | ||
Citigroup | USD | 59 | BRL | 230 | 12/16/15 | — | ||
Citigroup | USD | 143 | BRL | 560 | 12/16/15 | — | ||
Citigroup | USD | 9 | CAD | 12 | 12/16/15 | — | ||
Citigroup | USD | 35 | CAD | 45 | 12/16/15 | — | ||
Citigroup | USD | 51 | CAD | 67 | 12/16/15 | — | ||
Citigroup | USD | 78 | CAD | 101 | 12/16/15 | (1 | ) | |
Citigroup | USD | 140 | CAD | 186 | 12/16/15 | 3 | ||
Citigroup | USD | 151 | CAD | 199 | 12/16/15 | 2 | ||
Citigroup | USD | 194 | CAD | 252 | 12/16/15 | (1 | ) | |
Citigroup | USD | 216 | CAD | 279 | 12/16/15 | (2 | ) | |
Citigroup | USD | 242 | CAD | 317 | 12/16/15 | 1 | ||
Citigroup | USD | 255 | CAD | 333 | 12/16/15 | (1 | ) | |
Citigroup | USD | 2,495 | CAD | 3,267 | 12/16/15 | 3 | ||
Citigroup | USD | 1 | CHF | 1 | 12/16/15 | — | ||
Citigroup | USD | 66 | CHF | 63 | 12/16/15 | (2 | ) | |
Citigroup | USD | 1 | CLP | 859 | 12/16/15 | — | ||
Citigroup | USD | 1 | CLP | 1,000 | 12/16/15 | — | ||
Citigroup | USD | 4 | CLP | 2,556 | 12/16/15 | — | ||
Citigroup | USD | 4 | CLP | 2,603 | 12/16/15 | — | ||
Citigroup | USD | 7 | CLP | 5,000 | 12/16/15 | — | ||
Citigroup | USD | 17 | CLP | 12,000 | 12/16/15 | — | ||
Citigroup | USD | 20 | CLP | 14,000 | 12/16/15 | — | ||
Citigroup | USD | 29 | CLP | 20,585 | 12/16/15 | 1 | ||
Citigroup | USD | 124 | CLP | 84,553 | 12/16/15 | (2 | ) | |
Citigroup | USD | 61,650 | CNY | 392,863 | 02/16/16 | (202 | ) | |
Citigroup | USD | 2 | COP | 6,520 | 12/16/15 | — | ||
Citigroup | USD | 4 | COP | 12,346 | 12/16/15 | — | ||
Citigroup | USD | 61 | COP | 191,258 | 12/16/15 | 5 | ||
Citigroup | USD | 19 | CZK | 464 | 11/02/15 | — | ||
Citigroup | USD | 4 | CZK | 100 | 12/16/15 | — | ||
Citigroup | USD | 15 | CZK | 351 | 12/16/15 | — | ||
Citigroup | USD | 15 | CZK | 360 | 12/16/15 | — | ||
Citigroup | USD | 19 | CZK | 464 | 12/16/15 | — | ||
Citigroup | USD | 24 | CZK | 567 | 12/16/15 | (1 | ) | |
Citigroup | USD | 26 | CZK | 626 | 12/16/15 | (1 | ) | |
Citigroup | USD | 28 | CZK | 679 | 12/16/15 | — | ||
Citigroup | USD | 28 | CZK | 667 | 12/16/15 | (1 | ) | |
Citigroup | USD | 40 | CZK | 959 | 12/16/15 | (1 | ) | |
Citigroup | USD | 40 | CZK | 964 | 12/16/15 | (1 | ) | |
Citigroup | USD | 51 | CZK | 1,243 | 12/16/15 | — | ||
Citigroup | USD | 61 | CZK | 1,500 | 12/16/15 | — | ||
Citigroup | USD | 149 | CZK | 3,591 | 12/16/15 | (3 | ) | |
Citigroup | USD | 397 | CZK | 9,519 | 12/16/15 | (10 | ) | |
Citigroup | USD | 397 | CZK | 9,561 | 12/16/15 | (9 | ) | |
Citigroup | USD | 446 | CZK | 10,687 | 12/16/15 | (12 | ) | |
Citigroup | USD | 551 | CZK | 13,241 | 12/16/15 | (13 | ) | |
Citigroup | USD | 11 | EUR | 10 | 12/16/15 | — |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 601
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Citigroup | USD | 16 | EUR | 14 | 12/16/15 | (1 | ) | |
Citigroup | USD | 50 | EUR | 45 | 12/16/15 | (1 | ) | |
Citigroup | USD | 56 | EUR | 50 | 12/16/15 | (1 | ) | |
Citigroup | USD | 61 | EUR | 54 | 12/16/15 | (2 | ) | |
Citigroup | USD | 132 | EUR | 116 | 12/16/15 | (4 | ) | |
Citigroup | USD | 143 | EUR | 127 | 12/16/15 | (3 | ) | |
Citigroup | USD | 172 | EUR | 153 | 12/16/15 | (3 | ) | |
Citigroup | USD | 185 | EUR | 167 | 12/16/15 | (2 | ) | |
Citigroup | USD | 205 | EUR | 180 | 12/16/15 | (7 | ) | |
Citigroup | USD | 217 | EUR | 192 | 12/16/15 | (6 | ) | |
Citigroup | USD | 246 | EUR | 223 | 12/16/15 | (1 | ) | |
Citigroup | USD | 253 | EUR | 230 | 12/16/15 | — | ||
Citigroup | USD | 356 | EUR | 314 | 12/16/15 | (10 | ) | |
Citigroup | USD | 370 | EUR | 335 | 12/16/15 | (2 | ) | |
Citigroup | USD | 386 | EUR | 343 | 12/16/15 | (9 | ) | |
Citigroup | USD | 407 | EUR | 362 | 12/16/15 | (8 | ) | |
Citigroup | USD | 417 | EUR | 364 | 12/16/15 | (16 | ) | |
Citigroup | USD | 518 | EUR | 464 | 12/16/15 | (8 | ) | |
Citigroup | USD | 807 | EUR | 723 | 12/16/15 | (12 | ) | |
Citigroup | USD | 1,541 | EUR | 1,370 | 12/16/15 | (33 | ) | |
Citigroup | USD | 1,543 | EUR | 1,370 | 12/16/15 | (35 | ) | |
Citigroup | USD | 1,588 | EUR | 1,413 | 12/16/15 | (33 | ) | |
Citigroup | USD | 1,968 | EUR | 1,767 | 12/16/15 | (23 | ) | |
Citigroup | USD | 2,625 | EUR | 2,384 | 12/16/15 | (2 | ) | |
Citigroup | USD | 49 | GBP | 32 | 11/02/15 | 1 | ||
Citigroup | USD | 2 | GBP | 1 | 12/16/15 | — | ||
Citigroup | USD | 6 | GBP | 4 | 12/16/15 | — | ||
Citigroup | USD | 24 | GBP | 16 | 12/16/15 | — | ||
Citigroup | USD | 25 | GBP | 16 | 12/16/15 | — | ||
Citigroup | USD | 49 | GBP | 32 | 12/16/15 | — | ||
Citigroup | USD | 68 | GBP | 44 | 12/16/15 | — | ||
Citigroup | USD | 74 | GBP | 48 | 12/16/15 | — | ||
Citigroup | USD | 105 | GBP | 68 | 12/16/15 | — | ||
Citigroup | USD | 150 | GBP | 97 | 12/16/15 | — | ||
Citigroup | USD | 232 | GBP | 151 | 12/16/15 | 1 | ||
Citigroup | USD | 279 | GBP | 182 | 12/16/15 | 1 | ||
Citigroup | USD | 287 | GBP | 186 | 12/16/15 | — | ||
Citigroup | USD | 580 | GBP | 382 | 12/16/15 | 9 | ||
Citigroup | USD | 1,150 | GBP | 759 | 12/16/15 | 20 | ||
Citigroup | USD | 1,564 | GBP | 1,013 | 12/16/15 | (2 | ) | |
Citigroup | USD | 1 | HKD | 4 | 12/16/15 | — | ||
Citigroup | USD | 14 | HKD | 107 | 12/16/15 | — | ||
Citigroup | USD | 21 | HKD | 166 | 12/16/15 | — | ||
Citigroup | USD | 25 | HKD | 196 | 12/16/15 | — | ||
Citigroup | USD | 34 | HKD | 265 | 12/16/15 | — | ||
Citigroup | USD | 1 | HUF | 370 | 12/16/15 | — | ||
Citigroup | USD | 6 | HUF | 1,531 | 12/16/15 | — | ||
Citigroup | USD | 11 | HUF | 3,000 | 12/16/15 | — | ||
Citigroup | USD | 17 | HUF | 4,651 | 12/16/15 | (1 | ) | |
Citigroup | USD | 39 | HUF | 11,000 | 12/16/15 | (1 | ) | |
Citigroup | USD | 41 | HUF | 11,000 | 12/16/15 | (2 | ) | |
Citigroup | USD | 57 | HUF | 16,145 | 12/16/15 | — | ||
Citigroup | USD | 74 | HUF | 20,756 | 12/16/15 | (1 | ) | |
Citigroup | USD | 83 | HUF | 23,000 | 12/16/15 | (2 | ) | |
Citigroup | USD | 131 | HUF | 36,000 | 12/16/15 | (4 | ) | |
Citigroup | USD | 133 | HUF | 37,244 | 12/16/15 | (2 | ) | |
Citigroup | USD | 10 | IDR | 136,502 | 12/16/15 | — | ||
Citigroup | USD | 10 | IDR | 145,221 | 12/16/15 | — | ||
Citigroup | USD | 12 | IDR | 171,287 | 12/16/15 | — | ||
Citigroup | USD | 13 | IDR | 187,461 | 12/16/15 | — | ||
Citigroup | USD | 14 | IDR | 190,473 | 12/16/15 | — | ||
Citigroup | USD | 14 | IDR | 192,051 | 12/16/15 | — | ||
Citigroup | USD | 15 | IDR | 211,780 | 12/16/15 | — |
See accompanying notes which are an integral part of the financial statements.
602 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Citigroup | USD | 16 | IDR | 217,261 | 12/16/15 | — | ||
Citigroup | USD | 16 | IDR | 227,077 | 12/16/15 | — | ||
Citigroup | USD | 18 | IDR | 253,356 | 12/16/15 | — | ||
Citigroup | USD | 35 | IDR | 481,481 | 12/16/15 | — | ||
Citigroup | USD | 38 | IDR | 524,050 | 12/16/15 | — | ||
Citigroup | USD | 38 | IDR | 522,475 | 12/16/15 | (1 | ) | |
Citigroup | USD | 39 | IDR | 538,601 | 12/16/15 | — | ||
Citigroup | USD | 43 | IDR | 615,940 | 12/16/15 | 1 | ||
Citigroup | USD | 44 | IDR | 606,998 | 12/16/15 | (1 | ) | |
Citigroup | USD | 102 | IDR | 1,460,654 | 12/16/15 | 3 | ||
Citigroup | USD | 171 | IDR | 2,482,975 | 12/16/15 | 8 | ||
Citigroup | USD | 2 | ILS | 9 | 12/16/15 | — | ||
Citigroup | USD | 7 | ILS | 26 | 12/16/15 | — | ||
Citigroup | USD | 8 | ILS | 30 | 12/16/15 | — | ||
Citigroup | USD | 8 | ILS | 30 | 12/16/15 | — | ||
Citigroup | USD | 10 | ILS | 39 | 12/16/15 | — | ||
Citigroup | USD | 12 | ILS | 47 | 12/16/15 | — | ||
Citigroup | USD | 12 | ILS | 49 | 12/16/15 | — | ||
Citigroup | USD | 15 | ILS | 56 | 12/16/15 | — | ||
Citigroup | USD | 17 | ILS | 65 | 12/16/15 | — | ||
Citigroup | USD | 153 | ILS | 593 | 12/16/15 | — | ||
Citigroup | USD | 176 | ILS | 693 | 12/16/15 | 3 | ||
Citigroup | USD | 1 | INR | 75 | 12/16/15 | — | ||
Citigroup | USD | 1 | INR | 88 | 12/16/15 | — | ||
Citigroup | USD | 4 | INR | 266 | 12/16/15 | — | ||
Citigroup | USD | 8 | INR | 540 | 12/16/15 | — | ||
Citigroup | USD | 9 | INR | 588 | 12/16/15 | — | ||
Citigroup | USD | 9 | INR | 621 | 12/16/15 | — | ||
Citigroup | USD | 12 | INR | 784 | 12/16/15 | — | ||
Citigroup | USD | 15 | INR | 959 | 12/16/15 | — | ||
Citigroup | USD | 15 | INR | 991 | 12/16/15 | — | ||
Citigroup | USD | 16 | INR | 1,040 | 12/16/15 | — | ||
Citigroup | USD | 17 | INR | 1,086 | 12/16/15 | — | ||
Citigroup | USD | 20 | INR | 1,321 | 12/16/15 | — | ||
Citigroup | USD | 21 | INR | 1,356 | 12/16/15 | — | ||
Citigroup | USD | 27 | INR | 1,800 | 12/16/15 | 1 | ||
Citigroup | USD | 31 | INR | 2,022 | 12/16/15 | — | ||
Citigroup | USD | 33 | INR | 2,200 | 12/16/15 | 1 | ||
Citigroup | USD | 33 | INR | 2,181 | 12/16/15 | — | ||
Citigroup | USD | 35 | INR | 2,290 | 12/16/15 | — | ||
Citigroup | USD | 75 | INR | 5,000 | 12/16/15 | 1 | ||
Citigroup | USD | 77 | INR | 5,078 | 12/16/15 | — | ||
Citigroup | USD | 92 | INR | 6,200 | 12/16/15 | 2 | ||
Citigroup | USD | 142 | INR | 9,500 | 12/16/15 | 2 | ||
Citigroup | USD | 179 | INR | 11,900 | 12/16/15 | 2 | ||
Citigroup | USD | 234 | INR | 15,355 | 12/16/15 | (1 | ) | |
Citigroup | USD | 180 | JPY | 21,725 | 11/02/15 | — | ||
Citigroup | USD | 14 | JPY | 1,649 | 12/16/15 | — | ||
Citigroup | USD | 17 | JPY | 2,000 | 12/16/15 | — | ||
Citigroup | USD | 25 | JPY | 3,000 | 12/16/15 | — | ||
Citigroup | USD | 33 | JPY | 4,000 | 12/16/15 | — | ||
Citigroup | USD | 100 | JPY | 12,000 | 12/16/15 | — | ||
Citigroup | USD | 111 | JPY | 13,313 | 12/16/15 | — | ||
Citigroup | USD | 128 | JPY | 15,242 | 12/16/15 | (2 | ) | |
Citigroup | USD | 177 | JPY | 21,263 | 12/16/15 | — | ||
Citigroup | USD | 180 | JPY | 21,725 | 12/16/15 | — | ||
Citigroup | USD | 195 | JPY | 23,224 | 12/16/15 | (2 | ) | |
Citigroup | USD | 206 | JPY | 24,633 | 12/16/15 | (1 | ) | |
Citigroup | USD | 235 | JPY | 28,155 | 12/16/15 | (2 | ) | |
Citigroup | USD | 276 | JPY | 33,359 | 12/16/15 | 1 | ||
Citigroup | USD | 335 | JPY | 40,290 | 12/16/15 | (1 | ) | |
Citigroup | USD | 336 | JPY | 40,556 | 12/16/15 | — | ||
Citigroup | USD | 371 | JPY | 44,704 | 12/16/15 | (1 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 603
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Citigroup | USD | 426 | JPY | 51,117 | 12/16/15 | (2 | ) | |
Citigroup | USD | 435 | JPY | 52,478 | 12/16/15 | — | ||
Citigroup | USD | 566 | JPY | 68,481 | 12/16/15 | 2 | ||
Citigroup | USD | 575 | JPY | 68,546 | 12/16/15 | (7 | ) | |
Citigroup | USD | 860 | JPY | 103,857 | 12/16/15 | 1 | ||
Citigroup | USD | 912 | JPY | 109,619 | 12/16/15 | (3 | ) | |
Citigroup | USD | 1,102 | JPY | 132,513 | 12/16/15 | (3 | ) | |
Citigroup | USD | 1,135 | JPY | 135,115 | 12/16/15 | (14 | ) | |
Citigroup | USD | 1,146 | JPY | 137,629 | 12/16/15 | (4 | ) | |
Citigroup | USD | 1,147 | JPY | 137,214 | 12/16/15 | (9 | ) | |
Citigroup | USD | 1,720 | JPY | 206,973 | 12/16/15 | (4 | ) | |
Citigroup | USD | 3,194 | JPY | 384,505 | 12/16/15 | (5 | ) | |
Citigroup | USD | 9 | KRW | 10,000 | 12/16/15 | — | ||
Citigroup | USD | 17 | KRW | 20,000 | 12/16/15 | 1 | ||
Citigroup | USD | 26 | KRW | 30,000 | 12/16/15 | 1 | ||
Citigroup | USD | 50 | KRW | 56,962 | 12/16/15 | — | ||
Citigroup | USD | 60 | KRW | 70,000 | 12/16/15 | 2 | ||
Citigroup | USD | 67 | KRW | 78,324 | 12/16/15 | 1 | ||
Citigroup | USD | 94 | KRW | 108,032 | 12/16/15 | — | ||
Citigroup | USD | 104 | KRW | 118,021 | 12/16/15 | (1 | ) | |
Citigroup | USD | 107 | KRW | 120,860 | 12/16/15 | (2 | ) | |
Citigroup | USD | 116 | KRW | 133,394 | 12/16/15 | 1 | ||
Citigroup | USD | 134 | KRW | 150,779 | 12/16/15 | (2 | ) | |
Citigroup | USD | 135 | KRW | 153,664 | 12/16/15 | (1 | ) | |
Citigroup | USD | 145 | KRW | 172,510 | 12/16/15 | 6 | ||
Citigroup | USD | 155 | KRW | 175,666 | 12/16/15 | (2 | ) | |
Citigroup | USD | 158 | KRW | 179,486 | 12/16/15 | (1 | ) | |
Citigroup | USD | 190 | KRW | 218,038 | 12/16/15 | 1 | ||
Citigroup | USD | 209 | KRW | 236,751 | 12/16/15 | (2 | ) | |
Citigroup | USD | 229 | KRW | 263,042 | 12/16/15 | 1 | ||
Citigroup | USD | 233 | KRW | 263,752 | 12/16/15 | (2 | ) | |
Citigroup | USD | 256 | KRW | 289,136 | 12/16/15 | (3 | ) | |
Citigroup | USD | 440 | KRW | 501,931 | 12/16/15 | (1 | ) | |
Citigroup | USD | 1,202 | KRW | 1,402,396 | 12/16/15 | 25 | ||
Citigroup | USD | 36 | MXN | 602 | 11/03/15 | — | ||
Citigroup | USD | 6 | MXN | 103 | 12/16/15 | — | ||
Citigroup | USD | 10 | MXN | 162 | 12/16/15 | — | ||
Citigroup | USD | 16 | MXN | 269 | 12/16/15 | — | ||
Citigroup | USD | 29 | MXN | 500 | 12/16/15 | 1 | ||
Citigroup | USD | 30 | MXN | 500 | 12/16/15 | 1 | ||
Citigroup | USD | 36 | MXN | 602 | 12/16/15 | — | ||
Citigroup | USD | 41 | MXN | 700 | 12/16/15 | 1 | ||
Citigroup | USD | 48 | MXN | 800 | 12/16/15 | 1 | ||
Citigroup | USD | 48 | MXN | 800 | 12/16/15 | — | ||
Citigroup | USD | 355 | MXN | 5,965 | 12/16/15 | 5 | ||
Citigroup | USD | 1 | MYR | 4 | 12/16/15 | — | ||
Citigroup | USD | 2 | MYR | 10 | 12/16/15 | — | ||
Citigroup | USD | 3 | MYR | 14 | 12/16/15 | — | ||
Citigroup | USD | 5 | MYR | 20 | 12/16/15 | — | ||
Citigroup | USD | 5 | MYR | 23 | 12/16/15 | — | ||
Citigroup | USD | 5 | MYR | 23 | 12/16/15 | — | ||
Citigroup | USD | 16 | MYR | 68 | 12/16/15 | — | ||
Citigroup | USD | 29 | MYR | 122 | 12/16/15 | (1 | ) | |
Citigroup | USD | 62 | MYR | 281 | 12/16/15 | 3 | ||
Citigroup | USD | 109 | NOK | 932 | 11/02/15 | 1 | ||
Citigroup | USD | 69 | NOK | 566 | 12/16/15 | (3 | ) | |
Citigroup | USD | 93 | NOK | 774 | 12/16/15 | (2 | ) | |
Citigroup | USD | 102 | NOK | 838 | 12/16/15 | (4 | ) | |
Citigroup | USD | 173 | NOK | 1,397 | 12/16/15 | (9 | ) | |
Citigroup | USD | 176 | NOK | 1,425 | 12/16/15 | (8 | ) | |
Citigroup | USD | 184 | NOK | 1,535 | 12/16/15 | (4 | ) | |
Citigroup | USD | 276 | NOK | 2,288 | 12/16/15 | (7 | ) | |
Citigroup | USD | 750 | NOK | 6,382 | 12/16/15 | 1 |
See accompanying notes which are an integral part of the financial statements.
604 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Citigroup | USD | 774 | NOK | 6,548 | 12/16/15 | (4 | ) | ||
Citigroup | USD | 781 | NOK | 6,517 | 12/16/15 | (15 | ) | ||
Citigroup | USD | 789 | NOK | 6,646 | 12/16/15 | (7 | ) | ||
Citigroup | USD | 103 | NZD | 154 | 11/02/15 | 2 | |||
Citigroup | USD | 5 | NZD | 8 | 12/16/15 | — | |||
Citigroup | USD | 13 | NZD | 20 | 12/16/15 | — | |||
Citigroup | USD | 16 | NZD | 26 | 12/16/15 | 1 | |||
Citigroup | USD | 34 | NZD | 51 | 12/16/15 | — | |||
Citigroup | USD | 59 | NZD | 87 | 12/16/15 | — | |||
Citigroup | USD | 84 | NZD | 125 | 12/16/15 | — | |||
Citigroup | USD | 103 | NZD | 154 | 12/16/15 | 1 | |||
Citigroup | USD | 110 | NZD | 161 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 125 | NZD | 185 | 12/16/15 | — | |||
Citigroup | USD | 138 | NZD | 203 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 188 | NZD | 292 | 12/16/15 | 9 | |||
Citigroup | USD | 203 | NZD | 303 | 12/16/15 | 2 | |||
Citigroup | USD | 211 | NZD | 319 | 12/16/15 | 5 | |||
Citigroup | USD | 245 | NZD | 368 | 12/16/15 | 3 | |||
Citigroup | USD | 252 | NZD | 375 | 12/16/15 | 1 | |||
Citigroup | USD | 262 | NZD | 407 | 12/16/15 | 13 | |||
Citigroup | USD | 306 | NZD | 485 | 12/16/15 | 22 | |||
Citigroup | USD | 330 | NZD | 492 | 12/16/15 | 3 | |||
Citigroup | USD | 341 | NZD | 534 | 12/16/15 | 20 | |||
Citigroup | USD | 369 | NZD | 554 | 12/16/15 | 5 | |||
Citigroup | USD | 420 | NZD | 620 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 476 | NZD | 749 | 12/16/15 | 29 | |||
Citigroup | USD | 477 | NZD | 737 | 12/16/15 | 20 | |||
Citigroup | USD | 632 | NZD | 996 | 12/16/15 | 41 | |||
Citigroup | USD | 830 | NZD | 1,243 | 12/16/15 | 9 | |||
Citigroup | USD | 1,053 | NZD | 1,630 | 12/16/15 | 47 | |||
Citigroup | USD | 1,275 | NZD | 2,014 | 12/16/15 | 84 | |||
Citigroup | USD | 1,910 | NZD | 2,832 | 12/16/15 | 2 | |||
Citigroup | USD | 4 | PHP | 170 | 12/16/15 | — | |||
Citigroup | USD | 8 | PHP | 381 | 12/16/15 | — | |||
Citigroup | USD | 9 | PHP | 400 | 12/16/15 | — | |||
Citigroup | USD | 13 | PHP | 588 | 12/16/15 | — | |||
Citigroup | USD | 14 | PHP | 650 | 12/16/15 | — | |||
Citigroup | USD | 23 | PHP | 1,057 | 12/16/15 | — | |||
Citigroup | USD | 27 | PHP | 1,254 | 12/16/15 | — | |||
Citigroup | USD | 34 | PHP | 1,600 | 12/16/15 | — | |||
Citigroup | USD | 35 | PHP | 1,613 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 36 | PHP | 1,700 | 12/16/15 | — | |||
Citigroup | USD | 41 | PHP | 1,875 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 45 | PHP | 2,090 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 67 | PHP | 3,159 | 12/16/15 | — | |||
Citigroup | USD | 68 | PHP | 3,198 | 12/16/15 | — | |||
Citigroup | USD | 70 | PHP | 3,300 | 12/16/15 | — | |||
Citigroup | USD | 78 | PHP | 3,695 | 12/16/15 | 1 | |||
Citigroup | USD | 78 | PHP | 3,668 | 12/16/15 | — | |||
Citigroup | USD | 171 | PHP | 7,984 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 80 | PLN | 311 | 11/02/15 | 1 | |||
Citigroup | USD | 5 | PLN | 20 | 12/16/15 | — | |||
Citigroup | USD | 11 | PLN | 41 | 12/16/15 | — | |||
Citigroup | USD | 13 | PLN | 50 | 12/16/15 | — | |||
Citigroup | USD | 16 | PLN | 58 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 25 | PLN | 92 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 28 | PLN | 106 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 35 | PLN | 130 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 43 | PLN | 160 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 48 | PLN | 180 | 12/16/15 | (2 | ) | ||
Citigroup | USD | 54 | PLN | 200 | 12/16/15 | (2 | ) | ||
Citigroup | USD | 69 | PLN | 260 | 12/16/15 | (2 | ) | ||
Citigroup | USD | 83 | PLN | 310 | 12/16/15 | (3 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 605
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Citigroup | USD | 107 | PLN | 400 | 12/16/15 | (4 | ) | ||
Citigroup | USD | 251 | SEK | 2,135 | 11/02/15 | (1 | ) | ||
Citigroup | USD | 5 | SEK | 38 | 12/16/15 | — | |||
Citigroup | USD | 31 | SEK | 262 | 12/16/15 | — | |||
Citigroup | USD | 38 | SEK | 311 | 12/16/15 | (2 | ) | ||
Citigroup | USD | 57 | SEK | 476 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 94 | SEK | 792 | 12/16/15 | (1 | ) | ||
Citigroup | USD | 96 | SEK | 780 | 12/16/15 | (5 | ) | ||
Citigroup | USD | 101 | SEK | 823 | 12/16/15 | (5 | ) | ||
Citigroup | USD | 119 | SEK | 999 | 12/16/15 | (2 | ) | ||
Citigroup | USD | 137 | SEK | 1,136 | 12/16/15 | (4 | ) | ||
Citigroup | USD | 155 | SEK | 1,262 | 12/16/15 | (7 | ) | ||
Citigroup | USD | 179 | SEK | 1,475 | 12/16/15 | (6 | ) | ||
Citigroup | USD | 184 | SEK | 1,517 | 12/16/15 | (7 | ) | ||
Citigroup | USD | 195 | SEK | 1,623 | 12/16/15 | (5 | ) | ||
Citigroup | USD | 206 | SEK | 1,697 | 12/16/15 | (7 | ) | ||
Citigroup | USD | 224 | SEK | 1,823 | 12/16/15 | (10 | ) | ||
Citigroup | USD | 250 | SEK | 2,135 | 12/16/15 | — | |||
Citigroup | USD | 288 | SEK | 2,369 | 12/16/15 | (10 | ) | ||
Citigroup | USD | 315 | SEK | 2,593 | 12/16/15 | (12 | ) | ||
Citigroup | USD | 360 | SEK | 3,019 | 12/16/15 | (6 | ) | ||
Citigroup | USD | 396 | SEK | 3,259 | 12/16/15 | (14 | ) | ||
Citigroup | USD | 550 | SEK | 4,557 | 12/16/15 | (16 | ) | ||
Citigroup | USD | 653 | SEK | 5,465 | 12/16/15 | (12 | ) | ||
Citigroup | USD | 723 | SEK | 6,060 | 12/16/15 | (13 | ) | ||
Citigroup | USD | 766 | SEK | 6,339 | 12/16/15 | (23 | ) | ||
Citigroup | USD | 1 | SGD | 2 | 12/16/15 | — | |||
Citigroup | USD | 5 | SGD | 7 | 12/16/15 | — | |||
Citigroup | USD | 8 | SGD | 11 | 12/16/15 | — | |||
Citigroup | USD | 18 | SGD | 25 | 12/16/15 | — | |||
Citigroup | USD | 35 | SGD | 50 | 12/16/15 | — | |||
Citigroup | USD | 49 | SGD | 70 | 12/16/15 | 1 | |||
Citigroup | USD | 73 | SGD | 104 | 12/16/15 | 1 | |||
Citigroup | USD | 171 | SGD | 244 | 12/16/15 | 3 | |||
Citigroup | USD | 567 | SGD | 814 | 12/16/15 | 13 | |||
Citigroup | USD | 27 | TRY | 80 | 12/16/15 | — | |||
Citigroup | USD | 62 | TRY | 184 | 12/16/15 | 1 | |||
Citigroup | USD | 144 | TRY | 429 | 12/16/15 | 1 | |||
Citigroup | USD | 946 | TRY | 2,884 | 12/16/15 | 31 | |||
Citigroup | USD | 21 | TWD | 690 | 12/16/15 | — | |||
Citigroup | USD | 24 | TWD | 781 | 12/16/15 | — | |||
Citigroup | USD | 67 | TWD | 2,188 | 12/16/15 | — | |||
Citigroup | USD | 86 | TWD | 2,800 | 12/16/15 | — | |||
Citigroup | USD | 89 | TWD | 2,900 | 12/16/15 | — | |||
Citigroup | USD | 101 | TWD | 3,329 | 12/16/15 | 1 | |||
Citigroup | USD | 183 | TWD | 6,030 | 12/16/15 | 3 | |||
Citigroup | USD | 7 | ZAR | 101 | 11/02/15 | — | |||
Citigroup | USD | 7 | ZAR | 101 | 12/17/15 | — | |||
Citigroup | USD | 10 | ZAR | 139 | 12/17/15 | — | |||
Citigroup | USD | 33 | ZAR | 444 | 12/17/15 | (1 | ) | ||
Citigroup | USD | 67 | ZAR | 915 | 12/17/15 | (2 | ) | ||
Citigroup | USD | 71 | ZAR | 962 | 12/17/15 | (2 | ) | ||
Citigroup | USD | 73 | ZAR | 964 | 12/17/15 | (4 | ) | ||
Citigroup | USD | 500 | ZAR | 6,929 | 12/17/15 | (3 | ) | ||
Citigroup | AUD | 147 | USD | 104 | 11/02/15 | (1 | ) | ||
Citigroup | AUD | 404 | USD | 291 | 11/12/15 | 3 | |||
Citigroup | AUD | 3 | USD | 2 | 12/16/15 | — | |||
Citigroup | AUD | 39 | USD | 28 | 12/16/15 | — | |||
Citigroup | AUD | 46 | USD | 33 | 12/16/15 | — | |||
Citigroup | AUD | 65 | USD | 45 | 12/16/15 | (1 | ) | ||
Citigroup | AUD | 78 | USD | 54 | 12/16/15 | (1 | ) | ||
Citigroup | AUD | 97 | USD | 70 | 12/16/15 | 1 | |||
Citigroup | AUD | 107 | USD | 75 | 12/16/15 | (1 | ) |
See accompanying notes which are an integral part of the financial statements.
606 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Citigroup | AUD | 115 | USD | 84 | 12/16/15 | 2 | ||
Citigroup | AUD | 126 | USD | 89 | 12/16/15 | (1 | ) | |
Citigroup | AUD | 139 | USD | 101 | 12/16/15 | 2 | ||
Citigroup | AUD | 143 | USD | 100 | 12/16/15 | (2 | ) | |
Citigroup | AUD | 147 | USD | 104 | 12/16/15 | (1 | ) | |
Citigroup | AUD | 167 | USD | 116 | 12/16/15 | (2 | ) | |
Citigroup | AUD | 238 | USD | 166 | 12/16/15 | (3 | ) | |
Citigroup | AUD | 268 | USD | 188 | 12/16/15 | (3 | ) | |
Citigroup | AUD | 279 | USD | 201 | 12/16/15 | 3 | ||
Citigroup | AUD | 312 | USD | 226 | 12/16/15 | 4 | ||
Citigroup | AUD | 329 | USD | 228 | 12/16/15 | (6 | ) | |
Citigroup | AUD | 374 | USD | 261 | 12/16/15 | (5 | ) | |
Citigroup | AUD | 461 | USD | 322 | 12/16/15 | (6 | ) | |
Citigroup | AUD | 2,001 | USD | 1,421 | 12/16/15 | (3 | ) | |
Citigroup | AUD | 2,008 | USD | 1,402 | 12/16/15 | (27 | ) | |
Citigroup | AUD | 2,053 | USD | 1,454 | 12/16/15 | (7 | ) | |
Citigroup | AUD | 4,862 | USD | 3,456 | 12/16/15 | (4 | ) | |
Citigroup | BRL | 5 | USD | 1 | 12/16/15 | — | ||
Citigroup | BRL | 11 | USD | 3 | 12/16/15 | — | ||
Citigroup | BRL | 16 | USD | 4 | 12/16/15 | — | ||
Citigroup | BRL | 20 | USD | 5 | 12/16/15 | — | ||
Citigroup | BRL | 97 | USD | 25 | 12/16/15 | — | ||
Citigroup | BRL | 111 | USD | 28 | 12/16/15 | — | ||
Citigroup | BRL | 152 | USD | 39 | 12/16/15 | — | ||
Citigroup | BRL | 670 | USD | 171 | 12/16/15 | — | ||
Citigroup | BRL | 1,870 | USD | 492 | 12/16/15 | 14 | ||
Citigroup | BRL | 15,162 | USD | 4,795 | 02/16/16 | 996 | ||
Citigroup | CAD | 11 | USD | 8 | 12/16/15 | — | ||
Citigroup | CAD | 41 | USD | 31 | 12/16/15 | — | ||
Citigroup | CAD | 46 | USD | 35 | 12/16/15 | — | ||
Citigroup | CAD | 94 | USD | 72 | 12/16/15 | — | ||
Citigroup | CAD | 97 | USD | 74 | 12/16/15 | — | ||
Citigroup | CAD | 126 | USD | 96 | 12/16/15 | (1 | ) | |
Citigroup | CAD | 206 | USD | 156 | 12/16/15 | (1 | ) | |
Citigroup | CAD | 282 | USD | 213 | 12/16/15 | (3 | ) | |
Citigroup | CAD | 298 | USD | 225 | 12/16/15 | (3 | ) | |
Citigroup | CAD | 317 | USD | 239 | 12/16/15 | (3 | ) | |
Citigroup | CAD | 331 | USD | 251 | 12/16/15 | (2 | ) | |
Citigroup | CAD | 386 | USD | 291 | 12/16/15 | (5 | ) | |
Citigroup | CAD | 436 | USD | 325 | 12/16/15 | (9 | ) | |
Citigroup | CAD | 991 | USD | 750 | 12/16/15 | (8 | ) | |
Citigroup | CAD | 1,173 | USD | 874 | 12/16/15 | (22 | ) | |
Citigroup | CAD | 2,536 | USD | 1,930 | 12/16/15 | (9 | ) | |
Citigroup | CAD | 4,604 | USD | 3,478 | 12/16/15 | (43 | ) | |
Citigroup | CHF | 1 | USD | 1 | 11/02/15 | — | ||
Citigroup | CHF | 1 | USD | 1 | 12/16/15 | — | ||
Citigroup | CHF | 10 | USD | 10 | 12/16/15 | — | ||
Citigroup | CHF | 10 | USD | 10 | 12/16/15 | — | ||
Citigroup | CHF | 10 | USD | 10 | 12/16/15 | — | ||
Citigroup | CHF | 10 | USD | 10 | 12/16/15 | — | ||
Citigroup | CHF | 12 | USD | 12 | 12/16/15 | — | ||
Citigroup | CHF | 12 | USD | 12 | 12/16/15 | — | ||
Citigroup | CLP | 3,237 | USD | 5 | 12/16/15 | — | ||
Citigroup | CLP | 36,112 | USD | 52 | 12/16/15 | — | ||
Citigroup | CLP | 240,000 | USD | 343 | 12/16/15 | (2 | ) | |
Citigroup | CNY | 109,087 | USD | 17,125 | 02/16/16 | 62 | ||
Citigroup | CNY | 109,104 | USD | 17,125 | 02/16/16 | 60 | ||
Citigroup | CNY | 109,246 | USD | 17,150 | 02/17/16 | 64 | ||
Citigroup | COP | 2,414 | USD | 1 | 12/16/15 | — | ||
Citigroup | COP | 3,280 | USD | 1 | 12/16/15 | — | ||
Citigroup | COP | 17,140 | USD | 6 | 12/16/15 | — | ||
Citigroup | COP | 22,193 | USD | 8 | 12/16/15 | — | ||
Citigroup | COP | 34,919 | USD | 11 | 12/16/15 | (1 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 607
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Citigroup | COP | 46,398 | USD | 16 | 12/16/15 | — | ||
Citigroup | COP | 135,081 | USD | 44 | 12/16/15 | (2 | ) | |
Citigroup | CZK | 464 | USD | 19 | 11/02/15 | — | ||
Citigroup | CZK | 24 | USD | 1 | 12/16/15 | — | ||
Citigroup | CZK | 200 | USD | 8 | 12/16/15 | — | ||
Citigroup | CZK | 265 | USD | 11 | 12/16/15 | — | ||
Citigroup | CZK | 600 | USD | 25 | 12/16/15 | 1 | ||
Citigroup | CZK | 1,000 | USD | 42 | 12/16/15 | 2 | ||
Citigroup | CZK | 1,100 | USD | 45 | 12/16/15 | 1 | ||
Citigroup | CZK | 1,600 | USD | 67 | 12/16/15 | 2 | ||
Citigroup | CZK | 1,800 | USD | 74 | 12/16/15 | 1 | ||
Citigroup | CZK | 2,207 | USD | 92 | 12/16/15 | 2 | ||
Citigroup | CZK | 3,300 | USD | 138 | 12/16/15 | 4 | ||
Citigroup | CZK | 3,400 | USD | 142 | 12/16/15 | 4 | ||
Citigroup | CZK | 3,754 | USD | 154 | 12/16/15 | 2 | ||
Citigroup | CZK | 3,794 | USD | 157 | 12/16/15 | 3 | ||
Citigroup | CZK | 3,800 | USD | 156 | 12/16/15 | 2 | ||
Citigroup | CZK | 3,819 | USD | 158 | 12/16/15 | 2 | ||
Citigroup | CZK | 5,994 | USD | 249 | 12/16/15 | 6 | ||
Citigroup | EUR | 604 | USD | 662 | 11/02/15 | (3 | ) | |
Citigroup | EUR | 2,384 | USD | 2,624 | 11/03/15 | 3 | ||
Citigroup | EUR | 8 | USD | 9 | 12/16/15 | — | ||
Citigroup | EUR | 20 | USD | 23 | 12/16/15 | 1 | ||
Citigroup | EUR | 29 | USD | 33 | 12/16/15 | 1 | ||
Citigroup | EUR | 55 | USD | 62 | 12/16/15 | 1 | ||
Citigroup | EUR | 70 | USD | 79 | 12/16/15 | 2 | ||
Citigroup | EUR | 93 | USD | 106 | 12/16/15 | 4 | ||
Citigroup | EUR | 95 | USD | 107 | 12/16/15 | 3 | ||
Citigroup | EUR | 116 | USD | 130 | 12/16/15 | 3 | ||
Citigroup | EUR | 121 | USD | 137 | 12/16/15 | 4 | ||
Citigroup | EUR | 122 | USD | 138 | 12/16/15 | 3 | ||
Citigroup | EUR | 149 | USD | 169 | 12/16/15 | 5 | ||
Citigroup | EUR | 156 | USD | 176 | 12/16/15 | 5 | ||
Citigroup | EUR | 171 | USD | 193 | 12/16/15 | 5 | ||
Citigroup | EUR | 209 | USD | 235 | 12/16/15 | 5 | ||
Citigroup | EUR | 314 | USD | 352 | 12/16/15 | 7 | ||
Citigroup | EUR | 315 | USD | 356 | 12/16/15 | 10 | ||
Citigroup | EUR | 337 | USD | 383 | 12/16/15 | 12 | ||
Citigroup | EUR | 427 | USD | 485 | 12/16/15 | 15 | ||
Citigroup | EUR | 429 | USD | 478 | 12/16/15 | 6 | ||
Citigroup | EUR | 487 | USD | 537 | 12/16/15 | 1 | ||
Citigroup | EUR | 551 | USD | 610 | 12/16/15 | 4 | ||
Citigroup | EUR | 599 | USD | 662 | 12/16/15 | 3 | ||
Citigroup | EUR | 604 | USD | 660 | 12/16/15 | (4 | ) | |
Citigroup | EUR | 848 | USD | 948 | 12/16/15 | 15 | ||
Citigroup | EUR | 861 | USD | 962 | 12/16/15 | 15 | ||
Citigroup | EUR | 892 | USD | 989 | 12/16/15 | 7 | ||
Citigroup | EUR | 936 | USD | 1,045 | 12/16/15 | 15 | ||
Citigroup | EUR | 940 | USD | 1,040 | 12/16/15 | 5 | ||
Citigroup | EUR | 2,334 | USD | 2,618 | 12/16/15 | 50 | ||
Citigroup | EUR | 2,452 | USD | 2,766 | 12/16/15 | 66 | ||
Citigroup | GBP | 32 | USD | 49 | 11/02/15 | — | ||
Citigroup | GBP | 1,013 | USD | 1,564 | 11/02/15 | 2 | ||
Citigroup | GBP | 47 | USD | 73 | 11/12/15 | 1 | ||
Citigroup | GBP | 5 | USD | 8 | 12/16/15 | — | ||
Citigroup | GBP | 6 | USD | 9 | 12/16/15 | — | ||
Citigroup | GBP | 6 | USD | 9 | 12/16/15 | — | ||
Citigroup | GBP | 11 | USD | 17 | 12/16/15 | — | ||
Citigroup | GBP | 25 | USD | 38 | 12/16/15 | — | ||
Citigroup | GBP | 27 | USD | 41 | 12/16/15 | — | ||
Citigroup | GBP | 32 | USD | 49 | 12/16/15 | (1 | ) | |
Citigroup | GBP | 51 | USD | 78 | 12/16/15 | (1 | ) | |
Citigroup | GBP | 58 | USD | 89 | 12/16/15 | (1 | ) |
See accompanying notes which are an integral part of the financial statements.
608 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Citigroup | GBP | 77 | USD | 118 | 12/16/15 | (1 | ) | |
Citigroup | GBP | 86 | USD | 132 | 12/16/15 | — | ||
Citigroup | GBP | 132 | USD | 201 | 12/16/15 | (2 | ) | |
Citigroup | GBP | 153 | USD | 233 | 12/16/15 | (3 | ) | |
Citigroup | GBP | 198 | USD | 304 | 12/16/15 | (1 | ) | |
Citigroup | GBP | 231 | USD | 356 | 12/16/15 | — | ||
Citigroup | GBP | 274 | USD | 421 | 12/16/15 | (1 | ) | |
Citigroup | GBP | 290 | USD | 441 | 12/16/15 | (6 | ) | |
Citigroup | GBP | 310 | USD | 473 | 12/16/15 | (5 | ) | |
Citigroup | GBP | 363 | USD | 557 | 12/16/15 | (2 | ) | |
Citigroup | GBP | 382 | USD | 589 | 12/16/15 | — | ||
Citigroup | GBP | 450 | USD | 694 | 12/16/15 | — | ||
Citigroup | GBP | 495 | USD | 762 | 12/16/15 | (1 | ) | |
Citigroup | GBP | 524 | USD | 809 | 12/16/15 | 1 | ||
Citigroup | GBP | 791 | USD | 1,204 | 12/16/15 | (15 | ) | |
Citigroup | HKD | 1 | USD | — | 12/16/15 | — | ||
Citigroup | HKD | 249 | USD | 32 | 12/16/15 | — | ||
Citigroup | HUF | 248 | USD | 1 | 12/16/15 | — | ||
Citigroup | HUF | 3,943 | USD | 14 | 12/16/15 | — | ||
Citigroup | HUF | 4,570 | USD | 16 | 12/16/15 | — | ||
Citigroup | HUF | 4,696 | USD | 17 | 12/16/15 | 1 | ||
Citigroup | HUF | 5,601 | USD | 20 | 12/16/15 | — | ||
Citigroup | HUF | 8,849 | USD | 32 | 12/16/15 | — | ||
Citigroup | HUF | 13,758 | USD | 49 | 12/16/15 | 1 | ||
Citigroup | HUF | 33,000 | USD | 118 | 12/16/15 | 2 | ||
Citigroup | HUF | 55,371 | USD | 198 | 12/16/15 | 2 | ||
Citigroup | IDR | 327,723 | USD | 22 | 12/16/15 | (2 | ) | |
Citigroup | IDR | 998,030 | USD | 68 | 12/16/15 | (4 | ) | |
Citigroup | IDR | 1,005,383 | USD | 68 | 12/16/15 | (4 | ) | |
Citigroup | IDR | 1,413,622 | USD | 92 | 12/16/15 | (10 | ) | |
Citigroup | IDR | 1,508,457 | USD | 102 | 12/16/15 | (6 | ) | |
Citigroup | IDR | 1,594,332 | USD | 108 | 12/16/15 | (6 | ) | |
Citigroup | IDR | 1,993,798 | USD | 136 | 12/16/15 | (7 | ) | |
Citigroup | ILS | 7 | USD | 2 | 12/16/15 | — | ||
Citigroup | ILS | 17 | USD | 4 | 12/16/15 | — | ||
Citigroup | ILS | 40 | USD | 10 | 12/16/15 | — | ||
Citigroup | ILS | 58 | USD | 15 | 12/16/15 | — | ||
Citigroup | ILS | 90 | USD | 23 | 12/16/15 | — | ||
Citigroup | ILS | 120 | USD | 30 | 12/16/15 | (1 | ) | |
Citigroup | ILS | 140 | USD | 36 | 12/16/15 | (1 | ) | |
Citigroup | ILS | 150 | USD | 38 | 12/16/15 | (1 | ) | |
Citigroup | ILS | 200 | USD | 51 | 12/16/15 | (1 | ) | |
Citigroup | ILS | 300 | USD | 78 | 12/16/15 | — | ||
Citigroup | ILS | 1,290 | USD | 327 | 12/16/15 | (6 | ) | |
Citigroup | INR | 1,430 | USD | 22 | 11/18/15 | — | ||
Citigroup | INR | 533 | USD | 8 | 12/16/15 | — | ||
Citigroup | INR | 700 | USD | 10 | 12/16/15 | — | ||
Citigroup | INR | 707 | USD | 10 | 12/16/15 | — | ||
Citigroup | INR | 708 | USD | 10 | 12/16/15 | — | ||
Citigroup | INR | 714 | USD | 11 | 12/16/15 | — | ||
Citigroup | INR | 1,096 | USD | 17 | 12/16/15 | — | ||
Citigroup | INR | 1,210 | USD | 18 | 12/16/15 | — | ||
Citigroup | INR | 1,409 | USD | 21 | 12/16/15 | (1 | ) | |
Citigroup | INR | 1,412 | USD | 21 | 12/16/15 | (1 | ) | |
Citigroup | INR | 1,417 | USD | 21 | 12/16/15 | (1 | ) | |
Citigroup | INR | 8,000 | USD | 119 | 12/16/15 | (3 | ) | |
Citigroup | INR | 13,706 | USD | 203 | 12/16/15 | (5 | ) | |
Citigroup | JPY | 21,725 | USD | 180 | 11/02/15 | — | ||
Citigroup | JPY | 6,800 | USD | 55 | 11/12/15 | (2 | ) | |
Citigroup | JPY | 2,782 | USD | 23 | 12/16/15 | — | ||
Citigroup | JPY | 4,033 | USD | 34 | 12/16/15 | — | ||
Citigroup | JPY | 4,340 | USD | 36 | 12/16/15 | — | ||
Citigroup | JPY | 7,662 | USD | 64 | 12/16/15 | — |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 609
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Citigroup | JPY | 9,313 | USD | 78 | 12/16/15 | — | ||
Citigroup | JPY | 14,257 | USD | 119 | 12/16/15 | 1 | ||
Citigroup | JPY | 21,141 | USD | 177 | 12/16/15 | 1 | ||
Citigroup | JPY | 30,562 | USD | 254 | 12/16/15 | 1 | ||
Citigroup | JPY | 31,742 | USD | 263 | 12/16/15 | — | ||
Citigroup | JPY | 40,644 | USD | 339 | 12/16/15 | 2 | ||
Citigroup | JPY | 116,124 | USD | 968 | 12/16/15 | 5 | ||
Citigroup | JPY | 359,990 | USD | 3,006 | 12/16/15 | 21 | ||
Citigroup | JPY | 390,728 | USD | 3,250 | 12/16/15 | 10 | ||
Citigroup | KRW | 10,000 | USD | 8 | 12/16/15 | — | ||
Citigroup | KRW | 10,000 | USD | 8 | 12/16/15 | — | ||
Citigroup | KRW | 30,000 | USD | 25 | 12/16/15 | (1 | ) | |
Citigroup | KRW | 50,000 | USD | 42 | 12/16/15 | (2 | ) | |
Citigroup | KRW | 70,000 | USD | 59 | 12/16/15 | (3 | ) | |
Citigroup | KRW | 78,577 | USD | 66 | 12/16/15 | (3 | ) | |
Citigroup | KRW | 116,120 | USD | 98 | 12/16/15 | (4 | ) | |
Citigroup | KRW | 154,187 | USD | 130 | 12/16/15 | (5 | ) | |
Citigroup | KRW | 168,711 | USD | 141 | 12/16/15 | (7 | ) | |
Citigroup | KRW | 179,597 | USD | 149 | 12/16/15 | (9 | ) | |
Citigroup | KRW | 192,037 | USD | 162 | 12/16/15 | (6 | ) | |
Citigroup | KRW | 192,922 | USD | 164 | 12/16/15 | (5 | ) | |
Citigroup | KRW | 197,039 | USD | 165 | 12/16/15 | (7 | ) | |
Citigroup | KRW | 236,930 | USD | 198 | 12/16/15 | (9 | ) | |
Citigroup | KRW | 326,061 | USD | 278 | 12/16/15 | (8 | ) | |
Citigroup | KRW | 708,599 | USD | 600 | 12/16/15 | (20 | ) | |
Citigroup | KRW | 713,588 | USD | 599 | 12/16/15 | (25 | ) | |
Citigroup | MXN | 602 | USD | 36 | 11/03/15 | — | ||
Citigroup | MXN | 24 | USD | 1 | 12/16/15 | — | ||
Citigroup | MXN | 67 | USD | 4 | 12/16/15 | — | ||
Citigroup | MXN | 116 | USD | 7 | 12/16/15 | — | ||
Citigroup | MXN | 131 | USD | 8 | 12/16/15 | — | ||
Citigroup | MXN | 236 | USD | 14 | 12/16/15 | — | ||
Citigroup | MXN | 279 | USD | 17 | 12/16/15 | — | ||
Citigroup | MXN | 382 | USD | 23 | 12/16/15 | — | ||
Citigroup | MXN | 470 | USD | 28 | 12/16/15 | — | ||
Citigroup | MXN | 518 | USD | 30 | 12/16/15 | (1 | ) | |
Citigroup | MXN | 825 | USD | 50 | 12/16/15 | — | ||
Citigroup | MXN | 900 | USD | 53 | 12/16/15 | (2 | ) | |
Citigroup | MXN | 2,798 | USD | 163 | 12/16/15 | (6 | ) | |
Citigroup | MXN | 4,302 | USD | 259 | 12/16/15 | — | ||
Citigroup | MXN | 5,337 | USD | 314 | 12/16/15 | (8 | ) | |
Citigroup | MXN | 5,863 | USD | 345 | 12/16/15 | (8 | ) | |
Citigroup | MYR | 16 | USD | 4 | 12/16/15 | — | ||
Citigroup | MYR | 26 | USD | 6 | 12/16/15 | — | ||
Citigroup | MYR | 420 | USD | 101 | 12/16/15 | 3 | ||
Citigroup | NOK | 932 | USD | 109 | 11/02/15 | (1 | ) | |
Citigroup | NOK | 6 | USD | 1 | 12/16/15 | — | ||
Citigroup | NOK | 163 | USD | 20 | 12/16/15 | 1 | ||
Citigroup | NOK | 227 | USD | 28 | 12/16/15 | 1 | ||
Citigroup | NOK | 303 | USD | 37 | 12/16/15 | 1 | ||
Citigroup | NOK | 311 | USD | 37 | 12/16/15 | — | ||
Citigroup | NOK | 411 | USD | 51 | 12/16/15 | 2 | ||
Citigroup | NOK | 512 | USD | 61 | 12/16/15 | — | ||
Citigroup | NOK | 515 | USD | 62 | 12/16/15 | 2 | ||
Citigroup | NOK | 537 | USD | 66 | 12/16/15 | 3 | ||
Citigroup | NOK | 616 | USD | 74 | 12/16/15 | 1 | ||
Citigroup | NOK | 932 | USD | 109 | 12/16/15 | (1 | ) | |
Citigroup | NOK | 1,108 | USD | 130 | 12/16/15 | — | ||
Citigroup | NOK | 2,517 | USD | 304 | 12/16/15 | 8 | ||
Citigroup | NOK | 5,066 | USD | 608 | 12/16/15 | 12 | ||
Citigroup | NOK | 7,798 | USD | 942 | 12/16/15 | 24 | ||
Citigroup | NOK | 8,043 | USD | 972 | 12/16/15 | 26 | ||
Citigroup | NOK | 8,337 | USD | 1,016 | 12/16/15 | 35 |
See accompanying notes which are an integral part of the financial statements.
610 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Citigroup | NOK | 9,526 | USD | 1,154 | 12/16/15 | 34 | |||
Citigroup | NOK | 10,496 | USD | 1,238 | 12/16/15 | 3 | |||
Citigroup | NZD | 154 | USD | 103 | 11/02/15 | (1 | ) | ||
Citigroup | NZD | 3 | USD | 2 | 12/16/15 | — | |||
Citigroup | NZD | 5 | USD | 3 | 12/16/15 | — | |||
Citigroup | NZD | 9 | USD | 6 | 12/16/15 | — | |||
Citigroup | NZD | 254 | USD | 161 | 12/16/15 | (11 | ) | ||
Citigroup | NZD | 309 | USD | 196 | 12/16/15 | (12 | ) | ||
Citigroup | NZD | 3,615 | USD | 2,289 | 12/16/15 | (152 | ) | ||
Citigroup | NZD | 5,170 | USD | 3,295 | 12/16/15 | (196 | ) | ||
Citigroup | PEN | 47,242 | USD | 14,425 | 03/16/16 | 381 | |||
Citigroup | PHP | 393 | USD | 8 | 12/16/15 | — | |||
Citigroup | PHP | 412 | USD | 9 | 12/16/15 | — | |||
Citigroup | PHP | 461 | USD | 10 | 12/16/15 | — | |||
Citigroup | PHP | 731 | USD | 16 | 12/16/15 | — | |||
Citigroup | PHP | 769 | USD | 17 | 12/16/15 | — | |||
Citigroup | PHP | 1,679 | USD | 36 | 12/16/15 | — | |||
Citigroup | PHP | 3,788 | USD | 80 | 12/16/15 | (1 | ) | ||
Citigroup | PHP | 5,679 | USD | 121 | 12/16/15 | — | |||
Citigroup | PHP | 6,140 | USD | 131 | 12/16/15 | — | |||
Citigroup | PHP | 6,155 | USD | 130 | 12/16/15 | (1 | ) | ||
Citigroup | PHP | 6,398 | USD | 134 | 12/16/15 | (2 | ) | ||
Citigroup | PHP | 7,573 | USD | 160 | 12/16/15 | (1 | ) | ||
Citigroup | PHP | 7,606 | USD | 161 | 12/16/15 | (1 | ) | ||
Citigroup | PLN | 311 | USD | 80 | 11/02/15 | (1 | ) | ||
Citigroup | PLN | 9 | USD | 2 | 12/16/15 | — | |||
Citigroup | PLN | 135 | USD | 36 | 12/16/15 | 1 | |||
Citigroup | PLN | 190 | USD | 49 | 12/16/15 | — | |||
Citigroup | PLN | 199 | USD | 53 | 12/16/15 | 2 | |||
Citigroup | PLN | 239 | USD | 62 | 12/16/15 | — | |||
Citigroup | PLN | 246 | USD | 64 | 12/16/15 | 1 | |||
Citigroup | PLN | 311 | USD | 80 | 12/16/15 | (1 | ) | ||
Citigroup | PLN | 339 | USD | 90 | 12/16/15 | 3 | |||
Citigroup | PLN | 344 | USD | 91 | 12/16/15 | 2 | |||
Citigroup | PLN | 368 | USD | 98 | 12/16/15 | 3 | |||
Citigroup | PLN | 409 | USD | 108 | 12/16/15 | 2 | |||
Citigroup | PLN | 431 | USD | 114 | 12/16/15 | 3 | |||
Citigroup | PLN | 432 | USD | 111 | 12/16/15 | — | |||
Citigroup | PLN | 464 | USD | 120 | 12/16/15 | — | |||
Citigroup | PLN | 530 | USD | 140 | 12/16/15 | 3 | |||
Citigroup | PLN | 894 | USD | 235 | 12/16/15 | 4 | |||
Citigroup | PLN | 2,631 | USD | 683 | 12/16/15 | 3 | |||
Citigroup | SEK | 2,135 | USD | 250 | 11/02/15 | — | |||
Citigroup | SEK | 308 | USD | 36 | 12/16/15 | — | |||
Citigroup | SEK | 314 | USD | 37 | 12/16/15 | — | |||
Citigroup | SEK | 436 | USD | 52 | 12/16/15 | 1 | |||
Citigroup | SEK | 914 | USD | 109 | 12/16/15 | 2 | |||
Citigroup | SEK | 1,283 | USD | 156 | 12/16/15 | 6 | |||
Citigroup | SEK | 1,377 | USD | 166 | 12/16/15 | 5 | |||
Citigroup | SEK | 1,580 | USD | 190 | 12/16/15 | 5 | |||
Citigroup | SEK | 2,116 | USD | 254 | 12/16/15 | 7 | |||
Citigroup | SEK | 7,667 | USD | 908 | 12/16/15 | 10 | |||
Citigroup | SEK | 8,919 | USD | 1,060 | 12/16/15 | 15 | |||
Citigroup | SEK | 11,267 | USD | 1,339 | 12/16/15 | 19 | |||
Citigroup | SEK | 17,843 | USD | 2,120 | 12/16/15 | 29 | |||
Citigroup | SGD | 1,129 | USD | 785 | 12/10/15 | (19 | ) | ||
Citigroup | SGD | 1 | USD | 1 | 12/16/15 | — | |||
Citigroup | SGD | 5 | USD | 3 | 12/16/15 | — | |||
Citigroup | SGD | 8 | USD | 6 | 12/16/15 | — | |||
Citigroup | SGD | 9 | USD | 6 | 12/16/15 | — | |||
Citigroup | SGD | 10 | USD | 7 | 12/16/15 | — | |||
Citigroup | SGD | 18 | USD | 13 | 12/16/15 | — | |||
Citigroup | SGD | 25 | USD | 18 | 12/16/15 | — |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 611
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Citigroup | SGD | 30 | USD | 21 | 12/16/15 | — | |||
Citigroup | SGD | 30 | USD | 21 | 12/16/15 | — | |||
Citigroup | SGD | 30 | USD | 21 | 12/16/15 | — | |||
Citigroup | SGD | 38 | USD | 27 | 12/16/15 | — | |||
Citigroup | SGD | 40 | USD | 28 | 12/16/15 | — | |||
Citigroup | SGD | 40 | USD | 28 | 12/16/15 | — | |||
Citigroup | SGD | 40 | USD | 28 | 12/16/15 | — | |||
Citigroup | SGD | 42 | USD | 29 | 12/16/15 | (1 | ) | ||
Citigroup | SGD | 80 | USD | 56 | 12/16/15 | (1 | ) | ||
Citigroup | SGD | 150 | USD | 105 | 12/16/15 | (2 | ) | ||
Citigroup | SGD | 250 | USD | 177 | 12/16/15 | (1 | ) | ||
Citigroup | SGD | 335 | USD | 239 | 12/16/15 | — | |||
Citigroup | SGD | 910 | USD | 644 | 12/16/15 | (5 | ) | ||
Citigroup | TRY | 4 | USD | 1 | 12/16/15 | — | |||
Citigroup | TRY | 10 | USD | 3 | 12/16/15 | — | |||
Citigroup | TRY | 30 | USD | 10 | 12/16/15 | — | |||
Citigroup | TRY | 30 | USD | 10 | 12/16/15 | — | |||
Citigroup | TRY | 34 | USD | 12 | 12/16/15 | — | |||
Citigroup | TRY | 39 | USD | 13 | 12/16/15 | — | |||
Citigroup | TRY | 40 | USD | 13 | 12/16/15 | — | |||
Citigroup | TRY | 60 | USD | 20 | 12/16/15 | (1 | ) | ||
Citigroup | TRY | 80 | USD | 26 | 12/16/15 | (1 | ) | ||
Citigroup | TRY | 88 | USD | 30 | 12/16/15 | — | |||
Citigroup | TRY | 90 | USD | 30 | 12/16/15 | (1 | ) | ||
Citigroup | TRY | 100 | USD | 33 | 12/16/15 | (1 | ) | ||
Citigroup | TRY | 160 | USD | 53 | 12/16/15 | (1 | ) | ||
Citigroup | TRY | 166 | USD | 55 | 12/16/15 | (1 | ) | ||
Citigroup | TRY | 174 | USD | 59 | 12/16/15 | — | |||
Citigroup | TRY | 238 | USD | 77 | 12/16/15 | (3 | ) | ||
Citigroup | TRY | 303 | USD | 97 | 12/16/15 | (5 | ) | ||
Citigroup | TRY | 327 | USD | 109 | 12/16/15 | (2 | ) | ||
Citigroup | TRY | 337 | USD | 108 | 12/16/15 | (6 | ) | ||
Citigroup | TRY | 380 | USD | 124 | 12/16/15 | (5 | ) | ||
Citigroup | TRY | 484 | USD | 159 | 12/16/15 | (4 | ) | ||
Citigroup | TRY | 1,212 | USD | 391 | 12/16/15 | (19 | ) | ||
Citigroup | TRY | 1,319 | USD | 426 | 12/16/15 | (20 | ) | ||
Citigroup | TRY | 1,599 | USD | 514 | 12/16/15 | (27 | ) | ||
Citigroup | TRY | 2,108 | USD | 715 | 12/16/15 | 1 | |||
Citigroup | TWD | 87 | USD | 3 | 12/16/15 | — | |||
Citigroup | TWD | 102 | USD | 3 | 12/16/15 | — | |||
Citigroup | TWD | 136 | USD | 4 | 12/16/15 | — | |||
Citigroup | TWD | 180 | USD | 6 | 12/16/15 | — | |||
Citigroup | TWD | 203 | USD | 6 | 12/16/15 | — | |||
Citigroup | TWD | 244 | USD | 8 | 12/16/15 | — | |||
Citigroup | TWD | 496 | USD | 15 | 12/16/15 | — | |||
Citigroup | TWD | 517 | USD | 16 | 12/16/15 | — | |||
Citigroup | TWD | 989 | USD | 30 | 12/16/15 | — | |||
Citigroup | TWD | 1,019 | USD | 32 | 12/16/15 | — | |||
Citigroup | TWD | 1,200 | USD | 37 | 12/16/15 | — | |||
Citigroup | TWD | 1,288 | USD | 40 | 12/16/15 | — | |||
Citigroup | TWD | 1,300 | USD | 40 | 12/16/15 | — | |||
Citigroup | TWD | 2,700 | USD | 83 | 12/16/15 | — | |||
Citigroup | TWD | 3,800 | USD | 117 | 12/16/15 | — | |||
Citigroup | TWD | 6,730 | USD | 207 | 12/16/15 | (1 | ) | ||
Citigroup | TWD | 13,300 | USD | 408 | 12/16/15 | (1 | ) | ||
Citigroup | ZAR | 101 | USD | 7 | 11/02/15 | — | |||
Citigroup | ZAR | 100 | USD | 7 | 12/17/15 | — | |||
Citigroup | ZAR | 100 | USD | 7 | 12/17/15 | — | |||
Citigroup | ZAR | 100 | USD | 7 | 12/17/15 | — | |||
Citigroup | ZAR | 100 | USD | 7 | 12/17/15 | — | |||
Citigroup | ZAR | 100 | USD | 7 | 12/17/15 | — | |||
Citigroup | ZAR | 103 | USD | 8 | 12/17/15 | — | |||
Citigroup | ZAR | 200 | USD | 15 | 12/17/15 | — |
See accompanying notes which are an integral part of the financial statements.
612 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Citigroup | ZAR | 200 | USD | 14 | 12/17/15 | — | ||
Citigroup | ZAR | 300 | USD | 21 | 12/17/15 | — | ||
Citigroup | ZAR | 300 | USD | 22 | 12/17/15 | — | ||
Citigroup | ZAR | 300 | USD | 21 | 12/17/15 | — | ||
Citigroup | ZAR | 300 | USD | 22 | 12/17/15 | — | ||
Citigroup | ZAR | 374 | USD | 27 | 12/17/15 | 1 | ||
Citigroup | ZAR | 379 | USD | 28 | 12/17/15 | 1 | ||
Citigroup | ZAR | 400 | USD | 29 | 12/17/15 | — | ||
Citigroup | ZAR | 400 | USD | 29 | 12/17/15 | — | ||
Citigroup | ZAR | 400 | USD | 30 | 12/17/15 | 1 | ||
Citigroup | ZAR | 428 | USD | 32 | 12/17/15 | 1 | ||
Citigroup | ZAR | 446 | USD | 33 | 12/17/15 | 1 | ||
Citigroup | ZAR | 480 | USD | 35 | 12/17/15 | 1 | ||
Citigroup | ZAR | 500 | USD | 37 | 12/17/15 | 1 | ||
Citigroup | ZAR | 617 | USD | 45 | 12/17/15 | 1 | ||
Citigroup | ZAR | 880 | USD | 64 | 12/17/15 | 1 | �� | |
Citigroup | ZAR | 1,670 | USD | 119 | 12/17/15 | (1 | ) | |
Citigroup | ZAR | 2,414 | USD | 172 | 12/17/15 | (1 | ) | |
Citigroup | ZAR | 2,525 | USD | 178 | 12/17/15 | (3 | ) | |
Citigroup | ZAR | 2,531 | USD | 182 | 12/17/15 | 1 | ||
Citigroup | ZAR | 2,769 | USD | 200 | 12/17/15 | 1 | ||
Citigroup | ZAR | 5,844 | USD | 419 | 12/17/15 | — | ||
Deutsche Bank | AUD | 1,587 | USD | 1,106 | 11/03/15 | (25 | ) | |
Goldman Sachs | NZD | 107 | USD | 68 | 11/12/15 | (5 | ) | |
HSBC | USD | 108 | SEK | 940 | 11/12/15 | 2 | ||
JPMorgan Chase | USD | 63 | BRL | 250 | 11/03/15 | 1 | ||
JPMorgan Chase | USD | 1,540 | BRL | 5,975 | 11/03/15 | 9 | ||
JPMorgan Chase | USD | 4,228 | BRL | 15,162 | 02/16/16 | (430 | ) | |
JPMorgan Chase | USD | 13 | CAD | 18 | 11/02/15 | — | ||
JPMorgan Chase | USD | 4,417 | CAD | 5,741 | 12/16/15 | (27 | ) | |
JPMorgan Chase | USD | 6,310 | CLP | 4,281,317 | 11/13/15 | (125 | ) | |
JPMorgan Chase | USD | 12,320 | CNH | 78,700 | 11/09/15 | 119 | ||
JPMorgan Chase | USD | 241 | CNH | 1,542 | 12/16/15 | 2 | ||
JPMorgan Chase | USD | 4,330 | CNY | 27,885 | 02/16/16 | 32 | ||
JPMorgan Chase | USD | 38 | EUR | 34 | 11/03/15 | (1 | ) | |
JPMorgan Chase | USD | 1,122 | EUR | 1,010 | 11/03/15 | (12 | ) | |
JPMorgan Chase | USD | 2 | EUR | 2 | 12/15/15 | — | ||
JPMorgan Chase | USD | 71 | EUR | 63 | 12/15/15 | (2 | ) | |
JPMorgan Chase | USD | 1,291 | EUR | 1,150 | 12/16/15 | (26 | ) | |
JPMorgan Chase | USD | 3,523 | EUR | 3,140 | 12/16/15 | (68 | ) | |
JPMorgan Chase | USD | 7,021 | EUR | 6,310 | 12/16/15 | (78 | ) | |
JPMorgan Chase | USD | 7,089 | EUR | 6,270 | 12/16/15 | (190 | ) | |
JPMorgan Chase | USD | 33,551 | EUR | 29,783 | 12/16/15 | (777 | ) | |
JPMorgan Chase | USD | 4,867 | GBP | 3,155 | 12/16/15 | (4 | ) | |
JPMorgan Chase | USD | 4,883 | GBP | 3,155 | 12/16/15 | (20 | ) | |
JPMorgan Chase | USD | 12,620 | INR | 824,461 | 11/09/15 | (22 | ) | |
JPMorgan Chase | USD | 213 | INR | 14,120 | 11/18/15 | 2 | ||
JPMorgan Chase | USD | 6,270 | INR | 422,753 | 12/16/15 | 151 | ||
JPMorgan Chase | USD | 6,270 | INR | 422,596 | 12/16/15 | 148 | ||
JPMorgan Chase | USD | 3,155 | JPY | 373,204 | 12/16/15 | (60 | ) | |
JPMorgan Chase | USD | 3,155 | JPY | 373,558 | 12/16/15 | (57 | ) | |
JPMorgan Chase | USD | 6,270 | JPY | 746,251 | 12/16/15 | (82 | ) | |
JPMorgan Chase | USD | 6,280 | JPY | 752,075 | 12/16/15 | (43 | ) | |
JPMorgan Chase | USD | 6,310 | JPY | 755,018 | 12/16/15 | (49 | ) | |
JPMorgan Chase | USD | 6,310 | JPY | 761,150 | 12/16/15 | 2 | ||
JPMorgan Chase | USD | 16,697 | JPY | 2,000,091 | 12/16/15 | (111 | ) | |
JPMorgan Chase | USD | 1,578 | KZT | 443,278 | 11/13/15 | 12 | ||
JPMorgan Chase | USD | 3,155 | KZT | 886,555 | 11/16/15 | 9 | ||
JPMorgan Chase | USD | 1,578 | KZT | 444,855 | 11/19/15 | 4 | ||
JPMorgan Chase | USD | 2,508 | MXN | 42,685 | 12/16/15 | 68 | ||
JPMorgan Chase | USD | 3,762 | MXN | 64,011 | 12/16/15 | 101 | ||
JPMorgan Chase | USD | 6,310 | MXN | 104,712 | 12/16/15 | 10 | ||
JPMorgan Chase | USD | 2,356 | NGN | 468,874 | 11/02/15 | — |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 613
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
JPMorgan Chase | USD | 3,976 | NZD | 6,270 | 12/16/15 | 256 | |
JPMorgan Chase | USD | 14,326 | PEN | 46,982 | 03/16/16 | (360 | ) |
JPMorgan Chase | USD | 3,155 | RUB | 195,346 | 11/09/15 | (101 | ) |
JPMorgan Chase | USD | 5,048 | SGD | 6,985 | 12/16/15 | (69 | ) |
JPMorgan Chase | USD | 6,270 | SGD | 8,885 | 12/16/15 | 63 | |
JPMorgan Chase | USD | 14,204 | SGD | 19,792 | 12/16/15 | (97 | ) |
JPMorgan Chase | USD | 6,174 | TRY | 18,274 | 12/16/15 | 15 | |
JPMorgan Chase | USD | 3,135 | TWD | 101,856 | 12/16/15 | 1 | |
JPMorgan Chase | USD | 9,405 | TWD | 308,163 | 12/16/15 | 83 | |
JPMorgan Chase | USD | 12,540 | TWD | 410,999 | 12/16/15 | 115 | |
JPMorgan Chase | USD | 6,280 | TWD | 202,309 | 03/29/16 | (50 | ) |
JPMorgan Chase | USD | 6,280 | ZAR | 85,800 | 12/17/15 | (128 | ) |
JPMorgan Chase | BRL | 6,225 | USD | 1,540 | 11/03/15 | (74 | ) |
JPMorgan Chase | BRL | 6,143 | USD | 1,578 | 11/30/15 | (1 | ) |
JPMorgan Chase | BRL | 12,530 | USD | 3,155 | 12/16/15 | (49 | ) |
JPMorgan Chase | CLP | 4,337,701 | USD | 6,310 | 12/16/15 | 63 | |
JPMorgan Chase | CNH | 80,020 | USD | 12,560 | 11/09/15 | (88 | ) |
JPMorgan Chase | EUR | 16,302 | HUF | 5,116,603 | 12/16/15 | 156 | |
JPMorgan Chase | EUR | 6,270 | SEK | 59,467 | 12/16/15 | 68 | |
JPMorgan Chase | EUR | 631 | USD | 716 | 11/23/15 | 21 | |
JPMorgan Chase | EUR | 40 | USD | 44 | 12/15/15 | — | |
JPMorgan Chase | EUR | 48 | USD | 55 | 12/15/15 | 2 | |
JPMorgan Chase | EUR | 49 | USD | 56 | 12/15/15 | 2 | |
JPMorgan Chase | EUR | 158 | USD | 177 | 12/15/15 | 3 | |
JPMorgan Chase | EUR | 1,262 | USD | 1,396 | 12/16/15 | 7 | |
JPMorgan Chase | EUR | 1,578 | USD | 1,730 | 12/16/15 | (6 | ) |
JPMorgan Chase | EUR | 3,155 | USD | 3,472 | 12/16/15 | — | |
JPMorgan Chase | EUR | 3,155 | USD | 3,481 | 12/16/15 | 9 | |
JPMorgan Chase | EUR | 3,155 | USD | 3,477 | 12/16/15 | 5 | |
JPMorgan Chase | EUR | 6,270 | USD | 7,013 | 12/16/15 | 113 | |
JPMorgan Chase | EUR | 6,310 | USD | 7,159 | 12/16/15 | 215 | |
JPMorgan Chase | EUR | 10,727 | USD | 12,145 | 12/16/15 | 341 | |
JPMorgan Chase | GBP | 6,270 | USD | 9,624 | 12/17/15 | (40 | ) |
JPMorgan Chase | INR | 206,371 | USD | 3,155 | 11/09/15 | 2 | |
JPMorgan Chase | INR | 414,607 | USD | 6,310 | 12/16/15 | 13 | |
JPMorgan Chase | JPY | 527,699 | USD | 4,396 | 12/16/15 | 20 | |
JPMorgan Chase | JPY | 527,704 | USD | 4,396 | 12/16/15 | 20 | |
JPMorgan Chase | JPY | 753,799 | USD | 6,280 | 12/16/15 | 29 | |
JPMorgan Chase | JPY | 755,413 | USD | 6,270 | 12/16/15 | 6 | |
JPMorgan Chase | JPY | 756,394 | USD | 6,310 | 12/16/15 | 38 | |
JPMorgan Chase | JPY | 759,541 | USD | 6,310 | 12/16/15 | 12 | |
JPMorgan Chase | JPY | 763,302 | USD | 6,310 | 12/16/15 | (20 | ) |
JPMorgan Chase | JPY | 910,499 | USD | 7,572 | 12/16/15 | 22 | |
JPMorgan Chase | KRW | 14,293,480 | USD | 12,620 | 12/16/15 | 117 | |
JPMorgan Chase | NGN | 468,874 | USD | 2,191 | 11/02/15 | (165 | ) |
JPMorgan Chase | NZD | 6,270 | USD | 3,950 | 12/16/15 | (283 | ) |
JPMorgan Chase | NZD | 6,310 | USD | 4,286 | 12/16/15 | 27 | |
JPMorgan Chase | PLN | 69,335 | EUR | 16,302 | 12/16/15 | 19 | |
JPMorgan Chase | RUB | 206,921 | USD | 3,155 | 11/09/15 | (80 | ) |
JPMorgan Chase | SEK | 58,534 | EUR | 6,310 | 12/16/15 | 85 | |
JPMorgan Chase | SGD | 8,792 | USD | 6,160 | 12/16/15 | (107 | ) |
JPMorgan Chase | SGD | 8,850 | USD | 6,310 | 12/16/15 | 2 | |
JPMorgan Chase | SGD | 17,818 | USD | 12,540 | 12/16/15 | (161 | ) |
JPMorgan Chase | TRY | 3,746 | USD | 1,262 | 12/16/15 | (7 | ) |
JPMorgan Chase | TRY | 7,038 | USD | 2,257 | 12/16/15 | (126 | ) |
JPMorgan Chase | TRY | 31,308 | USD | 10,346 | 12/16/15 | (257 | ) |
JPMorgan Chase | TWD | 209,251 | USD | 6,280 | 03/29/16 | (164 | ) |
JPMorgan Chase | TWD | 358,072 | USD | 11,740 | 06/23/16 | 710 | |
JPMorgan Chase | TWD | 49,634 | USD | 1,520 | 07/11/16 | (9 | ) |
JPMorgan Chase | TWD | 181,324 | USD | 5,870 | 07/11/16 | 283 | |
JPMorgan Chase | TWD | 181,324 | USD | 5,870 | 07/11/16 | 283 | |
JPMorgan Chase | ZAR | 4,040 | USD | 289 | 12/17/15 | (1 | ) |
JPMorgan Chase | ZAR | 43,347 | USD | 3,135 | 12/17/15 | 27 |
See accompanying notes which are an integral part of the financial statements.
614 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
JPMorgan Chase | ZAR | 43,591 | USD | 3,155 | 12/17/15 | 30 | ||
JPMorgan Chase | ZAR | 123,868 | USD | 9,029 | 12/17/15 | 148 | ||
Morgan Stanley | JPY | 79,900 | USD | 666 | 11/04/15 | 3 | ||
National Australia Bank | USD | 1,148 | AUD | 1,587 | 11/03/15 | (17 | ) | |
National Australia Bank | USD | 664 | JPY | 79,900 | 11/04/15 | (2 | ) | |
National Australia Bank | AUD | 1,587 | USD | 1,147 | 12/02/15 | 17 | ||
National Australia Bank | JPY | 79,900 | USD | 664 | 12/02/15 | 2 | ||
Societe Generale | ILS | 1,576 | USD | 410 | 12/17/15 | 2 | ||
Standard Chartered | USD | 1,656 | GBP | 1,082 | 11/03/15 | 12 | ||
Standard Chartered | USD | 69 | NZD | 104 | 11/12/15 | 2 | ||
Standard Chartered | GBP | 1,082 | USD | 1,655 | 12/02/15 | (12 | ) | |
Standard Chartered | MYR | 2,461 | USD | 560 | 01/19/16 | (11 | ) | |
State Street | USD | 25 | CAD | 34 | 12/16/15 | 1 | ||
State Street | USD | 33 | EUR | 30 | 11/19/15 | — | ||
State Street | USD | 103 | EUR | 90 | 11/19/15 | (4 | ) | |
State Street | USD | 11 | EUR | 10 | 11/20/15 | — | ||
State Street | USD | 22 | EUR | 20 | 11/20/15 | — | ||
State Street | USD | 34 | EUR | 30 | 11/20/15 | (1 | ) | |
State Street | USD | 44 | EUR | 40 | 11/20/15 | — | ||
State Street | USD | 45 | EUR | 40 | 11/20/15 | (1 | ) | |
State Street | USD | 65 | EUR | 60 | 11/20/15 | 1 | ||
State Street | USD | 67 | EUR | 60 | 11/20/15 | (1 | ) | |
State Street | USD | 69 | EUR | 60 | 11/20/15 | (3 | ) | |
State Street | USD | 78 | EUR | 70 | 11/20/15 | (1 | ) | |
State Street | USD | 280 | EUR | 252 | 12/16/15 | (3 | ) | |
State Street | USD | 51 | GBP | 33 | 11/03/15 | — | ||
State Street | USD | 153 | GBP | 100 | 12/15/15 | 1 | ||
State Street | USD | 263 | GBP | 170 | 12/15/15 | (1 | ) | |
State Street | USD | 170 | GBP | 110 | 12/16/15 | — | ||
State Street | USD | 282 | GBP | 186 | 12/16/15 | 5 | ||
State Street | USD | 339 | GBP | 224 | 12/16/15 | 6 | ||
State Street | USD | 46 | GBP | 30 | 01/25/16 | 1 | ||
State Street | USD | 46 | GBP | 30 | 01/25/16 | — | ||
State Street | USD | 15 | GBP | 10 | 01/26/16 | — | ||
State Street | USD | 15 | GBP | 10 | 01/26/16 | — | ||
State Street | USD | 15 | GBP | 10 | 01/26/16 | — | ||
State Street | USD | 15 | GBP | 10 | 01/26/16 | — | ||
State Street | USD | 15 | GBP | 10 | 01/26/16 | — | ||
State Street | USD | 16 | GBP | 10 | 01/26/16 | — | ||
State Street | USD | 31 | GBP | 20 | 01/26/16 | — | ||
State Street | USD | 77 | GBP | 50 | 01/26/16 | — | ||
State Street | EUR | 30 | USD | 33 | 11/19/15 | — | ||
State Street | EUR | 30 | USD | 34 | 11/19/15 | 1 | ||
State Street | EUR | 130 | USD | 144 | 11/19/15 | 1 | ||
State Street | EUR | 320 | USD | 361 | 11/19/15 | 9 | ||
State Street | EUR | 30 | USD | 34 | 11/20/15 | 1 | ||
State Street | EUR | 30 | USD | 34 | 11/20/15 | 1 | ||
State Street | EUR | 40 | USD | 43 | 11/20/15 | (1 | ) | |
State Street | EUR | 40 | USD | 45 | 11/20/15 | 1 | ||
State Street | EUR | 50 | USD | 55 | 11/20/15 | — | ||
State Street | EUR | 1,120 | USD | 1,263 | 11/20/15 | 32 | ||
State Street | EUR | 34 | USD | 38 | 12/15/15 | — | ||
State Street | EUR | 782 | USD | 889 | 12/15/15 | 28 | ||
State Street | EUR | 252 | USD | 286 | 12/16/15 | 10 | ||
State Street | EUR | 480 | USD | 531 | 01/27/16 | 2 | ||
State Street | GBP | 440 | USD | 679 | 12/15/15 | — | ||
State Street | GBP | 45 | USD | 69 | 12/16/15 | — | ||
State Street | GBP | 110 | USD | 168 | 12/16/15 | (1 | ) | |
State Street | GBP | 199 | USD | 305 | 12/16/15 | (2 | ) | |
State Street | GBP | 365 | USD | 569 | 12/16/15 | 6 | ||
State Street | GBP | 60 | USD | 94 | 01/25/16 | 1 | ||
State Street | GBP | 10 | USD | 15 | 01/26/16 | — | ||
State Street | GBP | 30 | USD | 46 | 01/26/16 | (1 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 615
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
State Street | GBP | 90 | USD | 141 | 01/26/16 | 2 | ||
State Street | GBP | 320 | USD | 491 | 02/23/16 | (2 | ) | |
State Street | GBP | 20 | USD | 31 | 02/24/16 | — | ||
State Street | GBP | 100 | USD | 153 | 02/24/16 | (1 | ) | |
UBS | USD | 2,689 | EUR | 2,433 | 11/03/15 | (14 | ) | |
UBS | USD | 1,030 | GBP | 671 | 11/12/15 | 5 | ||
UBS | EUR | 3,477 | USD | 3,892 | 11/03/15 | 68 | ||
UBS | EUR | 2,433 | USD | 2,690 | 12/02/15 | 14 | ||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 509 |
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
Long Reference Entity | ||||||||
3M Co. | Goldman Sachs | 3,605 | USD | 567 | 06/30/16 | (1 | ) | |
A. O. Smith Corp. | Goldman Sachs | 3,130 | USD | 240 | 06/30/16 | 12 | ||
AA PLC | Morgan Stanley | 4,281 | GBP | 12 | 06/28/17 | — | ||
Abbott Laboratories | Goldman Sachs | 9,160 | USD | 410 | 06/30/16 | (36 | ) | |
Abengoa, SA | Morgan Stanley | 12,755 | EUR | 11 | 06/28/17 | — | ||
Accenture PLC | Goldman Sachs | 1,594 | USD | 171 | 06/30/16 | 13 | ||
ACE, Ltd. | Goldman Sachs | 837 | USD | 95 | 06/30/16 | 9 | ||
Actelion, Ltd. | Morgan Stanley | 3,844 | CHF | 528 | 06/28/17 | (3 | ) | |
Activision Blizzard, Inc. | Goldman Sachs | 2,456 | USD | 85 | 06/30/16 | 23 | ||
Acuity Brands, Inc. | Goldman Sachs | 265 | USD | 58 | 06/30/16 | 10 | ||
Adecco SA | Morgan Stanley | 574 | CHF | 42 | 06/28/17 | (1 | ) | |
Aeroports de Paris SA | Morgan Stanley | 199 | EUR | 23 | 06/28/17 | 2 | ||
Aetna , Inc. | Goldman Sachs | 4,787 | USD | 549 | 06/30/16 | (17 | ) | |
Aflac, Inc. | Goldman Sachs | 9,420 | USD | 601 | 06/30/16 | 2 | ||
AGCO Corp. | Goldman Sachs | 574 | USD | 28 | 06/30/16 | — | ||
AGEAS SA/NV | Morgan Stanley | 431 | EUR | 17 | 06/28/17 | 2 | ||
Aggreko PLC | Morgan Stanley | 1,107 | GBP | 10 | 06/28/17 | (3 | ) | |
Agilent Technologies, Inc. | Goldman Sachs | 12,238 | USD | 462 | 06/30/16 | 2 | ||
AIA Group, Ltd. | Morgan Stanley | 6,600 | HKD | 301 | 06/29/17 | 2 | ||
Air Canada | Morgan Stanley | 3,927 | CAD | 42 | 06/29/17 | (2 | ) | |
Ajinomoto Co., Inc. | Goldman Sachs | 3,000 | JPY | 8,121 | 06/30/16 | — | ||
Akamai Technologies, Inc. | Goldman Sachs | 3,744 | USD | 228 | 06/30/16 | (41 | ) | |
Alaska Air Group, Inc. | Goldman Sachs | 157 | USD | 12 | 08/04/16 | — | ||
Alfresa Holdings Corp. | Goldman Sachs | 1,300 | JPY | 3,033 | 09/14/16 | 2 | ||
Alleghany Corp. | Goldman Sachs | 78 | USD | 39 | 09/14/16 | 2 | ||
Alliant Energy Corp. | Goldman Sachs | 1,141 | USD | 67 | 06/30/16 | 2 | ||
Allianz SE | Morgan Stanley | 723 | EUR | 115 | 06/28/17 | 11 | ||
Allied World Assurance Company Holdings, | ||||||||
AG | Goldman Sachs | 798 | USD | 29 | 09/14/16 | (2 | ) | |
Alphabet, Inc. | Goldman Sachs | 431 | USD | 318 | 06/30/16 | 79 | ||
Altria Group, Inc. | Goldman Sachs | 6,040 | USD | 365 | 06/30/16 | 66 | ||
Amazon.com, Inc. | Goldman Sachs | 233 | USD | 146 | 06/30/16 | 36 | ||
Amcor, Ltd. | Morgan Stanley | 6,530 | AUD | 89 | 06/29/17 | 1 | ||
Amdocs, Ltd. | Goldman Sachs | 7,930 | USD | 472 | 06/30/16 | 27 | ||
Amer Sports OYJ | Morgan Stanley | 937 | EUR | 24 | 06/28/17 | 2 | ||
AMERCO | Goldman Sachs | 68 | USD | 28 | 09/14/16 | 2 | ||
Ameren Corp. | Goldman Sachs | 2,022 | USD | 88 | 06/30/16 | 12 | ||
American Eagle Outfitters, Inc. | Goldman Sachs | 4,425 | USD | 68 | 06/30/16 | (10 | ) | |
American Electric Power Co., Inc. | Goldman Sachs | 3,860 | USD | 219 | 06/30/16 | 15 | ||
American Express Co. | Goldman Sachs | 2,791 | USD | 204 | 06/30/16 | (19 | ) | |
Ameriprise Financial, Inc. | Goldman Sachs | 3,754 | USD | 433 | 06/30/16 | (46 | ) | |
AmerisourceBergen Corp. | Goldman Sachs | 5,052 | USD | 488 | 06/30/16 | (53 | ) | |
Amgen, Inc. | Goldman Sachs | 2,673 | USD | 423 | 06/30/16 | — | ||
Ansell, Ltd. | Morgan Stanley | 4,016 | AUD | 81 | 06/29/17 | 1 |
See accompanying notes which are an integral part of the financial statements.
616 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
Anthem, Inc. | Goldman Sachs | 3,490 | USD | 486 | 06/30/16 | (96 | ) | |
Aozora Bank, Ltd. | Goldman Sachs | 23,000 | JPY | 10,189 | 06/30/16 | (4 | ) | |
Apollo Education Group, Inc. | Goldman Sachs | 7,697 | USD | 56 | 09/14/16 | (30 | ) | |
Apple, Inc. | Goldman Sachs | 1,789 | USD | 214 | 06/30/16 | (14 | ) | |
Applied Materials, Inc. | Goldman Sachs | 5,416 | USD | 91 | 06/30/16 | (17 | ) | |
Archer-Daniels-Midland Co. | Goldman Sachs | 9,509 | USD | 434 | 06/30/16 | (40 | ) | |
Armstrong World Industries, Inc. | Goldman Sachs | 1,413 | USD | 70 | 10/11/16 | 1 | ||
Arrow Electronics, Inc. | Goldman Sachs | 6,351 | USD | 349 | 06/30/16 | (18 | ) | |
Asahi Kasei Corp. | Goldman Sachs | 13,000 | JPY | 9,705 | 06/30/16 | (30 | ) | |
Ascena Retail Group, Inc. | Goldman Sachs | 1,410 | USD | 19 | 10/17/16 | — | ||
Ashland, Inc. | Goldman Sachs | 874 | USD | 96 | 06/30/16 | (14 | ) | |
Aspen Insurance Holdings, Ltd. | Goldman Sachs | 584 | USD | 28 | 09/14/16 | 1 | ||
Assurant, Inc. | Goldman Sachs | 2,756 | USD | 225 | 06/30/16 | 31 | ||
Assured Guaranty, Ltd. | Goldman Sachs | 14,189 | USD | 389 | 06/30/16 | 9 | ||
Astellas Pharma, Inc. | Goldman Sachs | 12,800 | JPY | 22,592 | 06/30/16 | (2 | ) | |
Atlantia SpA | Morgan Stanley | 5,017 | EUR | 126 | 06/28/17 | 6 | ||
Atmos Energy Corp. | Goldman Sachs | 347 | USD | 22 | 06/30/16 | 4 | ||
Atos SE | Morgan Stanley | 530 | EUR | 38 | 06/28/17 | 3 | ||
Atwood Oceanics, Inc. | Goldman Sachs | 9,369 | USD | 155 | 09/14/16 | (2 | ) | |
Aurizon Holdings, Ltd. | Morgan Stanley | 12,419 | AUD | 64 | 06/29/17 | — | ||
Aurubis AG | Morgan Stanley | 1,074 | EUR | 65 | 06/28/17 | 4 | ||
Autogrill SpA | Morgan Stanley | 13,680 | EUR | 116 | 06/28/17 | 7 | ||
Automatic Data Processing, Inc. | Goldman Sachs | 1,299 | USD | 113 | 06/30/16 | 5 | ||
Avery Dennison Corp. | Goldman Sachs | 3,457 | USD | 225 | 06/30/16 | 11 | ||
Avnet, Inc. | Goldman Sachs | 7,991 | USD | 363 | 06/30/16 | 25 | ||
Avon Products, Inc. | Goldman Sachs | 52,897 | USD | 213 | 09/14/16 | 5 | ||
Azimut Holding SpA | Morgan Stanley | 620 | EUR | 14 | 06/28/17 | 1 | ||
BAE Systems PLC | Morgan Stanley | 3,551 | GBP | 16 | 06/28/17 | (1 | ) | |
Banca Generali SpA | Morgan Stanley | 719 | EUR | 20 | 06/28/17 | 2 | ||
Banca Popolare di Milano SCARL | Morgan Stanley | 73,492 | EUR | 63 | 06/28/17 | (12 | ) | |
Banco Popolare Societa Cooperativa | Morgan Stanley | 1,097 | EUR | 15 | 06/28/17 | (3 | ) | |
BANDAI NAMCO Holdings, Inc. | Goldman Sachs | 7,500 | JPY | 22,388 | 06/30/16 | 25 | ||
Bank of America Corp. | Goldman Sachs | 6,697 | USD | 112 | 06/30/16 | (4 | ) | |
Bank of Montreal | Morgan Stanley | 2,240 | CAD | 170 | 06/29/17 | 2 | ||
Barratt Developments PLC | Morgan Stanley | 19,499 | GBP | 119 | 06/28/17 | — | ||
Baxter International Inc. | Goldman Sachs | 1,150 | USD | 43 | 10/11/16 | 5 | ||
BCE, Inc. | Morgan Stanley | 1,697 | CAD | 96 | 06/29/17 | 3 | ||
Bed Bath & Beyond, Inc. | Goldman Sachs | 332 | USD | 20 | 06/30/16 | (4 | ) | |
Bellway P L C | Morgan Stanley | 342 | GBP | 9 | 06/28/17 | 1 | ||
Bemis Co., Inc. | Goldman Sachs | 6,980 | USD | 320 | 06/30/16 | (1 | ) | |
Best Buy Co., Inc. | Goldman Sachs | 11,882 | USD | 416 | 06/30/16 | 10 | ||
Big Lots, Inc. | Goldman Sachs | 1,427 | USD | 66 | 06/30/16 | (2 | ) | |
Biogen, Inc. | Goldman Sachs | 1,359 | USD | 395 | 06/30/16 | (154 | ) | |
Bio-Rad Laboratories, Inc. | Goldman Sachs | 449 | USD | 63 | 09/14/16 | 1 | ||
BlackBerry, Ltd. | Morgan Stanley | 19,672 | CAD | 187 | 06/29/17 | (12 | ) | |
BOC Hong Kong (Holdings), Ltd. | Morgan Stanley | 10,500 | HKD | 261 | 06/29/17 | — | ||
Boliden AB | Morgan Stanley | 11,457 | SEK | 1,874 | 06/28/17 | 7 | ||
Bombardier, Inc. | Morgan Stanley | 8,603 | CAD | 12 | 06/29/17 | (7 | ) | |
Boral, Ltd. | Morgan Stanley | 92,152 | AUD | 497 | 06/29/17 | (27 | ) | |
Boston Scientific Corp. | Goldman Sachs | 1,033 | USD | 19 | 06/30/16 | — | ||
bpost SA/NV | Morgan Stanley | 699 | EUR | 16 | 06/28/17 | 1 | ||
Brenntag AG | Morgan Stanley | 468 | EUR | 26 | 06/28/17 | 2 | ||
Bridgestone Corp. | Goldman Sachs | 500 | JPY | 2,238 | 06/30/16 | (1 | ) | |
Brinker International, Inc. | Goldman Sachs | 2,293 | USD | 104 | 06/30/16 | (19 | ) | |
Bristol-Myers Squibb Co. | Goldman Sachs | 1,038 | USD | 68 | 06/30/16 | (1 | ) | |
Britvic plc | Morgan Stanley | 1,355 | GBP | 9 | 06/28/17 | — | ||
Broadridge Financial Solutions, Inc. | Goldman Sachs | 6,341 | USD | 378 | 06/30/16 | 51 | ||
Brocade Communications Systems, Inc. | Goldman Sachs | 46,845 | USD | 488 | 06/30/16 | (63 | ) | |
Brother Industries, Ltd. | Goldman Sachs | 4,200 | JPY | 6,544 | 09/14/16 | (1 | ) | |
Brunswick Corp. | Goldman Sachs | 1,145 | USD | 62 | 06/30/16 | 2 | ||
Bunge, Ltd. | Goldman Sachs | 4,491 | USD | 328 | 06/30/16 | (42 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 617
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
Burberry Group plc | Morgan Stanley | 3,046 | GBP | 40 | 06/28/17 | (4 | ) | |
BWX Technologies, Inc. | Goldman Sachs | 4,689 | USD | 133 | 09/14/16 | 4 | ||
C.R. Bard, Inc. | Goldman Sachs | 1,541 | USD | 287 | 06/30/16 | 5 | ||
CA, Inc. | Goldman Sachs | 7,134 | USD | 198 | 06/30/16 | (16 | ) | |
CALBEE, Inc. | Goldman Sachs | 4,200 | JPY | 18,522 | 06/30/16 | (32 | ) | |
Caltex Australia, Ltd. | Morgan Stanley | 15,323 | AUD | 484 | 06/29/17 | (14 | ) | |
Cameco Corp. | Morgan Stanley | 1,271 | CAD | 24 | 06/29/17 | — | ||
Canadian Imperial Bank of Commerce | Morgan Stanley | 1,734 | CAD | 174 | 06/29/17 | 9 | ||
Canadian National Railway Co. | Morgan Stanley | 1,626 | CAD | 130 | 06/29/17 | 8 | ||
Canadian Tire Corp., Ltd. | Morgan Stanley | 1,616 | CAD | 186 | 06/29/17 | (25 | ) | |
Canfor Corp. | Morgan Stanley | 8,398 | CAD | 155 | 06/29/17 | (48 | ) | |
Cap Gemini SA | Morgan Stanley | 3,255 | EUR | 264 | 06/28/17 | — | ||
Capital One Financial Corp. | Goldman Sachs | 2,211 | USD | 174 | 06/30/16 | (23 | ) | |
Cardinal Health, Inc. | Goldman Sachs | 2,034 | USD | 167 | 06/30/16 | (5 | ) | |
Cargotec OYJ | Morgan Stanley | 640 | EUR | 21 | 06/28/17 | 3 | ||
Carlisle Companies, Inc. | Goldman Sachs | 719 | USD | 63 | 06/30/16 | (10 | ) | |
Carnival Corp. | Goldman Sachs | 4,081 | USD | 221 | 06/30/16 | 12 | ||
Carter's, Inc. | Goldman Sachs | 4,390 | USD | 399 | 06/30/16 | (73 | ) | |
Cascade Bancorp | Morgan Stanley | 1,430 | GBP | 5 | 06/28/17 | (3 | ) | |
Caterpillar, Inc. | Goldman Sachs | 172 | USD | 13 | 06/30/16 | (2 | ) | |
CCL Industries, Inc. | Morgan Stanley | 158 | CAD | 29 | 06/29/17 | — | ||
CDW Corp. | Goldman Sachs | 2,083 | USD | 93 | 06/30/16 | 19 | ||
CEB, Inc. | Goldman Sachs | 920 | USD | 69 | 09/14/16 | 3 | ||
Celanese Corp. | Goldman Sachs | 203 | USD | 14 | 06/30/16 | — | ||
Celgene Corp. | Goldman Sachs | 382 | USD | 47 | 09/14/16 | — | ||
Centene Corp. | Goldman Sachs | 5,535 | USD | 329 | 06/30/16 | (89 | ) | |
Central Japan Railway Co. | Goldman Sachs | 1,600 | JPY | 35,520 | 06/30/16 | — | ||
CF Industries Holdings, Inc. | Goldman Sachs | 816 | USD | 41 | 06/30/16 | (11 | ) | |
CGI Group, Inc. | Morgan Stanley | 7,180 | CAD | 349 | 06/29/17 | (14 | ) | |
Charles River Laboratories International, Inc. | Goldman Sachs | 932 | USD | 61 | 10/17/16 | (1 | ) | |
Chico's FAS, Inc. | Goldman Sachs | 1,617 | USD | 22 | 06/30/16 | (5 | ) | |
Chr. Hansen Holding A/S | Morgan Stanley | 365 | DKK | 149 | 06/28/17 | 3 | ||
Christian Dior SE | Morgan Stanley | 178 | EUR | 32 | 06/28/17 | 2 | ||
Chubu Electric Power Co., Inc. | Goldman Sachs | 9,600 | JPY | 17,947 | 06/30/16 | 4 | ||
Church & Dwight Co., Inc. | Goldman Sachs | 362 | USD | 31 | 06/30/16 | 1 | ||
CI Financial Corp. | Morgan Stanley | 2,003 | CAD | 62 | 06/29/17 | (4 | ) | |
CIMIC Group, Ltd. | Morgan Stanley | 1,684 | AUD | 47 | 06/29/17 | 2 | ||
Cintas Corp. | Goldman Sachs | 3,338 | USD | 311 | 06/30/16 | 25 | ||
Cisco Systems, Inc. | Goldman Sachs | 16,156 | USD | 466 | 06/30/16 | 14 | ||
CIT Group, Inc. | Goldman Sachs | 393 | USD | 17 | 06/30/16 | (2 | ) | |
Citigroup, Inc. | Goldman Sachs | 2,261 | USD | 120 | 06/30/16 | (8 | ) | |
Citrix Systems, Inc. | Goldman Sachs | 946 | USD | 78 | 06/30/16 | 10 | ||
CK Hutchison Holdings, Ltd. | Morgan Stanley | 16,500 | HKD | 1,757 | 06/29/17 | (13 | ) | |
Clariant AG | Morgan Stanley | 2,067 | CHF | 38 | 06/28/17 | (3 | ) | |
CLP Holdings, Ltd. | Morgan Stanley | 37,000 | HKD | 2,497 | 06/29/17 | 9 | ||
Coach, Inc. | Goldman Sachs | 1,981 | USD | 62 | 10/11/16 | 2 | ||
Coca-Cola Amatil, Ltd. | Morgan Stanley | 19,914 | AUD | 181 | 06/29/17 | — | ||
Coca-Cola HBC AG | Morgan Stanley | 8,128 | GBP | 126 | 06/28/17 | 16 | ||
Cochlear, Ltd. | Morgan Stanley | 278 | AUD | 25 | 06/29/17 | 2 | ||
Cognizant Technology Solutions Corp. | Goldman Sachs | 656 | USD | 45 | 06/30/16 | 3 | ||
Comcast Corp. | Goldman Sachs | 1,640 | USD | 103 | 06/30/16 | 3 | ||
ComfortDelGro Corp., Ltd. | Morgan Stanley | 35,100 | SGD | 107 | 06/30/17 | (5 | ) | |
Community Health Systems, Inc. | Goldman Sachs | 9,423 | USD | 264 | 06/30/16 | (239 | ) | |
Computer Sciences Corp. | Goldman Sachs | 2,457 | USD | 164 | 06/30/16 | — | ||
Consolidated Edison, Inc. | Goldman Sachs | 4,417 | USD | 290 | 06/30/16 | 35 | ||
Constellation Software, Inc. | Morgan Stanley | 425 | CAD | 240 | 06/29/17 | 15 | ||
Convergys Corp. | Goldman Sachs | 3,126 | USD | 80 | 09/14/16 | 5 | ||
CoreLogic, Inc. | Goldman Sachs | 1,218 | USD | 47 | 09/14/16 | 1 | ||
Corning, Inc. | Goldman Sachs | 13,085 | USD | 243 | 06/30/16 | (24 | ) | |
Coty, Inc. | Goldman Sachs | 367 | USD | 11 | 10/17/16 | — | ||
Crane Co. | Goldman Sachs | 2,084 | USD | 110 | 06/30/16 | (14 | ) |
See accompanying notes which are an integral part of the financial statements.
618 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
Credit Acceptance Corp. | Goldman Sachs | 274 | USD | 52 | 09/14/16 | (4 | ) | |
Crown Holdings, Inc. | Goldman Sachs | 221 | USD | 12 | 06/30/16 | — | ||
CSX Corp. | Goldman Sachs | 11,484 | USD | 310 | 06/30/16 | (76 | ) | |
Cummins, Inc. | Goldman Sachs | 1,965 | USD | 203 | 06/30/16 | (59 | ) | |
CVS Health Corp. | Goldman Sachs | 3,336 | USD | 330 | 06/30/16 | (21 | ) | |
Daicel Corp. | Goldman Sachs | 14,400 | JPY | 23,155 | 06/30/16 | — | ||
Danaher Corp. | Goldman Sachs | 402 | USD | 38 | 09/14/16 | 3 | ||
Darden Restaurants, Inc. | Goldman Sachs | 4,139 | USD | 256 | 06/30/16 | (43 | ) | |
Dassault Systemes | Morgan Stanley | 513 | EUR | 37 | 06/28/17 | 5 | ||
Davide Campari-Milano SpA | Morgan Stanley | 3,628 | EUR | 28 | 06/28/17 | 3 | ||
DCC PLC | Morgan Stanley | 6,321 | GBP | 329 | 06/28/17 | 12 | ||
Dean Foods Co. | Goldman Sachs | 9,322 | USD | 169 | 06/30/16 | 14 | ||
Deckers Outdoor Corp. | Goldman Sachs | 4,152 | USD | 231 | 06/30/16 | (52 | ) | |
Delta Air Lines, Inc. | Goldman Sachs | 5,211 | USD | 265 | 08/04/16 | 30 | ||
Deluxe Corp. | Goldman Sachs | 172 | USD | 10 | 10/17/16 | — | ||
DeNA Co., Ltd. | Goldman Sachs | 3,100 | JPY | 6,051 | 09/14/16 | (7 | ) | |
Denbury Resources, Inc. | Goldman Sachs | 6,023 | USD | 21 | 06/30/16 | (17 | ) | |
DENTSPLY International, Inc. | Goldman Sachs | 1,336 | USD | 81 | 06/30/16 | 11 | ||
Deutsche Lufthansa AG | Morgan Stanley | 7,487 | EUR | 101 | 06/28/17 | 13 | ||
Dialog Semiconductor PLC | Morgan Stanley | 2,913 | EUR | 98 | 06/28/17 | (19 | ) | |
Dick's Sporting Goods, Inc. | Goldman Sachs | 4,808 | USD | 214 | 06/30/16 | (41 | ) | |
Dillard's, Inc. | Goldman Sachs | 337 | USD | 30 | 06/30/16 | (4 | ) | |
Disco Corp. | Goldman Sachs | 1,200 | JPY | 13,332 | 06/30/16 | 7 | ||
Discover Financial Services | Goldman Sachs | 5,067 | USD | 285 | 06/30/16 | (11 | ) | |
Dixons Carphone PLC | Morgan Stanley | 8,436 | GBP | 39 | 06/28/17 | (1 | ) | |
DKSH Holding AG | Morgan Stanley | 185 | CHF | 11 | 06/28/17 | — | ||
Dollarama, Inc. | Morgan Stanley | 2,612 | CAD | 231 | 06/29/17 | 23 | ||
Domino's Pizza, Inc. | Goldman Sachs | 911 | USD | 97 | 06/30/16 | (3 | ) | |
Domtar Corp. | Goldman Sachs | 2,515 | USD | 104 | 06/30/16 | (6 | ) | |
Don Quijote Holdings Co., Ltd. | Goldman Sachs | 3,000 | JPY | 13,425 | 08/04/16 | (8 | ) | |
Dr Pepper Snapple Group, Inc. | Goldman Sachs | 5,759 | USD | 515 | 06/30/16 | 84 | ||
Drax Group PLC | Morgan Stanley | 5,953 | GBP | 16 | 06/28/17 | — | ||
DS Smith PLC | Morgan Stanley | 14,914 | GBP | 58 | 06/28/17 | — | ||
DST Systems, Inc. | Goldman Sachs | 1,301 | USD | 159 | 06/30/16 | (5 | ) | |
DSV A/S | Morgan Stanley | 859 | DKK | 236 | 06/28/17 | 4 | ||
DSW, Inc. | Goldman Sachs | 1,946 | USD | 49 | 06/30/16 | (17 | ) | |
DTE Energy Co. | Goldman Sachs | 4,044 | USD | 330 | 06/30/16 | 29 | ||
E. I. du Pont de Nemours and Co. | Goldman Sachs | 1,611 | USD | 102 | 06/30/16 | 13 | ||
easyJet PLC | Morgan Stanley | 2,278 | GBP | 40 | 06/28/17 | 6 | ||
eBay, Inc. | Goldman Sachs | 18,217 | USD | 508 | 06/30/16 | (12 | ) | |
Echo Entertainment Group, Ltd. | Morgan Stanley | 86,052 | AUD | 440 | 06/29/17 | 42 | ||
Edison International | Goldman Sachs | 3,095 | USD | 187 | 06/30/16 | 15 | ||
Edwards Lifesciences Corp. | Goldman Sachs | 1,655 | USD | 260 | 06/30/16 | 19 | ||
Eiffage SA | Morgan Stanley | 1,557 | EUR | 88 | 06/28/17 | 7 | ||
Electric Power Development Co., Ltd. | Goldman Sachs | 800 | JPY | 3,204 | 09/14/16 | 2 | ||
Electrolux AB | Morgan Stanley | 4,892 | SEK | 1,233 | 06/28/17 | (6 | ) | |
Electronic Arts, Inc. | Goldman Sachs | 979 | USD | 71 | 06/30/16 | 4 | ||
Eli Lilly and Co. | Goldman Sachs | 2,362 | USD | 193 | 08/04/16 | (7 | ) | |
Elisa OYJ | Morgan Stanley | 4,004 | EUR | 137 | 06/28/17 | 22 | ||
Emerson Electric Co. | Goldman Sachs | 4,321 | USD | 204 | 06/30/16 | (40 | ) | |
Empire Co., Ltd. | Morgan Stanley | 5,925 | CAD | 162 | 06/29/17 | (11 | ) | |
Endesa, SA | Morgan Stanley | 1,148 | EUR | 23 | 06/28/17 | 3 | ||
Ensco PLC | Goldman Sachs | 1,462 | USD | 24 | 10/17/16 | 1 | ||
Entergy Corp. | Goldman Sachs | 251 | USD | 17 | 06/30/16 | — | ||
EOG Resources, Inc. | Goldman Sachs | 2,036 | USD | 175 | 06/30/16 | 4 | ||
EP Energy Corp. | Goldman Sachs | 16,705 | USD | 92 | 09/14/16 | (18 | ) | |
Equifax, Inc. | Goldman Sachs | 4,488 | USD | 478 | 06/30/16 | 29 | ||
Eutelsat Communications | Morgan Stanley | 2,909 | EUR | 87 | 06/28/17 | (2 | ) | |
Evonik Industries AG | Morgan Stanley | 2,430 | EUR | 80 | 06/28/17 | 5 | ||
Expedia, Inc. | Goldman Sachs | 2,712 | USD | 370 | 06/30/16 | 72 | ||
Expeditors International of Washington, Inc. | Goldman Sachs | 530 | USD | 26 | 10/11/16 | 1 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 619
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
Ezaki Glico Co., Ltd. | Goldman Sachs | 600 | JPY | 3,480 | 09/14/16 | 2 | ||
F5 Networks, Inc. | Goldman Sachs | 1,353 | USD | 149 | 06/30/16 | (15 | ) | |
FactSet Research Systems, Inc. | Goldman Sachs | 335 | USD | 59 | 06/30/16 | 3 | ||
Fairchild Semiconductor International, Inc. | Goldman Sachs | 8,932 | USD | 149 | 06/30/16 | (12 | ) | |
Fairfax Financial Holdings, Ltd. | Morgan Stanley | 192 | CAD | 124 | 06/29/17 | (1 | ) | |
FamilyMart Co., Ltd. | Goldman Sachs | 600 | JPY | 2,979 | 08/04/16 | (5 | ) | |
FedEx Corp. | Goldman Sachs | 1,921 | USD | 300 | 06/30/16 | (19 | ) | |
Fiat Chrysler Automobiles NV | Morgan Stanley | 2,784 | EUR | 37 | 06/28/17 | 1 | ||
Fidelity National Information Services, Inc. | Goldman Sachs | 700 | USD | 51 | 06/30/16 | 7 | ||
Fifth Third Bancorp | Goldman Sachs | 2,427 | USD | 46 | 06/30/16 | (5 | ) | |
Finecobank Banca Fineco SpA | Morgan Stanley | 4,020 | EUR | 28 | 06/28/17 | 2 | ||
Finmeccanica SpA | Morgan Stanley | 8,646 | EUR | 103 | 06/28/17 | 1 | ||
Finning International, Inc. | Morgan Stanley | 15,459 | CAD | 323 | 06/29/17 | (33 | ) | |
First Solar, Inc. | Goldman Sachs | 6,845 | USD | 391 | 06/30/16 | 48 | ||
Fiserv, Inc. | Goldman Sachs | 608 | USD | 59 | 06/30/16 | 7 | ||
Fletcher Building, Ltd. | Morgan Stanley | 2,378 | AUD | 17 | 06/29/17 | 1 | ||
Flextronics International, Ltd. | Goldman Sachs | 21,063 | USD | 240 | 06/30/16 | (9 | ) | |
Flight Centre Travel Group, Ltd. | Morgan Stanley | 400 | AUD | 15 | 06/29/17 | — | ||
Flughafen Zuerich AG | Morgan Stanley | 289 | CHF | 216 | 06/28/17 | 6 | ||
Foot Locker, Inc. | Goldman Sachs | 2,695 | USD | 183 | 06/30/16 | 2 | ||
Ford Motor Co. | Goldman Sachs | 14,771 | USD | 219 | 06/30/16 | (7 | ) | |
Fortune Brands Home & Security, Inc. | Goldman Sachs | 617 | USD | 32 | 06/30/16 | 4 | ||
Franklin Resources, Inc. | Goldman Sachs | 2,702 | USD | 110 | 06/30/16 | (26 | ) | |
Fraport AG Frankfurt Airport Services | ||||||||
Worldwide | Morgan Stanley | 228 | EUR | 13 | 06/28/17 | 1 | ||
freenet AG | Morgan Stanley | 16,197 | EUR | 497 | 06/28/17 | (19 | ) | |
Fuji Electric Co., Ltd. | Goldman Sachs | 13,000 | JPY | 7,059 | 06/30/16 | — | ||
Fuji Heavy Industries, Ltd. | Goldman Sachs | 11,600 | JPY | 54,845 | 06/30/16 | 24 | ||
Fukuoka Financial Group, Inc. | Goldman Sachs | 3,000 | JPY | 1,923 | 06/30/16 | — | ||
Galenica AG | Morgan Stanley | 65 | CHF | 94 | 06/28/17 | 11 | ||
Gamesa Corporacion Tecnologica, SA | Morgan Stanley | 8,522 | EUR | 123 | 06/28/17 | 12 | ||
Geberit AG | Morgan Stanley | 298 | CHF | 95 | 06/28/17 | — | ||
General Dynamics Corp. | Goldman Sachs | 4,942 | USD | 734 | 06/30/16 | 18 | ||
General Motors Co. | Goldman Sachs | 16,269 | USD | 568 | 06/30/16 | 16 | ||
Genmab A/S | Morgan Stanley | 1,067 | DKK | 714 | 06/28/17 | 4 | ||
Genting Singapore PLC | Morgan Stanley | 23,600 | SGD | 19 | 06/30/17 | 1 | ||
George Weston Ltd. | Morgan Stanley | 558 | CAD | 61 | 06/29/17 | — | ||
Gilead Sciences, Inc. | Goldman Sachs | 5,703 | USD | 617 | 06/30/16 | (65 | ) | |
GKN PLC | Morgan Stanley | 10,998 | GBP | 32 | 06/28/17 | (10 | ) | |
Glencore PLC | Morgan Stanley | 92,527 | GBP | 104 | 06/28/17 | (19 | ) | |
GN Store Nord A/S | Morgan Stanley | 527 | DKK | 65 | 06/28/17 | (1 | ) | |
GNC Holdings, Inc. | Goldman Sachs | 2,619 | USD | 78 | 06/30/16 | (38 | ) | |
Graham Holdings Co. | Goldman Sachs | 283 | USD | 156 | 06/30/16 | — | ||
Groupe Eurotunnel SE | Morgan Stanley | 1,282 | EUR | 16 | 06/28/17 | — | ||
Groupon, Inc. | Goldman Sachs | 54,995 | USD | 204 | 06/30/16 | (39 | ) | |
H & R Block, Inc. | Goldman Sachs | 733 | USD | 27 | 06/30/16 | 4 | ||
Hakuhodo DY Holdings, Inc. | Goldman Sachs | 2,500 | JPY | 3,200 | 09/14/16 | 2 | ||
Hang Lung Properties, Ltd. | Morgan Stanley | 27,000 | HKD | 514 | 06/29/17 | (15 | ) | |
Hang Seng Bank, Ltd. | Morgan Stanley | 800 | HKD | 114 | 06/29/17 | (1 | ) | |
Hannover Rueck SE | Morgan Stanley | 1,329 | EUR | 140 | 06/28/17 | 22 | ||
Harvey Norman Holdings, Ltd. | Morgan Stanley | 13,668 | AUD | 54 | 06/29/17 | 1 | ||
HASEKO Corp. | Goldman Sachs | 12,900 | JPY | 16,009 | 09/14/16 | (11 | ) | |
Hays plc | Morgan Stanley | 4,911 | GBP | 7 | 06/28/17 | — | ||
HCA Holdings, Inc. | Goldman Sachs | 5,031 | USD | 346 | 06/30/16 | (114 | ) | |
HD Supply Holdings, Inc | Goldman Sachs | 2,815 | USD | 84 | 06/30/16 | (14 | ) | |
Heineken NV | Morgan Stanley | 655 | EUR | 54 | 06/28/17 | 9 | ||
Helix Energy Solutions Group, Inc. | Goldman Sachs | 4,375 | USD | 25 | 06/30/16 | (6 | ) | |
HELLA KGaA Hueck & Co. | Morgan Stanley | 307 | EUR | 11 | 06/28/17 | 1 | ||
Herman Miller, Inc. | Goldman Sachs | 2,074 | USD | 66 | 10/11/16 | 3 | ||
Hermes International | Morgan Stanley | 87 | EUR | 30 | 06/28/17 | 3 | ||
Hess Corp. | Goldman Sachs | 1,111 | USD | 62 | 06/30/16 | (13 | ) |
See accompanying notes which are an integral part of the financial statements.
620 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
Hewlett-Packard Co. | Goldman Sachs | 10,185 | USD | 275 | 06/30/16 | (38 | ) | |
Hexpol AB | Morgan Stanley | 1,165 | SEK | 97 | 06/28/17 | (1 | ) | |
Hikma Pharmaceuticals PLC | Morgan Stanley | 2,178 | GBP | 47 | 06/28/17 | 8 | ||
Hilton Worldwide Holdings, Inc. | Goldman Sachs | 5,468 | USD | 137 | 06/30/16 | (17 | ) | |
Hitachi High-Technologies Corp. | Goldman Sachs | 7,300 | JPY | 23,908 | 06/30/16 | 23 | ||
Hitachi Metals, Ltd. | Goldman Sachs | 3,000 | JPY | 4,137 | 06/30/16 | (13 | ) | |
HOCHTIEF Aktiengesellschaft | Morgan Stanley | 1,770 | EUR | 150 | 06/28/17 | 20 | ||
Hokuhoku Financial Group, Inc. | Goldman Sachs | 8,000 | JPY | 2,160 | 09/14/16 | — | ||
HollyFrontier Corp. | Goldman Sachs | 6,416 | USD | 314 | 06/30/16 | 26 | ||
HomeAway, Inc. | Goldman Sachs | 2,459 | USD | 78 | 09/14/16 | 8 | ||
Hormel Foods Corp. | Goldman Sachs | 2,055 | USD | 139 | 06/30/16 | 21 | ||
Hoshizaki Electric Co.,Ltd. | Goldman Sachs | 300 | JPY | 2,643 | 09/14/16 | 3 | ||
Hoya Corp. | Goldman Sachs | 12,600 | JPY | 63,365 | 06/30/16 | 9 | ||
Hubbell, Inc. | Goldman Sachs | 772 | USD | 75 | 06/30/16 | (11 | ) | |
Hudson's Bay Co. | Morgan Stanley | 877 | CAD | 20 | 06/29/17 | (1 | ) | |
HUGO BOSS AG | Morgan Stanley | 189 | EUR | 18 | 06/28/17 | (2 | ) | |
Huntington Ingalls Industries, Inc. | Goldman Sachs | 4,885 | USD | 586 | 06/30/16 | 25 | ||
Huntsman Corp. | Goldman Sachs | 8,354 | USD | 110 | 10/17/16 | 6 | ||
Husqvarna AB | Morgan Stanley | 16,460 | SEK | 928 | 06/28/17 | (10 | ) | |
IAC/InterActiveCorp | Goldman Sachs | 3,228 | USD | 216 | 06/30/16 | (41 | ) | |
Iberdrola, SA | Morgan Stanley | 9,393 | EUR | 61 | 06/28/17 | 2 | ||
IBIDEN Co., Ltd. | Goldman Sachs | 4,900 | JPY | 8,222 | 06/30/16 | (19 | ) | |
Idemitsu Kosan Co., Ltd. | Goldman Sachs | 1,200 | JPY | 2,387 | 10/11/16 | 1 | ||
IGM Financial, Inc. | Morgan Stanley | 2,530 | CAD | 96 | 06/29/17 | (5 | ) | |
Iida Group Holdings Co.,Ltd. | Goldman Sachs | 1,800 | JPY | 4,108 | 09/14/16 | 6 | ||
Illinois Tool Works, Inc. | Goldman Sachs | 1,824 | USD | 168 | 06/30/16 | (1 | ) | |
Iluka Resources, Ltd. | Morgan Stanley | 16,540 | AUD | 106 | 06/29/17 | (14 | ) | |
IMS Health Holdings, Inc. | Goldman Sachs | 595 | USD | 16 | 09/14/16 | (2 | ) | |
Incitec Pivot, Ltd. | Morgan Stanley | 9,881 | AUD | 39 | 06/29/17 | 2 | ||
Indivior PLC | Morgan Stanley | 3,990 | GBP | 8 | 06/28/17 | — | ||
Ingenico Group SA | Morgan Stanley | 1,224 | EUR | 131 | 06/28/17 | 3 | ||
Ingram Micro, Inc. | Goldman Sachs | 7,127 | USD | 212 | 09/14/16 | 10 | ||
Ingredion, Inc. | Goldman Sachs | 411 | USD | 39 | 06/30/16 | 3 | ||
Intact Financial Corp. | Morgan Stanley | 905 | CAD | 85 | 06/29/17 | 4 | ||
Integrated Device Technology, Inc. | Goldman Sachs | 9,586 | USD | 244 | 06/30/16 | 33 | ||
Intel Corp. | Goldman Sachs | 2,854 | USD | 97 | 06/30/16 | 8 | ||
Intercontinental Exchange, Inc. | Goldman Sachs | 145 | USD | 37 | 06/30/16 | 4 | ||
InterDigital, Inc. | Goldman Sachs | 519 | USD | 26 | 09/14/16 | 1 | ||
International Business Machines Corp. | Goldman Sachs | 2,529 | USD | 354 | 06/30/16 | (66 | ) | |
International Consolidated Airlines Group SA | Morgan Stanley | 8,803 | GBP | 51 | 06/28/17 | 9 | ||
International Game Technology PLC | Goldman Sachs | 791 | USD | 13 | 06/30/16 | (2 | ) | |
International Paper Co. | Goldman Sachs | 13,935 | USD | 595 | 06/30/16 | (81 | ) | |
Intuit, Inc. | Goldman Sachs | 2,424 | USD | 236 | 06/30/16 | (14 | ) | |
Invesco, Ltd. | Goldman Sachs | 5,905 | USD | 196 | 06/30/16 | (32 | ) | |
Ipsen SA | Morgan Stanley | 220 | EUR | 13 | 06/28/17 | 1 | ||
ISS A/S | Morgan Stanley | 1,674 | DKK | 400 | 06/28/17 | 4 | ||
Isuzu Motors, Ltd. | Goldman Sachs | 14,100 | JPY | 20,043 | 06/30/16 | (27 | ) | |
ITOCHU Corp. | Goldman Sachs | 24,400 | JPY | 37,186 | 06/30/16 | (25 | ) | |
ITOCHU Techno-Solutions Corp. | Goldman Sachs | 1,300 | JPY | 3,458 | 09/14/16 | 1 | ||
ITT Corp. | Goldman Sachs | 2,781 | USD | 110 | 06/30/16 | (5 | ) | |
Izumi Co., Ltd. | Goldman Sachs | 300 | JPY | 1,356 | 10/11/16 | (1 | ) | |
Jabil Circuit, Inc. | Goldman Sachs | 510 | USD | 12 | 06/30/16 | 1 | ||
Jack in the Box, Inc. | Goldman Sachs | 132 | USD | 10 | 10/17/16 | — | ||
Jacobs Engineering Group, Inc. | Goldman Sachs | 1,245 | USD | 50 | 06/30/16 | (1 | ) | |
Janus Capital Group, Inc. | Goldman Sachs | 1,486 | USD | 23 | 06/30/16 | (3 | ) | |
Japan Airlines Co., Ltd. | Goldman Sachs | 19,300 | JPY | 88,394 | 06/30/16 | 48 | ||
Japan Petroleum Exploration Co., Ltd. | Goldman Sachs | 900 | JPY | 3,276 | 09/14/16 | 1 | ||
Jeronimo Martins, SGPS, SA | Morgan Stanley | 3,599 | EUR | 46 | 06/28/17 | 1 | ||
John Wiley & Sons, Inc. | Goldman Sachs | 215 | USD | 11 | 10/11/16 | 1 | ||
John Wood Group PLC | Morgan Stanley | 3,904 | GBP | 23 | 06/28/17 | (3 | ) | |
Johnson & Johnson | Goldman Sachs | 3,499 | USD | 354 | 06/30/16 | 5 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 621
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
JPMorgan Chase & Co. | Goldman Sachs | 5,225 | USD | 336 | 06/30/16 | (22 | ) | |
JTEKT Corp. | Goldman Sachs | 4,000 | JPY | 8,408 | 06/30/16 | (10 | ) | |
Juniper Networks, Inc. | Goldman Sachs | 663 | USD | 21 | 06/30/16 | 3 | ||
Just Eat PLC | Morgan Stanley | 5,309 | GBP | 23 | 06/28/17 | 1 | ||
Kaken Pharmaceutical Co., Ltd. | Goldman Sachs | 1,000 | JPY | 8,400 | 09/14/16 | (15 | ) | |
Kamigumi Co., Ltd. | Goldman Sachs | 3,000 | JPY | 3,138 | 09/14/16 | 2 | ||
Kawasaki Heavy Industries, Ltd. | Goldman Sachs | 3,000 | JPY | 1,467 | 06/30/16 | (2 | ) | |
KBC Group NV | Morgan Stanley | 1,128 | EUR | 62 | 06/28/17 | (8 | ) | |
Kerry Properties, Ltd. | Morgan Stanley | 30,500 | HKD | 701 | 06/29/17 | (21 | ) | |
Kesko OYJ | Morgan Stanley | 470 | EUR | 14 | 06/28/17 | (2 | ) | |
Kewpie Corp. | Goldman Sachs | 1,300 | JPY | 3,606 | 09/14/16 | 4 | ||
Keyence Corp. | Goldman Sachs | 100 | JPY | 6,358 | 06/30/16 | (4 | ) | |
Kimberly-Clark Corp. | Goldman Sachs | 5,009 | USD | 600 | 06/30/16 | 58 | ||
Kingfisher PLC | Morgan Stanley | 42,013 | GBP | 148 | 06/28/17 | (5 | ) | |
Kinross Gold Corp. | Morgan Stanley | 16,840 | CAD | 44 | 06/29/17 | (1 | ) | |
Kion Group AG | Morgan Stanley | 1,248 | EUR | 51 | 06/28/17 | 2 | ||
KLA-Tencor Corp. | Goldman Sachs | 207 | USD | 14 | 06/30/16 | 2 | ||
Kobayashi Pharmaceutical Co., Ltd. | Goldman Sachs | 200 | JPY | 1,884 | 09/14/16 | 2 | ||
Kohl's Corp. | Goldman Sachs | 362 | USD | 17 | 06/30/16 | (6 | ) | |
Koito Manufacturing Co., Ltd. | Goldman Sachs | 500 | JPY | 2,313 | 06/30/16 | — | ||
Konami Corp. | Goldman Sachs | 5,900 | JPY | 16,272 | 06/30/16 | 16 | ||
Konica Minolta, Inc. | Goldman Sachs | 11,900 | JPY | 14,887 | 06/30/16 | (15 | ) | |
Koninklijke Ahold NV | Morgan Stanley | 9,166 | EUR | 170 | 06/28/17 | 5 | ||
Kuehne + Nagel International AG | Morgan Stanley | 277 | CHF | 38 | 06/28/17 | 2 | ||
L Brands, Inc. | Goldman Sachs | 1,494 | USD | 143 | 06/30/16 | 12 | ||
L-3 Communications Holdings, Inc. | Goldman Sachs | 945 | USD | 119 | 06/30/16 | 12 | ||
Lagardere SCA | Morgan Stanley | 1,917 | EUR | 51 | 06/28/17 | (1 | ) | |
Lancaster Colony Corp. | Goldman Sachs | 175 | USD | 20 | 10/11/16 | 2 | ||
Lear Corp. | Goldman Sachs | 642 | USD | 80 | 06/30/16 | 6 | ||
Legg Mason, Inc. | Goldman Sachs | 3,828 | USD | 171 | 06/30/16 | (21 | ) | |
Leggett & Platt, Inc. | Goldman Sachs | 1,232 | USD | 55 | 06/30/16 | (6 | ) | |
Legrand SA | Morgan Stanley | 600 | EUR | 30 | 06/28/17 | (1 | ) | |
Leidos Holdings, Inc. | Goldman Sachs | 1,135 | USD | 60 | 09/14/16 | 11 | ||
Lennox International, Inc. | Goldman Sachs | 872 | USD | 116 | 06/30/16 | 21 | ||
Lexmark International, Inc. | Goldman Sachs | 1,591 | USD | 52 | 06/30/16 | (19 | ) | |
Li & Fung, Ltd. | Morgan Stanley | 14,000 | HKD | 88 | 06/29/17 | — | ||
Liberty Interactive Corp. | Goldman Sachs | 5,815 | USD | 159 | 06/30/16 | (6 | ) | |
LifePoint Health, Inc. | Goldman Sachs | 875 | USD | 60 | 06/30/16 | (13 | ) | |
Linamar Corp. | Morgan Stanley | 3,142 | CAD | 239 | 06/29/17 | (11 | ) | |
Lincoln Electric Holdings, Inc. | Goldman Sachs | 2,594 | USD | 155 | 06/30/16 | (7 | ) | |
Lincoln National Corp. | Goldman Sachs | 8,666 | USD | 464 | 06/30/16 | (31 | ) | |
LIXIL Group Corp. | Goldman Sachs | 4,400 | JPY | 11,444 | 08/04/16 | 3 | ||
Lonza Group AG | Morgan Stanley | 1,079 | CHF | 157 | 06/28/17 | 16 | ||
Lowe's Companies, Inc. | Goldman Sachs | 4,510 | USD | 333 | 06/30/16 | 23 | ||
Luxottica Group SpA | Morgan Stanley | 523 | EUR | 33 | 06/28/17 | 1 | ||
LyondellBasell Industries NV | Goldman Sachs | 3,256 | USD | 303 | 06/30/16 | (39 | ) | |
M3, Inc. | Goldman Sachs | 3,000 | JPY | 7,071 | 09/14/16 | (2 | ) | |
Mabuchi Motor Co., Ltd. | Goldman Sachs | 800 | JPY | 4,832 | 06/30/16 | (13 | ) | |
Macy's, Inc. | Goldman Sachs | 6,260 | USD | 319 | 06/30/16 | (75 | ) | |
Magasins Couche-Tard, Inc. | Morgan Stanley | 3,879 | CAD | 218 | 06/29/17 | (7 | ) | |
Magna International, Inc. | Morgan Stanley | 8,770 | CAD | 605 | 06/29/17 | (14 | ) | |
Mallinckrodt PLC | Goldman Sachs | 1,165 | USD | 77 | 09/14/16 | (22 | ) | |
Man Group PLC | Morgan Stanley | 151,814 | GBP | 254 | 06/28/17 | 4 | ||
Manhattan Associates, Inc. | Goldman Sachs | 310 | USD | 23 | 09/14/16 | 3 | ||
Manpowergroup, Inc. | Goldman Sachs | 7,219 | USD | 663 | 06/30/16 | — | ||
MAPFRE, SA | Morgan Stanley | 3,916 | EUR | 11 | 06/28/17 | (1 | ) | |
Marathon Petroleum Corp. | Goldman Sachs | 8,861 | USD | 459 | 06/30/16 | 1 | ||
Marks and Spencer Group PLC | Morgan Stanley | 22,079 | GBP | 113 | 06/28/17 | (16 | ) | |
Marriott International, Inc. | Goldman Sachs | 405 | USD | 31 | 06/30/16 | — | ||
Marvell Technology Group, Ltd. | Goldman Sachs | 27,661 | USD | 227 | 06/30/16 | (90 | ) | |
Masco Corp. | Goldman Sachs | 23,177 | USD | 672 | 06/30/16 | 67 |
See accompanying notes which are an integral part of the financial statements.
622 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
Maxim Integrated Products, Inc. | Goldman Sachs | 368 | USD | 15 | 06/30/16 | 2 | ||
McDonald's Corp. | Goldman Sachs | 2,408 | USD | 270 | 06/30/16 | 38 | ||
McGraw Hill Financial, Inc. | Goldman Sachs | 434 | USD | 40 | 06/30/16 | (5 | ) | |
McKesson Corp. | Goldman Sachs | 1,603 | USD | 287 | 09/14/16 | (23 | ) | |
Mead Johnson Nutrition Co. | Goldman Sachs | 2,812 | USD | 231 | 09/14/16 | 19 | ||
Mediaset Espana Comunicacion, SA | Morgan Stanley | 11,486 | EUR | 127 | 06/28/17 | (15 | ) | |
Mediaset SpA | Morgan Stanley | 3,294 | EUR | 15 | 06/28/17 | — | ||
Medipal Holdings Corp. | Goldman Sachs | 2,600 | JPY | 5,522 | 09/14/16 | 3 | ||
Medivation, Inc. | Goldman Sachs | 7,602 | USD | 320 | 06/30/16 | (85 | ) | |
Merck & Co., Inc. | Goldman Sachs | 5,512 | USD | 301 | 06/30/16 | (21 | ) | |
Merck KGaA | Morgan Stanley | 637 | EUR | 57 | 06/28/17 | — | ||
MetLife, Inc. | Goldman Sachs | 7,867 | USD | 396 | 06/30/16 | (29 | ) | |
METRO AG | Morgan Stanley | 1,938 | EUR | 54 | 06/28/17 | (4 | ) | |
METRO, Inc. | Morgan Stanley | 6,986 | CAD | 261 | 06/29/17 | 15 | ||
Michael Kors Holdings, Ltd. | Goldman Sachs | 3,530 | USD | 136 | 06/30/16 | (19 | ) | |
Micron Technology, Inc. | Goldman Sachs | 15,872 | USD | 263 | 06/30/16 | (39 | ) | |
Microsoft Corp. | Goldman Sachs | 6,254 | USD | 329 | 06/30/16 | 45 | ||
Minerals Technologies, Inc. | Goldman Sachs | 213 | USD | 13 | 09/14/16 | 2 | ||
MISUMI Group, Inc. | Goldman Sachs | 5,500 | JPY | 8,740 | 09/14/16 | 10 | ||
Mitsubishi Chemical Holdings Corp. | Goldman Sachs | 14,800 | JPY | 11,254 | 06/30/16 | (3 | ) | |
Mitsubishi Corp. | Goldman Sachs | 2,800 | JPY | 6,195 | 06/30/16 | (12 | ) | |
Mitsubishi Electric Corp. | Goldman Sachs | 34,000 | JPY | 43,180 | 06/30/16 | (99 | ) | |
Mitsubishi Motors Corp. | Goldman Sachs | 42,500 | JPY | 45,900 | 06/30/16 | 11 | ||
Mitsubishi Tanabe Pharma Corp. | Goldman Sachs | 18,600 | JPY | 38,242 | 06/30/16 | 3 | ||
Mitsubishi UFJ Financial Group, Inc. | Goldman Sachs | 22,700 | JPY | 17,947 | 06/30/16 | (21 | ) | |
Mitsui & Co., Ltd. | Goldman Sachs | 2,000 | JPY | 3,081 | 06/30/16 | (2 | ) | |
mixi, Inc. | Goldman Sachs | 4,500 | JPY | 20,880 | 06/30/16 | 5 | ||
Mizuho Financial Group, Inc. | Goldman Sachs | 31,000 | JPY | 7,759 | 06/30/16 | (5 | ) | |
Molina Healthcare, Inc. | Goldman Sachs | 2,645 | USD | 164 | 10/17/16 | (13 | ) | |
Molson Coors Brewing Co. | Goldman Sachs | 813 | USD | 72 | 06/30/16 | 13 | ||
Moncler SpA | Morgan Stanley | 8,211 | EUR | 120 | 06/28/17 | (21 | ) | |
Mondelez International, Inc. | Goldman Sachs | 5,933 | USD | 274 | 06/30/16 | 30 | ||
Mondi PLC | Morgan Stanley | 3,642 | GBP | 55 | 06/28/17 | 3 | ||
Monsanto Co. | Goldman Sachs | 120 | USD | 11 | 06/30/16 | (1 | ) | |
Moody's Corp. | Goldman Sachs | 1,281 | USD | 123 | 06/30/16 | (18 | ) | |
Motorola Solutions, Inc. | Goldman Sachs | 165 | USD | 12 | 06/30/16 | 2 | ||
MS&AD Insurance Group Holdings, Inc. | Goldman Sachs | 5,500 | JPY | 19,756 | 06/30/16 | (9 | ) | |
MSCI, Inc. | Goldman Sachs | 4,178 | USD | 280 | 06/30/16 | 23 | ||
MTR Corp., Ltd. | Morgan Stanley | 11,000 | HKD | 387 | 06/29/17 | — | ||
MTU Aero Engines AG | Morgan Stanley | 1,739 | EUR | 146 | 06/28/17 | (3 | ) | |
Muenchener Rueckversicherungs- | ||||||||
Gesellschaft Aktiengesellschaft in Muenchen | Morgan Stanley | 629 | EUR | 114 | 06/28/17 | 12 | ||
Murata Manufacturing Co., Ltd. | Goldman Sachs | 600 | JPY | 10,413 | 06/30/16 | (8 | ) | |
Murphy Oil Corp. | Goldman Sachs | 1,392 | USD | 40 | 06/30/16 | (19 | ) | |
Murphy USA, Inc. | Goldman Sachs | 2,530 | USD | 155 | 06/30/16 | 9 | ||
Nabors Industries, Ltd. | Goldman Sachs | 8,795 | USD | 88 | 06/30/16 | (37 | ) | |
National Bank of Canada | Morgan Stanley | 1,320 | CAD | 57 | 06/29/17 | (4 | ) | |
Navient Corp. | Goldman Sachs | 9,216 | USD | 122 | 06/30/16 | (18 | ) | |
NCR Corp. | Goldman Sachs | 8,205 | USD | 218 | 09/14/16 | 16 | ||
Neste OYJ | Morgan Stanley | 918 | EUR | 20 | 06/28/17 | 1 | ||
NetApp, Inc. | Goldman Sachs | 9,084 | USD | 309 | 06/30/16 | 15 | ||
New World Development Co., Ltd. | Morgan Stanley | 128,000 | HKD | 1,064 | 06/29/17 | (17 | ) | |
Newfield Exploration Co. | Goldman Sachs | 521 | USD | 21 | 06/30/16 | 2 | ||
NEXON Co., Ltd. | Goldman Sachs | 4,500 | JPY | 7,596 | 09/14/16 | 2 | ||
NHK Spring Co., Ltd. | Goldman Sachs | 2,800 | JPY | 3,475 | 09/14/16 | 1 | ||
NIKE, Inc. | Goldman Sachs | 3,369 | USD | 441 | 06/30/16 | 70 | ||
Nintendo Co., Ltd. | Goldman Sachs | 800 | JPY | 15,584 | 09/14/16 | (26 | ) | |
Nippon Express Co., Ltd. | Goldman Sachs | 41,000 | JPY | 25,707 | 06/30/16 | — | ||
Nippon Shokubai Co., Ltd. | Goldman Sachs | 1,200 | JPY | 11,424 | 06/30/16 | 11 | ||
Nippon Telegraph and Telephone Corp. | Goldman Sachs | 3,200 | JPY | 14,355 | 10/11/16 | 7 | ||
Nippon Yusen Kabushiki Kaisha | Goldman Sachs | 44,000 | JPY | 13,992 | 06/30/16 | (11 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 623
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
NiSource, Inc. | Goldman Sachs | 7,241 | USD | 139 | 10/17/16 | 2 | ||
Nitori Holdings Co., Ltd. | Goldman Sachs | 300 | JPY | 2,847 | 06/30/16 | (1 | ) | |
Nitto Denko Corp. | Goldman Sachs | 800 | JPY | 6,259 | 06/30/16 | (16 | ) | |
NN Group NV | Morgan Stanley | 2,615 | EUR | 75 | 06/28/17 | 5 | ||
NOK Corp. | Goldman Sachs | 17,500 | JPY | 50,260 | 06/30/16 | (129 | ) | |
Nomura Research Institute, Ltd. | Goldman Sachs | 3,190 | JPY | 15,854 | 06/30/16 | 14 | ||
Norfolk Southern Corp. | Goldman Sachs | 878 | USD | 70 | 06/30/16 | (8 | ) | |
Norsk Hydro ASA | Morgan Stanley | 50,136 | NOK | 1,527 | 06/28/17 | (26 | ) | |
Northern Trust Corp. | Goldman Sachs | 155 | USD | 11 | 08/04/16 | (1 | ) | |
Northrop Grumman Corp. | Goldman Sachs | 2,047 | USD | 384 | 06/30/16 | 52 | ||
Novo Nordisk A/S | Morgan Stanley | 9,325 | DKK | 3,360 | 06/28/17 | (19 | ) | |
NRW.Bank | Morgan Stanley | 33,216 | GBP | 154 | 06/28/17 | (24 | ) | |
NTT DOCOMO, Inc. | Goldman Sachs | 4,700 | JPY | 11,080 | 06/30/16 | 1 | ||
Nu Skin Enterprises, Inc. | Goldman Sachs | 806 | USD | 31 | 10/11/16 | (3 | ) | |
Nuance Communications, Inc. | Goldman Sachs | 1,065 | USD | 18 | 09/14/16 | — | ||
Numericable-SFR SAS | Morgan Stanley | 731 | EUR | 30 | 06/28/17 | — | ||
OBIC Co., Ltd. | Goldman Sachs | 1,000 | JPY | 6,420 | 09/14/16 | 9 | ||
Oil States International, Inc. | Goldman Sachs | 8,053 | USD | 242 | 06/30/16 | (6 | ) | |
OMRON Corp. | Goldman Sachs | 3,600 | JPY | 14,526 | 06/30/16 | (42 | ) | |
ON Semiconductor Corp. | Goldman Sachs | 8,110 | USD | 89 | 06/30/16 | (9 | ) | |
OneMain Holdings, Inc. | Goldman Sachs | 1,071 | USD | 50 | 09/14/16 | 2 | ||
Open Text Corp. | Morgan Stanley | 3,723 | CAD | 226 | 06/29/17 | 29 | ||
OPKO Health, Inc. | Goldman Sachs | 1,151 | USD | 11 | 09/14/16 | (1 | ) | |
Oracle Corp. | Goldman Sachs | 8,855 | USD | 344 | 06/30/16 | (19 | ) | |
Orbital ATK, Inc. | Goldman Sachs | 2,130 | USD | 182 | 06/30/16 | 23 | ||
Orica, Ltd. | Morgan Stanley | 6,740 | AUD | 111 | 06/29/17 | 1 | ||
Orion OYJ | Morgan Stanley | 3,108 | EUR | 101 | 06/28/17 | — | ||
Orkla ASA | Morgan Stanley | 2,948 | NOK | 213 | 06/28/17 | 4 | ||
OSRAM Licht AG | Morgan Stanley | 1,073 | EUR | 57 | 06/28/17 | 5 | ||
Otsuka Corp. | Goldman Sachs | 5,500 | JPY | 32,285 | 06/30/16 | — | ||
Otsuka Holdings Co., Ltd. | Goldman Sachs | 9,100 | JPY | 36,800 | 06/30/16 | 4 | ||
Owens Corning | Goldman Sachs | 11,097 | USD | 505 | 06/30/16 | 38 | ||
Pacific Exploration & Production Corp. | Morgan Stanley | 7,992 | CAD | 20 | 06/29/17 | (7 | ) | |
Packaging Corp. of America | Goldman Sachs | 1,090 | USD | 75 | 06/30/16 | 4 | ||
Panasonic Corp. | Goldman Sachs | 30,300 | JPY | 43,481 | 06/30/16 | (81 | ) | |
PANDORA A/S | Morgan Stanley | 2,401 | DKK | 1,879 | 06/28/17 | 13 | ||
Panera Bread Co. | Goldman Sachs | 285 | USD | 51 | 09/14/16 | (1 | ) | |
PARK24 Co., Ltd. | Goldman Sachs | 3,400 | JPY | 8,650 | 06/30/16 | 14 | ||
Parker-Hannifin Corp. | Goldman Sachs | 825 | USD | 86 | 06/30/16 | (11 | ) | |
Partners Group Holding AG | Morgan Stanley | 230 | CHF | 82 | 06/28/17 | 14 | ||
Patterson Companies, Inc. | Goldman Sachs | 4,532 | USD | 215 | 06/30/16 | (5 | ) | |
Penn West Petroleum, Ltd. | Morgan Stanley | 10,519 | CAD | 16 | 06/29/17 | (5 | ) | |
PepsiCo, Inc. | Goldman Sachs | 10,284 | USD | 1,051 | 06/30/16 | 79 | ||
Persimmon PLC | Morgan Stanley | 10,765 | GBP | 215 | 06/28/17 | — | ||
Peugeot SA | Morgan Stanley | 49,176 | EUR | 788 | 06/28/17 | (61 | ) | |
Pfizer, Inc. | Goldman Sachs | 13,140 | USD | 444 | 06/30/16 | (3 | ) | |
PG&E Corp. | Goldman Sachs | 8,735 | USD | 466 | 06/30/16 | 35 | ||
Philip Morris International, Inc. | Goldman Sachs | 2,514 | USD | 222 | 06/30/16 | 22 | ||
Phillips 66 | Goldman Sachs | 1,422 | USD | 127 | 06/30/16 | 14 | ||
Pigeon Corp. | Goldman Sachs | 1,900 | JPY | 6,489 | 09/14/16 | 11 | ||
Pinnacle Foods, Inc. | Goldman Sachs | 1,106 | USD | 49 | 06/30/16 | (2 | ) | |
Pinnacle West Capital Corp. | Goldman Sachs | 3,772 | USD | 240 | 06/30/16 | 28 | ||
Pitney Bowes, Inc. | Goldman Sachs | 17,674 | USD | 365 | 06/30/16 | (14 | ) | |
Playtech PLC | Morgan Stanley | 2,923 | GBP | 25 | 06/28/17 | 1 | ||
Pola Orbis Holdings, Inc. | Goldman Sachs | 800 | JPY | 6,184 | 09/14/16 | 2 | ||
Polycom, Inc. | Goldman Sachs | 6,403 | USD | 88 | 09/14/16 | 13 | ||
Popular, Inc. | Goldman Sachs | 1,603 | USD | 47 | 09/14/16 | (2 | ) | |
Power Financial Corp. | Morgan Stanley | 783 | CAD | 25 | 06/29/17 | (2 | ) | |
ProSiebenSat.1 Media SE | Morgan Stanley | 3,279 | EUR | 161 | 06/28/17 | 13 | ||
Proximus SA | Morgan Stanley | 8,665 | EUR | 273 | 06/28/17 | (13 | ) | |
Prudential Financial, Inc. | Goldman Sachs | 2,441 | USD | 201 | 06/30/16 | (20 | ) |
See accompanying notes which are an integral part of the financial statements.
624 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
Prysmian SpA | Morgan Stanley | 19,671 | EUR | 387 | 06/28/17 | (16 | ) | |
PTC, Inc. | Goldman Sachs | 400 | USD | 14 | 06/30/16 | (3 | ) | |
Public Service Enterprise Group, Inc. | Goldman Sachs | 17,892 | USD | 739 | 06/30/16 | 34 | ||
PVH Corp. | Goldman Sachs | 476 | USD | 43 | 10/11/16 | (5 | ) | |
Qantas Airways, Ltd. | Morgan Stanley | 104,096 | AUD | 400 | 06/29/17 | 10 | ||
QEP Resources, Inc. | Goldman Sachs | 8,161 | USD | 126 | 06/30/16 | (8 | ) | |
Quanta Services, Inc. | Goldman Sachs | 5,915 | USD | 119 | 06/30/16 | (56 | ) | |
Quest Diagnostics, Inc. | Goldman Sachs | 2,047 | USD | 139 | 06/30/16 | (3 | ) | |
Quintiles Transnational Holdings, Inc. | Goldman Sachs | 4,165 | USD | 265 | 06/30/16 | (40 | ) | |
Rackspace Hosting, Inc. | Goldman Sachs | 6,544 | USD | 169 | 06/30/16 | (56 | ) | |
Ralph Lauren Corp. | Goldman Sachs | 739 | USD | 82 | 06/30/16 | (19 | ) | |
Randstad Holding NV | Morgan Stanley | 5,996 | EUR | 326 | 06/28/17 | (29 | ) | |
Raytheon Co. | Goldman Sachs | 2,834 | USD | 333 | 06/30/16 | 58 | ||
Recordati SpA | Morgan Stanley | 2,077 | EUR | 47 | 06/28/17 | 6 | ||
Recruit Holdings Co.,Ltd. | Goldman Sachs | 6,900 | JPY | 26,910 | 06/30/16 | 8 | ||
Red Hat, Inc. | Goldman Sachs | 160 | USD | 13 | 06/30/16 | — | ||
Regus plc | Morgan Stanley | 5,192 | GBP | 17 | 06/28/17 | 2 | ||
Reinsurance Group of America, Inc. | Goldman Sachs | 3,034 | USD | 274 | 06/30/16 | (17 | ) | |
Reliance Steel & Aluminum Co. | Goldman Sachs | 643 | USD | 39 | 06/30/16 | — | ||
Rentokil Initial PLC | Morgan Stanley | 5,228 | GBP | 8 | 06/28/17 | 1 | ||
Repsol YPF SA | JPMorgan Chase | 0 | USD | 4,044 | 12/20/15 | (2 | ) | |
Repsol YPF SA | Morgan Stanley | 0 | USD | 628 | 03/02/17 | 220 | ||
Repsol YPF SA | Morgan Stanley | 0 | USD | 667 | 09/18/17 | 127 | ||
Republic Services, Inc. | Goldman Sachs | 2,178 | USD | 95 | 06/30/16 | 7 | ||
Resona Holdings, Inc. | Goldman Sachs | 14,000 | JPY | 9,010 | 06/30/16 | (5 | ) | |
Rheinmetall Aktiengesellschaft | Morgan Stanley | 646 | EUR | 37 | 06/28/17 | 1 | ||
Rio Tinto PLC | Morgan Stanley | 994 | GBP | 23 | 06/28/17 | (5 | ) | |
Ritchie Bros. Auctioneers Inc. | Morgan Stanley | 800 | CAD | 27 | 06/29/17 | (1 | ) | |
Robert Half International, Inc. | Goldman Sachs | 6,043 | USD | 318 | 06/30/16 | (12 | ) | |
Rockwell Automation, Inc. | Goldman Sachs | 2,209 | USD | 241 | 06/30/16 | (31 | ) | |
Rohm Co., Ltd. | Goldman Sachs | 1,000 | JPY | 6,030 | 06/30/16 | (20 | ) | |
Ross Stores, Inc. | Goldman Sachs | 2,399 | USD | 121 | 06/30/16 | 1 | ||
Rovi Corp. | Goldman Sachs | 3,485 | USD | 32 | 10/11/16 | (7 | ) | |
Royal Bank of Canada | Morgan Stanley | 2,387 | CAD | 178 | 06/29/17 | (5 | ) | |
Royal Boskalis Westminster NV | Morgan Stanley | 3,343 | EUR | 148 | 06/28/17 | (4 | ) | |
Royal Mail PLC | Morgan Stanley | 17,323 | GBP | 77 | 06/28/17 | (12 | ) | |
Ryohin Keikaku Co., Ltd. | Goldman Sachs | 200 | JPY | 4,886 | 09/14/16 | 1 | ||
Safran SA | Morgan Stanley | 1,915 | EUR | 132 | 06/28/17 | 3 | ||
Sally Beauty Holdings, Inc. | Goldman Sachs | 441 | USD | 10 | 06/30/16 | (3 | ) | |
Sankyo Co., Ltd. | Goldman Sachs | 900 | JPY | 4,212 | 09/14/16 | 2 | ||
Sanofi | Morgan Stanley | 3,615 | EUR | 332 | 06/28/17 | (4 | ) | |
Santander Consumer USA Holdings, Inc. | Goldman Sachs | 6,846 | USD | 123 | 06/30/16 | (55 | ) | |
Santen Pharmaceutical Co., Ltd. | Goldman Sachs | 19,300 | JPY | 31,864 | 06/30/16 | (16 | ) | |
Saputo, Inc. | Morgan Stanley | 1,986 | CAD | 62 | 06/29/17 | — | ||
Schlumberger, Ltd. | Goldman Sachs | 227 | USD | 18 | 09/14/16 | 1 | ||
SCOR SE | Morgan Stanley | 4,374 | EUR | 148 | 06/28/17 | 7 | ||
SEB S.A. | Morgan Stanley | 245 | EUR | 23 | 06/28/17 | 2 | ||
Securitas AB | Morgan Stanley | 5,161 | SEK | 576 | 06/28/17 | — | ||
Sega Sammy Holdings, Inc. | Goldman Sachs | 3,000 | JPY | 3,837 | 09/14/16 | 1 | ||
SEI Investments Co. | Goldman Sachs | 1,354 | USD | 70 | 06/30/16 | 2 | ||
Seiko Epson Corp. | Goldman Sachs | 3,500 | JPY | 6,500 | 06/30/16 | (10 | ) | |
Sekisui Chemical Co., Ltd. | Goldman Sachs | 28,000 | JPY | 40,208 | 06/30/16 | (17 | ) | |
Service Corp. International | Goldman Sachs | 1,922 | USD | 54 | 09/14/16 | (3 | ) | |
SES SA | Morgan Stanley | 806 | EUR | 22 | 06/28/17 | (4 | ) | |
Seven & i Holdings Co., Ltd. | Goldman Sachs | 1,100 | JPY | 6,062 | 06/30/16 | 2 | ||
Shimadzu Corp. | Goldman Sachs | 4,000 | JPY | 7,580 | 06/30/16 | 6 | ||
SHIMAMURA CO., Ltd. | Goldman Sachs | 2,800 | JPY | 38,276 | 06/30/16 | 20 | ||
Shin-Etsu Chemical Co., Ltd. | Goldman Sachs | 200 | JPY | 1,447 | 06/30/16 | (1 | ) | |
Shinsei Bank, Ltd. | Morgan Stanley | 7,502 | GBP | 262 | 06/28/17 | 34 | ||
Shionogi & Co., Ltd. | Goldman Sachs | 600 | JPY | 2,995 | 06/30/16 | 2 | ||
Singapore Airlines, Ltd. | Morgan Stanley | 33,300 | SGD | 360 | 06/30/17 | 4 |
See accompanying notes which are an integral part of the financial statements
Russell Multi-Strategy Alternative Fund 625
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
Sino Land Co., Ltd. | Morgan Stanley | 90,000 | HKD | 1,082 | 06/29/17 | (5 | ) | |
Skanska AB | Morgan Stanley | 2,435 | SEK | 405 | 06/28/17 | (2 | ) | |
Skechers U.S.A., Inc. | Goldman Sachs | 1,827 | USD | 57 | 09/14/16 | (26 | ) | |
Skyworks Solutions, Inc. | Goldman Sachs | 1,250 | USD | 97 | 06/30/16 | (38 | ) | |
SM Energy Co. | Goldman Sachs | 1,951 | USD | 65 | 06/30/16 | (27 | ) | |
Smiths Group PLC | Morgan Stanley | 673 | GBP | 6 | 06/28/17 | (1 | ) | |
Snam SpA | Morgan Stanley | 3,566 | EUR | 17 | 06/28/17 | 1 | ||
Snap-on, Inc. | Goldman Sachs | 1,264 | USD | 210 | 06/30/16 | 6 | ||
Sojitz Corp. | Goldman Sachs | 108,100 | JPY | 28,971 | 06/30/16 | (30 | ) | |
SolarWinds, Inc. | Goldman Sachs | 888 | USD | 52 | 06/30/16 | 11 | ||
Sompo Japan Nipponkoa Holdings, Inc. | Goldman Sachs | 4,300 | JPY | 16,460 | 06/30/16 | (17 | ) | |
Sonoco Products Co. | Goldman Sachs | 1,824 | USD | 78 | 09/14/16 | 4 | ||
Southwest Airlines Co. | Goldman Sachs | 7,390 | USD | 342 | 06/30/16 | 81 | ||
Spirit AeroSystems Holdings, Inc. | Goldman Sachs | 14,309 | USD | 755 | 06/30/16 | (47 | ) | |
St. Jude Medical, Inc. | Goldman Sachs | 3,158 | USD | 202 | 06/30/16 | (33 | ) | |
STADA Arzneimittel AG | Morgan Stanley | 679 | EUR | 24 | 06/28/17 | 2 | ||
Stanley Black & Decker, Inc. | Goldman Sachs | 1,559 | USD | 165 | 06/30/16 | — | ||
Staples, Inc. | Goldman Sachs | 2,418 | USD | 31 | 06/30/16 | (7 | ) | |
Starbucks Corp. | Goldman Sachs | 1,332 | USD | 83 | 09/14/16 | 10 | ||
Starwood Hotels & Resorts Worldwide, Inc. | Goldman Sachs | 860 | USD | 69 | 06/30/16 | (2 | ) | |
State Street Corp. | Goldman Sachs | 2,294 | USD | 158 | 06/30/16 | (23 | ) | |
Steel Dynamics, Inc. | Goldman Sachs | 5,331 | USD | 98 | 06/30/16 | (19 | ) | |
Straumann Holding AG | Morgan Stanley | 36 | CHF | 10 | 06/28/17 | (1 | ) | |
Stryker Corp. | Goldman Sachs | 1,765 | USD | 169 | 06/30/16 | (2 | ) | |
Sugi Holdings Co., Ltd. | Goldman Sachs | 300 | JPY | 1,773 | 09/14/16 | 1 | ||
Sumitomo Chemical Co., Ltd. | Goldman Sachs | 11,000 | JPY | 7,689 | 06/30/16 | (5 | ) | |
Sumitomo Heavy Industries, Ltd. | Goldman Sachs | 38,000 | JPY | 20,900 | 06/30/16 | (53 | ) | |
Sumitomo Mitsui Financial Group, Inc. | Goldman Sachs | 4,200 | JPY | 20,412 | 06/30/16 | (21 | ) | |
Sumitomo Rubber Industries, Ltd. | Goldman Sachs | 12,100 | JPY | 21,925 | 06/30/16 | (14 | ) | |
Sun Hung Kai Properties Ltd. | Morgan Stanley | 7,000 | HKD | 727 | 06/29/17 | 4 | ||
Sundrug Co., Ltd. | Goldman Sachs | 400 | JPY | 2,568 | 09/14/16 | — | ||
Superior Energy Services, Inc. | Goldman Sachs | 6,744 | USD | 95 | 09/14/16 | (6 | ) | |
SUPERVALU, Inc. | Goldman Sachs | 32,029 | USD | 210 | 06/30/16 | (52 | ) | |
Suruga Bank, Ltd. | Goldman Sachs | 4,000 | JPY | 9,592 | 06/30/16 | (4 | ) | |
Suzuken Co., Ltd. | Goldman Sachs | 1,100 | JPY | 5,121 | 09/14/16 | 6 | ||
Svenska Cellulosa Aktiebolaget SCA | Morgan Stanley | 1,582 | SEK | 399 | 06/28/17 | 6 | ||
Swedish Orphan Biovitrum AB | Morgan Stanley | 3,632 | SEK | 472 | 06/28/17 | 6 | ||
Swiss Life Holding AG | Morgan Stanley | 222 | CHF | 52 | 06/28/17 | 4 | ||
Swiss Re AG | Morgan Stanley | 3,821 | CHF | 351 | 06/28/17 | 29 | ||
Synopsys, Inc. | Goldman Sachs | 5,181 | USD | 259 | 06/30/16 | (2 | ) | |
T&D Holdings, Inc. | Goldman Sachs | 4,700 | JPY | 7,529 | 06/30/16 | (11 | ) | |
Tabcorp Holdings, Ltd. | Morgan Stanley | 52,784 | AUD | 249 | 06/29/17 | 4 | ||
Target Corp. | Goldman Sachs | 6,415 | USD | 495 | 06/30/16 | (45 | ) | |
Tatts Group, Ltd. | Morgan Stanley | 15,567 | AUD | 62 | 06/29/17 | 3 | ||
Taylor Wimpey PLC | Morgan Stanley | 152,376 | GBP | 302 | 06/28/17 | 14 | ||
TDC A/S | Morgan Stanley | 2,065 | DKK | 73 | 06/28/17 | (4 | ) | |
TDK Corp. | Goldman Sachs | 1,700 | JPY | 13,209 | 06/30/16 | (26 | ) | |
TE Connectivity, Ltd. | Goldman Sachs | 374 | USD | 24 | 06/30/16 | (1 | ) | |
Tech Data Corp. | Goldman Sachs | 2,644 | USD | 192 | 09/14/16 | 5 | ||
Tecnicas Reunidas, SA | Morgan Stanley | 923 | EUR | 37 | 06/28/17 | (2 | ) | |
TEGNA, Inc. | Goldman Sachs | 1,136 | USD | 31 | 06/30/16 | 3 | ||
Tele2 AB | Morgan Stanley | 10,870 | SEK | 929 | 06/28/17 | (22 | ) | |
Teleperformance | Morgan Stanley | 354 | EUR | 25 | 06/28/17 | 2 | ||
Telephone and Data Systems, Inc. | Goldman Sachs | 641 | USD | 18 | 09/14/16 | 1 | ||
Television Francaise 1 SA | Morgan Stanley | 1,703 | EUR | 20 | 06/28/17 | (2 | ) | |
TeliaSonera Aktiebolag | Morgan Stanley | 16,094 | SEK | 704 | 06/28/17 | (12 | ) | |
Telstra Corp., Ltd. | Morgan Stanley | 25,988 | AUD | 140 | 06/29/17 | (15 | ) | |
Teradata Corp. | Goldman Sachs | 1,884 | USD | 53 | 10/11/16 | (2 | ) | |
Teradyne, Inc. | Goldman Sachs | 13,078 | USD | 255 | 06/30/16 | (4 | ) | |
Tesoro Corp. | Goldman Sachs | 2,390 | USD | 256 | 06/30/16 | 49 | ||
Texas Instruments, Inc. | Goldman Sachs | 938 | USD | 53 | 06/30/16 | 4 |
See accompanying notes which are an integral part of the financial statements.
626 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||
Amounts in thousands (except shares) | ||||||||
Notional | Termination | Fair Value | ||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||
Textron, Inc. | Goldman Sachs | 548 | USD | 23 | 06/30/16 | (2 | ) | |
Thales SA | Morgan Stanley | 1,900 | EUR | 125 | 06/28/17 | 8 | ||
The Allstate Corp. | Goldman Sachs | 8,079 | USD | 500 | 06/30/16 | (32 | ) | |
The Bank of Kyoto, Ltd. | Goldman Sachs | 2,000 | JPY | 2,462 | 09/14/16 | (1 | ) | |
The Bank of Nova Scotia | Morgan Stanley | 2,488 | CAD | 153 | 06/29/17 | (9 | ) | |
The Bank of Yokohama, Ltd. | Goldman Sachs | 22,000 | JPY | 16,705 | 06/30/16 | (1 | ) | |
The Berkeley Group Holdings PLC | Morgan Stanley | 4,363 | GBP | 145 | 06/28/17 | (3 | ) | |
The Boeing Co. | Goldman Sachs | 1,221 | USD | 181 | 06/30/16 | 17 | ||
The Cheesecake Factory, Inc. | Goldman Sachs | 1,979 | USD | 95 | 08/04/16 | (13 | ) | |
The Chemours Co. | Goldman Sachs | 4,890 | USD | 34 | 10/17/16 | (5 | ) | |
The Chiba Bank, Ltd. | Goldman Sachs | 9,000 | JPY | 7,992 | 06/30/16 | (5 | ) | |
The Clorox Co. | Goldman Sachs | 1,531 | USD | 187 | 06/30/16 | 24 | ||
The Dai-ichi Life Insurance Co., Ltd. | Goldman Sachs | 11,100 | JPY | 23,477 | 06/30/16 | (25 | ) | |
The Dow Chemical Co. | Goldman Sachs | 4,246 | USD | 219 | 06/30/16 | (3 | ) | |
The Dun & Bradstreet Corp. | Goldman Sachs | 2,345 | USD | 267 | 06/30/16 | (30 | ) | |
The Estee Lauder Companies, Inc. | Goldman Sachs | 2,902 | USD | 233 | 06/30/16 | (21 | ) | |
The Gap, Inc. | Goldman Sachs | 3,082 | USD | 84 | 06/30/16 | (35 | ) | |
The Goodyear Tire & Rubber Co. | Goldman Sachs | 14,381 | USD | 472 | 06/30/16 | 22 | ||
The Gunma Bank, Ltd. | Goldman Sachs | 2,000 | JPY | 1,530 | 09/14/16 | — | ||
The Hachijuni Bank, Ltd. | Goldman Sachs | 3,000 | JPY | 2,490 | 09/14/16 | — | ||
The Hartford Financial Services Group, Inc. | Goldman Sachs | 3,047 | USD | 141 | 06/30/16 | 13 | ||
The Hiroshima Bank, Ltd. | Goldman Sachs | 2,000 | JPY | 1,354 | 09/14/16 | — | ||
The Home Depot, Inc. | Goldman Sachs | 1,147 | USD | 142 | 06/30/16 | 12 | ||
The Interpublic Group of Companies, Inc. | Goldman Sachs | 9,315 | USD | 214 | 06/30/16 | 30 | ||
The Joyo Bank, Ltd. | Goldman Sachs | 3,000 | JPY | 1,896 | 09/14/16 | — | ||
The Kroger Co. | Goldman Sachs | 5,538 | USD | 209 | 06/30/16 | 5 | ||
The Mosaic Co. | Goldman Sachs | 3,998 | USD | 135 | 06/30/16 | (44 | ) | |
The NASDAQ OMX Group, Inc. | Goldman Sachs | 4,438 | USD | 257 | 06/30/16 | 31 | ||
The PNC Financial Services Group, Inc. | Goldman Sachs | 1,531 | USD | 138 | 06/30/16 | (12 | ) | |
The Procter & Gamble Co. | Goldman Sachs | 8,694 | USD | 664 | 06/30/16 | (22 | ) | |
The Sage Group PLC | Morgan Stanley | 2,611 | GBP | 14 | 06/28/17 | 1 | ||
The Timken Co. | Goldman Sachs | 2,244 | USD | 71 | 06/30/16 | (13 | ) | |
The TJX Companies, Inc. | Goldman Sachs | 3,352 | USD | 245 | 06/30/16 | 18 | ||
The Toronto-Dominion Bank | Morgan Stanley | 2,152 | CAD | 116 | 06/29/17 | — | ||
The Travelers Companies, Inc. | Goldman Sachs | 4,576 | USD | 517 | 06/30/16 | 67 | ||
The Western Union Co. | Goldman Sachs | 11,427 | USD | 220 | 06/30/16 | (6 | ) | |
Thermo Fisher Scientific, Inc. | Goldman Sachs | 591 | USD | 77 | 06/30/16 | — | ||
THK Co., Ltd. | Goldman Sachs | 4,000 | JPY | 9,188 | 06/30/16 | (13 | ) | |
Thomas Cook Group PLC | Morgan Stanley | 39,060 | GBP | 48 | 06/28/17 | (13 | ) | |
Thomson Reuters Corp. | Morgan Stanley | 883 | CAD | 47 | 06/29/17 | 1 | ||
Thor Industries, Inc. | Goldman Sachs | 244 | USD | 13 | 10/17/16 | — | ||
Time Warner, Inc. | Goldman Sachs | 352 | USD | 27 | 06/30/16 | (5 | ) | |
TOHO GAS Co., Ltd. | Goldman Sachs | 3,000 | JPY | 2,232 | 09/14/16 | 1 | ||
Tohoku Electric Power Co., Inc. | Goldman Sachs | 35,500 | JPY | 60,634 | 06/30/16 | 12 | ||
Tokio Marine Holdings, Inc. | Goldman Sachs | 6,000 | JPY | 28,152 | 06/30/16 | (21 | ) | |
Tokyo Electric Power Co., Inc. | Goldman Sachs | 47,500 | JPY | 39,378 | 06/30/16 | 54 | ||
TonenGeneral Sekiyu K.K. | Goldman Sachs | 3,000 | JPY | 3,777 | 10/11/16 | 1 | ||
Total System Services, Inc. | Goldman Sachs | 236 | USD | 12 | 06/30/16 | 2 | ||
Toyo Suisan Kaisha, Ltd. | Goldman Sachs | 1,200 | JPY | 5,376 | 08/04/16 | — | ||
Toyota Boshoku Corp. | Goldman Sachs | 900 | JPY | 2,343 | 09/14/16 | 5 | ||
Treasury Wine Estates, Ltd. | Morgan Stanley | 1,618 | AUD | 2 | 06/29/17 | 2 | ||
Treasury Wine Estates, Ltd. | Morgan Stanley | 12,138 | AUD | 86 | 06/29/17 | 6 | ||
Trinity Industries, Inc. | Goldman Sachs | 3,261 | USD | 88 | 06/30/16 | (2 | ) | |
Triumph Group, Inc. | Goldman Sachs | 3,079 | USD | 143 | 06/30/16 | (6 | ) | |
Tsuruha Holdings, Inc. | Goldman Sachs | 400 | JPY | 3,848 | 09/14/16 | 2 | ||
Twenty-First Century Fox, Inc. | Goldman Sachs | 1,344 | USD | 41 | 06/30/16 | (3 | ) | |
U.S. Bancorp | Goldman Sachs | 793 | USD | 33 | 06/30/16 | (2 | ) | |
Union Pacific Corp. | Goldman Sachs | 436 | USD | 39 | 06/30/16 | (2 | ) | |
United Internet AG | Morgan Stanley | 459 | EUR | 22 | 06/28/17 | 1 | ||
United Therapeutics Corp. | Goldman Sachs | 2,645 | USD | 388 | 06/30/16 | (24 | ) | |
UnitedHealth Group, Inc. | Goldman Sachs | 4,283 | USD | 504 | 06/30/16 | (25 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 627
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||
Amounts in thousands (except shares) | |||||||||
Notional | Termination | Fair Value | |||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | ||||
Universal Health Services, Inc. | Goldman Sachs | 358 | USD | 44 | 06/30/16 | (7 | ) | ||
Unum Group | Goldman Sachs | 9,904 | USD | 343 | 06/30/16 | (18 | ) | ||
V.F. Corp. | Goldman Sachs | 4,207 | USD | 284 | 06/30/16 | (14 | ) | ||
Valero Energy Corp. | Goldman Sachs | 6,495 | USD | 428 | 06/30/16 | 32 | |||
Validus Holdings, Ltd. | Goldman Sachs | 1,346 | USD | 60 | 06/30/16 | (1 | ) | ||
Varian Medical Systems, Inc. | Goldman Sachs | 1,482 | USD | 116 | 06/30/16 | (7 | ) | ||
Vectren Corp. | Goldman Sachs | 2,014 | USD | 92 | 06/30/16 | 13 | |||
Vedanta Resources PLC | Morgan Stanley | 5,407 | GBP | 27 | 06/28/17 | (7 | ) | ||
Veolia Environnement SA | Morgan Stanley | 6,976 | EUR | 148 | 06/28/17 | 16 | |||
VeriSign, Inc. | Goldman Sachs | 1,138 | USD | 92 | 06/30/16 | 20 | |||
Verizon Communications, Inc. | Goldman Sachs | 4,821 | USD | 226 | 09/14/16 | 8 | |||
Vestas Wind Systems A/S | Morgan Stanley | 392 | DKK | 155 | 06/28/17 | 2 | |||
Viacom, Inc. | Goldman Sachs | 7,446 | USD | 367 | 06/30/16 | (89 | ) | ||
Vishay Intertechnology, Inc. | Goldman Sachs | 1,058 | USD | 11 | 10/17/16 | — | |||
Vivendi SA | Morgan Stanley | 10,907 | EUR | 239 | 06/28/17 | (22 | ) | ||
VMware, Inc. | Goldman Sachs | 632 | USD | 38 | 10/11/16 | (12 | ) | ||
Vodafone Group PLC | Morgan Stanley | 96,263 | GBP | 206 | 06/28/17 | (34 | ) | ||
Voya Financial, Inc. | Goldman Sachs | 4,870 | USD | 198 | 06/30/16 | (36 | ) | ||
W.W. Grainger, Inc. | Goldman Sachs | 62 | USD | 13 | 06/30/16 | (2 | ) | ||
Wal-Mart Stores, Inc. | Goldman Sachs | 6,356 | USD | 364 | 06/30/16 | (95 | ) | ||
Waste Management, Inc. | Goldman Sachs | 5,144 | USD | 277 | 06/30/16 | 28 | |||
Waters Corp. | Goldman Sachs | 1,207 | USD | 154 | 06/30/16 | (4 | ) | ||
Wells Fargo & Co. | Goldman Sachs | 3,076 | USD | 167 | 08/04/16 | (12 | ) | ||
Werner Enterprises, Inc. | Goldman Sachs | 3,863 | USD | 102 | 09/14/16 | — | |||
WESCO International, Inc. | Goldman Sachs | 537 | USD | 26 | 06/30/16 | (7 | ) | ||
West Fraser Timber Co., Ltd. | Morgan Stanley | 3,598 | CAD | 166 | 06/29/17 | (35 | ) | ||
Western Digital Corp. | Goldman Sachs | 4,460 | USD | 298 | 06/30/16 | (79 | ) | ||
Western Refining, Inc. | Goldman Sachs | 6,788 | USD | 283 | 06/30/16 | (13 | ) | ||
Westlake Chemical Corp. | Goldman Sachs | 602 | USD | 36 | 06/30/16 | (6 | ) | ||
WestRock Co. | Goldman Sachs | 1,612 | USD | 87 | 06/30/16 | (13 | ) | ||
Whirlpool Corp. | Goldman Sachs | 1,072 | USD | 172 | 06/30/16 | (19 | ) | ||
Whole Foods Market, Inc. | Goldman Sachs | 1,367 | USD | 41 | 06/30/16 | (14 | ) | ||
William Hill PLC | Morgan Stanley | 19,234 | GBP | 61 | 06/28/17 | (25 | ) | ||
Wolters Kluwer NV | Morgan Stanley | 9,344 | EUR | 288 | 06/28/17 | 26 | |||
Woodside Petroleum, Ltd. | Morgan Stanley | 17,405 | AUD | 515 | 06/29/17 | (68 | ) | ||
World Fuel Services Corp. | Goldman Sachs | 2,332 | USD | 104 | 09/14/16 | 14 | |||
WPP PLC | Morgan Stanley | 10,184 | GBP | 148 | 06/28/17 | 1 | |||
WPX Energy, Inc. | Goldman Sachs | 4,937 | USD | 34 | 06/30/16 | (17 | ) | ||
Wyndham Worldwide Corp. | Goldman Sachs | 639 | USD | 52 | 06/30/16 | (1 | ) | ||
Xerox Corp. | Goldman Sachs | 23,147 | USD | 217 | 06/30/16 | (35 | ) | ||
Xilinx, Inc. | Goldman Sachs | 5,757 | USD | 274 | 06/30/16 | 15 | |||
XL Group PLC | Goldman Sachs | 1,414 | USD | 54 | 09/14/16 | 1 | |||
Yahoo!, Inc. | Goldman Sachs | 5,684 | USD | 202 | 06/30/16 | (26 | ) | ||
Yamaguchi Financial Group, Inc. | Goldman Sachs | 1,000 | JPY | 1,495 | 09/14/16 | — | |||
Yamaha Corp. | Goldman Sachs | 3,700 | JPY | 11,193 | 06/30/16 | 14 | |||
Yamaha Motor Co., Ltd. | Goldman Sachs | 4,400 | JPY | 12,065 | 06/30/16 | 13 | |||
Yara International ASA | Morgan Stanley | 1,859 | NOK | 717 | 06/28/17 | (1 | ) | ||
Yelp, Inc. | Goldman Sachs | 2,590 | USD | 58 | 09/14/16 | (5 | ) | ||
Yue Yuen Industrial (Holdings) Ltd. | Morgan Stanley | 15,000 | HKD | 425 | 06/29/17 | 1 | |||
Yum! Brands, Inc. | Goldman Sachs | 1,588 | USD | 113 | 06/30/16 | (24 | ) | ||
Zoetis, Inc. | Goldman Sachs | 5,620 | USD | 242 | 06/30/16 | (34 | ) | ||
Zurich Insurance Group AG | Morgan Stanley | 66 | CHF | 17 | 06/28/17 | (2 | ) | ||
Zynga, Inc. | Goldman Sachs | 51,741 | USD | 123 | 06/30/16 | (10 | ) | ||
Short Reference Entity | |||||||||
3D Systems Corp. | Goldman Sachs | (4,546 | ) | USD | 46 | 10/11/16 | 8 | ||
Aberdeen Asset Management PLC | Morgan Stanley | (35,839 | ) | GBP | 124 | 06/28/17 | 38 | ||
Acadia Healthcare Co., Inc. | Goldman Sachs | (2,554 | ) | USD | 157 | 09/14/16 | 19 | ||
Acxiom Corp. | Goldman Sachs | (2,305 | ) | USD | 51 | 09/14/16 | (2 | ) | |
adidas AG | Morgan Stanley | (1,519 | ) | EUR | 124 | 06/28/17 | (18 | ) | |
Admiral Group PLC | Morgan Stanley | (11,357 | ) | GBP | 183 | 06/28/17 | (37 | ) | |
Adobe Systems, Inc. | Goldman Sachs | (525 | ) | USD | 47 | 06/30/16 | (3 | ) |
See accompanying notes which are an integral part of the financial statements.
628 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||
Amounts in thousands (except shares) | |||||||||
Notional | Termination | Fair Value | |||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | ||||
Advance Auto Parts, Inc. | Goldman Sachs | (975 | ) | USD | 193 | 06/30/16 | (33 | ) | |
AECOM | Goldman Sachs | (7,093 | ) | USD | 209 | 06/30/16 | 16 | ||
AEON Co., Ltd. | Goldman Sachs | (4,900 | ) | JPY | 8,815 | 06/30/16 | (6 | ) | |
AEON Financial Service Co., Ltd. | Goldman Sachs | (700 | ) | JPY | 2,132 | 06/30/16 | 2 | ||
Agios Pharmaceuticals, Inc. | Goldman Sachs | (199 | ) | USD | 14 | 09/14/16 | 3 | ||
Agnico Eagle Mines, Ltd. | Morgan Stanley | (8,170 | ) | CAD | 302 | 06/29/17 | (4 | ) | |
Agrium, Inc. | Morgan Stanley | (567 | ) | CAD | 69 | 06/29/17 | 3 | ||
Akorn, Inc. | Goldman Sachs | (12,576 | ) | USD | 336 | 06/30/16 | 133 | ||
Aktiebolaget Volvo | Morgan Stanley | (6,403 | ) | SEK | 568 | 06/28/17 | 15 | ||
Albemarle Corp. | Goldman Sachs | (8,083 | ) | USD | 433 | 06/30/16 | (3 | ) | |
Alexion Pharmaceuticals, Inc. | Goldman Sachs | (2,944 | ) | USD | 518 | 06/30/16 | (2 | ) | |
Alfa Laval AB | Morgan Stanley | (3,343 | ) | SEK | 502 | 06/28/17 | — | ||
Align Technology, Inc. | Goldman Sachs | (3,220 | ) | USD | 211 | 06/30/16 | (12 | ) | |
Alkermes PLC | Goldman Sachs | (1,144 | ) | USD | 82 | 06/30/16 | (8 | ) | |
Allegheny Technologies, Inc. | Goldman Sachs | (5,954 | ) | USD | 88 | 06/30/16 | 87 | ||
Allergan PLC | Goldman Sachs | (1,383 | ) | USD | 427 | 06/30/16 | (3 | ) | |
Alliance Data Systems Corp. | Goldman Sachs | (2,568 | ) | USD | 763 | 06/30/16 | 14 | ||
Allscripts Healthcare Solutions, Inc. | Goldman Sachs | (2,582 | ) | USD | 36 | 09/14/16 | (2 | ) | |
Alnylam Pharmaceuticals, Inc. | Goldman Sachs | (1,312 | ) | USD | 113 | 09/14/16 | 12 | ||
Alps Electric Co., Ltd. | Goldman Sachs | (1,200 | ) | JPY | 4,548 | 10/11/16 | (2 | ) | |
ALS Ltd. | Morgan Stanley | (3,868 | ) | AUD | 20 | 06/29/17 | — | ||
AltaGas, Ltd. | Morgan Stanley | (1,506 | ) | CAD | 51 | 06/29/17 | 3 | ||
Amec Foster Wheeler PLC | Morgan Stanley | (4,481 | ) | GBP | 32 | 06/28/17 | 9 | ||
American Airlines Group, Inc. | Goldman Sachs | (1,665 | ) | USD | 77 | 06/30/16 | (7 | ) | |
AMETEK, Inc. | Goldman Sachs | (3,791 | ) | USD | 208 | 06/30/16 | (3 | ) | |
AMP, Ltd. | Morgan Stanley | (3,243 | ) | AUD | 19 | 06/29/17 | 2 | ||
Amphenol Corp. | Goldman Sachs | (6,162 | ) | USD | 334 | 06/30/16 | 7 | ||
Anadarko Petroleum Corp. | Goldman Sachs | (3,213 | ) | USD | 215 | 06/30/16 | 45 | ||
Anheuser-Busch InBev SA/NV | Morgan Stanley | (550 | ) | EUR | 60 | 06/28/17 | 2 | ||
Antofagasta PLC | Morgan Stanley | (44,274 | ) | GBP | 233 | 06/28/17 | 89 | ||
Aon PLC | Goldman Sachs | (2,948 | ) | USD | 275 | 06/30/16 | 27 | ||
APA Group | Morgan Stanley | (15,701 | ) | AUD | 144 | 06/29/17 | (5 | ) | |
Apache Corp. | Goldman Sachs | (3,683 | ) | USD | 174 | 06/30/16 | 39 | ||
Aqua America, Inc. | Goldman Sachs | (1,052 | ) | USD | 30 | 09/14/16 | (4 | ) | |
ARC Resources, Ltd. | Morgan Stanley | (1,782 | ) | CAD | 34 | 06/29/17 | (2 | ) | |
ArcelorMittal | Morgan Stanley | (47,185 | ) | EUR | 239 | 06/28/17 | 21 | ||
Arista Networks, Inc. | Goldman Sachs | (2,978 | ) | USD | 192 | 09/14/16 | 10 | ||
Arkema SA | Morgan Stanley | (1,382 | ) | EUR | 92 | 06/28/17 | — | ||
ARM Holdings PLC | Morgan Stanley | (20,739 | ) | GBP | 213 | 06/28/17 | (11 | ) | |
ARRIS Group, Inc. | Goldman Sachs | (16,996 | ) | USD | 480 | 06/30/16 | 38 | ||
Arthur J. Gallagher & Co. | Goldman Sachs | (249 | ) | USD | 11 | 06/30/16 | 1 | ||
ARYZTA AG | Morgan Stanley | (3,998 | ) | CHF | 178 | 06/28/17 | 9 | ||
Asahi Group Holdings, Ltd. | Goldman Sachs | (2,000 | ) | JPY | 7,494 | 06/30/16 | 2 | ||
Ashtead Group PLC | Morgan Stanley | (1,089 | ) | GBP | 11 | 06/28/17 | 2 | ||
ASML Holding NV | Morgan Stanley | (2,370 | ) | EUR | 201 | 06/28/17 | 35 | ||
AT&T, Inc. | Goldman Sachs | (8,448 | ) | USD | 283 | 06/30/16 | 15 | ||
athenahealth, Inc. | Goldman Sachs | (96 | ) | USD | 15 | 09/14/16 | (2 | ) | |
AusNet Services | Morgan Stanley | (11,362 | ) | AUD | 16 | 06/29/17 | — | ||
Autodesk, Inc. | Goldman Sachs | (2,035 | ) | USD | 112 | 06/30/16 | (6 | ) | |
Avago Technologies, Ltd. | Goldman Sachs | (512 | ) | USD | 63 | 10/11/16 | — | ||
Avis Budget Group, Inc. | Goldman Sachs | (10,263 | ) | USD | 513 | 08/04/16 | (58 | ) | |
B/E Aerospace, Inc. | Goldman Sachs | (1,316 | ) | USD | 62 | 06/30/16 | 12 | ||
Babcock International Group PLC | Morgan Stanley | (4,202 | ) | GBP | 41 | 06/28/17 | 9 | ||
Ball Corp. | Goldman Sachs | (7,115 | ) | USD | 487 | 06/30/16 | 26 | ||
Banco Popular Espanol, SA | Morgan Stanley | (35,282 | ) | EUR | 122 | 06/28/17 | 6 | ||
Banco Santander, SA | Morgan Stanley | (78,434 | ) | EUR | 400 | 06/28/17 | 20 | ||
BankUnited, Inc. | Goldman Sachs | (2,641 | ) | USD | 98 | 06/30/16 | (2 | ) | |
Barrick Gold Corp. | Morgan Stanley | (11,653 | ) | CAD | 117 | 06/29/17 | 31 | ||
Barry Callebaut AG | Morgan Stanley | (77 | ) | CHF | 91 | 06/28/17 | (10 | ) | |
Bayerische Motoren Werke Aktiengesellschaft | Morgan Stanley | (3,299 | ) | EUR | 308 | 06/28/17 | (21 | ) | |
Becton, Dickinson and Co. | Goldman Sachs | (1,135 | ) | USD | 162 | 06/30/16 | (1 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 629
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||
Amounts in thousands (except shares) | |||||||||
Notional | Termination | Fair Value | |||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | ||||
BioMarin Pharmaceutical, Inc. | Goldman Sachs | (798 | ) | USD | 93 | 06/30/16 | 14 | ||
Bio-Techne Corp. | Goldman Sachs | (1,467 | ) | USD | 129 | 09/14/16 | 9 | ||
Black Knight Financial Services, Inc. | Goldman Sachs | (1,458 | ) | USD | 53 | 09/14/16 | (4 | ) | |
bluebird bio, Inc. | Goldman Sachs | (1,627 | ) | USD | 125 | 09/14/16 | 44 | ||
Bollore SA | Morgan Stanley | (49,037 | ) | EUR | 221 | 06/28/17 | 30 | ||
BorgWarner, Inc. | Goldman Sachs | (12,443 | ) | USD | 533 | 06/30/16 | 176 | ||
BP PLC | Morgan Stanley | (7,111 | ) | GBP | 27 | 06/28/17 | 6 | ||
Brambles, Ltd. | Morgan Stanley | (6,917 | ) | AUD | 72 | 06/29/17 | 1 | ||
British American Tobacco PLC | Morgan Stanley | (11,670 | ) | GBP | 450 | 06/28/17 | (56 | ) | |
Brookdale Senior Living, Inc. | Goldman Sachs | (7,593 | ) | USD | 159 | 08/04/16 | 89 | ||
Brown-Forman Corp. | Goldman Sachs | (2,751 | ) | USD | 292 | 06/30/16 | (15 | ) | |
Bruker Corp. | Goldman Sachs | (941 | ) | USD | 17 | 09/14/16 | — | ||
BTG PLC | Morgan Stanley | (3,267 | ) | GBP | 18 | 06/28/17 | — | ||
Bureau Veritas SA | Morgan Stanley | (1,003 | ) | EUR | 21 | 06/28/17 | — | ||
Cabela's, Inc. | Goldman Sachs | (2,313 | ) | USD | 91 | 06/30/16 | 28 | ||
Cable & Wireless Communications PLC | Morgan Stanley | (45,386 | ) | GBP | 33 | 06/28/17 | (10 | ) | |
Cabot Oil & Gas Corp. | Goldman Sachs | (8,923 | ) | USD | 194 | 06/30/16 | 91 | ||
CAE, Inc. | Morgan Stanley | (4,259 | ) | CAD | 63 | 06/29/17 | 2 | ||
CaixaBank, SA | Morgan Stanley | (17,563 | ) | EUR | 61 | 06/28/17 | 4 | ||
CalAtlantic Group, Inc. | Goldman Sachs | (990 | ) | USD | 38 | 10/17/16 | 3 | ||
Campbell Soup Co. | Goldman Sachs | (463 | ) | USD | 24 | 06/30/16 | (2 | ) | |
Canadian Natural Resources , Ltd. | Morgan Stanley | (5,494 | ) | CAD | 167 | 06/29/17 | (14 | ) | |
Canadian Pacific Railway, Ltd. | Morgan Stanley | (1,588 | ) | CAD | 292 | 06/29/17 | 20 | ||
Canadian Utilities, Ltd. | Morgan Stanley | (13,878 | ) | CAD | 477 | 06/29/17 | 18 | ||
Canon, Inc. | Goldman Sachs | (1,500 | ) | JPY | 5,460 | 09/14/16 | 1 | ||
Carlsberg A/S | Morgan Stanley | (1,514 | ) | DKK | 842 | 06/28/17 | 7 | ||
CarMax, Inc. | Goldman Sachs | (6,401 | ) | USD | 378 | 06/30/16 | 58 | ||
Carrefour SA | Morgan Stanley | (4,384 | ) | EUR | 130 | 06/28/17 | 2 | ||
Casey's General Stores, Inc. | Goldman Sachs | (336 | ) | USD | 36 | 09/14/16 | 1 | ||
Casino Guichard-Perrachon | Morgan Stanley | (2,180 | ) | EUR | 114 | 06/28/17 | 9 | ||
Catalent, Inc. | Goldman Sachs | (1,956 | ) | USD | 52 | 10/17/16 | (4 | ) | |
Cathay Pacific Airways, Ltd. | Morgan Stanley | (37,000 | ) | HKD | 571 | 06/29/17 | 19 | ||
CBOE Holdings, Inc. | Goldman Sachs | (878 | ) | USD | 59 | 06/30/16 | (9 | ) | |
CDK Global, Inc. | Goldman Sachs | (5,903 | ) | USD | 294 | 06/30/16 | 34 | ||
Cenovus Energy, Inc. | Morgan Stanley | (10,027 | ) | CAD | 195 | 06/29/17 | 2 | ||
Centrica PLC | Morgan Stanley | (3,432 | ) | GBP | 8 | 06/28/17 | (1 | ) | |
CenturyLink, Inc. | Goldman Sachs | (2,102 | ) | USD | 59 | 06/30/16 | 3 | ||
Cerner Corp. | Goldman Sachs | (745 | ) | USD | 49 | 09/14/16 | (3 | ) | |
Cheniere Energy, Inc. | Goldman Sachs | (4,108 | ) | USD | 203 | 06/30/16 | 65 | ||
Cheung Kong Property Holdings , Ltd. | Morgan Stanley | (18,500 | ) | HKD | 1,008 | 06/29/17 | 8 | ||
Chevron Corp. | Goldman Sachs | (330 | ) | USD | 30 | 06/30/16 | 2 | ||
Chipotle Mexican Grill, Inc. | Goldman Sachs | (376 | ) | USD | 241 | 06/30/16 | (12 | ) | |
Chiyoda Corp. | Goldman Sachs | (8,000 | ) | JPY | 7,384 | 09/14/16 | (5 | ) | |
Chocoladefabriken Lindt & Spruengli AG | Morgan Stanley | (11 | ) | CHF | 66 | 06/28/17 | (12 | ) | |
Chugai Pharmaceutical Co., Ltd. | Goldman Sachs | (1,800 | ) | JPY | 7,038 | 06/30/16 | 5 | ||
Ciena Corp. | Goldman Sachs | (2,182 | ) | USD | 53 | 06/30/16 | 1 | ||
Cimarex Energy Co. | Goldman Sachs | (2,116 | ) | USD | 250 | 06/30/16 | (11 | ) | |
Cinemark Holdings, Inc. | Goldman Sachs | (510 | ) | USD | 18 | 06/30/16 | 3 | ||
Citizen Holdings Co., Ltd. | Goldman Sachs | (8,300 | ) | JPY | 7,653 | 09/14/16 | (4 | ) | |
Clean Harbors, Inc. | Goldman Sachs | (336 | ) | USD | 16 | 06/30/16 | 3 | ||
CME Group, Inc. | Goldman Sachs | (2,198 | ) | USD | 208 | 06/30/16 | (1 | ) | |
CNH Industrial NV | Morgan Stanley | (57,866 | ) | EUR | 356 | 06/28/17 | 110 | ||
Cobalt International Energy, Inc. | Goldman Sachs | (25,051 | ) | USD | 192 | 06/30/16 | 52 | ||
Cobham PLC | Morgan Stanley | (47,370 | ) | GBP | 131 | 06/28/17 | (5 | ) | |
Colfax Corp. | Goldman Sachs | (3,002 | ) | USD | 81 | 06/30/16 | 59 | ||
Colgate-Palmolive Co. | Goldman Sachs | (508 | ) | USD | 34 | 06/30/16 | — | ||
Columbia Pipeline Group, Inc. | Goldman Sachs | (10,749 | ) | USD | 223 | 06/30/16 | 24 | ||
Comerica, Inc. | Goldman Sachs | (729 | ) | USD | 32 | 06/30/16 | 7 | ||
Commerzbank Aktiengesellschaft | Morgan Stanley | (7,622 | ) | EUR | 76 | 06/28/17 | 16 | ||
CommScope Holding Co., Inc. | Goldman Sachs | (3,051 | ) | USD | 99 | 10/17/16 | (4 | ) | |
CommVault Systems, Inc. | Goldman Sachs | (296 | ) | USD | 12 | 06/30/16 | 1 |
See accompanying notes which are an integral part of the financial statements.
630 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||
Amounts in thousands (except shares) | |||||||||
Notional | Termination | Fair Value | |||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | ||||
Compagnie de Saint-Gobain SA | Morgan Stanley | (875 | ) | EUR | 33 | 06/28/17 | 4 | ||
Compagnie Financiere Richemont SA | Morgan Stanley | (5,554 | ) | CHF | 471 | 06/28/17 | (52 | ) | |
Compagnie Plastic Omnium SACA | Morgan Stanley | (1,212 | ) | EUR | 32 | 06/28/17 | (4 | ) | |
ConAgra Foods, Inc. | Goldman Sachs | (1,313 | ) | USD | 53 | 06/30/16 | 4 | ||
Concho Resources, Inc. | Goldman Sachs | (2,110 | ) | USD | 245 | 06/30/16 | (3 | ) | |
ConocoPhillips | Goldman Sachs | (2,755 | ) | USD | 147 | 10/11/16 | (4 | ) | |
CONSOL Energy, Inc. | Goldman Sachs | (16,412 | ) | USD | 109 | 06/30/16 | 226 | ||
Constellation Brands, Inc. | Goldman Sachs | (2,736 | ) | USD | 369 | 06/30/16 | (32 | ) | |
Copa Holdings, SA | Goldman Sachs | (775 | ) | USD | 39 | 06/30/16 | 26 | ||
Core Laboratories NV | Goldman Sachs | (2,378 | ) | USD | 277 | 06/30/16 | (10 | ) | |
CoStar Group, Inc. | Goldman Sachs | (735 | ) | USD | 149 | 06/30/16 | (4 | ) | |
Costco Wholesale Corp. | Goldman Sachs | (253 | ) | USD | 40 | 06/30/16 | (5 | ) | |
Covanta Holding Corp. | Goldman Sachs | (5,152 | ) | USD | 86 | 09/14/16 | 7 | ||
Credit Saison Co., Ltd. | Goldman Sachs | (10,300 | ) | JPY | 25,760 | 06/30/16 | 16 | ||
Credit Suisse Group AG | Morgan Stanley | (1,434 | ) | CHF | 35 | 06/28/17 | 2 | ||
Crown Resorts, Ltd. | Morgan Stanley | (9,706 | ) | AUD | 111 | 06/29/17 | 6 | ||
CST Brands, Inc. | Goldman Sachs | (4,516 | ) | USD | 162 | 06/30/16 | 22 | ||
Cullen/Frost Bankers, Inc. | Goldman Sachs | (937 | ) | USD | 64 | 06/30/16 | 11 | ||
Cypress Semiconductor Corp. | Goldman Sachs | (28,012 | ) | USD | 295 | 06/30/16 | 19 | ||
Daikin Industries, Ltd. | Goldman Sachs | (5,700 | ) | JPY | 44,688 | 06/30/16 | 50 | ||
Daiwa Securities Group, Inc. | Goldman Sachs | (4,000 | ) | JPY | 3,328 | 09/14/16 | (1 | ) | |
DaVita HealthCare Partners, Inc. | Goldman Sachs | (4,988 | ) | USD | 387 | 06/30/16 | 18 | ||
Delta Lloyd NV | Morgan Stanley | (1,202 | ) | EUR | 9 | 06/28/17 | 3 | ||
DENSO Corp. | Goldman Sachs | (5,500 | ) | JPY | 31,141 | 06/30/16 | 4 | ||
Devon Energy Corp. | Goldman Sachs | (460 | ) | USD | 19 | 06/30/16 | 6 | ||
DeVry Education Group, Inc. | Goldman Sachs | (1,204 | ) | USD | 28 | 09/14/16 | 3 | ||
DexCom, Inc. | Goldman Sachs | (1,254 | ) | USD | 104 | 09/14/16 | 1 | ||
Diageo PLC | Morgan Stanley | (4,639 | ) | GBP | 87 | 06/28/17 | 2 | ||
Diebold, Inc. | Goldman Sachs | (2,299 | ) | USD | 85 | 09/14/16 | (11 | ) | |
Discovery Communications, Inc. | Goldman Sachs | (7,271 | ) | USD | 214 | 09/14/16 | (18 | ) | |
Dolby Laboratories, Inc. | Goldman Sachs | (1,113 | ) | USD | 39 | 09/14/16 | (2 | ) | |
Dollar Tree, Inc. | Goldman Sachs | (9,923 | ) | USD | 650 | 09/14/16 | 17 | ||
Dominion Resources, Inc. | Goldman Sachs | (15,790 | ) | USD | 1,128 | 06/30/16 | (57 | ) | |
Donaldson Co., Inc. | Goldman Sachs | (1,143 | ) | USD | 35 | 09/14/16 | 1 | ||
Dufry AG | Morgan Stanley | (614 | ) | CHF | 71 | 06/28/17 | 6 | ||
Dunkin' Brands Group, Inc. | Goldman Sachs | (680 | ) | USD | 28 | 06/30/16 | 9 | ||
E*Trade Financial Corp. | Goldman Sachs | (8,611 | ) | USD | 245 | 06/30/16 | 19 | ||
E.ON SE | Morgan Stanley | (21,281 | ) | EUR | 204 | 06/28/17 | 9 | ||
Eagle Materials, Inc. | Goldman Sachs | (2,546 | ) | USD | 168 | 06/30/16 | 25 | ||
Eastman Chemical Co. | Goldman Sachs | (156 | ) | USD | 11 | 06/30/16 | 1 | ||
Ecolab, Inc. | Goldman Sachs | (2,983 | ) | USD | 359 | 06/30/16 | (13 | ) | |
Edenred | Morgan Stanley | (5,073 | ) | EUR | 85 | 06/28/17 | 1 | ||
Edgewell Personal Care Co. | Goldman Sachs | (886 | ) | USD | 75 | 06/30/16 | (9 | ) | |
EDP- Energias de Portugal SA | Morgan Stanley | (11,153 | ) | EUR | 38 | 06/28/17 | — | ||
Eldorado Gold Corp. | Morgan Stanley | (7,758 | ) | CAD | 35 | 06/29/17 | 1 | ||
Electricite de France Societe anonyme | Morgan Stanley | (7,008 | ) | EUR | 119 | 06/28/17 | 30 | ||
EMC Corp. | Goldman Sachs | (1,830 | ) | USD | 48 | 06/30/16 | 1 | ||
Enbridge, Inc. | Morgan Stanley | (5,906 | ) | CAD | 330 | 06/29/17 | 6 | ||
Encana Corp. | Morgan Stanley | (9,211 | ) | CAD | 92 | 06/29/17 | (4 | ) | |
Endo International PLC | Goldman Sachs | (5,488 | ) | USD | 329 | 06/30/16 | 116 | ||
Enel Green Power SpA | Morgan Stanley | (32,317 | ) | EUR | 62 | 06/28/17 | (3 | ) | |
Engie | Morgan Stanley | (20,533 | ) | EUR | 328 | 06/28/17 | (21 | ) | |
Envision Healthcare Holdings, Inc. | Goldman Sachs | (14,561 | ) | USD | 411 | 06/30/16 | 177 | ||
EQT Corp. | Goldman Sachs | (1,171 | ) | USD | 77 | 06/30/16 | 19 | ||
Esterline Technologies Corp. | Goldman Sachs | (304 | ) | USD | 23 | 06/30/16 | 6 | ||
Eversource Energy | Goldman Sachs | (4,256 | ) | USD | 217 | 06/30/16 | (22 | ) | |
Express Scripts Holding Co. | Goldman Sachs | (1,295 | ) | USD | 112 | 06/30/16 | 7 | ||
Exxon Mobil Corp. | Goldman Sachs | (182 | ) | USD | 15 | 06/30/16 | — | ||
Facebook, Inc. | Goldman Sachs | (1,301 | ) | USD | 133 | 06/30/16 | (19 | ) | |
Fast Retailing Co., Ltd. | Goldman Sachs | (200 | ) | JPY | 8,876 | 10/11/16 | 9 | ||
Fastenal Co. | Goldman Sachs | (4,878 | ) | USD | 191 | 06/30/16 | 17 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 631
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||
Amounts in thousands (except shares) | |||||||||
Notional | Termination | Fair Value | |||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | ||||
FEI Co. | Goldman Sachs | (1,699 | ) | USD | 123 | 06/30/16 | 21 | ||
First Niagara Financial Group, Inc. | Goldman Sachs | (34,091 | ) | USD | 353 | 06/30/16 | (23 | ) | |
First Quantum Minerals, Ltd. | Morgan Stanley | (36,965 | ) | CAD | 258 | 06/29/17 | 199 | ||
FleetCor Technologies, Inc. | Goldman Sachs | (2,604 | ) | USD | 377 | 06/30/16 | 38 | ||
FMC Corp. | Goldman Sachs | (5,929 | ) | USD | 241 | 06/30/16 | 52 | ||
Forest City Enterprises, Inc. | Goldman Sachs | (10,149 | ) | USD | 224 | 06/30/16 | 9 | ||
Fortinet, Inc. | Goldman Sachs | (1,966 | ) | USD | 68 | 06/30/16 | 14 | ||
Fortis, Inc. | Morgan Stanley | (3,694 | ) | CAD | 140 | 06/29/17 | (6 | ) | |
Franco-Nevada Corp. | Morgan Stanley | (526 | ) | CAD | 35 | 06/29/17 | (3 | ) | |
Frank's International NV | Goldman Sachs | (827 | ) | USD | 14 | 10/11/16 | (1 | ) | |
Freeport-McMoRan, Inc. | Goldman Sachs | (4,362 | ) | USD | 51 | 06/30/16 | 35 | ||
Fresenius Medical Care AG & Co. KGaA | Morgan Stanley | (532 | ) | EUR | 44 | 06/28/17 | (3 | ) | |
Frontier Communications Corp. | Goldman Sachs | (56,504 | ) | USD | 290 | 06/30/16 | (11 | ) | |
Fugro NV | Morgan Stanley | (1,310 | ) | EUR | 23 | 06/28/17 | — | ||
G4S PLC | Morgan Stanley | (6,924 | ) | GBP | 17 | 06/28/17 | 4 | ||
Galaxy Entertainment Group, Ltd. | Morgan Stanley | (55,000 | ) | HKD | 1,466 | 06/29/17 | 3 | ||
General Electric Co. | Goldman Sachs | (3,802 | ) | USD | 110 | 06/30/16 | (8 | ) | |
Genesee & Wyoming, Inc. | Goldman Sachs | (2,621 | ) | USD | 176 | 06/30/16 | 20 | ||
Gentex Corp. | Goldman Sachs | (6,985 | ) | USD | 114 | 06/30/16 | 2 | ||
Genworth Financial, Inc. | Goldman Sachs | (9,846 | ) | USD | 46 | 08/04/16 | 24 | ||
Getinge AB | Morgan Stanley | (1,451 | ) | SEK | 310 | 06/28/17 | (2 | ) | |
Gildan Activewear, Inc. | Morgan Stanley | (8,919 | ) | CAD | 335 | 06/29/17 | 29 | ||
Global Logistic Properties, Ltd. | Morgan Stanley | (16,100 | ) | SGD | 36 | 06/30/17 | (2 | ) | |
Golar LNG, Ltd. | Goldman Sachs | (4,786 | ) | USD | 139 | 06/30/16 | 86 | ||
Goldcorp, Inc. | Morgan Stanley | (6,567 | ) | CAD | 110 | 06/29/17 | 18 | ||
Golden Agri-Resources Ltd | Morgan Stanley | (160,100 | ) | SGD | 62 | 06/30/17 | 2 | ||
Graphic Packaging Holding Co. | Goldman Sachs | (5,171 | ) | USD | 73 | 09/14/16 | (1 | ) | |
Greif, Inc. | Goldman Sachs | (930 | ) | USD | 30 | 09/14/16 | 1 | ||
Halliburton Co. | Goldman Sachs | (8,471 | ) | USD | 325 | 06/30/16 | 25 | ||
Hancock Holding Co. | Goldman Sachs | (2,170 | ) | USD | 60 | 06/30/16 | 11 | ||
Hanesbrands, Inc. | Goldman Sachs | (5,431 | ) | USD | 173 | 06/30/16 | (8 | ) | |
Hargreaves Lansdown PLC | Morgan Stanley | (32,285 | ) | GBP | 466 | 06/28/17 | (122 | ) | |
Harley-Davidson, Inc. | Goldman Sachs | (6,313 | ) | USD | 312 | 06/30/16 | 48 | ||
Harris Corp. | Goldman Sachs | (2,731 | ) | USD | 216 | 09/14/16 | (10 | ) | |
Hasbro, Inc. | Goldman Sachs | (145 | ) | USD | 11 | 06/30/16 | — | ||
Helmerich & Payne, Inc. | Goldman Sachs | (5,042 | ) | USD | 284 | 06/30/16 | 49 | ||
Henry Schein, Inc. | Goldman Sachs | (401 | ) | USD | 61 | 06/30/16 | (3 | ) | |
Hertz Global Holdings, Inc. | Goldman Sachs | (29,882 | ) | USD | 583 | 06/30/16 | (16 | ) | |
Hexagon AB | Morgan Stanley | (1,093 | ) | SEK | 324 | 06/28/17 | 1 | ||
Hexcel Corp. | Goldman Sachs | (8,387 | ) | USD | 388 | 06/30/16 | 26 | ||
Hirose Electric Co., Ltd. | Goldman Sachs | (300 | ) | JPY | 4,428 | 06/30/16 | 7 | ||
Hitachi, Ltd. | Goldman Sachs | (10,000 | ) | JPY | 7,029 | 06/30/16 | (2 | ) | |
HKT Trust and HKT, Ltd. | Morgan Stanley | (221,000 | ) | HKD | 2,053 | 06/29/17 | (2 | ) | |
HNI Corp. | Goldman Sachs | (243 | ) | USD | 10 | 09/14/16 | 1 | ||
Hologic, Inc. | Goldman Sachs | (1,524 | ) | USD | 59 | 06/30/16 | (1 | ) | |
Honda Motor Co., Ltd. | Goldman Sachs | (11,900 | ) | JPY | 48,124 | 06/30/16 | (3 | ) | |
Honeywell International, Inc. | Goldman Sachs | (824 | ) | USD | 85 | 09/14/16 | (3 | ) | |
Husky Energy, Inc. | Morgan Stanley | (16,091 | ) | CAD | 284 | 06/29/17 | 79 | ||
Hutchison Port Holdings Trust | Morgan Stanley | (44,300 | ) | USD | 25 | 06/29/17 | 4 | ||
Hysan Development Co., Ltd. | Morgan Stanley | (4,000 | ) | HKD | 138 | 06/29/17 | (1 | ) | |
IDEXX Laboratories, Inc. | Goldman Sachs | (7,530 | ) | USD | 517 | 06/30/16 | (35 | ) | |
IHI Corp. | Goldman Sachs | (105,000 | ) | JPY | 36,120 | 06/30/16 | 166 | ||
IHS, Inc. | Goldman Sachs | (1,186 | ) | USD | 142 | 06/30/16 | 15 | ||
Iliad SA | Morgan Stanley | (51 | ) | EUR | 10 | 06/28/17 | 1 | ||
Illumina, Inc. | Goldman Sachs | (3,703 | ) | USD | 531 | 06/30/16 | 239 | ||
Imperial Oil, Ltd. | Morgan Stanley | (3,724 | ) | CAD | 162 | 06/29/17 | 11 | ||
Incyte Corp. | Goldman Sachs | (2,031 | ) | USD | 239 | 06/30/16 | (5 | ) | |
Infineon Technologies AG | Morgan Stanley | (22,921 | ) | EUR | 257 | 06/28/17 | 15 | ||
Inmarsat PLC | Morgan Stanley | (1,533 | ) | GBP | 15 | 06/28/17 | (2 | ) | |
Insurance Australia Group, Ltd. | Morgan Stanley | (12,223 | ) | AUD | 69 | 06/29/17 | — | ||
Intersil Corp. | Goldman Sachs | (3,106 | ) | USD | 42 | 09/14/16 | (7 | ) |
See accompanying notes which are an integral part of the financial statements.
632 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||
Amounts in thousands (except shares) | |||||||||
Notional | Termination | Fair Value | |||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | ||||
Intertek Group PLC | Morgan Stanley | (2,736 | ) | GBP | 72 | 06/28/17 | (8 | ) | |
Intuitive Surgical, Inc. | Goldman Sachs | (206 | ) | USD | 102 | 06/30/16 | — | ||
IPG Photonics Corp. | Goldman Sachs | (1,283 | ) | USD | 106 | 06/30/16 | 2 | ||
Isetan Mitsukoshi Holdings, Ltd. | Goldman Sachs | (9,700 | ) | JPY | 18,964 | 06/30/16 | 25 | ||
Isis Pharmaceuticals, Inc. | Goldman Sachs | (750 | ) | USD | 36 | 09/14/16 | 4 | ||
ITC Holdings Corp. | Goldman Sachs | (3,127 | ) | USD | 102 | 06/30/16 | (1 | ) | |
J Sainsbury PLC | Morgan Stanley | (21,063 | ) | GBP | 56 | 06/28/17 | (2 | ) | |
J. B. Hunt Transport Services, Inc. | Goldman Sachs | (2,157 | ) | USD | 165 | 06/30/16 | 16 | ||
Japan Airport Terminal Co., Ltd. | Goldman Sachs | (800 | ) | JPY | 5,280 | 10/11/16 | (7 | ) | |
Japan Display, Inc. | Goldman Sachs | (32,000 | ) | JPY | 12,224 | 06/30/16 | 6 | ||
Japan Tobacco, Inc. | Goldman Sachs | (6,400 | ) | JPY | 26,950 | 06/30/16 | 11 | ||
Jarden Corp. | Goldman Sachs | (4,325 | ) | USD | 194 | 06/30/16 | 40 | ||
Jardine Matheson Holdings, Ltd. | Morgan Stanley | (200 | ) | USD | 11 | 06/29/17 | — | ||
Jazz Pharmaceuticals PLC | Goldman Sachs | (1,239 | ) | USD | 170 | 06/30/16 | 48 | ||
JGC Corp. | Goldman Sachs | (16,000 | ) | JPY | 30,784 | 06/30/16 | 60 | ||
Johnson Controls, Inc. | Goldman Sachs | (930 | ) | USD | 42 | 06/30/16 | — | ||
Joy Global, Inc. | Goldman Sachs | (747 | ) | USD | 13 | 06/30/16 | 15 | ||
Kansas City Southern | Goldman Sachs | (5,743 | ) | USD | 475 | 06/30/16 | 61 | ||
KAR Auction Services, Inc. | Goldman Sachs | (624 | ) | USD | 24 | 06/30/16 | — | ||
Kate Spade & Co. | Goldman Sachs | (957 | ) | USD | 17 | 08/04/16 | 2 | ||
KBR, Inc. | Goldman Sachs | (7,379 | ) | USD | 136 | 06/30/16 | 11 | ||
Keppel Corp., Ltd. | Morgan Stanley | (56,300 | ) | SGD | 399 | 06/30/17 | 42 | ||
Keurig Green Mountain, Inc. | Goldman Sachs | (2,905 | ) | USD | 147 | 06/30/16 | 79 | ||
Kikkoman Corp. | Goldman Sachs | (2,000 | ) | JPY | 7,630 | 06/30/16 | — | ||
Kinder Morgan, Inc. | Goldman Sachs | (10,583 | ) | USD | 289 | 06/30/16 | 117 | ||
Kintetsu Group Holdings Co.,Ltd. | Goldman Sachs | (67,000 | ) | JPY | 31,423 | 06/30/16 | (28 | ) | |
Kirby Corp. | Goldman Sachs | (1,591 | ) | USD | 104 | 06/30/16 | 19 | ||
Kirin Holdings Co., Ltd. | Goldman Sachs | (9,900 | ) | JPY | 17,038 | 06/30/16 | — | ||
KLX, Inc. | Goldman Sachs | (7,168 | ) | USD | 280 | 06/30/16 | 40 | ||
Komatsu, Ltd. | Goldman Sachs | (9,200 | ) | JPY | 18,418 | 06/30/16 | 35 | ||
Koninklijke Philips NV | Morgan Stanley | (2,248 | ) | EUR | 55 | 06/28/17 | (3 | ) | |
Kosmos Energy Ltd. | Goldman Sachs | (7,851 | ) | USD | 54 | 09/14/16 | (2 | ) | |
Kubota Corp. | Goldman Sachs | (9,000 | ) | JPY | 17,019 | 06/30/16 | 5 | ||
Kyocera Corp. | Goldman Sachs | (800 | ) | JPY | 4,402 | 06/30/16 | 7 | ||
Kyushu Electric Power Co., Inc. | Goldman Sachs | (52,700 | ) | JPY | 77,364 | 06/30/16 | (23 | ) | |
Laboratory Corp. of America Holdings | Goldman Sachs | (3,020 | ) | USD | 371 | 06/30/16 | (4 | ) | |
Ladbrokes PLC | Morgan Stanley | (89,207 | ) | GBP | 94 | 06/28/17 | 38 | ||
LafargeHolcim, Ltd. | Morgan Stanley | (5,010 | ) | CHF | 279 | 06/28/17 | 7 | ||
Lam Research Corp. | Goldman Sachs | (154 | ) | USD | 12 | 06/30/16 | 1 | ||
Las Vegas Sands Corp. | Goldman Sachs | (2,196 | ) | USD | 109 | 06/30/16 | 4 | ||
Lennar Corp. | Goldman Sachs | (3,072 | ) | USD | 154 | 06/30/16 | 5 | ||
Leucadia National Corp. | Goldman Sachs | (7,963 | ) | USD | 159 | 09/14/16 | 4 | ||
Level 3 Communications, Inc. | Goldman Sachs | (16,372 | ) | USD | 834 | 06/30/16 | 9 | ||
Liberty Broadband Corp. | Goldman Sachs | (1,251 | ) | USD | 67 | 09/14/16 | 2 | ||
Liberty Global PLC | Goldman Sachs | (1,585 | ) | USD | 71 | 09/14/16 | 3 | ||
Linear Technology Corp. | Goldman Sachs | (4,188 | ) | USD | 186 | 09/14/16 | (15 | ) | |
LinkedIn Corp. | Goldman Sachs | (327 | ) | USD | 79 | 06/30/16 | (8 | ) | |
Lions Gate Entertainment Corp. | Goldman Sachs | (4,746 | ) | USD | 185 | 06/30/16 | (7 | ) | |
Live Nation Entertainment, Inc. | Goldman Sachs | (5,124 | ) | USD | 140 | 09/14/16 | (10 | ) | |
Loews Corp. | Goldman Sachs | (18,089 | ) | USD | 660 | 06/30/16 | 41 | ||
Louisiana-Pacific Corp. | Goldman Sachs | (28,669 | ) | USD | 506 | 06/30/16 | (15 | ) | |
lululemon athletica, Inc. | Goldman Sachs | (1,503 | ) | USD | 74 | 06/30/16 | 27 | ||
Lumentum Holdings, Inc. | Goldman Sachs | (1,099 | ) | USD | 16 | 06/30/16 | (5 | ) | |
M&T Bank Corp. | Goldman Sachs | (1,416 | ) | USD | 170 | 06/30/16 | 10 | ||
M.D.C. Holdings, Inc. | Goldman Sachs | (3,334 | ) | USD | 87 | 06/30/16 | 16 | ||
Macquarie Infrastructure Corp. | Goldman Sachs | (998 | ) | USD | 79 | 09/14/16 | (1 | ) | |
Makita Corp. | Goldman Sachs | (1,800 | ) | JPY | 12,006 | 06/30/16 | 3 | ||
Marathon Oil Corp. | Goldman Sachs | (4,744 | ) | USD | 87 | 10/11/16 | (3 | ) | |
Marsh & McLennan Companies, Inc. | Goldman Sachs | (487 | ) | USD | 27 | 06/30/16 | 1 | ||
Martin Marietta Materials, Inc. | Goldman Sachs | (3,046 | ) | USD | 473 | 06/30/16 | (26 | ) | |
Marui Group Co., Ltd. | Goldman Sachs | (41,900 | ) | JPY | 65,909 | 06/30/16 | 41 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 633
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||
Amounts in thousands (except shares) | |||||||||
Notional | Termination | Fair Value | |||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | ||||
MasterCard, Inc. | Goldman Sachs | (1,538 | ) | USD | 152 | 06/30/16 | (7 | ) | |
Mattel, Inc. | Goldman Sachs | (19,198 | ) | USD | 472 | 06/30/16 | (12 | ) | |
MDU Resources Group, Inc. | Goldman Sachs | (30,581 | ) | USD | 577 | 06/30/16 | 27 | ||
MEDNAX, Inc. | Goldman Sachs | (3,706 | ) | USD | 261 | 06/30/16 | 18 | ||
Medtronic PLC | Goldman Sachs | (805 | ) | USD | 60 | 06/30/16 | 1 | ||
Memorial Resource Development Corp. | Goldman Sachs | (6,505 | ) | USD | 115 | 09/14/16 | 10 | ||
Methanex Corp. | Morgan Stanley | (2,137 | ) | CAD | 111 | 06/29/17 | 30 | ||
Mettler-Toledo International, Inc. | Goldman Sachs | (265 | ) | USD | 82 | 09/14/16 | (4 | ) | |
MGM China Holdings, Ltd. | Morgan Stanley | (129,200 | ) | HKD | 1,468 | 06/29/17 | 25 | ||
MGM Resorts International | Goldman Sachs | (11,495 | ) | USD | 267 | 06/30/16 | (55 | ) | |
Minebea Co., Ltd. | Goldman Sachs | (17,000 | ) | JPY | 22,882 | 06/30/16 | 84 | ||
Mitsubishi Heavy Industries, Ltd. | Goldman Sachs | (8,000 | ) | JPY | 4,913 | 06/30/16 | 9 | ||
Mitsubishi Logistics Corp. | Goldman Sachs | (2,000 | ) | JPY | 3,492 | 09/14/16 | (5 | ) | |
Mitsui O.S.K. Lines, Ltd. | Goldman Sachs | (148,000 | ) | JPY | 48,100 | 06/30/16 | 45 | ||
Mohawk Industries, Inc. | Goldman Sachs | (121 | ) | USD | 24 | 09/14/16 | 1 | ||
Monster Beverage Corp. | Goldman Sachs | (4,578 | ) | USD | 624 | 06/30/16 | 1 | ||
MSC Industrial Direct Co., Inc. | Goldman Sachs | (2,409 | ) | USD | 151 | 06/30/16 | 19 | ||
Mylan NV | Goldman Sachs | (6,057 | ) | USD | 267 | 09/14/16 | 17 | ||
National Fuel Gas Co. | Goldman Sachs | (6,819 | ) | USD | 358 | 06/30/16 | 50 | ||
National Oilwell Varco, Inc. | Goldman Sachs | (2,896 | ) | USD | 109 | 06/30/16 | 29 | ||
Netflix, Inc. | Goldman Sachs | (647 | ) | USD | 70 | 06/30/16 | (4 | ) | |
NetSuite, Inc. | Goldman Sachs | (4,387 | ) | USD | 373 | 06/30/16 | 26 | ||
Newell Rubbermaid, Inc. | Goldman Sachs | (5,271 | ) | USD | 224 | 06/30/16 | (1 | ) | |
NGK Insulators, Ltd. | Goldman Sachs | (4,000 | ) | JPY | 10,544 | 06/30/16 | 20 | ||
NGK Spark Plug Co., Ltd. | Goldman Sachs | (12,800 | ) | JPY | 38,029 | 06/30/16 | 37 | ||
Nidec Corp. | Goldman Sachs | (3,800 | ) | JPY | 34,857 | 06/30/16 | (8 | ) | |
Nielsen Holdings PLC | Goldman Sachs | (11,361 | ) | USD | 540 | 06/30/16 | (13 | ) | |
Nikon Corp. | Goldman Sachs | (1,800 | ) | JPY | 2,830 | 09/14/16 | (1 | ) | |
Nippon Paint Holdings Co., Ltd. | Goldman Sachs | (7,100 | ) | JPY | 18,297 | 06/30/16 | 39 | ||
Nissan Motor Co., Ltd. | Goldman Sachs | (10,500 | ) | JPY | 13,298 | 09/14/16 | (14 | ) | |
Noble Energy, Inc. | Goldman Sachs | (3,889 | ) | USD | 139 | 06/30/16 | 31 | ||
Nokia OYJ | Morgan Stanley | (3,020 | ) | EUR | 20 | 06/28/17 | (2 | ) | |
Nomura Holdings, Inc. | Goldman Sachs | (9,400 | ) | JPY | 7,197 | 09/14/16 | (3 | ) | |
Nordson Corp. | Goldman Sachs | (961 | ) | USD | 68 | 09/14/16 | (5 | ) | |
Nordstrom, Inc. | Goldman Sachs | (2,382 | ) | USD | 155 | 06/30/16 | 14 | ||
NorthStar Asset Management Group, Inc. | Goldman Sachs | (3,497 | ) | USD | 51 | 09/14/16 | 7 | ||
Norwegian Cruise Line Holdings, Ltd. | Goldman Sachs | (1,201 | ) | USD | 76 | 06/30/16 | (8 | ) | |
NRG Energy, Inc. | Goldman Sachs | (17,369 | ) | USD | 224 | 06/30/16 | 190 | ||
Ocado Group PLC | Morgan Stanley | (8,371 | ) | GBP | 32 | 06/28/17 | (5 | ) | |
Occidental Petroleum Corp. | Goldman Sachs | (3,947 | ) | USD | 294 | 06/30/16 | 13 | ||
Odakyu Electric Railway Co., Ltd. | Goldman Sachs | (13,000 | ) | JPY | 15,444 | 06/30/16 | (3 | ) | |
OGE Energy Corp. | Goldman Sachs | (3,551 | ) | USD | 101 | 06/30/16 | — | ||
Old Mutual PLC | Morgan Stanley | (53,984 | ) | GBP | 115 | 06/28/17 | (4 | ) | |
Olympus Corp. | Goldman Sachs | (3,300 | ) | JPY | 13,547 | 06/30/16 | 7 | ||
Omnicom Group, Inc. | Goldman Sachs | (1,385 | ) | USD | 104 | 06/30/16 | (5 | ) | |
ONEOK, Inc. | Goldman Sachs | (5,910 | ) | USD | 200 | 06/30/16 | 30 | ||
O'Reilly Automotive, Inc. | Goldman Sachs | (85 | ) | USD | 23 | 06/30/16 | (4 | ) | |
Oriental Land Co., Ltd. | Goldman Sachs | (3,200 | ) | JPY | 23,622 | 10/11/16 | (7 | ) | |
Oshkosh Corp. | Goldman Sachs | (1,115 | ) | USD | 46 | 06/30/16 | — | ||
Owens-Illinois, Inc. | Goldman Sachs | (3,687 | ) | USD | 79 | 06/30/16 | 7 | ||
Palo Alto Networks, Inc. | Goldman Sachs | (2,061 | ) | USD | 332 | 06/30/16 | 31 | ||
Pandora Media, Inc. | Goldman Sachs | (1,537 | ) | USD | 18 | 06/30/16 | 7 | ||
PAREXEL International Corp. | Goldman Sachs | (1,113 | ) | USD | 70 | 10/17/16 | (2 | ) | |
Patterson-UTI Energy, Inc. | Goldman Sachs | (15,604 | ) | USD | 232 | 06/30/16 | 35 | ||
PBF Energy, Inc. | Goldman Sachs | (1,231 | ) | USD | 42 | 09/14/16 | (4 | ) | |
Penske Automotive Group, Inc. | Goldman Sachs | (292 | ) | USD | 14 | 09/14/16 | 1 | ||
Pentair PLC | Goldman Sachs | (987 | ) | USD | 55 | 09/14/16 | (2 | ) | |
People's United Financial, Inc. | Goldman Sachs | (17,232 | ) | USD | 275 | 06/30/16 | 7 | ||
PerkinElmer, Inc. | Goldman Sachs | (7,339 | ) | USD | 379 | 06/30/16 | 18 | ||
Pernod Ricard SA | Morgan Stanley | (2,702 | ) | EUR | 290 | 06/28/17 | 3 | ||
Petrofac, Ltd. | Morgan Stanley | (3,731 | ) | GBP | 31 | 06/28/17 | 6 |
See accompanying notes which are an integral part of the financial statements.
634 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||
Amounts in thousands (except shares) | |||||||||
Notional | Termination | Fair Value | |||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | ||||
Peyto Exploration & Development Corp. | Morgan Stanley | (968 | ) | CAD | 26 | 06/29/17 | 3 | ||
Platform Specialty Products Corp. | Goldman Sachs | (14,959 | ) | USD | 156 | 09/14/16 | 68 | ||
Polaris Industries, Inc. | Goldman Sachs | (1,724 | ) | USD | 194 | 06/30/16 | 66 | ||
Post Holdings, Inc. | Goldman Sachs | (2,723 | ) | USD | 175 | 06/30/16 | (31 | ) | |
Potash Corp. of Saskatchewan, Inc. | Morgan Stanley | (2,720 | ) | CAD | 72 | 06/29/17 | 25 | ||
PPL Corp. | Goldman Sachs | (338 | ) | USD | 12 | 06/30/16 | (2 | ) | |
Praxair, Inc. | Goldman Sachs | (1,650 | ) | USD | 183 | 06/30/16 | 18 | ||
Precision Drilling Corp. | Morgan Stanley | (13,089 | ) | CAD | 68 | 06/29/17 | 16 | ||
Premier, Inc. | Goldman Sachs | (860 | ) | USD | 29 | 10/17/16 | 2 | ||
Prosperity Bancshares, Inc. | Goldman Sachs | (542 | ) | USD | 28 | 06/30/16 | 4 | ||
PulteGroup, Inc. | Goldman Sachs | (1,471 | ) | USD | 27 | 09/14/16 | 4 | ||
QBE Insurance Group, Ltd. | Morgan Stanley | (2,387 | ) | AUD | 32 | 06/29/17 | 1 | ||
Qiagen NV | Goldman Sachs | (5,786 | ) | USD | 140 | 09/14/16 | 12 | ||
Qorvo, Inc. | Goldman Sachs | (1,221 | ) | USD | 54 | 06/30/16 | 46 | ||
QUALCOMM, Inc. | Goldman Sachs | (4,100 | ) | USD | 244 | 06/30/16 | 23 | ||
Questar Corp. | Goldman Sachs | (7,931 | ) | USD | 164 | 06/30/16 | 3 | ||
Ramsay Health Care Ltd. | Morgan Stanley | (681 | ) | AUD | 42 | 06/29/17 | (1 | ) | |
Range Resources Corp. | Goldman Sachs | (9,034 | ) | USD | 275 | 06/30/16 | 129 | ||
REA Group Ltd. | Morgan Stanley | (427 | ) | AUD | 21 | 06/29/17 | (1 | ) | |
Regal Beloit Corp. | Goldman Sachs | (1,639 | ) | USD | 105 | 06/30/16 | 16 | ||
Regeneron Pharmaceuticals, Inc. | Goldman Sachs | (1,165 | ) | USD | 649 | 06/30/16 | (47 | ) | |
Remy Cointreau SA | Morgan Stanley | (640 | ) | EUR | 41 | 06/28/17 | (2 | ) | |
Renault SA | Morgan Stanley | (1,752 | ) | EUR | 150 | 06/28/17 | 24 | ||
Restaurant Brands International, Inc. | Goldman Sachs | (6,487 | ) | USD | 261 | 06/30/16 | (8 | ) | |
Restaurant Brands International, Inc. | Morgan Stanley | (1,000 | ) | CAD | 52 | 06/29/17 | (3 | ) | |
Reynolds American, Inc. | Goldman Sachs | (7,604 | ) | USD | 367 | 06/30/16 | (76 | ) | |
Rice Energy, Inc. | Goldman Sachs | (11,021 | ) | USD | 168 | 06/30/16 | 63 | ||
Ricoh Co., Ltd. | Goldman Sachs | (71,900 | ) | JPY | 94,117 | 06/30/16 | (34 | ) | |
Rinnai Corp. | Goldman Sachs | (800 | ) | JPY | 7,704 | 06/30/16 | 2 | ||
Rite Aid Corp. | Goldman Sachs | (4,679 | ) | USD | 37 | 10/11/16 | (7 | ) | |
Rockwell Collins, Inc. | Goldman Sachs | (774 | ) | USD | 67 | 06/30/16 | 6 | ||
Rogers Communications, Inc. | Morgan Stanley | (9,229 | ) | CAD | 480 | 06/29/17 | (60 | ) | |
Rollins, Inc. | Goldman Sachs | (886 | ) | USD | 24 | 10/17/16 | 1 | ||
Rolls-Royce Holdings PLC | Morgan Stanley | (24,788 | ) | GBP | 170 | 06/28/17 | 55 | ||
Rolls-Royce Holdings PLC | Morgan Stanley | (2,297,847 | ) | GBP | 2 | 06/28/17 | (4 | ) | |
Roper Technologies, Inc. | Goldman Sachs | (1,287 | ) | USD | 240 | 06/30/16 | (13 | ) | |
Rotork PLC | Morgan Stanley | (5,978 | ) | GBP | 11 | 06/28/17 | 4 | ||
Royal Caribbean Cruises, Ltd. | Goldman Sachs | (1,195 | ) | USD | 118 | 06/30/16 | (22 | ) | |
RPM International, Inc. | Goldman Sachs | (1,151 | ) | USD | 53 | 06/30/16 | 5 | ||
RSA Insurance Group PLC | Morgan Stanley | (20,401 | ) | GBP | 86 | 06/28/17 | (4 | ) | |
RWE Aktiengesellschaft | Morgan Stanley | (21,316 | ) | EUR | 270 | 06/28/17 | (14 | ) | |
Ryder System, Inc. | Goldman Sachs | (571 | ) | USD | 41 | 06/30/16 | 10 | ||
salesforce.com, Inc. | Goldman Sachs | (2,473 | ) | USD | 192 | 06/30/16 | (12 | ) | |
Samsonite International SA | Morgan Stanley | (56,100 | ) | HKD | 1,287 | 06/29/17 | 28 | ||
SanDisk Corp. | Goldman Sachs | (3,898 | ) | USD | 300 | 09/14/16 | (75 | ) | |
Sands China, Ltd. | Morgan Stanley | (9,200 | ) | HKD | 259 | 06/29/17 | — | ||
SBA Communications Corp. | Goldman Sachs | (5,448 | ) | USD | 648 | 06/30/16 | (10 | ) | |
SBM Offshore NV | Morgan Stanley | (3,094 | ) | EUR | 39 | 06/28/17 | (4 | ) | |
Schibsted ASA | Morgan Stanley | (9,202 | ) | NOK | 2,623 | 06/28/17 | (40 | ) | |
Schneider Electric SE | Morgan Stanley | (1,752 | ) | EUR | 97 | 06/28/17 | 20 | ||
Sealed Air Corp. | Goldman Sachs | (3,342 | ) | USD | 164 | 06/30/16 | 11 | ||
Seattle Genetics, Inc. | Goldman Sachs | (4,296 | ) | USD | 178 | 06/30/16 | 18 | ||
SEEK, Ltd. | Morgan Stanley | (145,165 | ) | AUD | 1,862 | 06/29/17 | 108 | ||
SEIBU Holdings, Inc. | Goldman Sachs | (19,000 | ) | JPY | 46,759 | 06/30/16 | 80 | ||
Sempra Energy | Goldman Sachs | (1,020 | ) | USD | 104 | 06/30/16 | (3 | ) | |
Sensata Technologies Holding NV | Goldman Sachs | (19,394 | ) | USD | 933 | 06/30/16 | 89 | ||
Serco Group PLC | Morgan Stanley | (53,279 | ) | GBP | 50 | 06/28/17 | 20 | ||
ServiceMaster Global Holdings, Inc. | Goldman Sachs | (922 | ) | USD | 33 | 10/11/16 | (1 | ) | |
ServiceNow, Inc. | Goldman Sachs | (2,952 | ) | USD | 241 | 06/30/16 | (14 | ) | |
SGS SA | Morgan Stanley | (36 | ) | CHF | 68 | 06/28/17 | (7 | ) | |
Shimano, Inc. | Goldman Sachs | (100 | ) | JPY | 1,918 | 10/11/16 | — |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 635
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||
Amounts in thousands (except shares) | |||||||||
Notional | Termination | Fair Value | |||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | ||||
Shiseido Co., Ltd. | Goldman Sachs | (11,000 | ) | JPY | 31,801 | 06/30/16 | (11 | ) | |
Siemens Aktiengesellschaft | Morgan Stanley | (2,513 | ) | EUR | 230 | 06/28/17 | 9 | ||
Signature Bank | Goldman Sachs | (1,072 | ) | USD | 160 | 06/30/16 | (1 | ) | |
Signature Metals, Ltd. | Morgan Stanley | (4,371 | ) | GBP | 151 | 06/28/17 | (32 | ) | |
Signet Jewelers, Ltd. | Goldman Sachs | (1,209 | ) | USD | 182 | 06/30/16 | (24 | ) | |
Silicon Laboratories, Inc. | Goldman Sachs | (919 | ) | USD | 46 | 09/14/16 | (6 | ) | |
Silver Wheaton Corp. | Morgan Stanley | (12,606 | ) | CAD | 224 | 06/29/17 | 19 | ||
Singapore Post, Ltd. | Morgan Stanley | (8,100 | ) | SGD | 15 | 06/30/17 | (1 | ) | |
Sirius XM Holdings, Inc. | Goldman Sachs | (65,377 | ) | USD | 267 | 06/30/16 | (16 | ) | |
Six Flags Entertainment Corp. | Goldman Sachs | (631 | ) | USD | 33 | 10/11/16 | (3 | ) | |
SLM Corp. | Goldman Sachs | (1,449 | ) | USD | 10 | 10/17/16 | — | ||
SoftBank Group Corp. | Goldman Sachs | (7,600 | ) | JPY | 51,657 | 06/30/16 | 38 | ||
Sohgo Security Services Co., Ltd. | Goldman Sachs | (800 | ) | JPY | 4,696 | 10/11/16 | (1 | ) | |
Sotheby's | Goldman Sachs | (6,952 | ) | USD | 241 | 06/30/16 | 79 | ||
South32 Ltd. | Morgan Stanley | (10,638 | ) | AUD | 16 | 06/29/17 | (1 | ) | |
Southwestern Energy Co. | Goldman Sachs | (9,377 | ) | USD | 104 | 06/30/16 | 75 | ||
Spectra Energy Corp. | Goldman Sachs | (12,126 | ) | USD | 346 | 06/30/16 | 50 | ||
Spectrum Brands Holdings, Inc. | Goldman Sachs | (4,349 | ) | USD | 417 | 06/30/16 | 23 | ||
Spirit Airlines, Inc. | Goldman Sachs | (3,357 | ) | USD | 125 | 06/30/16 | 86 | ||
Splunk, Inc. | Goldman Sachs | (4,685 | ) | USD | 263 | 06/30/16 | 50 | ||
Sports Direct International PLC | Morgan Stanley | (1,281 | ) | GBP | 9 | 06/28/17 | 1 | ||
Sprint Corp. | Goldman Sachs | (70,951 | ) | USD | 336 | 06/30/16 | (77 | ) | |
Sprouts Farmers Market, Inc. | Goldman Sachs | (26,804 | ) | USD | 546 | 06/30/16 | 199 | ||
St. James's Place PLC | Morgan Stanley | (1,644 | ) | GBP | 16 | 06/28/17 | (1 | ) | |
Standard Life PLC | Morgan Stanley | (29,392 | ) | GBP | 124 | 06/28/17 | 16 | ||
Stanley Electric Co., Ltd. | Goldman Sachs | (1,700 | ) | JPY | 3,951 | 06/30/16 | 3 | ||
Stericycle, Inc. | Goldman Sachs | (5,318 | ) | USD | 645 | 06/30/16 | 76 | ||
Subsea 7 SA | Morgan Stanley | (2,560 | ) | NOK | 170 | 06/28/17 | — | ||
Suez Environnement Co. SA | Morgan Stanley | (4,021 | ) | EUR | 70 | 06/28/17 | 2 | ||
Sulzer AG | Morgan Stanley | (707 | ) | CHF | 69 | 06/28/17 | 2 | ||
Sumco Corp. | Goldman Sachs | (41,500 | ) | JPY | 50,962 | 06/30/16 | 126 | ||
Sumitomo Dainippon Pharma Co., Ltd. | Goldman Sachs | (3,900 | ) | JPY | 5,238 | 09/14/16 | (3 | ) | |
Sumitomo Metal Mining Co., Ltd. | Goldman Sachs | (1,000 | ) | JPY | 1,511 | 09/14/16 | — | ||
Suncor Energy, Inc. | Morgan Stanley | (3,182 | ) | CAD | 124 | 06/29/17 | (10 | ) | |
SunEdison, Inc. | Goldman Sachs | (37,592 | ) | USD | 274 | 08/04/16 | 100 | ||
SunPower Corp. | Goldman Sachs | (594 | ) | USD | 16 | 06/30/16 | 2 | ||
Suntory Beverage & Food, Ltd. | Goldman Sachs | (2,800 | ) | JPY | 13,748 | 06/30/16 | 1 | ||
SVB Financial Group | Goldman Sachs | (558 | ) | USD | 68 | 06/30/16 | 14 | ||
Swire Properties, Ltd. | Morgan Stanley | (20,600 | ) | HKD | 481 | 06/29/17 | 2 | ||
Synaptics, Inc. | Goldman Sachs | (178 | ) | USD | 15 | 10/17/16 | — | ||
Synovus Financial Corp. | Goldman Sachs | (2,519 | ) | USD | 80 | 06/30/16 | (1 | ) | |
Sysmex Corp. | Goldman Sachs | (800 | ) | JPY | 5,576 | 06/30/16 | 3 | ||
Takashimaya Co., Ltd. | Goldman Sachs | (8,000 | ) | JPY | 8,696 | 09/14/16 | (7 | ) | |
Targa Resources Corp. | Goldman Sachs | (5,270 | ) | USD | 301 | 06/30/16 | 168 | ||
Technip SA | Morgan Stanley | (3,384 | ) | EUR | 161 | 06/28/17 | — | ||
Techtronic Industries Co., Ltd. | Morgan Stanley | (26,000 | ) | HKD | 740 | 06/29/17 | (8 | ) | |
Teck Resources, Ltd. | Morgan Stanley | (12,447 | ) | CAD | 95 | 06/29/17 | 30 | ||
Teekay Corp. | Goldman Sachs | (5,637 | ) | USD | 181 | 06/30/16 | 63 | ||
Telecom Italia SpA | Morgan Stanley | (15,851 | ) | EUR | 20 | 06/28/17 | (2 | ) | |
Telefonica Deutschland Holding AG | Morgan Stanley | (7,149 | ) | EUR | 42 | 06/28/17 | (3 | ) | |
Tempur Sealy International, Inc. | Goldman Sachs | (3,189 | ) | USD | 248 | 06/30/16 | (20 | ) | |
Tenaris SA | Morgan Stanley | (33,811 | ) | EUR | 386 | 06/28/17 | 28 | ||
Tenet Healthcare Corp. | Goldman Sachs | (6,345 | ) | USD | 199 | 06/30/16 | 166 | ||
TerraForm Power, Inc. | Goldman Sachs | (7,710 | ) | USD | 141 | 10/17/16 | 5 | ||
Terumo Corp. | Goldman Sachs | (12,300 | ) | JPY | 44,403 | 06/30/16 | (64 | ) | |
Tesco PLC | Morgan Stanley | (171,883 | ) | GBP | 315 | 06/28/17 | 90 | ||
Tesla Motors, Inc. | Goldman Sachs | (3,523 | ) | USD | 729 | 06/30/16 | 189 | ||
The ADT Corp. | Goldman Sachs | (8,614 | ) | USD | 285 | 06/30/16 | 3 | ||
The Charles Schwab Corp. | Goldman Sachs | (21,723 | ) | USD | 663 | 06/30/16 | 63 | ||
The Chugoku Electric Power Co., Inc. | Goldman Sachs | (7,100 | ) | JPY | 13,021 | 06/30/16 | (4 | ) | |
The Cooper Companies, Inc. | Goldman Sachs | (1,622 | ) | USD | 247 | 06/30/16 | 40 |
See accompanying notes which are an integral part of the financial statements.
636 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||
Amounts in thousands (except shares) | |||||||||
Notional | Termination | Fair Value | |||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | ||||
The Hain Celestial Group, Inc. | Goldman Sachs | (4,605 | ) | USD | 230 | 06/30/16 | 78 | ||
The Hong Kong and China Gas Co., Ltd. | Morgan Stanley | (222,000 | ) | HKD | 3,494 | 06/29/17 | 8 | ||
The Howard Hughes Corp. | Goldman Sachs | (1,647 | ) | USD | 204 | 06/30/16 | 22 | ||
The J. M. Smucker Co. | Goldman Sachs | (2,269 | ) | USD | 266 | 06/30/16 | (15 | ) | |
The Kansai Electric Power Co., Inc. | Goldman Sachs | (7,200 | ) | JPY | 11,218 | 06/30/16 | (12 | ) | |
The Manitowoc Co., Inc. | Goldman Sachs | (1,446 | ) | USD | 22 | 10/11/16 | 1 | ||
The Middleby Corp. | Goldman Sachs | (864 | ) | USD | 101 | 09/14/16 | (6 | ) | |
The Priceline Group, Inc. | Goldman Sachs | (50 | ) | USD | 73 | 06/30/16 | (16 | ) | |
The Royal Bank of Scotland Group PLC | Morgan Stanley | (2,304 | ) | GBP | 7 | 06/28/17 | 2 | ||
The Southern Co. | Goldman Sachs | (3,505 | ) | USD | 158 | 06/30/16 | (12 | ) | |
The Swatch Group AG | Morgan Stanley | (1,175 | ) | CHF | 455 | 06/28/17 | (11 | ) | |
The Ultimate Software Group, Inc. | Goldman Sachs | (1,698 | ) | USD | 347 | 06/30/16 | (63 | ) | |
The Valspar Corp. | Goldman Sachs | (485 | ) | USD | 39 | 09/14/16 | (3 | ) | |
The Walt Disney Co. | Goldman Sachs | (670 | ) | USD | 76 | 06/30/16 | — | ||
The Weir Group PLC | Morgan Stanley | (4,989 | ) | GBP | 53 | 06/28/17 | 49 | ||
The WhiteWave Foods Co. | Goldman Sachs | (1,436 | ) | USD | 59 | 06/30/16 | 10 | ||
ThyssenKrupp AG | Morgan Stanley | (690 | ) | EUR | 13 | 06/28/17 | 5 | ||
Tiffany & Co. | Goldman Sachs | (928 | ) | USD | 77 | 06/30/16 | 11 | ||
T-Mobile US, Inc. | Goldman Sachs | (5,779 | ) | USD | 219 | 06/30/16 | 11 | ||
Toshiba Corp. | Goldman Sachs | (98,000 | ) | JPY | 33,624 | 06/30/16 | 64 | ||
TOTAL SA | Morgan Stanley | (2,150 | ) | EUR | 95 | 06/28/17 | (12 | ) | |
TOTO, Ltd. | Goldman Sachs | (4,000 | ) | JPY | 16,520 | 06/30/16 | 14 | ||
Tourmaline Oil Corp. | Morgan Stanley | (2,554 | ) | CAD | 69 | 06/29/17 | 12 | ||
Toyo Seikan Group Holdings, Ltd. | Goldman Sachs | (2,100 | ) | JPY | 4,939 | 09/14/16 | (7 | ) | |
Toyota Industries Corp. | Goldman Sachs | (4,500 | ) | JPY | 28,845 | 06/30/16 | 27 | ||
Toyota Motor Corp. | Goldman Sachs | (2,500 | ) | JPY | 18,673 | 09/14/16 | (3 | ) | |
TransAlta Corp. | Morgan Stanley | (2,467 | ) | CAD | 15 | 06/29/17 | 1 | ||
TransCanada Corp. | Morgan Stanley | (6,691 | ) | CAD | 294 | 06/29/17 | 24 | ||
TransDigm Group, Inc. | Goldman Sachs | (2,757 | ) | USD | 606 | 06/30/16 | 25 | ||
TreeHouse Foods, Inc. | Goldman Sachs | (4,316 | ) | USD | 370 | 06/30/16 | (37 | ) | |
TRI Pointe Group, Inc. | Goldman Sachs | (4,327 | ) | USD | 56 | 10/17/16 | 6 | ||
Trimble Navigation, Ltd. | Goldman Sachs | (4,404 | ) | USD | 100 | 06/30/16 | (11 | ) | |
TripAdvisor, Inc. | Goldman Sachs | (3,555 | ) | USD | 298 | 06/30/16 | (18 | ) | |
Tryg A/S | Morgan Stanley | (1,086 | ) | DKK | 132 | 06/28/17 | 3 | ||
Twitter, Inc. | Goldman Sachs | (15,188 | ) | USD | 432 | 06/30/16 | 59 | ||
UCB SA | Morgan Stanley | (649 | ) | EUR | 51 | 06/28/17 | (9 | ) | |
UGI Corp. | Goldman Sachs | (695 | ) | USD | 25 | 10/11/16 | (1 | ) | |
Ulta Salon, Cosmetics & Fragrance, Inc. | Goldman Sachs | (173 | ) | USD | 30 | 06/30/16 | (3 | ) | |
Under Armour, Inc. | Goldman Sachs | (5,060 | ) | USD | 481 | 06/30/16 | (47 | ) | |
Unicharm Corp. | Goldman Sachs | (21,100 | ) | JPY | 54,755 | 06/30/16 | 61 | ||
United Natural Foods, Inc. | Goldman Sachs | (2,598 | ) | USD | 131 | 06/30/16 | 36 | ||
United Rentals, Inc. | Goldman Sachs | (2,280 | ) | USD | 171 | 06/30/16 | 34 | ||
Urban Outfitters, Inc. | Goldman Sachs | (1,544 | ) | USD | 44 | 06/30/16 | 11 | ||
USG Corp. | Goldman Sachs | (24,722 | ) | USD | 583 | 06/30/16 | 113 | ||
Valeant Pharmaceuticals International, Inc. | Morgan Stanley | (1,725 | ) | CAD | 211 | 06/29/17 | 240 | ||
Value Partners Group, Ltd. | Morgan Stanley | (37,000 | ) | HKD | 306 | 06/29/17 | 2 | ||
Vantiv, Inc. | Goldman Sachs | (1,410 | ) | USD | 71 | 06/30/16 | (16 | ) | |
Veeva Systems, Inc. | Goldman Sachs | (1,657 | ) | USD | 42 | 10/11/16 | (2 | ) | |
VeriFone Systems, Inc. | Goldman Sachs | (3,646 | ) | USD | 110 | 06/30/16 | 19 | ||
Verisk Analytics, Inc. | Goldman Sachs | (2,287 | ) | USD | 164 | 09/14/16 | 14 | ||
Vermilion Energy, Inc. | Morgan Stanley | (3,058 | ) | CAD | 141 | 06/29/17 | 10 | ||
Vertex Pharmaceuticals, Inc. | Goldman Sachs | (1,376 | ) | USD | 172 | 06/30/16 | 5 | ||
Viavi Solutions, Inc. | Goldman Sachs | (14,382 | ) | USD | 86 | 06/30/16 | 59 | ||
Visa, Inc. | Goldman Sachs | (6,583 | ) | USD | 511 | 06/30/16 | (58 | ) | |
Vista Outdoor, Inc. | Goldman Sachs | (1,038 | ) | USD | 46 | 09/14/16 | — | ||
Visteon Corp. | Goldman Sachs | (1,580 | ) | USD | 172 | 08/04/16 | (16 | ) | |
Volkswagen Aktiengesellschaft | Morgan Stanley | (1,445 | ) | EUR | 158 | 06/28/17 | 97 | ||
Vulcan Materials Co. | Goldman Sachs | (1,356 | ) | USD | 131 | 06/30/16 | (14 | ) | |
W. R. Grace & Co. | Goldman Sachs | (1,831 | ) | USD | 184 | 06/30/16 | 4 | ||
WABCO Holdings, Inc. | Goldman Sachs | (444 | ) | USD | 50 | 06/30/16 | 2 | ||
Walgreens Boots Alliance, Inc. | Goldman Sachs | (2,159 | ) | USD | 183 | 06/30/16 | 4 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 637
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | ||||||||||||||
Amounts in thousands (except shares) | ||||||||||||||
Notional | Termination | Fair Value | ||||||||||||
Underlying Reference Entity | Counterparty | Shares | Amount | Date | $ | |||||||||
Waste Connections, Inc. | Goldman Sachs | (1,469 | ) | USD | 80 | 06/30/16 | (9 | ) | ||||||
Weatherford International PLC | Goldman Sachs | (15,335 | ) | USD | 157 | 09/14/16 | (10 | ) | ||||||
WEC Energy Group, Inc. | Goldman Sachs | (14,428 | ) | USD | 744 | 06/30/16 | (14 | ) | ||||||
WellCare Health Plans, Inc. | Goldman Sachs | (2,902 | ) | USD | 257 | 06/30/16 | (1 | ) | ||||||
Westpac Banking Corp. | Morgan Stanley | (8,047 | ) | AUD | 253 | 06/29/17 | 9 | |||||||
Westpac Banking Corp. | Morgan Stanley | (349 | ) | AUD | 2 | 06/29/17 | (1 | ) | ||||||
WEX, Inc. | Goldman Sachs | (460 | ) | USD | 41 | 06/30/16 | 12 | |||||||
Whiting Petroleum Corp. | Goldman Sachs | (718 | ) | USD | 12 | 06/30/16 | 5 | |||||||
Willis Group Holdings PLC | Goldman Sachs | (816 | ) | USD | 36 | 06/30/16 | 2 | |||||||
Wirecard AG | Morgan Stanley | (4,200 | ) | EUR | 197 | 06/28/17 | (54 | ) | ||||||
WisdomTree Investments, Inc. | Goldman Sachs | (20,453 | ) | USD | 393 | 09/14/16 | (45 | ) | ||||||
Woolworths, Ltd. | Morgan Stanley | (3,573 | ) | AUD | 86 | 06/29/17 | 9 | |||||||
Workday, Inc. | Goldman Sachs | (2,085 | ) | USD | 165 | 06/30/16 | (1 | ) | ||||||
Wynn Macau, Ltd. | Morgan Stanley | (12,400 | ) | HKD | 133 | 06/29/17 | 6 | |||||||
Wynn Resorts, Ltd. | Goldman Sachs | (4,512 | ) | USD | 316 | 06/30/16 | 69 | |||||||
Yahoo Japan Corp. | Goldman Sachs | (67,600 | ) | JPY | 34,814 | 06/30/16 | (3 | ) | ||||||
Yakult Honsha Co., Ltd. | Goldman Sachs | (7,700 | ) | JPY | 49,588 | 06/30/16 | 60 | |||||||
Yamana Gold, Inc. | Morgan Stanley | (16,351 | ) | CAD | 47 | 06/29/17 | (5 | ) | ||||||
Yamato Holdings Co., Ltd. | Goldman Sachs | (9,900 | ) | JPY | 23,666 | 06/30/16 | (3 | ) | ||||||
YASKAWA Electric Corp. | Goldman Sachs | (24,600 | ) | JPY | 35,596 | 06/30/16 | 11 | |||||||
Yokogawa Electric Corp. | Goldman Sachs | (13,700 | ) | JPY | 18,618 | 06/30/16 | 28 | |||||||
Zebra Technologies Corp. | Goldman Sachs | (3,789 | ) | USD | 291 | 06/30/16 | 76 | |||||||
Zions BanCorp. | Goldman Sachs | (7,908 | ) | USD | 228 | 06/30/16 | 29 | |||||||
Zodiac Aerospace | Morgan Stanley | (20,669 | ) | EUR | 475 | 06/28/17 | 141 | |||||||
Total Fair Value of Open Total Return Swap Contracts Premiums Paid (Received) - $(5) (å) | 4,862 | |||||||||||||
(*) Total return swaps (which includes index swaps) are agreements between counterparties to exchange cash flows, one based on a | ||||||||||||||
market-linked returns of an individual asset or a basket of assets (i.e. an index), and the other on a fixed or floating rate. The | ||||||||||||||
fixed fees embedded in the total return swaps held as of October 31, 2015 ranged from 0.25% to 0.45%. | ||||||||||||||
Interest Rate Swap Contracts | ||||||||||||||
Amounts in thousands | ||||||||||||||
Termination | Fair Value | |||||||||||||
Counterparty | Notional Amount | Fund Receives | Fund Pays | Date | $ | |||||||||
Citigroup | NOK | 125,000 | Six Month NIBOR | 2.035% | 01/14/17 | (376 | ) | |||||||
Citigroup | MXN | 43,000 | 6.630 | % | Mexico Interbank 28 Day Deposit Rate | 12/18/23 | 106 | |||||||
Citigroup | CAD | 100 | Canadian Dealer Offer Rate | 3.500% | 06/20/44 | (17 | ) | |||||||
Credit Suisse | MXN | 11,400 | 5.270 | % | Mexico Interbank 28 Day Deposit Rate | 02/05/20 | 5 | |||||||
Credit Suisse | MXN | 7,500 | 5.670 | % | Mexico Interbank 28 Day Deposit Rate | 06/01/20 | 9 | |||||||
Credit Suisse | MXN | 2,700 | 5.615 | % | Mexico Interbank 28 Day Deposit Rate | 06/02/20 | 3 | |||||||
Credit Suisse | MXN | 7,200 | 5.535 | % | Mexico Interbank 28 Day Deposit Rate | 06/11/20 | 6 | |||||||
Credit Suisse | MXN | 3,200 | 5.610 | % | Mexico Interbank 28 Day Deposit Rate | 07/07/21 | 1 | |||||||
Credit Suisse | MXN | 5,200 | 5.430 | % | Mexico Interbank 28 Day Deposit Rate | 11/17/21 | (4 | ) | ||||||
Credit Suisse | USD | 500 | Three Month LIBOR | 2.150% | 04/30/22 | (14 | ) | |||||||
Credit Suisse | USD | 800 | Three Month LIBOR | 2.000% | 06/19/23 | (13 | ) | |||||||
Credit Suisse | JPY | 40,000 | Six Month LIBOR | 1.000% | 09/18/23 | (18 | ) | |||||||
Credit Suisse | USD | 1,800 | Three Month LIBOR | 2.750% | 06/17/25 | (132 | ) | |||||||
Credit Suisse | GBP | 4,200 | Six Month LIBOR | 2.400% | 06/17/25 | (7 | ) | |||||||
Credit Suisse | EUR | 5,500 | 1.600 | % | Six Month EURIBOR | 06/17/25 | 40 | |||||||
Credit Suisse | JPY | 342,000 | Six Month LIBOR | 1.500% | 06/19/28 | (307 | ) | |||||||
Credit Suisse | GBP | 400 | Six Month LIBOR | 3.750% | 09/18/43 | (92 | ) | |||||||
JPMorgan Chase | NZD | 208,000 | 3.710 | % | NZD-BBR-FRA | 04/21/16 | 643 | |||||||
JPMorgan Chase | MXN | 914,000 | 5.400 | % | Mexico Interbank 28 Day Deposit Rate | 10/11/17 | 366 | |||||||
JPMorgan Chase | INR | 458,000 | 6.903 | % | Six Month MIBOR | 01/09/20 | 45 | |||||||
JPMorgan Chase | INR | 1,430,000 | 6.425 | % | Six Month MIBOR | 01/20/20 | (211 | ) | ||||||
JPMorgan Chase | MXN | 40,000 | 6.535 | % | Mexico Interbank 28 Day Deposit Rate | 01/10/24 | 77 | |||||||
Mexico Interbank 28 Day | ||||||||||||||
JPMorgan Chase | MXN | 80,000 | Deposit Rate | 6.130% | 05/27/24 | 7 | ||||||||
Morgan Stanley | GBP | 500 | Six Month LIBOR | 3.758% | 09/18/43 | (115 | ) |
See accompanying notes which are an integral part of the financial statements.
638 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Interest Rate Swap Contracts | |||||||||||
Amounts in thousands | |||||||||||
Termination | Fair Value | ||||||||||
Counterparty | Notional Amount | Fund Receives | Fund Pays | Date | $ | ||||||
Total Fair Value on Open Interest Rate Swap Contracts Premiums Paid (Received) - $(53) (å) | 2 | ||||||||||
Credit Default Swap Contracts | |||||||||||
Amounts in thousands | |||||||||||
Corporate Issues | |||||||||||
Implied | Fund (Pays)/ | ||||||||||
Credit | Receives | Termination | Fair Value | ||||||||
Reference Entity | Counterparty | Spread | Notional Amount | Fixed Rate | Date | $ | |||||
21st Centry Fox America, Inc. | JPMorgan Chase | 0.513 | % | USD | 2,000 | 1.000 | % | 09/20/20 | 49 | ||
Airbus Group | JPMorgan Chase | 0.624 | % | EUR | 1,000 | (1.000 | %) | 09/20/20 | (21 | ) | |
Altria Group, Inc. | JPMorgan Chase | 0.311 | % | USD | 2,000 | 1.000 | % | 09/20/20 | 68 | ||
Altria Group, Inc. | JPMorgan Chase | 0.328 | % | USD | 500 | 1.000 | % | 12/20/20 | 17 | ||
American Education Services | JPMorgan Chase | 3.484 | % | USD | 250 | (5.000 | %) | 09/20/20 | (18 | ) | |
American Education Services | JPMorgan Chase | 3.484 | % | USD | 1,000 | 5.000 | % | 09/20/20 | 73 | ||
American Electric Power Co. Inc. | JPMorgan Chase | 0.210 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (41 | ) | |
American Electric Power Co. Inc. | JPMorgan Chase | 0.210 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (41 | ) | |
Amgen, Inc. | JPMorgan Chase | 0.538 | % | USD | 2,000 | 1.000 | % | 09/20/20 | 46 | ||
Anadarko Petroleum Corp. | JPMorgan Chase | 1.402 | % | USD | 1,000 | (1.000 | %) | 06/20/20 | 17 | ||
Anadarko Petroleum Corp. | JPMorgan Chase | 1.402 | % | USD | 3,000 | 1.000 | % | 06/20/20 | (50 | ) | |
Anheuser-Busch InBev | JPMorgan Chase | 0.815 | % | EUR | 1,000 | 1.000 | % | 09/20/20 | 11 | ||
Anheuser-Busch InBev | JPMorgan Chase | 0.851 | % | EUR | 500 | 1.000 | % | 12/20/20 | 5 | ||
Apache Corp. | JPMorgan Chase | 1.484 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | 22 | ||
ArcelorMittal | JPMorgan Chase | 6.019 | % | EUR | 500 | 1.000 | % | 12/20/20 | (115 | ) | |
Arrow Electonics, Inc. | JPMorgan Chase | 0.591 | % | USD | 1,000 | (1.000 | %) | 09/20/20 | (21 | ) | |
Arrow Electonics, Inc. | JPMorgan Chase | 0.591 | % | USD | 2,000 | (1.000 | %) | 09/20/20 | (41 | ) | |
ArvinMeritor | JPMorgan Chase | 3.383 | % | USD | 1,000 | 5.000 | % | 06/20/20 | 74 | ||
AT&T, Inc. | JPMorgan Chase | 0.648 | % | USD | 1,000 | 1.000 | % | 03/20/20 | 16 | ||
AT&T, Inc. | JPMorgan Chase | 0.796 | % | USD | 1,000 | 1.000 | % | 12/20/20 | 11 | ||
AutoZone, Inc. | JPMorgan Chase | 0.321 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (35 | ) | |
Avnet, Inc. | JPMorgan Chase | 0.558 | % | USD | 1,500 | (1.000 | %) | 06/20/20 | (32 | ) | |
Avnet, Inc. | JPMorgan Chase | 0.609 | % | USD | 500 | (1.000 | %) | 09/20/20 | (10 | ) | |
Avnet, Inc. | JPMorgan Chase | 0.609 | % | USD | 1,000 | (1.000 | %) | 09/20/20 | (20 | ) | |
BAE Systems PLC | JPMorgan Chase | 0.582 | % | EUR | 1,000 | 1.000 | % | 03/20/20 | 21 | ||
BAE Systems PLC | JPMorgan Chase | 0.582 | % | EUR | 500 | 1.000 | % | 03/20/20 | 11 | ||
BAE Systems PLC | JPMorgan Chase | 0.615 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | 21 | ||
Barrick Gold Corp. | JPMorgan Chase | 2.145 | % | USD | 500 | 1.000 | % | 09/20/20 | (26 | ) | |
Barrick Gold Corp. | JPMorgan Chase | 2.145 | % | USD | 2,000 | (1.000 | %) | 09/20/20 | 103 | ||
BASF SE | JPMorgan Chase | 0.329 | % | EUR | 1,000 | (1.000 | %) | 06/20/20 | (36 | ) | |
BASF SE | JPMorgan Chase | 0.363 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (37 | ) | |
Bayer AG | JPMorgan Chase | 0.337 | % | EUR | 3,000 | (1.000 | %) | 12/20/19 | (95 | ) | |
Bayer AG | JPMorgan Chase | 0.337 | % | EUR | 2,000 | 1.000 | % | 12/20/19 | 63 | ||
Bayer AG | JPMorgan Chase | 0.398 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (35 | ) | |
Bayerische Motoren Werke AG | JPMorgan Chase | 0.681 | % | EUR | 500 | 1.000 | % | 12/20/20 | 10 | ||
Bayerische Motoren Werke AG | JPMorgan Chase | 0.681 | % | EUR | 1,000 | 1.000 | % | 12/20/20 | 19 | ||
Berkshire Hathaway, Inc. | JPMorgan Chase | 0.569 | % | USD | 1,000 | 1.000 | % | 12/20/20 | 23 | ||
Berkshire Hathaway, Inc. | JPMorgan Chase | 0.569 | % | USD | 1,000 | 1.000 | % | 12/20/20 | 23 | ||
BestBuy Co., Inc. | JPMorgan Chase | 1.756 | % | USD | 1,000 | (5.000 | %) | 12/20/20 | (163 | ) | |
BHP Billiton | JPMorgan Chase | 1.045 | % | USD | 500 | (1.000 | %) | 06/20/20 | — | ||
BHP Billiton | JPMorgan Chase | 1.045 | % | USD | 1,000 | (1.000 | %) | 06/20/20 | 1 | ||
Boston Scientific Corp. | JPMorgan Chase | 0.558 | % | USD | 2,500 | 1.000 | % | 12/20/20 | 58 | ||
Bouygues | JPMorgan Chase | 0.453 | % | EUR | 2,000 | 1.000 | % | 12/20/19 | 53 | ||
Bouygues | JPMorgan Chase | 0.453 | % | EUR | 3,000 | (1.000 | %) | 12/20/19 | (79 | ) | |
Bouygues | JPMorgan Chase | 0.528 | % | EUR | 500 | (1.000 | %) | 09/20/20 | (13 | ) | |
BP PLC | JPMorgan Chase | 0.828 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (11 | ) | |
BP PLC | JPMorgan Chase | 0.828 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (11 | ) | |
British American Tobacco PLC | JPMorgan Chase | 0.408 | % | EUR | 2,000 | (1.000 | %) | 09/20/20 | (66 | ) | |
British American Tobacco PLC | JPMorgan Chase | 0.408 | % | EUR | 2,000 | 1.000 | % | 09/20/20 | 66 | ||
British American Tobacco PLC | JPMorgan Chase | 0.430 | % | EUR | 1,500 | 1.000 | % | 12/20/20 | 50 | ||
British Telecommunications PLC | JPMorgan Chase | 0.754 | % | EUR | 2,000 | 1.000 | % | 09/20/20 | 29 | ||
Canadian Resources Ltd. | JPMorgan Chase | 1.764 | % | USD | 1,000 | 1.000 | % | 09/20/20 | (34 | ) | |
Canadian Resources Ltd. | JPMorgan Chase | 1.764 | % | USD | 500 | 1.000 | % | 09/20/20 | (17 | ) | |
Cardinal Health, Inc. | JPMorgan Chase | 0.199 | % | USD | 2,000 | (1.000 | %) | 12/20/20 | (83 | ) | |
Carlsberg Breweries A/S | JPMorgan Chase | 0.877 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (8 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 639
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Credit Default Swap Contracts | ||||||||||
Amounts in thousands | ||||||||||
Corporate Issues | ||||||||||
Implied | Fund (Pays)/ | |||||||||
Credit | Receives | Termination | Fair Value | |||||||
Reference Entity | Counterparty | Spread | Notional Amount | Fixed Rate | Date | $ | ||||
Carlsberg Breweries A/S | JPMorgan Chase | 0.877 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (1 | ) |
Carnival Corp. | JPMorgan Chase | 0.388 | % | USD | 2,000 | 1.000 | % | 03/20/20 | 55 | |
Casino Guichard-Perrachon | JPMorgan Chase | 2.242 | % | EUR | 2,000 | 1.000 | % | 09/20/20 | (124 | ) |
Casino Guichard-Perrachon | JPMorgan Chase | 2.242 | % | EUR | 500 | (1.000 | %) | 09/20/20 | 31 | |
Catepillar, Inc. | JPMorgan Chase | 0.707 | % | USD | 1,000 | 1.000 | % | 09/20/20 | 15 | |
Catepillar, Inc. | JPMorgan Chase | 0.707 | % | USD | 1,000 | 1.000 | % | 09/20/20 | 15 | |
Centrica PLC | JPMorgan Chase | 0.747 | % | EUR | 500 | (1.000 | %) | 06/20/20 | (7 | ) |
Centrica PLC | JPMorgan Chase | 0.747 | % | EUR | 1,000 | (1.000 | %) | 06/20/20 | (14 | ) |
Centrica PLC | JPMorgan Chase | 0.813 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (12 | ) |
CNH Industrial NV | JPMorgan Chase | 3.304 | % | EUR | 250 | 5.000 | % | 06/20/20 | 21 | |
CNH Industrial NV | JPMorgan Chase | 3.304 | % | EUR | 500 | 5.000 | % | 06/20/20 | 43 | |
Comcast | JPMorgan Chase | 0.308 | % | USD | 1,500 | (1.000 | %) | 12/20/20 | (54 | ) |
Comcast | JPMorgan Chase | 0.308 | % | USD | 1,500 | 1.000 | % | 12/20/20 | 54 | |
Comcast | JPMorgan Chase | 0.308 | % | USD | 1,000 | 1.000 | % | 12/20/20 | 36 | |
Compass Group PLC | JPMorgan Chase | 0.403 | % | EUR | 1,000 | 1.000 | % | 12/20/20 | 35 | |
ConAgra Foods, Inc. | JPMorgan Chase | 0.846 | % | USD | 1,000 | 1.000 | % | 09/20/20 | 8 | |
ConAgra Foods, Inc. | JPMorgan Chase | 0.895 | % | USD | 1,500 | 1.000 | % | 12/20/20 | 9 | |
ConocoPhillips | JPMorgan Chase | 0.666 | % | USD | 1,500 | 1.000 | % | 09/20/20 | 25 | |
ConocoPhillips | JPMorgan Chase | 0.666 | % | USD | 1,500 | (1.000 | %) | 09/20/20 | (25 | ) |
ConocoPhillips | JPMorgan Chase | 0.666 | % | USD | 2,000 | (1.000 | %) | 09/20/20 | (34 | ) |
Continental AG | JPMorgan Chase | 0.621 | % | EUR | 2,000 | 1.000 | % | 09/20/20 | 43 | |
CSX Corp. | JPMorgan Chase | 0.264 | % | USD | 3,000 | (1.000 | %) | 12/20/20 | (114 | ) |
Daimler AG | JPMorgan Chase | 0.558 | % | EUR | 2,000 | 1.000 | % | 12/20/20 | 52 | |
Danone | JPMorgan Chase | 0.385 | % | EUR | 500 | 1.000 | % | 06/20/20 | 16 | |
Danone | JPMorgan Chase | 0.385 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | 33 | |
Danone | JPMorgan Chase | 0.385 | % | EUR | 500 | (1.000 | %) | 06/20/20 | (16 | ) |
Danone | JPMorgan Chase | 0.408 | % | EUR | 1,000 | 1.000 | % | 09/20/20 | 33 | |
Deere & Co. | JPMorgan Chase | 0.544 | % | USD | 3,000 | 1.000 | % | 09/20/20 | 68 | |
Deere & Co. | JPMorgan Chase | 0.544 | % | USD | 3,000 | (1.000 | %) | 09/20/20 | (68 | ) |
Deutsche Lufthansa AG | JPMorgan Chase | 0.984 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | 2 | |
Deutsche Lufthansa AG | JPMorgan Chase | 0.984 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | 2 | |
Deutsche Lufthansa AG | JPMorgan Chase | 1.043 | % | EUR | 500 | (1.000 | %) | 09/20/20 | — | |
Deutsche Lufthansa AG | JPMorgan Chase | 1.043 | % | EUR | 500 | 1.000 | % | 09/20/20 | (1 | ) |
Deutsche Telekom AG | JPMorgan Chase | 0.406 | % | EUR | 1,000 | (1.000 | %) | 06/20/20 | (32 | ) |
Deutsche Telekom AG | JPMorgan Chase | 0.438 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (33 | ) |
Diageo PLC | JPMorgan Chase | 0.518 | % | EUR | 500 | 1.000 | % | 09/20/20 | 14 | |
Diageo PLC | JPMorgan Chase | 0.518 | % | EUR | 1,000 | 1.000 | % | 09/20/20 | 27 | |
Dish DBS Corp. | JPMorgan Chase | 2.423 | % | USD | 1,000 | 5.000 | % | 03/20/20 | 111 | |
Dominion Resources Inc. | JPMorgan Chase | 0.326 | % | USD | 2,000 | 1.000 | % | 09/20/20 | 67 | |
Dow Chemical Co. | JPMorgan Chase | 0.657 | % | USD | 1,500 | 1.000 | % | 06/20/20 | 25 | |
Dow Chemical Co. | JPMorgan Chase | 0.657 | % | USD | 2,500 | (1.000 | %) | 06/20/20 | (42 | ) |
Dow Chemical Co. | JPMorgan Chase | 0.657 | % | USD | 1,000 | 1.000 | % | 06/20/20 | 17 | |
E. ON AG | JPMorgan Chase | 0.813 | % | EUR | 1,000 | (1.000 | %) | 06/20/20 | (11 | ) |
E.I. DuPont de Nemours & Co. | JPMorgan Chase | 0.788 | % | USD | 1,000 | 1.000 | % | 12/20/20 | 12 | |
E.I. DuPont de Nemours & Co. | JPMorgan Chase | 0.788 | % | USD | 1,000 | 1.000 | % | 12/20/20 | 12 | |
E.ON SE | JPMorgan Chase | 0.858 | % | EUR | 500 | (1.000 | %) | 09/20/20 | (4 | ) |
Eastman Chemical Co. | JPMorgan Chase | 0.865 | % | USD | 2,000 | 1.000 | % | 12/20/20 | 16 | |
Electrolux | JPMorgan Chase | 0.580 | % | EUR | 1,500 | (1.000 | %) | 06/20/20 | (34 | ) |
Electrolux AB | JPMorgan Chase | 0.580 | % | EUR | 1,000 | (1.000 | %) | 06/20/20 | (23 | ) |
Electrolux AB | JPMorgan Chase | 0.580 | % | EUR | 500 | 1.000 | % | 06/20/20 | 11 | |
Electrolux AB | JPMorgan Chase | 0.612 | % | EUR | 1,000 | (1.000 | %) | 09/20/20 | (22 | ) |
Enbridge, Inc. | JPMorgan Chase | 2.762 | % | USD | 1,500 | 1.000 | % | 06/20/20 | (109 | ) |
ERP Operating LP | JPMorgan Chase | 0.355 | % | USD | 1,000 | 1.000 | % | 06/20/20 | 30 | |
ERP Operating LP | JPMorgan Chase | 0.355 | % | USD | 1,000 | (1.000 | %) | 06/20/20 | (30 | ) |
ERP Operating LP | JPMorgan Chase | 0.370 | % | USD | 1,000 | (1.000 | %) | 09/20/20 | (31 | ) |
ERP Operating LP | JPMorgan Chase | 0.382 | % | USD | 1,500 | (1.000 | %) | 12/20/20 | (48 | ) |
Exelon Corp. | JPMorgan Chase | 0.323 | % | USD | 1,000 | (1.000 | %) | 06/20/20 | (32 | ) |
Exelon Corp. | JPMorgan Chase | 0.347 | % | USD | 1,000 | (1.000 | %) | 09/20/20 | (32 | ) |
Exelon Corp. | JPMorgan Chase | 0.368 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (33 | ) |
Experian Finance PLC | JPMorgan Chase | 0.391 | % | EUR | 1,000 | 1.000 | % | 03/20/20 | 31 | |
Experian Finance PLC | JPMorgan Chase | 0.417 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | 31 | |
FirstEnergy Corp. | JPMorgan Chase | 0.801 | % | USD | 500 | (1.000 | %) | 06/20/20 | (5 | ) |
See accompanying notes which are an integral part of the financial statements.
640 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Credit Default Swap Contracts | ||||||||||
Amounts in thousands | ||||||||||
Corporate Issues | ||||||||||
Implied | Fund (Pays)/ | |||||||||
Credit | Receives | Termination | Fair Value | |||||||
Reference Entity | Counterparty | Spread | Notional Amount | Fixed Rate | Date | $ | ||||
FirstEnergy Corp. | JPMorgan Chase | 0.801 | % | USD | 1,500 | (1.000 | %) | 06/20/20 | (15 | ) |
FirstEnergy Corp. | JPMorgan Chase | 0.801 | % | USD | 1,000 | (1.000 | %) | 06/20/20 | (10 | ) |
Gas Natural SDG SA | JPMorgan Chase | 0.899 | % | EUR | 1,500 | 1.000 | % | 06/20/20 | 10 | |
Goodyear Tire & Rubber Co. | JPMorgan Chase | 1.577 | % | USD | 1,000 | 5.000 | % | 09/20/20 | 164 | |
Groupe Michelin | JPMorgan Chase | 0.587 | % | EUR | 2,000 | 1.000 | % | 09/20/20 | 47 | |
Halliburton | JPMorgan Chase | 0.609 | % | USD | 1,000 | (1.000 | %) | 09/20/20 | (20 | ) |
Halliburton | JPMorgan Chase | 0.609 | % | USD | 2,000 | (1.000 | %) | 09/20/20 | (39 | ) |
HeidelbergCement AG | JPMorgan Chase | 1.592 | % | EUR | 1,000 | 5.000 | % | 12/20/20 | 192 | |
Heineken NV | JPMorgan Chase | 0.558 | % | EUR | 1,500 | 1.000 | % | 12/20/20 | 39 | |
Home Depot | JPMorgan Chase | 0.209 | % | USD | 2,000 | (1.000 | %) | 12/20/20 | (82 | ) |
Home Depot | JPMorgan Chase | 0.209 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (41 | ) |
Iberdrola SA | JPMorgan Chase | 0.669 | % | EUR | 500 | 1.000 | % | 06/20/20 | 9 | |
Iberdrola SA | JPMorgan Chase | 0.669 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | 18 | |
Iberdrola SA | JPMorgan Chase | 0.744 | % | EUR | 1,000 | 1.000 | % | 12/20/20 | 16 | |
Imperial Tobacco Group PLC | JPMorgan Chase | 0.775 | % | EUR | 2,000 | 1.000 | % | 12/20/20 | 28 | |
Ingersoll-Rand Co. | JPMorgan Chase | 0.358 | % | USD | 2,000 | (1.000 | %) | 12/20/20 | (67 | ) |
International Paper Co. | JPMorgan Chase | 0.775 | % | USD | 3,000 | (1.000 | %) | 12/20/20 | (37 | ) |
International Paper Co. | JPMorgan Chase | 0.775 | % | USD | 1,000 | 1.000 | % | 12/20/20 | 12 | |
ITV PLC | JPMorgan Chase | 1.010 | % | EUR | 1,000 | (5.000 | %) | 03/20/20 | (196 | ) |
ITV PLC | JPMorgan Chase | 1.010 | % | EUR | 1,000 | 5.000 | % | 03/20/20 | 196 | |
ITV PLC | JPMorgan Chase | 1.165 | % | EUR | 1,500 | 5.000 | % | 12/20/20 | 327 | |
JCPenny Co. | JPMorgan Chase | 6.142 | % | USD | 1,000 | (5.000 | %) | 06/20/20 | 39 | |
Johnson Controls, Inc. | JPMorgan Chase | 0.569 | % | USD | 1,000 | (1.000 | %) | 09/20/20 | (22 | ) |
Johnson Controls, Inc. | JPMorgan Chase | 0.603 | % | USD | 2,000 | (1.000 | %) | 12/20/20 | (42 | ) |
KB Home | JPMorgan Chase | 3.964 | % | USD | 500 | 5.000 | % | 06/20/20 | 24 | |
KB Home | JPMorgan Chase | 4.172 | % | USD | 500 | 5.000 | % | 09/20/20 | 21 | |
Kering | JPMorgan Chase | 0.721 | % | EUR | 2,000 | (1.000 | %) | 09/20/20 | (32 | ) |
Kering | JPMorgan Chase | 0.721 | % | EUR | 500 | 1.000 | % | 09/20/20 | 8 | |
Kering | JPMorgan Chase | 0.721 | % | EUR | 1,500 | 1.000 | % | 09/20/20 | 24 | |
Kohl's Corp. | JPMorgan Chase | 1.427 | % | USD | 1,000 | 1.000 | % | 06/20/20 | (18 | ) |
Kohl's Corp. | JPMorgan Chase | 1.427 | % | USD | 2,000 | (1.000 | %) | 06/20/20 | 36 | |
Kohl's Corp. | JPMorgan Chase | 1.630 | % | USD | 500 | (1.000 | %) | 12/20/20 | 15 | |
Kohl's Corp. | JPMorgan Chase | 1.630 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | 29 | |
Koninklijke KPN NV | JPMorgan Chase | 0.417 | % | EUR | 1,000 | (1.000 | %) | 06/20/20 | (31 | ) |
Koninklijke KPN NV | JPMorgan Chase | 0.829 | % | EUR | 1,000 | (1.000 | %) | 09/20/20 | (10 | ) |
Koninklijke KPN NV | JPMorgan Chase | 0.829 | % | EUR | 2,000 | 1.000 | % | 09/20/20 | 21 | |
Koninklijke KPN NV | JPMorgan Chase | 0.829 | % | EUR | 500 | 1.000 | % | 09/20/20 | 5 | |
Kroger | JPMorgan Chase | 0.334 | % | USD | 2,500 | 1.000 | % | 06/20/20 | 79 | |
Kroger | JPMorgan Chase | 0.334 | % | USD | 1,500 | (1.000 | %) | 06/20/20 | (47 | ) |
Kroger | JPMorgan Chase | 0.334 | % | USD | 1,000 | (1.000 | %) | 06/20/20 | (31 | ) |
Kroger | JPMorgan Chase | 0.379 | % | USD | 2,000 | (1.000 | %) | 12/20/20 | (64 | ) |
Lanxess AG | JPMorgan Chase | 0.699 | % | EUR | 500 | 1.000 | % | 09/20/20 | 9 | |
Lanxess AG | JPMorgan Chase | 0.699 | % | EUR | 2,000 | (1.000 | %) | 09/20/20 | (35 | ) |
Lennar Corp. | JPMorgan Chase | 1.964 | % | USD | 1,500 | 5.000 | % | 06/20/20 | 207 | |
Lennar Corp. | JPMorgan Chase | 1.964 | % | USD | 500 | (5.000 | %) | 06/20/20 | (69 | ) |
Lennar Corp. | JPMorgan Chase | 2.081 | % | USD | 500 | 5.000 | % | 09/20/20 | 69 | |
Level 3 Communications, Inc. | JPMorgan Chase | 1.770 | % | USD | 1,000 | (5.000 | %) | 09/20/20 | (155 | ) |
Level 3 Communications, Inc. | JPMorgan Chase | 1.900 | % | USD | 1,000 | (5.000 | %) | 12/20/20 | (155 | ) |
Linde AG | JPMorgan Chase | 0.307 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (41 | ) |
Linde AG | JPMorgan Chase | 0.307 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (41 | ) |
Lowe's Companies, Inc. | JPMorgan Chase | 0.186 | % | USD | 2,000 | (1.000 | %) | 12/20/20 | (84 | ) |
LVMH Moët Hennessy - Louis Vuitton | JPMorgan Chase | 0.396 | % | EUR | 1,000 | (1.000 | %) | 09/20/20 | (34 | ) |
M.D.C. Holdings, Inc. | JPMorgan Chase | 1.295 | % | USD | 2,000 | 1.000 | % | 09/20/20 | (25 | ) |
Marsh & McLennan | JPMorgan Chase | 0.231 | % | USD | 2,000 | 1.000 | % | 09/20/20 | 76 | |
McDonald's Corp. | JPMorgan Chase | 0.462 | % | USD | 1,000 | 1.000 | % | 12/20/20 | 28 | |
McDonald's Corp. | JPMorgan Chase | 0.462 | % | USD | 1,000 | 1.000 | % | 12/20/20 | 28 | |
McKesson Corp. | JPMorgan Chase | 0.244 | % | USD | 1,000 | (1.000 | %) | 09/20/20 | (37 | ) |
McKesson Corp. | JPMorgan Chase | 0.257 | % | USD | 2,000 | (1.000 | %) | 12/20/20 | (77 | ) |
Metro AG | JPMorgan Chase | 0.972 | % | EUR | 1,000 | (1.000 | %) | 06/20/20 | (3 | ) |
Metsa Board Corp. | JPMorgan Chase | 0.912 | % | EUR | 500 | (5.000 | %) | 06/20/20 | (106 | ) |
Metsa Board Corp. | JPMorgan Chase | 0.912 | % | EUR | 500 | 5.000 | % | 06/20/20 | 106 | |
Metsa Board Corp. | JPMorgan Chase | 0.948 | % | EUR | 1,000 | (5.000 | %) | 09/20/20 | (221 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 641
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Credit Default Swap Contracts | ||||||||||
Amounts in thousands | ||||||||||
Corporate Issues | ||||||||||
Implied | Fund (Pays)/ | |||||||||
Credit | Receives | Termination | Fair Value | |||||||
Reference Entity | Counterparty | Spread | Notional Amount | Fixed Rate | Date | $ | ||||
Metsa Board Corp. | JPMorgan Chase | 0.972 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | 3 | |
Metsa Board Corp. | JPMorgan Chase | 0.981 | % | EUR | 1,000 | (5.000 | %) | 12/20/20 | (230 | ) |
Motorola Solutions, Inc. | JPMorgan Chase | 1.206 | % | USD | 2,000 | 1.000 | % | 06/20/20 | (16 | ) |
Motorola Solutions, Inc. | JPMorgan Chase | 1.206 | % | USD | 1,000 | (1.000 | %) | 06/20/20 | 8 | |
Motorola Solutions, Inc. | JPMorgan Chase | 1.303 | % | USD | 1,000 | 1.000 | % | 09/20/20 | (13 | ) |
New York Times Co. | JPMorgan Chase | 0.877 | % | USD | 1,500 | (1.000 | %) | 06/20/20 | (10 | ) |
New York Times Co. | JPMorgan Chase | 0.877 | % | USD | 1,500 | (1.000 | %) | 06/20/20 | (10 | ) |
Newell Rubbermaind, Inc. | JPMorgan Chase | 0.386 | % | USD | 1,000 | (1.000 | %) | 06/20/20 | (29 | ) |
Newell Rubbermaind, Inc. | JPMorgan Chase | 0.386 | % | USD | 1,000 | 1.000 | % | 06/20/20 | 29 | |
Newmont Mining Corp. | JPMorgan Chase | 1.655 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | 31 | |
Next PLC | JPMorgan Chase | 0.373 | % | EUR | 1,500 | (1.000 | %) | 03/20/20 | (48 | ) |
Next PLC | JPMorgan Chase | 0.373 | % | EUR | 1,500 | 1.000 | % | 03/20/20 | 47 | |
Next PLC | JPMorgan Chase | 0.400 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | 32 | |
Next PLC | JPMorgan Chase | 0.447 | % | EUR | 1,000 | 1.000 | % | 12/20/20 | 33 | |
Nokia OYJ | JPMorgan Chase | 1.323 | % | EUR | 500 | (5.000 | %) | 06/20/20 | (95 | ) |
Nokia OYJ | JPMorgan Chase | 1.323 | % | EUR | 1,000 | (5.000 | %) | 06/20/20 | (190 | ) |
Nokia OYJ | JPMorgan Chase | 1.396 | % | EUR | 1,000 | (5.000 | %) | 09/20/20 | (195 | ) |
Nordstrom, Inc. | JPMorgan Chase | 0.527 | % | USD | 1,500 | 1.000 | % | 09/20/20 | 35 | |
Nordstrom, Inc. | JPMorgan Chase | 0.527 | % | USD | 3,000 | (1.000 | %) | 09/20/20 | (71 | ) |
Norfolk Southern Corp. | JPMorgan Chase | 0.196 | % | USD | 2,000 | (1.000 | %) | 09/20/20 | (79 | ) |
Omnicom Group, Inc. | JPMorgan Chase | 0.150 | % | USD | 1,500 | (1.000 | %) | 12/20/20 | (66 | ) |
Omnicom Group, Inc. | JPMorgan Chase | 0.240 | % | USD | 1,000 | (1.000 | %) | 09/20/20 | (38 | ) |
Omnicom Group, Inc. | JPMorgan Chase | 0.255 | % | USD | 500 | (1.000 | %) | 12/20/20 | (19 | ) |
Pernod Ricard | JPMorgan Chase | 0.658 | % | EUR | 1,500 | 1.000 | % | 06/20/20 | 28 | |
Pernod Ricard | JPMorgan Chase | 0.658 | % | EUR | 500 | 1.000 | % | 06/20/20 | 9 | |
Pitney Bowes, Inc. | JPMorgan Chase | 1.078 | % | USD | 500 | 1.000 | % | 06/20/20 | (1 | ) |
Pitney Bowes, Inc. | JPMorgan Chase | 1.078 | % | USD | 1,000 | 1.000 | % | 06/20/20 | (2 | ) |
Pitney Bowes, Inc. | JPMorgan Chase | 1.171 | % | USD | 500 | 1.000 | % | 09/20/20 | (3 | ) |
PostNL NV | JPMorgan Chase | 0.552 | % | EUR | 500 | (1.000 | %) | 06/20/20 | (12 | ) |
PostNL NV | JPMorgan Chase | 0.552 | % | EUR | 1,000 | (1.000 | %) | 06/20/20 | (24 | ) |
Publicis Groupe SA | JPMorgan Chase | 0.884 | % | EUR | 1,000 | 1.000 | % | 09/20/20 | 7 | |
Publicis Groupe SA | JPMorgan Chase | 0.884 | % | EUR | 1,000 | (1.000 | %) | 09/20/20 | (7 | ) |
Quest Diagnostics, Inc. | JPMorgan Chase | 0.616 | % | USD | 1,000 | 1.000 | % | 03/20/20 | 18 | |
Quest Diagnostics, Inc. | JPMorgan Chase | 0.736 | % | USD | 1,000 | 1.000 | % | 09/20/20 | 14 | |
Raytheon Co. | JPMorgan Chase | 0.151 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (44 | ) |
Rexel SA | JPMorgan Chase | 2.056 | % | EUR | 1,000 | 5.000 | % | 12/20/20 | 164 | |
Rite Aid Corp. | JPMorgan Chase | 1.019 | % | USD | 500 | 5.000 | % | 06/20/20 | 92 | |
Rite Aid Corp. | JPMorgan Chase | 1.019 | % | USD | 1,000 | (5.000 | %) | 06/20/20 | (183 | ) |
Rite Aid Corp. | JPMorgan Chase | 1.019 | % | USD | 500 | (5.000 | %) | 06/20/20 | (92 | ) |
Rite Aid Corp. | JPMorgan Chase | 1.019 | % | USD | 500 | (5.000 | %) | 06/20/20 | (92 | ) |
Rolls-Royce PLC | JPMorgan Chase | 0.732 | % | EUR | 1,000 | (1.000 | %) | 09/20/20 | (16 | ) |
Rolls-Royce PLC | JPMorgan Chase | 0.732 | % | EUR | 1,000 | 1.000 | % | 09/20/20 | 16 | |
Royal Caribbean Cruises, Ltd. | JPMorgan Chase | 1.166 | % | USD | 500 | 5.000 | % | 03/20/20 | 84 | |
Royal Caribbean Cruises, Ltd. | JPMorgan Chase | 1.415 | % | USD | 1,000 | 5.000 | % | 09/20/20 | 173 | |
Royal Dutch Shell PLC | JPMorgan Chase | 0.643 | % | EUR | 2,000 | 1.000 | % | 09/20/20 | 41 | |
Royal Dutch Shell PLC | JPMorgan Chase | 0.643 | % | EUR | 2,000 | (1.000 | %) | 09/20/20 | (41 | ) |
RWE AG | JPMorgan Chase | 1.100 | % | EUR | 1,000 | (1.000 | %) | 03/20/20 | 3 | |
RWE AG | JPMorgan Chase | 1.182 | % | EUR | 500 | (1.000 | %) | 09/20/20 | 4 | |
Saint-Gobain | JPMorgan Chase | 0.781 | % | EUR | 500 | 1.000 | % | 12/20/20 | 7 | |
Saint-Gobain | JPMorgan Chase | 0.781 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (14 | ) |
Saint-Gobain | JPMorgan Chase | 0.781 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (14 | ) |
Sempra Energy | JPMorgan Chase | 0.294 | % | USD | 1,000 | (1.000 | %) | 06/20/20 | (33 | ) |
Sempra Energy | JPMorgan Chase | 0.325 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (35 | ) |
Sherwin Williams Co. | JPMorgan Chase | 0.184 | % | USD | 3,000 | 1.000 | % | 06/20/19 | 92 | |
Sherwin Williams Co. | JPMorgan Chase | 0.254 | % | USD | 3,000 | (1.000 | %) | 09/20/20 | (110 | ) |
Simon Property Group LP | JPMorgan Chase | 0.357 | % | USD | 1,000 | 1.000 | % | 09/20/20 | 32 | |
Simon Property Group LP | JPMorgan Chase | 0.357 | % | USD | 2,000 | (1.000 | %) | 09/20/20 | (64 | ) |
Simon Property Group LP | JPMorgan Chase | 0.383 | % | USD | 1,500 | (1.000 | %) | 12/20/20 | (48 | ) |
Simon Property Group LP | JPMorgan Chase | 0.786 | % | EUR | 1,500 | 1.000 | % | 12/20/20 | 20 | |
SMC Coporation of America | JPMorgan Chase | 0.310 | % | USD | 2,000 | (1.000 | %) | 12/20/20 | (72 | ) |
Southwest Airlines Co. | JPMorgan Chase | 0.396 | % | USD | 500 | 1.000 | % | 06/20/20 | 14 | |
Southwest Airlines Co. | JPMorgan Chase | 0.396 | % | USD | 2,000 | (1.000 | %) | 06/20/20 | (57 | ) |
See accompanying notes which are an integral part of the financial statements.
642 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Credit Default Swap Contracts | ||||||||||
Amounts in thousands | ||||||||||
Corporate Issues | ||||||||||
Implied | Fund (Pays)/ | |||||||||
Credit | Receives | Termination | Fair Value | |||||||
Reference Entity | Counterparty | Spread | Notional Amount | Fixed Rate | Date | $ | ||||
Southwest Airlines Co. | JPMorgan Chase | 0.396 | % | USD | 500 | 1.000 | % | 06/20/20 | 14 | |
Southwest Airlines Co. | JPMorgan Chase | 0.424 | % | USD | 2,000 | (1.000 | %) | 09/20/20 | (57 | ) |
Sprint Communications, Inc. | JPMorgan Chase | 6.320 | % | USD | 500 | 5.000 | % | 06/20/20 | (22 | ) |
Starwood Hotels & Resorts Worldwide, Inc. | JPMorgan Chase | 0.814 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (10 | ) |
Stora Enso | JPMorgan Chase | 1.263 | % | EUR | 2,000 | (5.000 | %) | 12/20/20 | (425 | ) |
Supervalu, Inc. | JPMorgan Chase | 4.335 | % | USD | 1,000 | (5.000 | %) | 06/20/20 | (33 | ) |
Target Corp. | JPMorgan Chase | 0.250 | % | USD | 2,000 | (1.000 | %) | 09/20/20 | (74 | ) |
Telefonaktiebolaget LM Ericsson | JPMorgan Chase | 0.566 | % | EUR | 1,000 | (1.000 | %) | 06/20/20 | (23 | ) |
Telefonaktiebolaget LM Ericsson | JPMorgan Chase | 0.602 | % | EUR | 1,000 | (1.000 | %) | 09/20/20 | (23 | ) |
Telenor ASA | JPMorgan Chase | 0.444 | % | EUR | 1,000 | (1.000 | %) | 09/20/20 | (31 | ) |
Telenor ASA | JPMorgan Chase | 0.444 | % | EUR | 2,000 | (1.000 | %) | 09/20/20 | (62 | ) |
Tesco PLC | JPMorgan Chase | 2.102 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | (53 | ) |
Tesco PLC | JPMorgan Chase | 2.102 | % | EUR | 500 | (1.000 | %) | 06/20/20 | 26 | |
Tesco PLC | JPMorgan Chase | 2.102 | % | EUR | 500 | (1.000 | %) | 06/20/20 | 26 | |
Tesco PLC | JPMorgan Chase | 2.102 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | (53 | ) |
Tesoro Corp. | JPMorgan Chase | 1.470 | % | USD | 2,000 | (5.000 | %) | 09/20/20 | (340 | ) |
Tesoro Corp. | JPMorgan Chase | 1.470 | % | USD | 500 | 5.000 | % | 09/20/20 | 85 | |
Tesoro Corp. | JPMorgan Chase | 1.470 | % | USD | 500 | 5.000 | % | 09/20/20 | 85 | |
Tesoro Corp. | JPMorgan Chase | 1.570 | % | USD | 1,000 | (5.000 | %) | 12/20/20 | (172 | ) |
The Boeing Co. | JPMorgan Chase | 0.191 | % | USD | 1,000 | (1.000 | %) | 09/20/20 | (40 | ) |
The Boeing Co. | JPMorgan Chase | 0.202 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (41 | ) |
The Boeing Co. | JPMorgan Chase | 0.202 | % | USD | 1,500 | (1.000 | %) | 12/20/20 | (62 | ) |
The Gap, Inc. | JPMorgan Chase | 1.929 | % | USD | 2,000 | 1.000 | % | 12/20/20 | (87 | ) |
The Gap, Inc. | JPMorgan Chase | 1.929 | % | USD | 500 | (1.000 | %) | 12/20/20 | 22 | |
The Goodyear Tire Co. | JPMorgan Chase | 1.466 | % | USD | 1,000 | 5.000 | % | 06/20/20 | 162 | |
The Sherwin-Williams Co. | JPMorgan Chase | 0.184 | % | USD | 3,000 | (1.000 | %) | 06/20/19 | (92 | ) |
The Volvo Group | JPMorgan Chase | 0.966 | % | EUR | 1,000 | (1.000 | %) | 06/20/20 | (3 | ) |
The Walt Disney Co. | JPMorgan Chase | 0.143 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (44 | ) |
ThyssenKrupp AG | JPMorgan Chase | 2.501 | % | EUR | 1,000 | 1.000 | % | 12/20/20 | (78 | ) |
Time Warner Cable, Inc. | JPMorgan Chase | 0.575 | % | USD | 2,000 | 1.000 | % | 09/20/20 | 43 | |
Total SA | JPMorgan Chase | 0.491 | % | EUR | 1,000 | (1.000 | %) | 12/20/20 | (30 | ) |
Tyson Foods, Inc. | JPMorgan Chase | 0.430 | % | USD | 2,000 | (1.000 | %) | 09/20/20 | (57 | ) |
Unilever NV | JPMorgan Chase | 0.286 | % | EUR | 2,000 | (1.000 | %) | 12/20/20 | (84 | ) |
Union Pacific Corp. | JPMorgan Chase | 0.164 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (43 | ) |
Union Pacific Corp. | JPMorgan Chase | 0.286 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (44 | ) |
United Health Group, Inc. | JPMorgan Chase | 0.307 | % | USD | 1,500 | (1.000 | %) | 06/20/20 | (49 | ) |
United Health Group, Inc. | JPMorgan Chase | 0.348 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (34 | ) |
United Parcel Service, Inc. | JPMorgan Chase | 0.177 | % | USD | 1,000 | (1.000 | %) | 12/20/20 | (43 | ) |
United Rentals, Inc. | JPMorgan Chase | 2.626 | % | USD | 1,000 | (5.000 | %) | 09/20/20 | (112 | ) |
United Rentals, Inc. | JPMorgan Chase | 2.626 | % | USD | 1,000 | 5.000 | % | 09/20/20 | 112 | |
United Utilities PLC | JPMorgan Chase | 0.714 | % | EUR | 1,500 | 1.000 | % | 06/20/20 | 24 | |
United Utilities PLC | JPMorgan Chase | 0.714 | % | EUR | 1,500 | (1.000 | %) | 06/20/20 | (24 | ) |
United Utilities PLC | JPMorgan Chase | 0.808 | % | EUR | 1,000 | 1.000 | % | 12/20/20 | 12 | |
UPM-Kymmene OYJ | JPMorgan Chase | 0.985 | % | EUR | 1,000 | (5.000 | %) | 12/20/20 | (230 | ) |
Veolia Environment | JPMorgan Chase | 0.536 | % | EUR | 500 | (1.000 | %) | 06/20/20 | (12 | ) |
Veolia Environment | JPMorgan Chase | 0.536 | % | EUR | 500 | 1.000 | % | 06/20/20 | 12 | |
Veolia Environment | JPMorgan Chase | 0.568 | % | EUR | 1,000 | 1.000 | % | 09/20/20 | 24 | |
Veolia Environment | JPMorgan Chase | 0.568 | % | EUR | 3,000 | (1.000 | %) | 09/20/20 | (73 | ) |
Verizon Communications, Inc. | JPMorgan Chase | 0.498 | % | USD | 1,000 | 1.000 | % | 03/20/20 | 23 | |
Verizon Communications, Inc. | JPMorgan Chase | 0.540 | % | USD | 1,000 | 1.000 | % | 06/20/20 | 22 | |
Viacom | JPMorgan Chase | 1.460 | % | USD | 1,000 | 1.000 | % | 09/20/20 | (20 | ) |
Viacom | JPMorgan Chase | 1.460 | % | USD | 1,000 | 1.000 | % | 09/20/20 | (20 | ) |
Vinci | JPMorgan Chase | 0.454 | % | EUR | 2,000 | (1.000 | %) | 12/20/20 | (64 | ) |
Vivendi | JPMorgan Chase | 0.577 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | 23 | |
Vivendi | JPMorgan Chase | 0.577 | % | EUR | 1,000 | 1.000 | % | 06/20/20 | 23 | |
Vivendi | JPMorgan Chase | 0.577 | % | EUR | 500 | (1.000 | %) | 06/20/20 | (11 | ) |
Vivendi | JPMorgan Chase | 0.577 | % | EUR | 500 | 1.000 | % | 06/20/20 | 11 | |
Volvo AB | JPMorgan Chase | 0.966 | % | EUR | 500 | (1.000 | %) | 06/20/20 | (1 | ) |
Volvo AB | JPMorgan Chase | 1.015 | % | EUR | 1,000 | (1.000 | %) | 09/20/20 | — | |
Vulcan Materials Co. | JPMorgan Chase | 0.717 | % | USD | 1,000 | (5.000 | %) | 03/20/20 | (189 | ) |
Vulcan Materials Co. | JPMorgan Chase | 0.717 | % | USD | 1,000 | 5.000 | % | 03/20/20 | 189 | |
Vulcan Materials Co. | JPMorgan Chase | 0.789 | % | USD | 1,000 | 5.000 | % | 06/20/20 | 195 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 643
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Credit Default Swap Contracts | ||||||||||
Amounts in thousands | ||||||||||
Corporate Issues | ||||||||||
Implied | Fund (Pays)/ | |||||||||
Credit | Receives | Termination | Fair Value | |||||||
Reference Entity | Counterparty | Spread | Notional Amount | Fixed Rate | Date | $ | ||||
Vulcan Materials Co. | JPMorgan Chase | 0.789 | % | USD | 1,000 | (5.000 | %) | 06/20/20 | (196 | ) |
Wal-Mart Stores, Inc. | JPMorgan Chase | 0.278 | % | USD | 1,500 | (1.000 | %) | 06/20/20 | (51 | ) |
Wal-Mart Stores, Inc. | JPMorgan Chase | 0.295 | % | USD | 1,500 | (1.000 | %) | 09/20/20 | (52 | ) |
Weatherford International Ltd. | JPMorgan Chase | 5.570 | % | USD | 500 | (1.000 | %) | 09/20/20 | 92 | |
Weatherford International Ltd. | JPMorgan Chase | 5.570 | % | USD | 1,000 | 1.000 | % | 09/20/20 | (184 | ) |
Weyerhaeuser Co. | JPMorgan Chase | 0.551 | % | USD | 2,000 | 1.000 | % | 12/20/20 | 47 | |
Whirlpool Corp. | JPMorgan Chase | 0.936 | % | USD | 1,000 | 1.000 | % | 06/20/20 | 4 | |
Whirlpool Corp. | JPMorgan Chase | 0.936 | % | USD | 1,000 | (1.000 | %) | 06/20/20 | (4 | ) |
Whirlpool Corp. | JPMorgan Chase | 1.009 | % | USD | 1,000 | (1.000 | %) | 09/20/20 | (1 | ) |
Whirlpool Corp. | JPMorgan Chase | 1.009 | % | USD | 1,000 | 1.000 | % | 09/20/20 | 1 | |
Whirlpool Corp. | JPMorgan Chase | 1.074 | % | USD | 1,500 | (1.000 | %) | 12/20/20 | 4 | |
Wolters Kluwer NV | JPMorgan Chase | 0.413 | % | EUR | 2,000 | (1.000 | %) | 12/20/20 | (69 | ) |
Wolters Kluwer NV | JPMorgan Chase | 0.413 | % | EUR | 2,000 | 1.000 | % | 12/20/20 | 69 | |
WPP GRP PLC | JPMorgan Chase | 0.421 | % | EUR | 3,000 | (1.000 | %) | 12/20/19 | (83 | ) |
WPP GRP PLC | JPMorgan Chase | 0.421 | % | EUR | 2,000 | 1.000 | % | 12/20/19 | 55 | |
WPP GRP PLC | JPMorgan Chase | 0.488 | % | EUR | 500 | (1.000 | %) | 06/20/20 | (14 | ) |
WPP GRP PLC | JPMorgan Chase | 0.517 | % | EUR | 1,000 | (1.000 | %) | 09/20/20 | (27 | ) |
YUM! Brands, Inc. | JPMorgan Chase | 1.781 | % | USD | 1,500 | (1.000 | %) | 03/20/20 | 47 | |
YUM! Brands, Inc. | JPMorgan Chase | 1.781 | % | USD | 1,500 | 1.000 | % | 03/20/20 | (47 | ) |
YUM! Brands, Inc. | JPMorgan Chase | 2.028 | % | USD | 500 | 1.000 | % | 09/20/20 | (23 | ) |
YUM! Brands, Inc. | JPMorgan Chase | 2.028 | % | USD | 500 | (1.000 | %) | 09/20/20 | 23 | |
Total Fair Value on Open Corporate Issues Premiums Paid (Received) - ($2,567) | (3,473 | ) |
See accompanying notes which are an integral part of the financial statements.
644 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Schedule of Investments, continued — October 31, 2015
Consolidated Presentation of Portfolio Holdings | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fair Value | ||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||||
Long-Term Investments | ||||||||||||||
Asset-Backed Securities | $ | — | $ | 1,069 | $ | — | $ | 1,069 | 0.2 | |||||
Corporate Bonds and Notes | — | 36,028 | — | 36,028 | 6.8 | |||||||||
International Debt | — | 17,562 | — | 17,562 | 3.3 | |||||||||
Loan Agreements | — | 13,897 | — | 13,897 | 2.6 | |||||||||
Mortgage-Backed Securities | — | 6,285 | — | 6,285 | 1.2 | |||||||||
Municipal Bonds | — | 1,914 | — | 1,914 | 0.4 | |||||||||
Non-US Bonds | — | 6,884 | — | 6,884 | 1.3 | |||||||||
United States Government Treasuries | — | 9,060 | — | 9,060 | 1.7 | |||||||||
Common Stocks | ||||||||||||||
Consumer Discretionary | 20,836 | 1,250 | — | 22,086 | 4.2 | |||||||||
Consumer Staples | 8,573 | 523 | — | 9,096 | 1.7 | |||||||||
Energy | 8,532 | — | — | 8,532 | 1.6 | |||||||||
Financial Services | 21,442 | 2,698 | — | 24,140 | 4.6 | |||||||||
Health Care | 18,337 | — | — | 18,337 | 3.5 | |||||||||
Materials and Processing | 9,391 | — | — | 9,391 | 1.8 | |||||||||
Producer Durables | 8,209 | 890 | — | 9,099 | 1.7 | |||||||||
Technology | 15,588 | 2,653 | — | 18,241 | 3.4 | |||||||||
Utilities | 4,964 | — | — | 4,964 | 0.9 | |||||||||
Investments in Other Funds | 1,302 | — | — | 1,302 | 0.2 | |||||||||
Preferred Stocks | 270 | — | — | 270 | 0.1 | |||||||||
Options Purchased | 1,106 | 6,220 | — | 7,326 | 1.4 | |||||||||
Warrants & Rights | 2 | 1,620 | — | 1,622 | 0.3 | |||||||||
Short-Term Investments | — | 212,282 | 236 | 212,518 | 40.1 | |||||||||
Repurchase Agreements | — | 36,700 | — | 36,700 | 6.9 | |||||||||
Total Investments | 118,552 | 357,535 | 236 | 476,323 | 89.9 | |||||||||
Securities Sold Short*** | ||||||||||||||
Common Stocks | (20,069 | ) | (2,552 | ) | — | (22,621 | ) | (4.3 | ) | |||||
Investments in Other Funds | (5,710 | ) | — | — | (5,710 | ) | (1.1 | ) | ||||||
Other Assets and Liabilities, Net | 15.5 | |||||||||||||
100.0 | ||||||||||||||
Other Financial Instruments | ||||||||||||||
Futures Contracts | (343 | ) | — | — | (343 | ) | (0.1 | ) | ||||||
Options Written | (198 | ) | (2,669 | ) | — | (2,867 | ) | (0.5 | ) | |||||
Foreign Currency Exchange Contracts | 2 | 507 | — | 509 | 0.1 | |||||||||
Interest Rate Swap Contracts | — | 2 | — | 2 | —* | |||||||||
Credit Default Swap Contracts | — | (3,473 | ) | — | (3,473 | ) | (0.7 | ) | ||||||
Total Return Swap Contracts | — | 4,862 | — | 4,862 | 0.9 | |||||||||
Total Other Financial Instruments** | $ | (539 | ) | $ | (771 | ) | $ | — | $ | (1,310 | ) | |||
* Less than .05% of net assets. | ||||||||||||||
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments. | ||||||||||||||
*** Refer to Schedule of Investments for detailed sector breakout. | ||||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||||||
Statements. | ||||||||||||||
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended October | ||||||||||||||
31, 2015 were less than 1% of net assets. |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 645
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||||||||||||
Foreign | ||||||||||||||||
Equity | Credit | Currency | Interest Rate | Commodity | ||||||||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | Contracts | Contracts | |||||||||||
Location: Statement of Assets and Liabilities - Assets | ||||||||||||||||
Investments, at fair value* | $ | 1,070 | $ | — | $ | 5,685 | $ | 563 | $ | 7 | ||||||
Unrealized appreciation on foreign currency exchange contracts | — | — | 7,124 | — | — | |||||||||||
Variation margin on futures contracts*** | 592 | — | — | 394 | 289 | |||||||||||
Total return swap contracts, at fair value | 14,382 | — | — | — | — | |||||||||||
Interest rate swap contracts, at fair value | — | — | — | 1,308 | — | |||||||||||
Credit default swap contracts, at fair value | — | 6,353 | — | — | — | |||||||||||
Total | $ | 16,044 | $ | 6,353 | $ | 12,809 | $ | 2,265 | $ | 296 | ||||||
Location: Statement of Assets and Liabilities - Liabilities | ||||||||||||||||
Variation margin on futures contracts*** | $ | 728 | $ | — | $ | — | $ | 249 | $ | 641 | ||||||
Unrealized depreciation on foreign currency exchange contracts | — | — | 6,615 | — | — | |||||||||||
Options written, at fair value | 183 | — | 2,174 | 510 | — | |||||||||||
Total return swap contracts, at fair value | 9,520 | — | — | — | — | |||||||||||
Interest rate swap contracts, at fair value | — | — | — | 1,306 | — | |||||||||||
Credit default swap contracts, at fair value | — | 9,826 | — | — | — | |||||||||||
Total | $ | 10,431 | $ | 9,826 | $ | 8,789 | $ | 2,065 | $ | 641 | ||||||
Foreign | ||||||||||||||||
Equity | Credit | Currency | Interest Rate | Commodity | ||||||||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | Contracts | Contracts | |||||||||||
Location: Statement of Operations - Net realized gain (loss) | ||||||||||||||||
Investments** | $ | (8,876 | ) | $ | — | $ | (15,190 | ) | $ | (3,316 | ) | $ | (442 | ) | ||
Futures contracts | 344 | — | 29 | 3,731 | 5,162 | |||||||||||
Options written | 2,925 | — | 6,428 | 1,369 | — | |||||||||||
Total return swap contracts | (363 | ) | — | — | — | — | ||||||||||
Interest rate swap contracts | — | — | — | 2,076 | — | |||||||||||
Credit default swap contracts | — | (2,598 | ) | — | — | — | ||||||||||
Foreign currency-related transactions**** | — | — | 22,167 | — | — | |||||||||||
Total | $ | (5,970 | ) | $ | (2,598 | ) | $ | 13,434 | $ | 3,860 | $ | 4,720 | ||||
Location: Statement of Operations - Net change in unrealized | ||||||||||||||||
appreciation (depreciation) | ||||||||||||||||
Investments***** | $ | (168 | ) | $ | — | $ | 2,922 | $ | 214 | $ | (311 | ) | ||||
Futures contracts | 1,850 | $ | — | — | (399 | ) | (1,063 | ) | ||||||||
Options written | 10 | — | 4,295 | (161 | ) | — | ||||||||||
Total return swap contracts | 4,799 | — | — | — | — | |||||||||||
Interest rate swap contracts | — | — | — | (932 | ) | — | ||||||||||
Credit default swap contracts | — | (96 | ) | — | — | — | ||||||||||
Foreign currency-related transactions****** | — | — | (9,154 | ) | — | — | ||||||||||
Total | $ | 6,491 | $ | (96 | ) | $ | (1,937 | ) | $ | (1,278 | ) | $ | (1,374 | ) | ||
* | Fair value of purchased options. | |||||||||||||||
** | Includes net realized gain (loss) on purchased options as reported in the Statement of Operations. | |||||||||||||||
*** | Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the | |||||||||||||||
Statement of Assets and Liabilities. | ||||||||||||||||
**** | Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported | |||||||||||||||
within the Statement of Operations. | ||||||||||||||||
***** | Includes net unrealized gain (loss) on purchased options as reported in the Schedule of Investments. | |||||||||||||||
****** | Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change unrealized gain (loss) on foreign currency-related | |||||||||||||||
transactions reported within the Statement of Operations. | ||||||||||||||||
For further disclosure on derivatives see note 2 in the Notes to Financial Statements. | ||||||||||||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||||||||||
646 Russell Multi-Strategy Alternative Fund |
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Balance Sheet Offsetting of Financial and Derivative Instruments —
October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Assets | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||||
Options Purchased Contracts | Investments, at fair value | $ | 7,326 | $ | — | $ | 7,326 | ||||||
Repurchase Agreements | Repurchase agreements, at fair value | 36,700 | — | 36,700 | |||||||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 7,124 | — | 7,124 | |||||||||
Futures Contracts | Variation margin on futures contracts | 12,088 | — | 12,088 | |||||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 14,382 | — | 14,382 | |||||||||
Interest Rate Swap Contracts | Interest rate swap contracts, at fair value | 1,308 | — | 1,308 | |||||||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 6,353 | — | 6,353 | |||||||||
Total Financial and Derivative Assets | 85,280 | — | 85,280 | ||||||||||
Financial and Derivative Assets not subject to a netting agreement | (25,904) | — | (25,904 | ) | |||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 59,376 | $ | — | $ | 59,376 | |||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Assets | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||||
Bank of America | $ | 27 | $ | 18 | $ | — | $ | 9 | |||||
Barclays | 1,201 | — | 1,201 | — | |||||||||
Citigroup | 1,192 | 1,180 | — | 12 | |||||||||
Credit Suisse | 259 | 240 | — | 19 | |||||||||
Deutsche Bank | 9,660 | 85 | 9,575 | — | |||||||||
Goldman Sachs | 18,580 | 7,894 | 7,617 | 3,070 | |||||||||
HSBC | 1 | — | — | 1 | |||||||||
JPMorgan Chase | 24,903 | 6,396 | 18,507 | — | |||||||||
Morgan Stanley | 3,375 | 1,800 | — | 1,575 | |||||||||
National Australia Bank | 19 | 19 | — | — | |||||||||
Societe Generale | 2 | — | — | 2 | |||||||||
Standard Chartered | 14 | 14 | — | — | |||||||||
State Street | 57 | 7 | — | 50 | |||||||||
UBS | 86 | 14 | — | 72 | |||||||||
Total | $ | 59,376 | $ | 17,667 | $ | 36,900 | $ | 4,809 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 647
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Balance Sheet Offsetting of Financial and Derivative Instruments, continued
— October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Liabilities | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||||||
Futures Contracts | Variation margin on futures contracts | $ | 368 | $ | — | $ | 368 | ||||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 6,615 | — | 6,615 | |||||||||
Options Written Contracts | Options written, at fair value | 2,867 | — | 2,867 | |||||||||
Short Sales | Securities sold short, at market value | 36,256 | — | 36,256 | |||||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 9,520 | — | 9,520 | |||||||||
Interest Rate Swap Contracts | Interest rate swap contracts, at fair value | 1,306 | — | 1,306 | |||||||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 9,826 | — | 9,826 | |||||||||
Total Financial and Derivative Liabilities | 66,758 | — | 66,758 | ||||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (8,879 | ) | — | (8,879 | ) | ||||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 57,879 | $ | — | $ | 57,879 | |||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Liabilities | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||||
Bank of America | $ | 58 | $ | 18 | $ | — $ | 40 | ||||||
Barclays | 14 | — | — | 14 | |||||||||
Citigroup | 1,605 | 1,180 | — | 425 | |||||||||
Credit Suisse | 240 | 240 | — | — | |||||||||
Deutsche Bank | 85 | 85 | — | — | |||||||||
Goldman Sachs | 7,894 | 7,894 | — | — | |||||||||
JPMorgan Chase | 46,121 | 6,396 | 39,725 | — | |||||||||
Morgan Stanley | 1,800 | 1,800 | — | — | |||||||||
National Australia Bank | 19 | 19 | — | — | |||||||||
Standard Chartered | 22 | 14 | — | 8 | |||||||||
State Street | 7 | 7 | — | — | |||||||||
UBS | 14 | 14 | — | — | |||||||||
Total | $ | 57,879 | $ | 17,667 | $ | 39,725 | $ | 487 | |||||
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance | |||||||||||||
Sheet collateral and adjustments made to exclude overcollateralization. | |||||||||||||
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
648 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Statement of Assets and Liabilities(†) — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 482,850 |
Investments, at fair value(>) | 476,323 | |
Cash (restricted)(a)(b) | 32,814 | |
Deposits with brokers for securities sold short | 42,091 | |
Foreign currency holdings(^) | 819 | |
Unrealized appreciation on foreign currency exchange contracts | 7,124 | |
Receivables: | ||
Dividends and interest | 1,843 | |
Dividends from affiliated Russell funds | 18 | |
Investments sold | 13,893 | |
Fund shares sold | 482 | |
Variation margin on futures contracts | 12,088 | |
Total return swap contracts, at fair value(8) | 14,382 | |
Interest rate swap contracts, at fair value(•) | 1,308 | |
Credit default swap contracts, at fair value(+) | 6,353 | |
Total assets | 609,538 | |
Liabilities | ||
Payables: | ||
Due to custodian | 190 | |
Due to broker (c)(d)(e) | 11,810 | |
Investments purchased | 6,865 | |
Fund shares redeemed | 425 | |
Accrued fees to affiliates | 802 | |
Other accrued expenses | 568 | |
Variation margin on futures contracts | 368 | |
Dividends for securities sold short | 41 | |
Unrealized depreciation on foreign currency exchange contracts | 6,615 | |
Options written, at fair value(x) | 2,867 | |
Securities sold short, at fair value(‡) | 28,331 | |
Total return swap contracts, at fair value(8) | 9,520 | |
Interest rate swap contracts, at fair value(•) | 1,306 | |
Credit default swap contracts, at fair value(+) | 9,826 | |
Total liabilities | 79,534 | |
Net Assets | $ | 530,004 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 649
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Statement of Assets and Liabilities(†) , continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 7,170 | |
Accumulated net realized gain (loss) | (60,601 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | (6,527 | ) | |
Futures contracts | (343 | ) | |
Options written | 2,451 | ||
Total return swap contracts | 4,867 | ||
Interest rate swap contracts | 55 | ||
Credit default swap contracts | (906 | ) | |
Securities sold short | 2,850 | ||
Foreign currency-related transactions | 509 | ||
Shares of beneficial interest | 568 | ||
Additional paid-in capital | 579,911 | ||
Net Assets | $ | 530,004 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 9.31 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 9.88 | |
Class A — Net assets | $ | 1,789,052 | |
Class A — Shares outstanding ($.01 par value) | 192,082 | ||
Net asset value per share: Class C(#) | $ | 9.20 | |
Class C — Net assets | $ | 5,267,533 | |
Class C — Shares outstanding ($.01 par value) | 572,471 | ||
Net asset value per share: Class E(#) | $ | 9.30 | |
Class E — Net assets | $ | 13,720,976 | |
Class E — Shares outstanding ($.01 par value) | 1,475,362 | ||
Net asset value per share: Class S(#) | $ | 9.33 | |
Class S — Net assets | $ | 509,226,844 | |
Class S — Shares outstanding ($.01 par value) | 54,582,948 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 834 | |
(x) Premiums received on options written | $ | 5,318 | |
(+) Credit default swap contracts - premiums paid (received) | $ | (2,567 | ) |
(•) Interest rate swap contracts - premiums paid (received) | $ | (53 | ) |
(‡) Proceeds on securities sold short | $ | 31,181 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 155,794 | |
(8) Total return swap contracts - premiums paid (received) | $ | (5 | ) |
(a) Cash Collateral for Futures | $ | 21,595 | |
(b) Cash Collateral for Swaps | $ | 11,219 | |
(c) Due to Broker for Futures | $ | 1,636 | |
(d) Due to Broker for Swaps | $ | 448 | |
(e) Due to Broker for Options | $ | 9,726 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. | |||
(†) The Statement of Assets and Liabilities is consolidated and includes the balances of Russell Cayman Multi-Strategy Alternative Fund Ltd. (wholly owned | |||
subsidiary). Accordingly, all interfund balances and transactions have been eliminated. Refer to note 3 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
650 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Statement of Operations(†) — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 3,703 | |
Dividends from affiliated Russell funds | 199 | ||
Interest | 7,278 | ||
Total investment income | 11,180 | ||
Expenses | |||
Advisory fees | 10,946 | ||
Administrative fees | 348 | ||
Custodian fees | 1,389 | ||
Distribution fees - Class A | 6 | ||
Distribution fees - Class C | 49 | ||
Transfer agent fees - Class A | 5 | ||
Transfer agent fees - Class C | 13 | ||
Transfer agent fees - Class E | 30 | ||
Transfer agent fees - Class S | 1,164 | ||
Transfer agent fees - Class Y | 4 | ||
Professional fees | 174 | ||
Registration fees | 97 | ||
Shareholder servicing fees - Class C | 16 | ||
Shareholder servicing fees - Class E | 38 | ||
Trustees’ fees | 21 | ||
Printing fees | 182 | ||
Dividends from securities sold short | 987 | ||
Interest expense paid on securities sold short | 340 | ||
Miscellaneous | 159 | ||
Expenses before reductions | 15,968 | ||
Expense reductions | (347 | ) | |
Net expenses | 15,621 | ||
Net investment income (loss) | (4,441 | ) | |
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (40,599 | ) | |
Futures contracts | 9,266 | ||
Options written | 10,722 | ||
Total return swap contracts | (363 | ) | |
Interest rate swap contracts | 2,076 | ||
Credit default swap contracts | (2,598 | ) | |
Securities sold short | 7,515 | ||
Foreign currency-related transactions | 12,131 | ||
Net realized gain (loss) | (1,850 | ) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (15,513 | ) | |
Futures contracts | 388 | ||
Options written | 4,144 | ||
Total return swap contracts | 4,799 | ||
Interest rate swap contracts | (932 | ) | |
Credit default swap contracts | (96 | ) | |
Securities sold short | 1,249 | ||
Investment matured | (28 | ) | |
Foreign currency-related transactions | (8,526 | ) | |
Net change in unrealized appreciation (depreciation) | (14,515 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 651
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Statement of Operations(†) — For the Period Ended October 31, 2015
Amounts in thousands | |||
Net realized and unrealized gain (loss) | (16,365 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (20,806 | ) |
(†) The Statement of Operations is consolidated and includes the balances of Russell Cayman Multi-Strategy Alternative Fund Ltd. (wholly owned | |||
subsidiary). Accordingly, all interfund balances and transactions have been eliminated. Refer to note 3 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
652 Russell Multi-Strategy Alternative Fund
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Consolidated Statements of Changes in Net Assets(†)
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | (4,441 | ) | $ | (969 | ) |
Net realized gain (loss) | (1,850 | ) | 4,681 | |||
Net change in unrealized appreciation (depreciation) | (14,515 | ) | (12,607 | ) | ||
Net increase (decrease) in net assets from operations | (20,806 | ) | (8,895 | ) | ||
Distributions | ||||||
From net investment income | ||||||
Class A | (69 | ) | (8 | ) | ||
Class C | (122 | ) | (—)** | |||
Class E | (409 | ) | (58 | ) | ||
Class S | (17,630 | ) | (3,305 | ) | ||
Class Y | (8,878 | ) | (2,375 | ) | ||
From net realized gain | ||||||
Class A | — | (12 | ) | |||
Class C | — | (38 | ) | |||
Class E | — | (76 | ) | |||
Class S | — | (2,568 | ) | |||
Class Y | — | (1,412 | ) | |||
Net decrease in net assets from distributions | (27,108 | ) | (9,852 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (384,137 | ) | 67,260 | |||
Total Net Increase (Decrease) in Net Assets | (432,051 | ) | 48,513 | |||
Net Assets | ||||||
Beginning of period | 962,055 | 913,542 | ||||
End of period | $ | 530,004 | $ | 962,055 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 7,170 | $ | 16,229 | ||
** Less than $500. | ||||||
(†) The Statements of Changes in Net Assets is consolidated and includes the balances of Russell Cayman Multi-Strategy Alternative Fund | ||||||
Ltd. (wholly owned subsidiary). Accordingly, all interfund balances and transactions have been eliminated. | ||||||
Refer to note 3 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 653
Russell Investment Company
Russell Multi-Strategy Alternative Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 49 | $ | 480 | 142 | $ | 1,445 | ||||||
Proceeds from reinvestment of distributions | 7 | 67 | 2 | 20 | ||||||||
Payments for shares redeemed | (150 | ) | (1,451 | ) | (148 | ) | (1,503 | ) | ||||
Net increase (decrease) | (94 | ) | (904 | ) | (4 | ) | (38 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 54 | 518 | 554 | 5,626 | ||||||||
Proceeds from reinvestment of distributions | 13 | 121 | 4 | 38 | ||||||||
Payments for shares redeemed | (285 | ) | (2,735 | ) | (403 | ) | (4,053 | ) | ||||
Net increase (decrease) | (218 | ) | (2,096 | ) | 155 | 1,611 | ||||||
Class E | ||||||||||||
Proceeds from shares sold | 125 | 1,206 | 341 | 3,458 | ||||||||
Proceeds from reinvestment of distributions | 42 | 409 | 13 | 133 | ||||||||
Payments for shares redeemed | (318 | ) | (3,071 | ) | (397 | ) | (4,019 | ) | ||||
Net increase (decrease) | (151 | ) | (1,456 | ) | (43 | ) | (428 | ) | ||||
Class S | ||||||||||||
Proceeds from shares sold | 11,473 | 111,546 | 21,148 | 215,387 | ||||||||
Proceeds from reinvestment of distributions | 1,800 | 17,550 | 569 | 5,844 | ||||||||
Payments for shares redeemed | (22,208 | ) | (214,838 | ) | (13,843 | ) | (140,361 | ) | ||||
Net increase (decrease) | (8,935 | ) | (85,742 | ) | 7,874 | 80,870 | ||||||
Class Y | ||||||||||||
Proceeds from shares sold | 79 | 779 | 836 | 8,524 | ||||||||
Proceeds from reinvestment of distributions | 909 | 8,878 | 369 | 3,788 | ||||||||
Payments for shares redeemed | (30,990 | ) | (303,597 | ) | (2,658 | ) | (27,067 | ) | ||||
Net increase (decrease) | (30,002 | ) | (293,939 | ) | (1,453 | ) | (14,755 | ) | ||||
Total increase (decrease) | (39,400 | ) | $ | (384,137 | ) | 6,529 | $ | 67,260 |
See accompanying notes which are an integral part of the financial statements.
654 Russell Multi-Strategy Alternative Fund
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Russell Investment Company
Russell Multi-Strategy Alternative Fund
Financial Highlights — For the Periods Ended (†)
For a Share Outstanding Throughout Each Period. | |||||||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | ||||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||||
Class A | |||||||||||||||||
October 31, 2015 | 9.97 | (.09 | ) | (.32 | ) | (.41 | ) | (.25 | ) | — | |||||||
October 31, 2014 | 10.15 | (.04 | ) | (.06 | ) | (.10 | ) | (.03 | ) | (.05 | ) | ||||||
October 31, 2013 | 9.95 | (.06 | ) | .26 | .20 | — | — | ||||||||||
October 31, 2012(2) | 10.00 | (.01 | ) | (.04 | ) | (.05 | ) | — | — | ||||||||
Class C | |||||||||||||||||
October 31, 2015 | 9.84 | (.16 | ) | (.32 | ) | (.48 | ) | (.16 | ) | — | |||||||
October 31, 2014 | 10.07 | (.11 | ) | (.07 | ) | (.18 | ) | —(f) | (.05 | ) | |||||||
October 31, 2013 | 9.94 | (.13 | ) | .26 | .13 | — | — | ||||||||||
October 31, 2012(2) | 10.00 | (.03 | ) | (.03 | ) | (.06 | ) | — | — | ||||||||
Class E | |||||||||||||||||
October 31, 2015 | 9.96 | (.08 | ) | (.33 | ) | (.41 | ) | (.25 | ) | — | |||||||
October 31, 2014 | 10.15 | (.04 | ) | (.07 | ) | (.11 | ) | (.03 | ) | (.05 | ) | ||||||
October 31, 2013 | 9.95 | (.06 | ) | .26 | .20 | — | — | ||||||||||
October 31, 2012(2) | 10.00 | (.01 | ) | (.04 | ) | (.05 | ) | — | — | ||||||||
Class S | |||||||||||||||||
October 31, 2015 | 9.99 | (.06 | ) | (.32 | ) | (.38 | ) | (.28 | ) | — | |||||||
October 31, 2014 | 10.18 | (.02 | ) | (.06 | ) | (.08 | ) | (.06 | ) | (.05 | ) | ||||||
October 31, 2013 | 9.95 | (.04 | ) | .27 | .23 | — | — | ||||||||||
October 31, 2012(2) | 10.00 | —(f) | (.05 | ) | (.05 | ) | — | — | |||||||||
See accompanying notes which are an integral part of the financial statements.
656 Russell Multi-Strategy Alternative Fund
% | % | % | ||||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||||
Total Distributions | Period | Return(b)(c) | (000 | ) | Gross(e) | Net(d)(e)(g) | Net Assets(d)(e) | Turnover Rate(b) | ||||||||||
(.25 | ) | 9.31 | (4.24 | ) | 1,789 | 2.51 | 2.47 | (.88 | ) | 272 | ||||||||
(.08 | ) | 9.97 | (1.05 | ) | 2,850 | 2.31 | 2.25 | (.39 | ) | 478 | ||||||||
— | 10.15 | 2.01 | 2,946 | 2.47 | 2.39 | (.59 | ) | 316 | ||||||||||
— | 9.95 | (.50 | ) | 279 | 2.47 | 2.39 | (.42 | ) | 97 | |||||||||
(.16 | ) | 9.20 | (4.95 | ) | 5,267 | 3.27 | 3.22 | (1.63 | ) | 272 | ||||||||
(.05 | ) | 9.84 | (1.85 | ) | 7,782 | 3.06 | 3.00 | (1.12 | ) | 478 | ||||||||
— | 10.07 | 1.27 | 6,400 | 3.21 | 3.14 | (1.33 | ) | 316 | ||||||||||
— | 9.94 | (.60 | ) | 1,505 | 3.20 | 3.12 | (1.51 | ) | 97 | |||||||||
(.25 | ) | 9.30 | (4.21 | ) | 13,721 | 2.52 | 2.47 | (.88 | ) | 272 | ||||||||
(.08 | ) | 9.96 | (1.11 | ) | 16,195 | 2.30 | 2.25 | (.40 | ) | 478 | ||||||||
— | 10.15 | 1.97 | 16,936 | 2.47 | 2.39 | (.63 | ) | 316 | ||||||||||
— | 9.95 | (.50 | ) | 13,401 | 2.52 | 2.43 | (.62 | ) | 97 | |||||||||
(.28 | ) | 9.33 | (3.94 | ) | 509,227 | 2.27 | 2.22 | (.63 | ) | 272 | ||||||||
(.11 | ) | 9.99 | (.88 | ) | 634,610 | 2.05 | 2.00 | (.15 | ) | 478 | ||||||||
— | 10.18 | 2.27 | 566,322 | 2.22 | 2.14 | (.38 | ) | 316 | ||||||||||
— | 9.95 | (.50 | ) | 403,576 | 2.23 | 2.15 | (.18 | ) | 97 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Alternative Fund 657
Russell Investment Company
Russell Multi-Strategy Income Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Multi-Strategy Income Fund - Class A‡ | Russell Multi-Strategy Income Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
Inception* | (8.96 | )% | Inception* | (3.27 | )% | ||
Russell Multi-Strategy Income Fund - Class C | Russell Multi-Strategy Income Fund - Class Y | ||||||
Total | Total | ||||||
Return | Return | ||||||
Inception* | (3.71 | )% | Inception* | (3.09 | )% | ||
Russell Multi-Strategy Income Fund - Class E | BofA Merrill Lynch Global High Yield 2% Constrained | ||||||
Total | Index** | ||||||
Return | Total | ||||||
Inception* | (3.25 | )% | Return | ||||
Inception* | (2.82 | )% |
658 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Russell Multi-Strategy Income Fund (the “Fund”) employs | classes. While diversification within its fixed income allocation |
a multi-manager approach whereby portions of the Fund | benefited the Fund, out-of-benchmark exposure to global equities |
are allocated to different money managers. Fund assets not | and infrastructure had a negative impact and was the primary |
allocated to money managers are managed by Russell Investment | driver of the Fund’s benchmark-relative underperformance. |
Management Company (“RIMCo”), the Fund’s advisor. RIMCo | These asset classes returned significantly less than fixed income |
may change the allocation of the Fund’s assets among money | in what was a risk-off environment. |
managers at any time. An exemptive order from the Securities | Within the Fund’s fixed income allocation, an underweight to |
and Exchange Commission (“SEC”) permits RIMCo to engage | investment grade credit in favor of high yield fixed income had a |
or terminate a money manager at any time, subject to approval | negative impact. High yield fixed income was the worst performing |
by the Fund’s Board, without a shareholder vote. Pursuant to the | fixed income asset class over the period due in large part to the |
terms of the exemptive order, the Fund is required to notify its | strong sell-off among U.S. energy companies as the price of oil |
shareholders within 90 days of when a money manager begins | fell sharply and stayed low, significantly raising the likelihood |
providing services. As of October 31, 2015, the Fund had seven | of defaults across the sector. Exposure to emerging market (EM) |
money managers. | debt was also a drag, as it underperformed developed markets |
What is the Fund’s investment objective? | as growth disappointed, particularly in key markets China and |
The Fund seeks to provide a high level of current income and, as | Brazil. Local currency EM bonds (those issued in the issuing |
a secondary objective, long-term capital growth. | country’s own currency) saw much larger declines as currencies |
were hit by both the slowdown in emerging market growth and | |
How did the Fund perform relative to its benchmark for the | the broader U.S. dollar rally that occurred during the period. |
fiscal year ended October 31, 2015? | Preferred securities and bank loans added modest value during |
For the period of May 1, 2015 (inception of the Fund) through | the period as these asset classes outperformed the Fund’s global |
October 31, 2015, the Fund’s Class A, Class C, Class E, Class | high yield fixed income benchmark. |
S and Class Y Shares lost 3.40%, 3.71%, 3.25% 3.27% and | The Fund’s allocation to global equities had a negative impact |
3.09%, respectively. This is compared to the Fund’s benchmark, | on the Fund as global equities underperformed high yield fixed |
the BofA Merrill Lynch Global High Yield 2% Constrained Index | income. Within equities, underweights to Canada and Australia |
(USD Hedged), which lost 2.82% during the same period. The | in favor of the U.S. helped as these commodity-related regions |
Fund’s performance includes operating expenses, whereas index | saw extreme sell-offs during the period. Underweights to the |
returns are unmanaged and do not include expenses of any kind. | Canadian dollar and Australian dollar versus the U.S. dollar |
From inception through October 31, 2015, the Fund’s Class A, | were also beneficial. A European overweight detracted slightly, |
Class C, Class E, Class S and Class Y Shares generated a 30-day | with Europe selling off more than the U.S. The Fund’s overall |
unsubsidized SEC yield of 3.27%, 2.52%, 3.27%, 3.52%, and | defensive positioning within equities added value. |
3.71%, respectively. | |
Within real assets results were mixed. Global real estate modestly | |
For the period of May 1, 2015 (inception of the Fund) through | outperformed global high yield debt, which benefited the Fund, |
October 31, 2015, the Morningstar® Conservative Allocation, a | while global infrastructure underperformed global high yield |
group of funds that Morningstar considers to have investment | debt, which detracted. |
strategies similar to those of the Fund, lost 2.56%. This result | |
serves as a peer comparison and is expressed net of operating | How did the investment strategies and techniques employed |
expenses. | by the Fund and its money managers affect its benchmark- |
RIMCo may assign a money manager a specific style or | relative performance? |
capitalization benchmark other than the Fund’s index. However, | The Fund employs discretionary and non-discretionary money |
the Fund’s primary index remains the benchmark for the Fund | managers. The Fund’s discretionary money managers select |
and is representative of the aggregate of each money manager’s | the individual portfolio securities for the assets assigned to |
benchmark index. | them. The Fund’s non-discretionary money managers provide |
a model portfolio to RIMCo representing their investment | |
How did the market conditions described in the Market | recommendations, based upon which RIMCo purchases and sells |
Summary report affect the Fund’s performance? | securities for the Fund. Fund assets not allocated to discretionary |
The inception-to-date period ended October 31, 2015 was | money managers include assets managed by RIMCo based upon |
characterized by slowing global growth and commodity price | model portfolios provided by non-discretionary money managers, |
weakness which resulted in significant volatility across asset | the Fund’s liquidity reserves and assets which may be managed |
Russell Multi-Strategy Income Fund 659
Russell Investment Company
Russell Multi-Strategy Income Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
directly by RIMCo to effect the Fund’s investment strategies and/ | Fund’s allocation to investment grade credit manager Loomis, | |
or to actively manage the Fund’s overall exposures by investing in | Sayles & Company, L.P. These allocation changes were intended | |
securities or other instruments that RIMCo believes will achieve | to allow the Fund to take advantage of low valuations in the high | |
the desired risk/return profile for the Fund. | yield market and to position the Fund for rising interest rates. | |
Performance of the Fund’s money managers was mixed during the | During the period, RIMCo equitized the Fund’s cash using index | |
inception-to-date period. With respect to certain of the Fund’s | futures contracts to provide the Fund with full market exposure. | |
money managers, high yield manager DDJ Capital Management | This did not have a material impact on the Fund’s performance | |
(“DDJ”) underperformed the Fund’s benchmark during the | for the period. | |
period. The manager struggled in the riskier parts of high yield as | ||
lower quality issues underperformed. | Describe any changes to the Fund’s structure or the money | |
manager line-up. | ||
Global equity managers Epoch Investment Partners, Inc. and | Other than as described above, there were no changes to the | |
Janus Capital Management LLC outperformed the Russell Global | Fund’s structure or the money manager line-up during the period. | |
Index. Both benefited from good stock selection in defensive | ||
sectors such as utilities and consumer staples which outperformed | Money Managers as of October 31, | |
on the uptick in volatility. | 2015 | Styles |
Real assets and preferred securities manager Cohen & Steers | Cohen & Steers Capital Management, Inc. | Global Listed Real |
Capital Management, Inc. benefited from positive stock selection | Estate Securities, | |
in U.S. hotels and resorts and an underweight to Canada with | Global Listed | |
respect to their global real estate securities investments. Within | Infrastructure, | |
Preferred Securities | ||
infrastructure, the manager outperformed due to an underweight | DDJ Capital Management, LLC | Global High Yield |
to transportation logistics and out-of-benchmark positions in | Debt | |
pipelines. Stock selection in toll roads also added value. | Epoch Investment Partners, Inc. | Global Equities |
Janus Capital Management LLC and Perkins | Global Equities | |
During the period, RIMCo utilized a positioning strategy to | Investment Management, LLC | |
control Fund-level exposures and risks through the purchase | Lazard Asset Management, LLC | Emerging Markets |
of and sale of equites, equity futures contracts and currency | Debt | |
forwards. Using the output from a quantitative model, the strategy | Loomis, Sayles & Company, L.P. | Global Investment |
seeks to position the portfolio to meet RIMCo’s overall preferred | Grade Credit | |
positioning with respect to Fund exposures, while optimizing the | THL Credit Advisors LLC | Bank Loans |
portfolio to minimize tracking error relative to the Fund’s money | The views expressed in this report reflect those of the portfolio | |
manager portfolios. During the period, the strategy was designed | managers only through the end of the period covered by | |
to position the Fund defensively with a preference for low | the report. These views do not necessarily represent the | |
volatility and high dividend yield within equities. The strategy | views of RIMCo, or any other person in RIMCo or any other | |
maintained an underweight to Canadian and Australian equity | affiliated organization. These views are subject to change | |
and an overweight to European equity excluding the United | at any time based upon market conditions or other events, | |
Kingdom. The strategy also maintained an underweight to the | and RIMCo disclaims any responsibility to update the views | |
Australian dollar and Canadian dollar in favor of the U.S. dollar. | contained herein. These views should not be relied on as | |
These positions added value to the Fund over the period. | investment advice and, because investment decisions for | |
a Russell Investment Company (“RIC”) Fund are based on | ||
After the market sell-off in August, RIMCo increased the Fund’s | numerous factors, should not be relied on as an indication | |
allocation to high yield debt manager DDJ, and decreased the | of investment decisions of any RIC Fund. |
660 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* | Assumes initial investment on May 1, 2015. |
** | The BofA Merrill Lynch Global High Yield 2% Constrained Index contains all securities in the BofA Merrill Lynch Global High Yield Index but caps issuer |
exposure at 2%. Index constituents are capitalization-weighted, based on their current amount outstanding, provided the total allocation to an individual issuer | |
does not exceed 2%. Issuers that exceed the limit are reduced to 2% and the face value of each of their bonds is adjusted on a pro-rata basis. Similarly, the face | |
values of bonds of all other issuers that fall below the 2% cap are increased on a pro-rata basis. In the event there are fewer than 50 issuers in the Index, each is | |
equally weighted and the face values of their respective bonds are increased or decreased on a pro-rata basis. | |
‡ | The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%. |
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s | |
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the | |
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
Russell Multi-Strategy Income Fund 661
Russell Investment Company
Russell Multi-Strategy Income Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | ||||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | ||||||
and other Fund expenses. The Example is intended to help | Performance (5% | ||||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | |||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | ||||
Beginning Account Value | |||||||
investing in other mutual funds. The Example is based on an | May 4, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
investment of $1,000 invested at the beginning of the period and | Ending Account Value | ||||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 966.00 | $ | 1,019.66 | ||
May 4, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 5.42 | $ | 5.60 | ||
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 1.10% | ||||||
(representing the 183-day period annualized), multiplied by the average | |||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 183/365 (to reflect the period | ||||||
Performance” provides information about actual account values | since commencement of operations). May reflect amounts waived and/or | ||||||
and actual expenses. You may use the information in this column, | reimbursed. Without any waivers and/or reimbursements, expenses would have | ||||||
together with the amount you invested, to estimate the expenses | been higher. Hypothetical expenses are equal to the Fund’s annualized expense | ||||||
ratio of 1.10% (representing the six-month period annualized), multiplied by | |||||||
that you paid over the period. Simply divide your account value by | the average account value over the period, multiplied by 184/365 (to reflect the | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | one-half year period). | ||||||
= 8.6), then multiply the result by the number in the first column | |||||||
in the row entitled “Expenses Paid During Period” to estimate | Hypothetical | ||||||
Performance (5% | |||||||
the expenses you paid on your account during this period. | Actual | return before | |||||
Class C | Performance | expenses) | |||||
Hypothetical Example for Comparison Purposes | Beginning Account Value | ||||||
The information in the table under the heading “Hypothetical | May 4, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Performance (5% return before expenses)” provides information | Ending Account Value | ||||||
October 31, 2015 | $ | 962.90 | $ | 1,015.88 | |||
about hypothetical account values and hypothetical expenses | Expenses Paid During Period* | $ | 9.10 | $ | 9.40 | ||
based on the Fund’s actual expense ratio and an assumed rate of | |||||||
return of 5% per year before expenses, which is not the Fund’s | * Expenses are equal to the Fund's annualized expense ratio of 1.85% | ||||||
actual return. The hypothetical account values and expenses | (representing the 183-day period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 183/365 (to reflect the period | |||||||
may not be used to estimate the actual ending account balance or | since commencement of operations). May reflect amounts waived and/or | ||||||
expenses you paid for the period. You may use this information | reimbursed. Without any waivers and/or reimbursements, expenses would have | ||||||
to compare the ongoing costs of investing in the Fund and other | been higher. Hypothetical expenses are equal to the Fund’s annualized expense | ||||||
funds. To do so, compare this 5% hypothetical example with the | ratio of 1.85% (representing the six-month period annualized), multiplied by | ||||||
the average account value over the period, multiplied by 184/365 (to reflect the | |||||||
5% hypothetical examples that appear in the shareholder reports | one-half year period). | ||||||
of other funds. |
662 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class E | Performance | expenses) | |||
Beginning Account Value | |||||
May 4, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 967.50 | $ | 1,019.66 | |
Expenses Paid During Period* | $ | 5.43 | $ | 5.60 | |
* Expenses are equal to the Fund's annualized expense ratio of 1.10% | |||||
(representing the 183-day period annualized), multiplied by the average | |||||
account value over the period, multiplied by 183/365 (to reflect the period | |||||
since commencement of operations). May reflect amounts waived and/or | |||||
reimbursed. Without any waivers and/or reimbursements, expenses would have | |||||
been higher. Hypothetical expenses are equal to the Fund’s annualized expense | |||||
ratio of 1.10% (representing the six-month period annualized), multiplied by | |||||
the average account value over the period, multiplied by 184/365 (to reflect the | |||||
one-half year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 4, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 967.30 | $ | 1,020.92 | |
Expenses Paid During Period* | $ | 4.19 | $ | 4.33 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.85% | |||||
(representing the 183-day period annualized), multiplied by the average | |||||
account value over the period, multiplied by 183/365 (to reflect the period | |||||
since commencement of operations). May reflect amounts waived and/or | |||||
reimbursed. Without any waivers and/or reimbursements, expenses would have | |||||
been higher. Hypothetical expenses are equal to the Fund’s annualized expense | |||||
ratio of 0.85% (representing the six-month period annualized), multiplied by | |||||
the average account value over the period, multiplied by 184/365 (to reflect the | |||||
one-half year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class Y | Performance | expenses) | |||
Beginning Account Value | |||||
May 4, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 969.10 | $ | 1,021.93 | |
Expenses Paid During Period* | $ | 3.21 | $ | 3.31 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.65% | |||||
(representing the 183-day period annualized), multiplied by the average | |||||
account value over the period, multiplied by 183/365 (to reflect the period | |||||
since commencement of operations). May reflect amounts waived and/or | |||||
reimbursed. Without any waivers and/or reimbursements, expenses would have | |||||
been higher. Hypothetical expenses are equal to the Fund’s annualized expense | |||||
ratio of 0.65% (representing the six-month period annualized), multiplied by | |||||
the average account value over the period, multiplied by 184/365 (to reflect the | |||||
one-half year period). |
Russell Multi-Strategy Income Fund 663
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Long-Term Investments - 52.0% | 6.000% due 10/15/22 (Å) | 28 | 29 | ||||
Asset-Backed Securities - 0.1% | Bill Barrett Corp. | ||||||
CLI Funding V LLC | 7.625% due 10/01/19 | 620 | 476 | ||||
Series 2014-2A Class A | Blue Coat Holdings, Inc. | ||||||
3.380% due 10/18/29 (Þ) | 126 | 123 | 8.375% due 06/01/23 (Å) | 250 | 259 | ||
Credit Acceptance Auto Loan Trust | BreitBurn Energy Partners, LP / | ||||||
Series 2015-1A Class A | BreitBurn Finance Corp. | ||||||
2.000% due 07/15/22 (Þ) | 250 | 249 | 7.875% due 04/15/22 | 920 | 345 | ||
372 | Brixmor Operating Partnership, LP | ||||||
Corporate Bonds and Notes - 17.9% | 3.875% due 08/15/22 | 80 | 80 | ||||
21st Century Fox America, Inc. | Building Materials Corp. of America | ||||||
Series WI | 6.000% due 10/15/25 (Å) | 55 | 58 | ||||
3.700% due 09/15/24 | 175 | 177 | Caesars Entertainment Operating Co., | ||||
99 Cents Only Stores LLC | Inc. | ||||||
11.000% due 12/15/19 | 930 | 484 | 11.250% due 06/01/17 (Ø) | 1,490 | 1,181 | ||
Celgene Corp. | |||||||
AbbVie, Inc. | 2.875% due 08/15/20 | 45 | 45 | ||||
2.900% due 11/06/22 | 170 | 165 | 3.550% due 08/15/22 | 50 | 51 | ||
Air Lease Corp. | |||||||
3.750% due 02/01/22 | 70 | 69 | 5.000% due 08/15/45 | 45 | 45 | ||
4.250% due 09/15/24 | 20 | 20 | Century Aluminum Co. | ||||
Aircastle, Ltd. | 7.500% due 06/01/21 (Þ) | 2,320 | 1,960 | ||||
5.500% due 02/15/22 | 40 | 42 | CF Industries, Inc. | ||||
Ally Financial, Inc. | 3.450% due 06/01/23 | 10 | 10 | ||||
3.750% due 11/18/19 | 135 | 137 | Chesapeake Energy Corp. | ||||
4.125% due 03/30/20 | 5 | 5 | 4.875% due 04/15/22 | 125 | 77 | ||
4.125% due 02/13/22 | 80 | 81 | CHS/Community Health Systems, Inc. | ||||
Altria Group, Inc. | 5.125% due 08/15/18 | 40 | 41 | ||||
2.850% due 08/09/22 | 120 | 119 | Cigna Corp. | ||||
Amazon.com, Inc. | 3.250% due 04/15/25 | 15 | 15 | ||||
3.300% due 12/05/21 | 45 | 47 | CIT Group, Inc. | ||||
4.800% due 12/05/34 | 40 | 42 | 5.250% due 03/15/18 | 95 | 100 | ||
Citigroup, Inc. | |||||||
American Airlines Pass-Through Trust | 4.000% due 08/05/24 | 90 | 90 | ||||
Series 2015-1 Class A | |||||||
3.375% due 05/01/27 | 145 | 141 | Series O | ||||
American International Group, Inc. | 5.875% due 12/29/49 (ƒ) | 50 | 49 | ||||
4.875% due 06/01/22 | 35 | 39 | Series Q | ||||
4.800% due 07/10/45 | 45 | 46 | 5.950% due 12/31/49 (ƒ) | 50 | 50 | ||
8.175% due 05/15/58 | 41 | 54 | Clear Channel Worldwide Holdings, Inc. | ||||
American Tire Distributors, Inc. | 6.500% due 11/15/22 | 2,250 | 2,317 | ||||
10.250% due 03/01/22 (Þ) | 500 | 505 | Cleaver-Brooks, Inc. | ||||
Ancestry.com Holdings LLC | 8.750% due 12/15/19 (Þ) | 630 | 606 | ||||
9.625% due 10/15/18 (Þ) | 1,980 | 2,000 | Comcast Corp. | ||||
3.375% due 08/15/25 | 160 | 163 | |||||
Anthem, Inc. | 4.200% due 08/15/34 | 55 | 54 | ||||
3.500% due 08/15/24 | 20 | 20 | |||||
4.650% due 08/15/44 | 70 | 69 | Constellation Brands, Inc. | ||||
3.875% due 11/15/19 | 25 | 26 | |||||
Arrow Electronics, Inc. | Constellis Holdings LLC / Constellis | ||||||
3.500% due 04/01/22 | 45 | 44 | Finance Corp. | ||||
AT&T, Inc. | 9.750% due 05/15/20 (Å) | 500 | 453 | ||||
4.300% due 12/15/42 | 55 | 48 | Continental Resources, Inc. | ||||
4.350% due 06/15/45 | 80 | 69 | 3.800% due 06/01/24 | 100 | 84 | ||
4.750% due 05/15/46 | 45 | 41 | CRH America, Inc. | ||||
Aviation Capital Group Corp. | 3.875% due 05/18/25 (Þ) | 200 | 201 | ||||
4.875% due 10/01/25 (Þ) | 40 | 40 | CVS Health Corp. | ||||
Ball Corp. | 2.250% due 08/12/19 | 115 | 116 | ||||
4.000% due 11/15/23 | 35 | 34 | Daimler Finance NA LLC | ||||
Baltimore Gas & Electric Co. | 2.700% due 08/03/20 (Þ) | 150 | 150 | ||||
3.350% due 07/01/23 | 45 | 46 | DDR Corp. | ||||
Bank of America Corp. | 3.375% due 05/15/23 | 20 | 19 | ||||
Series L | 3.625% due 02/01/25 | 105 | 100 | ||||
3.950% due 04/21/25 | 180 | 177 | Delta Air Lines Pass-Through Trust | ||||
Series Z | Series 15-1 Class B | ||||||
6.500% due 12/31/49 (ƒ) | 150 | 157 | 4.250% due 07/30/23 | 55 | 56 | ||
Becton Dickinson and Co. | DIRECTV Holdings LLC / DIRECTV | ||||||
2.675% due 12/15/19 | 40 | 41 | Financing Co., Inc. | ||||
3.734% due 12/15/24 | 95 | 97 | 4.450% due 04/01/24 | 15 | 15 | ||
Berry Plastics Corp. | Dominion Resources, Inc. |
See accompanying notes which are an integral part of the financial statements.
664 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
5.750% due 10/01/54 | 44 | 46 | HCP, Inc. | ||||
DR Horton, Inc. | 3.400% due 02/01/25 | 110 | 103 | ||||
3.750% due 03/01/19 | 55 | 57 | Hewlett Packard Enterprise Co. | ||||
Duke Energy Carolinas LLC | 4.900% due 10/15/25 (Å) | 15 | 15 | ||||
4.000% due 09/30/42 | 25 | 25 | 6.200% due 10/15/35 (Å) | 20 | 19 | ||
Eaton Corp. | 6.350% due 10/15/45 (Å) | 40 | 39 | ||||
4.000% due 11/02/32 | 45 | 43 | Hologic, Inc. | ||||
Embarq Corp. | 5.250% due 07/15/22 (Þ) | 35 | 37 | ||||
7.995% due 06/01/36 | 50 | 53 | Home Depot, Inc. | ||||
Energy Transfer Partners, LP | 2.625% due 06/01/22 | 135 | 136 | ||||
4.900% due 02/01/24 | 110 | 104 | Host Hotels & Resorts, LP | ||||
5.150% due 03/15/45 | 45 | 36 | Series C | ||||
6.125% due 12/15/45 | 25 | 22 | 4.750% due 03/01/23 | 85 | 88 | ||
Enterprise Products Operating LLC | Series D | ||||||
1.650% due 05/07/18 | 45 | 45 | 3.750% due 10/15/23 | 75 | 73 | ||
ERAC USA Finance LLC | HRG Group, Inc. | ||||||
2.800% due 11/01/18 (Þ) | 70 | 71 | 7.750% due 01/15/22 (Þ) | 1,330 | 1,320 | ||
4.500% due 02/15/45 (Þ) | 45 | 42 | 7.750% due 01/15/22 | 1,030 | 1,022 | ||
Essex Portfolio, LP | HSBC Bank USA NA | ||||||
3.250% due 05/01/23 | 90 | 88 | Series BKNT | ||||
Flextronics International, Ltd. | 5.875% due 11/01/34 | 250 | 294 | ||||
4.750% due 06/15/25 (Þ) | 20 | 19 | HSBC USA, Inc. | ||||
Ford Motor Credit Co. LLC | 2.750% due 08/07/20 | 130 | 131 | ||||
4.250% due 09/20/22 | 200 | 209 | Hyundai Capital America | ||||
4.134% due 08/04/25 | 200 | 204 | 3.000% due 10/30/20 (Å) | 55 | 55 | ||
Foresight Energy LLC / Foresight Energy | Series REGS | ||||||
Finance Corp. | 2.600% due 03/19/20 | 115 | 113 | ||||
7.875% due 08/15/21 (Þ) | 2,410 | 1,771 | IHS, Inc. | ||||
Freeport-McMoRan, Inc. | Series WI | ||||||
5.450% due 03/15/43 | 15 | 11 | 5.000% due 11/01/22 | 40 | 40 | ||
Fresenius Medical Care US Finance II, | INVISTA Finance LLC | ||||||
Inc. | 4.250% due 10/15/19 (Þ) | 100 | 98 | ||||
4.125% due 10/15/20 (Þ) | 35 | 36 | Jo-Ann Stores Holdings, Inc. | ||||
Fresenius US Finance II, Inc. | 9.750% due 10/15/19 (Þ) | 100 | 75 | ||||
4.500% due 01/15/23 (Þ) | 25 | 26 | Jo-Ann Stores LLC | ||||
4.500% due 01/15/23 (Å) | 55 | 56 | 8.125% due 03/15/19 (Þ) | 750 | 684 | ||
Frontier Communications Corp. | Joseph T Ryerson & Son, Inc. | ||||||
8.875% due 09/15/20 (Å) | 11 | 12 | 9.000% due 10/15/17 | 650 | 567 | ||
9.000% due 08/15/31 | 70 | 63 | JPMorgan Chase & Co. | ||||
GATX Corp. | 3.200% due 01/25/23 | 50 | 50 | ||||
3.250% due 03/30/25 | 90 | 84 | Series 1 | ||||
General Electric Capital Corp. | 7.900% due 04/29/49 (ƒ) | 75 | 78 | ||||
Series A | Series S | ||||||
7.125% due 06/15/49 (ƒ) | 200 | 235 | 6.750% due 01/29/49 (ƒ) | 100 | 108 | ||
Series GMTN | Series Z | ||||||
3.150% due 09/07/22 | 185 | 190 | 5.300% due 12/29/49 (ƒ) | 50 | 50 | ||
General Motors Financial Co., Inc. | Kimco Realty Corp. | ||||||
4.375% due 09/25/21 | 115 | 119 | 3.200% due 05/01/21 | 130 | 131 | ||
4.250% due 05/15/23 | 15 | 15 | 4.250% due 04/01/45 | 80 | 73 | ||
4.000% due 01/15/25 | 120 | 118 | Kinder Morgan, Inc. | ||||
Gibson Brands, Inc. | 5.050% due 02/15/46 | 125 | 99 | ||||
8.875% due 08/01/18 (Þ) | 360 | 316 | Lennar Corp. | ||||
Gilead Sciences, Inc. | 4.875% due 12/15/23 | 15 | 15 | ||||
4.750% due 03/01/46 | 40 | 40 | 4.750% due 05/30/25 | 45 | 44 | ||
Glencore Funding LLC | Liberty Mutual Group, Inc. | ||||||
Series REGS | 4.250% due 06/15/23 (Þ) | 55 | 57 | ||||
2.500% due 01/15/19 | 60 | 51 | 7.800% due 03/15/37 (Þ) | 100 | 117 | ||
Goldman Sachs Group, Inc. (The) | 4.850% due 08/01/44 (Þ) | 55 | 54 | ||||
3.850% due 07/08/24 | 100 | 102 | McGraw Hill Financial, Inc. | ||||
Series GMTN | 4.000% due 06/15/25 (Þ) | 190 | 189 | ||||
5.375% due 03/15/20 | 80 | 89 | McKesson Corp. | ||||
H&E Equipment Services, Inc. | 4.883% due 03/15/44 | 35 | 35 | ||||
7.000% due 09/01/22 | 750 | 761 | Medtronic, Inc. | ||||
HCA, Inc. | Series WI | ||||||
4.750% due 05/01/23 | 5 | 5 | 3.500% due 03/15/25 | 175 | 179 | ||
5.375% due 02/01/25 | 100 | 103 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 665
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Memorial Production Partners, LP / | Shale-Inland Holdings LLC / Shale- | ||||||
Memorial Production Finance Corp. | Inland Finance Corp. | ||||||
6.875% due 08/01/22 | 1,500 | 945 | 8.750% due 11/15/19 (Þ) | 210 | 156 | ||
Merck & Co., Inc. | Simmons Foods, Inc. | ||||||
2.350% due 02/10/22 | 180 | 179 | 7.875% due 10/01/21 (Þ) | 70 | 65 | ||
MetLife Capital Trust IV | Southwestern Electric Power Co. | ||||||
7.875% due 12/15/37 (Þ) | 175 | 217 | 3.550% due 02/15/22 | 90 | 92 | ||
MetLife, Inc. | Spirit Airlines Pass-Through Trust | ||||||
4.050% due 03/01/45 | 25 | 24 | Series 2015-1 Class B | ||||
Series C | 4.450% due 04/01/24 | 62 | 61 | ||||
5.250% due 12/29/49 (ƒ) | 135 | 136 | State Street Corp. | ||||
Micron Technology, Inc. | Series F | ||||||
5.250% due 01/15/24 (Þ) | 55 | 53 | 5.250% due 12/29/49 (ƒ) | 100 | 100 | ||
Morgan Stanley | Sterigenics-Nordion Holdings LLC | ||||||
3.950% due 04/23/27 | 30 | 29 | 4.250% due 05/15/22 (Ê) | 500 | 494 | ||
Series GMTN | 6.500% due 05/15/23 (Þ) | 120 | 121 | ||||
5.500% due 07/28/21 | 110 | 125 | Surgical Care Affiliates, Inc. | ||||
MPH Acquisition Holdings LLC | 6.000% due 04/01/23 (Þ) | 400 | 402 | ||||
6.625% due 04/01/22 (Þ) | 1,000 | 1,020 | Targa Resources Partners, LP / Targa | ||||
Nabors Industries, Inc. | Resources Partners Finance Corp. | ||||||
4.625% due 09/15/21 | 70 | 64 | 5.000% due 01/15/18 (Þ) | 40 | 39 | ||
Nationwide Financial Services, Inc. | Tenet Healthcare Corp. | ||||||
5.375% due 03/25/21 (Þ) | 172 | 191 | 4.500% due 04/01/21 | 90 | 90 | ||
Neptune Finco Corp. | 8.125% due 04/01/22 | 1,750 | 1,851 | ||||
6.625% due 10/15/25 (Þ) | 28 | 29 | Tesoro Logistics, LP / Tesoro Logistics | ||||
NextEra Energy Capital Holdings, Inc. | Finance Corp. | ||||||
2.400% due 09/15/19 | 105 | 104 | 5.500% due 10/15/19 (Þ) | 40 | 41 | ||
Noble Energy, Inc. | Time Warner Cable, Inc. | ||||||
5.250% due 11/15/43 | 80 | 74 | 4.500% due 09/15/42 | 125 | 101 | ||
Northrop Grumman Corp. | Time Warner, Inc. | ||||||
3.850% due 04/15/45 | 45 | 40 | 4.875% due 03/15/20 | 40 | 44 | ||
Nuance Communications, Inc. | 6.100% due 07/15/40 | 35 | 39 | ||||
5.375% due 08/15/20 (Þ) | 750 | 765 | 4.850% due 07/15/45 | 90 | 90 | ||
Omnicom Group, Inc. | Trans-Allegheny Interstate Line Co. | ||||||
3.650% due 11/01/24 | 65 | 65 | 3.850% due 06/01/25 (Þ) | 40 | 40 | ||
Opal Acquisition, Inc. | TransDigm, Inc. | ||||||
8.875% due 12/15/21 (Þ) | 540 | 480 | 5.500% due 10/15/20 | 1,000 | 1,002 | ||
Optima Specialty Steel, Inc. | Travelers Cos., Inc. (The) | ||||||
12.500% due 12/15/16 (Þ) | 1,000 | 890 | 4.600% due 08/01/43 | 30 | 32 | ||
Optimas OE Solutions Holding LLC / | Tyson Foods, Inc. | ||||||
Optimas OE Solutions, Inc. | 2.650% due 08/15/19 | 80 | 81 | ||||
8.625% due 06/01/21 (Þ) | 750 | 712 | 3.950% due 08/15/24 | 125 | 128 | ||
Peabody Energy Corp. | 4.875% due 08/15/34 | 15 | 15 | ||||
6.250% due 11/15/21 | 1,060 | 140 | United Airlines Pass-Through Trust | ||||
PFS Holding Corp. | Series 2013-1 Class B | ||||||
4.500% due 01/31/21 (Ê) | 398 | 362 | 5.375% due 08/15/21 | 50 | 52 | ||
Pioneer Natural Resources Co. | Series 2014-2 Class B | ||||||
3.950% due 07/15/22 | 50 | 50 | 4.625% due 09/03/22 | 50 | 50 | ||
PNC Financial Services Group, Inc. | United Continental Holdings, Inc. | ||||||
(The) | 6.375% due 06/01/18 | 40 | 42 | ||||
6.750% due 12/31/49 (ƒ) | 100 | 108 | UnitedHealth Group, Inc. | ||||
Principal Financial Group, Inc. | 2.700% due 07/15/20 | 80 | 82 | ||||
3.400% due 05/15/25 | 45 | 44 | 4.750% due 07/15/45 | 45 | 48 | ||
4.700% due 05/15/55 | 50 | 51 | US Foods, Inc. | ||||
Prudential Financial, Inc. | 8.500% due 06/30/19 | 2,500 | 2,600 | ||||
5.625% due 06/15/43 | 100 | 105 | Verizon Communications, Inc. | ||||
5.375% due 05/15/45 | 109 | 109 | 5.150% due 09/15/23 | 145 | 162 | ||
Quicken Loans, Inc. | 5.050% due 03/15/34 | 70 | 70 | ||||
5.750% due 05/01/25 (Þ) | 45 | 45 | 4.750% due 11/01/41 | 20 | 19 | ||
Real Alloy Holding, Inc. | 3.850% due 11/01/42 | 90 | 75 | ||||
10.000% due 01/15/19 (Þ) | 1,000 | 1,020 | Series WI | ||||
Regency Centers, LP | 2.625% due 02/21/20 | 100 | 101 | ||||
4.800% due 04/15/21 | 40 | 43 | 4.272% due 01/15/36 | 35 | 32 | ||
Sabine Pass Liquefaction LLC | 4.522% due 09/15/48 | 75 | 68 | ||||
5.625% due 02/01/21 | 1,500 | 1,489 | Viacom, Inc. | ||||
Santander Holdings USA, Inc. | 4.375% due 03/15/43 | 20 | 15 | ||||
4.500% due 07/17/25 | 80 | 81 | Virginia Electric & Power Co. |
See accompanying notes which are an integral part of the financial statements.
666 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
4.450% due 02/15/44 | 40 | 42 | 3.500% due 06/15/22 (Þ) | 110 | 114 | |||
Vulcan Materials Co. | Belize Government International Bond | |||||||
4.500% due 04/01/25 | 55 | 56 | Series REGS | |||||
Wayne Merger Sub LLC | 6.767% due 08/20/17 | 75 | 55 | |||||
8.250% due 08/01/23 (Þ) | 610 | 606 | BG Energy Capital PLC | |||||
Wells Fargo & Co. | 4.000% due 12/09/20 (Þ) | 100 | 107 | |||||
Series K | BNP Paribas SA | |||||||
7.980% due 03/29/49 (ƒ) | 100 | 106 | 7.375% due 12/31/49 (ƒ)(Þ) | 200 | 207 | |||
Series U | BP Capital Markets PLC | |||||||
5.875% due 12/31/49 (ƒ) | 100 | 106 | 3.245% due 05/06/22 | 160 | 162 | |||
Welltower, Inc. | Brazilian Government International Bond | |||||||
4.000% due 06/01/25 | 105 | 104 | 4.875% due 01/22/21 | 155 | 152 | |||
Whiting Petroleum Corp. | 4.250% due 01/07/25 | 80 | 71 | |||||
5.750% due 03/15/21 | 115 | 107 | 8.250% due 01/20/34 | 55 | 59 | |||
Wisconsin Power & Light Co. | Burger King | |||||||
4.100% due 10/15/44 | 85 | 84 | 3.750% due 12/12/21 (Ê) | 459 | 460 | |||
WMG Acquisition Corp. | Citigroup, Inc. | |||||||
6.750% due 04/15/22 (Þ) | 1,000 | 926 | 1.375% due 10/27/21 | 130 | 144 | |||
Worthington Industries, Inc. | Series MPLE | |||||||
4.550% due 04/15/26 | 25 | 25 | 4.090% due 06/09/25 (Þ) | 100 | 76 | |||
Zayo Group LLC / Zayo Capital, Inc. | CNOOC Finance 2015 Australia Pty, | |||||||
6.000% due 04/01/23 (Þ) | 1,750 | 1,784 | Ltd. | |||||
Zebra Technologies Corp. | 2.625% due 05/05/20 | 200 | 197 | |||||
7.250% due 10/15/22 (Þ) | 1,000 | 1,091 | Colombia Government International | |||||
Zions Bancorporation | Bond | |||||||
Series J | 2.625% due 03/15/23 | 200 | 181 | |||||
7.200% due 09/29/49 (ƒ) | 125 | 135 | ConvaTec Finance International SA | |||||
8.250% due 01/15/19 (Þ) | 750 | 748 | ||||||
49,293 | Cooperatieve Centrale Raiffeisen- | |||||||
International Debt - 8.8% | Boerenleenbank BA | |||||||
1011778 BC ULC / New Red Finance, | 11.000% due 06/29/49 (ƒ)(Þ) | 100 | 124 | |||||
Inc. | Costa Rica Government International | |||||||
4.625% due 01/15/22 (Å) | 500 | 508 | Bond | |||||
1011778 BC ULC/New Red Finance, | Series REGS | |||||||
Inc. | 4.375% due 04/30/25 | 125 | 108 | |||||
6.000% due 04/01/22 (Þ) | 1,275 | 1,334 | Credit Agricole SA | |||||
Actavis Funding SCS | Series REGS | |||||||
3.450% due 03/15/22 | 40 | 40 | 4.375% due 03/17/25 | 200 | 197 | |||
3.800% due 03/15/25 | 80 | 79 | Croatia Government International Bond | |||||
4.550% due 03/15/35 | 75 | 71 | ||||||
AerCap Ireland Capital, Ltd. / AerCap | Series REGS | |||||||
6.625% due 07/14/20 | 180 | 196 | ||||||
Global Aviation Trust | Dai-ichi Life Insurance Co., Ltd. (The) | |||||||
Series WI | ||||||||
3.750% due 05/15/19 | 150 | 152 | 7.250% due 12/29/49 (ƒ)(Þ) | 100 | 117 | |||
Albemarle Corp. | Delhaize Group | |||||||
1.875% due 12/08/21 | 100 | 106 | 5.700% due 10/01/40 | 10 | 11 | |||
Aquarius & Investments PLC for Swiss | Delta 2 Lux Sarl Covenant-Lite Lien | |||||||
Reinsurance Co., Ltd. | Term Loan B | |||||||
8.250% due 09/29/49 (ƒ) | 200 | 218 | 7.750% due 07/29/22 (Ê) | 500 | 476 | |||
ArcelorMittal | Delta 2 Lux Sarl Covenant-Lite Term | |||||||
Loan B3 | ||||||||
5.125% due 06/01/20 | 50 | 48 | 4.750% due 07/30/21 (Ê) | 1,000 | 980 | |||
6.000% due 08/05/20 | 95 | 90 | Dominican Republic International Bond | |||||
Argentine Republic Government | ||||||||
Series REGS | ||||||||
International Bond | 7.500% due 05/06/21 | 100 | 109 | |||||
Series 1 | ||||||||
8.750% due 06/02/17 | 75 | 82 | 7.450% due 04/30/44 | 240 | 253 | |||
Series NY | Ecopetrol SA | |||||||
3.750% due 03/31/19 | 215 | 136 | 4.125% due 01/16/25 | 60 | 53 | |||
8.280% due 12/31/33 | 380 | 422 | Ecuador Government International Bond | |||||
AXA SA | Series REGS | |||||||
6.463% due 12/14/18 (ƒ)(Þ) | 125 | 130 | 7.950% due 06/20/24 | 230 | 175 | |||
Baidu, Inc. | EDP Finance BV | |||||||
3.250% due 08/06/18 | 200 | 204 | 4.900% due 10/01/19 (Þ) | 100 | 104 | |||
Bank of America Corp. | Egypt Government International Bond | |||||||
4.625% due 09/14/18 | 135 | 163 | Series REGS | |||||
Barclays PLC | 5.750% due 04/29/20 | 140 | 144 | |||||
4.375% due 09/11/24 | 200 | 196 | El Salvador Government International | |||||
BAT International Finance PLC | Bond |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 667
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Series REGS | 7.500% due 12/31/49 (ƒ) | 300 | 319 | ||||||
6.375% due 01/18/27 | 120 | 107 | Mallinckrodt International Finance SA / | ||||||
Embraer Netherlands Finance BV | Mallinckrodt CB LLC | ||||||||
5.050% due 06/15/25 | 75 | 72 | 5.625% due 10/15/23 (Å) | 28 | 26 | ||||
Emirates Telecommunications Group | Methanex Corp. | ||||||||
Co. PJSC | 3.250% due 12/15/19 | 40 | 39 | ||||||
Series GMTN | Mexico Government International Bond | ||||||||
2.375% due 06/18/19 | 200 | 201 | 6.050% due 01/11/40 | 95 | 107 | ||||
Enel SpA | 4.750% due 03/08/44 | 290 | 276 | ||||||
8.750% due 09/24/73 (Þ) | 200 | 231 | 4.600% due 01/23/46 | 115 | 107 | ||||
Evergreen Skills Lux Sarl 2nd Lien Term | Mitsui Sumitomo Insurance Co., Ltd. | ||||||||
Loan | 7.000% due 03/15/72 (Þ) | 100 | 116 | ||||||
9.250% due 04/28/22 (Ê) | 500 | 377 | Mood Media Corp. Term Loan | ||||||
Ghana Government International Bond | 7.000% due 05/01/19 (Ê) | 125 | 122 | ||||||
Series REGS | Morgan Stanley | ||||||||
7.875% due 08/07/23 | 200 | 172 | 1.875% due 03/30/23 | 100 | 112 | ||||
Global SC Finance II SRL | Namibia International Bonds | ||||||||
Series 2014-1A Class A1 | 5.250% due 10/29/25 (Þ) | 20 | 20 | ||||||
3.190% due 07/17/29 (Þ) | 219 | 214 | OCP SA | ||||||
Guatemala Government Bond | Series REGS | ||||||||
Series REGS | 5.625% due 04/25/24 | 200 | 209 | ||||||
5.750% due 06/06/22 | 10 | 10 | Ooredoo International Finance, Ltd. | ||||||
4.875% due 02/13/28 | 10 | 10 | Series REGS | ||||||
Houghton Mifflin Harcourt Publishers, | 5.000% due 10/19/25 | 200 | 219 | ||||||
Inc. Term Loan B | Panama Government International Bond | ||||||||
4.000% due 05/29/21 (Ê) | 499 | 491 | 4.000% due 09/22/24 | 135 | 136 | ||||
Hungary Government International Bond | 3.750% due 03/16/25 | 200 | 198 | ||||||
5.375% due 02/21/23 | 250 | 275 | 8.875% due 09/30/27 | 35 | 49 | ||||
ICICI Bank, Ltd./Hong Kong | 6.700% due 01/26/36 | 125 | 155 | ||||||
Series REGS | Parq Holdings, LP 1st Lien Term Loan | ||||||||
5.750% due 11/16/20 | 100 | 112 | 8.500% due 12/17/20 (Ê) | 139 | 136 | ||||
Indonesia Government International | Parq Holdings, LP Term Loan | ||||||||
Bond | 8.500% due 12/17/20 (Ê) | 681 | 667 | ||||||
Series REGS | Pernod Ricard SA | ||||||||
5.875% due 03/13/20 | 80 | 89 | 5.500% due 01/15/42 (Þ) | 150 | 155 | ||||
4.125% due 01/15/25 | 240 | 234 | Pertamina Persero PT | ||||||
7.750% due 01/17/38 | 80 | 99 | Series REGS | ||||||
5.125% due 01/15/45 | 100 | 94 | 4.300% due 05/20/23 | 200 | 189 | ||||
Itau Unibanco Holding SA/Cayman | Petrobras Global Finance BV | ||||||||
Island | |||||||||
2.850% due 05/26/18 (Þ) | 200 | 194 | 3.214% due 03/17/20 (Ê) | 195 | 149 | ||||
Ivory Coast Government International | Petroleos de Venezuela SA | ||||||||
Bond | Series REGS | ||||||||
Series REGS | 8.500% due 11/02/17 | 120 | 73 | ||||||
5.750% due 12/31/32 | 540 | 481 | 6.000% due 05/16/24 | 100 | 36 | ||||
Jamaica Government International Bond | Philip Morris International, Inc. | ||||||||
8.000% due 06/24/19 | 35 | 38 | 1.750% due 03/19/20 | 140 | 161 | ||||
6.750% due 04/28/28 | 40 | 41 | Playa Resorts Holding BV 1st Lien Term | ||||||
JPMorgan Chase & Co. | Loan B | ||||||||
1.500% due 01/27/25 | 165 | 179 | 4.000% due 08/09/19 (Ê) | 497 | 490 | ||||
Kazakhstan Government International | Poland Government International Bond | ||||||||
Bond | 6.375% due 07/15/19 | 50 | 58 | ||||||
Series REGS | 5.125% due 04/21/21 | 25 | 28 | ||||||
3.875% due 10/14/24 | 240 | 225 | 5.000% due 03/23/22 | 72 | 81 | ||||
KazMunayGas National Co. JSC | 3.000% due 03/17/23 | 130 | 131 | ||||||
Series REGS | 4.000% due 01/22/24 | 25 | 27 | ||||||
9.125% due 07/02/18 | 100 | 110 | QBE Insurance Group, Ltd. | ||||||
Linxens France SA 2nd Lien Term Loan | 6.750% due 12/02/44 | 200 | 207 | ||||||
1.000% due 07/15/23 (Þ) | 310 | 305 | Republic of Paraguay | ||||||
Lithuania Government International | Series REGS | ||||||||
Bond | 6.100% due 08/11/44 | 145 | 147 | ||||||
Series REGS | Romania Government International Bond | ||||||||
7.375% due 02/11/20 | 200 | 240 | Series REGS | ||||||
Lloyds Bank PLC | 6.125% due 01/22/44 | 110 | 130 | ||||||
2.350% due 09/05/19 | 200 | 200 | Royal Bank of Scotland Group PLC | ||||||
Lloyds Banking Group PLC | 6.100% due 06/10/23 | 30 | 33 | ||||||
4.500% due 11/04/24 | 200 | 203 | 5.125% due 05/28/24 | 200 | 205 |
See accompanying notes which are an integral part of the financial statements.
668 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
7.648% due 09/30/49 (ƒ) | 100 | 124 | Loan Agreements - 18.1% | ||||
7.500% due 12/29/49 (ƒ) | 200 | 207 | 99 Cents Only Stores LLC Covenant-Lite | ||||
Russian Foreign Bond - Eurobond | Term Loan B2 | ||||||
Series REGS | 1.000% due 01/13/19 (Ê) | 50 | 40 | ||||
4.875% due 09/16/23 | 200 | 207 | ABG Intermediate Holdings 2, LLC 1st | ||||
7.500% due 03/31/30 | 89 | 106 | Lien Term Loan | ||||
SGSP Australia Assets Pty, Ltd. | 5.500% due 05/27/21 (Ê) | 116 | 115 | ||||
Series EMTN | ABG Intermediate Holdings 2, LLC | ||||||
2.000% due 06/30/22 | 100 | 110 | Incremental Covenant-Lite Term Loan | ||||
Simon Property Group, LP | 1.000% due 05/27/21 (Ê) | 9 | 9 | ||||
2.375% due 10/02/20 | 100 | 117 | AF Borrower LLC 2nd Lien Term Loan | ||||
Sky PLC | 10.000% due 12/02/22 | 900 | 883 | ||||
Alvogen Pharmaceutical US, Inc. Term | |||||||
Series REGS | Loan | ||||||
3.750% due 09/16/24 | 200 | 199 | 6.000% due 04/02/22 (Ê) | 1,316 | 1,290 | ||
Slovenia Government International Bond | American Airlines, Inc. Term Loan | ||||||
Series REGS | 3.250% due 05/21/20 (Ê) | 500 | 495 | ||||
5.850% due 05/10/23 | 400 | 463 | American Pacific Corp. 1st Lien Term | ||||
5.250% due 02/18/24 | 200 | 224 | Loan B | ||||
South Africa Government International | 7.000% due 02/27/19 (Ê) | 125 | 124 | ||||
Bond | Ancestry.com Inc. Term Loan B | ||||||
5.875% due 05/30/22 | 100 | 110 | 5.000% due 08/17/22 | 1,100 | 1,097 | ||
5.375% due 07/24/44 | 120 | 117 | AP Gaming I LLC 1st Lien Term Loan B | ||||
Sri Lanka Government International | 9.250% due 12/20/20 (Ê) | 249 | 243 | ||||
Bond | Arctic Glacier USA, Inc. Covenant-Lite | ||||||
6.850% due 11/03/25 (Þ) | 130 | 129 | Term Loan | ||||
Standard Chartered PLC | 6.000% due 05/13/19 (Ê) | 386 | 365 | ||||
3.950% due 01/11/23 (Þ) | 200 | 196 | AssuredPartners Capital, Inc. 1st Lien | ||||
SUAM Finance BV | Term Loan | ||||||
Series REGS | 5.750% due 10/06/22 | 214 | 214 | ||||
4.875% due 04/17/24 | 100 | 103 | Asurion LLC Covenant-Lite 2nd Lien | ||||
Sumitomo Life Insurance Co. | Term Loan | ||||||
6.500% due 09/20/73 (Þ) | 200 | 225 | 8.500% due 03/03/21 (Ê) | 250 | 224 | ||
Talisman Energy, Inc. | Asurion LLC Covenant-Lite Term Loan | ||||||
5.850% due 02/01/37 | 40 | 31 | B4 | ||||
Teine Energy, Ltd. | 5.000% due 08/04/22 (Ê) | 998 | 941 | ||||
6.875% due 09/30/22 (Þ) | 80 | 72 | Avaya, Inc. Term Loan | ||||
Telecom Italia Capital SA | 6.250% due 05/29/20 (Ê) | 1,988 | 1,522 | ||||
6.000% due 09/30/34 | 80 | 75 | Berlin Packaging LLC 2nd Lien Term | ||||
Telefonica Emisiones SAU | Loan | ||||||
5.462% due 02/16/21 | 180 | 201 | 7.750% due 10/01/22 (Ê) | 1,000 | 980 | ||
7.045% due 06/20/36 | 20 | 24 | BioScrip, Inc. Covenant-Lite 1st Lien | ||||
Travelport Finance Sarl Term Loan B | Term Loan B | ||||||
5.750% due 09/02/21 | 125 | 124 | 6.500% due 07/31/20 (Ê) | 834 | 759 | ||
Turkey Government International Bond | BioScrip, Inc. Covenant-Lite Term Loan | ||||||
7.375% due 02/05/25 | 130 | 155 | 6.500% due 07/31/20 (Ê) | 501 | 456 | ||
4.250% due 04/14/26 | 50 | 48 | Blue Coat Systems, Inc. Term Loan | ||||
UBS Group AG | 4.500% due 05/26/22 (Ê) | 500 | 496 | ||||
7.125% due 12/29/49 (ƒ) | 200 | 209 | BMC Software Finance, Inc. Term Loan | ||||
Ukraine Government International Bond | 5.000% due 09/10/20 (Ê) | 497 | 447 | ||||
Series REGS | BWAY Holding Co. Covenant-Lite Term | ||||||
6.750% due 11/14/17 | 225 | 176 | Loan B | ||||
7.750% due 09/23/20 | 325 | 254 | 5.500% due 08/14/20 (Ê) | 497 | 499 | ||
Vale Overseas, Ltd. | Caesars Entertainment Corp. 1st Lien | ||||||
6.875% due 11/21/36 | 75 | 61 | Term Loan B | ||||
Venezuela Government International | 7.000% due 10/11/20 (Ê) | 995 | 940 | ||||
Calpine Construction Finance Co., LP | |||||||
Bond | Term Loan B1 | ||||||
Series REGS | 3.000% due 05/03/20 (Ê) | 497 | 484 | ||||
6.000% due 12/09/20 | 60 | 23 | Camping World, Inc. Covenant-Lite 1st | ||||
8.250% due 10/13/24 | 330 | 125 | Lien Term Loan B | ||||
Vietnam Government International Bond | 5.250% due 02/20/20 (Ê) | 487 | 485 | ||||
Series REGS | Cast & Crew Payroll, LLC 2nd Lien Term | ||||||
6.750% due 01/29/20 | 15 | 16 | Loan | ||||
4.800% due 11/19/24 | 15 | 15 | 8.750% due 07/23/23 | 250 | 247 | ||
WPP Finance | Cengage Learning Acquisitions, Inc. | ||||||
5.625% due 11/15/43 | 80 | 83 | Covenant-Lite 1st Lien Term Loan | ||||
24,405 | 7.000% due 03/31/20 (Ê) | 486 | 482 | ||||
Chemours Co. Term Loan B |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 669
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
3.750% due 05/22/22 | 499 | 456 | 10.500% due 02/06/22 (Ê) | 250 | 232 | ||||
Chrysler Group LLC 1st Lien Term | J Crew Group, Inc. Covenant-Lite Term | ||||||||
Loan B | Loan B | ||||||||
3.250% due 12/31/18 (Ê) | 995 | 991 | 4.000% due 03/05/21 (Ê) | 100 | 73 | ||||
CHS/Community Health Systems, Inc. | Jill Acquisition LLC Term Loan | ||||||||
1st Lien Term Loan H | 6.000% due 05/04/22 | 525 | 518 | ||||||
4.000% due 01/27/21 (Ê) | 998 | 994 | Koosharem LLC Term Loan | ||||||
Cincinnati Bell, Inc. 1st Lien Term | 7.500% due 05/16/20 (Ê) | 497 | 487 | ||||||
Loan B | La Quinta Intermediate Holdings LLC | ||||||||
4.000% due 09/10/20 (Ê) | 497 | 491 | Covenant-Lite Term Loan B | ||||||
Commercial Barge Line Co. 2nd Lien | 3.750% due 04/14/21 (Ê) | 116 | 115 | ||||||
Term Loan | LTS Buyer LLC 2nd Lien Term Loan | ||||||||
10.750% due 03/22/20 (Ê) | 500 | 507 | 8.000% due 04/01/21 (Ê) | 320 | 311 | ||||
Communications Sales & Leasing, Inc. | MCC Iowa LLC Term Loan H | ||||||||
Covenant-Lite Term Loan B | 3.250% due 01/29/21 (Ê) | 497 | 489 | ||||||
5.000% due 10/16/22 (Ê) | 998 | 940 | Media General, Inc. 1st Lien Term Loan | ||||||
Compuware Corp. Term Loan B2 | B | ||||||||
6.250% due 12/15/21 (Ê) | 995 | 942 | 4.000% due 07/31/20 (Ê) | 462 | 462 | ||||
Connolly Corp. Covenant-Lite 2nd Lien | Mergermarket USA, Inc. 1st Lien Term | ||||||||
Term Loan | Loan | ||||||||
8.000% due 05/14/22 (Ê) | 510 | 506 | 4.500% due 02/04/21 (Ê) | 995 | 969 | ||||
CPI Card Group, Inc. Covenant-Lite | Millennium Laboratories, Inc. Term | ||||||||
Term Loan B | Loan B | ||||||||
6.750% due 08/17/22 (Ê) | 185 | 185 | 5.250% due 04/16/21 (Ê) | 249 | 88 | ||||
Creative Artists Agency LLC Covenant- | MSC.Software Corp. 1st Lien Term Loan | ||||||||
Lite Term Loan B | 5.000% due 05/29/20 (Ê) | 497 | 489 | ||||||
5.500% due 12/12/21 (Ê) | 250 | 250 | National Vision, Inc. Covenant-Lite 2nd | ||||||
Crowne Group LLC 1st Lien Term Loan | Lien Term Loan | ||||||||
6.000% due 09/29/20 | 249 | 247 | 6.750% due 03/13/22 (Ê) | 1,280 | 1,235 | ||||
CSC Holdings LLC Term Loan | Navistar, Inc. 1st Lien Term Loan B | ||||||||
5.000% due 09/21/22 | 250 | 251 | 6.500% due 08/07/20 (Ê) | 250 | 235 | ||||
Dell International LLC Term Loan B2 | New Albertson's, Inc. Term Loan B | ||||||||
4.000% due 04/29/20 (Ê) | 499 | 498 | 4.750% due 06/27/21 (Ê) | 497 | 494 | ||||
Dollar Tree, Inc. 1st Lien Term Loan B1 | nTelos, Inc. Term Loan B | ||||||||
3.500% due 03/09/22 (Ê) | 833 | 834 | 5.750% due 11/09/19 (Ê) | 205 | 203 | ||||
Eastman Kodak Co.1st Lien Term Loan | Numericable US LLC 1st Lien Term | ||||||||
7.250% due 09/03/19 (Ê) | 249 | 236 | Loan B1 | ||||||
eResearchTechnology, Inc. Term Loan B | 4.500% due 05/21/20 (Ê) | 267 | 263 | ||||||
5.500% due 05/11/22 (Ê) | 499 | 494 | Numericable US LLC 1st Lien Term | ||||||
First Data Corp. Term Loan | Loan B2 | ||||||||
3.947% due 06/23/22 | 1,000 | 997 | 4.500% due 05/21/20 (Ê) | 231 | 228 | ||||
Fitness International LLC Covenant-Lite | Numericable US LLC Term Loan | ||||||||
Term Loan B | 1.000% due 01/31/23 | 250 | 247 | ||||||
5.500% due 07/01/20 (Ê) | 125 | 118 | Ocwen Loan Servicing LLC Term Loan B | ||||||
Foundation Building Materials LLC 2nd | 5.500% due 02/15/18 (Ê) | 637 | 637 | ||||||
Lien Term Loan | Patterson Medical Holdings Inc. 2nd | ||||||||
11.500% due 10/06/23 | 590 | 555 | Lien Term Loan | ||||||
FPC Holdings, Inc. 1st Lien Term Loan | 8.750% due 08/14/23 | 590 | 581 | ||||||
5.250% due 11/27/19 (Ê) | 497 | 471 | PharMEDium Healthcare Corp. | ||||||
FULLBEAUTY Brands, Inc. 1st Lien | Covenant-Lite 2nd Lien Term Loan | ||||||||
Term Loan | 7.750% due 01/28/22 (Ê) | 1,000 | 1,002 | ||||||
5.750% due 09/22/22 | 500 | 474 | Physio-Control International, Inc. 2nd | ||||||
FULLBEAUTY Brands, Inc. 2nd Lien | Lien Term Loan | ||||||||
Term Loan | 10.000% due 05/05/23 | 1,090 | 1,019 | ||||||
1.000% due 09/22/23 | 250 | 218 | PowerTeam Services, LLC Covenant-Lite | ||||||
GENEX Holdings, Inc. 2nd Lien Term | 2nd Lien Term Loan | ||||||||
Loan | 8.250% due 11/06/20 (Ê) | 250 | 237 | ||||||
8.750% due 05/30/22 (Ê) | 250 | 239 | Pre-Paid Legal Services, Inc. 2nd Lien | ||||||
Genoa a QoL Healthcare Co LLC 2nd | Term Loan | ||||||||
Lien Term Loan | 10.250% due 07/01/20 (Ê) | 250 | 247 | ||||||
8.750% due 04/30/23 (Ê) | 154 | 153 | Quincy Newspapers, Inc. Term Loan B | ||||||
Getty Images, Inc. Covenant-Lite Term | 1.000% due 10/13/22 | 250 | 248 | ||||||
Loan B | RentPath, Inc. Covenant-Lite 1st Lien | ||||||||
4.750% due 10/18/19 (Ê) | 995 | 664 | Term Loan | ||||||
GTCR Valor Cos., Inc. 1st Lien Term | 6.250% due 12/17/21 (Ê) | 995 | 882 | ||||||
Loan | Roundy's Supermarkets, Inc. Covenant- | ||||||||
6.000% due 05/30/21 (Ê) | 249 | 243 | Lite 1st Lien Term Loan B | ||||||
IPC Corp. 2nd Lien Term Loan | 5.750% due 03/03/21 (Ê) | 125 | 102 |
See accompanying notes which are an integral part of the financial statements.
670 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Rovi Solutions Corp. Syndicated Loans | Series 2010-GG10 Class A4B | ||||||||
Covenant-Lite Term Loan B | 5.989% due 08/15/45 (Þ) | 150 | 157 | ||||||
3.750% due 07/02/21 (Ê) | 125 | 117 | 443 | ||||||
Royal Holdings, Inc. Term Loan | Non-US Bonds - 6.7% | ||||||||
8.500% due 06/19/23 (Ê) | 390 | 388 | Abbey National Treasury Serices PLC | ||||||
RPI Finance Trust Term Loan B4 | 0.875% due 01/13/20 | EUR | 170 | 187 | |||||
3.500% due 12/11/20 | 497 | 496 | Alimentation Couche-Tard, Inc. | ||||||
Sage Products Holdings III, LLC 2nd | |||||||||
Lien Term Loan | Series 2 | ||||||||
9.250% due 06/13/20 (Ê) | 330 | 330 | 3.319% due 11/01/19 | CAD | 170 | 134 | |||
Scientific Games International, Inc. Term | Allianz Finance II BV | ||||||||
Loan B2 | 5.750% due 07/08/41 | EUR | 200 | 256 | |||||
6.000% due 10/01/21 (Ê) | 1,492 | 1,456 | Aquarius & Investments PLC for Zurich | ||||||
Seaworld Parks & Entertainment, Inc. | Insurance Co., Ltd. | ||||||||
Term Loan B3 | 4.250% due 10/02/43 | EUR | 135 | 163 | |||||
4.000% due 05/14/20 | 498 | 480 | Aviva PLC | ||||||
Signode Industrial Group US, Inc. | 6.625% due 06/03/41 | GBP | 100 | 167 | |||||
Covenant-Lite 1st Lien Term Loan B | 3.875% due 07/03/44 | EUR | 100 | 112 | |||||
3.750% due 05/01/21 (Ê) | 125 | 123 | AXA SA | ||||||
Sirius Computer Solutions, Inc. 1st Lien | 5.250% due 04/16/40 | EUR | 150 | 183 | |||||
Term Loan | Bank Nederlandse Gemeenten NV | ||||||||
1.000% due 10/08/22 | 500 | 493 | Series EMTN | ||||||
SIRVA Worldwide, Inc. Term Loan | 3.000% due 10/25/21 | EUR | 75 | 96 | |||||
7.500% due 03/27/19 (Ê) | 125 | 119 | BMW Finance NV | ||||||
Spectrum Brands, Inc. Term Loan | 3.625% due 01/29/18 | EUR | 70 | 82 | |||||
3.750% due 06/09/22 | 423 | 424 | BNP Paribas SA | ||||||
SterlingBackcheck, Inc. 2nd Lien Term | 5.750% due 01/24/22 | GBP | 75 | 129 | |||||
Loan | 2.375% due 02/17/25 | EUR | 100 | 107 | |||||
8.750% due 06/08/23 | 660 | 655 | BNZ International Funding, Ltd. | ||||||
The Active Network, Inc. 1st Lien Term | Series GMTN | ||||||||
Loan | 4.000% due 03/08/17 | EUR | 70 | 81 | |||||
5.500% due 11/15/20 (Ê) | 497 | 492 | Brazil Letras do Tesouro Nacional | ||||||
Transdigm, Inc. Term Loan E | Series LTN | ||||||||
3.500% due 05/14/22 (Ê) | 498 | 487 | Zero coupon due 01/01/17 | BRL | 960 | 211 | |||
Tribune Media Co. Term Loan | Zero coupon due 01/01/19 | BRL | 3,750 | 610 | |||||
3.750% due 12/27/20 (Ê) | 499 | 497 | 0.010% due 07/01/19 | BRL | 300 | 45 | |||
TTM Technologies, Inc. 1st Lien Term | Brazil Notas do Tesouro Nacional Serie B | ||||||||
Loan | Series NTNB | ||||||||
6.000% due 05/07/21 | 499 | 466 | 6.000% due 08/15/50 | BRL | 160 | 98 | |||
TWCC Holding Corp. 2nd Lien | Brazil Notas do Tesouro Nacional Serie F | ||||||||
Covenant-Lite Term Loan | |||||||||
7.000% due 06/26/20 (Ê) | 375 | 374 | Series NTNF | ||||||
TWCC Holding Corp. Extended Term | 10.000% due 01/01/23 | BRL | 790 | 164 | |||||
Loan | 10.000% due 01/01/25 | BRL | 1,290 | 256 | |||||
5.750% due 02/13/20 (Ê) | 125 | 125 | Bundesrepublik Deutschland | ||||||
Valeant Pharmaceuticals International, | 1.500% due 05/15/24 | EUR | 390 | 471 | |||||
Inc. 1st Lien Term Loan B | Canadian Government Bond | ||||||||
4.000% due 04/02/22 (Ê) | 995 | 924 | 2.750% due 06/01/22 | CAD | 125 | 105 | |||
Visant Corp. Covenant-Lite Term Loan | Carrefour SA | ||||||||
7.000% due 09/23/21 (Ê) | 468 | 466 | 1.750% due 07/15/22 | EUR | 100 | 114 | |||
William Morris Endeavor Entertainment | Centrica PLC | ||||||||
LLC Covenant-Lite Term Loan | 4.375% due 03/13/29 | GBP | 100 | 162 | |||||
5.250% due 05/06/21 (Ê) | 497 | 496 | Claris ABS | ||||||
World Endurance Holdings Term Loan | Series 2012-1 Class REGS | ||||||||
5.250% due 06/26/21 (Ê) | 125 | 124 | 0.412% due 10/31/60 (Ê) | EUR | 60 | 64 | |||
Zebra Technologies Corp. Term Loan | Colombian TES | ||||||||
4.750% due 10/27/21 (Ê) | 1,444 | 1,452 | Series B | ||||||
49,868 | 10.000% due 07/24/24 | COP | 1,759,000 | 690 | |||||
Mortgage-Backed Securities - 0.2% | 6.000% due 04/28/28 | COP | 445,000 | 127 | |||||
COMM Mortgage Trust | Deutsche Bahn Finance BV | ||||||||
Series 2014-KYO Class A | 2.500% due 09/12/23 | EUR | 115 | 142 | |||||
1.092% due 06/11/27 (Ê)(Þ) | 150 | 149 | Enel Finance International NV | ||||||
JPMorgan Chase Commercial Mortgage | 5.625% due 08/14/24 | GBP | 80 | 143 | |||||
Securities Trust | �� | 5.750% due 09/14/40 | GBP | 50 | 90 | ||||
Series 2006-LDP9 Class A3 | European Investment Bank | ||||||||
5.336% due 05/15/47 | 134 | 137 | 2.750% due 09/15/21 | EUR | 225 | 284 | |||
Morgan Stanley Re-REMIC Trust | Fonterra Co.-operative Group, Ltd. | ||||||||
4.500% due 06/30/21 | AUD | 200 | 148 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 671
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Hungary Government Bond | Province of Ontario Canada | |||||||||
Series 18/C | 4.650% due 06/02/41 | CAD | 80 | 75 | ||||||
2.500% due 06/22/18 | HUF | 16,050 | 57 | Romania Government Bond | ||||||
Series 19/A | Series 10YR | |||||||||
6.500% due 06/24/19 | HUF | 93,960 | 381 | 5.950% due 06/11/21 | RON | 450 | 130 | |||
Series 20/B | Series 10Y | |||||||||
3.500% due 06/24/20 | HUF | 4,300 | 16 | 4.750% due 02/24/25 | RON | 450 | 123 | |||
Series 25/B | Romania Government International Bond | |||||||||
5.500% due 06/24/25 | HUF | 93,870 | 389 | Series EMTN | ||||||
Iberdrola Finanzas SAU | 2.875% due 10/28/24 | EUR | 50 | 57 | ||||||
6.000% due 07/01/22 | GBP | 50 | 91 | RTE Reseau de Transport d'Electricite | ||||||
Indonesia Treasury Bond | SA | |||||||||
Series FR56 | 1.625% due 10/08/24 | EUR | 100 | 112 | ||||||
8.375% due 09/15/26 | IDR | 763,000 | 54 | 2.750% due 06/20/29 | EUR | 100 | 118 | |||
Series FR68 | Russian Federal Bond - OFZ | |||||||||
8.375% due 03/15/34 | IDR | 944,000 | 64 | Series 6208 | ||||||
Series FR69 | 7.500% due 02/27/19 | RUB | 12,410 | 181 | ||||||
7.875% due 04/15/19 | IDR | 4,369,000 | 310 | Series 6209 | ||||||
Series FR70 | 7.600% due 07/20/22 | RUB | 6,540 | 91 | ||||||
8.375% due 03/15/24 | IDR | 2,881,000 | 205 | Series 6211 | ||||||
Series FR71 | 7.000% due 01/25/23 | RUB | 22,190 | 297 | ||||||
Series 6215 | ||||||||||
9.000% due 03/15/29 | IDR | 10,418,000 | 756 | 7.000% due 08/16/23 | RUB | 7,020 | 93 | |||
Kelda Finance No. 3 PLC | Santander Issuances SAU | |||||||||
Series REGS | 2.500% due 03/18/25 | EUR | 100 | 105 | ||||||
5.750% due 02/17/20 | GBP | 100 | 161 | Siviglia SPV SRL | ||||||
KFW | Series 2012-1 Class A | |||||||||
1.625% due 01/15/21 | EUR | 95 | 113 | 0.498% due 10/25/55 (Ê) | EUR | 65 | 70 | |||
Malaysia Government Bond | Societe Generale SA | |||||||||
Series 0114 | 2.625% due 02/27/25 | EUR | 100 | 107 | ||||||
4.181% due 07/15/24 | MYR | 1,670 | 389 | South Africa Government Bond | ||||||
Series 0115 | Series 2032 | |||||||||
3.955% due 09/15/25 | MYR | 1,250 | 287 | 8.250% due 03/31/32 | ZAR | 650 | 45 | |||
Series 0210 | Series R186 | |||||||||
4.012% due 09/15/17 | MYR | 240 | 57 | 10.500% due 12/21/26 | ZAR | 10,830 | 903 | |||
Series 0215 | Series R203 | |||||||||
3.795% due 09/30/22 | MYR | 240 | 55 | 8.250% due 09/15/17 | ZAR | 2,210 | 163 | |||
Series 0414 | Series R214 | |||||||||
3.654% due 10/31/19 | MYR | 1,370 | 318 | 6.500% due 02/28/41 | ZAR | 4,350 | 236 | |||
Mexican Bonos | Standard Chartered PLC | |||||||||
Series M 20 | 4.000% due 10/21/25 | EUR | 100 | 113 | ||||||
10.000% due 12/05/24 | MXN | 10,242 | 794 | Telefonica Emisiones SAU | ||||||
Series M 30 | 5.375% due 02/02/26 | GBP | 50 | 85 | ||||||
10.000% due 11/20/36 | MXN | 2,764 | 230 | Telstra Corp., Ltd. | ||||||
Series M | 4.500% due 11/13/18 | AUD | 170 | 127 | ||||||
5.000% due 12/11/19 | MXN | 10,017 | 605 | Tesco PLC | ||||||
Muenchener Rueckversicherungs- | 5.000% due 03/24/23 | GBP | 70 | 106 | ||||||
Gesellschaft AG in Muenchen | Thailand Government Bond | |||||||||
6.000% due 05/26/41 | EUR | 100 | 131 | 3.250% due 06/16/17 | THB | 13,960 | 403 | |||
NWEN Finance PLC | 3.875% due 06/13/19 | THB | 3,000 | 90 | ||||||
5.875% due 06/21/21 | GBP | 100 | 161 | 3.850% due 12/12/25 | THB | 17,120 | 532 | |||
Peruvian Government International Bond | Travis Perkins PLC | |||||||||
Series REGS | 4.375% due 09/15/21 | GBP | 100 | 156 | ||||||
6.950% due 08/12/31 | PEN | 160 | 47 | Turkey Government Bond | ||||||
6.900% due 08/12/37 | PEN | 540 | 154 | 8.000% due 03/12/25 | TRY | 2,040 | 633 | |||
Poland Government Bond | Series 5Y | |||||||||
Series 0718 | 6.300% due 02/14/18 | TRY | 1,280 | 407 | ||||||
2.500% due 07/25/18 | PLN | 90 | 24 | United Kingdom Gilt | ||||||
Series 0725 | 3.250% due 01/22/44 | GBP | 35 | 61 | ||||||
3.250% due 07/25/25 | PLN | 1,160 | 315 | Vier Gas Transport GmbH | ||||||
Series 0922 | 2.000% due 06/12/20 | EUR | 100 | 116 | ||||||
5.750% due 09/23/22 | PLN | 1,460 | 457 | Virgin Media Finance PLC | ||||||
Series 1019 | 6.375% due 10/15/24 (Þ) | GBP | 100 | 157 | ||||||
5.500% due 10/25/19 | PLN | 250 | 74 | WPP Finance Deutschland GmbH | ||||||
Province of Manitoba Canada | 1.625% due 03/23/30 | EUR | 100 | 97 | ||||||
4.400% due 09/05/25 | CAD | 165 | 146 | 18,451 |
See accompanying notes which are an integral part of the financial statements.
672 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
United States Government Treasuries - 0.2% | Amec Foster Wheeler PLC - GDR | 16,818 | 184 | ||||||
United States Treasury Notes | BP PLC - ADR | 19,195 | 685 | ||||||
0.625% due 09/30/17 | 105 | 105 | BP PLC | 40,458 | 240 | ||||
0.875% due 10/15/18 | 195 | 194 | Cenovus Energy, Inc. | 20,572 | 306 | ||||
1.500% due 12/31/18 | 150 | 152 | Cheniere Energy, Inc.(Æ) | 7,001 | 347 | ||||
451 | Chevron Corp. | 2,955 | 269 | ||||||
Total Long-Term Investments | ConocoPhillips | 6,017 | 321 | ||||||
Devon Energy Corp. | 5,137 | 215 | |||||||
(cost $150,949) | 143,283 | Enterprise Products Partners, LP | 11,302 | 312 | |||||
Common Stocks - 37.3% | Exxaro Resources, Ltd.(Æ) | 41,689 | 172 | ||||||
Consumer Discretionary - 2.7% | Exxon Mobil Corp. | 6,908 | 572 | ||||||
BAE Systems PLC | 76,718 | 520 | Hanergy Thin Film Power Group, Ltd. | ||||||
Barratt Developments PLC | 37,248 | 351 | 205,123 | 103 | |||||
(Æ) | |||||||||
Belmond, Ltd. Class A(Æ) | 3,783 | 41 | Kinder Morgan, Inc. | 33,407 | 914 | ||||
Berkeley Group Holdings PLC | 4,265 | 218 | Occidental Petroleum Corp. | 6,449 | 481 | ||||
Daimler AG | 3,134 | 272 | Royal Dutch Shell PLC Class A | 33,867 | 883 | ||||
Diageo PLC | 9,699 | 280 | Royal Dutch Shell PLC Class A | ||||||
G4S PLC | 68,544 | 256 | - ADR(Æ) | 7,378 | 387 | ||||
Grupo Televisa SAB - ADR | 13,707 | 399 | SemGroup Corp. Class A | 1,833 | 83 | ||||
Home Depot, Inc. | 1,755 | 217 | Statoil ASA Class N | 24,575 | 397 | ||||
Hugo Boss AG | 165 | 17 | Tallgrass Energy GP, LP Class A | 2,280 | 55 | ||||
Hyundai Motor Co. | 4,974 | 680 | Tatneft PAO | 3,555 | 18 | ||||
Kongsberg Gruppen ASA | 924 | 15 | TGS Nopec Geophysical Co. ASA - ADR | 1,119 | 22 | ||||
Matas A/S | 13,596 | 246 | Total SA | 8,439 | 409 | ||||
McDonald's Corp. | 4,446 | 499 | Vermilion Energy, Inc. | 1,667 | 59 | ||||
Mediaset Espana Comunicacion SA | 15,898 | 193 | Williams Cos., Inc. (The) | 6,215 | 245 | ||||
Metropole Television SA | 11,376 | 219 | 7,743 | ||||||
Mr Price Group, Ltd.(Æ) | 615 | 9 | |||||||
Pearson PLC | 15,699 | 208 | |||||||
Persimmon PLC Class A(Æ) | 11,326 | 347 | Financial Services - 10.2% | ||||||
Aberdeen Asset Management PLC | 35,685 | 190 | |||||||
RAI Way SpA(Þ) | 13,226 | 67 | ACE, Ltd. | 2,412 | 274 | ||||
Regal Entertainment Group Class A | 10,241 | 199 | Aegon NV | 5,800 | 36 | ||||
Secom Co., Ltd. | 4,861 | 323 | Aeon Mall Co., Ltd. | 2,600 | 43 | ||||
Shaw Communications, Inc. Class B | 9,871 | 205 | Aflac, Inc. | 2,491 | 159 | ||||
Shingakukai Co., Ltd. | 18,484 | 111 | Alexander Forbes Group Holdings, Ltd. | 75,583 | 48 | ||||
Societe Television Francaise 1 | 11,079 | 143 | Allianz SE | 2,014 | 353 | ||||
Stock Spirits Group PLC | 120,703 | 354 | Ally Financial, Inc.(Æ) | 25,724 | 512 | ||||
Taylor Wimpey PLC | 121,289 | 369 | alstria office REIT-AG(Æ)(ö) | 3,016 | 42 | ||||
Vivendi SA - ADR | 17,602 | 424 | American Capital Agency Corp.(ö) | 9,252 | 165 | ||||
Wal-Mart Stores, Inc. | 1,295 | 74 | Amlin PLC | 35,423 | 360 | ||||
7,256 | Apartment Investment & Management | 3,771 | 148 | ||||||
Co. Class A(ö) | |||||||||
Consumer Staples - 3.8% | Arthur J Gallagher & Co. | 3,331 | 146 | ||||||
Altria Group, Inc. | 10,923 | 661 | AXA SA | 16,594 | 443 | ||||
British American Tobacco PLC | 9,088 | 539 | Bank Handlowy w Warszawie SA | 9,161 | 186 | ||||
Coca-Cola Co. (The) | 34,297 | 1,453 | Bank of Communications Co., Ltd. Class | 204,188 | 150 | ||||
Imperial Tobacco Group PLC | 8,522 | 459 | H | ||||||
Japan Tobacco, Inc. | 2,000 | 69 | Bank of Queensland, Ltd. | 6,019 | 56 | ||||
Kimberly-Clark Corp. | 3,067 | 367 | Bank Pekao SA | 1,324 | 51 | ||||
KT&G Corp. | 1,599 | 160 | Bankinter SA | 6,643 | 48 | ||||
PepsiCo, Inc. | 13,102 | 1,339 | Banque Cantonale Vaudoise | 217 | 134 | ||||
Philip Morris International, Inc. | 8,574 | 758 | Barclays Africa Group, Ltd. - ADR | 16,395 | 210 | ||||
Procter & Gamble Co. (The) | 20,626 | 1,575 | Bendigo & Adelaide Bank, Ltd. | 14,070 | 107 | ||||
Reynolds American, Inc. | 12,279 | 593 | Beni Stabili SpA SIIQ(ö) | 88,290 | 73 | ||||
Rite Aid Corp.(Æ) | 42,019 | 331 | Big Yellow Group PLC(ö) | 6,348 | 73 | ||||
Swedish Match AB | 21,219 | 667 | Brixmor Property Group, Inc.(ö) | 1,319 | 34 | ||||
Sysco Corp. | 10,774 | 445 | CapitaLand, Ltd. | 27,800 | 61 | ||||
Tesco PLC(Æ) | 185,390 | 522 | CBL & Associates Properties, Inc.(ö) | 2,500 | 63 | ||||
Unilever NV | 9,380 | 423 | Charles Schwab Corp. (The) | 5,747 | 175 | ||||
Wesfarmers, Ltd. | 4,502 | 126 | Chesapeake Lodging Trust(ö) | 2,000 | 54 | ||||
Woolworths, Ltd. | 1,858 | 32 | Cheung Kong Property Holdings, Ltd. | 28,000 | 196 | ||||
10,519 | China CITIC Bank Corp., Ltd. Class | 440,000 | 284 | ||||||
H(Æ) | |||||||||
China Construction Bank Corp. Class H | 256,000 | 185 | |||||||
Energy - 2.8% | China Everbright Bank Co., Ltd. Class H | 137,742 | 67 | ||||||
8Point3 Energy Partners, LP Class A(Æ) | 1,831 | 25 | |||||||
AltaGas, Ltd. - ADR | 1,502 | 39 | China Life Insurance Co., Ltd. Class H | 38,126 | 137 | ||||
Cincinnati Financial Corp. | 2,399 | 145 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 673
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
CIT Group, Inc. | 17,580 | 756 | Mapfre SA | 3,820 | 11 | |||||
Citigroup, Inc.(ƒ) | 1,000 | 28 | Mercury General Corp. | 2,319 | 125 | |||||
Citizens Financial Group, Inc. | 27,414 | 666 | Meritz Securities Co., Ltd. | 7,270 | 32 | |||||
CK Hutchison Holdings, Ltd. | 20,219 | 276 | Mid-America Apartment Communities, | 903 | 77 | |||||
CME Group, Inc. Class A | 2,683 | 253 | Inc.(ö) | |||||||
CNP Assurances | 1,856 | 26 | Mitsubishi Estate Co., Ltd. | 6,000 | 128 | |||||
Colony Capital, Inc.(ö) | 1,000 | 26 | Mitsui Fudosan Co., Ltd. | 6,000 | 163 | |||||
Commonwealth Bank of Australia - ADR | 3,270 | 179 | MMI Holdings, Ltd. | 6,113 | 11 | |||||
Corrections Corp. of America(ö) | 10,092 | 288 | Mori Hills REIT Investment Corp. Class | 38 | 47 | |||||
Credit Agricole SA | 4,446 | 56 | A(ö) | |||||||
Crown Castle International Corp. | 1,588 | 136 | Moscow Exchange MICEX-RTS PJSC | 197,082 | 277 | |||||
CyrusOne, Inc.(ö) | 1,280 | 45 | Muenchener Rueckversicherungs- | 5,269 | 1,052 | |||||
DDR Corp.(ö) | 9,383 | 173 | Gesellschaft AG in Muenchen | |||||||
Derwent London PLC(ö) | 797 | 48 | National Retail Properties, Inc.(ö) | 2,200 | 55 | |||||
Deutsche Bank AG | 9,494 | 266 | New World Development Co., Ltd. | 78,000 | 83 | |||||
Deutsche Boerse AG | 225 | 21 | NN Group NV | 3,093 | 97 | |||||
Deutsche Wohnen AG | 4,379 | 123 | Nomura Holdings, Inc. | 44,400 | 278 | |||||
Nomura Real Estate Master Fund, Inc. | ||||||||||
Digital Realty Trust, Inc.(ƒ) | 2,100 | 54 | 30 | 38 | ||||||
Direct Line Insurance Group PLC | 44,014 | 267 | (Æ)(ö) | |||||||
Nordea Bank AB | 19,776 | 218 | ||||||||
Douglas Emmett, Inc.(ö) | 2,072 | 63 | NorthStar Realty Finance Corp. | 2,100 | 50 | |||||
DuPont Fabros Technology, Inc.(ƒ) | 2,000 | 51 | NSI NV(ö) | 14,055 | 61 | |||||
Education Realty Trust, Inc.(ö) | 1,623 | 58 | Omega Healthcare Investors, Inc.(ö) | 4,170 | 144 | |||||
Empire State Realty Trust, Inc. Class | 2,794 | 50 | Pennsylvania Real Estate Investment | |||||||
A(ö) | 1,939 | 50 | ||||||||
Equity Residential(ö) | 3,001 | 232 | Trust(ƒ) | |||||||
People's United Financial, Inc. | 12,647 | 202 | ||||||||
Euler Hermes Group | 1,318 | 123 | PS Business Parks, Inc.(ƒ) | 4,711 | 119 | |||||
Eurobank Ergasias SA(Æ) | 10,384,307 | 353 | Public Storage(ƒ)(ö) | 2,579 | 368 | |||||
Euronext NV(Þ) | 5,637 | 247 | QTS Realty Trust, Inc. Class A(ö) | 1,116 | 48 | |||||
Extra Space Storage, Inc.(ö) | 1,806 | 143 | Regency Centers Corp.(ƒ)(ö) | 3,441 | 192 | |||||
Federation Centres(ö) | 45,275 | 94 | RMB Holdings, Ltd. | 7,460 | 36 | |||||
Fifth Third Bancorp | 24,595 | 469 | Royal Bank of Canada - GDR | 466 | 27 | |||||
Fonciere Des Regions(ö) | 725 | 68 | Sampo Oyj Class A | 9,865 | 481 | |||||
Global Logistic Properties, Ltd. | 37,757 | 60 | SBI Holdings, Inc. | 22,800 | 257 | |||||
GLP J-Reit(ö) | 41 | 41 | Scentre Group(ö) | 36,874 | 109 | |||||
Gramercy Property Trust, Inc.(ö) | 1,569 | 36 | SCOR SE - ADR | 9,500 | 353 | |||||
Great-West Lifeco, Inc. | 5,007 | 133 | Simon Property Group, Inc.(ö) | 2,008 | 405 | |||||
Hammerson PLC(ö) | 14,597 | 143 | Singapore Exchange, Ltd. | 29,700 | 156 | |||||
Hang Seng Bank, Ltd. | 8,600 | 157 | SL Green Realty Corp.(ö) | 912 | 108 | |||||
Hannover Rueck SE | 2,986 | 346 | Societe Generale SA | 920 | 43 | |||||
Hatteras Financial Corp.(ö) | 11,338 | 162 | Sompo Japan Nipponkoa Holdings, Inc. | 9,494 | 296 | |||||
HCP, Inc.(ö) | 1,474 | 55 | Spirit Realty Capital, Inc.(ö) | 6,220 | 63 | |||||
Healthcare Trust of America, Inc. Class | 1,767 | 47 | St. James's Place PLC | 14,367 | 213 | |||||
A(ö) | ||||||||||
Henderson Land Development Co., Ltd. | 8,000 | 51 | Starwood Waypoint Residential Trust(ö) | 1,752 | 43 | |||||
Hispania Activos Inmobiliarios SA(Æ) | 2,495 | 38 | Sun Communities, Inc.(ö) | 1,549 | 104 | |||||
Hong Kong Exchanges and Clearing, | Sun Hung Kai Properties, Ltd. | 10,000 | 133 | |||||||
Ltd. | 9,000 | 235 | Sunstone Hotel Investors, Inc.(ö) | 3,016 | 44 | |||||
Hongkong Land Holdings, Ltd. | 13,700 | 103 | Svenska Handelsbanken AB Class A | 19,039 | 258 | |||||
Hospitality Properties Trust(ƒ) | 2,063 | 54 | T Rowe Price Group, Inc. | 111 | 8 | |||||
Host Hotels & Resorts, Inc.(ö) | 5,085 | 88 | Talanx AG | 1,291 | 41 | |||||
HSBC Holdings PLC | 18,957 | 148 | Thomson Reuters Corp. | 705 | 29 | |||||
Hulic Reit, Inc.(ö) | 56 | 73 | Toronto Dominion Bank | 5,828 | 239 | |||||
IG Group Holdings PLC | 11,743 | 137 | Travelers Cos., Inc. (The) | 2,407 | 272 | |||||
ING Groep NV | 4,371 | 63 | Tryg A/S | 13,175 | 237 | |||||
Insurance Australia Group, Ltd. | 69,988 | 278 | Two Harbors Investment Corp.(ö) | 46,257 | 391 | |||||
Intact Financial Corp. | 1,069 | 76 | UDR, Inc.(ö) | 4,170 | 144 | |||||
Intesa Sanpaolo SpA | 65,419 | 228 | Unibail-Rodamco SE(ö) | 1,381 | 385 | |||||
Iron Mountain, Inc.(ö) | 12,350 | 378 | United Business Media, Ltd. | 31,801 | 250 | |||||
Japan Retail Fund Investment Corp.(ö) | 35 | 68 | Urstadt Biddle Properties, Inc.(ƒ) | 3,025 | 80 | |||||
Kilroy Realty Corp.(ö) | 1,867 | 123 | VEREIT, Inc.(ƒ) | 3,300 | 82 | |||||
Klepierre - GDR(ö) | 4,826 | 229 | Vornado Realty Trust(ƒ)(ö) | 4,508 | 264 | |||||
Komercni Banka AS | 1,077 | 223 | Wells Fargo & Co. | 25,768 | 1,395 | |||||
Land Securities Group PLC(ö) | 5,971 | 123 | Welltower, Inc.(Æ)(ö) | 9,310 | 604 | |||||
Lazard, Ltd. Class A | 5,891 | 273 | Wereldhave NV(ö) | 2,737 | 171 | |||||
Link Real Estate Investment True (The) | Westfield Corp.(ö) | 13,959 | 102 | |||||||
(ö) | 18,000 | 107 | Westpac Banking Corp. | 11,208 | 251 | |||||
Macerich Co. (The)(ö) | 1,275 | 108 | Zions Bancorporation | 17,100 | 492 |
See accompanying notes which are an integral part of the financial statements.
674 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Zurich Insurance Group AG(Æ) | 108 | 28 | Babcock & Wilcox Co. (The) Class W | 7,767 | 220 | ||||
27,950 | BBA Aviation PLC | 42,348 | 124 | ||||||
Boeing Co. (The) | 1,183 | 175 | |||||||
Health Care - 3.1% | bpost SA | 1,666 | 42 | ||||||
As One Corp. | 3,981 | 140 | Canadian Pacific Railway, Ltd. | 434 | 61 | ||||
AstraZeneca PLC | 2,580 | 165 | Canon, Inc. | 13,329 | 398 | ||||
AstraZeneca PLC - ADR | 11,869 | 378 | Central Japan Railway Co. | 500 | 91 | ||||
Bristol-Myers Squibb Co. | 2,198 | 145 | China Railway Construction Corp., Ltd. | 18,723 | 28 | ||||
Eli Lilly & Co. | 2,030 | 166 | Class H | ||||||
GlaxoSmithKline PLC - ADR | 73,276 | 1,578 | Cobham PLC | 104,436 | 446 | ||||
Johnson & Johnson | 11,172 | 1,129 | COSCO Pacific, Ltd.(Þ) | 62,000 | 80 | ||||
Medikit Co., Ltd. | 621 | 18 | Cosel Co., Ltd. | 19,239 | 187 | ||||
Medtronic PLC | 4,092 | 302 | CRRC Corp., Ltd.(Æ) | 142,000 | 180 | ||||
Merck & Co., Inc. | 7,019 | 384 | Cummins, Inc. | 261 | 27 | ||||
Nakanishi, Inc. | 2,020 | 69 | Danone SA | 10,867 | 756 | ||||
Novartis AG | 8,779 | 796 | Deutsche Post AG | 6,468 | 193 | ||||
Pfizer, Inc. | 40,104 | 1,356 | easyJet PLC | 3,480 | 94 | ||||
Roche Holding AG | 1,915 | 519 | Emerson Electric Co. | 3,812 | 180 | ||||
Sanofi - ADR | 6,307 | 636 | Ferrovial SA | 11,464 | 289 | ||||
Sonic Healthcare, Ltd. | 10,426 | 143 | Flughafen Zuerich AG | 421 | 319 | ||||
Stryker Corp. | 4,849 | 464 | Groupe Eurotunnel SE | 29,721 | 416 | ||||
Grupo Aeroportuario del Pacifico SAB de | |||||||||
Takeda Pharmaceutical Co., Ltd. | 2,100 | 102 | 2,784 | 253 | |||||
Valeant Pharmaceuticals International, | CV - ADR | ||||||||
Inc.(Æ) | 1,436 | 134 | Hamburger Hafen und Logistik AG | 9,825 | 142 | ||||
Kitagawa Industries Co., Ltd. | 5,631 | 62 | |||||||
8,624 | Kuehne & Nagel International AG | 727 | 101 | ||||||
Lockheed Martin Corp. | 2,534 | 557 | |||||||
Materials and Processing - 2.1% | Macquarie Infrastructure Corp. | 1,168 | 93 | ||||||
Abertis Infraestructuras SA | 17,649 | 293 | Nestle SA | 8,980 | 686 | ||||
Alrosa PAO | 176,900 | 142 | Oesterreichische Post AG | 1,674 | 61 | ||||
Alumina, Ltd. | 146,516 | 113 | Orkla ASA | 46,929 | 399 | ||||
Anglo American Platinum, Ltd.(Æ) | 15,403 | 269 | Qantas Airways, Ltd.(Æ) | 2,360 | 7 | ||||
Atlantia SpA | 12,121 | 336 | Raytheon Co. | 1,812 | 213 | ||||
BASF SE | 3,516 | 288 | RR Donnelley & Sons Co. | 15,325 | 258 | ||||
BHP Billiton, Ltd. - ADR | 11,021 | 181 | Secom Joshinetsu Co., Ltd. | 4,502 | 148 | ||||
CF Industries Holdings, Inc. | 5,683 | 289 | Shanghai Electric Group Co., Ltd. Class | ||||||
Dow Chemical Co. (The) | 6,153 | 318 | H | 124,669 | 77 | ||||
Eregli Demir ve Celik Fabrikalari TAS | 5,402 | 8 | Skanska AB Class B | 9,911 | 192 | ||||
Huntsman Corp. | 26,336 | 347 | Teekay Corp. | 4,647 | 149 | ||||
James Hardie Industries PLC | 4,586 | 60 | Unilever PLC | 5,995 | 266 | ||||
Jiangsu Expressway Co., Ltd. Class H | 58,000 | 78 | Union Pacific Corp. | 1,215 | 108 | ||||
Koza Altin Isletmeleri AS | 22,557 | 127 | United Parcel Service, Inc. Class B | 1,016 | 105 | ||||
Mosaic Co. (The) | 6,467 | 218 | United Technologies Corp. | 829 | 82 | ||||
Nippon Fine Chemical Co., Ltd. | 13,141 | 100 | Vinci SA | 4,775 | 322 | ||||
Nitto FC Co., Ltd. | 19,585 | 159 | Waste Management, Inc. | 3,479 | 187 | ||||
Norsk Hydro ASA | 2,178 | 8 | Westshore Terminals Investment Corp. | 3,701 | 62 | ||||
Novolipetsk Steel OJSC | 149,248 | 183 | 10,191 | ||||||
OHL Mexico SAB de CV(Æ) | 32,608 | 43 | |||||||
Potash Corp. of Saskatchewan, Inc. | 16,351 | 331 | Technology - 4.0% | ||||||
Rio Tinto PLC | 5,071 | 184 | Alphabet, Inc. Class A(Æ) | 1,322 | 975 | ||||
Siemens AG | 1,937 | 195 | America Movil SAB de CV | 829,267 | 740 | ||||
Sinopec Oilfield Service Corp. Class | 179,023 | 56 | Analog Devices, Inc. | 625 | 38 | ||||
H(Æ) | |||||||||
Soda Sanayii AS | 150,913 | 249 | AVX Corp. | 6,002 | 81 | ||||
Tipco Asphalt PCL(Æ) | 313,900 | 374 | BCE, Inc. | 12,042 | 520 | ||||
Transurban Group - ADR(Æ) | 75,535 | 563 | CA, Inc. | 1,940 | 54 | ||||
Ultrapar Participacoes SA | 3,284 | 57 | Cellnex Telecom SAU Class X(Æ)(Þ) | 3,257 | 56 | ||||
Yara International ASA | 4,990 | 226 | Corning, Inc. | 3,375 | 63 | ||||
Zhejiang Expressway Co., Ltd. Class H | 36,000 | 44 | Ei Towers SpA | 2,332 | 141 | ||||
Eutelsat Communications SA | 5,969 | 197 | |||||||
5,839 | Icom, Inc. | 4,043 | 84 | ||||||
Intel Corp. | 16,126 | 546 | |||||||
Producer Durables - 3.7% | International Business Machines Corp. | 884 | 124 | ||||||
3M Co. | 1,257 | 198 | Lectra | 8,960 | 106 | ||||
Accenture PLC Class A | 3,719 | 399 | Microchip Technology, Inc. | 4,393 | 212 | ||||
Aeroports de Paris | 771 | 97 | Microsoft Corp. | 37,904 | 1,995 | ||||
Auckland International Airport, Ltd. | 59,511 | 211 | NTT DOCOMO, Inc. | 7,839 | 154 | ||||
Automatic Data Processing, Inc. | 5,177 | 450 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 675
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Oracle Corp. | 28,581 | 1,110 | Tokyo Gas Co., Ltd. | 9,000 | 44 | ||||
QUALCOMM, Inc. | 4,810 | 286 | TransCanada Corp. | 10,040 | 338 | ||||
Rogers Communications, Inc. Class B | 31,780 | 1,265 | United Utilities Group PLC | 9,521 | 145 | ||||
Seagate Technology PLC | 7,082 | 270 | Verizon Communications, Inc. | 10,770 | 505 | ||||
Skyworks Solutions, Inc. | 2,492 | 192 | WEC Energy Group, Inc. | 8,895 | 459 | ||||
Symantec Corp. | 2,784 | 57 | Xcel Energy, Inc. | 1,267 | 45 | ||||
Taiwan Semiconductor Manufacturing | 9,871 | 217 | 13,562 | ||||||
Co., Ltd. - ADR | |||||||||
Telefonaktiebolaget LM Ericsson Class B | 21,902 | 213 | Total Common Stocks | ||||||
Telenor ASA | 11,082 | 209 | |||||||
Texas Instruments, Inc. | 4,345 | 246 | (cost $107,095) | 102,769 | |||||
Vodafone Group PLC | 278,514 | 918 | Preferred Stocks - 0.8% | ||||||
VTech Holdings, Ltd. | 1,300 | 16 | Consumer Discretionary - 0.1% | ||||||
CHS, Inc. | 4,762 | 132 | |||||||
11,085 | GMAC Capital Trust I | 2,000 | 52 | ||||||
Utilities - 4.9% | 184 | ||||||||
AGL Energy, Ltd. | 3,781 | 45 | Energy - 0.0% | ||||||
Aguas Andinas SA Class A | 94,907 | 50 | Southern Co. (The) | 4,700 | 124 | ||||
Alliant Energy Corp. | 1,199 | 71 | |||||||
Ameren Corp. | 6,857 | 299 | Financial Services - 0.6% | ||||||
American Water Works Co., Inc. | 1,803 | 103 | Aegon NV | 2,000 | 52 | ||||
APA Group | 14,319 | 94 | Allstate Corp. (The) | 3,000 | 81 | ||||
AT&T, Inc. | 15,571 | 522 | American Financial Group, Inc. | 2,000 | 53 | ||||
Atmos Energy Corp. | 660 | 42 | Bank of America Corp. | 3,619 | 95 | ||||
Canadian Natural Resources, Ltd. | 7,756 | 180 | Barclays Bank PLC | 3,700 | 97 | ||||
CenturyLink, Inc. | 13,251 | 374 | BB&T Corp. | 1,700 | 44 | ||||
China Gas Holdings, Ltd.(Æ) | 23,735 | 38 | Charles Schwab Corp. (The) | 1,500 | 39 | ||||
Chugoku Electric Power Co., Inc. (The) | 3,300 | 50 | CoBank ACB | 700 | 72 | ||||
CMS Energy Corp. | 2,250 | 81 | Fifth Third Bancorp | 1,500 | 42 | ||||
Deutsche Telekom AG | 11,734 | 219 | First Republic Bank | 2,000 | 50 | ||||
Dominion Resources, Inc. | 4,392 | 314 | Hanover Insurance Group, Inc. (The) | 2,000 | 51 | ||||
DTE Energy Co. | 1,241 | 101 | Hartford Financial Services Group, Inc. | 1,000 | 31 | ||||
Duke Energy Corp. | 7,851 | 561 | (The) | ||||||
Edison International | 2,657 | 161 | ING Groep NV | 2,500 | 65 | ||||
Electric Power Development Co., Ltd. | 1,500 | 49 | JPMorgan Chase & Co. | 1,800 | 46 | ||||
Electricite de France SA | 13,473 | 251 | Morgan Stanley | 9,750 | 257 | ||||
Enagas SA | 5,408 | 164 | National Westminster Bank PLC | 900 | 23 | ||||
Enbridge, Inc. | 6,717 | 287 | PartnerRe, Ltd. | 2,884 | 82 | ||||
PNC Financial Services Group, Inc. | |||||||||
Energy Transfer Equity, LP | 4,682 | 101 | 1,500 | 42 | |||||
(The) | |||||||||
Engie SA | 13,150 | 230 | PrivateBancorp, Inc. | 1,092 | 30 | ||||
ENN Energy Holdings, Ltd. | 8,000 | 46 | RBS Capital Funding Trust VI | 1,000 | 25 | ||||
Entergy Corp. | 5,256 | 358 | Regions Financial Corp. | 2,223 | 59 | ||||
Eversource Energy | 2,997 | 153 | Reinsurance Group of America, Inc. | 1,000 | 29 | ||||
Exelon Corp. | 17,043 | 476 | State Street Corp. | 1,000 | 27 | ||||
Gas Natural SDG SA | 9,526 | 206 | SunTrust Banks, Inc. | 1,700 | 43 | ||||
National Grid PLC | 64,066 | 912 | US Bancorp | 1,500 | 43 | ||||
NextEra Energy, Inc. | 4,675 | 480 | Wells Fargo & Co. | 5,075 | 135 | ||||
NiSource, Inc. | 1,802 | 34 | Wells Fargo Real Estate Investment | ||||||
Pattern Energy Group, Inc. Class A | 4,603 | 108 | Corp. | 1,200 | 32 | ||||
PG&E Corp. | 3,968 | 212 | WR Berkley Corp. | 2,000 | 50 | ||||
Power Assets Holdings, Ltd. | 5,000 | 50 | |||||||
PPL Corp. | 35,728 | 1,229 | 1,695 | ||||||
Public Service Enterprise Group, Inc. | 869 | 36 | Technology - 0.0% | ||||||
Scottish & Southern Energy PLC | 17,224 | 402 | Qwest Corp. | 1,460 | 37 | ||||
Sempra Energy | 2,460 | 252 | |||||||
Singapore Telecommunications, Ltd. | 80,066 | 226 | Utilities - 0.1% | ||||||
Snam Rete Gas SpA | 31,227 | 161 | Integrys Holding, Inc. | 1,000 | 25 | ||||
Southern Co. (The) | 4,651 | 210 | NextEra Energy Capital Holdings, Inc. | 1,700 | 43 | ||||
Swisscom AG | 766 | 394 | Qwest Corp. | 2,000 | 52 | ||||
TECO Energy, Inc. | 18,297 | 494 | SCE Trust III | 1,592 | 44 | ||||
Telenet Group Holding NV(Æ) | 2,456 | 143 | SCE Trust IV | 5,300 | 140 | ||||
Telkom SA SOC, Ltd. | 2,036 | 11 | 304 | ||||||
Telstra Corp., Ltd. | 86,024 | 331 | Total Preferred Stocks | ||||||
TELUS Corp. | 6,579 | 219 | (cost $2,293) | 2,344 | |||||
Terna Rete Elettrica Nazionale SpA | 87,665 | 446 | Warrants & Rights - 0.0% | ||||||
Tohoku Electric Power Co., Inc. | 3,600 | 50 | Warrants and Rights - 0.0% |
See accompanying notes which are an integral part of the financial statements.
676 Russell Multi-Strategy Income Fund
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Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | |||||
Principal | Fair | ||||
Amount ($) | Value | ||||
or Shares | $ | ||||
Westpac Banking Corp.(Æ) | |||||
2016 Right | 487 | 2 | |||
Total Warrants & Rights | |||||
(cost $—) | 2 | ||||
Short-Term Investments - 8.7% | |||||
Colombian TES | |||||
Series B | |||||
7.250% due 06/15/16 | 261,000 | 91 | |||
Malaysia Government Bond | |||||
Series 1/06 | |||||
4.262% due 09/15/16 | 700 | 165 | |||
Poland Government Bond | |||||
Series 1016 | |||||
4.750% due 10/25/16 | 1,680 | 448 | |||
Russell U.S. Cash Management Fund | 22,661,563 | (8) | 22,662 | ||
Russian Federal Bond - OFZ | |||||
Series 6203 | |||||
6.900% due 08/03/16 | 4,600 | 70 | |||
Turkey Government Bond | |||||
9.000% due 01/27/16 | 887 | 303 | |||
United States Treasury Notes | |||||
1.500% due 07/31/16 | 110 | 111 | |||
Total Short-Term Investments | |||||
(cost $23,956) | 23,850 | ||||
Total Investments 98.8% | |||||
(identified cost $284,293) | 272,248 | ||||
Other Assets and Liabilities, | |||||
Net - 1.2% | 3,419 | ||||
Net Assets - 100.0% | 275,667 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 677
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Schedule of Investments, continued — October 31, 2015
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
0.6% | ||||||||||||
1011778 BC ULC / New Red Finance, Inc. | 05/14/15 | 500,000 | 100.00 | 500 | 508 | |||||||
Berry Plastics Corp. | 09/16/15 | 28,000 | 100.00 | 28 | 29 | |||||||
Blue Coat Holdings, Inc. | 05/19/15 | 250,000 | 100.00 | 250 | 259 | |||||||
Building Materials Corp. of America | 09/22/15 | 55,000 | 100.00 | 55 | 58 | |||||||
Constellis Holdings LLC / Constellis Finance Corp. | 05/06/15 | 500,000 | 99.55 | 498 | 453 | |||||||
Fresenius US Finance II, Inc. | 09/16/15 | 55,000 | 100.00 | 55 | 56 | |||||||
Frontier Communications Corp. | 09/11/15 | 11,000 | 100.00 | 11 | 12 | |||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 15,000 | 99.73 | 15 | 15 | |||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 40,000 | 99.93 | 40 | 39 | |||||||
Hewlett Packard Enterprise Co. | 09/30/15 | 20,000 | 99.94 | 20 | 19 | |||||||
Hyundai Capital America | 10/27/15 | 55,000 | 99.94 | 55 | 55 | |||||||
Mallinckrodt International Finance SA / Mallinckrodt CB LLC | 09/09/15 | 28,000 | 100.00 | 28 | 26 | |||||||
1,529 | ||||||||||||
For a description of restricted securities see note 8 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
678 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||||
Amounts in thousands (except contract amounts) | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||
Contracts | Amount | Date | $ | ||||||
Long Positions | |||||||||
MSCI EAFE Mini Index Futures | 21 | USD | 1,845 | 12/15 | 51 | ||||
MSCI Emerging Markets Mini Index Futures | 6 | USD | 253 | 12/15 | 11 | ||||
Russell 1000 Index Mini Futures | 6 | USD | 690 | 12/15 | 35 | ||||
S&P 500 E-Mini Index Futures | 126 | USD | 13,064 | 12/15 | 817 | ||||
S&P E-Mini Consumer Discretionary Select Sector Index Futures | 34 | USD | 2,764 | 12/15 | 198 | ||||
S&P E-Mini Financial Select Sector Index Futures | 50 | USD | 2,996 | 12/15 | 133 | ||||
S&P Mid 400 E-Mini Index Futures | 6 | USD | 865 | 12/15 | 20 | ||||
TOPIX Index Futures | 24 | JPY | 374,040 | 12/15 | 244 | ||||
United States 2 Year Treasury Note Futures | 12 | USD | 2,624 | 12/15 | 4 | ||||
United States 5 Year Treasury Note Futures | 37 | USD | 4,432 | 12/15 | 18 | ||||
United States 10 Year Treasury Note Futures | 21 | USD | 2,681 | 12/15 | 23 | ||||
United States Treasury Long Bond Futures | 4 | USD | 626 | 12/15 | 10 | ||||
Short Positions | |||||||||
Amsterdam Index Futures | 2 | EUR | 185 | 11/15 | (12 | ) | |||
CAC40 10 EURO Index Futures | 18 | EUR | 881 | 11/15 | (62 | ) | |||
DAX Index Futures | 2 | EUR | 541 | 12/15 | (39 | ) | |||
Euro STOXX Index 50 Futures | 3 | EUR | 102 | 12/15 | (5 | ) | |||
FTSE 100 Index Futures | 75 | GBP | 4,740 | 12/15 | (195 | ) | |||
FTSE/MIB Index Futures | 2 | EUR | 224 | 12/15 | (8 | ) | |||
IBEX 35 Index Futures | 3 | EUR | 309 | 11/15 | (9 | ) | |||
MSCI Emerging Markets Mini Index Futures | 37 | USD | 1,561 | 12/15 | (81 | ) | |||
OMXS30 Index Futures | 12 | SEK | 1,795 | 11/15 | (5 | ) | |||
S&P E-Mini Energy Select Sector Index Futures | 23 | USD | 1,562 | 12/15 | (122 | ) | |||
S&P E-Mini Utilities Select Sector Index Futures | 96 | USD | 4,222 | 12/15 | (255 | ) | |||
S&P/TSX 50 Index Futures | 7 | CAD | 1,109 | 12/15 | (5 | ) | |||
SPI 200 Index Futures | 9 | AUD | 1,178 | 12/15 | (26 | ) | |||
United States 10 Year Treasury Note Futures | 42 | USD | 5,363 | 12/15 | (26 | ) | |||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 714 | ||||||||
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Bank of America | USD | 4 | AUD | 5 | 11/04/15 | — | |||
Bank of Montreal | USD | 469 | EUR | 420 | 12/16/15 | (7 | ) | ||
Bank of Montreal | USD | 654 | JPY | 79,100 | 12/16/15 | 2 | |||
Bank of Montreal | AUD | 224 | USD | 157 | 12/16/15 | (3 | ) | ||
Bank of Montreal | CAD | 520 | USD | 393 | 12/16/15 | (4 | ) | ||
Bank of Montreal | CHF | 152 | USD | 156 | 12/16/15 | 2 | |||
Bank of Montreal | EUR | 1,134 | USD | 1,267 | 12/16/15 | 19 | |||
Bank of Montreal | GBP | 956 | USD | 1,468 | 12/16/15 | (5 | ) | ||
Bank of Montreal | NOK | 2,486 | USD | 302 | 12/16/15 | 9 | |||
Bank of Montreal | SEK | 722 | USD | 86 | 12/16/15 | 1 | |||
Barclays | USD | 69 | INR | 4,489 | 11/16/15 | — | |||
Barclays | USD | 90 | TRY | 263 | 11/16/15 | — | |||
Barclays | HUF | 49,319 | USD | 180 | 11/16/15 | 5 | |||
BNP Paribas | USD | 470 | EUR | 420 | 12/16/15 | (7 | ) | ||
BNP Paribas | USD | 655 | JPY | 79,100 | 12/16/15 | 1 | |||
BNP Paribas | AUD | 224 | USD | 156 | 12/16/15 | (3 | ) | ||
BNP Paribas | CAD | 520 | USD | 393 | 12/16/15 | (5 | ) | ||
BNP Paribas | CHF | 152 | USD | 156 | 12/16/15 | 2 | |||
BNP Paribas | EUR | 1,134 | USD | 1,268 | 12/16/15 | 21 | |||
BNP Paribas | GBP | 956 | USD | 1,468 | 12/16/15 | (6 | ) | ||
BNP Paribas | NOK | 2,486 | USD | 302 | 12/16/15 | 9 | |||
BNP Paribas | SEK | 722 | USD | 86 | 12/16/15 | 1 | |||
Credit Suisse | USD | 91 | EUR | 80 | 12/16/15 | (3 | ) | ||
Credit Suisse | USD | 157 | EUR | 140 | 12/16/15 | (3 | ) | ||
Credit Suisse | USD | 179 | EUR | 160 | 12/16/15 | (3 | ) |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 679
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Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||||
Amounts in thousands | ||||||||||
Unrealized | ||||||||||
Appreciation | ||||||||||
Amount | Amount | (Depreciation) | ||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||
Credit Suisse | USD | 590 | EUR | 525 | 12/16/15 | (12 | ) | |||
HSBC | USD | 469 | EUR | 420 | 12/16/15 | (7 | ) | |||
HSBC | USD | 654 | JPY | 79,100 | 12/16/15 | 2 | ||||
HSBC | AUD | 224 | USD | 157 | 12/16/15 | (3 | ) | |||
HSBC | CAD | 520 | USD | 393 | 12/16/15 | (5 | ) | |||
HSBC | CHF | 152 | USD | 156 | 12/16/15 | 2 | ||||
HSBC | EUR | 1,134 | USD | 1,267 | 12/16/15 | 20 | ||||
HSBC | GBP | 956 | USD | 1,468 | 12/16/15 | (6 | ) | |||
HSBC | NOK | 2,486 | USD | 302 | 12/16/15 | 10 | ||||
HSBC | SEK | 722 | USD | 86 | 12/16/15 | 1 | ||||
JPMorgan Chase | USD | 69 | INR | 4,489 | 11/16/15 | — | ||||
Royal Bank of Canada | USD | 469 | EUR | 420 | 12/16/15 | (7 | ) | |||
Royal Bank of Canada | USD | 654 | JPY | 79,100 | 12/16/15 | 1 | ||||
Royal Bank of Canada | AUD | 224 | USD | 156 | 12/16/15 | (3 | ) | |||
Royal Bank of Canada | CAD | 520 | USD | 393 | 12/16/15 | (5 | ) | |||
Royal Bank of Canada | CHF | 152 | USD | 156 | 12/16/15 | 2 | ||||
Royal Bank of Canada | EUR | 1,134 | USD | 1,267 | 12/16/15 | 20 | ||||
Royal Bank of Canada | GBP | 956 | USD | 1,468 | 12/16/15 | (6 | ) | |||
Royal Bank of Canada | NOK | 2,486 | USD | 302 | 12/16/15 | 10 | ||||
Royal Bank of Canada | SEK | 722 | USD | 86 | 12/16/15 | 1 | ||||
Standard Chartered | USD | 69 | INR | 4,489 | 11/16/15 | — | ||||
State Street | USD | 1,022 | CAD | 1,320 | 12/16/15 | (12 | ) | |||
State Street | USD | 409 | EUR | 360 | 12/16/15 | (13 | ) | |||
State Street | EUR | 6 | USD | 6 | 11/02/15 | — | ||||
UBS | USD | 256 | CHF | 250 | 12/16/15 | (2 | ) | |||
UBS | USD | 469 | EUR | 420 | 12/16/15 | (7 | ) | |||
UBS | USD | 69 | INR | 4,489 | 11/16/15 | — | ||||
UBS | USD | 442 | JPY | 53,000 | 12/16/15 | (3 | ) | |||
UBS | USD | 654 | JPY | 79,100 | 12/16/15 | 2 | ||||
UBS | AUD | 224 | USD | 157 | 12/16/15 | (3 | ) | |||
UBS | CAD | 520 | USD | 393 | 12/16/15 | (4 | ) | |||
UBS | CHF | 152 | USD | 156 | 12/16/15 | 2 | ||||
UBS | EUR | 1,134 | USD | 1,267 | 12/16/15 | 19 | ||||
UBS | GBP | 956 | USD | 1,468 | 12/16/15 | (6 | ) | |||
UBS | NOK | 2,486 | USD | 302 | 12/16/15 | 9 | ||||
UBS | SEK | 722 | USD | 86 | 12/16/15 | 1 | ||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 21 | |||||||||
Credit Default Swap Contracts | ||||||||||
Amounts in thousands | ||||||||||
Credit Indices | ||||||||||
Fund (Pays)/ | ||||||||||
Receives | Termination | Fair Value | ||||||||
Reference Entity | Counterparty | Notional Amount | Fixed Rate | Date | $ | |||||
CDX NA High Yield Index | Morgan Stanley | USD | 10,600 | 5.000 | % | 12/20/20 | 400 | |||
Total Fair Value on Open Credit Indices Premiums Paid (Received) - ($20) | 400 |
See accompanying notes which are an integral part of the financial statements.
680 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | ||||||||||
Amounts in thousands | ||||||||||
Fair Value | ||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||
Long-Term Investments | ||||||||||
Asset-Backed Securities | $ | — | $ | 372 | $ | — | $ | 372 | 0.1 | |
Corporate Bonds and Notes | — | 49,293 | — | 49,293 | 17.9 | |||||
International Debt | — | 24,405 | — | 24,405 | 8.8 | |||||
Loan Agreements | — | 49,868 | — | 49,868 | 18.1 | |||||
Mortgage-Backed Securities | — | 443 | — | 443 | 0.2 | |||||
Non-US Bonds | — | 18,451 | — | 18,451 | 6.7 | |||||
United States Government Treasuries | — | 451 | — | 451 | 0.2 | |||||
Common Stocks | ||||||||||
Consumer Discretionary | 1,634 | 5,622 | — | 7,256 | 2.7 | |||||
Consumer Staples | 7,522 | 2,997 | — | 10,519 | 3.8 | |||||
Energy | 5,315 | 2,325 | 103 | 7,743 | 2.8 | |||||
Financial Services | 13,161 | 14,789 | — | 27,950 | 10.2 | |||||
Health Care | 4,458 | 4,166 | — | 8,624 | 3.1 | |||||
Materials and Processing | 1,603 | 4,236 | — | 5,839 | 2.1 | |||||
Producer Durables | 3,784 | 6,250 | 157 | 10,191 | 3.7 | |||||
Technology | 8,991 | 2,094 | — | 11,085 | 4.0 | |||||
Utilities | 8,855 | 4,707 | — | 13,562 | 4.9 | |||||
Preferred Stocks | ||||||||||
Consumer Discretionary | 184 | — | — | 184 | 0.1 | |||||
Energy | 124 | — | — | 124 | —* | |||||
Financial Services | 1,695 | — | — | 1,695 | 0.6 | |||||
Technology | 37 | — | — | 37 | —* | |||||
Utilities | 304 | — | — | 304 | 0.1 | |||||
Warrants & Rights | 2 | — | — | 2 | —* | |||||
Short-Term Investments | — | 23,850 | — | 23,850 | 8.7 | |||||
Total Investments | 57,669 | 214,319 | 260 | 272,248 | 98.8 | |||||
Other Assets and Liabilities, Net | 1.2 | |||||||||
100.0 | ||||||||||
Other Financial Instruments | ||||||||||
Futures Contracts | 714 | — | — | 714 | 0.3 | |||||
Foreign Currency Exchange Contracts | — | 21 | — | 21 | —* | |||||
Credit Default Swap Contracts | — | 400 | — | 400 | 0.1 | |||||
Total Other Financial Instruments** | $ | 714 | $ | 421 | $ | — | $ | 1,135 | ||
* Less than .05% of net assets. | ||||||||||
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments. | ||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||
Statements. | ||||||||||
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended October | ||||||||||
31, 2015 were less than 1% of net assets. |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 681
Russell Investment Company
Russell Multi-Strategy Income Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||||||
Foreign | ||||||||||
Equity | Credit | Currency | Interest Rate | |||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | Contracts | ||||||
Location: Statement of Assets and Liabilities - Assets | ||||||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | — | $ | 174 | $ | — | ||
Variation margin on futures contracts* | 1,509 | — | — | 55 | ||||||
Credit default swap contracts, at fair value | — | 400 | — | — | ||||||
Total | $ | 1,509 | $ | 400 | $ | 174 | $ | 55 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||||||
Variation margin on futures contracts* | $ | 824 | $ | — | $ | — | $ | 26 | ||
Unrealized depreciation on foreign currency exchange contracts | — | — | 153 | — | ||||||
Total | $ | 824 | $ | — | $ | 153 | $ | 26 | ||
Foreign | ||||||||||
Equity | Credit | Currency | Interest Rate | |||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | Contracts | ||||||
Location: Statement of Operations - Net realized gain (loss) | ||||||||||
Futures contracts | $ | 197 | $ | — | $ | — | $ | 19 | ||
Options written | 17 | — | — | — | ||||||
Credit default swap contracts | — | (267 | ) | — | — | |||||
Foreign currency-related transactions** | — | — | 215 | — | ||||||
Total | $ | 214 | $ | (267 | ) | $ | 215 | $ | 19 | |
Location: Statement of Operations - Net change in unrealized appreciation | ||||||||||
(depreciation) | ||||||||||
Futures contracts | $ | 685 | $ | — | $ | — | $ | 29 | ||
Credit default swap contracts | — | 420 | — | — | ||||||
Foreign currency-related transactions*** | — | — | 20 | — | ||||||
Total | $ | 685 | $ | 420 | $ | 20 | $ | 29 | ||
* | Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the | |||||||||
Statement of Assets and Liabilities. | ||||||||||
** | Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported | |||||||||
within the Statement of Operations. | ||||||||||
*** | Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related | |||||||||
transactions reported within the Statement of Operations. | ||||||||||
For further disclosure on derivatives see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
682 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Balance Sheet Offsetting Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Assets | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | $ | 174 | $ | — | $ | 174 | ||||||
Futures Contracts | Variation margin on futures contracts | 120 | — | 120 | |||||||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 400 | — | 400 | |||||||||
Total Financial and Derivative Assets | 694 | — | 694 | ||||||||||
Financial and Derivative Assets not subject to a netting agreement | (520) | — | (520 | ) | |||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 174 | $ | — | $ | 174 | |||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Assets | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||||
Bank of Montreal | $ | 33 | $ | 19 | $ | — | $ | 14 | |||||
Barclays | 6 | — | — | 6 | |||||||||
BNP Paribas | 34 | 21 | — | 13 | |||||||||
HSBC | 34 | 20 | — | 14 | |||||||||
Royal Bank of Canada | 33 | 20 | — | 13 | |||||||||
UBS | 34 | 20 | — | 14 | |||||||||
Total | $ | 174 | $ | 100 | $ | — | $ | 74 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 683
Russell Investment Company
Russell Multi-Strategy Income Fund
Balance Sheet Offsetting Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | ||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Liabilities | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | ||||||||
Futures Contracts | Variation margin on futures contracts | $ | 158 | $ | — | $ | 158 | |||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 153 | — | 153 | ||||||||
Total Financial and Derivative Liabilities | 311 | — | 311 | |||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (158) | — | (158 | ) | ||||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 153 | $ | — | $ | 153 | ||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Liabilities | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | ||||||||
Bank of Montreal | $ | 19 | $ | 19 | $ | — | $ | — | ||||
BNP Paribas | 21 | 21 | — | — | ||||||||
Credit Suisse | 21 | — | — | 21 | ||||||||
HSBC | 20 | 20 | — | — | ||||||||
Royal Bank of Canada | 20 | 20 | — | — | ||||||||
State Street | 26 | — | — | 26 | ||||||||
UBS | 26 | 20 | — | 6 | ||||||||
Total | $ | 153 | $ | 100 | $ | — | $ | 53 | ||||
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance | ||||||||||||
Sheet collateral and adjustments made to exclude overcollateralization. | ||||||||||||
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
684 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 284,293 |
Investments, at fair value(>) | 272,248 | |
Cash | 58 | |
Cash (restricted)(a)(b) | 3,350 | |
Foreign currency holdings(^) | 366 | |
Unrealized appreciation on foreign currency exchange contracts | 174 | |
Receivables: | ||
Dividends and interest | 1,878 | |
Dividends from affiliated Russell funds | 3 | |
Investments sold | 2,155 | |
Fund shares sold | 209 | |
Variation margin on futures contracts | 120 | |
Prepaid expenses | 57 | |
Credit default swap contracts, at fair value | 400 | |
Total assets | 281,018 | |
Liabilities | ||
Payables: | ||
Due to broker (c) | 383 | |
Investments purchased | 3,982 | |
Fund shares redeemed | 410 | |
Accrued fees to affiliates | 152 | |
Other accrued expenses | 94 | |
Variation margin on futures contracts | 158 | |
Dividends and interest payable | 19 | |
Unrealized depreciation on foreign currency exchange contracts | 153 | |
Total liabilities | 5,351 | |
Net Assets | $ | 275,667 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 685
Russell Investment Company
Russell Multi-Strategy Income Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 285 | |
Accumulated net realized gain (loss) | (1,847 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | (12,064 | ) | |
Futures contracts | 714 | ||
Credit default swap contracts | 420 | ||
Foreign currency-related transactions | 14 | ||
Shares of beneficial interest | 289 | ||
Additional paid-in capital | 287,856 | ||
Net Assets | $ | 275,667 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 9.52 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 10.11 | |
Class A — Net assets | $ | 2,887,506 | |
Class A — Shares outstanding ($.01 par value) | 303,151 | ||
Net asset value per share: Class C(#) | $ | 9.51 | |
Class C — Net assets | $ | 2,455,710 | |
Class C — Shares outstanding ($.01 par value) | 258,222 | ||
Net asset value per share: Class E (#) | $ | 9.53 | |
Class E — Net assets | $ | 7,187,211 | |
Class E — Shares outstanding ($.01 par value) | 754,352 | ||
Net asset value per share: Class S (#) | $ | 9.53 | |
Class S — Net assets | $ | 163,158,981 | |
Class S — Shares outstanding ($.01 par value) | 17,113,687 | ||
Net asset value per share: Class Y(#) | $ | 9.54 | |
Class Y — Net assets | $ | 99,978,007 | |
Class Y — Shares outstanding ($.01 par value) | 10,483,852 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 366 | |
(+) Credit default swap contracts - premiums paid (received) | $ | (20 | ) |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 22,662 | |
(a) Cash Collateral for Futures | $ | 2,700 | |
(b) Cash Collateral for Swaps | $ | 650 | |
(c) Due to Broker for Swaps | $ | 383 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
686 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Statement of Operations — For the Period Ended October 31, 2015(1)
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 2,071 | |
Dividends from affiliated Russell funds | 19 | ||
Interest | 3,814 | ||
Total investment income | 5,904 | ||
Expenses | |||
Advisory fees | 1,029 | ||
Administrative fees | 66 | ||
Custodian fees | 104 | ||
Distribution fees - Class A | 2 | ||
Distribution fees - Class C | 5 | ||
Transfer agent fees - Class A | 2 | ||
Transfer agent fees - Class C | 1 | ||
Transfer agent fees - Class E | 2 | ||
Transfer agent fees - Class S . | 162 | ||
Transfer agent fees - Class Y | 2 | ||
Professional fees | 82 | ||
Registration fees | 50 | ||
Shareholder servicing fees - Class C | 2 | ||
Shareholder servicing fees - Class E | 3 | ||
Trustees’ fees | 4 | ||
Printing fees | 14 | ||
Offering fees | 35 | ||
Miscellaneous | 3 | ||
Expenses before reductions | 1,568 | ||
Expense reductions | (492 | ) | |
Net expenses | 1,076 | ||
Net investment income (loss) | 4,828 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | (2,505 | ) | |
Futures contracts | 216 | ||
Options written | 17 | ||
Credit default swap contracts | (267 | ) | |
Foreign currency-related transactions | 252 | ||
Net realized gain (loss) | (2,287 | ) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | (12,064 | ) | |
Futures contracts | 714 | ||
Credit default swap contracts | 420 | ||
Foreign currency-related transactions | 14 | ||
Net change in unrealized appreciation (depreciation) | (10,916 | ) | |
Net realized and unrealized gain (loss) | (13,203 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (8,375 | ) |
(1) For the period May 4, 2015 (commencement of operations) to October 31, 2015. |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 687
Russell Investment Company
Russell Multi-Strategy Income Fund
Statement of Changes in Net Assets
For the Period Ended | |||
Amounts in thousands | 2015 | (1) | |
Increase (Decrease) in Net Assets | |||
Operations | |||
Net investment income (loss) | $ | 4,828 | |
Net realized gain (loss) | (2,287 | ) | |
Net change in unrealized appreciation (depreciation) | (10,916 | ) | |
Net increase (decrease) in net assets from operations | (8,375 | ) | |
Distributions | |||
From net investment income | |||
Class A | (31 | ) | |
Class C | (22 | ) | |
Class E . | (69 | ) | |
Class S | (2,412 | ) | |
Class Y | (1,619 | ) | |
Net decrease in net assets from distributions | (4,153 | ) | |
Share Transactions* | |||
Net increase (decrease) in net assets from share transactions | 288,195 | ||
Total Net Increase (Decrease) in Net Assets | 275,667 | ||
Net Assets | |||
Beginning of period | — | ||
End of period | $ | 275,667 | |
Undistributed (overdistributed) net investment income included in net assets | $ | 285 | |
(1) For the period May 4, 2015 (commencement of operations) to October 31, 2015. |
See accompanying notes which are an integral part of the financial statements.
688 Russell Multi-Strategy Income Fund
Russell Investment Company
Russell Multi-Strategy Income Fund
Statement of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the period ended October 31, 2015 were as follows: | |||||||
2015 | (1) | ||||||
Shares | Dollars | ||||||
Class A | |||||||
Proceeds from shares sold | 349 | $ | 3,391 | ||||
Proceeds from reinvestment of distributions | 3 | 27 | |||||
Payments for shares redeemed | (49 | ) | (466 | ) | |||
Net increase (decrease) | 303 | 2,952 | |||||
Class C | |||||||
Proceeds from shares sold | 295 | 2,871 | |||||
Proceeds from reinvestment of distributions | 2 | 21 | |||||
Payments for shares redeemed | (39 | ) | (379 | ) | |||
Net increase (decrease) | 258 | 2,513 | |||||
Class E | |||||||
Proceeds from shares sold | 785 | 7,422 | |||||
Proceeds from reinvestment of distributions | 7 | 69 | |||||
Payments for shares redeemed | (38 | ) | (361 | ) | |||
Net increase (decrease) | 754 | 7,130 | |||||
Class S | |||||||
Proceeds from shares sold | 19,539 | 193,959 | |||||
Proceeds from reinvestment of distributions | 255 | 2,407 | |||||
Payments for shares redeemed | (2,680 | ) | (25,926 | ) | |||
Net increase (decrease) | 17,114 | 170,440 | |||||
Class Y | |||||||
Proceeds from shares sold | 11,736 | 117,289 | |||||
Proceeds from reinvestment of distributions | 172 | 1,620 | |||||
Payments for shares redeemed | (1,424 | ) | (13,749 | ) | |||
Net increase (decrease) | 10,484 | 105,160 | |||||
Total increase (decrease) | 28,913 | $ | 288,195 | ||||
(1) For the period May 4, 2015 (commencement of operations) to October 31, 2015. |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 689
Russell Investment Company
Russell Multi-Strategy Income Fund
Financial Highlights — For the Period Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | $ | |||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Total Distributions | |||||||||||
Class A | ||||||||||||||||
October 31, 2015(6) | 10.00 | .16 | (.50 | ) | (.34 | ) | (.14 | ) | (.14 | ) | ||||||
Class C | ||||||||||||||||
October 31, 2015(6) | 10.00 | .12 | (.49 | ) | (.37 | ) | (.12 | ) | (.12 | ) | ||||||
Class E | ||||||||||||||||
October 31, 2015(6) | 10.00 | .15 | (.48 | ) | (.33 | ) | (.14 | ) | (.14 | ) | ||||||
Class S | ||||||||||||||||
October 31, 2015(6) | 10.00 | .17 | (.50 | ) | (.33 | ) | (.14 | ) | (.14 | ) | ||||||
Class Y | ||||||||||||||||
October 31, 2015(6) | 10.00 | .18 | (.49 | ) | (.31 | ) | (.15 | ) | (.15 | ) | ||||||
See accompanying notes which are an integral part of the financial statements.
690 Russell Multi-Strategy Income Fund
% | % | % | ||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||
End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||
Period | Return(b)(c) | (000 | ) | Gross(e) | Net(d)(e) | Net Assets(d)(e) | Turnover Rate(b) | |||||||
9.52 | (3.40 | ) | 2,887 | 1.44 | 1.10 | 3.35 | 38 | |||||||
9.51 | (3.71 | ) | 2,456 | 2.19 | 1.85 | 2.59 | 38 | |||||||
9.53 | (3.25 | ) | 7,187 | 1.43 | 1.10 | 3.31 | 38 | |||||||
9.53 | (3.27 | ) | 163,159 | 1.18 | .85 | 3.50 | 38 | |||||||
9.54 | (3.09 | ) | 99,978 | .98 | .65 | 3.56 | 38 |
See accompanying notes which are an integral part of the financial statements.
Russell Multi-Strategy Income Fund 691
Russell Investment Company
Russell Strategic Call Overwriting Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Russell Strategic Call Overwriting Fund - Class S | S&P 500® Index*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 6.03 | % | 1 Year | 5.20 | % | ||
Inception* | 5.11 | %§ | Inception* | 15.36 | %§ | ||
CBOE S&P 500 BuyWrite Index** | |||||||
Total | |||||||
Return | |||||||
1 Year | 6.47 | % | |||||
Inception* | 6.85 | %§ |
692 Russell Strategic Call Overwriting Fund
Russell Investment Company
Russell Strategic Call Overwriting Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
moves relative to a static, monthly option buy write approach. | ||||
What is the Fund’s investment objective? | Because of this, the Fund takes directional views based on | |||
momentum and statistically overbought or oversold conditions. | ||||
The Russell Strategic Call Overwriting Fund (the “Fund”) seeks to | The Fund does so by utilizing weekly, bi-weekly and monthly | |||
provide total return with lower volatility than U.S. equity markets. | options that are slightly in-the-money to slightly out-of-the- | |||
How did the Fund perform relative to its benchmark for the | money. | |||
fiscal year ended October 31, 2015? | The Fund trailed the benchmark for the fiscal year ended October | |||
For the fiscal year ended October 31, 2015, the Fund’s Class S | 31, 2015 and was negatively impacted by the shorter tenor, higher | |||
Shares gained 6.03%. This is compared to the Fund’s benchmark, | strike options written during the first half of the fiscal year. During | |||
the CBOE S&P 500® BuyWrite Index, which gained 6.47% | the first half of the fiscal year, Fund positioning allowed for more | |||
during the same period. The Fund’s performance includes | potential equity upside which was not realized due to a flat market | |||
operating expenses, whereas index returns are unmanaged and | environment. During the market selloff in August, the Fund was | |||
do not include expenses of any kind. | positively impacted by the shorter tenored options, more frequent | |||
For the fiscal year ended October 31, 2015, the Morningstar® | rolls, as well as the heightened market volatility which lead to | |||
Large Blend, a group of funds that Morningstar considers to have | higher than normal option premiums. These positive impacts | |||
investment strategies similar to those of the Fund, gained 2.79%. | helped to offset benchmark-relative losses earlier in the fiscal | |||
This result serves as a peer comparison and is expressed net of | year, while providing more equity upside potential. | |||
operating expenses. | Describe any changes to the Fund’s structure. | |||
How did the market conditions described in the Market | There were no changes to the Fund’s structure during the fiscal | |||
Summary report affect the Fund’s performance? | year. | |||
Fund performance was positively impacted by the increased | The views expressed in this report reflect those of the portfolio | |||
level of market volatility experienced in 2015, as the Fund’s call | managers only through the end of the period covered by | |||
overwriting program seeks to benefit from mispricing based upon | the report. These views do not necessarily represent the | |||
market anticipated volatility and realized volatility. | views of RIMCo, or any other person in RIMCo or any other | |||
How did the investment strategies and techniques employed | affiliated organization. These views are subject to change | |||
by the Fund and its money managers affect its benchmark- | at any time based upon market conditions or other events, | |||
relative performance? | and RIMCo disclaims any responsibility to update the views | |||
The Fund seeks to be less time and path dependent relative to the | contained herein. These views should not be relied on as | |||
buy write approach of the Fund’s benchmark, which only trades | investment advice and, because investment decisions for | |||
options once per month. The Fund seeks a smoother overwriting | a Russell Investment Company (“RIC”) Fund are based on | |||
profile through a more diversified option tenor selection relative | numerous factors, should not be relied on as an indication | |||
to the benchmark and is designed to adapt to market and volatility | of investment decisions of any RIC Fund. | |||
* | Assumes initial investment on August 15, 2012. | |||
** | CBOE S&P 500 BuyWrite Index is a passive total return index based on (1) buying an S&P® stock index portfolio, and (2) “writing” (or selling) the near-term | |||
S&P 500 Index “covered” call option, generally on the third Friday of each month. The SPX call written will have about one month remaining to expiration, with | ||||
an exercise price just above the prevailing index level (i.e., slightly out of the money). The SPX call is held until expiration and cash settled, at which time a new | ||||
one-month, near-the-money call is written. | ||||
*** | The Standard & Poor’s 500® Index is composed of 500 common stocks which are chosen by Standard & Poor’s Corporation to best capture the price performance | |||
of a large cross-section of the U.S. publicly traded stock market. The index is structured to approximate the general distribution of industries in the U.S. | ||||
economy. | ||||
§ | Annualized. | |||
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s | ||||
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the | ||||
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
Russell Strategic Call Overwriting Fund 693
Russell Investment Company
Russell Strategic Call Overwriting Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; and other Fund expenses. The Example is | Hypothetical | |||||
intended to help you understand your ongoing costs (in dollars) | Performance (5% | |||||
of investing in the Fund and to compare these costs with the | Actual | return before | ||||
ongoing costs of investing in other mutual funds. The Example | Class S | Performance | expenses) | |||
Beginning Account Value | ||||||
is based on an investment of $1,000 invested at the beginning of | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the period and held for the entire period indicated, which for this | Ending Account Value | |||||
Fund is from May 1, 2015 to October 31, 2015. | October 31, 2015 | $ | 1,032.80 | $ | 1,020.32 | |
Expenses Paid During Period* | $ | 4.97 | $ | 4.94 | ||
Actual Expenses | ||||||
The information in the table under the heading “Actual | * Expenses are equal to the Fund's annualized expense ratio of 0.97% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
Performance” provides information about actual account values | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
and actual expenses. You may use the information in this column, | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
together with the amount you invested, to estimate the expenses | waivers and/or reimbursements, expenses would have been higher. | |||||
that you paid over the period. Simply divide your account value by | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | ||||||
= 8.6), then multiply the result by the number in the first column | ||||||
in the row entitled “Expenses Paid During Period” to estimate | ||||||
the expenses you paid on your account during this period. | ||||||
Hypothetical Example for Comparison Purposes | ||||||
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | ||||||
about hypothetical account values and hypothetical expenses | ||||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
return of 5% per year before expenses, which is not the Fund’s | ||||||
actual return. The hypothetical account values and expenses | ||||||
may not be used to estimate the actual ending account balance or | ||||||
expenses you paid for the period. You may use this information | ||||||
to compare the ongoing costs of investing in the Fund and other | ||||||
funds. To do so, compare this 5% hypothetical example with the | ||||||
5% hypothetical examples that appear in the shareholder reports | ||||||
of other funds. |
694 Russell Strategic Call Overwriting Fund
Russell Investment Company
Russell Strategic Call Overwriting Fund
Schedule of Investments — October 31, 2015
Ll | |||||||
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | ||||||
Principal | Fair | Amount ($) or | Value | ||||
Amount ($) or | Value | Shares | $ | ||||
Shares | $ | ||||||
Common Stocks - 89.8% | Nielsen Holdings PLC(Æ) | 237 | 11 | ||||
Consumer Discretionary - 13.5% | Nike, Inc. Class B | 4,257 | 558 | ||||
Abercrombie & Fitch Co. Class A | 705 | 15 | Nu Skin Enterprises, Inc. Class A | 284 | 11 | ||
Advance Auto Parts, Inc. | 242 | 48 | Pandora Media, Inc.(Æ) | 1,810 | 21 | ||
Amazon.com, Inc.(Æ)(ì) | 2,052 | 1,284 | PulteGroup, Inc. | 2,943 | 54 | ||
AMC Networks, Inc. Class A(Æ) | 208 | 15 | PVH Corp. | 797 | 73 | ||
Ascena Retail Group, Inc.(Æ) | 3,338 | 44 | Regal Entertainment Group Class A | 1,672 | 32 | ||
AutoNation, Inc.(Æ) | 793 | 50 | Sally Beauty Holdings, Inc.(Æ) | 375 | 9 | ||
Best Buy Co., Inc. | 2,196 | 77 | Scripps Networks Interactive, Inc. Class A | 597 | 36 | ||
Cable One, Inc.(Æ) | 55 | 24 | SeaWorld Entertainment, Inc. | 715 | 14 | ||
Cablevision Systems Corp. Class A | 2,094 | 68 | Starbucks Corp. | 7,452 | 466 | ||
CarMax, Inc.(Æ) | 2,143 | 126 | Taylor Morrison Home Corp. Class A(Æ) | 957 | 18 | ||
Charter Communications, Inc. Class A(Æ) | 238 | 45 | TEGNA, Inc. | 1,865 | 50 | ||
Chico's FAS, Inc. | 1,305 | 18 | Tempur Sealy International, Inc.(Æ) | 219 | 17 | ||
Choice Hotels International, Inc. | 141 | 7 | Tesla Motors, Inc.(Æ) | 344 | 71 | ||
Cinemark Holdings, Inc. | 781 | 28 | Tiffany & Co. | 1,156 | 95 | ||
Clear Channel Outdoor Holdings, Inc. Class | Time Warner, Inc. | 4,934 | 372 | ||||
A(Æ) | 2,880 | 22 | TJX Cos., Inc. | 4,732 | 346 | ||
Comcast Corp. Class A(Æ)(ì) | 14,746 | 923 | TripAdvisor, Inc.(Æ) | 769 | 64 | ||
Costco Wholesale Corp. | 2,784 | 440 | Twenty-First Century Fox, Inc. Class A | 10,120 | 311 | ||
Deckers Outdoor Corp.(Æ) | 368 | 21 | Urban Outfitters, Inc.(Æ) | 1,573 | 45 | ||
Dollar General Corp. | 2,083 | 141 | Visteon Corp.(Æ) | 226 | 25 | ||
DR Horton, Inc. | 2,712 | 80 | Wal-Mart Stores, Inc.(ì) | 8,670 | 496 | ||
DreamWorks Animation SKG, Inc. Class | Walt Disney Co. (The)(ì) | 9,323 | 1,060 | ||||
A(Æ) | 725 | 15 | Whirlpool Corp. | 556 | 89 | ||
DSW, Inc. Class A | 958 | 24 | Wyndham Worldwide Corp. | 1,531 | 125 | ||
Dunkin' Brands Group, Inc. | 958 | 40 | 11,797 | ||||
eBay, Inc.(Æ) | 5,552 | 155 | |||||
Expedia, Inc. | 692 | 94 | Consumer Staples - 7.6% | ||||
Ford Motor Co. | 21,357 | 316 | Altria Group, Inc.(ì) | 14,066 | 851 | ||
Fortune Brands Home & Security, Inc. | 621 | 33 | Bunge, Ltd. | 647 | 47 | ||
Fossil Group, Inc.(Æ) | 397 | 22 | Campbell Soup Co. | 2,795 | 142 | ||
GameStop Corp. Class A | 1,714 | 79 | Coca-Cola Co. (The)(ì) | 10,630 | 450 | ||
Gannett Co., Inc. | 932 | 15 | Colgate-Palmolive Co. | 5,464 | 363 | ||
Gentex Corp. | 3,254 | 53 | Constellation Brands, Inc. Class A | 597 | 81 | ||
Goodyear Tire & Rubber Co. (The) | 2,724 | 89 | CVS Health Corp. | 6,712 | 663 | ||
Graham Holdings Co. Class B | 55 | 30 | GNC Holdings, Inc. Class A | 545 | 16 | ||
H&R Block, Inc. | 2,631 | 98 | Herbalife, Ltd.(Æ) | 359 | 20 | ||
Harman International Industries, Inc. | 482 | 53 | Hormel Foods Corp. | 2,326 | 157 | ||
Hasbro, Inc. | 1,340 | 103 | Keurig Green Mountain, Inc. | 526 | 27 | ||
Home Depot, Inc.(ì) | 8,950 | 1,107 | Kimberly-Clark Corp. | 2,584 | 309 | ||
Hyatt Hotels Corp. Class A(Æ) | 488 | 25 | Kraft Heinz Co. (The) | 3,305 | 258 | ||
International Game Technology PLC | 482 | 8 | Molson Coors Brewing Co. Class B | 1,487 | 131 | ||
Interpublic Group of Cos., Inc. (The) | 1,780 | 41 | Mondelez International, Inc. Class A | 9,898 | 457 | ||
J Alexander's Holdings, Inc.(Æ) | 247 | 2 | PepsiCo, Inc.(ì) | 9,278 | 948 | ||
JC Penney Co., Inc.(Æ) | 10,549 | 97 | Philip Morris International, Inc.(ì) | 4,891 | 432 | ||
Lamar Advertising Co. Class A(ö) | 451 | 25 | Procter & Gamble Co. (The)(ì) | 13,742 | 1,050 | ||
Lear Corp. | 1,030 | 129 | Safeway, Inc.(Æ) | 4,648 | 2 | ||
Leggett & Platt, Inc. | 680 | 31 | Tyson Foods, Inc. Class A | 2,568 | 114 | ||
Lennar Corp. Class A | 954 | 48 | Walgreens Boots Alliance, Inc. | 1,585 | 134 | ||
Liberty Interactive Corp. QVC Group Class | 6,652 | ||||||
A(Æ) | 1,594 | 44 | |||||
Liberty Ventures Class A(Æ) | 226 | 10 | Energy - 6.3% | ||||
Madison Square Garden Co. (The) Class A(Æ) | 107 | 19 | Anadarko Petroleum Corp. | 3,508 | 235 | ||
McDonald's Corp. | 5,682 | 638 | Apache Corp. | 2,959 | 140 | ||
Michael Kors Holdings, Ltd.(Æ) | 852 | 33 | California Resources Corp. | 1,795 | 7 | ||
MSG Networks, Inc.(Æ) | 323 | 7 | Cheniere Energy, Inc.(Æ) | 1,236 | 61 | ||
Netflix, Inc.(Æ) | 2,569 | 278 | Chevron Corp.(ì) | 9,365 | 851 | ||
New Remy Holdco Corp. | 256 | 8 | Cobalt International Energy, Inc.(Æ) | 440 | 3 | ||
Newell Rubbermaid, Inc. | 1,515 | 64 | Columbia Pipeline Group, Inc. | 4,424 | 92 | ||
News Corp. Class A | 1,262 | 19 | ConocoPhillips | 8,741 | 466 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Call Overwriting Fund 695
Russell Investment Company
Russell Strategic Call Overwriting Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
CONSOL Energy, Inc. | 4,549 | 30 | Kilroy Realty Corp.(ö) | 1,430 | 94 | ||
Denbury Resources, Inc. | 5,120 | 18 | Legg Mason, Inc. | 2,165 | 97 | ||
EQT Corp. | 2,257 | 149 | Leucadia National Corp. | 2,584 | 52 | ||
Exxon Mobil Corp.(ì) | 21,225 | 1,756 | Lincoln National Corp. | 2,048 | 110 | ||
First Solar, Inc.(Æ) | 501 | 29 | Macerich Co. (The)(ö) | 665 | 56 | ||
Halliburton Co. | 7,112 | 273 | MasterCard, Inc. Class A | 6,458 | 639 | ||
Helmerich & Payne, Inc. | 1,227 | 69 | MBIA, Inc.(Æ) | 504 | 4 | ||
HollyFrontier Corp. | 948 | 46 | MetLife, Inc. | 6,203 | 312 | ||
Kosmos Energy, Ltd.(Æ) | 1,026 | 7 | Nasdaq, Inc. | 2,333 | 135 | ||
Nabors Industries, Ltd. | 4,749 | 48 | Old Republic International Corp. | 1,160 | 21 | ||
Noble Corp. PLC | 1,228 | 17 | PayPal Holdings, Inc.(Æ) | 5,552 | 200 | ||
Occidental Petroleum Corp. | 4,488 | 335 | People's United Financial, Inc. | 6,651 | 106 | ||
Paragon Offshore PLC | 409 | — | Public Storage(ö) | 857 | 197 | ||
Peabody Energy Corp.(Æ) | 31 | — | Raymond James Financial, Inc. | 1,908 | 105 | ||
QEP Resources, Inc. | 1,612 | 25 | Realty Income Corp.(ö) | 772 | 38 | ||
Rowan Cos. PLC Class A | 1,570 | 31 | RenaissanceRe Holdings, Ltd. | 1,137 | 125 | ||
Schlumberger, Ltd.(ì) | 8,132 | 636 | SEI Investments Co. | 2,715 | 141 | ||
SM Energy Co. | 785 | 26 | Simon Property Group, Inc.(ö) | 2,224 | 448 | ||
Superior Energy Services, Inc. | 1,913 | 27 | SL Green Realty Corp.(ö) | 803 | 95 | ||
Tesoro Corp. | 1,113 | 119 | StanCorp Financial Group, Inc. | 824 | 95 | ||
Ultra Petroleum Corp.(Æ) | 832 | 5 | Synovus Financial Corp. | 1,170 | 37 | ||
Whiting Petroleum Corp.(Æ) | 1,117 | 19 | TD Ameritrade Holding Corp. | 4,432 | 153 | ||
WPX Energy, Inc.(Æ) | 2,077 | 14 | Torchmark Corp. | 2,565 | 149 | ||
5,534 | Total System Services, Inc. | 2,598 | 136 | ||||
Unum Group | 5,074 | 176 | |||||
Financial Services - 17.1% | US Bancorp | 9,816 | 414 | ||||
Affiliated Managers Group, Inc.(Æ) | 867 | 156 | Visa, Inc. Class A(ì) | 12,100 | 939 | ||
Alliance Data Systems Corp.(Æ) | 375 | 111 | Waddell & Reed Financial, Inc. Class A | 2,936 | 108 | ||
American Express Co.(ì) | 6,880 | 504 | Weingarten Realty Investors(ö) | 1,406 | 50 | ||
American International Group, Inc. | 8,619 | 544 | Wells Fargo & Co.(ì) | 25,452 | 1,378 | ||
American Tower Corp.(ö) | 1,011 | 103 | Weyerhaeuser Co.(ö) | 3,853 | 113 | ||
Apartment Investment & Management Co. | WP Glimcher, Inc.(ö) | 1,284 | 15 | ||||
Class A(ö) | 2,311 | 91 | WR Berkley Corp. | 1,829 | 102 | ||
Assurant, Inc. | 1,255 | 102 | XL Group PLC Class A | 3,586 | 137 | ||
Bank of America Corp.(ì) | 47,474 | 797 | Zions Bancorporation | 4,152 | 119 | ||
BankUnited, Inc. | 3,208 | 119 | 14,976 | ||||
Berkshire Hathaway, Inc. Class B(Æ)(ì) | 9,794 | 1,332 | |||||
CBRE Group, Inc. Class A(Æ) | 2,909 | 108 | Health Care - 12.7% | ||||
Chimera Investment Corp.(ö) | 445 | 6 | Abbott Laboratories(ì) | 7,702 | 345 | ||
Cincinnati Financial Corp. | 3,366 | 203 | AbbVie, Inc.(ì) | 7,637 | 455 | ||
Citigroup, Inc.(ì) | 12,560 | 668 | Aetna, Inc. | 1,106 | 127 | ||
Comerica, Inc. | 912 | 40 | Allergan PLC(Æ) | 408 | 126 | ||
Crown Castle International Corp. | 1,126 | 96 | Allscripts Healthcare Solutions, Inc.(Æ) | 993 | 14 | ||
DDR Corp.(ö) | 3,346 | 56 | Amgen, Inc.(ì) | 4,291 | 679 | ||
Duke Realty Corp.(ö) | 4,212 | 87 | Baxalta, Inc. | 3,771 | 130 | ||
E*Trade Financial Corp.(Æ) | 4,055 | 116 | Baxter International, Inc. | 3,771 | 141 | ||
Eaton Vance Corp. | 3,867 | 140 | Becton Dickinson and Co. | 169 | 24 | ||
Equifax, Inc. | 652 | 69 | Biogen, Inc.(Æ) | 1,635 | 475 | ||
Federal Realty Investment Trust(ö) | 676 | 97 | Bristol-Myers Squibb Co. | 8,156 | 538 | ||
Federated Investors, Inc. Class B | 2,001 | 61 | Bruker Corp.(Æ) | 746 | 14 | ||
Fidelity National Information Services, Inc. | 1,695 | 124 | Celgene Corp.(Æ) | 568 | 70 | ||
First Horizon National Corp. | 3,802 | 54 | Dentsply International, Inc. | 1,764 | 107 | ||
FNF Group | 4,299 | 152 | Eli Lilly & Co. | 5,710 | 466 | ||
FNFV Group(Æ) | 1,432 | 16 | Express Scripts Holding Co.(Æ) | 4,536 | 392 | ||
Genworth Financial, Inc. Class A(Æ) | 4,514 | 21 | Gilead Sciences, Inc.(ì) | 7,706 | 833 | ||
Goldman Sachs Group, Inc. (The) | 2,470 | 463 | Halyard Health, Inc.(Æ) | 323 | 9 | ||
Hudson City Bancorp, Inc. | 5,916 | 60 | HCA Holdings, Inc.(Æ) | 842 | 58 | ||
Huntington Bancshares, Inc. | 11,657 | 128 | Health Net, Inc.(Æ) | 409 | 26 | ||
Intercontinental Exchange, Inc. | 514 | 130 | Henry Schein, Inc.(Æ) | 1,290 | 196 | ||
JPMorgan Chase & Co.(ì) | 17,526 | 1,126 | Hill-Rom Holdings, Inc. | 428 | 22 |
See accompanying notes which are an integral part of the financial statements.
696 Russell Strategic Call Overwriting Fund
Russell Investment Company
Russell Strategic Call Overwriting Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
IDEXX Laboratories, Inc.(Æ) | 1,224 | 84 | Caterpillar, Inc. | 4,132 | 302 | ||
Incyte Corp.(Æ) | 500 | 59 | Chicago Bridge & Iron Co. | 461 | 21 | ||
Johnson & Johnson(ì) | 14,881 | 1,503 | Cintas Corp. | 713 | 66 | ||
Medivation, Inc.(Æ) | 848 | 36 | Copa Holdings Class A | 212 | 11 | ||
Medtronic PLC | 7,884 | 583 | Delta Air Lines, Inc. | 3,227 | 164 | ||
Merck & Co., Inc.(ì) | 15,711 | 859 | Emerson Electric Co. | 5,760 | 272 | ||
Myriad Genetics, Inc.(Æ) | 401 | 16 | Flir Systems, Inc. | 1,971 | 53 | ||
Patterson Cos., Inc. | 1,312 | 62 | Flowserve Corp. | 2,221 | 103 | ||
PerkinElmer, Inc. | 2,078 | 107 | GATX Corp. | 511 | 24 | ||
Pfizer, Inc.(ì) | 36,879 | 1,247 | General Electric Co.(ì) | 52,542 | 1,519 | ||
Regeneron Pharmaceuticals, Inc.(Æ) | 412 | 230 | Honeywell International, Inc. | 5,132 | 530 | ||
ResMed, Inc. | 905 | 52 | IDEX Corp. | 1,808 | 139 | ||
Sirona Dental Systems, Inc.(Æ) | 468 | 51 | IHS, Inc. Class A(Æ) | 339 | 41 | ||
Tenet Healthcare Corp.(Æ) | 1,398 | 44 | Jacobs Engineering Group, Inc.(Æ) | 2,018 | 81 | ||
United Therapeutics Corp.(Æ) | 369 | 54 | Joy Global, Inc. | 1,124 | 19 | ||
UnitedHealth Group, Inc.(ì) | 6,346 | 747 | Kennametal, Inc. | 1,039 | 29 | ||
Varian Medical Systems, Inc.(Æ) | 1,286 | 101 | L-3 Communications Holdings, Inc. | 1,344 | 170 | ||
11,082 | Mettler-Toledo International, Inc.(Æ) | 372 | 116 | ||||
Navistar International Corp.(Æ) | 312 | 4 | |||||
Materials and Processing - 2.9% | Oshkosh Corp. | 638 | 26 | ||||
Airgas, Inc. | 844 | 81 | Pitney Bowes, Inc. | 2,023 | 42 | ||
Albemarle Corp. | 1,165 | 62 | Quanta Services, Inc.(Æ) | 1,940 | 39 | ||
Allegheny Technologies, Inc. | 1,360 | 20 | Robert Half International, Inc. | 1,651 | 87 | ||
Ball Corp. | 1,447 | 99 | Rockwell Collins, Inc. | 1,531 | 133 | ||
Bemis Co., Inc. | 1,486 | 68 | RR Donnelley & Sons Co. | 1,424 | 24 | ||
Cabot Corp. | 555 | 20 | Ryder System, Inc. | 494 | 35 | ||
Chemours Co. (The) | 1,067 | 8 | Snap-on, Inc. | 769 | 128 | ||
Domtar Corp. | 658 | 27 | Southwest Airlines Co. | 2,791 | 129 | ||
Dow Chemical Co. (The) | 6,661 | 344 | Teekay Corp. | 526 | 17 | ||
EI du Pont de Nemours & Co. | 5,336 | 338 | Textron, Inc. | 2,068 | 87 | ||
FMC Corp. | 1,114 | 45 | TopBuild Corp.(Æ) | 334 | 9 | ||
Huntsman Corp. | 1,323 | 18 | TransDigm Group, Inc.(Æ) | 332 | 73 | ||
International Flavors & Fragrances, Inc. | 520 | 60 | Trimble Navigation, Ltd.(Æ) | 1,732 | 39 | ||
Lennox International, Inc. | 551 | 73 | Union Pacific Corp.(ì) | 6,272 | 560 | ||
Masco Corp. | 3,011 | 87 | United Parcel Service, Inc. Class B | 5,059 | 521 | ||
Monsanto Co. | 3,444 | 321 | United Technologies Corp. | 5,341 | 526 | ||
Newmont Mining Corp. | 2,293 | 45 | Waters Corp.(Æ) | 1,344 | 172 | ||
Owens-Illinois, Inc.(Æ) | 1,379 | 30 | WESCO International, Inc.(Æ) | 875 | 43 | ||
Packaging Corp. of America | 995 | 68 | Xylem, Inc. | 2,411 | 88 | ||
Praxair, Inc. | 1,988 | 221 | 8,399 | ||||
Reliance Steel & Aluminum Co. | 589 | 35 | |||||
Royal Gold, Inc. | 2,332 | 112 | Technology - 16.0% | ||||
Sealed Air Corp. | 2,145 | 106 | 3D Systems Corp.(Æ) | 304 | 3 | ||
Steel Dynamics, Inc. | 1,639 | 30 | Akamai Technologies, Inc.(Æ) | 1,200 | 73 | ||
Tahoe Resources, Inc. | 1,578 | 13 | Alphabet, Inc. Class A(Æ) | 1,303 | 961 | ||
United States Steel Corp. | 2,527 | 30 | Alphabet, Inc. Class C(Æ) | 1,305 | 928 | ||
Vulcan Materials Co. | 817 | 79 | Ansys, Inc.(Æ) | 309 | 29 | ||
WestRock Co. | 1,507 | 81 | Apple, Inc.(ì) | 29,269 | 3,498 | ||
2,521 | Avago Technologies, Ltd. Class A | 839 | 103 | ||||
Avnet, Inc. | 1,478 | 67 | |||||
Producer Durables - 9.6% | Cadence Design Systems, Inc.(Æ) | 4,432 | 99 | ||||
3M Co.(ì) | 4,400 | 692 | Cisco Systems, Inc.(ì) | 26,614 | 768 | ||
Accenture PLC Class A | 3,500 | 375 | Computer Sciences Corp. | 949 | 63 | ||
AECOM(Æ) | 197 | 6 | Cree, Inc.(Æ) | 943 | 24 | ||
AGCO Corp. | 898 | 43 | Electronic Arts, Inc.(Æ) | 3,031 | 218 | ||
Allison Transmission Holdings, Inc. Class A | 500 | 14 | Facebook, Inc. Class A(Æ) | 8,223 | 839 | ||
Ametek, Inc. | 860 | 47 | Fortinet, Inc.(Æ) | 757 | 26 | ||
Avery Dennison Corp. | 1,187 | 77 | Freescale Semiconductor, Ltd.(Æ) | 543 | 18 | ||
Boeing Co. (The) | 4,507 | 667 | Harris Corp. | 882 | 70 | ||
Booz Allen Hamilton Holding Corp. Class A | 1,211 | 36 | HP Inc.(Æ) | 9,771 | 263 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Call Overwriting Fund 697
Russell Investment Company
Russell Strategic Call Overwriting Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||||
Principal | Fair | Principal | Fair | |||||||||
Amount ($) or | Value | Amount ($) or | Value | |||||||||
Shares | $ | Shares | $ | |||||||||
IAC/InterActiveCorp | 410 | 27 | Nov 2015 14.00 Put (350) | USD | 490 | (ÿ) | 2 | |||||
Intel Corp.(ì) | 12,135 | 411 | Nov 2015 14.00 Put (190) | USD | 266 | (ÿ) | 3 | |||||
International Business Machines Corp.(ì) | 3,241 | 454 | Nov 2015 14.50 Put (380) | USD | 551 | (ÿ) | 13 | |||||
Nov 2015 17.00 Put (70) | USD | 119 | (ÿ) | 12 | ||||||||
JDS Uniphase Corp. Class W(Æ) | 3,969 | 24 | Nov 2015 21.00 Put (140) | USD | 294 | (ÿ) | 69 | |||||
Lam Research Corp. | 1,621 | 124 | Dec 2015 19.00 Put (340) | USD | 646 | (ÿ) | 110 | |||||
Leidos Holdings, Inc. | 900 | 47 | Dec 2015 23.00 Put (210) | USD | 483 | (ÿ) | 139 | |||||
Linear Technology Corp. | 4,274 | 190 | Jan 2016 19.00 Put (140) | USD | 266 | (ÿ) | 45 | |||||
LinkedIn Corp. Class A(Æ) | 183 | 44 | Jan 2016 22.00 Put (210) | USD | 462 | (ÿ) | 117 | |||||
Lumentum Holdings, Inc.(Æ) | 793 | 11 | Total Options Purchased | |||||||||
Marvell Technology Group, Ltd. | 1,954 | 16 | (cost $819) | 676 | ||||||||
Maxim Integrated Products, Inc. | 1,820 | 75 | ||||||||||
Microchip Technology, Inc. | 2,564 | 124 | Short-Term Investments - 8.1% | |||||||||
Micron Technology, Inc.(Æ) | 7,807 | 129 | Russell U.S. Cash Management Fund | 7,126,417 | (8) | 7,126 | ||||||
Microsoft Corp.(ì) | 39,090 | 2,059 | Total Short-Term Investments | |||||||||
NetSuite, Inc.(Æ) | 320 | 27 | (cost $7,126) | 7,126 | ||||||||
Oracle Corp.(ì) | 20,062 | 779 | ||||||||||
QUALCOMM, Inc.(ì) | 9,016 | 536 | Total Investments 98.7% | |||||||||
SBA Communications Corp. Class A(Æ) | 1,097 | 131 | (identified cost $61,656) | 86,295 | ||||||||
Seagate Technology PLC | 121 | 5 | ||||||||||
Skyworks Solutions, Inc. | 674 | 52 | Other Assets and Liabilities, Net | |||||||||
Splunk, Inc.(Æ) | 453 | 25 | - 1.3% | 1,107 | ||||||||
Teradyne, Inc. | 2,531 | 49 | Net Assets - 100.0% | 87,402 | ||||||||
Texas Instruments, Inc. | 6,986 | 396 | ||||||||||
VeriSign, Inc.(Æ) | 1,322 | 107 | ||||||||||
Vishay Intertechnology, Inc. | 1,240 | 13 | ||||||||||
VMware, Inc. Class A(Æ) | 362 | 22 | ||||||||||
Zynga, Inc. Class A(Æ) | 1,760 | 4 | ||||||||||
13,931 | ||||||||||||
Utilities - 4.1% | ||||||||||||
AGL Resources, Inc.(Æ) | 769 | 48 | ||||||||||
Ameren Corp. | 3,981 | 174 | ||||||||||
American Electric Power Co., Inc. | 4,308 | 244 | ||||||||||
AT&T, Inc.(ì) | 25,720 | 862 | ||||||||||
Calpine Corp.(Æ) | 2,233 | 34 | ||||||||||
CMS Energy Corp. | 7,106 | 256 | ||||||||||
Duke Energy Corp. | 5,607 | 401 | ||||||||||
Frontier Communications Corp. | 4,965 | 25 | ||||||||||
NiSource, Inc. | 4,424 | 85 | ||||||||||
NRG Energy, Inc. | 3,627 | 47 | ||||||||||
Pepco Holdings, Inc. | 4,275 | 114 | ||||||||||
Pinnacle West Capital Corp. | 2,955 | 188 | ||||||||||
Questar Corp. | 1,644 | 34 | ||||||||||
SCANA Corp. | 2,626 | 155 | ||||||||||
Verizon Communications, Inc.(ì) | 18,621 | 873 | ||||||||||
Westar Energy, Inc. Class A | 1,532 | 61 | ||||||||||
3,601 | ||||||||||||
Total Common Stocks | ||||||||||||
(cost $53,711) | 78,493 | |||||||||||
Options Purchased - 0.8% | ||||||||||||
(Number of Contracts) | ||||||||||||
SPX Volatility Index | ||||||||||||
Nov 2015 19.00 Call (350) | USD | 665 | (ÿ) | 3 | ||||||||
Nov 2015 22.00 Call (575) | USD | 1,265 | (ÿ) | 27 | ||||||||
Dec 2015 23.00 Call (380) | USD | 874 | (ÿ) | 36 | ||||||||
Dec 2015 25.00 Call (455) | USD | 1,138 | (ÿ) | 34 | ||||||||
Jan 2016 27.00 Call (170) | USD | 459 | (ÿ) | 18 | ||||||||
Jan 2016 30.00 Call (210) | USD | 630 | (ÿ) | 17 | ||||||||
Feb 2016 27.00 Call (70) | USD | 189 | (ÿ) | 9 | ||||||||
Feb 2016 30.00 Call (210) | USD | 630 | (ÿ) | 22 |
See accompanying notes which are an integral part of the financial statements.
698 Russell Strategic Call Overwriting Fund
Russell Investment Company
Russell Strategic Call Overwriting Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||||||||||
Amounts in thousands (except contract amounts) | |||||||||||||||
Unrealized | |||||||||||||||
Appreciation | |||||||||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||||||||
Contracts | Amount | Date | $ | ||||||||||||
Long Positions | |||||||||||||||
S&P 500 E-Mini Index Futures | 81 | USD | 8,398 | 12/15 | 577 | ||||||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 577 | ||||||||||||||
Options Written | |||||||||||||||
Amounts in thousands (except contract amounts) | |||||||||||||||
Number of | Strike | Notional | Expiration | Fair Value | |||||||||||
Call/Put | Contracts | Price | Amount | Date | $ | ||||||||||
S&P 500 Index | Call | 70 | 2,105.00 | USD | 14,735 | 11/06/15 | (23 | ) | |||||||
S&P 500 Index | Call | 45 | 1,975.00 | USD | 8,888 | 11/13/15 | (471 | ) | |||||||
S&P 500 Index | Call | 45 | 2,025.00 | USD | 9,113 | 11/13/15 | (269 | ) | |||||||
S&P 500 Index | Call | 35 | 2,075.00 | USD | 7,263 | 11/13/15 | (59 | ) | |||||||
S&P 500 Index | Call | 35 | 2,085.00 | USD | 7,298 | 11/13/15 | (57 | ) | |||||||
S&P 500 Index | Call | 90 | 2,025.00 | USD | 18,225 | 11/20/15 | (608 | ) | |||||||
S&P 500 Index | Call | 45 | 2,075.00 | USD | 9,338 | 11/20/15 | (119 | ) | |||||||
S&P 500 Index | Call | 45 | 2,125.00 | USD | 9,563 | 11/27/15 | (30 | ) | |||||||
SPX Volatility Index | Call | 220 | 15.00 | USD | 330 | 11/04/15 | (20 | ) | |||||||
SPX Volatility Index | Call | 380 | 15.00 | USD | 570 | 11/18/15 | (81 | ) | |||||||
SPX Volatility Index | Call | 190 | 16.00 | USD | 304 | 11/18/15 | (31 | ) | |||||||
SPX Volatility Index | Call | 380 | 40.00 | USD | 1,520 | 01/20/16 | (13 | ) | |||||||
SPX Volatility Index | Call | 280 | 40.00 | USD | 1,120 | 02/17/16 | (14 | ) | |||||||
SPX Volatility Index | Put | 730 | 15.00 | USD | 1,095 | 11/18/15 | (30 | ) | |||||||
SPX Volatility Index | Put | 190 | 16.00 | USD | 304 | 11/18/15 | (20 | ) | |||||||
SPX Volatility Index | Put | 70 | 17.00 | USD | 119 | 11/18/15 | (12 | ) | |||||||
SPX Volatility Index | Put | 115 | 16.00 | USD | 184 | 01/20/16 | (13 | ) | |||||||
Total Liability for Options Written (premiums received $1,561) | (1,870 | ) | |||||||||||||
Transactions in options written contracts for the period ended October 31, 2015 were as follows: | |||||||||||||||
Number of | Premiums | ||||||||||||||
Contracts | Received | ||||||||||||||
Outstanding October 31, 2014 | 3,165 | $ | 2,226 | ||||||||||||
Opened | 100,274 | 41,608 | |||||||||||||
Closed | (99,099 | ) | (42,236 | ) | |||||||||||
Expired | (1,375 | ) | (37 | ) | |||||||||||
Outstanding October 31, 2015 | 2,965 | $ | 1,561 | ||||||||||||
Presentation of Portfolio Holdings | |||||||||||||||
Amounts in thousands | |||||||||||||||
Fair Value | |||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||||
Common Stocks | |||||||||||||||
Consumer Discretionary | $ | 11,797 | $ | — | $ | — | $ | 11,797 | 13.5 | ||||||
Consumer Staples | 6,650 | — | 2 | 6,652 | 7.6 | ||||||||||
Energy | 5,534 | — | — | 5,534 | 6.3 | ||||||||||
Financial Services | 14,976 | — | — | 14,976 | 17.1 | ||||||||||
Health Care | 11,082 | — | — | 11,082 | 12.7 | ||||||||||
Materials and Processing | 2,521 | — | — | 2,521 | 2.9 | ||||||||||
Producer Durables | 8,399 | — | — | 8,399 | 9.6 | ||||||||||
Technology | 13,931 | — | — | 13,931 | 16.0 | ||||||||||
Utilities | 3,601 | — | — | 3,601 | 4.1 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Call Overwriting Fund 699
Russell Investment Company
Russell Strategic Call Overwriting Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | |||||||||||||
Amounts in thousands | |||||||||||||
Fair Value | |||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||
Options Purchased | 676 | — | — | 676 | 0.8 | ||||||||
Short-Term Investments | — | 7,126 | — | 7,126 | 8.1 | ||||||||
Total Investments | 79,167 | 7,126 | 2 | 86,295 | 98.7 | ||||||||
Other Assets and Liabilities, Net | 1.3 | ||||||||||||
100.0 | |||||||||||||
Other Financial Instruments | |||||||||||||
Futures Contracts | 577 | — | — | 577 | 0.7 | ||||||||
Options Written | (1,870 | ) | — | — | (1,870 | ) | (2.1 | ) | |||||
Total Other Financial Instruments* | $ | (1,293 | ) | $ | — | $ | — | $ | (1,293 | ) | |||
* Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments. | |||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | |||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | |||||||||||||
Statements. | |||||||||||||
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended October 31, | |||||||||||||
2015 were less than 1% of net assets. |
See accompanying notes which are an integral part of the financial statements.
700 Russell Strategic Call Overwriting Fund
Russell Investment Company
Russell Strategic Call Overwriting Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||
Equity | ||||
Derivatives not accounted for as hedging instruments | Contracts | |||
Location: Statement of Assets and Liabilities - Assets | ||||
Investments, at fair value* | $ | 676 | ||
Variation margin on futures contracts** | 577 | |||
Total | $ | 1,253 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||
Options written, at fair value | $ | 1,870 | ||
Equity | ||||
Derivatives not accounted for as hedging instruments | Contracts | |||
Location: Statement of Operations - Net realized gain (loss) | ||||
Investments*** | $ | (1,725 | ) | |
Futures contracts | 124 | |||
Options written | 3,008 | |||
Total | $ | 1,407 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||
Investments**** | $ | (39 | ) | |
Futures contracts | 436 | |||
Options written | (147 | ) | ||
Total | $ | 250 | ||
* | Fair value of purchased options. | |||
** | Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the | |||
Statement of Assets and Liabilities. | ||||
*** | Includes net realized gain (loss) on purchased options as reported in the Statement of Operations. | |||
**** | Includes net unrealized gain (loss) on purchased options as reported in the Schedule of Investments. | |||
For further disclosure on derivatives see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Call Overwriting Fund 701
Russell Investment Company
Russell Strategic Call Overwriting Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Options Purchased Contracts | Investments, at fair value | $ | 676 | $ | — | $ | 676 | ||
Futures Contracts | Variation margin on futures contracts | — | — | — | |||||
Total Financial and Derivative Assets | 676 | — | 676 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (676) | — | (676 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | — | $ | — | $ | — | |||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 35 | $ | — | $ | 35 | ||
Options Written Contracts | Options written, at fair value | 1,870 | — | 1,870 | |||||
Total Financial and Derivative Liabilities | 1,905 | — | 1,905 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (1,905) | — | (1,905 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | — | $ | — | $ | — |
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
702 Russell Strategic Call Overwriting Fund
Russell Investment Company
Russell Strategic Call Overwriting Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 61,656 |
Investments, at fair value(>) | 86,295 | |
Cash (restricted)(a)(b) | 3,757 | |
Receivables: | ||
Dividends and interest | 92 | |
Dividends from affiliated Russell funds | 1 | |
Investments sold | 800 | |
Fund shares sold | 128 | |
Total assets | 91,073 | |
Liabilities | ||
Payables: | ||
Investments purchased | 1,650 | |
Fund shares redeemed | 1 | |
Accrued fees to affiliates | 69 | |
Other accrued expenses | 46 | |
Variation margin on futures contracts | 35 | |
Options written, at fair value(x) | 1,870 | |
Total liabilities | 3,671 | |
Net Assets | $ | 87,402 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Call Overwriting Fund 703
Russell Investment Company
Russell Strategic Call Overwriting Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 23 | |
Accumulated net realized gain (loss) | (15,223 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | 24,639 | ||
Futures contracts | 577 | ||
Options written | (309 | ) | |
Shares of beneficial interest | 77 | ||
Additional paid-in capital | 77,618 | ||
Net Assets | $ | 87,402 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class S(#) | $ | 11.30 | |
Class S — Net assets | $ | 87,401,964 | |
Class S — Shares outstanding ($.01 par value) | 7,733,431 | ||
Amounts in thousands | |||
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 7,126 | |
(x) Premiums received on options written | $ | 1,561 | |
(a) Cash Collateral for Futures | $ | 650 | |
(b) Cash Collateral for Options | $ | 3,107 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
704 Russell Strategic Call Overwriting Fund
Russell Investment Company
Russell Strategic Call Overwriting Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 1,603 | |
Dividends from affiliated Russell funds | 9 | ||
Total investment income | 1,612 | ||
Expenses | |||
Advisory fees | 701 | ||
Administrative fees | 42 | ||
Custodian fees | 32 | ||
Transfer agent fees - Class S | 175 | ||
Professional fees | 58 | ||
Registration fees | 13 | ||
Trustees’ fees | 2 | ||
Printing fees | 4 | ||
Miscellaneous | 16 | ||
Expenses before reductions | 1,043 | ||
Expense reductions | (193 | ) | |
Net expenses | 850 | ||
Net investment income (loss) | 762 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (851 | ) | |
Futures contracts | 124 | ||
Options written | 3,008 | ||
Net realized gain (loss) | 2,281 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | 1,735 | ||
Futures contracts | 436 | ||
Options written | (147 | ) | |
Net change in unrealized appreciation (depreciation) | 2,024 | ||
Net realized and unrealized gain (loss) | 4,305 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 5,067 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Call Overwriting Fund 705
Russell Investment Company
Russell Strategic Call Overwriting Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | |||||||
Amounts in thousands | 2015 | 2014 | |||||
Increase (Decrease) in Net Assets | |||||||
Operations | |||||||
Net investment income (loss) | $ | 762 | $ | 749 | |||
Net realized gain (loss) | 2,281 | (7,304 | ) | ||||
Net change in unrealized appreciation (depreciation) | 2,024 | 8,307 | |||||
Net increase (decrease) in net assets from operations | 5,067 | 1,752 | |||||
Distributions | |||||||
From net investment income | |||||||
Class S | (761 | ) | (755 | ) | |||
Net decrease in net assets from distributions | (761 | ) | (755 | ) | |||
Share Transactions* | |||||||
Net increase (decrease) in net assets from share transactions | (3,677 | ) | 2,235 | ||||
Total Net Increase (Decrease) in Net Assets | 629 | 3,232 | |||||
Net Assets | |||||||
Beginning of period | 86,773 | 83,541 | |||||
End of period | $ | 87,402 | $ | 86,773 | |||
Undistributed (overdistributed) net investment income included in net assets | $ | 23 | $ | 21 |
See accompanying notes which are an integral part of the financial statements.
706 Russell Strategic Call Overwriting Fund
Russell Investment Company
Russell Strategic Call Overwriting Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class S | ||||||||||||
Proceeds from shares sold | 1,130 | $ | 12,343 | 1,570 | $ | 17,006 | ||||||
Proceeds from reinvestment of distributions | 69 | 758 | 69 | 754 | ||||||||
Payments for shares redeemed | (1,526 | ) | (16,778 | ) | (1,428 | ) | (15,525 | ) | ||||
Total increase (decrease) | (327 | ) | $ | (3,677 | ) | 211 | $ | 2,235 |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Call Overwriting Fund 707
Russell Investment Company
Russell Strategic Call Overwriting Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||
Class S | ||||||||||||||
October 31, 2015 | 10.77 | .10 | .53 | .63 | (.10 | ) | — | |||||||
October 31, 2014 | 10.64 | .10 | .13 | .23 | (.10 | ) | — | |||||||
October 31, 2013 | 10.06 | .12 | .65 | .77 | (.13 | ) | (.06 | ) | ||||||
October 31, 2012(3) | 10.00 | .02 | .05 | .07 | (.01 | ) | — | |||||||
See accompanying notes which are an integral part of the financial statements.
708 Russell Strategic Call Overwriting Fund
% | % | % | ||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||
Total Distributions | Period | Return(b)(c) | (000 | ) | Gross(e) | Net(d)(e) | Net Assets(d)(e) | Turnover Rate(b) | ||||||||
(.10 | ) | 11.30 | 5.84 | 87,402 | 1.19 | .97 | .87 | 1 | ||||||||
(.10 | ) | 10.77 | 2.13 | 86,773 | 1.19 | .97 | .88 | 5 | ||||||||
(.19 | ) | 10.64 | 7.78 | 83,541 | 1.45 | .97 | 1.11 | 3 | ||||||||
(.01 | ) | 10.06 | .68 | 59,941 | 1.88 | .97 | .73 | — |
See accompanying notes which are an integral part of the financial statements.
Russell Strategic Call Overwriting Fund 709
Russell Investment Company
Select U.S. Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Select U.S. Equity Fund - Class S‡ | Select U.S. Equity Fund - Class Y | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 4.46 | % | 1 Year | 4.71 | % | ||
Inception* | 7.12 | %§ | Inception* | 7.33 | %§ | ||
Select U.S. Equity Fund - Class T‡ | Russell 1000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 4.65 | % | 1 Year | 4.86 | % | ||
Inception* | 7.28 | %§ | Inception* | 7.84 | %§ |
710 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Fund’s overweight to defensive stocks was rewarded during | |
What is the Fund’s investment objective? | the year, but its value exposures were not rewarded. Specifically |
an overweight to stocks with lower price-to-earnings, price- | |
The Select U.S. Equity Fund (the “Fund”) seeks to provide long | to-book, and price-to-cash flow ratios detracted. From a sector |
term capital growth. | perspective, the overweight to one particular low-valuation |
How did the Fund perform relative to its benchmark for the | sector (energy) detracted, but the Fund’s other sector tilts were |
fiscal year ended October 31, 2015? | beneficial in aggregate. Specifically, RIMCo’s sector allocation |
For the fiscal year ended October 31, 2015, the Select U.S. | strategy included an overweight to the consumer discretionary |
Equity Fund’s Class S, Class T and Class Y Shares gained | sector for much of the year and this was beneficial as the U.S. |
4.46%, 4.65% and 4.71%, respectively. This is compared to | economy stayed on track and consumer spending was sufficient |
the Fund’s benchmark, the Russell 1000® Index, which gained | to keep many consumer stocks performing well. RIMCo reduced |
4.86% during the same period. The Fund’s performance includes | the Fund’s consumer discretionary weight after the overweight |
operating expenses, whereas index returns are unmanaged and do | generated positive relative performance. Additionally, the Fund’s |
not include expenses of any kind. | underweight to the utilities sector was beneficial and RIMCO also |
reduced this underweight after the position generated positive | |
For the fiscal year ended October 31, 2015, the Morningstar® | relative performance. From an industry perspective, the Fund’s |
Large Blend, a group of funds that Morningstar considers to have | overweights to the health care management services and property |
investment strategies similar to those of the Fund, gained 2.79%. | & casualty insurance industries were rewarded while rotation |
This result serves as a peer comparison and is expressed net of | away from the real estate investment trust (“REIT”) industry |
operating expenses. | during the year was beneficial given REIT’s performed relatively |
How did the market conditions described in the Market | poorly after peaking near the end of January 2015. |
Summary report affect the Fund’s performance? | During the period, RIMCo used index futures contracts to equitize |
During the fiscal year, the U.S. large capitalization equity market | the Fund’s cash. The decision to equitize cash was beneficial to |
produced positive returns. Relevant Fund exposures included | Fund performance for the fiscal year as the market had a positive |
tilts toward stocks with lower than benchmark valuation ratios | absolute return. |
(lower price-to-earnings, price-to-book, and price-to-cash flow | |
ratios) and consumer discretionary and energy stocks, and away | Describe any changes to the Fund’s structure. |
from growth stocks. Growth stocks significantly outperformed | There were no changes to the Fund’s structure during the fiscal |
value stocks within the Russell 1000® Index, detracting from | year. |
the Fund’s benchmark-relative performance. An overweight to | The views expressed in this report reflect those of the portfolio |
defensive stocks was rewarded during the year as the Russell | managers only through the end of the period covered by |
1000® Defensive™ Index outperformed the Russell 1000® | the report. These views do not necessarily represent the |
Dynamic™ Index. Despite occasional market jitters about the | views of RIMCo, or any other person in RIMCo or any other |
sustainability of economic growth, as the year progressed, positive | affiliated organization. These views are subject to change |
U.S. gross domestic product growth led the market to believe that | at any time based upon market conditions or other events, |
interest rates would rise near the end of 2015 or in early 2016. As | and RIMCo disclaims any responsibility to update the views |
a result, an underweight to the utility sector, which is an area of | contained herein. These views should not be relied on as |
the market considered to be interest rate sensitive, was beneficial | investment advice and, because investment decisions for |
as this sector became less attractive to investors anticipating | a Russell Investment Company (“RIC”) Fund are based on |
improved opportunity for income from the bond market. | numerous factors, should not be relied on as an indication |
How did the investment strategies and techniques employed | of investment decisions of any RIC Fund. |
by the Fund and its money managers affect its benchmark- | |
relative performance? |
Select U.S. Equity Fund 711
Russell Investment Company
Select U.S. Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* | Assumes initial investment on July 31, 2014. |
** | Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which |
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions | |
reinvested as of the ex-dividend dates. | |
‡ | The Fund first issued Class S and Class T Shares on January 2, 2015. The returns shown for Class S and Class T Shares prior to that date are the returns of the |
Fund’s Class Y Shares. Class S and Class T Shares will have substantially similar annual returns as the Class Y Shares because the Shares of each Class are | |
invested in the same portfolio of securities. Annual returns for each Class will differ only to the extent that the Class S and Class T Shares do not have the same | |
expenses as the Class Y Shares. | |
§ | Annualized. |
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s | |
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the | |
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
712 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class S | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 999.10 | $ | 1,022.43 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 2.77 | $ | 2.80 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.55% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class T | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 999.80 | $ | 1,023.19 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 2.02 | $ | 2.04 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 0.40% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class Y | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 1,001.20 | $ | 1,023.44 | |
Expenses Paid During Period* | $ | 1.77 | $ | 1.79 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.35% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Select U.S. Equity Fund 713
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Common Stocks - 95.7% | Finish Line, Inc. (The) Class A | 682 | 13 | ||||
Consumer Discretionary - 13.8% | Foot Locker, Inc. | 7,600 | 515 | ||||
Aaron's, Inc. Class A | 3,391 | 84 | Ford Motor Co. | 238,324 | 3,530 | ||
Advance Auto Parts, Inc. | 3,162 | 627 | Fortune Brands Home & Security, Inc. | 2,332 | 122 | ||
Amazon.com, Inc.(Æ) | 6,983 | 4,371 | Fossil Group, Inc.(Æ) | 1,320 | 72 | ||
AMC Networks, Inc. Class A(Æ) | 1,847 | 137 | GameStop Corp. Class A | 5,313 | 245 | ||
Amerco, Inc. | 224 | 91 | Gannett Co., Inc. | 5,905 | 93 | ||
American Eagle Outfitters, Inc. | 2,033 | 31 | Gap, Inc. (The) | 3,221 | 88 | ||
Aramark | 2,052 | 62 | Garmin, Ltd. | 9,803 | 348 | ||
AutoNation, Inc.(Æ) | 2,837 | 179 | General Motors Co. | 98,215 | 3,429 | ||
AutoZone, Inc.(Æ) | 1,679 | 1,317 | Genesco, Inc.(Æ) | 296 | 19 | ||
Avis Budget Group, Inc.(Æ) | 1,244 | 62 | Gentex Corp. | 8,319 | 136 | ||
Avon Products, Inc. | 6,104 | 25 | Genuine Parts Co. | 8,058 | 731 | ||
Bed Bath & Beyond, Inc.(Æ) | 6,644 | 396 | Goodyear Tire & Rubber Co. (The) | 22,027 | 723 | ||
Belmond, Ltd. Class A(Æ) | 1,328 | 14 | GoPro, Inc. Class A(Æ) | 2,226 | 56 | ||
Best Buy Co., Inc. | 13,942 | 488 | Graham Holdings Co. Class B | 297 | 164 | ||
BJ's Restaurants, Inc.(Æ) | 309 | 13 | Group 1 Automotive, Inc. | 261 | 23 | ||
Bob Evans Farms, Inc. | 333 | 14 | Guess?, Inc. | 986 | 21 | ||
BorgWarner, Inc. | 1,178 | 50 | H&R Block, Inc. | 1,859 | 69 | ||
Brinker International, Inc. | 3,937 | 179 | Hanesbrands, Inc. | 10,694 | 342 | ||
Brunswick Corp. | 461 | 25 | Harley-Davidson, Inc. | 4,133 | 204 | ||
Buffalo Wild Wings, Inc.(Æ) | 84 | 13 | Harman International Industries, Inc. | 2,168 | 238 | ||
Cabela's, Inc.(Æ) | 2,424 | 95 | Hasbro, Inc. | 2,985 | 229 | ||
Cable One, Inc.(Æ) | 439 | 190 | Helen of Troy, Ltd.(Æ) | 276 | 27 | ||
Cablevision Systems Corp. Class A | 9,304 | 303 | Hertz Global Holdings, Inc.(Æ) | 4,892 | 95 | ||
CalAtlantic Group, Inc.(Æ) | 865 | 33 | Hilton Worldwide Holdings, Inc. | 4,621 | 116 | ||
CarMax, Inc.(Æ) | 4,329 | 256 | Home Depot, Inc. | 44,762 | 5,534 | ||
Carnival Corp. | 34,482 | 1,865 | HomeAway, Inc.(Æ) | 1,314 | 42 | ||
Carter's, Inc. | 1,660 | 151 | Houghton Mifflin Harcourt Co.(Æ) | 1,108 | 22 | ||
Cato Corp. (The) Class A | 396 | 15 | Hyatt Hotels Corp. Class A(Æ) | 2,172 | 110 | ||
CBS Corp. Class B | 6,197 | 288 | Iconix Brand Group, Inc.(Æ) | 548 | 8 | ||
Charter Communications, Inc. Class A(Æ) | 1,251 | 239 | International Game Technology PLC | 631 | 10 | ||
Children's Place, Inc. (The) | 331 | 18 | International Speedway Corp. Class A | 540 | 19 | ||
Chipotle Mexican Grill, Inc. Class A(Æ) | 279 | 179 | Interpublic Group of Cos., Inc. (The) | 2,064 | 47 | ||
Choice Hotels International, Inc. | 1,766 | 92 | Jack in the Box, Inc. | 171 | 13 | ||
Cinemark Holdings, Inc. | 3,591 | 127 | Jarden Corp.(Æ) | 6,468 | 290 | ||
Coach, Inc. | 6,749 | 211 | JC Penney Co., Inc.(Æ) | 13,152 | 121 | ||
Comcast Corp. Class A(Æ) | 85,756 | 5,371 | John Wiley & Sons, Inc. Class A(Æ) | 3,769 | 197 | ||
Cooper Tire & Rubber Co. | 548 | 23 | Johnson Controls, Inc. | 34,228 | 1,546 | ||
Costco Wholesale Corp. | 18,246 | 2,885 | KAR Auction Services, Inc. | 5,384 | 207 | ||
Coty, Inc. Class A(Æ) | 3,112 | 90 | Kate Spade & Co.(Æ) | 1,777 | 32 | ||
Cracker Barrel Old Country Store, Inc. | 112 | 15 | Kohl's Corp. | 13,050 | 602 | ||
Dana Holding Corp. | 917 | 15 | L Brands, Inc.(Æ) | 3,866 | 371 | ||
Darden Restaurants, Inc. | 5,408 | 335 | Lamar Advertising Co. Class A(ö) | 1,086 | 61 | ||
Delphi Automotive PLC | 5,231 | 435 | Las Vegas Sands Corp. | 4,719 | 234 | ||
Dick's Sporting Goods, Inc. | 9,603 | 428 | Lear Corp. | 5,573 | 697 | ||
Dillard's, Inc. Class A | 1,276 | 114 | Leggett & Platt, Inc. | 10,984 | 495 | ||
DineEquity, Inc. | 149 | 12 | Lennar Corp. Class A | 8,823 | 442 | ||
Discovery Communications, Inc. Class A(Æ) | 3,071 | 90 | Liberty Broadband Corp. Class A(Æ) | 197 | 11 | ||
Discovery Communications, Inc. Class C(Æ) | 2,080 | 57 | Liberty Broadband Corp. Class C(Æ) | 3,824 | 206 | ||
DISH Network Corp. Class A(Æ) | 5,674 | 357 | Liberty Media Corp. Class A(Æ) | 18,722 | 659 | ||
Dollar General Corp. | 11,437 | 775 | Liberty Media Corp.(Æ) | 4,917 | 193 | ||
Dollar Tree, Inc.(Æ) | 15,443 | 1,011 | Liberty TripAdvisor Holdings, Inc. Class | ||||
Domino's Pizza, Inc. | 2,001 | 213 | A(Æ) | 1,036 | 32 | ||
DR Horton, Inc. | 13,152 | 387 | Liberty Ventures Class A(Æ) | 3,814 | 166 | ||
DSW, Inc. Class A | 3,658 | 91 | Lions Gate Entertainment Corp. | 1,131 | 44 | ||
Dunkin' Brands Group, Inc. | 2,779 | 115 | Live Nation Entertainment, Inc.(Æ) | 4,942 | 135 | ||
eBay, Inc.(Æ) | 39,172 | 1,093 | LKQ Corp.(Æ) | 12,758 | 378 | ||
Estee Lauder Cos., Inc. (The) Class A | 10,486 | 844 | Lowe's Cos., Inc. | 31,891 | 2,355 | ||
Expedia, Inc. | 3,276 | 447 | lululemon athletica, Inc.(Æ) | 2,488 | 122 | ||
Express, Inc.(Æ) | 1,226 | 24 | Macy's, Inc. | 3,809 | 194 | ||
See accompanying notes which are an integral part of the financial statements. |
714 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Madison Square Garden Co. (The) Class A(Æ) | 1,453 | 259 | Thor Industries, Inc. | 3,307 | 179 | ||
Marriott International, Inc. Class A | 2,923 | 224 | Tiffany & Co. | 1,892 | 156 | ||
Marriott Vacations Worldwide Corp. | 314 | 20 | Time Warner Cable, Inc. | 6,093 | 1,154 | ||
Mattel, Inc. | 15,111 | 371 | Time Warner, Inc. | 29,070 | 2,190 | ||
Matthews International Corp. Class A | 415 | 24 | Time, Inc.(Æ) | 1,202 | 22 | ||
McDonald's Corp. | 27,288 | 3,063 | TJX Cos., Inc. | 29,954 | 2,192 | ||
Media General, Inc.(Æ) | 1,092 | 16 | Toll Brothers, Inc.(Æ) | 7,709 | 277 | ||
Meredith Corp. | 445 | 21 | Tractor Supply Co. | 4,816 | 445 | ||
Meritage Homes Corp.(Æ) | 448 | 16 | TRI Pointe Group, Inc.(Æ) | 1,351 | 18 | ||
MGM Resorts International(Æ) | 16,560 | 384 | Tribune Media Co. Class A | 2,949 | 119 | ||
Michael Kors Holdings, Ltd.(Æ) | 2,179 | 84 | TripAdvisor, Inc.(Æ) | 1,688 | 141 | ||
Michaels Cos., Inc. (The)(Æ) | 2,792 | 65 | Tupperware Brands Corp. | 708 | 42 | ||
Mohawk Industries, Inc.(Æ) | 2,012 | 393 | Twenty-First Century Fox, Inc. Class A | 35,254 | 1,082 | ||
MSG Networks, Inc.(Æ) | 4,360 | 90 | Twenty-First Century Fox, Inc. Class B | 10,149 | 313 | ||
Murphy USA, Inc.(Æ) | 2,220 | 136 | Ulta Salon Cosmetics & Fragrance, Inc.(Æ) | 2,117 | 368 | ||
Netflix, Inc.(Æ) | 11,328 | 1,228 | Under Armour, Inc. Class A(Æ) | 4,105 | 390 | ||
New York Times Co. (The) Class A | 1,463 | 19 | Urban Outfitters, Inc.(Æ) | 2,993 | 86 | ||
Newell Rubbermaid, Inc. | 10,554 | 448 | VF Corp. | 16,691 | 1,127 | ||
News Corp. Class A | 24,001 | 370 | Viacom, Inc. Class B | 12,475 | 615 | ||
Nielsen Holdings PLC(Æ) | 3,956 | 188 | Vista Outdoor, Inc.(Æ) | 1,515 | 68 | ||
Nike, Inc. Class B | 29,022 | 3,803 | WABCO Holdings, Inc.(Æ) | 1,600 | 180 | ||
Nordstrom, Inc. | 5,642 | 368 | Wal-Mart Stores, Inc. | 113,072 | 6,472 | ||
Norwegian Cruise Line Holdings, Ltd.(Æ) | 3,091 | 197 | Walt Disney Co. (The) | 58,907 | 6,700 | ||
Nu Skin Enterprises, Inc. Class A | 504 | 19 | Wendy's Co. (The) | 5,007 | 46 | ||
NVR, Inc.(Æ) | 375 | 614 | Whirlpool Corp. | 4,216 | 675 | ||
Office Depot, Inc.(Æ) | 19,687 | 150 | Williams-Sonoma, Inc. | 674 | 50 | ||
Omnicom Group, Inc. | 6,886 | 516 | Wyndham Worldwide Corp. | 713 | 58 | ||
O'Reilly Automotive, Inc.(Æ) | 6,015 | 1,662 | Wynn Resorts, Ltd. | 1,138 | 80 | ||
Outfront Media, Inc. (ö) | 1,765 | 42 | Yum! Brands, Inc. | 18,595 | 1,319 | ||
Pandora Media, Inc.(Æ) | 2,887 | 33 | 111,088 | ||||
Panera Bread Co. Class A(Æ) | 2,224 | 395 | |||||
Penn National Gaming, Inc.(Æ) | 1,031 | 18 | Consumer Staples - 6.1% | ||||
Penske Automotive Group, Inc. | 1,399 | 68 | Altria Group, Inc. | 47,926 | 2,898 | ||
Polaris Industries, Inc. | 2,371 | 266 | Archer-Daniels-Midland Co. | 39,122 | 1,786 | ||
Priceline Group, Inc. (The)(Æ) | 762 | 1,108 | Brown-Forman Corp. Class B - ADR(Æ) | 6,964 | 739 | ||
PulteGroup, Inc. | 17,020 | 312 | Bunge, Ltd. | 6,111 | 446 | ||
PVH Corp. | 3,332 | 303 | Campbell Soup Co. | 6,773 | 344 | ||
Ralph Lauren Corp. Class A | 4,130 | 458 | Church & Dwight Co., Inc. | 6,080 | 523 | ||
Regal Entertainment Group Class A | 3,078 | 60 | Clorox Co. (The) | 6,593 | 804 | ||
Rent-A-Center, Inc. Class A | 738 | 14 | Coca-Cola Co. (The) | 77,022 | 3,262 | ||
Ross Stores, Inc. | 25,244 | 1,277 | Coca-Cola Enterprises, Inc. | 7,495 | 385 | ||
Royal Caribbean Cruises, Ltd. | 9,477 | 932 | Colgate-Palmolive Co. | 23,575 | 1,564 | ||
Sally Beauty Holdings, Inc.(Æ) | 9,521 | 224 | ConAgra Foods, Inc. | 4,033 | 164 | ||
Scholastic Corp. | 450 | 18 | Constellation Brands, Inc. Class A | 2,436 | 328 | ||
Scripps Networks Interactive, Inc. Class A | 5,293 | 318 | Core-Mark Holding Co., Inc. | 293 | 24 | ||
Service Corp. International | 3,933 | 111 | CVS Health Corp. | 33,572 | 3,316 | ||
ServiceMaster Global Holdings, Inc.(Æ) | 2,525 | 90 | Dean Foods Co. | 1,121 | 20 | ||
Signet Jewelers, Ltd. | 1,068 | 161 | Dr Pepper Snapple Group, Inc. | 9,032 | 807 | ||
Sirius XM Holdings, Inc.(Æ) | 11,227 | 46 | Energizer Holdings, Inc. | 1,654 | 87 | ||
Six Flags Entertainment Corp. | 1,024 | 53 | Flowers Foods, Inc. | 7,852 | 212 | ||
Skechers U.S.A., Inc. Class A(Æ) | 3,372 | 105 | Fresh Del Monte Produce, Inc. | 540 | 25 | ||
Sonic Automotive, Inc. Class A | 657 | 16 | General Mills, Inc. | 18,163 | 1,055 | ||
Staples, Inc. | 40,234 | 523 | Hain Celestial Group, Inc. (The)(Æ) | 2,299 | 115 | ||
Starbucks Corp. | 55,680 | 3,484 | Herbalife, Ltd.(Æ) | 827 | 46 | ||
Starwood Hotels & Resorts Worldwide, Inc. | 821 | 66 | Hershey Co. (The) | 6,693 | 594 | ||
Starz Class A(Æ) | 1,315 | 44 | Hormel Foods Corp. | 14,904 | 1,007 | ||
Target Corp. | 49,176 | 3,795 | Ingredion, Inc. | 5,214 | 496 | ||
TEGNA, Inc. | 17,310 | 468 | JM Smucker Co. (The) | 5,963 | 700 | ||
Tempur Sealy International, Inc.(Æ) | 114 | 9 | Keurig Green Mountain, Inc. | 514 | 26 | ||
Tesla Motors, Inc.(Æ) | 1,204 | 249 | Kimberly-Clark Corp. | 11,648 | 1,394 |
See accompanying notes which are an integral part of the financial statements.
Select U.S. Equity Fund 715
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Kraft Heinz Co. (The) | 6,114 | 477 | FMC Technologies, Inc.(Æ) | 3,372 | 114 | ||
Kroger Co. (The) | 37,744 | 1,427 | Frank's International NV | 4,293 | 74 | ||
Lancaster Colony Corp. | 177 | 20 | Golar LNG, Ltd. | 480 | 14 | ||
McCormick & Co., Inc. | 6,784 | 570 | Gulfport Energy Corp.(Æ) | 3,498 | 107 | ||
Mead Johnson Nutrition Co. Class A | 3,098 | 254 | Halliburton Co. | 39,485 | 1,515 | ||
Molson Coors Brewing Co. Class B | 2,203 | 194 | Helix Energy Solutions Group, Inc.(Æ) | 1,385 | 8 | ||
Mondelez International, Inc. Class A | 77,078 | 3,558 | Helmerich & Payne, Inc. | 3,950 | 222 | ||
Monster Beverage Corp.(Æ) | 603 | 82 | Hess Corp. | 6,481 | 364 | ||
PepsiCo, Inc. | 30,856 | 3,153 | HollyFrontier Corp. | 6,913 | 339 | ||
Philip Morris International, Inc. | 43,756 | 3,868 | Kinder Morgan, Inc. | 58,756 | 1,607 | ||
Pinnacle Foods, Inc. | 6,289 | 277 | Kosmos Energy, Ltd.(Æ) | 4,466 | 30 | ||
Post Holdings, Inc.(Æ) | 440 | 28 | Laredo Petroleum, Inc.(Æ) | 9,930 | 114 | ||
Procter & Gamble Co. (The) | 102,720 | 7,846 | Marathon Oil Corp. | 15,815 | 291 | ||
Reynolds American, Inc. | 35,416 | 1,711 | Marathon Petroleum Corp. | 34,988 | 1,812 | ||
Rite Aid Corp.(Æ) | 19,919 | 157 | Murphy Oil Corp. | 4,444 | 126 | ||
Safeway, Inc.(Æ) | 4,520 | 2 | Nabors Industries, Ltd. | 10,354 | 104 | ||
Seaboard Corp.(Æ) | 4 | 14 | National Oilwell Varco, Inc. | 8,745 | 329 | ||
Snyders-Lance, Inc. | 664 | 24 | Newfield Exploration Co.(Æ) | 4,602 | 185 | ||
SpartanNash Co. | 641 | 18 | Noble Corp. PLC | 6,181 | 83 | ||
SUPERVALU, Inc.(Æ) | 2,110 | 14 | Noble Energy, Inc. | 10,040 | 360 | ||
Sysco Corp. | 13,478 | 556 | NOW, Inc.(Æ) | 4,899 | 81 | ||
TreeHouse Foods, Inc.(Æ) | 303 | 26 | Occidental Petroleum Corp. | 30,565 | 2,278 | ||
Tyson Foods, Inc. Class A | 2,581 | 115 | Oceaneering International, Inc. | 4,009 | 168 | ||
United Natural Foods, Inc.(Æ) | 205 | 10 | ONEOK, Inc. | 1,140 | 39 | ||
Universal Corp. | 372 | 20 | Patterson-UTI Energy, Inc. | 5,489 | 82 | ||
Vector Group, Ltd. | 745 | 18 | PBF Energy, Inc. Class A | 3,046 | 104 | ||
Walgreens Boots Alliance, Inc. | 18,091 | 1,532 | PDC Energy, Inc.(Æ) | 372 | 22 | ||
WhiteWave Foods Co. (The) Class A(Æ) | 321 | 13 | Peabody Energy Corp.(Æ) | 606 | 8 | ||
49,151 | Phillips 66(Æ) | 23,583 | 2,100 | ||||
Pioneer Natural Resources Co. | 746 | 102 | |||||
Energy - 7.2% | QEP Resources, Inc. | 6,880 | 106 | ||||
Anadarko Petroleum Corp. | 14,936 | 999 | Range Resources Corp. | 2,341 | 71 | ||
Antero Resources Corp.(Æ) | 3,139 | 74 | Rice Energy, Inc.(Æ) | 2,048 | 31 | ||
Apache Corp. | 18,699 | 881 | Rowan Cos. PLC Class A | 4,648 | 92 | ||
Baker Hughes, Inc. | 20,254 | 1,067 | RPC, Inc. | 5,838 | 64 | ||
Cabot Oil & Gas Corp. | 1,302 | 28 | SandRidge Energy, Inc.(Æ) | 29,149 | 11 | ||
California Resources Corp. | 14,080 | 57 | Schlumberger, Ltd. | 43,345 | 3,388 | ||
Cameron International Corp.(Æ) | 6,869 | 467 | SEACOR Holdings, Inc.(Æ) | 269 | 16 | ||
Cheniere Energy, Inc.(Æ) | 1,100 | 54 | Seadrill, Ltd.(Æ) | 12,253 | 79 | ||
Chesapeake Energy Corp. | 11,101 | 79 | SM Energy Co. | 3,346 | 112 | ||
Chevron Corp. | 98,584 | 8,959 | SolarCity Corp.(Æ) | 795 | 24 | ||
Cimarex Energy Co. | 356 | 42 | Southwestern Energy Co.(Æ) | 10,353 | 114 | ||
Columbia Pipeline Group, Inc. | 7,253 | 151 | Spectra Energy Corp. | 18,992 | 543 | ||
Concho Resources, Inc.(Æ) | 509 | 59 | SunPower Corp. Class A(Æ) | 316 | 9 | ||
ConocoPhillips | 61,977 | 3,307 | Superior Energy Services, Inc. | 4,249 | 60 | ||
CONSOL Energy, Inc. | 8,596 | 57 | Targa Resources Corp. | 749 | 43 | ||
Continental Resources, Inc.(Æ) | 1,290 | 44 | Tesoro Corp. | 7,267 | 777 | ||
CVR Energy, Inc. | 126 | 6 | Ultra Petroleum Corp.(Æ) | 1,397 | 8 | ||
Denbury Resources, Inc. | 13,375 | 47 | Valero Energy Corp. | 33,454 | 2,205 | ||
Devon Energy Corp. | 19,055 | 799 | Weatherford International PLC(Æ) | 16,505 | 169 | ||
Diamond Offshore Drilling, Inc. | 2,936 | 58 | Whiting Petroleum Corp.(Æ) | 6,142 | 106 | ||
Dril-Quip, Inc.(Æ) | 896 | 55 | Williams Cos., Inc. (The) | 8,902 | 351 | ||
Energen Corp. | 2,834 | 165 | World Fuel Services Corp. | 3,557 | 158 | ||
Ensco PLC Class A | 8,261 | 137 | WPX Energy, Inc.(Æ) | 6,782 | 47 | ||
EOG Resources, Inc. | 16,568 | 1,422 | 58,562 | ||||
EP Energy Corp. Class A(Æ) | 9,386 | 52 | |||||
EQT Corp. | 823 | 54 | Financial Services - 20.2% | ||||
Exterran Holdings, Inc. | 625 | 14 | Acadia Realty Trust (ö) | 782 | 26 | ||
Exxon Mobil Corp. | 216,795 | 17,938 | ACE, Ltd. | 22,635 | 2,570 | ||
First Solar, Inc.(Æ) | 2,169 | 124 | Affiliated Managers Group, Inc.(Æ) | 1,692 | 305 |
See accompanying notes which are an integral part of the financial statements.
716 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Aflac, Inc. | 28,826 | 1,838 | CIT Group, Inc. | 3,196 | 137 | ||
Alexander & Baldwin, Inc. | 509 | 19 | Citigroup, Inc. | 115,870 | 6,161 | ||
Alexandria Real Estate Equities, Inc. (ö) | 901 | 81 | Citizens Financial Group, Inc. | 4,548 | 110 | ||
Alleghany Corp.(Æ) | 675 | 335 | City National Corp. | 2,783 | 249 | ||
Alliance Data Systems Corp.(Æ) | 210 | 62 | CME Group, Inc. Class A | 18,225 | 1,722 | ||
Allied World Assurance Co. Holdings AG | 16,360 | 595 | CNA Financial Corp. | 3,872 | 142 | ||
Allstate Corp. (The) | 33,384 | 2,066 | CNO Financial Group, Inc. | 1,856 | 36 | ||
Ally Financial, Inc.(Æ) | 10,011 | 199 | Colony Capital, Inc. Class A(ö) | 1,156 | 23 | ||
American Campus Communities, Inc.(ö) | 1,304 | 53 | Columbia Banking System, Inc. | 762 | 25 | ||
American Capital Agency Corp.(ö) | 11,201 | 200 | Comerica, Inc. | 4,865 | 211 | ||
American Equity Investment Life Holding | Commerce Bancshares, Inc. | 7,176 | 327 | ||||
Co. | 862 | 22 | Communications Sales & Leasing, Inc.(ö) | 5,405 | 109 | ||
American Express Co. | 33,004 | 2,418 | Community Bank System, Inc. | 569 | 23 | ||
American Financial Group, Inc. | 7,914 | 571 | CoreLogic, Inc.(Æ) | 2,865 | 112 | ||
American Homes 4 Rent Class A(ö) | 7,802 | 129 | Corrections Corp. of America(ö) | 5,990 | 171 | ||
American International Group, Inc. | 53,971 | 3,403 | Cousins Properties, Inc. (ö) | 2,516 | 25 | ||
American National Insurance Co. | 2,014 | 208 | Credit Acceptance Corp.(Æ) | 361 | 68 | ||
American Tower Corp.(ö) | 9,847 | 1,007 | CubeSmart (ö) | 1,335 | 37 | ||
Ameriprise Financial, Inc. | 2,766 | 319 | Cullen/Frost Bankers, Inc. | 4,929 | 337 | ||
AmTrust Financial Services, Inc. | 1,552 | 106 | CVB Financial Corp. | 1,392 | 24 | ||
Annaly Capital Management, Inc. (ö) | 12,141 | 121 | CYS Investments, Inc. (ö) | 2,020 | 16 | ||
Aon PLC | 5,698 | 532 | DCT Industrial Trust, Inc. (ö) | 840 | 31 | ||
Arch Capital Group, Ltd.(Æ) | 11,828 | 886 | DiamondRock Hospitality Co. (ö) | 2,041 | 24 | ||
Argo Group International Holdings, Ltd. | 411 | 26 | Discover Financial Services | 23,483 | 1,320 | ||
ARMOUR Residential REIT, Inc. (ö) | 679 | 14 | Dun & Bradstreet Corp. (The) | 2,778 | 316 | ||
Arthur J Gallagher & Co. | 8,771 | 384 | DuPont Fabros Technology, Inc. (ö) | 622 | 20 | ||
Aspen Insurance Holdings, Ltd. | 6,713 | 326 | E*Trade Financial Corp.(Æ) | 8,634 | 246 | ||
Associated Banc-Corp. | 6,655 | 129 | East West Bancorp, Inc. | 5,344 | 216 | ||
Assurant, Inc. | 6,053 | 493 | Eaton Vance Corp. | 1,852 | 67 | ||
Assured Guaranty, Ltd. | 9,950 | 273 | Education Realty Trust, Inc.(ö) | 597 | 21 | ||
Astoria Financial Corp. | 1,367 | 22 | Endurance Specialty Holdings, Ltd. | 5,587 | 353 | ||
AvalonBay Communities, Inc.(ö) | 3,159 | 552 | Enstar Group, Ltd.(Æ) | 131 | 21 | ||
Axis Capital Holdings, Ltd. | 12,203 | 659 | EPR Properties (ö) | 579 | 33 | ||
Banco Latinoamericano de Comercio Exterior | Equifax, Inc. | 11,364 | 1,211 | ||||
SA Class E | 555 | 15 | Equinix, Inc. (ö) | 636 | 189 | ||
BancorpSouth, Inc. | 1,136 | 28 | Equity LifeStyle Properties, Inc. Class A(ö) | 3,608 | 218 | ||
Bank of America Corp. | 401,519 | 6,737 | Equity One, Inc. (ö) | 804 | 21 | ||
Bank of Hawaii Corp. | 1,565 | 102 | Equity Residential(ö) | 10,916 | 844 | ||
Bank of New York Mellon Corp. (The) | 53,759 | 2,239 | Erie Indemnity Co. Class A | 3,428 | 300 | ||
BankUnited, Inc. | 3,131 | 116 | Essex Property Trust, Inc.(ö) | 1,419 | 313 | ||
BB&T Corp. | 46,227 | 1,717 | EverBank Financial Corp. | 1,053 | 18 | ||
Berkshire Hathaway, Inc. Class B(Æ) | 88,943 | 12,098 | Everest Re Group, Ltd. | 5,258 | 936 | ||
BlackRock, Inc. Class A | 5,426 | 1,910 | Extra Space Storage, Inc.(ö) | 7,291 | 578 | ||
BOK Financial Corp. | 2,347 | 158 | FactSet Research Systems, Inc. | 2,835 | 496 | ||
Broadridge Financial Solutions, Inc. | 11,051 | 658 | Federal Realty Investment Trust(ö) | 1,928 | 277 | ||
Brown & Brown, Inc. | 5,706 | 184 | Federated Investors, Inc. Class B | 5,832 | 179 | ||
Camden Property Trust(ö) | 2,844 | 210 | FelCor Lodging Trust, Inc. (ö) | 1,675 | 13 | ||
Capital One Financial Corp. | 32,471 | 2,562 | Fidelity National Information Services, Inc. | 6,324 | 461 | ||
Capitol Federal Financial, Inc. | 1,827 | 24 | Fifth Third Bancorp | 18,954 | 361 | ||
Capstead Mortgage Corp. (ö) | 1,505 | 15 | First American Financial Corp. | 1,062 | 40 | ||
Care Capital Properties, Inc.(Æ)(ö) | 1,488 | 49 | First Citizens BancShares, Inc. Class A | 109 | 28 | ||
Cathay General Bancorp | 936 | 29 | First Financial Bankshares, Inc. | 688 | 23 | ||
CBOE Holdings, Inc. | 3,550 | 238 | First Horizon National Corp. | 7,257 | 103 | ||
CBRE Group, Inc. Class A(Æ) | 8,855 | 330 | First Industrial Realty Trust, Inc. (ö) | 1,066 | 23 | ||
Chambers Street Properties (ö) | 2,493 | 18 | First Midwest Bancorp, Inc. | 1,101 | 20 | ||
Charles Schwab Corp. (The) | 24,594 | 751 | First Niagara Financial Group, Inc. | 11,415 | 118 | ||
Chemical Financial Corp. | 595 | 20 | First Republic Bank | 6,206 | 405 | ||
Chesapeake Lodging Trust (ö) | 620 | 17 | FirstMerit Corp. | 1,748 | 33 | ||
Chimera Investment Corp. (ö) | 2,908 | 41 | Fiserv, Inc.(Æ) | 14,696 | 1,418 | ||
Chubb Corp. (The) | 20,054 | 2,594 | FleetCor Technologies, Inc.(Æ) | 827 | 120 | ||
Cincinnati Financial Corp. | 9,839 | 593 |
See accompanying notes which are an integral part of the financial statements
Select U.S. Equity Fund 717
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
FNB Corp. | 2,028 | 27 | Mercury General Corp. | 3,725 | 201 | ||
FNF Group | 19,166 | 676 | MetLife, Inc. | 38,092 | 1,919 | ||
Forest City Enterprises, Inc. Class A(Æ) | 1,258 | 28 | MFA Financial, Inc.(ö) | 27,903 | 193 | ||
Franklin Resources, Inc. | 26,391 | 1,076 | MGIC Investment Corp.(Æ) | 2,152 | 20 | ||
Franklin Street Properties Corp. (ö) | 1,420 | 15 | Moody's Corp. | 8,266 | 795 | ||
General Growth Properties, Inc. (ö) | 617 | 18 | Morgan Stanley | 64,232 | 2,118 | ||
Genworth Financial, Inc. Class A(Æ) | 15,346 | 72 | Morningstar, Inc. | 1,951 | 160 | ||
GEO Group, Inc. (The) (ö) | 757 | 24 | MSCI, Inc. Class A | 10,061 | 674 | ||
Glacier Bancorp, Inc. | 943 | 26 | Nasdaq, Inc. | 12,088 | 700 | ||
Global Payments, Inc. | 3,608 | 492 | National Penn Bancshares, Inc. | 1,768 | 21 | ||
Goldman Sachs Group, Inc. (The) | 20,004 | 3,751 | National Retail Properties, Inc.(ö) | 7,069 | 269 | ||
Government Properties Income Trust (ö) | 905 | 15 | Nationstar Mortgage Holdings, Inc.(Æ) | 2,378 | 32 | ||
Gramercy Property Trust, Inc.(ö) | 621 | 14 | Navient Corp. | 12,390 | 163 | ||
Hancock Holding Co. | 934 | 26 | NBT Bancorp, Inc. | 773 | 22 | ||
Hanover Insurance Group, Inc. (The) | 4,735 | 399 | New Residential Investment Corp. (ö) | 1,493 | 18 | ||
Hartford Financial Services Group, Inc. | 10,504 | 486 | New York Community Bancorp, Inc. | 36,182 | 598 | ||
Hatteras Financial Corp.(ö) | 1,218 | 17 | New York REIT, Inc. (ö) | 1,827 | 21 | ||
HCP, Inc.(ö) | 12,986 | 483 | Northern Trust Corp. | 8,006 | 564 | ||
Healthcare Realty Trust, Inc. (ö) | 1,014 | 27 | NorthStar Asset Management Group, Inc. | 10,983 | 161 | ||
Hersha Hospitality Trust Class A(ö) | 682 | 16 | Northwest Bancshares, Inc. | 1,613 | 22 | ||
Highwoods Properties, Inc. (ö) | 867 | 38 | Ocwen Financial Corp.(Æ) | 3,632 | 25 | ||
Hilltop Holdings, Inc.(Æ) | 990 | 21 | Old National Bancorp | 1,548 | 22 | ||
Horace Mann Educators Corp. | 597 | 20 | Old Republic International Corp. | 15,716 | 283 | ||
Hudson City Bancorp, Inc. | 3,856 | 39 | PacWest Bancorp | 784 | 35 | ||
Hudson Pacific Properties, Inc. (ö) | 674 | 19 | Park National Corp. | 220 | 20 | ||
Huntington Bancshares, Inc. | 65,646 | 720 | Parkway Properties, Inc. (ö) | 1,052 | 18 | ||
Iberiabank Corp. | 383 | 23 | PartnerRe, Ltd. | 6,397 | 889 | ||
Independent Bank Corp. | 450 | 21 | PayPal Holdings, Inc.(Æ) | 36,914 | 1,329 | ||
Interactive Brokers Group, Inc. Class A | 2,147 | 88 | Pebblebrook Hotel Trust (ö) | 692 | 24 | ||
Intercontinental Exchange, Inc. | 2,328 | 588 | Pennsylvania Real Estate Investment Trust | ||||
International Bancshares Corp. | 728 | 20 | (ö) | 803 | 18 | ||
Invesco Mortgage Capital, Inc. (ö) | 1,371 | 17 | PennyMac Mortgage Investment Trust (ö) | 903 | 13 | ||
Invesco, Ltd. | 2,885 | 96 | People's United Financial, Inc. | 16,096 | 257 | ||
Investors Bancorp, Inc. | 3,202 | 40 | Pinnacle Financial Partners, Inc. | 468 | 25 | ||
Jack Henry & Associates, Inc. | 4,848 | 375 | Plum Creek Timber Co., Inc.(ö) | 5,480 | 223 | ||
Janus Capital Group, Inc. | 1,662 | 26 | PNC Financial Services Group, Inc. (The) | 29,758 | 2,686 | ||
Jones Lang LaSalle, Inc. | 1,088 | 181 | Popular, Inc.(Æ) | 1,240 | 37 | ||
JPMorgan Chase & Co. | 164,668 | 10,580 | Post Properties, Inc.(ö) | 2,886 | 172 | ||
Kemper Corp. | 603 | 22 | Primerica, Inc. | 565 | 27 | ||
Kennedy-Wilson Holdings, Inc. | 829 | 20 | Principal Financial Group, Inc. | 14,434 | 724 | ||
KeyCorp | 19,442 | 241 | PrivateBancorp, Inc. Class A | 676 | 28 | ||
LaSalle Hotel Properties (ö) | 1,054 | 31 | ProAssurance Corp. | 6,187 | 328 | ||
Lazard, Ltd. Class A | 3,221 | 149 | Progressive Corp. (The) | 34,068 | 1,129 | ||
Legg Mason, Inc. | 2,999 | 134 | Prosperity Bancshares, Inc. | 699 | 36 | ||
Leucadia National Corp. | 6,331 | 127 | Provident Financial Services, Inc. | 1,032 | 21 | ||
Lexington Realty Trust (ö) | 2,197 | 19 | Prudential Financial, Inc. | 20,649 | 1,704 | ||
Liberty Property Trust(ö) | 2,597 | 88 | PS Business Parks, Inc. (ö) | 215 | 18 | ||
Lincoln National Corp. | 8,677 | 464 | Public Storage(ö) | 3,868 | 888 | ||
Loews Corp. | 13,367 | 487 | Radian Group, Inc. | 1,459 | 21 | ||
LPL Financial Holdings, Inc. | 286 | 12 | Ramco-Gershenson Properties Trust (ö) | 1,033 | 17 | ||
LTC Properties, Inc. (ö) | 471 | 20 | Raymond James Financial, Inc. | 7,736 | 426 | ||
M&T Bank Corp. | 5,847 | 701 | Rayonier, Inc. (ö) | 3,305 | 75 | ||
Macerich Co. (The)(ö) | 2,922 | 248 | Realogy Holdings Corp.(Æ) | 4,007 | 157 | ||
Mack-Cali Realty Corp. (ö) | 1,143 | 25 | Realty Income Corp.(ö) | 6,621 | 327 | ||
Markel Corp.(Æ) | 874 | 759 | Redwood Trust, Inc. (ö) | 1,057 | 14 | ||
Marsh & McLennan Cos., Inc. | 19,682 | 1,097 | Regions Financial Corp. | 39,941 | 373 | ||
MasterCard, Inc. Class A | 33,251 | 3,291 | Reinsurance Group of America, Inc. Class A | 4,699 | 424 | ||
MB Financial, Inc. | 776 | 25 | RenaissanceRe Holdings, Ltd. | 5,090 | 558 | ||
McGraw Hill Financial, Inc. | 3,757 | 348 | Retail Opportunity Investments Corp. (ö) | 1,225 | 22 | ||
Medical Properties Trust, Inc. (ö) | 2,166 | 24 | RLI Corp. | 515 | 31 |
See accompanying notes which are an integral part of the financial statements.
718 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
RLJ Lodging Trust (ö) | 1,123 | 28 | White Mountains Insurance Group, Ltd. | 483 | 382 | ||
Ryman Hospitality Properties, Inc. (ö) | 287 | 15 | Wintrust Financial Corp. | 546 | 28 | ||
Santander Consumer USA Holdings, Inc.(Æ) | 3,537 | 64 | WR Berkley Corp. | 6,936 | 387 | ||
SEI Investments Co. | 10,870 | 563 | XL Group PLC Class A | 19,923 | 759 | ||
Selective Insurance Group, Inc. | 765 | 28 | Zillow Group, Inc.(Æ) | 992 | 27 | ||
Senior Housing Properties Trust(ö) | 7,976 | 121 | Zillow Group, Inc. Class A(Æ) | 496 | 15 | ||
Signature Bank(Æ) | 710 | 106 | Zions Bancorporation | 1,368 | 39 | ||
Simon Property Group, Inc.(ö) | 5,315 | 1,071 | 162,662 | ||||
SLM Corp.(Æ) | 28,279 | 200 | |||||
South State Corp. | 319 | 25 | Health Care - 13.3% | ||||
Sovran Self Storage, Inc. (ö) | 196 | 20 | Abbott Laboratories | 83,622 | 3,746 | ||
Springleaf Holdings, Inc. Class A(Æ) | 1,626 | 76 | AbbVie, Inc. | 28,423 | 1,693 | ||
STAG Industrial, Inc. (ö) | 756 | 15 | Acadia Healthcare Co., Inc.(Æ) | 652 | 40 | ||
StanCorp Financial Group, Inc. | 2,597 | 298 | Aetna, Inc. | 24,337 | 2,793 | ||
Starwood Property Trust, Inc.(ö) | 15,474 | 311 | Agilent Technologies, Inc. | 6,561 | 248 | ||
State Street Corp. | 17,982 | 1,241 | Agios Pharmaceuticals, Inc.(Æ) | 810 | 59 | ||
Sterling Bancorp | 1,313 | 20 | Akorn, Inc.(Æ) | 1,963 | 52 | ||
Stifel Financial Corp.(Æ) | 658 | 29 | Alere, Inc.(Æ) | 2,355 | 109 | ||
Sunstone Hotel Investors, Inc.(ö) | 1,859 | 27 | Alexion Pharmaceuticals, Inc.(Æ) | 3,399 | 598 | ||
SunTrust Banks, Inc. | 12,301 | 511 | Align Technology, Inc.(Æ) | 1,450 | 95 | ||
SVB Financial Group(Æ) | 1,630 | 199 | Alkermes PLC(Æ) | 2,803 | 202 | ||
Symetra Financial Corp. | 980 | 31 | Allergan PLC(Æ) | 11,682 | 3,604 | ||
Synchrony Financial(Æ) | 2,401 | 74 | Allscripts Healthcare Solutions, Inc.(Æ) | 7,622 | 107 | ||
Synovus Financial Corp. | 5,635 | 178 | Alnylam Pharmaceuticals, Inc.(Æ) | 1,351 | 116 | ||
T Rowe Price Group, Inc. | 7,185 | 543 | AmerisourceBergen Corp. Class A | 4,425 | 427 | ||
Taubman Centers, Inc.(ö) | 1,323 | 102 | Amgen, Inc. | 23,586 | 3,731 | ||
TCF Financial Corp. | 5,745 | 88 | Amsurg Corp. Class A(Æ) | 422 | 30 | ||
TD Ameritrade Holding Corp. | 2,146 | 74 | Analogic Corp. | 203 | 18 | ||
Texas Capital Bancshares, Inc.(Æ) | 453 | 25 | Anthem, Inc. | 19,171 | 2,668 | ||
Thomson Reuters Corp. | 15,879 | 651 | Athenahealth, Inc.(Æ) | 687 | 105 | ||
Torchmark Corp. | 9,063 | 526 | Baxalta, Inc. | 23,437 | 808 | ||
Total System Services, Inc. | 9,115 | 478 | Baxter International, Inc. | 23,585 | 882 | ||
Travelers Cos., Inc. (The) | 26,670 | 3,011 | Becton Dickinson and Co. | 10,175 | 1,450 | ||
Trustmark Corp. | 912 | 22 | Biogen, Inc.(Æ) | 5,002 | 1,453 | ||
Two Harbors Investment Corp.(ö) | 5,058 | 43 | BioMarin Pharmaceutical, Inc.(Æ) | 2,928 | 343 | ||
UDR, Inc.(ö) | 3,169 | 109 | Bio-Rad Laboratories, Inc. Class A(Æ) | 2,084 | 291 | ||
UMB Financial Corp. | 464 | 23 | Bluebird Bio, Inc.(Æ) | 838 | 65 | ||
Umpqua Holdings Corp. | 1,787 | 30 | Boston Scientific Corp.(Æ) | 23,519 | 430 | ||
Union Bankshares Corp. | 835 | 21 | Bristol-Myers Squibb Co. | 48,665 | 3,209 | ||
United Bankshares, Inc. | 765 | 30 | Brookdale Senior Living, Inc. Class A(Æ) | 1,153 | 24 | ||
Unum Group | 6,509 | 226 | Bruker Corp.(Æ) | 1,963 | 36 | ||
US Bancorp | 84,228 | 3,553 | Cardinal Health, Inc. | 14,910 | 1,226 | ||
Validus Holdings, Ltd. | 5,754 | 255 | Celgene Corp.(Æ) | 12,681 | 1,556 | ||
Valley National Bancorp | 2,670 | 28 | Centene Corp.(Æ) | 4,339 | 258 | ||
Vantiv, Inc. Class A(Æ) | 2,821 | 141 | Cerner Corp.(Æ) | 12,905 | 855 | ||
Ventas, Inc.(ö) | 5,952 | 320 | Charles River Laboratories International, | ||||
Visa, Inc. Class A | 61,628 | 4,781 | Inc.(Æ) | 1,349 | 88 | ||
Voya Financial, Inc. | 11,000 | 446 | Cigna Corp. | 11,921 | 1,598 | ||
Waddell & Reed Financial, Inc. Class A | 1,325 | 49 | Community Health Systems, Inc.(Æ) | 4,191 | 117 | ||
Washington Federal, Inc. | 1,200 | 30 | CONMED Corp. | 388 | 16 | ||
Washington Real Estate Investment Trust (ö) | 802 | 22 | Cooper Cos., Inc. (The) | 2,645 | 403 | ||
Webster Financial Corp. | 908 | 34 | CR Bard, Inc. | 3,446 | 642 | ||
Weingarten Realty Investors(ö) | 4,799 | 172 | DaVita HealthCare Partners, Inc.(Æ) | 1,048 | 81 | ||
Wells Fargo & Co. | 230,897 | 12,501 | Dentsply International, Inc. | 5,872 | 357 | ||
Welltower, Inc.(Æ)(ö) | 2,571 | 167 | DexCom, Inc.(Æ) | 2,246 | 187 | ||
WesBanco, Inc. | 570 | 19 | Edwards Lifesciences Corp.(Æ) | 2,758 | 433 | ||
Westamerica Bancorporation | 444 | 20 | Eli Lilly & Co. | 34,998 | 2,855 | ||
Western Union Co. (The) | 15,063 | 290 | Endo International PLC(Æ) | 4,204 | 252 | ||
WEX, Inc.(Æ) | 159 | 14 | Envision Healthcare Holdings, Inc.(Æ) | 1,438 | 41 | ||
Weyerhaeuser Co. (ö) | 746 | 22 | Express Scripts Holding Co.(Æ) | 26,589 | 2,297 |
See accompanying notes which are an integral part of the financial statements.
Select U.S. Equity Fund 719
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Gilead Sciences, Inc. | 32,916 | 3,559 | VCA, Inc.(Æ) | 2,084 | 114 | ||
Greatbatch, Inc.(Æ) | 364 | 19 | Veeva Systems, Inc. Class A(Æ) | 1,263 | 32 | ||
Haemonetics Corp.(Æ) | 576 | 19 | Vertex Pharmaceuticals, Inc.(Æ) | 5,346 | 667 | ||
HCA Holdings, Inc.(Æ) | 19,513 | 1,342 | VWR Corp.(Æ) | 2,823 | 78 | ||
Health Net, Inc.(Æ) | 2,848 | 183 | West Pharmaceutical Services, Inc. | 302 | 18 | ||
HealthSouth Corp. | 482 | 17 | Zimmer Biomet Holdings, Inc. | 4,875 | 510 | ||
Henry Schein, Inc.(Æ) | 5,491 | 833 | Zoetis, Inc. Class A | 7,034 | 303 | ||
Hill-Rom Holdings, Inc. | 2,022 | 107 | 107,204 | ||||
Hologic, Inc.(Æ) | 6,607 | 257 | |||||
Humana, Inc. | 6,158 | 1,100 | Materials and Processing - 3.4% | ||||
ICU Medical, Inc.(Æ) | 207 | 23 | A Schulman, Inc. | 397 | 14 | ||
IDEXX Laboratories, Inc.(Æ) | 770 | 53 | Acuity Brands, Inc. | 1,302 | 285 | ||
Illumina, Inc.(Æ) | 4,327 | 620 | Air Products & Chemicals, Inc. | 9,454 | 1,314 | ||
Incyte Corp.(Æ) | 3,514 | 413 | Airgas, Inc. | 3,769 | 362 | ||
Integra LifeSciences Holdings Corp.(Æ) | 287 | 17 | Albemarle Corp. | 3,187 | 171 | ||
Intercept Pharmaceuticals, Inc.(Æ) | 146 | 23 | Alcoa, Inc. | 35,791 | 320 | ||
Intrexon Corp.(Æ) | 1,625 | 55 | Allegheny Technologies, Inc. | 4,212 | 62 | ||
Intuitive Surgical, Inc.(Æ) | 165 | 82 | AptarGroup, Inc. | 3,890 | 286 | ||
Isis Pharmaceuticals, Inc.(Æ) | 3,429 | 165 | Ashland, Inc. | 2,354 | 258 | ||
Jazz Pharmaceuticals PLC(Æ) | 1,461 | 201 | Axalta Coating Systems, Ltd.(Æ) | 2,668 | 74 | ||
Johnson & Johnson | 129,816 | 13,115 | Axiall Corp. | 600 | 12 | ||
Juno Therapeutics, Inc.(Æ) | 1,815 | 94 | Ball Corp. | 7,734 | 530 | ||
Kindred Healthcare, Inc. | 845 | 11 | Beacon Roofing Supply, Inc.(Æ) | 625 | 22 | ||
Laboratory Corp. of America Holdings(Æ) | 8,828 | 1,084 | Bemis Co., Inc. | 9,005 | 412 | ||
LifePoint Health, Inc.(Æ) | 3,362 | 232 | Berry Plastics Group, Inc.(Æ) | 499 | 17 | ||
Magellan Health, Inc.(Æ) | 353 | 19 | Cabot Corp. | 1,250 | 45 | ||
Mallinckrodt PLC(Æ) | 2,586 | 170 | Celanese Corp. Class A | 1,699 | 121 | ||
McKesson Corp. | 8,656 | 1,548 | CF Industries Holdings, Inc. | 5,795 | 294 | ||
Medivation, Inc.(Æ) | 5,456 | 229 | Chemours Co. (The) | 4,357 | 30 | ||
MEDNAX, Inc.(Æ) | 7,853 | 553 | Cliffs Natural Resources, Inc. | 8,577 | 24 | ||
Medtronic PLC | 61,166 | 4,521 | Commercial Metals Co. | 1,400 | 20 | ||
Merck & Co., Inc. | 129,773 | 7,093 | Compass Minerals International, Inc. | 1,934 | 157 | ||
Mylan NV(Æ) | 14,016 | 618 | Crown Holdings, Inc.(Æ) | 2,789 | 148 | ||
Myriad Genetics, Inc.(Æ) | 321 | 13 | Cytec Industries, Inc. | 2,195 | 163 | ||
OPKO Health, Inc.(Æ) | 7,233 | 68 | Domtar Corp. | 3,581 | 148 | ||
Owens & Minor, Inc. | 736 | 26 | Dow Chemical Co. (The) | 39,675 | 2,050 | ||
PAREXEL International Corp.(Æ) | 261 | 16 | Eagle Materials, Inc. | 816 | 54 | ||
Patterson Cos., Inc. | 3,325 | 158 | Eastman Chemical Co. | 4,277 | 309 | ||
PerkinElmer, Inc. | 2,634 | 136 | Ecolab, Inc. | 13,543 | 1,630 | ||
Perrigo Co. PLC | 2,357 | 372 | EI du Pont de Nemours & Co. | 23,715 | 1,503 | ||
Pfizer, Inc. | 314,170 | 10,625 | Fastenal Co. | 11,658 | 456 | ||
Premier, Inc. Class A(Æ) | 2,013 | 68 | FMC Corp. | 1,069 | 43 | ||
Puma Biotechnology, Inc.(Æ) | 732 | 60 | Freeport-McMoRan, Inc. | 29,049 | 342 | ||
Qiagen NV(Æ) | 9,335 | 226 | Graphic Packaging Holding Co. | 8,087 | 114 | ||
Quest Diagnostics, Inc. | 10,714 | 728 | Hecla Mining Co. | 4,958 | 10 | ||
Quintiles Transnational Holdings, Inc.(Æ) | 2,262 | 144 | Hexcel Corp. | 8,716 | 404 | ||
Regeneron Pharmaceuticals, Inc.(Æ) | 2,269 | 1,265 | Huntsman Corp. | 3,469 | 46 | ||
ResMed, Inc. | 7,778 | 448 | Ingersoll-Rand PLC | 2,542 | 151 | ||
Seattle Genetics, Inc.(Æ) | 549 | 23 | Innospec, Inc. | 369 | 20 | ||
Sirona Dental Systems, Inc.(Æ) | 3,918 | 428 | International Flavors & Fragrances, Inc. | 7,321 | 850 | ||
St. Jude Medical, Inc. | 6,944 | 443 | International Paper Co. | 2,993 | 128 | ||
STERIS Corp. | 254 | 19 | Kaiser Aluminum Corp. | 260 | 21 | ||
Stryker Corp. | 14,377 | 1,375 | Lennox International, Inc. | 1,125 | 149 | ||
Teleflex, Inc. | 2,302 | 306 | Louisiana-Pacific Corp.(Æ) | 1,363 | 24 | ||
Tenet Healthcare Corp.(Æ) | 527 | 16 | LyondellBasell Industries Class A | 6,394 | 594 | ||
Thermo Fisher Scientific, Inc. | 16,993 | 2,222 | Martin Marietta Materials, Inc. | 1,827 | 283 | ||
United Therapeutics Corp.(Æ) | 1,666 | 244 | Masco Corp. | 14,372 | 417 | ||
UnitedHealth Group, Inc. | 35,985 | 4,238 | Masonite International Corp.(Æ) | 308 | 18 | ||
Universal Health Services, Inc. Class B | 2,739 | 334 | Minerals Technologies, Inc. | 332 | 20 | ||
Varian Medical Systems, Inc.(Æ) | 5,253 | 412 | Monsanto Co. | 8,295 | 773 |
See accompanying notes which are an integral part of the financial statements.
720 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Mosaic Co. (The) | 8,368 | 283 | Atlas Air Worldwide Holdings, Inc.(Æ) | 353 | 15 | ||
Mueller Industries, Inc. | 488 | 15 | Automatic Data Processing, Inc. | 23,245 | 2,022 | ||
NewMarket Corp. | 661 | 260 | Avery Dennison Corp. | 6,552 | 426 | ||
Newmont Mining Corp. | 14,349 | 279 | Babcock & Wilcox Co. (The) Class W | 3,631 | 103 | ||
Nucor Corp. | 12,163 | 514 | Babcock & Wilcox Enterprises, Inc.(Æ) | 4,164 | 71 | ||
Olin Corp. | 927 | 18 | Barnes Group, Inc. | 641 | 24 | ||
Owens Corning | 4,065 | 185 | Boeing Co. (The) | 17,414 | 2,578 | ||
Owens-Illinois, Inc.(Æ) | 2,544 | 55 | Brady Corp. Class A | 703 | 16 | ||
Packaging Corp. of America | 1,845 | 126 | Briggs & Stratton Corp. | 795 | 14 | ||
Platform Specialty Products Corp.(Æ) | 509 | 5 | Bristow Group, Inc. | 418 | 15 | ||
PPG Industries, Inc. | 8,462 | 882 | Carlisle Cos., Inc. | 3,407 | 296 | ||
Praxair, Inc. | 13,301 | 1,478 | Caterpillar, Inc. | 19,502 | 1,423 | ||
Precision Castparts Corp. | 7,318 | 1,689 | CH Robinson Worldwide, Inc. | 4,891 | 339 | ||
Reliance Steel & Aluminum Co. | 3,079 | 185 | Chicago Bridge & Iron Co. | 3,489 | 157 | ||
Royal Gold, Inc. | 319 | 15 | Cintas Corp. | 7,313 | 681 | ||
RPM International, Inc. | 3,950 | 181 | Clarcor, Inc. | 252 | 13 | ||
Schweitzer-Mauduit International, Inc. | 396 | 15 | Clean Harbors, Inc.(Æ) | 844 | 39 | ||
Sealed Air Corp. | 4,577 | 225 | Colfax Corp.(Æ) | 2,086 | 56 | ||
Sensient Technologies Corp. | 501 | 33 | Convergys Corp. | 1,180 | 30 | ||
Sherwin-Williams Co. (The) | 4,748 | 1,267 | Copa Holdings SA Class A | 932 | 47 | ||
Sigma-Aldrich Corp. | 7,609 | 1,063 | Copart, Inc.(Æ) | 6,454 | 234 | ||
Silgan Holdings, Inc. | 3,232 | 164 | CoStar Group, Inc.(Æ) | 964 | 196 | ||
Simpson Manufacturing Co., Inc. | 556 | 21 | Covanta Holding Corp. | 2,768 | 46 | ||
Sonoco Products Co. | 9,839 | 420 | Crane Co. | 1,929 | 102 | ||
Southern Copper Corp. | 1,704 | 47 | CSX Corp. | 35,562 | 960 | ||
Steel Dynamics, Inc. | 10,928 | 202 | Cubic Corp. | 329 | 15 | ||
Tahoe Resources, Inc. | 4,879 | 41 | Cummins, Inc. | 7,916 | 819 | ||
Timken Co. (The) | 3,435 | 109 | Curtiss-Wright Corp. | 418 | 29 | ||
Tronox, Ltd. Class A | 789 | 5 | Danaher Corp. | 27,246 | 2,542 | ||
United States Steel Corp. | 4,864 | 57 | Darling Ingredients, Inc.(Æ) | 1,555 | 16 | ||
Universal Forest Products, Inc. | 310 | 22 | Deere & Co. | 16,294 | 1,271 | ||
USG Corp.(Æ) | 1,600 | 38 | Delta Air Lines, Inc. | 10,187 | 518 | ||
Valmont Industries, Inc. | 1,665 | 181 | Deluxe Corp. | 370 | 22 | ||
Valspar Corp. | 3,935 | 319 | Donaldson Co., Inc. | 7,890 | 238 | ||
Vulcan Materials Co. | 4,529 | 437 | Dover Corp. | 7,034 | 453 | ||
Watsco, Inc. | 2,102 | 259 | Eaton Corp. PLC | 19,130 | 1,070 | ||
Westlake Chemical Corp. | 739 | 45 | EMCOR Group, Inc. | 715 | 35 | ||
WestRock Co. | 12,124 | 652 | Emerson Electric Co. | 25,778 | 1,217 | ||
WR Grace & Co.(Æ) | 518 | 52 | EnerSys | 431 | 26 | ||
27,542 | ESCO Technologies, Inc. | 446 | 17 | ||||
Essendant, Inc. | 529 | 18 | |||||
Producer Durables - 10.3% | Esterline Technologies Corp.(Æ) | 316 | 24 | ||||
3M Co. | 17,316 | 2,722 | Expeditors International of Washington, Inc. | 4,418 | 220 | ||
AAR Corp. | 570 | 13 | Federal Signal Corp. | 972 | 15 | ||
ABM Industries, Inc. | 722 | 20 | FedEx Corp. | 11,347 | 1,771 | ||
Accenture PLC Class A | 23,690 | 2,540 | Flir Systems, Inc. | 7,124 | 190 | ||
Actuant Corp. Class A(Æ) | 834 | 19 | Fluor Corp. | 2,433 | 116 | ||
ADT Corp. (The) | 4,461 | 147 | FTI Consulting, Inc.(Æ) | 490 | 17 | ||
AECOM(Æ) | 3,042 | 90 | G&K Services, Inc. Class A | 280 | 18 | ||
AGCO Corp. | 1,114 | 54 | GATX Corp. | 521 | 24 | ||
Air Lease Corp. Class A | 3,433 | 116 | General Dynamics Corp. | 15,436 | 2,293 | ||
Aircastle, Ltd. | 708 | 16 | General Electric Co. | 402,748 | 11,647 | ||
Alaska Air Group, Inc. | 4,065 | 310 | Genesee & Wyoming, Inc. Class A(Æ) | 799 | 54 | ||
Albany International Corp. Class A | 427 | 16 | Genpact, Ltd.(Æ) | 11,557 | 286 | ||
Allegion PLC | 1,017 | 66 | Graco, Inc. | 3,536 | 260 | ||
Allison Transmission Holdings, Inc. Class A | 1,526 | 44 | Granite Construction, Inc. | 562 | 18 | ||
American Airlines Group, Inc. | 9,787 | 452 | HD Supply Holdings, Inc.(Æ) | 4,145 | 123 | ||
Ametek, Inc. | 10,901 | 598 | HEICO Corp. | 281 | 14 | ||
AO Smith Corp. | 5,808 | 446 | Honeywell International, Inc. | 22,038 | 2,276 | ||
Applied Industrial Technologies, Inc. | 443 | 18 | Hubbell, Inc. Class B(Æ) | 4,799 | 465 |
See accompanying notes which are an integral part of the financial statements.
Select U.S. Equity Fund 721
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Huntington Ingalls Industries, Inc. | 1,251 | 150 | Southwest Airlines Co. | 7,377 | 341 | ||
Huron Consulting Group, Inc.(Æ) | 301 | 15 | Spirit AeroSystems Holdings, Inc. Class A(Æ) | 2,897 | 153 | ||
IDEX Corp. | 3,721 | 286 | Spirit Airlines, Inc.(Æ) | 784 | 29 | ||
IHS, Inc. Class A(Æ) | 420 | 50 | SPX Corp. | 1,999 | 24 | ||
Illinois Tool Works, Inc. | 13,106 | 1,205 | SPX FLOW, Inc.(Æ) | 1,999 | 68 | ||
Itron, Inc.(Æ) | 500 | 18 | Stanley Black & Decker, Inc. | 4,346 | 461 | ||
ITT Corp. | 3,653 | 145 | Stericycle, Inc.(Æ) | 4,496 | 546 | ||
Jacobs Engineering Group, Inc.(Æ) | 3,491 | 140 | Sykes Enterprises, Inc.(Æ) | 720 | 21 | ||
JB Hunt Transport Services, Inc. | 4,591 | 351 | Teekay Corp. | 242 | 8 | ||
JetBlue Airways Corp.(Æ) | 17,234 | 428 | Teledyne Technologies, Inc.(Æ) | 324 | 29 | ||
Joy Global, Inc. | 4,038 | 69 | Terex Corp. | 941 | 19 | ||
Kansas City Southern | 980 | 81 | Tetra Tech, Inc. | 835 | 22 | ||
KBR, Inc. | 6,008 | 111 | Textron, Inc. | 9,801 | 413 | ||
Kennametal, Inc. | 3,055 | 86 | TopBuild Corp.(Æ) | 270 | 8 | ||
Keysight Technologies, Inc.(Æ) | 2,835 | 94 | Toro Co. (The) | 4,129 | 311 | ||
Kirby Corp.(Æ) | 4,932 | 322 | Towers Watson & Co. Class A | 3,740 | 462 | ||
Korn/Ferry International | 541 | 20 | TransDigm Group, Inc.(Æ) | 2,319 | 510 | ||
L-3 Communications Holdings, Inc. | 6,370 | 805 | Trinity Industries, Inc. | 5,316 | 144 | ||
Landstar System, Inc. | 1,527 | 96 | Triumph Group, Inc. | 1,988 | 93 | ||
Lexmark International, Inc. Class A | 3,036 | 99 | Tyco International PLC | 12,201 | 445 | ||
Lincoln Electric Holdings, Inc. | 1,640 | 98 | UniFirst Corp. | 190 | 20 | ||
Lockheed Martin Corp. | 10,098 | 2,220 | Union Pacific Corp. | 26,961 | 2,409 | ||
Macquarie Infrastructure Corp. | 473 | 38 | United Continental Holdings, Inc.(Æ) | 4,411 | 266 | ||
Manitowoc Co., Inc. (The) | 2,169 | 33 | United Parcel Service, Inc. Class B | 16,716 | 1,722 | ||
ManpowerGroup, Inc. | 1,867 | 171 | United Rentals, Inc.(Æ) | 781 | 58 | ||
Matson, Inc. | 478 | 22 | United Technologies Corp. | 38,805 | 3,819 | ||
MAXIMUS, Inc. | 283 | 19 | UTi Worldwide, Inc.(Æ) | 1,248 | 9 | ||
Mettler-Toledo International, Inc.(Æ) | 1,829 | 569 | Verisk Analytics, Inc. Class A(Æ) | 8,076 | 578 | ||
Middleby Corp.(Æ) | 640 | 75 | Wabtec Corp. | 4,972 | 412 | ||
Mobile Mini, Inc. | 493 | 17 | Waste Connections, Inc. | 7,549 | 411 | ||
Moog, Inc. Class A(Æ) | 416 | 26 | Waste Management, Inc. | 17,051 | 917 | ||
MSC Industrial Direct Co., Inc. Class A | 3,218 | 202 | Waters Corp.(Æ) | 4,241 | 542 | ||
National Instruments Corp. | 2,557 | 78 | Watts Water Technologies, Inc. Class A | 375 | 20 | ||
Navistar International Corp.(Æ) | 123 | 2 | Werner Enterprises, Inc. | 578 | 15 | ||
Nordson Corp. | 3,989 | 284 | WESCO International, Inc.(Æ) | 797 | 39 | ||
Norfolk Southern Corp. | 17,555 | 1,405 | Woodward, Inc. | 440 | 20 | ||
Northrop Grumman Corp. | 11,169 | 2,097 | WW Grainger, Inc. | 2,710 | 569 | ||
Old Dominion Freight Line, Inc.(Æ) | 4,877 | 302 | Xerox Corp. | 32,459 | 305 | ||
Orbital ATK, Inc. | 3,504 | 300 | XPO Logistics, Inc.(Æ) | 454 | 13 | ||
Oshkosh Corp. | 1,331 | 55 | Xylem, Inc. | 10,566 | 385 | ||
OSI Systems, Inc.(Æ) | 251 | 22 | Zebra Technologies Corp. Class A(Æ) | 981 | 75 | ||
PACCAR, Inc. | 5,465 | 288 | 82,956 | ||||
Parker-Hannifin Corp. | 2,111 | 221 | |||||
Paychex, Inc. | 15,097 | 779 | Technology - 16.7% | ||||
Pentair PLC | 562 | 31 | 3D Systems Corp.(Æ) | 1,150 | 12 | ||
Pitney Bowes, Inc. | 1,481 | 31 | Activision Blizzard, Inc. | 19,891 | 691 | ||
Quanta Services, Inc.(Æ) | 10,511 | 211 | Acxiom Corp.(Æ) | 923 | 20 | ||
Raytheon Co. | 18,969 | 2,227 | Adobe Systems, Inc.(Æ) | 6,202 | 550 | ||
Regal Beloit Corp. | 1,589 | 101 | Akamai Technologies, Inc.(Æ) | 5,018 | 305 | ||
Republic Services, Inc. Class A | 12,519 | 548 | Alphabet, Inc. Class A(Æ) | 10,553 | 7,782 | ||
Robert Half International, Inc. | 6,798 | 358 | Alphabet, Inc. Class C(Æ) | 7,026 | 4,994 | ||
Rockwell Automation, Inc. | 1,798 | 196 | Altera Corp. | 8,092 | 425 | ||
Rockwell Collins, Inc. | 8,352 | 724 | Amdocs, Ltd. | 15,914 | 948 | ||
Rollins, Inc. | 7,762 | 208 | Amphenol Corp. Class A | 16,507 | 895 | ||
Roper Technologies, Inc. | 6,215 | 1,158 | Analog Devices, Inc. | 13,393 | 805 | ||
RR Donnelley & Sons Co. | 6,184 | 104 | Anixter International, Inc.(Æ) | 254 | 17 | ||
Ryder System, Inc. | 2,331 | 167 | Ansys, Inc.(Æ) | 5,654 | 539 | ||
Scorpio Tankers, Inc. | 2,066 | 19 | Apple, Inc. | 195,217 | 23,328 | ||
Ship Finance International, Ltd. | 1,038 | 18 | Applied Materials, Inc. | 11,383 | 191 | ||
Snap-on, Inc. | 3,154 | 523 | ARRIS Group, Inc.(Æ) | 2,868 | 81 |
See accompanying notes which are an integral part of the financial statements.
722 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Arrow Electronics, Inc.(Æ) | 3,992 | 220 | Lam Research Corp. | 5,374 | 412 | ||
Aspen Technology, Inc.(Æ) | 446 | 18 | Leidos Holdings, Inc. | 1,768 | 93 | ||
Atmel Corp. | 4,404 | 33 | Linear Technology Corp. | 8,886 | 395 | ||
Autodesk, Inc.(Æ) | 1,942 | 107 | LinkedIn Corp. Class A(Æ) | 906 | 218 | ||
Avago Technologies, Ltd. Class A | 6,615 | 815 | Lumentum Holdings, Inc.(Æ) | 1,124 | 16 | ||
Avnet, Inc. | 4,139 | 188 | Manhattan Associates, Inc.(Æ) | 328 | 24 | ||
Benchmark Electronics, Inc.(Æ) | 808 | 16 | Marvell Technology Group, Ltd. | 21,033 | 173 | ||
Bio Techne Corp. | 2,205 | 194 | Maxim Integrated Products, Inc. | 4,110 | 168 | ||
Black Knight Financial Services, Inc. Class | Mentor Graphics Corp. | 1,127 | 31 | ||||
A(Æ) | 2,131 | 77 | Microchip Technology, Inc. | 1,153 | 56 | ||
Broadcom Corp. Class A | 28,042 | 1,441 | Micron Technology, Inc.(Æ) | 65,174 | 1,079 | ||
Brocade Communications Systems, Inc. | 18,014 | 188 | Microsemi Corp.(Æ) | 608 | 22 | ||
CA, Inc. | 19,388 | 537 | Microsoft Corp. | 354,284 | 18,650 | ||
CACI International, Inc. Class A(Æ) | 283 | 27 | MKS Instruments, Inc. | 668 | 24 | ||
Cadence Design Systems, Inc.(Æ) | 3,992 | 89 | Motorola Solutions, Inc. | 1,111 | 78 | ||
CDK Global Inc. | 3,523 | 175 | NCR Corp.(Æ) | 7,718 | 205 | ||
CDW Corp. | 2,657 | 119 | NetApp, Inc. | 10,843 | 369 | ||
Cirrus Logic, Inc.(Æ) | 595 | 18 | NETGEAR, Inc.(Æ) | 554 | 23 | ||
Cisco Systems, Inc. | 330,409 | 9,532 | NetSuite, Inc.(Æ) | 813 | 69 | ||
Citrix Systems, Inc.(Æ) | 798 | 66 | Nuance Communications, Inc.(Æ) | 6,378 | 108 | ||
Cognex Corp. | 2,796 | 105 | NVIDIA Corp. | 25,786 | 732 | ||
Cognizant Technology Solutions Corp. Class | OmniVision Technologies, Inc.(Æ) | 702 | 20 | ||||
A(Æ) | 29,011 | 1,976 | ON Semiconductor Corp.(Æ) | 14,903 | 164 | ||
Coherent, Inc.(Æ) | 323 | 18 | Oracle Corp. | 121,761 | 4,729 | ||
CommScope Holding Co., Inc.(Æ) | 1,833 | 59 | Palo Alto Networks, Inc.(Æ) | 1,538 | 248 | ||
Computer Sciences Corp. | 6,402 | 426 | Plexus Corp.(Æ) | 424 | 15 | ||
Corning, Inc. | 76,921 | 1,431 | PMC-Sierra, Inc.(Æ) | 1,990 | 24 | ||
Cree, Inc.(Æ) | 4,666 | 118 | Polycom, Inc.(Æ) | 1,165 | 16 | ||
Cypress Semiconductor Corp.(Æ) | 8,377 | 88 | Progress Software Corp.(Æ) | 731 | 18 | ||
Diebold, Inc. | 1,123 | 41 | PTC, Inc.(Æ) | 1,378 | 49 | ||
DigitalGlobe, Inc.(Æ) | 712 | 11 | QLogic Corp.(Æ) | 1,286 | 16 | ||
Dolby Laboratories, Inc. Class A | 5,101 | 177 | Qorvo, Inc.(Æ) | 1,416 | 62 | ||
DST Systems, Inc. | 3,002 | 367 | QUALCOMM, Inc. | 83,679 | 4,972 | ||
EchoStar Corp. Class A(Æ) | 1,406 | 63 | Rackspace Hosting, Inc.(Æ) | 1,988 | 51 | ||
Electronic Arts, Inc.(Æ) | 7,925 | 571 | Red Hat, Inc.(Æ) | 4,653 | 368 | ||
EMC Corp. | 116,470 | 3,054 | Rogers Corp.(Æ) | 228 | 11 | ||
Entegris, Inc.(Æ) | 1,315 | 17 | Rovi Corp.(Æ) | 2,303 | 21 | ||
F5 Networks, Inc.(Æ) | 1,078 | 119 | Sabre Corp. | 1,873 | 55 | ||
Facebook, Inc. Class A(Æ) | 50,484 | 5,148 | Salesforce.com, Inc.(Æ) | 16,599 | 1,290 | ||
Fairchild Semiconductor International, Inc. | SanDisk Corp. | 8,375 | 645 | ||||
Class A(Æ) | 1,322 | 22 | Sanmina Corp.(Æ) | 885 | 18 | ||
FireEye, Inc.(Æ) | 3,231 | 85 | SBA Communications Corp. Class A(Æ) | 1,522 | 181 | ||
Fortinet, Inc.(Æ) | 3,096 | 106 | ScanSource, Inc.(Æ) | 475 | 16 | ||
Freescale Semiconductor, Ltd.(Æ) | 2,511 | 84 | ServiceNow, Inc.(Æ) | 4,463 | 364 | ||
Gartner, Inc.(Æ) | 6,804 | 617 | Silicon Laboratories, Inc.(Æ) | 343 | 17 | ||
Groupon, Inc. Class A(Æ) | 10,977 | 41 | Skyworks Solutions, Inc. | 5,728 | 442 | ||
Harris Corp. | 2,083 | 165 | SolarWinds, Inc.(Æ) | 1,045 | 61 | ||
HP Inc.(Æ) | 98,906 | 2,667 | Solera Holdings, Inc. | 719 | 39 | ||
II-VI, Inc.(Æ) | 939 | 17 | Splunk, Inc.(Æ) | 2,667 | 150 | ||
IMS Health Holdings, Inc.(Æ) | 2,542 | 69 | SS&C Technologies Holdings, Inc. | 2,599 | 193 | ||
Ingram Micro, Inc. Class A | 3,265 | 97 | Stratasys, Ltd.(Æ) | 1,069 | 27 | ||
Insight Enterprises, Inc.(Æ) | 663 | 17 | SunEdison, Inc.(Æ) | 6,301 | 46 | ||
Intel Corp. | 283,605 | 9,603 | Symantec Corp. | 25,192 | 519 | ||
International Business Machines Corp. | 39,978 | 5,600 | SYNNEX Corp. | 314 | 28 | ||
Intersil Corp. Class A | 1,410 | 19 | Synopsys, Inc.(Æ) | 14,020 | 701 | ||
Intuit, Inc. | 11,087 | 1,080 | Tableau Software, Inc. Class A(Æ) | 658 | 55 | ||
IPG Photonics Corp.(Æ) | 834 | 69 | Take-Two Interactive Software, Inc.(Æ) | 844 | 28 | ||
Jabil Circuit, Inc. | 10,228 | 235 | Teradata Corp.(Æ) | 1,324 | 37 | ||
JDS Uniphase Corp. Class W(Æ) | 5,623 | 33 | Teradyne, Inc. | 5,489 | 107 | ||
Juniper Networks, Inc. | 14,089 | 442 | Texas Instruments, Inc. | 40,870 | 2,318 | ||
KLA-Tencor Corp. | 909 | 61 |
See accompanying notes which are an integral part of the financial statements.
Select U.S. Equity Fund 723
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) or | Value | Amount ($) or | Value | ||||||
Shares | $ | Shares | $ | ||||||
Twitter, Inc.(Æ) | 2,198 | 63 | NRG Energy, Inc. | 3,145 | 41 | ||||
Tyler Technologies, Inc.(Æ) | 140 | 24 | NRG Yield, Inc. Class A | 320 | 4 | ||||
Ultimate Software Group, Inc.(Æ) | 742 | 152 | NRG Yield, Inc. Class C | 320 | 5 | ||||
Veeco Instruments, Inc.(Æ) | 540 | 10 | OGE Energy Corp. | 6,443 | 184 | ||||
Verint Systems, Inc.(Æ) | 273 | 13 | ONE Gas, Inc. | 522 | 25 | ||||
VeriSign, Inc.(Æ) | 1,938 | 156 | Otter Tail Corp. | 564 | 15 | ||||
VMware, Inc. Class A(Æ) | 1,228 | 74 | Pepco Holdings, Inc. | 5,294 | 141 | ||||
Western Digital Corp. | 9,031 | 603 | PG&E Corp. | 19,936 | 1,065 | ||||
Workday, Inc. Class A(Æ) | 979 | 77 | Piedmont Natural Gas Co., Inc. | 834 | 48 | ||||
Xilinx, Inc. | 3,435 | 164 | Pinnacle West Capital Corp. | 3,165 | 201 | ||||
Yahoo!, Inc.(Æ) | 45,484 | 1,620 | PNM Resources, Inc. | 918 | 26 | ||||
Yelp, Inc. Class A(Æ) | 1,086 | 24 | Portland General Electric Co. | 836 | 31 | ||||
Zynga, Inc. Class A(Æ) | 21,456 | 51 | PPL Corp. | 14,918 | 513 | ||||
134,458 | Public Service Enterprise Group, Inc. | 14,304 | 591 | ||||||
Questar Corp. | 8,898 | 184 | |||||||
Utilities - 4.7% | SCANA Corp. | 9,578 | 567 | ||||||
AES Corp. | 8,541 | 94 | Sempra Energy | 10,242 | 1,049 | ||||
AGL Resources, Inc.(Æ) | 3,393 | 212 | South Jersey Industries, Inc. | 826 | 22 | ||||
ALLETE, Inc. | 504 | 25 | Southern Co. (The) | 36,973 | 1,667 | ||||
Alliant Energy Corp. | 4,580 | 270 | Southwest Gas Corp. | 512 | 31 | ||||
Ameren Corp. | 3,086 | 135 | Sprint Corp.(Æ) | 24,933 | 118 | ||||
American Electric Power Co., Inc. | 23,805 | 1,349 | Talen Energy Corp.(Æ) | 1,767 | 15 | ||||
American States Water Co. | 511 | 21 | TECO Energy, Inc. | 12,148 | 328 | ||||
American Water Works Co., Inc. | 7,050 | 404 | Telephone & Data Systems, Inc. | 5,211 | 149 | ||||
Aqua America, Inc. | 8,922 | 255 | T-Mobile US, Inc.(Æ) | 16,022 | 607 | ||||
AT&T, Inc. | 299,109 | 10,023 | UGI Corp. | 5,258 | 193 | ||||
Atmos Energy Corp. | 7,011 | 442 | UIL Holdings Corp. | 608 | 31 | ||||
Avista Corp. | 726 | 25 | US Cellular Corp.(Æ) | 2,005 | 82 | ||||
Black Hills Corp. | 519 | 24 | Vectren Corp. | 6,543 | 297 | ||||
California Water Service Group | 731 | 16 | Verizon Communications, Inc. | 120,971 | 5,671 | ||||
Calpine Corp.(Æ) | 5,885 | 91 | WEC Energy Group, Inc. | 15,305 | 789 | ||||
CenterPoint Energy, Inc. | 6,665 | 124 | Westar Energy, Inc. Class A | 5,852 | 232 | ||||
CenturyLink, Inc. | 14,808 | 418 | WGL Holdings, Inc. | 557 | 35 | ||||
CMS Energy Corp. | 3,313 | 119 | Windstream Holdings, Inc. | 3,466 | 23 | ||||
Consolidated Edison, Inc. | 10,040 | 660 | Xcel Energy, Inc. | 18,013 | 642 | ||||
Dominion Resources, Inc. | 7,870 | 562 | 38,192 | ||||||
DTE Energy Co. | 6,786 | 554 | |||||||
Duke Energy Corp. | 25,326 | 1,810 | Total Common Stocks | ||||||
Dynegy, Inc. Class A(Æ) | 1,034 | 20 | (cost $780,772) | 771,815 | |||||
Edison International | 4,400 | 266 | |||||||
El Paso Electric Co. | 552 | 21 | Short-Term Investments - 4.1% | ||||||
Empire District Electric Co. (The) | 698 | 16 | Russell U.S. Cash Management Fund | 33,264,297 | (8) | 33,264 | |||
Entergy Corp. | 1,606 | 109 | Total Short-Term Investments | ||||||
Eversource Energy | 9,612 | 490 | (cost $33,264) | 33,264 | |||||
Exelon Corp. | 32,051 | 895 | |||||||
FirstEnergy Corp. | 3,880 | 121 | Total Investments 99.8% | ||||||
Frontier Communications Corp. | 35,220 | 181 | (identified cost $814,036) | 805,079 | |||||
Hawaiian Electric Industries, Inc. | 4,288 | 125 | |||||||
Idacorp, Inc. | 525 | 35 | Other Assets and Liabilities, Net | ||||||
ITC Holdings Corp. | 4,373 | 143 | - 0.2% | 1,475 | |||||
Laclede Group, Inc. (The) | 505 | 30 | Net Assets - 100.0% | 806,554 | |||||
Level 3 Communications, Inc.(Æ) | 7,692 | 392 | |||||||
MDU Resources Group, Inc. | 5,406 | 102 | |||||||
MGE Energy, Inc. | 479 | 20 | |||||||
National Fuel Gas Co. | 2,487 | 131 | |||||||
New Jersey Resources Corp. | 930 | 29 | |||||||
NextEra Energy, Inc. | 15,826 | 1,625 | |||||||
NiSource, Inc. | 7,253 | 139 | |||||||
Northwest Natural Gas Co. | 404 | 19 | |||||||
NorthWestern Corp. | 524 | 28 |
See accompanying notes which are an integral part of the financial statements.
724 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||
Amounts in thousands (except contract amounts) | ||||||
Unrealized | ||||||
Appreciation | ||||||
Number of | Notional | Expiration | (Depreciation) | |||
Contracts | Amount | Date | $ | |||
Long Positions | ||||||
Russell 1000 Index Mini Futures | 148 | USD | 17,032 | 12/15 | 688 | |
S&P 500 E-Mini Index Futures | 136 | USD | 14,101 | 12/15 | 882 | |
S&P Health Care Index Futures | 51 | USD | 3,648 | 12/15 | 63 | |
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 1,633 |
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Common Stocks | |||||||||||
Consumer Discretionary | $ | 111,088 | $ | — | $ | — | $ | 111,088 | 13.8 | ||
Consumer Staples | 49,149 | — | 2 | 49,151 | 6.1 | ||||||
Energy | 58,562 | — | — | 58,562 | 7.2 | ||||||
Financial Services | 162,662 | — | — | 162,662 | 20.2 | ||||||
Health Care | 107,204 | — | — | 107,204 | 13.3 | ||||||
Materials and Processing | 27,542 | — | — | 27,542 | 3.4 | ||||||
Producer Durables | 82,956 | — | — | 82,956 | 10.3 | ||||||
Technology | 134,458 | — | — | 134,458 | 16.7 | ||||||
Utilities | 38,192 | — | — | 38,192 | 4.7 | ||||||
Short-Term Investments | — | 33,264 | — | 33,264 | 4.1 | ||||||
Total Investments | 771,813 | 33,264 | 2 | 805,079 | 99.8 | ||||||
Other Assets and Liabilities, Net | 0.2 | ||||||||||
100.0 | |||||||||||
Other Financial Instruments | |||||||||||
Futures Contracts | 1,633 | — | — | 1,633 | 0.2 | ||||||
Total Other Financial Instruments* | $ | 1,633 | $ | — | $ | — | $ | 1,633 |
* Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended October 31,
2015 were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
Select U.S. Equity Fund 725
Russell Investment Company
Select U.S. Equity Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||
Equity | ||
Derivatives not accounted for as hedging instruments | Contracts | |
Location: Statement of Assets and Liabilities - Assets | ||
Variation margin on futures contracts* | $ | 1,633 |
Equity | ||
Derivatives not accounted for as hedging instruments | Contracts | |
Location: Statement of Operations - Net realized gain (loss) | ||
Futures contracts | $ | 424 |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||
Futures contracts | $ | 1,515 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
726 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 116 | $ | — | $ | 116 | ||
Total Financial and Derivative Liabilities | 116 | — | 116 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (116) | — | (116 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | — | $ | — | $ | — |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Select U.S. Equity Fund 727
Russell Investment Company
Select U.S. Equity Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 814,036 |
Investments, at fair value(>) | 805,079 | |
Cash | 18 | |
Cash (restricted)(a) | 2,100 | |
Receivables: | ||
Dividends and interest | 828 | |
Dividends from affiliated Russell funds | 164 | |
Fund shares sold | 284 | |
Prepaid expenses | 1 | |
Total assets | 808,474 | |
Liabilities | ||
Payables: | ||
Fund shares redeemed | 1,456 | |
Accrued fees to affiliates | 213 | |
Other accrued expenses | 135 | |
Variation margin on futures contracts | 116 | |
Total liabilities | 1,920 | |
Net Assets | $ | 806,554 |
See accompanying notes which are an integral part of the financial statements.
728 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 726 | |
Accumulated net realized gain (loss) | 4,554 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | (8,957 | ) | |
Futures contracts | 1,633 | ||
Shares of beneficial interest | 751 | ||
Additional paid-in capital | 807,847 | ||
Net Assets | $ | 806,554 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class S(#) | $ | 10.73 | |
Class S — Net assets | $ | 3,226,496 | |
Class S — Shares outstanding ($.01 par value) | 300,643 | ||
Net asset value per share: Class T(#) | $ | 10.74 | |
Class T — Net assets | $ | 873,202 | |
Class T — Shares outstanding ($.01 par value) | 81,276 | ||
Net asset value per share: Class Y(#) | $ | 10.74 | |
Class Y — Net assets | $ | 802,454,382 | |
Class Y — Shares outstanding ($.01 par value) | 74,717,234 | ||
Amounts in thousands | |||
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 33,264 | |
(a) Cash Collateral for Futures | $ | 2,100 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Select U.S. Equity Fund 729
Russell Investment Company
Select U.S. Equity Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 11,149 | |
Dividends from affiliated Russell funds | 31 | ||
Interest | 151 | ||
Total investment income | 11,331 | ||
Expenses | |||
Advisory fees | 1,777 | ||
Administrative fees | 283 | ||
Custodian fees | 178 | ||
Transfer agent fees - Class S | 4 | ||
Transfer agent fees - Class T | 1 | ||
Transfer agent fees - Class Y | 26 | ||
Professional fees | 87 | ||
Registration fees | 70 | ||
Trustees’ fees | 15 | ||
Printing fees | 51 | ||
Offering fees | 34 | ||
Miscellaneous | 17 | ||
Expenses before reductions | 2,543 | ||
Expense reductions | (440 | ) | |
Net expenses | 2,103 | ||
Net investment income (loss) | 9,228 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 4,256 | ||
Futures contracts | 424 | ||
Net realized gain (loss) | 4,680 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (12,681 | ) | |
Futures contracts | 1,515 | ||
Net change in unrealized appreciation (depreciation) | (11,166 | ) | |
Net realized and unrealized gain (loss) | (6,486 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | 2,742 |
See accompanying notes which are an integral part of the financial statements.
730 Select U.S. Equity Fund
Russell Investment Company
Select U.S. Equity Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | (1) | |||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 9,228 | $ | 431 | ||
Net realized gain (loss) | 4,680 | (19 | ) | |||
Net change in unrealized appreciation (depreciation) | (11,166 | ) | 3,842 | |||
Net increase (decrease) in net assets from operations | 2,742 | 4,254 | ||||
Distributions | ||||||
From net investment income | ||||||
Class S | (25 | ) | — | |||
Class T | (7 | ) | — | |||
Class Y | (8,598 | ) | (315 | ) | ||
From net realized gain | ||||||
Class Y | (107 | ) | — | |||
Net decrease in net assets from distributions | (8,737 | ) | (315 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 671,710 | 136,900 | ||||
Total Net Increase (Decrease) in Net Assets | 665,715 | 140,839 | ||||
Net Assets | ||||||
Beginning of period | 140,839 | — | ||||
End of period | $ | 806,554 | $ | 140,839 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 726 | $ | 127 |
(1) For the period August 1, 2014 (commencement of operations) to October 31, 2014.
See accompanying notes which are an integral part of the financial statements.
Select U.S. Equity Fund 731
Russell Investment Company
Select U.S. Equity Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | |||||||||||||
2015 | 2014 (1) | ||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||
Class S(2) | |||||||||||||
Proceeds from shares sold | 322 | $ | 3,455 | — | $ | — | |||||||
Proceeds from reinvestment of distributions | 2 | 25 | — | — | |||||||||
Payments for shares redeemed | (23 | ) | (246 | ) | — | — | |||||||
Net increase (decrease) | 301 | 3,234 | — | — | |||||||||
Class T(2) | |||||||||||||
Proceeds from shares sold | 102 | 1,099 | — | — | |||||||||
Proceeds from reinvestment of distributions | 1 | 8 | — | — | |||||||||
Payments for shares redeemed | (22 | ) | (221 | ) | — | — | |||||||
Net increase (decrease) | 81 | 886 | — | — | |||||||||
Class Y | |||||||||||||
Proceeds from shares sold | 87,095 | 948,364 | 14,731 | 149,195 | |||||||||
Proceeds from reinvestment of distributions | 827 | 8,705 | 31 | 315 | |||||||||
Payments for shares redeemed | (26,729 | ) | (289,479 | ) | (1,238 | ) | (12,610 | ) | |||||
Net increase (decrease) | 61,193 | 667,590 | 13,524 | 136,900 | |||||||||
Total increase (decrease) | 61,575 | $ | 671,710 | 13,524 | $ | 136,900 |
(1) For the period August 1, 2014 (commencement of operations) to October 31, 2014.
(2) For the period January 5, 2015 (commencement of operations) to October 31, 2015.
See accompanying notes which are an integral part of the financial statements.
732 Select U.S. Equity Fund
(This page intentionally left blank)
Russell Investment Company
Select U.S. Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||
Class S | ||||||||||||||
October 31, 2015(5) | 10.61 | .12 | .09 | .21 | (.09 | ) | — | |||||||
Class T | ||||||||||||||
October 31, 2015(5) | 10.61 | .14 | .09 | .23 | (.10 | ) | — | |||||||
Class Y | ||||||||||||||
October 31, 2015 | 10.41 | .17 | .31 | .48 | (.14 | ) | (.01 | ) | ||||||
October 31, 2014(4) | 10.00 | .04 | .39 | .43 | (.02 | ) | — | |||||||
See accompanying notes which are an integral part of the financial statements.
734 Select U.S. Equity Fund
% | % | % | ||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||
Total Distributions | Period | Return(b) | (000 | ) | Gross(e) | Net(d)(e) | Net Assets(d)(e) | Turnover Rate(b) | ||||||||
(.09 | ) | 10.73 | 2.04 | 3,227 | .62 | .40 | 1.36 | 44 | ||||||||
(.10 | ) | 10.74 | 2.23 | 873 | .62 | .40 | 1.53 | 44 | ||||||||
(.15 | ) | 10.74 | 4.71 | 802,454 | .43 | .35 | 1.56 | 44 | ||||||||
(.02 | ) | 10.41 | 4.34 | 140,839 | .60 | .35 | 1.42 | 2 |
See accompanying notes which are an integral part of the financial statements.
Select U.S. Equity Fund 735
Russell Investment Company
Select International Equity Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Select International Equity Fund - Class S‡ | Select International Equity Fund - Class Y | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (2.53 | )% | 1 Year | (2.43 | )% | ||
Inception* | (6.59 | )%§ | Inception* | (6.51 | )%§ | ||
Select International Equity Fund - Class T‡ | Russell Developed ex-U.S. Large Cap® Index Net** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (2.32 | )% | 1 Year | (1.36 | )% | ||
Inception* | (6.43 | )%§ | Inception* | (5.40 | )%§ |
736 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
were partially offset by a marginal overweight to energy which | |
What is the Fund’s investment objective? | detracted as energy stocks underperformed. The overweight to |
financials and underweight to health care were primarily driven | |
The Select International Equity Fund (the “Fund”) seeks to | by the Fund’s value orientation. |
provide long term capital growth. | |
Over the period, the Fund was regionally positioned to favor | |
How did the Fund perform relative to its benchmark for the | Continental Europe, Japan and emerging markets while being |
fiscal year ended October 31, 2015? | underweight to Canada, Australia and Asia ex-Japan. This |
For the fiscal year ended October 31, 2015, the Select | positioning generally had a positive impact on performance. |
International Equity Fund’s Class S, Class T and Class Y Shares | Regional allocations were driven by RIMCo’s cycle, valuation |
lost 2.53%, 2.32% and 2.43%, respectively. This is compared | and sentiment views. Underweights to Canada, Australia and |
to the Fund’s benchmark, the Russell Developed ex-U.S. Large | New Zealand contributed positively, but were partially offset by |
Cap® Index (Net), which lost 1.36% during the same period. The | an overweight to emerging markets. |
Fund’s performance includes operating expenses, whereas index | Over the period, RIMCo hedged the Fund’s exposure to certain |
returns are unmanaged and do not include expenses of any kind. | currencies through the use of forward currency contracts in order |
For the fiscal year ended October 31, 2015, the Morningstar® | to allow RIMCo to make certain country allocation decisions |
Foreign Large Blend, a group of funds that Morningstar considers | without generating equivalent currency exposures. RIMCo’s |
to have investment strategies similar to those of the Fund, lost | currency hedging strategy also incorporated RIMCo’s views on |
1.58%. This result serves as a peer comparison and is expressed | currency market factors that are expected to result in positive |
net of operating expenses. | returns over time, creating modestly active currency positioning |
relative to the Fund’s benchmark. The Fund’s currency positions | |
How did the market conditions described in the Market | did not have a material impact on the Fund’s benchmark-relative |
Summary report affect the Fund’s performance? | returns for the period. |
The Russell Developed ex-U.S. Large Cap® Index (Net) returned | |
-1.36% for the fiscal year ended October 31, 2015. Commodity | During the period, RIMCo used index futures contracts to equitize |
heavy economies like Canada and Australia lagged significantly | the Fund’s cash. The decision to equitize cash was beneficial to |
due to a demand slowdown, particularly from China. Energy and | Fund performance for the fiscal year. |
materials were the worst hit sectors as oil prices tumbled to the | Fair value pricing adjustments on the last business day of |
lowest levels since 2009 and a demand slowdown in emerging | the period detracted from the Fund’s benchmark-relative |
markets caused commodity prices to plunge significantly. | performance because the Fund’s index does not use fair value |
Defensive sectors held up well amid the volatility. Value | pricing adjustments. |
underperformed growth, small and mid-cap stocks broadly | |
outperformed large cap stocks and higher momentum stocks held | Describe any changes to the Fund’s structure. |
up well in the period. | There were no changes to the Fund’s structure during the fiscal |
year. | |
How did the investment strategies and techniques employed | |
by the Fund and its money managers affect its benchmark- | The views expressed in this report reflect those of the portfolio |
relative performance? | managers only through the end of the period covered by |
The Fund underperformed the benchmark for the one year | the report. These views do not necessarily represent the |
period ending October 31, 2015. The Fund’s value bias was a | views of RIMCo, or any other person in RIMCo or any other |
negative contributor as lower price-to-book stocks strongly | affiliated organization. These views are subject to change |
underperformed. | at any time based upon market conditions or other events, |
and RIMCo disclaims any responsibility to update the views | |
Benchmark-relative sector deviations in the Fund were modest | contained herein. These views should not be relied on as |
and over the period favored financials, utilities and consumer | investment advice and, because investment decisions for |
discretionary, while underweighting health care and technology | a Russell Investment Company (“RIC”) Fund are based on |
sectors and to a lesser degree energy. The Fund’s overweights to | numerous factors, should not be relied on as an indication |
utilities and consumer discretionary sectors were favorable, but | of investment decisions of any RIC Fund. |
Select International Equity Fund 737
Russell Investment Company
Select International Equity Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* Assumes initial investment on July 31, 2014.
** The Russell Developed ex-U.S. Large Cap® Index Net is an index which offers investors access to the large-cap segment of the global equity market, excluding
companies assigned to the United States. It is constructed to provide a comprehensive and unbiased barometer of the large-cap segment and is completely
reconstituted annually to accurately reflect the changes in the market over time.
‡ The Fund first issued Class S and Class T Shares on January 2, 2015. The returns shown for Class S and Class T Shares prior to that date are the returns of the
Fund’s Class Y Shares. Class S and Class T Shares will have substantially similar annual returns as the Class Y Shares because the Shares of each Class are
invested in the same portfolio of securities. Annual returns for each Class will differ only to the extent that the Class S and Class T Shares do not have the same
expenses as the Class Y Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
738 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class S | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 918.40 | $ | 1,021.98 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 3.09 | $ | 3.26 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.64% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/303 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class T | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 920.40 | $ | 1,022.74 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 2.37 | $ | 2.50 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 0.49% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/303 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class Y | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 919.40 | $ | 1,022.99 | |
Expenses Paid During Period* | $ | 2.13 | $ | 2.24 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.44% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Select International Equity Fund 739
Russell Investment Company
Select International Equity Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Common Stocks - 98.2% | Telstra Corp., Ltd. | 276,605 | 1,066 | ||||||||
Australia - 4.8% | TPG Telecom, Ltd. | 18,562 | 146 | ||||||||
AGL Energy, Ltd. | 88,444 | 1,056 | Transurban Group - ADR(Æ) | 91,778 | 683 | ||||||
ALS, Ltd. | 39,489 | 145 | Treasury Wine Estates, Ltd. | 21,687 | 110 | ||||||
Alumina, Ltd. | 161,959 | 125 | Washington H Soul Pattinson & Co., Ltd. | 7,562 | 87 | ||||||
Amcor, Ltd. Class A | 67,607 | 654 | Wesfarmers, Ltd. | 48,492 | 1,355 | ||||||
AMP, Ltd. | 152,002 | 621 | Westfield Corp.(ö) | 28,192 | 206 | ||||||
Ansell, Ltd. - GDR | 4,991 | 71 | Westpac Banking Corp. | 136,612 | 3,054 | ||||||
APA Group | 43,504 | 286 | Woodside Petroleum, Ltd. | 25,763 | 542 | ||||||
Aristocrat Leisure, Ltd. | 14,596 | 97 | Woolworths, Ltd. | 59,766 | 1,028 | ||||||
Asciano, Ltd. | 39,133 | 228 | WorleyParsons, Ltd. | 19,763 | 92 | ||||||
ASX, Ltd. - ADR | 15,511 | 456 | 41,648 | ||||||||
Aurizon Holdings, Ltd. | 31,695 | 117 | |||||||||
AusNet Services(Æ) | 95,591 | 99 | Austria - 0.4% | ||||||||
Australia & New Zealand Banking | ams AG | 8,073 | 258 | ||||||||
Group, Ltd. - ADR | 125,263 | 2,410 | Andritz AG | 4,707 | 237 | ||||||
Bank of Queensland, Ltd. | 9,316 | 87 | Erste Group Bank AG(Æ) | 30,556 | 896 | ||||||
Bendigo & Adelaide Bank, Ltd. | 87,448 | 668 | EVN AG | 15,053 | 166 | ||||||
BHP Billiton, Ltd. - ADR | 209,050 | 3,434 | Immofinanz AG(Æ) | 97,073 | 249 | ||||||
Boral, Ltd. | 77,581 | 298 | Mayr Melnhof Karton AG | 1,981 | 234 | ||||||
Brambles, Ltd. | 76,049 | 563 | Oesterreichische Post AG | 3,501 | 127 | ||||||
Caltex Australia, Ltd. | 9,401 | 210 | OMV AG | 12,829 | 341 | ||||||
Challenger, Ltd. | 34,872 | 205 | Raiffeisen Bank International AG(Æ) | 6,856 | 108 | ||||||
CIMIC Group, Ltd. | 8,318 | 164 | Strabag SE | 5,597 | 129 | ||||||
Coca-Cola Amatil, Ltd. | 2,757 | 18 | UNIQA Insurance Group AG | 12,614 | 117 | ||||||
Cochlear, Ltd. | 4,674 | 297 | Verbund AG Class A | 6,937 | 98 | ||||||
Commonwealth Bank of Australia - ADR | 91,576 | 5,014 | Vienna Insurance Group AG Wiener | ||||||||
Computershare, Ltd. | 9,560 | 74 | Versicherung Gruppe | 6,376 | 204 | ||||||
Crown Resorts, Ltd. | 14,125 | 115 | Voestalpine AG | 17,576 | 635 | ||||||
CSL, Ltd. | 29,380 | 1,951 | 3,799 | ||||||||
Dexus Property Group(ö) | 16,084 | 89 | |||||||||
Echo Entertainment Group, Ltd. | 83,911 | 306 | Belgium - 1.4% | ||||||||
Federation Centres(ö) | 55,572 | 115 | Ackermans & van Haaren NV | 1,321 | 201 | ||||||
Flight Centre, Ltd. | 203 | 5 | Ageas | 20,348 | 898 | ||||||
Fortescue Metals Group, Ltd. | 161,093 | 236 | Anheuser-Busch InBev SA | 41,329 | 4,928 | ||||||
Goodman Group(ö) | 19,121 | 83 | bpost SA | 11,294 | 282 | ||||||
Harvey Norman Holdings, Ltd. | 37,889 | 108 | Cie d'Entreprises CFE | 967 | 120 | ||||||
Healthscope, Ltd. | 5,129 | 10 | Colruyt SA(Æ) | 4,280 | 212 | ||||||
Iluka Resources, Ltd. | 852 | 4 | Delhaize Group | 19,756 | 1,830 | ||||||
Incitec Pivot, Ltd. | 225,480 | 635 | D'ieteren SA | 3,533 | 120 | ||||||
Insurance Australia Group, Ltd. | 99,626 | 396 | Elia System Operator SA | 4,610 | 223 | ||||||
Lend Lease Group | 47,442 | 440 | Financiere de Tubize SA | 184 | 13 | ||||||
Macquarie Group, Ltd. | 16,328 | 987 | Groupe Bruxelles Lambert SA | 10,220 | 829 | ||||||
Medibank Pvt, Ltd. | 49,078 | 83 | KBC Groep NV | 16,529 | 1,005 | ||||||
National Australia Bank, Ltd. - ADR | 116,598 | 2,484 | Proximus SADP | 10,206 | 353 | ||||||
Newcrest Mining, Ltd.(Æ) | 108,791 | 945 | Sofina SA | 2,328 | 262 | ||||||
Orica, Ltd. | 30,246 | 356 | Umicore SA | 7,585 | 322 | ||||||
Origin Energy, Ltd. | 91,496 | 359 | 11,598 | ||||||||
Qantas Airways, Ltd.(Æ) | 131,731 | 371 | |||||||||
QBE Insurance Group, Ltd. | 195,916 | 1,822 | Bermuda - 0.9% | ||||||||
Ramsay Health Care, Ltd. | 12,787 | 561 | Cheung Kong Infrastructure Holdings, | ||||||||
REA Group, Ltd. | 3,483 | 118 | Ltd. | 47,000 | 436 | ||||||
Rio Tinto, Ltd. - ADR | 13,952 | 499 | Chinese Estates Holdings, Ltd. | 27,500 | 64 | ||||||
Santos, Ltd. | 84,951 | 354 | Dairy Farm International Holdings, Ltd. | 11,100 | 73 | ||||||
SEEK, Ltd. | 9,338 | 85 | Esprit Holdings, Ltd. | 152,400 | 171 | ||||||
Sonic Healthcare, Ltd. | 14,651 | 201 | First Pacific Co., Ltd. | 172,000 | 117 | ||||||
South32, Ltd.(Æ) | 484,370 | 501 | Global Brands Group Holding, Ltd.(Æ) | 508,000 | 105 | ||||||
Suncorp Group, Ltd. | 87,817 | 814 | Goldin Financial Holdings, Ltd.(Æ) | 444,000 | 828 | ||||||
Sydney Airport | 58,643 | 270 | Guoco Group, Ltd. | 17,569 | 201 | ||||||
Tabcorp Holdings, Ltd. | 53,143 | 179 | HAL Trust | 2,528 | 467 | ||||||
Tatts Group, Ltd. | 141,414 | 400 | Hiscox, Ltd. | 63,039 | 939 | ||||||
Hongkong Land Holdings, Ltd. | 194,100 | 1,453 |
See accompanying notes which are an integral part of the financial statements.
740 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Jardine Matheson Holdings, Ltd. | 35,600 | 1,932 | IGM Financial, Inc. | 4,493 | 130 | ||||
Jardine Strategic Holdings, Ltd. | 21,800 | 657 | Imperial Oil, Ltd. | 43,414 | 1,445 | ||||
Noble Group, Ltd. | 336,300 | 121 | Industrial Alliance Insurance & | ||||||
Orient Overseas International, Ltd. | 63,000 | 300 | Financial Services, Inc. | 8,501 | 279 | ||||
VimpelCom, Ltd. - ADR | 15,892 | 60 | Intact Financial Corp. | 6,675 | 477 | ||||
VTech Holdings, Ltd. | 6,800 | 82 | Jean Coutu Group PJC, Inc. (The) Class | ||||||
8,006 | A | 11,970 | 182 | ||||||
Keyera Corp. | 14,273 | 440 | |||||||
Canada - 7.7% | Kinross Gold Corp.(Æ) | 182,822 | 368 | ||||||
Agrium, Inc. | 5,687 | 529 | Linamar Corp. | 2,490 | 145 | ||||
Alimentation Couche-Tard, Inc. Class B | 30,478 | 1,311 | Loblaw Cos., Ltd. | 11,238 | 592 | ||||
Atco, Ltd. Class I | 9,600 | 274 | Lundin Mining Corp.(Æ) | 50,772 | 171 | ||||
Bank of Montreal | 43,551 | 2,533 | Magna International, Inc. Class A | 23,514 | 1,240 | ||||
Bank of Nova Scotia (The) | 54,081 | 2,542 | Manulife Financial Corp. | 125,179 | 2,075 | ||||
Barrick Gold Corp. | 113,894 | 875 | Metro, Inc. Class A | 26,940 | 770 | ||||
Baytex Energy Corp. | 15,143 | 62 | National Bank of Canada | 11,740 | 389 | ||||
BCE, Inc. | 26,350 | 1,139 | Pembina Pipeline Corp. | 10,544 | 265 | ||||
Boardwalk Real Estate Investment | Potash Corp. of Saskatchewan, Inc. | 20,734 | 420 | ||||||
Trust(ö) | 2,075 | 85 | Power Corp. of Canada | 54,116 | 1,216 | ||||
Brookfield Asset Management, Inc. | Power Financial Corp. | 37,783 | 935 | ||||||
Class A | 50,886 | 1,778 | Precision Drilling Corp. | 26,102 | 104 | ||||
Brookfield Canada Office Properties(ö) | 5,216 | 110 | Progressive Waste Solutions, Ltd. | 6,362 | 153 | ||||
CAE, Inc. | 13,040 | 147 | Quebecor, Inc. Class B | 4,620 | 109 | ||||
Cameco Corp. | 32,039 | 454 | Restaurant Brands International, Inc. | 7,180 | 288 | ||||
Canadian Imperial Bank of Commerce | 13,761 | 1,055 | RioCan Real Estate Investment Trust(ö) | 10,971 | 214 | ||||
Canadian National Railway Co. | 28,308 | 1,729 | Ritchie Bros Auctioneers, Inc. | 10,981 | 285 | ||||
Canadian Natural Resources, Ltd. | 76,019 | 1,763 | Rogers Communications, Inc. Class B | 16,896 | 672 | ||||
Canadian Oil Sands, Ltd. | 50,939 | 384 | Royal Bank of Canada - GDR | 72,542 | 4,147 | ||||
Canadian Pacific Railway, Ltd. | 3,962 | 557 | Saputo, Inc. - ADR | 17,025 | 406 | ||||
Canadian Tire Corp., Ltd. Class A | 8,327 | 732 | Shaw Communications, Inc. Class B | 20,500 | 426 | ||||
Canadian Utilities, Ltd. Class A | 3,212 | 85 | Smart Real Estate Investment Trust(ö) | 4,941 | 117 | ||||
CCL Industries, Inc. Class B | 1,431 | 203 | SNC-Lavalin Group, Inc. | 21,911 | 702 | ||||
Cenovus Energy, Inc. | 85,230 | 1,270 | Sun Life Financial, Inc. | 54,590 | 1,841 | ||||
CGI Group, Inc. Class A(Æ) | 15,898 | 591 | Suncor Energy, Inc. | 122,728 | 3,651 | ||||
Choice Properties Real Estate | Teck Resources, Ltd. Class B | 58,511 | 343 | ||||||
Investment Trust(ö) | 24,014 | 217 | TELUS Corp. | 19,589 | 654 | ||||
CI Financial Corp. | 5,746 | 137 | TMX Group, Ltd. | 8,596 | 303 | ||||
Constellation Software, Inc. | 1,165 | 503 | Toronto Dominion Bank | 91,120 | 3,740 | ||||
DH Corp. | 6,038 | 163 | TransAlta Corp. | 30,338 | 142 | ||||
Dollarama, Inc. | 12,481 | 843 | TransCanada Corp. | 31,666 | 1,066 | ||||
Eldorado Gold Corp. | 44,431 | 155 | Turquoise Hill Resources, Ltd. Class | ||||||
Element Financial Corp.(Æ) | 21,403 | 277 | B(Æ) | 84,469 | 229 | ||||
Emera, Inc. | 16,866 | 553 | Valeant Pharmaceuticals International, | ||||||
Empire Co., Ltd. Class A | 37,383 | 783 | Inc.(Æ) | 14,907 | 1,391 | ||||
Enbridge, Inc. | 28,000 | 1,197 | West Fraser Timber Co., Ltd. | 4,682 | 166 | ||||
Encana Corp. | 22,952 | 175 | WSP Global, Inc. | 4,850 | 169 | ||||
Fairfax Financial Holdings, Ltd. | 3,960 | 1,950 | Yamana Gold, Inc. | 151,185 | 331 | ||||
Finning International, Inc. | 14,764 | 236 | 67,040 | ||||||
First Capital Realty, Inc. Class A | 7,692 | 114 | |||||||
First Quantum Minerals, Ltd. | 75,455 | 403 | Cayman Islands - 0.1% | ||||||
Fortis, Inc. | 45,960 | 1,330 | CK Hutchison Holdings, Ltd. | 49,036 | 669 | ||||
Franco-Nevada Corp. Class T | 6,313 | 320 | HK Electric Investments & HK Electric | ||||||
Genworth MI Canada, Inc. | 11,793 | 292 | Investments, Ltd.(Þ) | 270,500 | 208 | ||||
George Weston, Ltd. | 2,289 | 193 | Melco Crown Entertainment, Ltd. | 8,400 | 51 | ||||
Gildan Activewear, Inc. Class A | 18,109 | 521 | Xinyi Glass Holdings, Ltd. | 216,000 | 112 | ||||
Goldcorp, Inc. | 98,941 | 1,266 | 1,040 | ||||||
Great-West Lifeco, Inc. | 38,072 | 1,009 | |||||||
H&R Real Estate Investment Trust(ö) | 5,027 | 81 | Denmark - 1.6% | ||||||
Home Capital Group, Inc. Class B | 3,453 | 84 | AP Moeller - Maersk A/S Class A | 133 | 190 | ||||
Hudson's Bay Co. - ADR | 11,401 | 198 | AP Moeller - Maersk A/S Class B | 876 | 1,289 | ||||
Husky Energy, Inc. | 47,660 | 644 | Carlsberg A/S Class B | 12,122 | 992 |
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 741
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Christian Hansen Holding | 8,215 | 493 | Eramet(Æ) | 1,512 | 60 | ||||
Coloplast A/S Class B | 6,290 | 450 | Essilor International SA | 14,660 | 1,924 | ||||
Danske Bank A/S | 44,245 | 1,214 | Euler Hermes Group | 1,338 | 125 | ||||
DSV A/S | 9,528 | 386 | Eutelsat Communications SA | 10,638 | 351 | ||||
FLSmidth & Co. A/S | 5,127 | 194 | Faurecia | 4,110 | 162 | ||||
Genmab A/S(Æ) | 4,215 | 414 | Financiere de L'Odet | 260 | 280 | ||||
H Lundbeck A/S(Æ) | 4,256 | 125 | Fonciere Des Regions(ö) | 1,057 | 99 | ||||
ISS A/S | 10,369 | 364 | Groupe Eurotunnel SE | 36,000 | 504 | ||||
Novo Nordisk A/S Class B | 104,269 | 5,524 | Iliad SA | 444 | 93 | ||||
Novozymes A/S Class B | 11,261 | 521 | Imerys SA | 369 | 25 | ||||
Pandora A/S | 3,768 | 434 | Ingenico Group SA | 3,200 | 377 | ||||
TDC A/S | 25,269 | 132 | Ipsen SA | 1,783 | 112 | ||||
Topdanmark A/S(Æ) | 8,218 | 218 | JCDecaux SA | 392 | 16 | ||||
Tryg A/S | 11,310 | 203 | Kering | 3,085 | 570 | ||||
Vestas Wind Systems A/S | 8,245 | 479 | Korian SA Class B | 2,508 | 95 | ||||
William Demant Holding A/S(Æ) | 878 | 76 | Legrand SA - ADR | 12,354 | 677 | ||||
13,698 | L'Oreal SA | 11,808 | 2,151 | ||||||
LVMH Moet Hennessy Louis Vuitton | |||||||||
Finland - 0.8% | SE - ADR | 14,081 | 2,620 | ||||||
Amer Sports OYJ Class A | 3,136 | 88 | Metropole Television SA | 5,549 | 107 | ||||
Cargotec OYJ Class B | 4,804 | 171 | Natixis SA | 151,664 | 928 | ||||
Elisa OYJ Class A | 13,097 | 493 | Numericable-SFR SAS(Æ) | 9,202 | 416 | ||||
Fortum OYJ | 46,951 | 703 | Orange SA - ADR | 177,226 | 3,118 | ||||
Huhtamaki OYJ | 2,572 | 91 | Orpea | 5,089 | 408 | ||||
Kesko OYJ Class B | 8,858 | 282 | Pernod Ricard SA | 13,252 | 1,560 | ||||
Kone OYJ Class B | 21,452 | 914 | Peugeot SA(Æ) | 69,556 | 1,223 | ||||
Neste OYJ | 12,181 | 297 | Publicis Groupe SA - ADR | 8,639 | 560 | ||||
Nokia OYJ | 91,296 | 677 | Renault SA | 26,898 | 2,530 | ||||
Orion OYJ Class B | 2,230 | 80 | Rexel SA Class H | 22,468 | 307 | ||||
Outokumpu OYJ(Æ) | 23,196 | 79 | Safran SA | 15,130 | 1,148 | ||||
Sampo OYJ Class A | 24,936 | 1,216 | Sanofi - ADR | 55,334 | 5,580 | ||||
Stora Enso OYJ Class R | 103,117 | 955 | Sartorius Stedim Biotech | 592 | 209 | ||||
UPM-Kymmene OYJ | 60,038 | 1,121 | Schneider Electric SE | 21,097 | 1,276 | ||||
7,167 | SCOR SE - ADR | 38,679 | 1,439 | ||||||
SEB SA | 1,777 | 180 | |||||||
France - 9.7% | Societe BIC SA | 3,717 | 592 | ||||||
Accor SA | 7,445 | 370 | Societe Generale SA | 63,228 | 2,936 | ||||
Aeroports de Paris | 2,783 | 349 | Societe Television Francaise 1 | 12,989 | 167 | ||||
Air Liquide SA Class A | 14,865 | 1,923 | Sodexo SA | 5,140 | 457 | ||||
Alcatel-Lucent - ADR(Æ) | 93,318 | 379 | Suez Environnement Co. | 44,481 | 845 | ||||
Alstom SA(Æ) | 26,082 | 850 | Technip SA | 14,741 | 769 | ||||
Arkema SA | 7,096 | 518 | Teleperformance - GDR | 5,467 | 429 | ||||
Atos SE | 1,656 | 132 | Thales SA | 8,116 | 588 | ||||
AXA SA | 187,638 | 5,011 | Total SA | 143,042 | 6,933 | ||||
BioMerieux | 1,771 | 206 | Valeo SA | 4,391 | 678 | ||||
BNP Paribas SA | 73,094 | 4,433 | Vallourec SA | 14,532 | 161 | ||||
Bollore SA | 20,924 | 103 | Veolia Environnement SA | 74,769 | 1,738 | ||||
Bouygues SA - ADR | 26,612 | 1,007 | Vicat | 2,082 | 133 | ||||
Bureau Veritas SA | 8,389 | 190 | Vinci SA | 46,530 | 3,136 | ||||
Capital Gemini SA | 12,563 | 1,117 | Vivendi SA - ADR | 126,414 | 3,042 | ||||
Carrefour SA | 47,167 | 1,536 | Wendel SA | 2,738 | 328 | ||||
Casino Guichard Perrachon SA | 4,856 | 279 | Zodiac Aerospace | 16,184 | 409 | ||||
Christian Dior SE | 4,064 | 799 | 83,588 | ||||||
Cie de Saint-Gobain | 46,850 | 1,963 | |||||||
CNP Assurances | 15,315 | 219 | Germany - 7.4% | ||||||
Credit Agricole SA | 153,177 | 1,937 | Adidas AG | 5,349 | 479 | ||||
Danone SA | 18,421 | 1,282 | Allianz SE | 35,756 | 6,260 | ||||
Dassault Systemes SA | 14,430 | 1,139 | Aurubis AG | 5,323 | 356 | ||||
Eiffage SA | 9,087 | 567 | Axel Springer SE Class A | 1,950 | 110 | ||||
Electricite de France SA | 26,935 | 501 | BASF SE | 36,883 | 3,023 | ||||
Engie SA | 125,976 | 2,207 | Bayer AG | 35,812 | 4,779 |
See accompanying notes which are an integral part of the financial statements.
742 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Bayerische Motoren Werke AG | 25,750 | 2,643 | Hong Kong - 1.6% | ||||||||
Beiersdorf AG | 5,401 | 513 | AIA Group, Ltd. | 174,400 | 1,018 | ||||||
Bilfinger SE | 3,474 | 156 | Bank of East Asia, Ltd. (The) | 119,600 | 446 | ||||||
Brenntag AG | 4,450 | 269 | Cathay Pacific Airways, Ltd. | 92,000 | 183 | ||||||
Commerzbank AG(Æ) | 109,720 | 1,208 | Champion(Æ)(ö) | 196,000 | 102 | ||||||
Continental AG | 3,432 | 825 | China South City Holdings, Ltd. | 218,000 | 52 | ||||||
Daimler AG | 76,089 | 6,602 | CLP Holdings, Ltd. | 19,000 | 165 | ||||||
Deutsche Bank AG | 101,826 | 2,856 | Hang Lung Group, Ltd. | 65,000 | 235 | ||||||
Deutsche Boerse AG | 9,330 | 859 | Hang Lung Properties, Ltd. - ADR | 237,000 | 579 | ||||||
Deutsche Lufthansa AG(Æ) | 29,623 | 438 | Hang Seng Bank, Ltd. | 25,300 | 463 | ||||||
Deutsche Post AG | 34,858 | 1,038 | Henderson Land Development Co., Ltd. | 194,700 | 1,239 | ||||||
Deutsche Telekom AG | 106,130 | 1,984 | Hong Kong & China Gas Co., Ltd. | 223,400 | 453 | ||||||
Deutsche Wohnen AG | 25,974 | 732 | Hong Kong Exchanges and Clearing, | ||||||||
E.ON SE | 134,188 | 1,416 | Ltd. | 32,000 | 835 | ||||||
Evonik Industries AG | 6,658 | 242 | Hongkong & Shanghai Hotels, Ltd. (The) | 146,000 | 166 | ||||||
Fielmann AG | 2,855 | 200 | Hopewell Holdings, Ltd. | 97,000 | 350 | ||||||
Fraport AG Frankfurt Airport Services | Hysan Development Co., Ltd. | 49,000 | 217 | ||||||||
Worldwide | 2,332 | 148 | Link Real Estate Investment True (The) | ||||||||
Freenet AG | 10,308 | 348 | (ö) | 78,500 | 466 | ||||||
Fresenius Medical Care AG & Co. KGaA | 17,557 | 1,582 | MTR Corp., Ltd. | 88,500 | 400 | ||||||
Fresenius SE & Co. KGaA | 27,740 | 2,035 | New World Development Co., Ltd. | 350,000 | 373 | ||||||
GEA Group AG | 8,518 | 341 | Power Assets Holdings, Ltd. | 51,000 | 507 | ||||||
Hannover Rueck SE | 10,052 | 1,164 | Sino Land Co., Ltd. | 366,000 | 564 | ||||||
HeidelbergCement AG | 13,710 | 1,021 | Sun Hung Kai Properties, Ltd. | 118,000 | 1,576 | ||||||
Henkel AG & Co. KGaA | 3,191 | 295 | Swire Pacific, Ltd. Class A | 102,000 | 1,178 | ||||||
Hochtief AG | 1,167 | 109 | Swire Properties, Ltd. | 180,400 | 540 | ||||||
Hugo Boss AG | 1,491 | 154 | Television Broadcasts, Ltd. | 13,600 | 49 | ||||||
Infineon Technologies AG - ADR | 32,188 | 396 | Wharf Holdings, Ltd. (The) | 144,000 | 855 | ||||||
K&S AG | 25,094 | 635 | Wheelock & Co., Ltd. | 119,000 | 553 | ||||||
Kabel Deutschland Holding AG(Æ) | 1,224 | 156 | 13,564 | ||||||||
KION Group AG(Æ) | 248 | 11 | |||||||||
Krones AG | 1,620 | 195 | Ireland - 0.5% | ||||||||
Lanxess AG | 12,091 | 649 | Bank of Ireland(Æ) | 794,500 | 296 | ||||||
Linde AG | 6,510 | 1,129 | CRH PLC | 37,210 | 1,015 | ||||||
MAN SE | 877 | 92 | DCC PLC | 5,819 | 466 | ||||||
Merck KGaA | 10,519 | 1,026 | Glanbia PLC | 11,737 | 227 | ||||||
Metro AG | 8,616 | 266 | Horizon Pharma PLC(Æ) | 6,713 | 106 | ||||||
MTU Aero Engines AG | 2,633 | 244 | ICON PLC(Æ) | 3,245 | 207 | ||||||
Muenchener Rueckversicherungs- | James Hardie Industries PLC | 15,133 | 198 | ||||||||
Gesellschaft AG in Muenchen | 16,987 | 3,391 | Kerry Group PLC Class A | 8,400 | 682 | ||||||
OSRAM Licht AG | 4,636 | 273 | Kingspan Group PLC | 4,131 | 100 | ||||||
ProSiebenSat.1 Media SE | 8,648 | 468 | Paddy Power PLC | 2,584 | 299 | ||||||
Puma SE | 580 | 130 | Seagate Technology PLC | 9,139 | 348 | ||||||
Rational AG | 312 | 124 | Smurfit Kappa Group PLC | 13,616 | 388 | ||||||
Rheinmetall AG | 3,505 | 221 | Willis Group Holdings PLC | 1,214 | 54 | ||||||
Rhoen Klinikum AG | 4,181 | 125 | 4,386 | ||||||||
RWE AG | 59,772 | 832 | |||||||||
Salzgitter AG | 7,589 | 219 | Isle of Man - 0.0% | ||||||||
SAP SE - ADR | 34,848 | 2,755 | Playtech PLC | 941 | 12 | ||||||
Siemens AG | 41,267 | 4,150 | Israel - 0.5% | ||||||||
Suedzucker AG | 8,798 | 164 | Azrieli Group | 9,015 | 352 | ||||||
Symrise AG | 14,131 | 931 | Bank Hapoalim BM | 83,194 | 433 | ||||||
Talanx AG | 6,377 | 204 | Bank Leumi Le-Israel BM(Æ) | 77,935 | 295 | ||||||
Telefonica Deutschland Holding AG | 3,978 | 26 | Check Point Software Technologies, Ltd. | ||||||||
ThyssenKrupp AG - ADR | 15,067 | 304 | (Æ) | 6,242 | 530 | ||||||
TUI AG | 16,744 | 311 | Elbit Systems, Ltd. | 1,110 | 88 | ||||||
United Internet AG | 9,113 | 473 | Mizrahi Tefahot Bank, Ltd. | 11,133 | 135 | ||||||
Volkswagen AG | 830 | 115 | NICE-Systems, Ltd. | 6,388 | 395 | ||||||
Vonovia SE | 6,691 | 223 | |||||||||
64,423 |
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 743
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Teva Pharmaceutical Industries, Ltd. | 39,266 | 2,333 | Aozora Bank, Ltd. | 94,000 | 342 | |||||
4,561 | Asahi Glass Co., Ltd. | 98,000 | 558 | |||||||
Asahi Group Holdings, Ltd. | 11,500 | 354 | ||||||||
Italy - 3.0% | Asahi Kasei Corp. | 89,000 | 544 | |||||||
A2A SpA | 517,109 | 709 | Asics Corp. | 11,000 | 303 | |||||
Assicurazioni Generali SpA | 112,100 | 2,126 | Astellas Pharma, Inc. | 79,000 | 1,142 | |||||
Atlantia SpA | 14,721 | 408 | Bandai Namco Holdings, Inc. | 1,200 | 29 | |||||
Autogrill SpA(Æ) | 815 | 8 | Bank of Kyoto, Ltd. (The) | 32,000 | 322 | |||||
Azimut Holding SpA | 5,067 | 122 | Bank of Yokohama, Ltd. (The) | 74,000 | 460 | |||||
Banca Generali SpA | 2,996 | 92 | Benesse Holdings, Inc. | 7,400 | 198 | |||||
Banca Monte dei Paschi di Siena | Bridgestone Corp. | 36,100 | 1,324 | |||||||
SpA(Æ) | 235,669 | 432 | Brother Industries, Ltd. | 21,600 | 275 | |||||
Banca Popolare dell'Emilia Romagna SC | 37,716 | 304 | Calbee, Inc. | 7,700 | 277 | |||||
Banca Popolare di Milano Scarl | 428,494 | 403 | Canon, Inc. | 53,500 | 1,598 | |||||
Banco Popolare SC(Æ) | 57,820 | 866 | Casio Computer Co., Ltd. | 12,800 | 240 | |||||
Buzzi Unicem SpA | 11,395 | 193 | Central Japan Railway Co. | 7,800 | 1,416 | |||||
Credito Emiliano SpA | 16,345 | 117 | Century Tokyo Leasing Corp. | 7,800 | 263 | |||||
Davide Campari-Milano SpA | 12,672 | 108 | Chiba Bank, Ltd. (The) | 64,000 | 465 | |||||
De' Longhi SpA | 4,420 | 108 | Chiyoda Corp. | 16,000 | 121 | |||||
Enel Green Power SpA | 106,566 | 225 | Chubu Electric Power Co., Inc. | 69,300 | 1,063 | |||||
Enel SpA | 552,060 | 2,549 | Chugai Pharmaceutical Co., Ltd. | 13,300 | 426 | |||||
ENI SpA - ADR | 169,674 | 2,768 | Chugoku Bank, Ltd. (The) | 20,700 | 292 | |||||
EXOR SpA | 19,868 | 987 | Chugoku Electric Power Co., Inc. (The) | 20,700 | 312 | |||||
Finmeccanica SpA(Æ) | 33,507 | 439 | Citizen Holdings Co., Ltd. | 2,300 | 17 | |||||
Hera SpA | 103,399 | 272 | Credit Saison Co., Ltd. | 16,800 | 344 | |||||
Intesa Sanpaolo SpA | 1,205,998 | 4,183 | Dai Nippon Printing Co., Ltd. | 69,000 | 711 | |||||
Luxottica Group SpA | 14,078 | 985 | Daicel Chemical Industries, Ltd. | 25,300 | 333 | |||||
Mediaset SpA | 4,253 | 22 | Daido Steel Co., Ltd. | 37,000 | 141 | |||||
Mediobanca SpA | 48,456 | 488 | Daihatsu Motor Co., Ltd. | 24,500 | 299 | |||||
Mediolanum SpA | 12,562 | 102 | Dai-ichi Life Insurance Co., Ltd. (The) | 39,600 | 685 | |||||
Moncler SpA | 462 | 7 | Daiichi Sankyo Co., Ltd. | 21,500 | 419 | |||||
Parmalat SpA | 125,743 | 327 | Daikin Industries, Ltd. | 12,800 | 819 | |||||
Pirelli & C. SpA - ADR | 18,078 | 297 | Daito Trust Construction Co., Ltd. | 4,500 | 487 | |||||
Prada SpA | 12,500 | 51 | Daiwa House Industry Co., Ltd. | 36,700 | 958 | |||||
Prysmian SpA | 5,021 | 109 | Daiwa Securities Group, Inc. | 24,000 | 164 | |||||
Recordati SpA | 9,173 | 228 | DeNA Co., Ltd. | 11,900 | 191 | |||||
Saipem SpA - ADR(Æ) | 23,885 | 225 | Denso Corp. | 20,900 | 968 | |||||
Salvatore Ferragamo SpA | 347 | 9 | Dentsu, Inc. | 6,900 | 387 | |||||
Snam Rete Gas SpA | 95,298 | 493 | Disco Corp. | 1,700 | 154 | |||||
Telecom Italia SpA(Æ) | 1,274,091 | 1,775 | Don Quijote Holdings Co., Ltd. | 6,600 | 242 | |||||
Telecom Italia SpA | 470,081 | 529 | East Japan Railway Co. | 16,500 | 1,566 | |||||
Terna Rete Elettrica Nazionale SpA | 34,994 | 178 | Eisai Co., Ltd. | 11,000 | 684 | |||||
UniCredit SpA | 256,529 | 1,660 | Electric Power Development Co., Ltd. | 16,100 | 529 | |||||
Unione di Banche Italiane SpA | 53,993 | 403 | Ezaki Glico Co., Ltd. | 1,700 | 81 | |||||
Unipol Gruppo Finanziario SpA | 54,753 | 255 | FamilyMart Co., Ltd. | 3,500 | 143 | |||||
UnipolSai SpA | 111,608 | 269 | FANUC Corp. | 7,300 | 1,285 | |||||
25,831 | Fast Retailing Co., Ltd. | 2,400 | 873 | |||||||
Fuji Electric Co., Ltd. | 26,000 | 116 | ||||||||
Japan - 20.1% | Fuji Heavy Industries, Ltd. | 24,000 | 927 | |||||||
ABC-Mart, Inc. | 3,500 | 195 | FUJIFILM Holdings Corp. | 44,600 | 1,773 | |||||
Advantest Corp. | 5,200 | 41 | Fujitsu, Ltd. | 29,000 | 136 | |||||
Aeon Co., Ltd. | 56,600 | 836 | Fukuoka Financial Group, Inc. | 122,000 | 639 | |||||
AEON Financial Service Co., Ltd. | 300 | 7 | Gunma Bank, Ltd. (The) | 62,000 | 388 | |||||
Aeon Mall Co., Ltd. | 300 | 5 | Hachijuni Bank, Ltd. (The) | 61,000 | 413 | |||||
Air Water, Inc. | 16,000 | 261 | Hakuhodo DY Holdings, Inc. | 13,300 | 139 | |||||
Aisin Seiki Co., Ltd. | 25,600 | 1,013 | Hamamatsu Photonics KK | 18,800 | 481 | |||||
Ajinomoto Co., Inc. | 25,000 | 555 | Hankyu Hanshin Holdings, Inc. | 41,000 | 267 | |||||
Alfresa Holdings Corp. | 19,000 | 364 | Haseko Corp. | 18,600 | 189 | |||||
Alps Electric Co., Ltd. | 8,700 | 268 | Hirose Electric Co., Ltd. | 1,500 | 181 | |||||
Amada Holdings Co., Ltd. | 2,900 | 26 | Hiroshima Bank, Ltd. (The) | 41,000 | 227 | |||||
ANA Holdings, Inc. | 66,000 | 196 |
See accompanying notes which are an integral part of the financial statements.
744 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Hisamitsu Pharmaceutical Co., Inc. | 3,400 | 131 | Kurita Water Industries, Ltd. | 6,000 | 135 | ||||||
Hitachi Capital Corp. | 5,900 | 169 | Kyocera Corp. | 21,900 | 987 | ||||||
Hitachi Chemical Co., Ltd. | 19,100 | 301 | Kyushu Electric Power Co., Inc. | 11,600 | 140 | ||||||
Hitachi Construction Machinery Co., | Lawson, Inc. | 2,300 | 170 | ||||||||
Ltd. | 5,200 | 81 | LIXIL Group Corp. | 23,200 | 495 | ||||||
Hitachi High-Technologies Corp. | 4,600 | 123 | Mabuchi Motor Co., Ltd. | 6,300 | 309 | ||||||
Hitachi Metals, Ltd. | 11,000 | 124 | Makita Corp. | 1,900 | 104 | ||||||
Hitachi, Ltd. | 310,000 | 1,781 | Marubeni Corp. | 136,500 | 786 | ||||||
Hokuhoku Financial Group, Inc. | 173,000 | 383 | Marui Group Co., Ltd. | 29,300 | 378 | ||||||
Hokuriku Electric Power Co. | 24,100 | 358 | Mazda Motor Corp. | 7,400 | 145 | ||||||
Honda Motor Co., Ltd. | 99,300 | 3,298 | McDonald's Holdings Co. Japan, Ltd. | 4,100 | 97 | ||||||
Hoshizaki Electric Co., Ltd. | 5,800 | 419 | Medipal Holdings Corp. | 21,900 | 381 | ||||||
Hoya Corp. | 14,600 | 600 | MEIJI Holdings Co., Ltd. | 3,200 | 251 | ||||||
Ibiden Co., Ltd. | 10,500 | 144 | Minebea Co., Ltd. | 20,000 | 219 | ||||||
Idemitsu Kosan Co., Ltd. | 10,400 | 171 | MISUMI Group, Inc. | 11,000 | 143 | ||||||
Iida Group Holdings Co., Ltd. | 13,900 | 260 | Mitsubishi Chemical Holdings Corp. | 227,800 | 1,415 | ||||||
Inpex Corp. | 95,300 | 908 | Mitsubishi Corp. | 115,700 | 2,097 | ||||||
Isetan Mitsukoshi Holdings, Ltd. | 23,200 | 371 | Mitsubishi Electric Corp. | 70,000 | 726 | ||||||
Isuzu Motors, Ltd. | 7,300 | 85 | Mitsubishi Estate Co., Ltd. | 25,000 | 534 | ||||||
ITOCHU Corp. | 146,500 | 1,825 | Mitsubishi Gas Chemical Co., Inc. | 29,000 | 161 | ||||||
Itochu Techno-Solutions Corp. | 4,400 | 96 | Mitsubishi Heavy Industries, Ltd. | 102,000 | 513 | ||||||
Iyo Bank, Ltd. (The) | 39,300 | 420 | Mitsubishi Logistics Corp. | 1,000 | 14 | ||||||
Izumi Co., Ltd. | 2,000 | 74 | Mitsubishi Materials Corp. | 143,000 | 496 | ||||||
J Front Retailing Co., Ltd. | 23,800 | 389 | Mitsubishi Motors Corp. | 48,900 | 433 | ||||||
Japan Display, Inc.(Æ) | 40,600 | 126 | Mitsubishi Tanabe Pharma Corp. | 13,000 | 219 | ||||||
Japan Exchange Group, Inc. | 33,400 | 536 | Mitsubishi UFJ Financial Group, Inc. | 1,044,100 | 6,752 | ||||||
Japan Petroleum Exploration Co., Ltd. | 4,500 | 135 | Mitsubishi UFJ Lease & Finance Co., | ||||||||
Japan Tobacco, Inc. | 40,900 | 1,413 | Ltd. | 55,200 | 289 | ||||||
JFE Holdings, Inc. | 38,300 | 599 | Mitsui & Co., Ltd. | 138,100 | 1,744 | ||||||
JGC Corp. | 20,000 | 316 | Mitsui Chemicals, Inc. | 101,000 | 381 | ||||||
Joyo Bank, Ltd. (The) | 66,000 | 341 | Mitsui Fudosan Co., Ltd. | 27,000 | 732 | ||||||
JSR Corp. | 6,700 | 106 | Mitsui OSK Lines, Ltd. | 69,000 | 183 | ||||||
JTEKT Corp. | 1,100 | 19 | Mizuho Financial Group, Inc. | 1,678,300 | 3,433 | ||||||
JX Holdings, Inc. | 157,200 | 614 | MS&AD Insurance Group Holdings, Inc. | 59,000 | 1,731 | ||||||
Kajima Corp. | 90,000 | 515 | Murata Manufacturing Co., Ltd. | 9,500 | 1,347 | ||||||
Kamigumi Co., Ltd. | 30,000 | 258 | Nabtesco Corp. | 8,100 | 162 | ||||||
Kaneka Corp. | 55,000 | 486 | Nagoya Railroad Co., Ltd. | 67,000 | 277 | ||||||
Kansai Electric Power Co., Inc. (The)(Æ) | 54,300 | 692 | Nankai Electric Railway Co., Ltd. | 30,000 | 153 | ||||||
Kansai Paint Co., Ltd. | 11,000 | 167 | NEC Corp. | 76,000 | 234 | ||||||
Kao Corp. | 23,600 | 1,205 | Nexon Co., Ltd. | 1,400 | 19 | ||||||
Kawasaki Heavy Industries, Ltd. | 80,000 | 319 | NGK Insulators, Ltd. | 7,000 | 151 | ||||||
KDDI Corp. | 69,400 | 1,676 | NH Foods, Ltd. | 15,000 | 313 | ||||||
Keihan Electric Railway Co., Ltd. | 29,000 | 205 | NHK Spring Co., Ltd. | 46,500 | 473 | ||||||
Keikyu Corp. | 13,000 | 107 | Nidec Corp. | 9,100 | 684 | ||||||
Keio Corp. | 22,000 | 179 | Nikon Corp. | 31,000 | 400 | ||||||
Keisei Electric Railway Co., Ltd. | 16,000 | 196 | Nintendo Co., Ltd. | 5,600 | 894 | ||||||
Kewpie Corp. | 4,100 | 93 | Nippon Electric Glass Co., Ltd. | 34,000 | 167 | ||||||
Keyence Corp. | 2,800 | 1,453 | Nippon Express Co., Ltd. | 74,000 | 380 | ||||||
Kikkoman Corp. | 16,000 | 499 | Nippon Paint Holdings Co., Ltd. | 7,700 | 162 | ||||||
Kintetsu Group Holdings Co., Ltd. | 10,000 | 39 | Nippon Shokubai Co., Ltd. | 5,000 | 390 | ||||||
Kirin Holdings Co., Ltd. | 26,300 | 371 | Nippon Steel & Sumitomo Metal Corp. | 55,900 | 1,131 | ||||||
Kobayashi Pharmaceutical Co., Ltd. | 1,400 | 108 | Nippon Telegraph & Telephone Corp. | 100,500 | 3,692 | ||||||
Kobe Steel, Ltd. | 276,000 | 347 | Nippon Yusen | 109,000 | 284 | ||||||
Koito Manufacturing Co., Ltd. | 8,300 | 313 | Nissan Chemical Industries, Ltd. | 6,600 | 163 | ||||||
Komatsu, Ltd. | 44,800 | 740 | Nissan Motor Co., Ltd. | 210,500 | 2,185 | ||||||
Konami Holdings Corp. | 5,700 | 129 | Nisshin Seifun Group, Inc. | 35,200 | 536 | ||||||
Konica Minolta, Inc. | 38,400 | 394 | Nitori Holdings Co., Ltd. | 8,900 | 693 | ||||||
Kose Corp. | 4,000 | 388 | Nitto Denko Corp. | 13,200 | 842 | ||||||
Kubota Corp. | 34,000 | 524 | NOK Corp. | 8,700 | 204 | ||||||
Kuraray Co., Ltd. | 45,000 | 553 | Nomura Holdings, Inc. | 129,400 | 811 |
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 745
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Nomura Real Estate Holdings, Inc. | 16,900 | 359 | Stanley Electric Co., Ltd. | 7,300 | 139 | ||||
Nomura Research Institute, Ltd. | 10,100 | 412 | Sumco Corp. | 8,400 | |||||
NSK, Ltd. | 12,400 | 146 | Sumitomo Chemical Co., Ltd. | 113,000 | 645 | ||||
NTN Corp. | 34,000 | 168 | Sumitomo Corp. | 114,700 | 1,257 | ||||
NTT Data Corp. | 4,700 | 233 | Sumitomo Dainippon Pharma Co., Ltd. | 900 | |||||
NTT DOCOMO, Inc. | 62,200 | 1,221 | Sumitomo Electric Industries, Ltd. | 94,000 | 1,279 | ||||
NTT Urban Development Corp. | 800 | 8 | Sumitomo Heavy Industries, Ltd. | 90,000 | 404 | ||||
Obayashi Corp. | 28,000 | 245 | Sumitomo Metal Mining Co., Ltd. | 73,000 | 909 | ||||
Obic Co., Ltd. | 7,200 | 380 | Sumitomo Mitsui Financial Group, Inc. | 93,800 | 3,730 | ||||
Odakyu Electric Railway Co., Ltd. | 15,000 | 146 | Sumitomo Mitsui Trust Holdings, Inc. | 268,000 | 1,026 | ||||
Oji Holdings Corp. | 81,000 | 419 | Sumitomo Realty & Development Co., | ||||||
Ono Pharmaceutical Co., Ltd. | 2,700 | 368 | Ltd. | 7,000 | 230 | ||||
Oracle Corp. Japan | 2,200 | 100 | Sumitomo Rubber Industries, Ltd. | 29,200 | 434 | ||||
Oriental Land Co., Ltd. | 11,500 | 696 | Sundrug Co., Ltd. | 1,600 | |||||
ORIX Corp. | 116,500 | 1,703 | Suntory Beverage & Food, Ltd. | 5,700 | 230 | ||||
Osaka Gas Co., Ltd. | 238,000 | 935 | Suruga Bank, Ltd. | 1,600 | |||||
Otsuka Corp. | 2,600 | 126 | Suzuken Co., Ltd. | 11,200 | 428 | ||||
Otsuka Holdings Co., Ltd. | 34,600 | 1,145 | Suzuki Motor Corp. | 12,200 | 398 | ||||
Panasonic Corp. | 91,700 | 1,076 | Sysmex Corp. | 16,700 | 954 | ||||
Park24 Co., Ltd.(Æ) | 5,200 | 109 | T&D Holdings, Inc. | 7,700 | 101 | ||||
Pigeon Corp. | 4,400 | 123 | Taiheiyo Cement Corp. | 35,000 | 115 | ||||
Rakuten, Inc. | 32,300 | 447 | Taisei Corp. | 39,000 | 253 | ||||
Recruit Holdings Co., Ltd. | 9,200 | 295 | Taisho Pharmaceutical Holdings Co., | ||||||
Renesas Electronics Corp.(Æ) | 900 | 6 | Ltd. | 2,900 | 180 | ||||
Resona Holdings, Inc. | 167,400 | 883 | Taiyo Nippon Sanso Corp. | 19,000 | 195 | ||||
Ricoh Co., Ltd. | 66,400 | 714 | Takashimaya Co., Ltd. | 32,000 | 285 | ||||
Rinnai Corp. | 2,300 | 182 | Takeda Pharmaceutical Co., Ltd. | 32,100 | 1,560 | ||||
Rohm Co., Ltd. | 4,300 | 211 | TDK Corp. | 4,500 | 285 | ||||
Ryohin Keikaku Co., Ltd. | 1,100 | 220 | Teijin, Ltd. | 99,000 | 348 | ||||
Sankyo Co., Ltd. | 4,800 | 185 | THK Co., Ltd. | 2,800 | |||||
Sanrio Co., Ltd. | 200 | 5 | Tobu Railway Co., Ltd. | 18,000 | |||||
Santen Pharmaceutical Co., Ltd. | 39,000 | 527 | Toho Co., Ltd. | 8,200 | 213 | ||||
SBI Holdings, Inc. | 12,300 | 138 | Toho Gas Co., Ltd. | 35,000 | 214 | ||||
Secom Co., Ltd. | 7,700 | 512 | Tohoku Electric Power Co., Inc. | 25,600 | 358 | ||||
Sega Sammy Holdings, Inc. | 18,100 | 190 | Tokio Marine Holdings, Inc. | 38,400 | 1,471 | ||||
Seibu Holdings, Inc. | 1,100 | 22 | Tokyo Broadcasting System Holdings, | ||||||
Seiko Epson Corp. | 12,700 | 193 | Inc. | 12,000 | 178 | ||||
Sekisui Chemical Co., Ltd. | 30,000 | 353 | Tokyo Electric Power Co., Inc.(Æ) | 117,800 | 801 | ||||
Sekisui House, Ltd. | 69,500 | 1,153 | Tokyo Electron, Ltd. | 3,500 | 209 | ||||
Seven & i Holdings Co., Ltd. | 39,100 | 1,767 | Tokyo Gas Co., Ltd. | 137,000 | 676 | ||||
Seven Bank, Ltd. | 25,600 | 116 | Tokyo Tatemono Co., Ltd. | 1,000 | |||||
Sharp Corp. | 72,000 | 79 | Tokyu Corp. | 16,000 | 129 | ||||
Shikoku Electric Power Co., Inc.(Æ) | 13,500 | 228 | Tokyu Fudosan Holdings Corp. | 1,600 | |||||
Shimadzu Corp. | 16,000 | 248 | TonenGeneral Sekiyu KK | 20,000 | 208 | ||||
Shimamura Co., Ltd. | 3,000 | 336 | Toppan Printing Co., Ltd. | 87,000 | 778 | ||||
Shimano, Inc. | 2,400 | 377 | Toray Industries, Inc. | 60,000 | 522 | ||||
Shimizu Corp. | 26,000 | 227 | Toshiba Corp. | 372,000 | 1,046 | ||||
Shin-Etsu Chemical Co., Ltd. | 19,400 | 1,149 | Tosoh Corp. | 125,000 | 632 | ||||
Shinsei Bank, Ltd. | 211,000 | 441 | TOTO, Ltd. | 5,500 | 185 | ||||
Shionogi & Co., Ltd. | 17,700 | 724 | Toyo Seikan Group Holdings, Ltd. | 12,100 | 235 | ||||
Shiseido Co., Ltd. | 7,800 | 184 | Toyo Suisan Kaisha, Ltd. | 5,800 | 214 | ||||
Shizuoka Bank, Ltd. (The) | 43,000 | 429 | Toyoda Gosei Co., Ltd. | 15,900 | 364 | ||||
Showa Shell Sekiyu KK | 17,800 | 156 | Toyota Boshoku Corp. | 29,400 | 625 | ||||
SMC Corp. | 3,300 | 846 | Toyota Industries Corp. | 12,300 | 644 | ||||
SoftBank Group Corp. | 18,700 | 1,041 | Toyota Motor Corp. | 145,800 | 8,928 | ||||
Sohgo Security Services Co., Ltd. | 6,700 | 324 | Toyota Tsusho Corp. | 14,100 | 321 | ||||
Sojitz Corp. | 331,700 | 727 | Trend Micro, Inc. | 5,100 | 198 | ||||
Sompo Japan Nipponkoa Holdings, Inc. | 14,400 | 449 | Tsuruha Holdings, Inc. | 3,600 | 285 | ||||
Sony Corp. | 64,900 | 1,841 | Unicharm Corp. | 17,700 | 377 | ||||
Sony Financial Holdings, Inc. | 8,200 | 147 | USS Co., Ltd. | 15,000 | 264 | ||||
West Japan Railway Co. | 14,500 | 1,014 |
See accompanying notes which are an integral part of the financial statements.
746 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Yahoo! Japan Corp. | 36,500 | 154 | SBM Offshore NV(Æ) | 19,306 | 264 | ||||
Yamada Denki Co., Ltd. | 76,800 | 346 | STMicroelectronics NV | 29,198 | 202 | ||||
Yamaguchi Financial Group, Inc. | 30,000 | 368 | Unilever NV | 77,670 | 3,501 | ||||
Yamaha Corp. | 5,500 | 136 | Wolters Kluwer NV | 21,095 | 713 | ||||
Yamaha Motor Co., Ltd. | 15,900 | 356 | X5 Retail Group NV - GDR(Æ) | 6,409 | 133 | ||||
Yamato Holdings Co., Ltd. | 20,000 | 392 | 26,162 | ||||||
Yamazaki Baking Co., Ltd. | 20,000 | 384 | |||||||
Yaskawa Electric Corp. | 700 | 8 | New Zealand - 0.1% | ||||||
Yokogawa Electric Corp. | 700 | 8 | Auckland International Airport, Ltd. | 76,762 | 273 | ||||
Yokohama Rubber Co., Ltd. (The) | 16,300 | 312 | Fletcher Building, Ltd. | 12,832 | 65 | ||||
173,959 | Fonterra Group, Ltd. | 26,408 | 96 | ||||||
Meridian Energy, Ltd. | 423,747 | 634 | |||||||
Jersey - 0.7% | Ryman Healthcare, Ltd. | 17,195 | 92 | ||||||
Experian PLC | 36,665 | 625 | 1,160 | ||||||
Glencore PLC(Æ) | 550,778 | 949 | |||||||
Henderson Group PLC | 37,781 | 167 | Norway - 0.7% | ||||||
Petrofac, Ltd. | 24,942 | 323 | DNB ASA | 122,207 | 1,551 | ||||
Regus PLC | 33,501 | 173 | Gjensidige Forsikring ASA | 18,477 | 280 | ||||
Shire PLC - ADR | 25,077 | 1,898 | Kongsberg Gruppen ASA | 4,247 | 66 | ||||
Wolseley PLC - ADR | 5,673 | 333 | Norsk Hydro ASA | 82,687 | 296 | ||||
WPP PLC | 69,505 | 1,558 | Orkla ASA | 17,110 | 145 | ||||
6,026 | Schibsted ASA Class A | 4,511 | 151 | ||||||
Schibsted ASA Class B(Æ) | 4,511 | 140 | |||||||
Luxembourg - 0.3% | Statoil ASA Class N | 95,634 | 1,545 | ||||||
APERAM SA(Æ) | 7,329 | 225 | Telenor ASA | 36,577 | 688 | ||||
ArcelorMittal | 116,399 | 648 | Yara International ASA | 30,155 | 1,368 | ||||
L'Occitane International SA(Æ) | 61,000 | 122 | 6,230 | ||||||
RTL Group SA | 2,083 | 180 | |||||||
SES SA | 12,068 | 356 | Portugal - 0.3% | ||||||
Subsea 7 SA(Æ) | 30,690 | 241 | Banco BPI SA Class G(Æ) | 104,870 | 127 | ||||
Tenaris SA | 47,672 | 601 | Banco Comercial Portugues SA Class | ||||||
Ternium SA - ADR | 7,378 | 106 | R(Æ) | 3,654,779 | 210 | ||||
2,479 | Banco Espirito Santo SA Class C(Æ) | 22,842 | 3 | ||||||
Energias de Portugal SA | 328,382 | 1,213 | |||||||
Mauritius - 0.0% | Galp Energia SGPS SA Class B | 21,422 | 231 | ||||||
Golden Agri-Resources, Ltd. | 522,400 | 145 | NOS SGPS SA | 2,243 | 19 | ||||
Portucel SA - ADR | 62,797 | 255 | |||||||
Netherlands - 3.0% | Sonae SGPS SA | 94,039 | 112 | ||||||
Aalberts Industries NV | 4,977 | 161 | 2,170 | ||||||
Aegon NV | 222,843 | 1,369 | |||||||
Airbus Group SE | 22,315 | 1,551 | Singapore - 0.8% | ||||||
Akzo Nobel NV | 11,004 | 777 | CapitaLand Commercial Trust, Ltd.(Æ) | ||||||
Altice NV Class A(Æ) | 24,870 | 429 | (ö) | 83,000 | 83 | ||||
Altice NV Class B(Æ) | 8,290 | 146 | CapitaLand, Ltd. | 158,300 | 348 | ||||
ASML Holding NV | 16,121 | 1,494 | City Developments, Ltd. | 44,000 | 249 | ||||
Boskalis Westminster | 7,378 | 358 | ComfortDelGro Corp., Ltd. | 137,000 | 296 | ||||
CNH Industrial NV | 121,085 | 817 | DBS Group Holdings, Ltd. | 21,300 | 262 | ||||
Delta Lloyd NV | 18,331 | 144 | Fraser and Neave, Ltd. | 26,100 | 40 | ||||
Euronext NV(Þ) | 4,830 | 212 | Frasers Centrepoint, Ltd. | 88,969 | 103 | ||||
Fiat Chrysler Automobiles NV | 137,968 | 2,029 | Great Eastern Holdings, Ltd. | 7,600 | 116 | ||||
Fugro NV(Æ) | 8,360 | 158 | Keppel Corp., Ltd. - ADR | 165,500 | 832 | ||||
Heineken Holding NV | 8,186 | 655 | Neptune Orient Lines, Ltd.(Æ) | 189,000 | 134 | ||||
Heineken NV | 16,142 | 1,472 | Olam International, Ltd. | 121,000 | 172 | ||||
ING Groep NV | 330,806 | 4,797 | Oversea-Chinese Banking Corp., Ltd. | 201,700 | 1,296 | ||||
Koninklijke Ahold NV | 59,344 | 1,205 | SATS, Ltd. | 23,800 | 64 | ||||
Koninklijke KPN NV | 112,744 | 413 | Sembcorp Industries, Ltd. | 95,400 | 242 | ||||
Koninklijke Philips NV | 20,596 | 556 | SIA Engineering Co., Ltd. | 25,100 | 71 | ||||
NN Group NV | 6,119 | 192 | Singapore Airlines, Ltd. | 63,200 | 486 | ||||
NXP Semiconductors NV(Æ) | 13,514 | 1,059 | Singapore Exchange, Ltd. | 45,900 | 241 | ||||
Randstad Holding NV | 5,158 | 307 | Singapore Telecommunications, Ltd. | 94,600 | 268 | ||||
RELX NV | 61,467 | 1,048 | StarHub, Ltd. | 24,000 | 61 |
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 747
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Suntec Real Estate Investment Trust(Æ) | Hufvudstaden AB Class A | 23,124 | 327 | |||||||
(ö) | 81,600 | 96 | Investment AB Latour Class B | 6,996 | 238 | |||||
United Industrial Corp., Ltd. | 108,800 | 239 | L E Lundbergforetagen AB Class B | 7,370 | 375 | |||||
United Overseas Bank, Ltd. | 57,100 | 828 | NCC AB Class B | 9,274 | 286 | |||||
UOL Group, Ltd. | 61,500 | 288 | Nibe Industrier AB Class B | 4,333 | 139 | |||||
Wilmar International, Ltd. | 191,100 | 425 | Nordea Bank AB | 203,080 | 2,239 | |||||
7,240 | Ratos AB Class B | 21,770 | 127 | |||||||
Saab AB Class B | 3,608 | 102 | ||||||||
Spain - 3.0% | Sandvik AB | 31,171 | 291 | |||||||
Abengoa SA Class B | 54,573 | 53 | Securitas AB Class B | 36,148 | 471 | |||||
Abertis Infraestructuras SA | 10,667 | 177 | Skandinaviska Enskilda Banken AB | |||||||
Acciona SA | 2,040 | 171 | Class A | 42,603 | 446 | |||||
ACS Actividades de Construccion y | Skanska AB Class B | 20,821 | 404 | |||||||
Servicios SA | 15,400 | 523 | SKF AB Class A | 297 | 5 | |||||
Amadeus IT Holding SA Class A | 29,502 | 1,255 | SKF AB Class B | 11,146 | 196 | |||||
Atresmedia Corp. de Medios de | SSAB AB Class A(Æ) | 21,895 | 79 | |||||||
Comunicacion SA | 480 | 6 | Svenska Cellulosa AB SCA Class A | 284 | 8 | |||||
Banco Bilbao Vizcaya Argentaria SA | Svenska Cellulosa AB SCA Class B | 40,496 | 1,194 | |||||||
- ADR | 362,534 | 3,117 | Svenska Handelsbanken AB Class A | 48,683 | 660 | |||||
Banco de Sabadell SA - ADR | 336,266 | 650 | Svenska Handelsbanken AB Class B | 6,078 | 88 | |||||
Banco Popular Espanol SA | 161,166 | 613 | Swedbank AB Class A | 29,807 | 684 | |||||
Banco Santander SA - ADR | 834,214 | 4,671 | Tele2 AB Class B | 70,990 | 709 | |||||
Bankia SA Class A | 529,917 | 682 | Telefonaktiebolaget LM Ericsson Class A | 7,548 | 69 | |||||
CaixaBank SA | 72,302 | 277 | Telefonaktiebolaget LM Ericsson Class B | 101,683 | 989 | |||||
Corp. Financiera Alba SA | 5,955 | 263 | TeliaSonera AB | 82,125 | 419 | |||||
Ebro Foods SA | 15,141 | 287 | Volvo AB Class A - GDR | 5,493 | 57 | |||||
Enagas SA | 14,252 | 432 | Volvo AB Class B | 53,342 | 552 | |||||
Endesa SA - ADR | 16,471 | 367 | 18,772 | |||||||
Ferrovial SA | 25,532 | 644 | ||||||||
Gamesa Corp. Tecnologica SA | 5,768 | 91 | Switzerland - 8.4% | |||||||
Gas Natural SDG SA | 46,756 | 1,012 | ABB, Ltd.(Æ) | 75,455 | 1,421 | |||||
Grupo Catalana Occidente SA | 5,461 | 170 | Actelion, Ltd.(Æ) | 3,233 | 448 | |||||
Iberdrola SA | 444,578 | 3,173 | Allreal Holding AG(Æ) | 2,520 | 334 | |||||
Industria de Diseno Textil SA | 65,300 | 2,446 | Alpiq Holding AG(Æ) | 4,294 | 453 | |||||
International Consolidated Airlines | Baloise Holding AG | 9,601 | 1,151 | |||||||
Group SA(Æ) | 57,622 | 516 | Banque Cantonale Vaudoise | 299 | 184 | |||||
Mapfre SA | 68,548 | 204 | Barry Callebaut AG(Æ) | 70 | 84 | |||||
Obrascon Huarte Lain SA | 5,127 | 41 | Basellandschaftliche Kantonalbank | 391 | 352 | |||||
Prosegur Cia de Seguridad SA | 12,861 | 57 | Basler Kantonalbank | 5,044 | 344 | |||||
Red Electrica Corp. SA | 5,516 | 486 | Berner Kantonalbank AG | 1,072 | 200 | |||||
Repsol SA - ADR | 88,893 | 1,120 | Bucher Industries AG | 739 | 168 | |||||
Sacyr SA | 33,638 | 85 | Chocoladefabriken Lindt & Spruengli | |||||||
Tecnicas Reunidas SA | 1,651 | 74 | AG | 88 | 537 | |||||
Telefonica SA - ADR | 154,688 | 2,044 | Cie Financiere Richemont SA(Æ) | 11,336 | 970 | |||||
Zardoya Otis SA | 9,825 | 121 | Credit Suisse Group AG(Æ) | 111,084 | 2,766 | |||||
25,828 | EMS-Chemie Holding AG | 1,054 | 446 | |||||||
Flughafen Zuerich AG | 439 | 332 | ||||||||
Sweden - 2.2% | Galenica AG | 233 | 341 | |||||||
Alfa Laval AB | 11,153 | 196 | GAM Holding AG(Æ) | 14,871 | 272 | |||||
Assa Abloy AB Class B | 79,450 | 1,575 | Geberit AG | 1,750 | 564 | |||||
Atlas Copco AB Class A | 54,096 | 1,407 | Givaudan SA(Æ) | 464 | 829 | |||||
Atlas Copco AB Class B | 21,702 | 524 | Graubuendner Kantonalbank | 159 | 264 | |||||
Axfood AB | 5,369 | 97 | Helvetia Holding AG | 1,311 | 686 | |||||
BillerudKorsnas AB | 11,282 | 204 | Julius Baer Group, Ltd.(Æ) | 9,654 | 478 | |||||
Boliden AB | 30,260 | 579 | Kuehne & Nagel International AG | 4,523 | 626 | |||||
Electrolux AB | 15,418 | 453 | LafargeHolcim, Ltd.(Æ) | 18,198 | 1,023 | |||||
Fastighets AB Balder Class B(Æ) | 13,113 | 264 | Lonza Group AG(Æ) | 3,584 | 525 | |||||
Hennes & Mauritz AB Class B | 36,367 | 1,410 | Luzerner Kantonalbank AG | 206 | 76 | |||||
Hexagon AB Class B | 14,362 | 497 | Nestle SA | 179,513 | 13,705 | |||||
Hexpol AB | 19,050 | 185 | Novartis AG | 142,942 | 12,960 | |||||
Holmen AB Class B | 7,524 | 227 | OC Oerlikon Corp. AG(Æ) | 17,600 | 169 |
See accompanying notes which are an integral part of the financial statements.
748 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Partners Group Holding AG | 1,003 | 363 | Croda International PLC | 11,847 | 528 | ||||
PSP Swiss Property AG(Æ) | 7,644 | 665 | Derwent London PLC(ö) | 11,724 | 700 | ||||
Roche Holding AG | 39,962 | 10,826 | Diageo PLC | 92,850 | 2,683 | ||||
Schindler Holding AG | 3,519 | 571 | Dialog Semiconductor PLC(Æ) | 6,349 | 235 | ||||
SFS Group AG(Æ) | 2,712 | 175 | Direct Line Insurance Group PLC | 171,886 | 1,044 | ||||
SGS SA | 286 | 544 | Drax Group PLC | 29,889 | 120 | ||||
Sika AG | 101 | 331 | Dunelm Group PLC | 6,163 | 90 | ||||
St. Galler Kantonalbank AG | 364 | 132 | Essentra PLC | 7,510 | 97 | ||||
Sulzer AG | 2,357 | 238 | Evraz PLC(Æ) | 191,888 | 250 | ||||
Swatch Group AG (The) | 1,409 | 102 | Galiform PLC | 41,142 | 294 | ||||
Swatch Group AG (The) Class B | 1,460 | 570 | GlaxoSmithKline PLC - ADR | 237,817 | 5,122 | ||||
Swiss Life Holding AG(Æ) | 3,432 | 818 | Great Portland Estates PLC(ö) | 44,044 | 603 | ||||
Swiss Prime Site AG Class A(Æ) | 8,702 | 665 | Greene King PLC | 27,575 | 341 | ||||
Swiss Re AG(Æ) | 33,373 | 3,096 | Halma PLC | 32,735 | 385 | ||||
Swisscom AG | 1,368 | 704 | Hammerson PLC(ö) | 81,559 | 799 | ||||
Syngenta AG | 4,715 | 1,584 | Hargreaves Lansdown PLC | 690 | 15 | ||||
TE Connectivity, Ltd. | 10,273 | 662 | HSBC Holdings PLC | 1,366,455 | 10,672 | ||||
Transocean, Ltd. | 33,045 | 506 | ICAP PLC | 23,405 | 159 | ||||
UBS Group AG | 178,838 | 3,569 | IG Group Holdings PLC | 38,928 | 453 | ||||
Zurich Insurance Group AG(Æ) | 13,431 | 3,543 | Imperial Tobacco Group PLC | 86,579 | 4,664 | ||||
72,372 | Inchcape PLC | 105,741 | 1,300 | ||||||
Informa PLC | 23,662 | 207 | |||||||
United Kingdom - 18.2% | Inmarsat PLC | 26,569 | 403 | ||||||
3i Group PLC | 89,440 | 690 | InterContinental Hotels Group PLC | 11,958 | 479 | ||||
AA PLC(Æ) | 18,672 | 80 | Intermediate Capital Group PLC | 73,639 | 642 | ||||
Aberdeen Asset Management PLC | 3,323 | 18 | Intertek Group PLC | 10,305 | 416 | ||||
Admiral Group PLC | 6,030 | 150 | Intu Properties PLC Class H(ö) | 88,054 | 469 | ||||
Aggreko PLC | 3,668 | 52 | Investec PLC | 82,027 | 684 | ||||
Amec Foster Wheeler PLC - GDR | 51,648 | 564 | ITV PLC | 284,578 | 1,104 | ||||
Amlin PLC | 102,923 | 1,045 | J Sainsbury PLC | 182,143 | 746 | ||||
Anglo American PLC | 115,452 | 967 | Jardine Lloyd Thompson Group PLC | 7,380 | 108 | ||||
Antofagasta PLC | 32,727 | 265 | John Wood Group PLC | 38,227 | 351 | ||||
ARM Holdings PLC | 112,036 | 1,771 | Johnson Matthey PLC | 5,126 | 204 | ||||
Ashmore Group PLC | 1,702 | 7 | Jupiter Fund Management PLC | 12,546 | 87 | ||||
ASOS PLC(Æ) | 2,137 | 107 | Kingfisher PLC | 334,505 | 1,818 | ||||
Associated British Foods PLC | 20,483 | 1,089 | Land Securities Group PLC(ö) | 93,200 | 1,921 | ||||
AstraZeneca PLC | 34,601 | 2,209 | Legal & General Group PLC | 661,505 | 2,660 | ||||
Auto Trader Group PLC(Æ)(Þ) | 39,384 | 235 | Liberty Global PLC Class A(Æ) | 17,035 | 758 | ||||
Aviva PLC | 371,002 | 2,775 | Liberty Global PLC Class C(Æ) | 16,583 | 707 | ||||
Babcock International Group PLC | 18,668 | 277 | Liberty Global PLC LiLAC(Æ) | 1,565 | 61 | ||||
BAE Systems PLC | 117,785 | 798 | Liberty Global PLC LiLAC Class A(Æ) | 851 | 33 | ||||
Balfour Beatty PLC(Æ) | 106,601 | 409 | Lloyds Banking Group PLC | 2,828,010 | 3,209 | ||||
Barclays PLC | 1,035,057 | 3,684 | Man Group PLC | 330,686 | 848 | ||||
Barratt Developments PLC | 105,459 | 993 | Marks & Spencer Group PLC | 107,124 | 846 | ||||
Bellway PLC | 11,695 | 467 | Meggitt PLC | 73,930 | 402 | ||||
Berkeley Group Holdings PLC | 11,497 | 587 | Melrose Industries PLC | 103,484 | 424 | ||||
Betfair Group PLC | 9,607 | 477 | Merlin Entertainments PLC(Þ) | 18,245 | 116 | ||||
BG Group PLC | 165,179 | 2,602 | Micro Focus International PLC | 10,007 | 193 | ||||
BHP Billiton PLC | 156,915 | 2,510 | Millennium & Copthorne Hotels PLC | 23,172 | 172 | ||||
Booker Group PLC | 86,010 | 246 | Mondi PLC | 29,119 | 673 | ||||
BP PLC | 1,227,993 | 7,289 | National Grid PLC | 214,189 | 3,049 | ||||
British American Tobacco PLC | 91,406 | 5,425 | Next PLC | 8,205 | 1,010 | ||||
BT Group PLC | 305,290 | 2,183 | Old Mutual PLC | 581,287 | 1,899 | ||||
Bunzl PLC | 22,224 | 636 | Pearson PLC | 64,568 | 855 | ||||
Burberry Group PLC | 19,827 | 405 | Persimmon PLC Class A(Æ) | 21,077 | 646 | ||||
Cable & Wireless Communications PLC | 91,909 | 104 | Provident Financial PLC | 15,254 | 815 | ||||
Capital & Counties Properties PLC | 203,485 | 1,391 | Prudential PLC | 95,019 | 2,218 | ||||
Carnival PLC | 23,738 | 1,320 | Reckitt Benckiser Group PLC | 27,594 | 2,692 | ||||
Centrica PLC | 147,359 | 513 | RELX PLC | 60,494 | 1,081 | ||||
Close Brothers Group PLC | 5,741 | 129 | Rentokil Initial PLC | 52,415 | 125 | ||||
Compass Group PLC | 73,851 | 1,272 |
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 749
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Rightmove PLC | 3,231 | 191 | Volkswagen AG | 13,797 | 1,657 | |||||
Rio Tinto PLC | 71,109 | 2,579 | 4,349 | |||||||
Rolls-Royce Holdings PLC(Æ) | 15,199,639 | 1,739 | ||||||||
Rotork PLC | 52,790 | 152 | Japan - 0.0% | |||||||
Royal Bank of Scotland Group PLC(Æ) | 170,832 | 835 | Shinkin Central Bank Class A | 111 | 206 | |||||
Royal Dutch Shell PLC Class A | 354,234 | 9,262 | ||||||||
Royal Dutch Shell PLC Class B | 50,386 | 1,316 | Total Preferred Stocks | |||||||
Royal Mail PLC | 42,203 | 289 | (cost $7,336) | 4,555 | ||||||
RSA Insurance Group PLC | 127,194 | 824 | ||||||||
SABMiller PLC - ADR | 38,139 | 2,346 | Warrants & Rights - 0.0% | |||||||
Saga PLC | 50,748 | 162 | Australia - 0.0% | |||||||
Sage Group PLC (The) | 96,340 | 808 | Westpac Banking Corp.(Æ) | |||||||
Schroders PLC | 7,038 | 323 | 2015 Rights | 5,940 | 21 | |||||
Scottish & Southern Energy PLC | 28,369 | 662 | ||||||||
Segro PLC(ö) | 111,651 | 773 | Italy - 0.0% | |||||||
Serco Group PLC(Æ) | 51,471 | 74 | Mediolanum SpA(Æ) | |||||||
Shaftesbury PLC(ö) | 41,737 | 604 | 2015 Rights | 12,562 | — | |||||
Sky PLC | 44,645 | 753 | Total Warrants & Rights | |||||||
Smith & Nephew PLC | 32,611 | 557 | ||||||||
Smiths Group PLC | 17,844 | 264 | (cost $—) | 21 | ||||||
Spirax-Sarco Engineering PLC | 6,540 | 306 | ||||||||
St. James's Place PLC | 2,290 | 34 | Short-Term Investments - 0.3% | |||||||
Stagecoach Group PLC | 19,716 | 105 | United States - 0.3% | |||||||
Standard Chartered PLC | 163,228 | 1,812 | Russell U.S. Cash Management Fund | 2,875,494 | (8) | 2,875 | ||||
Standard Life PLC | 264,926 | 1,713 | Total Short-Term Investments | |||||||
TalkTalk Telecom Group PLC | 5,570 | 22 | (cost $2,875) | 2,875 | ||||||
Tate & Lyle PLC | 41,947 | 386 | ||||||||
Taylor Wimpey PLC | 238,906 | 728 | Total Investments 99.5% | |||||||
Telecity Group PLC | 13,767 | 249 | (identified cost $926,238) | 862,245 | ||||||
Tesco PLC(Æ) | 709,545 | 1,999 | ||||||||
Travis Perkins PLC | 50,933 | 1,501 | Other Assets and Liabilities, Net | |||||||
Tullow Oil PLC(Æ) | 10,594 | 33 | - 0.5% | 4,199 | ||||||
Unilever PLC | 51,364 | 2,281 | Net Assets - 100.0% | 866,444 | ||||||
Vedanta Resources PLC | 11,874 | 90 | ||||||||
Vodafone Group PLC | 2,553,206 | 8,417 | ||||||||
Weir Group PLC (The) | 16,954 | 278 | ||||||||
Whitbread PLC | 8,801 | 673 | ||||||||
William Hill PLC | 29,932 | 146 | ||||||||
Wm Morrison Supermarkets PLC | 292,663 | 758 | ||||||||
157,470 | ||||||||||
United States - 0.0% | ||||||||||
Autoliv, Inc. | 652 | 79 | ||||||||
Total Common Stocks | ||||||||||
(cost $910,847) | 850,453 | |||||||||
Investments in Other Funds - 0.5% | ||||||||||
Vanguard FTSE Emerging Markets | 124,600 | 4,341 | ||||||||
Total ETF Investments in Other Funds | ||||||||||
(cost $5,180) | 4,341 | |||||||||
Preferred Stocks - 0.5% | ||||||||||
Germany - 0.5% | ||||||||||
Bayerische Motoren Werke AG | 1,787 | 144 | ||||||||
Fuchs Petrolub SE | 5,567 | 267 | ||||||||
Henkel AG & Co. KGaA | 12,942 | 1,404 | ||||||||
Man SE | 60 | 6 | ||||||||
Porsche Automobil Holding SE | 18,596 | 871 |
See accompanying notes which are an integral part of the financial statements.
750 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||
Amounts in thousands (except contract amounts) | ||||||
Unrealized | ||||||
Appreciation | ||||||
Number of | Notional | Expiration | (Depreciation) | |||
Contracts | Amount | Date | $ | |||
Long Positions | ||||||
MSCI EAFE Mini Index Futures | 72 | USD | 6,326 | 12/15 | 290 | |
S&P/TSX 50 Index Futures | 5 | CAD | 792 | 12/15 | 13 | |
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 303 |
Foreign Currency Exchange Contracts | |||||||||
Amounts in thousands | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Amount | Amount | (Depreciation) | |||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||
Bank of America | USD | 30 | CAD | 40 | 12/16/15 | — | |||
Bank of America | USD | 37 | CAD | 50 | 12/16/15 | 1 | |||
Bank of America | USD | 76 | CAD | 100 | 12/16/15 | — | |||
Bank of America | BRL | 1,941 | USD | 497 | 12/16/15 | — | |||
Bank of America | CAD | 100 | USD | 77 | 12/16/15 | — | |||
Bank of America | CAD | 150 | USD | 117 | 12/16/15 | 2 | |||
Bank of America | CAD | 250 | USD | 194 | 12/16/15 | 3 | |||
Bank of America | CNY | 3,674 | USD | 564 | 12/16/15 | (13 | ) | ||
Bank of America | INR | 57,528 | USD | 850 | 12/16/15 | (24 | ) | ||
Bank of America | TWD | 31,700 | USD | 975 | 12/16/15 | (1 | ) | ||
Bank of Montreal | USD | 677 | AUD | 969 | 12/16/15 | 12 | |||
Bank of Montreal | USD | 249 | CAD | 329 | 12/16/15 | 3 | |||
Bank of Montreal | USD | 259 | CAD | 342 | 12/16/15 | 3 | |||
Bank of Montreal | USD | 164 | DKK | 1,098 | 12/16/15 | (2 | ) | ||
Bank of Montreal | USD | 1,073 | GBP | 699 | 12/16/15 | 4 | |||
Bank of Montreal | USD | 447 | HKD | 3,462 | 12/16/15 | — | |||
Bank of Montreal | USD | 403 | ILS | 1,568 | 12/16/15 | 2 | |||
Bank of Montreal | USD | 576 | NZD | 908 | 12/16/15 | 36 | |||
Bank of Montreal | USD | 288 | SEK | 2,424 | 12/16/15 | (4 | ) | ||
Bank of Montreal | USD | 542 | SGD | 771 | 12/16/15 | 7 | |||
Bank of Montreal | CAD | 45 | USD | 34 | 12/16/15 | — | |||
Bank of Montreal | CHF | 235 | USD | 242 | 12/16/15 | 3 | |||
Bank of Montreal | EUR | 3,206 | USD | 3,580 | 12/16/15 | 54 | |||
Bank of Montreal | JPY | 67,884 | USD | 561 | 12/16/15 | (2 | ) | ||
Bank of Montreal | NOK | 8,084 | USD | 981 | 12/16/15 | 30 | |||
Bank of Montreal | ZAR | 1,748 | USD | 125 | 12/15/15 | — | |||
Bank of New York | USD | 75 | CAD | 100 | 12/16/15 | 1 | |||
Bank of New York | CAD | 180 | USD | 139 | 12/16/15 | 1 | |||
BNP Paribas | USD | 677 | AUD | 969 | 12/16/15 | 13 | |||
BNP Paribas | USD | 249 | CAD | 329 | 12/16/15 | 3 | |||
BNP Paribas | USD | 259 | CAD | 342 | 12/16/15 | 3 | |||
BNP Paribas | USD | 2,586 | CAD | 3,430 | 12/16/15 | 37 | |||
BNP Paribas | USD | 238 | CHF | 230 | 12/16/15 | (5 | ) | ||
BNP Paribas | USD | 165 | DKK | 1,098 | 12/16/15 | (3 | ) | ||
BNP Paribas | USD | 1,000 | EUR | 880 | 12/16/15 | (32 | ) | ||
BNP Paribas | USD | 1,073 | GBP | 699 | 12/16/15 | 4 | |||
BNP Paribas | USD | 447 | HKD | 3,462 | 12/16/15 | — | |||
BNP Paribas | USD | 403 | ILS | 1,568 | 12/16/15 | 2 | |||
BNP Paribas | USD | 864 | NOK | 7,050 | 12/16/15 | (36 | ) | ||
BNP Paribas | USD | 577 | NZD | 908 | 12/16/15 | 36 | |||
BNP Paribas | USD | 289 | SEK | 2,424 | 12/16/15 | (5 | ) | ||
BNP Paribas | USD | 542 | SGD | 771 | 12/16/15 | 7 | |||
BNP Paribas | CAD | 100 | USD | 77 | 12/16/15 | — | |||
BNP Paribas | EUR | 3,206 | USD | 3,584 | 12/16/15 | 58 | |||
BNP Paribas | HKD | 6,700 | USD | 864 | 12/16/15 | — | |||
BNP Paribas | JPY | 67,884 | USD | 562 | 12/16/15 | (1 | ) | ||
BNP Paribas | NOK | 8,084 | USD | 981 | 12/16/15 | 30 | |||
BNP Paribas | NZD | 4,580 | USD | 2,872 | 12/16/15 | (219 | ) | ||
BNP Paribas | ZAR | 1,748 | USD | 125 | 12/15/15 | — | |||
Citigroup | USD | 75 | CAD | 100 | 12/16/15 | 2 | |||
Commonwealth Bank of Australia | CAD | 50 | USD | 38 | 12/16/15 | — |
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 751
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Commonwealth Bank of Australia | CAD | 100 | USD | 77 | 12/16/15 | — | ||
HSBC | USD | 677 | AUD | 969 | 12/16/15 | 12 | ||
HSBC | USD | 249 | CAD | 329 | 12/16/15 | 3 | ||
HSBC | USD | 259 | CAD | 342 | 12/16/15 | 3 | ||
HSBC | USD | 164 | DKK | 1,098 | 12/16/15 | (2 | ) | |
HSBC | USD | 1,072 | GBP | 699 | 12/16/15 | 4 | ||
HSBC | USD | 447 | HKD | 3,462 | 12/16/15 | — | ||
HSBC | USD | 404 | ILS | 1,568 | 12/16/15 | 2 | ||
HSBC | USD | 577 | NZD | 908 | 12/16/15 | 36 | ||
HSBC | USD | 289 | SEK | 2,424 | 12/16/15 | (5 | ) | |
HSBC | USD | 542 | SGD | 771 | 12/16/15 | 7 | ||
HSBC | EUR | 3,206 | USD | 3,580 | 12/16/15 | 53 | ||
HSBC | JPY | 67,884 | USD | 561 | 12/16/15 | (1 | ) | |
HSBC | NOK | 8,084 | USD | 982 | 12/16/15 | 31 | ||
HSBC | ZAR | 1,748 | USD | 125 | 12/15/15 | — | ||
Royal Bank of Canada | USD | 677 | AUD | 969 | 12/16/15 | 13 | ||
Royal Bank of Canada | USD | 60 | CAD | 80 | 12/16/15 | 1 | ||
Royal Bank of Canada | USD | 249 | CAD | 329 | 12/16/15 | 3 | ||
Royal Bank of Canada | USD | 259 | CAD | 342 | 12/16/15 | 3 | ||
Royal Bank of Canada | USD | 165 | DKK | 1,098 | 12/16/15 | (2 | ) | |
Royal Bank of Canada | USD | 1,072 | GBP | 699 | 12/16/15 | 4 | ||
Royal Bank of Canada | USD | 447 | HKD | 3,462 | 12/16/15 | — | ||
Royal Bank of Canada | USD | 403 | ILS | 1,568 | 12/16/15 | 2 | ||
Royal Bank of Canada | USD | 576 | NZD | 908 | 12/16/15 | 36 | ||
Royal Bank of Canada | USD | 288 | SEK | 2,424 | 12/16/15 | (4 | ) | |
Royal Bank of Canada | USD | 542 | SGD | 771 | 12/16/15 | 7 | ||
Royal Bank of Canada | CAD | 70 | USD | 53 | 12/16/15 | — | ||
Royal Bank of Canada | CAD | 150 | USD | 115 | 12/16/15 | — | ||
Royal Bank of Canada | EUR | 3,206 | USD | 3,582 | 12/16/15 | 54 | ||
Royal Bank of Canada | JPY | 67,884 | USD | 562 | 12/16/15 | (1 | ) | |
Royal Bank of Canada | NOK | 8,084 | USD | 981 | 12/16/15 | 30 | ||
Royal Bank of Canada | ZAR | 1,748 | USD | 125 | 12/15/15 | — | ||
State Street | USD | 876 | AUD | 1,220 | 12/16/15 | (8 | ) | |
State Street | USD | 38 | CAD | 50 | 12/16/15 | 1 | ||
State Street | USD | 119 | CAD | 160 | 12/16/15 | 3 | ||
State Street | USD | 465 | MXN | 7,710 | 12/16/15 | — | ||
State Street | USD | 2,019 | SEK | 17,140 | 12/16/15 | (10 | ) | |
State Street | CAD | 40 | USD | 31 | 12/16/15 | — | ||
State Street | CAD | 120 | USD | 92 | 12/16/15 | — | ||
State Street | CAD | 220 | USD | 166 | 12/16/15 | (2 | ) | |
State Street | CAD | 1,440 | USD | 1,085 | 12/16/15 | (16 | ) | |
State Street | EUR | 940 | USD | 1,039 | 12/16/15 | 4 | ||
State Street | GBP | 1,380 | USD | 2,111 | 12/16/15 | (16 | ) | |
State Street | JPY | 105,610 | USD | 878 | 12/16/15 | 2 | ||
State Street | MXN | 7,700 | USD | 455 | 12/16/15 | (10 | ) | |
State Street | NZD | 3,220 | USD | 2,175 | 12/16/15 | 1 | ||
UBS | USD | 677 | AUD | 969 | 12/16/15 | 12 | ||
UBS | USD | 249 | CAD | 329 | 12/16/15 | 3 | ||
UBS | USD | 259 | CAD | 342 | 12/16/15 | 3 | ||
UBS | USD | 165 | DKK | 1,098 | 12/16/15 | (2 | ) | |
UBS | USD | 1,890 | EUR | 1,680 | 12/16/15 | (43 | ) | |
UBS | USD | 1,072 | GBP | 699 | 12/16/15 | 4 | ||
UBS | USD | 447 | HKD | 3,462 | 12/16/15 | — | ||
UBS | USD | 403 | ILS | 1,568 | 12/16/15 | 2 | ||
UBS | USD | 2,350 | NOK | 20,080 | 12/16/15 | 12 | ||
UBS | USD | 577 | NZD | 908 | 12/16/15 | 36 | ||
UBS | USD | 1,985 | NZD | 3,150 | 12/16/15 | 142 | ||
UBS | USD | 288 | SEK | 2,424 | 12/16/15 | (4 | ) | |
UBS | USD | 542 | SGD | 771 | 12/16/15 | 7 | ||
UBS | CAD | 6,560 | USD | 4,897 | 12/16/15 | (121 | ) | |
UBS | EUR | 3,206 | USD | 3,582 | 12/16/15 | 55 | ||
UBS | JPY | 67,884 | USD | 561 | 12/16/15 | (1 | ) | |
UBS | JPY | 264,910 | USD | 2,210 | 12/16/15 | 13 |
See accompanying notes which are an integral part of the financial statements.
752 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
UBS | NOK | 8,084 | USD | 981 | 12/16/15 | 30 | |
UBS | ZAR | 1,748 | USD | 125 | 12/15/15 | — | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 396 |
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Common Stocks | |||||||||||
Australia | $ | 371 | $ | 41,277 | $ | — | $ | 41,648 | 4.8 | ||
Austria | — | 3,799 | — | 3,799 | 0.4 | ||||||
Belgium | — | 11,598 | — | 11,598 | 1.4 | ||||||
Bermuda | 60 | 7,946 | — | 8,006 | 0.9 | ||||||
Canada | 67,040 | — | — | 67,040 | 7.7 | ||||||
Cayman Islands | — | 989 | 51 | 1,040 | 0.1 | ||||||
Denmark | — | 13,698 | — | 13,698 | 1.6 | ||||||
Finland | — | 7,167 | — | 7,167 | 0.8 | ||||||
France | — | 83,588 | — | 83,588 | 9.7 | ||||||
Germany | — | 64,423 | — | 64,423 | 7.4 | ||||||
Hong Kong | — | 13,564 | — | 13,564 | 1.6 | ||||||
Ireland | 715 | 3,671 | — | 4,386 | 0.5 | ||||||
Isle of Man | — | 12 | — | 12 | —* | ||||||
Israel | 530 | 4,031 | — | 4,561 | 0.5 | ||||||
Italy | — | 25,831 | — | 25,831 | 3.0 | ||||||
Japan | — | 173,959 | — | 173,959 | 20.1 | ||||||
Jersey | — | 6,026 | — | 6,026 | 0.7 | ||||||
Luxembourg | 106 | 2,373 | — | 2,479 | 0.3 | ||||||
Mauritius | — | 145 | — | 145 | —* | ||||||
Netherlands | 1,192 | 24,970 | — | 26,162 | 3.0 | ||||||
New Zealand | — | 1,160 | — | 1,160 | 0.1 | ||||||
Norway | — | 6,230 | — | 6,230 | 0.7 | ||||||
Portugal | — | 2,167 | 3 | 2,170 | 0.3 | ||||||
Singapore | — | 7,240 | — | 7,240 | 0.8 | ||||||
Spain | — | 25,828 | — | 25,828 | 3.0 | ||||||
Sweden | — | 18,772 | — | 18,772 | 2.2 | ||||||
Switzerland | 662 | 71,710 | — | 72,372 | 8.4 | ||||||
United Kingdom | 1,559 | 155,888 | 23 | 157,470 | 18.2 | ||||||
United States | 79 | — | — | 79 | —* | ||||||
Investments in Other Funds | 4,341 | — | — | 4,341 | 0.5 | ||||||
Preferred Stocks | — | 4,555 | — | 4,555 | 0.5 | ||||||
Warrants & Rights | 21 | — | — | 21 | —* | ||||||
Short-Term Investments | — | 2,875 | — | 2,875 | 0.3 | ||||||
Total Investments | 76,676 | 785,492 | 77 | 862,245 | 99.5 | ||||||
Other Assets and Liabilities, Net | 0.5 | ||||||||||
100.0 | |||||||||||
Other Financial Instruments | |||||||||||
Futures Contracts | 303 | — | — | 303 | —* | ||||||
Foreign Currency Exchange Contracts | — | 396 | — | 396 | —* | ||||||
Total Other Financial Instruments** | $ | 303 | $ | 396 | $ | — | $ | 699 |
* Less than .05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments.
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 753
Russell Investment Company
Select International Equity Fund
Schedule of Investments, continued — October 31, 2015
Presentation of Portfolio Holdings | ||||||
Amounts in thousands | ||||||
Fair Value | ||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets |
For a description of the Levels see note 2 in the Notes to Financial Statements.
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial
Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended October
31, 2015 were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
754 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 991 | ||
Variation margin on futures contracts* | 303 | — | ||||
Total | $ | 303 | $ | 991 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Unrealized depreciation on foreign currency exchange contracts | $ | — | $ | 595 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Futures contracts | $ | (500 | ) | $ | — | |
Foreign currency-related transactions** | — | (1,049 | ) | |||
Total | $ | (500 | ) | $ | (1,049 | ) |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | 312 | $ | — | ||
Foreign currency-related transactions*** | — | 396 | ||||
Total | $ | 312 | $ | 396 |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
** Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported
within the Statement of Operations.
*** Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related
transactions reported within the Statement of Operations.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 755
Russell Investment Company
Select International Equity Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||||
Offsetting of Financial Assets and Derivative Assets | ||||||||
Gross | Net Amounts | |||||||
Amounts | of Assets | |||||||
Gross | Offset in the | Presented in | ||||||
Amounts of | Statement of | the Statement | ||||||
Recognized | Assets and | of Assets and | ||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | $ | 991 | $ | — | $ | 991 | |
Total Financial and Derivative Assets | 991 | — | 991 | |||||
Financial and Derivative Assets not subject to a netting agreement | — | — | — | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 991 | $ | — | $ | 991 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Assets | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||
Bank of America | $ | 6 | $ | 6 | $ | — | $ — | ||
Bank of Montreal | 154 | 8 | — | 146 | |||||
Bank of New York | 2 | — | — | 2 | |||||
BNP Paribas | 192 | 192 | — | — | |||||
Citigroup | 2 | — | — | 2 | |||||
HSBC | 152 | 8 | — | 144 | |||||
Royal Bank of Canada | 155 | 8 | — | 147 | |||||
State Street | 12 | 12 | — | — | |||||
UBS | 316 | 169 | — | 147 | |||||
Total | $ | 991 | $ | 403 | $ | — | $ 588 |
See accompanying notes which are an integral part of the financial statements.
756 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 28 | $ | — | $ | 28 | ||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 595 | — | 595 | |||||
Total Financial and Derivative Liabilities | 623 | — | 623 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (28) | — | (28 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 595 | $ | — | $ | 595 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||
Gross Amounts Not Offset in | |||||||||
the Statement of Assets and | |||||||||
Liabilities | |||||||||
Net Amounts | |||||||||
of Liabilities | |||||||||
Presented in | |||||||||
the Statement | Financial and | ||||||||
of Assets and | Derivative | Collateral | |||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||
Bank of America | $ | 40 | $ | 6 | $ | — | $ 34 | ||
Bank of Montreal | 8 | 8 | — | — | |||||
BNP Paribas | 298 | 192 | — | 106 | |||||
HSBC | 8 | 8 | — | — | |||||
Royal Bank of Canada | 8 | 8 | — | — | |||||
State Street | 64 | 12 | — | 52 | |||||
UBS | 169 | 169 | — | — | |||||
Total | $ | 595 | $ | 403 | $ | — | $ 192 |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 757
Russell Investment Company
Select International Equity Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 926,238 |
Investments, at fair value(>) | 862,245 | |
Cash (restricted)(a) | 1,000 | |
Foreign currency holdings(^) | 623 | |
Unrealized appreciation on foreign currency exchange contracts | 991 | |
Receivables: | ||
Dividends and interest | 1,808 | |
Dividends from affiliated Russell funds | 46 | |
Fund shares sold | 216 | |
Foreign capital gains taxes recoverable | 736 | |
Prepaid expenses | 1 | |
Total assets | 867,666 | |
Liabilities | ||
Payables: | ||
Investments purchased | 23 | |
Fund shares redeemed | 84 | |
Accrued fees to affiliates | 248 | |
Other accrued expenses | 244 | |
Variation margin on futures contracts | 28 | |
Unrealized depreciation on foreign currency exchange contracts | 595 | |
Total liabilities | 1,222 | |
Net Assets | $ | 866,444 |
See accompanying notes which are an integral part of the financial statements.
758 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 18,437 | |
Accumulated net realized gain (loss) | (9,142 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | (63,993 | ) | |
Futures contracts | 303 | ||
Foreign currency-related transactions | 370 | ||
Shares of beneficial interest | 949 | ||
Additional paid-in capital | 919,520 | ||
Net Assets | $ | 866,444 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class S(#) | $ | 9.12 | |
Class S — Net assets | $ | 1,679,225 | |
Class S — Shares outstanding ($.01 par value) | 184,045 | ||
Net asset value per share: Class T(#) | $ | 9.14 | |
Class T — Net assets | $ | 2,724,092 | |
Class T — Shares outstanding ($.01 par value) | 298,161 | ||
Net asset value per share: Class Y(#) | $ | 9.13 | |
Class Y — Net assets | $ | 862,040,442 | |
Class Y — Shares outstanding ($.01 par value) | 94,373,909 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 630 | |
(>) Investments in affiliates, Russell U.S. Cash Management Fund | $ | 2,875 | |
(a) Cash Collateral for Futures | $ | 1,000 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 759
Russell Investment Company
Select International Equity Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 25,043 | |
Dividends from affiliated Russell funds | 16 | ||
Interest | 29 | ||
Less foreign taxes withheld | (2,113 | ) | |
Total investment income | 22,975 | ||
Expenses | |||
Advisory fees | 2,938 | ||
Administrative fees | 311 | ||
Custodian fees | 653 | ||
Transfer agent fees - Class S | 3 | ||
Transfer agent fees - Class T | 2 | ||
Transfer agent fees - Class Y | 29 | ||
Professional fees | 110 | ||
Registration fees | 74 | ||
Trustees’ fees | 16 | ||
Printing fees | 56 | ||
Offering fees | 34 | ||
Miscellaneous | 21 | ||
Expenses before reductions | 4,247 | ||
Expense reductions | (1,342 | ) | |
Net expenses | 2,905 | ||
Net investment income (loss) | 20,070 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (8,189 | ) | |
Futures contracts | (500 | ) | |
Foreign currency-related transactions | (1,446 | ) | |
Net realized gain (loss) | (10,135 | ) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments (net of deferred tax liability for foreign capital gains taxes) | (57,350 | ) | |
Futures contracts | 312 | ||
Foreign currency-related transactions | 375 | ||
Net change in unrealized appreciation (depreciation) | (56,663 | ) | |
Net realized and unrealized gain (loss) | (66,798 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (46,728 | ) |
See accompanying notes which are an integral part of the financial statements.
760 Select International Equity Fund
Russell Investment Company
Select International Equity Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | (1) | |||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 20,070 | $ | 460 | ||
Net realized gain (loss) | (10,135 | ) | (358 | ) | ||
Net change in unrealized appreciation (depreciation) | (56,663 | ) | (6,657 | ) | ||
Net increase (decrease) in net assets from operations | (46,728 | ) | (6,555 | ) | ||
Distributions | ||||||
From net investment income | ||||||
Class Y | (755 | ) | — | |||
Net decrease in net assets from distributions | (755 | ) | — | |||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 802,026 | 118,456 | ||||
Total Net Increase (Decrease) in Net Assets | 754,543 | 111,901 | ||||
Net Assets | ||||||
Beginning of period | 111,901 | — | ||||
End of period | $ | 866,444 | $ | 111,901 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 18,437 | $ | 455 |
(1) For the period August 1, 2014 (commencement of operations) to October 31, 2014.
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 761
Russell Investment Company
Select International Equity Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | |||||||||||||
2015 | 2014 (1) | ||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||
Class S (2) | |||||||||||||
Proceeds from shares sold | 235 | $ | 2,236 | — | $ | — | |||||||
Payments for shares redeemed | (51 | ) | (474 | ) | — | — | |||||||
Net increase (decrease) | 184 | 1,762 | — | — | |||||||||
Class T (2) | |||||||||||||
Proceeds from shares sold | 324 | 3,130 | — | — | |||||||||
Payments for shares redeemed | (26 | ) | (244 | ) | — | — | |||||||
Net increase (decrease) | 298 | 2,886 | — | — | |||||||||
Class Y | |||||||||||||
Proceeds from shares sold | 95,343 | 920,901 | 12,448 | 123,949 | |||||||||
Proceeds from reinvestment of distributions | 82 | 755 | — | — | |||||||||
Payments for shares redeemed | (12,928 | ) | (124,278 | ) | (570 | ) | (5,493 | ) | |||||
Net increase (decrease) | 82,497 | 797,378 | 11,878 | 118,456 | |||||||||
Total increase (decrease) | 82,979 | $ | 802,026 | 11,878 | $ | 118,456 |
(1) For the period August 1, 2014 (commencement of operations) to October 31, 2014.
(2) For the period January 5, 2015 (commencement of operations) to October 31, 2015.
See accompanying notes which are an integral part of the financial statements.
762 Select International Equity Fund
(This page intentionally left blank)
Russell Investment Company
Select International Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | $ | |||||||||||
Period | Income (Loss)(a)(d) | Gain (Loss) | Operations | Investment Income | Total Distributions | |||||||||||
Class S | ||||||||||||||||
October 31, 2015(5) | 9.07 | .23 | (.18 | ) | .05 | — | — | |||||||||
Class T | ||||||||||||||||
October 31, 2015(5) | 9.07 | .22 | (.15 | ) | .07 | — | — | |||||||||
Class Y | ||||||||||||||||
October 31, 2015 | 9.42 | .29 | (.52 | ) | (.23 | ) | (.06 | ) | (.06 | ) | ||||||
October 31, 2014(4) | 10.00 | .05 | (.63 | ) | (.58 | ) | — | — | ||||||||
See accompanying notes which are an integral part of the financial statements.
764 Select International Equity Fund
% | % | % | ||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||
End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||
Period | Return(b) | (000 | ) | Gross(e) | Net(d)(e) | Net Assets(d)(e) | Turnover Rate(b) | |||||||
9.12 | .55 | 1,679 | .84 | .64 | 2.91 | 25 | ||||||||
9.14 | .77 | 2,724 | .84 | .49 | 2.77 | 25 | ||||||||
9.13 | (2.43 | ) | 862,041 | .65 | .44 | 3.07 | 25 | |||||||
9.42 | (5.80 | ) | 111,901 | .87 | .44 | 1.90 | 7 |
See accompanying notes which are an integral part of the financial statements.
Select International Equity Fund 765
Russell Investment Company
Russell Funds
Notes to Schedules of Investments — October 31, 2015
Footnotes: | |
(Æ) | Non-Income producing security. |
(Ï) | Forward commitment. |
(Ê) | Adjustable or floating rate security. Rate shown reflects rate in effect at period end. |
(ƒ) | Perpetual floating rate security. Rate shown reflects rate in effect at period end. |
(ö) | Real Estate Investment Trust (REIT). |
(µ) | Bond is insured by a guarantor. |
(Ø) | In default. |
(ç) | At amortized cost, which approximates market value. |
(~ ) | Rate noted is yield-to-maturity from date of acquisition. |
(æ) | Pre-refunded: These bonds are collateralized by U.S. Treasury securities, which are held in escrow by a trustee and used to pay |
principal and interest in the tax-exempt issue and to retire the bonds in full at the earliest refunding date. | |
(§) | All or a portion of the shares of this security are held as collateral in connection with futures contracts purchased (sold) or swap |
contracts entered into by the Fund. | |
(x) | The security is purchased with the cash collateral from 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 is not registered under the Securities Act of 1933. | |
(Å) | Illiquid and restricted security. |
(Û) | All or a portion of the shares of this security are held as collateral in connection with securities sold short. |
(ÿ) | Notional Amount in thousands. |
(8) | Unrounded units. |
(å) | Currency balances were held in connection with futures contracts purchased (sold), options written, or swaps entered into by the |
Fund. See Statement of Assets and Liabilities. | |
(ì) | All or a portion of the shares of this security are held as collateral in connection with options written contracts. |
(v) | Loan agreement still pending. Rate not available at period end. 1.000% Rate is used as a placeholder. |
Abbreviations: | |
ADR - American Depositary Receipt | |
ADS - American Depositary Share | |
BBR - Bank Bill Rate | |
BBSW - Bank Bill Swap Reference Rate | |
BUBOR – Budapest Interbank Offered 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 Bank | |
FDIC - Federal Deposit Insurance Company | |
GDR - Global Depositary Receipt | |
GDS - Global Depositary Share | |
GSCI – Goldman Sachs Commodity Index | |
HIBOR – Hong Kong Interbank Offer Rate | |
JIBAR – Johannesburg Interbank Agreed Rate | |
KSDA – Korean Securities Dealers Association | |
LIBOR - London Interbank Offered Rate | |
MIBOR - Mumbai Interbank Offered Rate | |
NIBOR - Norwegian Interbank Offered Rate | |
PIK - Payment in Kind | |
REMIC - Real Estate Mortgage Investment Conduit | |
STIBOR – Stockholm Interbank Offered Rate | |
STRIP - Separate Trading of Registered Interest and Principal of Securities | |
SFE - Sydney Futures Exchange | |
TBA - To Be Announced Security | |
UK - United Kingdom | |
WTI – West Texas Intermediate | |
Foreign Currency Abbreviations: |
766 Notes to Schedules of Investments
Russell Investment Company
Russell Funds
Notes to Schedules of Investments, continued — October 31, 2015
ARS - Argentine peso | HKD - Hong Kong dollar | PKR - Pakistani rupee |
AUD - Australian dollar | HUF - Hungarian forint | PLN - Polish zloty |
BRL - Brazilian real | IDR - Indonesian rupiah | RON – Romanian New Leu |
CAD - Canadian dollar | ILS - Israeli shekel | RUB - Russian ruble |
CHF - Swiss franc | INR - Indian rupee | SEK - Swedish krona |
CLP - Chilean peso | ISK - Icelandic krona | SGD - Singapore dollar |
CNH – Chinese offshore spot | ITL - Italian lira | SKK - Slovakian koruna |
CNY - Chinese renminbi yuan | JPY - Japanese yen | THB - Thai baht |
COP - Colombian peso | KES - Kenyan schilling | TRY - Turkish lira |
CRC - Costa Rican colon | KRW - South Korean won | TWD - Taiwanese dollar |
CZK - Czech koruna | MXN - Mexican peso | USD - United States dollar |
DKK - Danish krone | MYR - Malaysian ringgit | UYU – Uruguayan peso |
DOP - Dominican peso | NOK - Norwegian krone | VEB - Venezuelan bolivar |
EGP - Egyptian pound | NGN – Nigerian naira | VND - Vietnamese dong |
EUR - Euro | NZD - New Zealand dollar | ZAR - South African rand |
GBP - British pound sterling | PEN - Peruvian nuevo sol | |
GHS - Ghanaian | PHP - Philippine peso |
Notes to Schedules of Investments 767
Russell Investment Company
Russell Funds
Notes to Financial Highlights — October 31, 2015
(1 | ) | For the period February 7, 2012 (commencement of operations) to October 31, 2012. | ||||||||||||
(2 | ) | For the period August 7, 2012 (commencement of operations) to October 31, 2012. | ||||||||||||
(3 | ) | For the period August 16, 2012 (commencement of operations) to October 31, 2012. | ||||||||||||
(4 | ) | For the period August 1, 2014 (commencement of operations) to October 31, 2014. | ||||||||||||
(5 | ) | For the period January 5, 2015 (commencement of operations) to October 31, 2015. | ||||||||||||
(6 | ) | For the period May 4, 2015 (commencement of operations) to October 31, 2015. | ||||||||||||
(7 | ) | For the period June 2, 2015 (commencement of operations) to October 31, 2015. | ||||||||||||
(a) | Average daily shares outstanding were used for this calculation. | |||||||||||||
(b) | The ratios for periods less than one year are not annualized. | |||||||||||||
(c) | Total return for Class A does not reflect a front-end sales charge. If sales charges were included, the total return would be lower. | |||||||||||||
(d) | May reflect amounts waived and/or reimbursed by Russell Investment Management Company (“RIMCo”) and /or Russell Fund Services Company | |||||||||||||
(“RFSC”). | ||||||||||||||
(e) | The ratios for periods less than one year are annualized. | |||||||||||||
(f) | Less than $.01 per share. | |||||||||||||
(g) | For the Russell U.S. Defensive Equity Fund, the respective annualized net expense ratios, not including the dividends and interest expense from | |||||||||||||
short sales, were as follows: | ||||||||||||||
For the period ended | Class A | Class C | Class E | Class I | Class S | Class Y | ||||||||
October 31, 2015 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||
October 31, 2014 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||
October 31, 2013 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||
October 31, 2012 | 1.09 | % | 1.83 | % | 1.03 | % | 0.76 | % | 0.83 | % | 0.65 | % | ||
October 31, 2011 | 1.08 | % | 1.83 | % | 1.01 | % | 0.75 | % | 0.83 | % | 0.65 | % | ||
For the Russell U.S. Dynamic Equity Fund, the respective annualized net expense ratios, not including the dividends and interest expense from short | ||||||||||||||
sales, were as follows: | ||||||||||||||
For the period ended | Class A | Class C | Class E | Class I | Class S | Class Y | ||||||||
October 31, 2015 | 1.36 | % | 2.11 | % | 1.36 | % | 1.03 | % | 1.11 | % | 0.91 | % | ||
October 31, 2014 | 1.34 | % | 2.10 | % | 1.35 | % | 1.00 | % | 1.10 | % | 0.90 | % | ||
October 31, 2013 | 1.35 | % | 2.11 | % | 1.36 | % | 0.98 | % | 1.11 | % | 0.91 | % | ||
For the Russell U.S. Strategic Equity Fund, the respective annualized net expense ratios, not including the dividends and interest expense from short | ||||||||||||||
sales, were as follows: | ||||||||||||||
For the period ended | Class A | Class C | Class E | Class S | ||||||||||
October 31, 2015 | 1.02 | % | 1.77 | % | 1.02 | % | 0.77 | % | ||||||
October 31, 2014 | 1.03 | % | 1.78 | % | 1.03 | % | 0.78 | % | ||||||
October 31, 2013 | 1.10 | % | 1.85 | % | 1.10 | % | 0.85 | % | ||||||
October 31, 2012 | 1.10 | % | 1.85 | % | 1.10 | % | 0.85 | % | ||||||
For the Russell Multi-Strategy Alternative Fund, the respective annualized net expense ratios, not including the dividends and interest expense from | ||||||||||||||
short sales, were as follows: | ||||||||||||||
For the period ended | Class A | Class C | Class E | Class S | ||||||||||
October 31, 2015 | 2.28 | % | 3.04 | % | 2.30 | % | 2.05 | % | ||||||
October 31, 2014 | 2.17 | % | 2.91 | % | 2.17 | % | 1.92 | % | ||||||
October 31, 2013 | 2.20 | % | 2.95 | % | 2.18 | % | 1.93 | % | ||||||
October 31, 2012 | 2.20 | % | 2.93 | % | 2.16 | % | 1.96 | % | ||||||
(h) | Distributions in excess of accumulated earnings and profits but not in excess of current earnings and profits computed on a tax basis. | |||||||||||||
(i) | Less than .005% of average net assets. | |||||||||||||
(†) | For the Russell Cayman Commodity Strategies Fund and the Russell Multi-Strategy Alternative Fund, the Financial Highlights are consolidated and | |||||||||||||
include the balances of the Russell Cayman Commodity Strategies Fund Ltd. and the Russell Multi-Strategy Alternative Fund Ltd. (wholly-owned | ||||||||||||||
subsidiaries), respectively. Accordingly, all interfund balances and transactions have been eliminated. Refer to note 3 in the Notes to the Financial | ||||||||||||||
Statements. |
768 Notes to Financial Highlights
Russell Investment Company
Russell Funds
Notes to Financial Statements — October 31, 2015
1. Organization
Russell Investment Company (the “Investment Company” or “RIC”) is a series investment company with 41 different investment
portfolios referred to as funds (each a “Fund” and collectively the “Funds”). These financial statements report on 27 of these
Funds. The Investment Company is registered under the Investment Company Act of 1940, as amended (“Investment Company
Act”), as an open-end management investment company. It is organized and operated as a Massachusetts business trust under a
Second Amended and Restated Master Trust Agreement dated October 1, 2008, as amended (“Master Trust Agreement”), and the
provisions of Massachusetts law governing the operation of a Massachusetts business trust. 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 Funds’ financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”)
which require the use of management estimates and assumptions at the date of the financial statements. Actual results could differ
from those estimates. The Funds are considered investment companies under U.S. GAAP and follow the accounting and reporting
guidance applicable to investment companies. The following is a summary of the significant accounting policies consistently
followed by each Fund in the preparation of its financial statements.
Security Valuation
The Funds value portfolio securities according to Board-approved securities valuation procedures which include market and fair
value procedures. The Board has delegated the responsibility for administration of the securities valuation procedures to Russell
Fund Services Company (“RFSC”).
U.S. GAAP defines fair value as the price that a Fund would receive to sell an asset or pay to transfer a liability in an orderly
transaction between market participants at the measurement date. It establishes a fair value hierarchy that prioritizes inputs to
valuation methods and requires a separate disclosure of the fair value hierarchy for each major category of assets and liabilities,
that segregates fair value measurements into levels (Level 1, 2, and 3). The inputs or methodology used for valuing securities are
not necessarily an indication of the risk associated with investing in those securities. Levels 1, 2 and 3 of the fair value hierarchy
are defined as follows:
• Level 1 — Quoted prices (unadjusted) in active markets or exchanges for identical assets and liabilities.
• Level 2 — Inputs other than quoted prices included within Level 1 that are observable, which may include, but are not
limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets
or liabilities in markets that are not active, and inputs such as interest rates, yield curves, implied volatilities, credit spreads
or other market corroborated inputs.
• Level 3 — Significant unobservable inputs based on the best information available in the circumstances, to the extent
observable inputs are not available, which may include assumptions made by RFSC, acting at the discretion of the Board,
that are used in determining the fair value of investments.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for
example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and
other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or
unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised
in determining fair value is greatest for instruments categorized in Level 3. The inputs or methodology used for valuing securities
are not necessarily an indication of the risk associated with investing in those securities.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes,
the level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that
is significant to the fair value measurement in its entirety.
The valuation techniques and significant inputs used in determining the fair market values of financial instruments categorized as
Level 1 and Level 2 of the fair value hierarchy are as follows:
Equity securities, including common and preferred stock, that are traded on a national securities exchange (or reported on the
NASDAQ national market), are stated at the last reported sales price on the day of valuation. To the extent these securities are
actively traded, and valuation adjustments are not applied, they are categorized as Level 1 of the fair value hierarchy. Preferred
stock and other equities traded on inactive markets or valued by reference to similar instruments are categorized as Level 2 of the
fair value hierarchy. Certain foreign equity securities may be fair valued using a pricing service that considers the correlation of
Notes to Financial Statements 769
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments such as American Depositary
Receipts, financial futures, exchange-traded funds, and the movement of certain indexes of securities, based on the statistical
analysis of historical relationships. Foreign equity securities prices as described above are categorized as Level 2 of the fair value
hierarchy.
Fixed income securities including corporate, convertible, U.S. government agency, municipal bonds and notes, U.S. treasury
obligations, sovereign issues, bank loans, bank notes and non-U.S. bonds are normally valued by pricing service providers that use
broker dealer quotations or valuation estimates from their internal pricing models. The pricing service providers’ internal models
use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads and
default rates. Such fixed income securities that use pricing service internal models as described above are categorized as Level
2 of the fair value hierarchy. Such fixed income securities that use broker dealer quotations are categorized as Level 3 of the fair
value hierarchy.
Fixed income securities purchased on a delayed-delivery basis and marked-to-market daily until settlement at the forward settlement
date are categorized as Level 2 of the fair value hierarchy.
Mortgage and asset-backed securities are usually issued as separate tranches, or classes, of securities within each deal. These
securities are also normally valued by pricing service providers that use broker dealer quotations or valuation estimates from their
internal pricing models. The pricing models for these securities usually consider tranche-level attributes, including estimated cash
flows of each tranche, market-based yield spreads for each tranche, and current market data, as well as incorporate deal collateral
performance, as available. Mortgage and asset-backed securities that use these and similar valuation techniques and inputs as
described above are categorized as Level 2 of the fair value hierarchy.
Investments in privately held investment funds will be valued based upon the net asset value (“NAV”) of such investments and
are categorized as Level 2 of the fair value hierarchy if the privately-held investment funds’ redemption terms require 90 days
notice or less. If the redemption terms require greater than 90 days notice for redemptions, then the investment will be categorized
as Level 3. The Funds have adopted the authoritative guidance under U.S. GAAP for estimating the fair value of investments in
funds that have calculated NAV per share in accordance with the specialized accounting guidance for investment companies.
Accordingly, the Funds estimate the fair value of an investment in a fund using the NAV per share without further adjustment as a
practical expedient, if the NAV per share of the investment is determined in accordance with the specialized accounting guidance
for investment companies as of the reporting entity’s measurement date.
Short-term investments having a maturity of 60 days or less are generally valued at amortized cost, which approximates fair market
value. These investments are categorized as Level 2 of the fair value hierarchy.
Derivative instruments are instruments such as foreign currency contracts, futures contracts, options contracts, or swap agreements
that derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors.
Derivatives may be classified into two groups depending upon the way that they are traded: privately traded over-the-counter
(“OTC”) derivatives that do not go through an exchange or intermediary and exchange-traded derivatives that are traded through
specialized derivatives exchanges or other regulated exchanges. OTC derivatives are normally valued on the basis of broker dealer
quotations or pricing service providers. Depending on the product and the terms of the transaction, the value of the derivative
instrument can be estimated by a pricing service provider using a series of techniques, including simulation pricing models.
The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest
rates, yield curves, dividends and exchange rates. OTC derivatives that use these and similar valuation techniques and inputs as
described above are categorized as Level 2 of the fair value hierarchy, with the exception of foreign currency spot contracts which
are categorized as Level 1 of the fair value hierarchy. OTC derivatives that use broker dealer quotations are categorized as level 3 of
the fair value hierarchy. Exchange-traded derivatives are valued based on the last reported sales price on the day of valuation and
are categorized as Level 1 of the fair value hierarchy.
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at
the daily settlement price determined by the respective exchange. For centrally cleared credit default swaps, the clearing facility
requires its members to provide actionable levels across complete term structures. These levels along with external third party
prices are used to produce daily settlement prices. These securities are categorized as Level 2 of the fair value hierarchy. Centrally
cleared interest rate swaps are valued using a pricing model that references the underlying rates including the overnight index
swap rate and London Interbank Offered Rate (“LIBOR”) forward rate to produce the daily settlement price. These securities are
categorized as Level 2 of the fair value hierarchy.
770 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
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 NAV of Fund shares is determined may be reflected in the calculation of NAV for each applicable
Fund when the Fund deems that the particular event or circumstance would materially affect such Fund’s NAV. 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. Although there are observable inputs assigned on a security level, prices are derived from factors using
proprietary models or matrix pricing. For this reason, significant events will cause movement between Levels 1 and 2. Significant
events that could trigger fair value pricing of one or more securities include: any market movement of the U.S. securities market;
a company development such as a material business development; a natural disaster or emergency situation; or an armed conflict.
The NAV 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.
The Russell U.S. Core Equity, Russell U.S. Defensive Equity, Russell U.S. Dynamic Equity, Russell U.S. Strategic Equity, Russell
U.S. Large Cap Equity, Russell U.S. Mid Cap Equity, Russell U.S. Small Cap Equity, Russell International Developed Markets,
Russell Tax-Managed U.S. Large Cap, Russell Tax-Managed U.S. Mid & Small Cap, Russell Tax-Managed International Equity,
Russell Tax Exempt High Yield Bond, Russell Tax Exempt Bond, Russell Commodity Strategies, Russell Global Real Estate
Securities, Russell Multi-Strategy Income, Russell Strategic Call Overwriting and Select U.S. Equity Funds had no transfers
between Levels 1, 2 and 3 for the period ended October 31, 2015.
The Russell Global Equity, Russell Emerging Markets, Russell Global Infrastructure and Select International Equity Funds had
transfers out of Level 1 into Level 3 representing financial instruments for which pricing had been determined using observable
inputs that became unobservable. The amounts transferred were as follows:
Russell Global Equity Fund | $ | 36,075 |
Russell Emerging Markets Fund | 6,353,281 | |
Russell Global Infrastructure Fund | 15,731,612 | |
Select International Equity | 50,559 |
The Russell Global Opportunistic Credit, Russell Strategic Bond, Russell Investment Grade Bond and Russell Short Duration Bond
Funds had transfers out of Level 2 into Level 3 representing financial instruments for which pricing had been determined using
observable inputs that became unobservable. The amounts transferred were as follows:
Russell Global Opportunistic Credit Fund | $ | 2,567,100 |
Russell Strategic Bond Fund | 6,908,495 | |
Russell Investment Grade Bond Fund | 3,342,973 | |
Russell Short Duration Bond Fund | 5,149,309 |
The Russell Global Opportunistic Credit, Russell Strategic Bond, Russell Investment Grade Bond, Russell Short Duration Bond
and Russell Multi-Strategy Alternative Funds had transfers out of Level 3 into Level 2 representing financial instruments for which
pricing had been determined using unobservable inputs that became observable. The amounts transferred were as follows:
Russell Global Opportunistic Credit Fund | $ | 1,835,617 |
Russell Strategic Bond Fund | 28,880,928 | |
Russell Investment Grade Bond Fund | 5,199,368 | |
Russell Short Duration Bond Fund | 2,779,057 | |
Russell Multi-Strategy Alternative Fund | 217,799 |
Level 3 Fair Value Investments
The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of
the fair value hierarchy are as follows:
Securities and other assets for which market quotes are not readily available, or are not reliable, are valued at fair value as
determined in good faith by RFSC and are categorized as Level 3 of the fair value hierarchy. Market quotes are considered not
readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or
broker quotes). When RFSC applies fair valuation methods that use significant unobservable inputs to determine a Fund’s NAV,
securities will not be priced on the basis of quotes from the primary market in which they are traded, but instead may be priced by
Notes to Financial Statements 771
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
another method that RFSC believes accurately reflects fair value and will be categorized as Level 3 of the fair value hierarchy. Fair
value pricing may require subjective determinations about the value of a security. While the securities valuation procedures are
intended to result in a calculation of a Fund’s NAV that fairly reflects security values as of the time of pricing, the process cannot
guarantee that fair values determined by RFSC would accurately reflect the price that a Fund could obtain for a security if it were to
dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ
from the value that would be realized if the security was sold.
RFSC employs third party pricing vendors to provide fair value measurements. RFSC oversees third-party pricing service providers
in order to support the valuation process throughout the year.
The significant unobservable input used in fair value measurement of certain of the Funds’ preferred equity securities is the
redemption value calculated on a fully-diluted basis if converted to common stock. Significant increases or decreases in the
redemption value would have a direct and proportional impact to fair value.
The significant unobservable input used in the fair value measurement of certain Funds’ debt securities is the yield to worst ratio.
Significant increases (decreases) in the yield to worst ratio would result in a lower (higher) fair value measurement.
These significant unobservable inputs are further disclosed in the Presentation of Portfolio Holdings for each respective Fund as
applicable.
If third party evaluated vendor pricing is neither available nor deemed to be indicative of fair value, RFSC may elect to obtain
indicative market quotations (“broker quotes”) directly from the broker or passed through from a third party vendor. In the event
that the source of fair value is from a single source broker quote, these securities are classified as Level 3 per the fair value
hierarchy. Broker quotes are typically received from established market participants. Although independently received on a daily
basis, RFSC does not have the transparency to view the underlying inputs which support the broker quotes. Significant changes
in the broker quote would have direct and proportional changes in the fair value of the security. There is a third-party pricing
exception to the quantitative disclosure requirement when prices are not determined by the reporting entity. RFSC is exercising
this exception and has made a reasonable attempt to obtain quantitative information from the third party pricing vendors regarding
the unobservable inputs used.
For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances
for reported fair values that present changes attributable to total realized and unrealized gains or losses, purchases and sales, and
transfers in/out of the Level 3 category during the period. Additionally, U.S. GAAP requires quantitative information regarding the
significant unobservable inputs used in the determination of fair value of assets categorized as Level 3 in the fair value hierarchy. In
accordance with the requirements of U.S. GAAP, a fair value hierarchy, a Level 3 reconciliation and an additional disclosure about
fair value measurements, if any, has been included in the Presentation of Portfolio Holdings for each respective Fund.
Investment Transactions
Investment transactions are reflected as of the trade date for financial reporting purposes. This may cause the NAV stated in the
financial statements to be different from the NAV at which shareholders may transact. Realized gains and losses from securities
transactions, if applicable, 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 as the Funds are informed of the dividend, subsequent to the ex-dividend date. Interest income is
recorded daily on the accrual basis. The Funds classify 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. Debt obligation securities may be placed in a non-accrual status and related interest
income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of
interest has become doubtful.
Federal Income Taxes
Since the Investment Company is a Massachusetts business trust, each Fund is a separate corporate taxpayer and determines its
net investment income and capital gains (or losses) and the amounts to be distributed to each Fund’s shareholders without regard
to the income and capital gains (or losses) of the other Funds.
772 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
For each year, each Fund intends to qualify or continue to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”) and intends to distribute all of its taxable income and capital gains.
Therefore, no federal income tax provision is required for the Funds.
The Russell Commodity Strategies Fund and the Russell Multi-Strategy Alternative Fund intend to gain exposure indirectly to
commodities markets by investing in wholly-owned subsidiaries which are organized as companies under the laws of the Cayman
Islands and may invest in commodity index-linked instruments and other commodity-linked instruments and derivative instruments.
In order for the Funds to qualify as regulated investment companies under Subchapter M of the Code, the Funds must derive at
least 90 percent of their gross income each taxable year from certain qualifying sources of income. The Internal Revenue Service
(“IRS”) has issued a revenue ruling which holds that income derived from commodity-linked swaps is not qualifying income under
Subchapter M of the Code. However, the IRS has also issued private letter rulings to other taxpayers in which the IRS specifically
concluded that income from certain commodity-linked notes is qualifying income and that income derived from a wholly-owned
subsidiary will also constitute qualifying income, even if the subsidiary itself owns commodity-linked swaps and other commodity-
linked derivative instruments. Although those private letter rulings can be relied on only by the taxpayers to whom they were
issued, based on the reasoning in such rulings, the Russell Commodity Strategies Fund and the Russell Multi-Strategy Alternative
Fund may seek to gain exposure to the commodity markets primarily through investments in commodity-linked notes and, through
investments in each respective Subsidiary (as defined in note 3), commodity-linked swaps and other commodity-linked derivative
instruments. The Russell Commodity Strategies Fund has also requested its own such private letter ruling, although the IRS has
suspended the issuance of such rulings pending further internal review. The Russell Multi-Strategy Alternative Fund has not
requested such a ruling due to the IRS suspension. There can be no assurance that the IRS will issue the requested ruling to the
Russell Commodity Strategies Fund, or that the IRS will not change its position based on private letter rulings that income derived
from commodity-linked notes and wholly-owned subsidiaries is qualifying income. The ability of the Russell Commodity Strategies
Fund and Russell Multi-Strategy Alternative Fund to qualify for regulated investment company status under the Code could be
jeopardized if they are unable to treat their income from commodity-linked notes and a wholly-owned subsidiary as qualifying
income. Furthermore, the tax treatment of commodity-linked notes, other commodity-linked derivatives and the Russell Commodity
Strategy and Russell Multi-Strategy Alternative Funds' investments in their repsective Subsidiary, including the wholly-owned
subsidiaries, may otherwise be adversely affected by future legislation, Treasury Regulation and/or guidance issued by the IRS
that could affect the character, timing and/or amount the Funds' taxable income or any gains and distributions made by the Funds.
The Funds comply with the authoritative guidance for uncertainty in income taxes which requires management to determine whether
a tax position of the Funds is more likely than not to be sustained upon examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the
tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being
realized upon ultimate settlement with the relevant taxing authority. Management determined that no accruals need to be made in
the financial statements due to uncertain tax positions. Management continually reviews and adjusts the Funds’ liability for income
taxes based on analyses of tax laws and regulations, as well as their interpretations, and other relevant factors.
Each Fund files a U.S. tax return. At October 31, 2015, the Funds had recorded no liabilities for net unrecognized tax benefits
relating to uncertain income tax positions they have taken or expect to take in future tax returns. While the statute of limitations
remains open to examine the Funds’ U.S. tax returns filed for the fiscal years ended October 31, 2012 through October 31, 2014,
no examinations are in progress or anticipated at this time. The Funds are not aware of any tax positions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
Dividends and Distributions to Shareholders
For all Funds, income and capital gain distributions, if any, are recorded on the ex-dividend date. Income distributions are generally
declared and paid according to the following schedule:
Notes to Financial Statements 773
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Declared | Payable | Funds |
Monthly | Early in the following month | Russell Global Opportunistic Credit, Russell Strategic Bond, |
Russell Investment Grade Bond, Russell Short Duration Bond, | ||
Russell Tax Exempt High Yield Bond and Russell Tax Exempt | ||
Bond Funds | ||
Quarterly | April, July, October and December | Russell U.S. Core Equity, Russell U.S. Defensive Equity, Russell |
U.S. Dynamic Equity, Russell U.S. Strategic Equity, Russell U.S. | ||
Large Cap Equity, Russell U.S. Mid Cap Equity, Russell Global | ||
Infrastructure, Russell Global Real Estate Securities, Russell | ||
Multi-Strategy Income, Russell Strategic Call Overwriting and | ||
Select U.S. Equity Funds | ||
Annually | Mid-December | Russell U.S. Small Cap Equity, Russell International Developed |
Markets, Russell Global Equity, Russell Emerging Markets, | ||
Russell Tax-Managed U.S. Large Cap, Russell Tax-Managed U.S. | ||
Mid & Small Cap, Russell Tax-Managed International Equity, | ||
Russell Commodity Strategies, Russell Multi-Strategy Alternative | ||
and Select International Equity Funds |
Capital gain distributions are generally declared and paid annually. An additional distribution may be paid by the Funds to avoid
imposition of federal income and excise tax on any remaining undistributed capital gains and net investment income.
The timing and characterization of certain income and capital gain distributions are determined in accordance with federal tax
regulations which may differ from U.S. GAAP. As a result, net investment income and net realized gain (or loss) on investments
and foreign currency-related transactions for a reporting period may differ significantly from distributions during such period. The
differences between tax regulations and U.S. GAAP primarily relate to investments in options, futures, forward contracts, swap
contracts, passive foreign investment companies, foreign-denominated investments, mortgage-backed securities, certain securities
sold at a loss, wash sale deferrals and capital loss carryforwards. Accordingly, the Funds may periodically make reclassifications
among certain of their capital accounts without impacting their NAVs.
Expenses
The Funds pay their own expenses other than those expressly assumed by Russell Investment Management Company (“RIMCo”),
the Funds’ adviser, or RFSC. Most expenses can be directly attributed to the individual Funds. Expenses which cannot be directly
attributed to a specific Fund are allocated among all Funds principally based on their relative net assets.
Class Allocation
Each of the Funds presented herein may offer certain of the following classes of shares: Class A, Class C, Class E, Class I,
Class S, Class T and Class Y. All share classes have identical voting, dividend, liquidation and other rights, preferences, powers,
restrictions, limitations, qualifications and the same terms and conditions. The separate classes of shares differ principally in the
applicable transfer agent fees, distribution fees and shareholder servicing fees. Shareholders of each class bear certain expenses
that pertain to that particular class. Realized and unrealized gains (losses), investment income and expenses, with the exception
of class level expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class.
Foreign Currency Translations
The books and records of the Funds are maintained in U.S. dollars. Foreign currency amounts and transactions of the Funds are
translated into U.S. dollars on the following basis:
(a) Fair value of investment securities, other assets and liabilities at the closing rate of exchange on the valuation date.
(b) Purchases and sales of investment securities and income at the closing rate of exchange prevailing on the respective trade
dates of such transactions.
Net realized gains or losses from foreign currency-related transactions arise from: sales and maturities of short-term securities;
sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; the
difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’ books and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized gains or losses from foreign currency-related transactions
arise from changes in the value of assets and liabilities, other than investments in securities, as a result of changes in the exchange
rates.
774 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
The Funds do not isolate that portion of the results of operations of the Funds that arises as a result of changes in exchange rates
from that portion that arises from changes in market prices of investments during the year. Such fluctuations are included with the
net realized and unrealized gain or loss from investments. However, for federal income tax purposes, the Funds do isolate the effects
of changes in foreign exchange rates from the fluctuations arising from changes in market prices for realized gain (or loss) on debt
obligations.
Capital Gains Taxes
The Russell International Developed Markets, Russell Global Equity, Russell Emerging Markets, Russell Tax-Managed International
Equity, Russell Global Opportunistic Credit, Russell Global Infrastructure, Russell Global Real Estate Securities, Russell Multi-
Strategy Alternative, Russell Multi-Strategy Income and Select International Equity Funds may be subject to capital gains taxes
and repatriation taxes imposed by certain countries in which they invest. The Funds may record a deferred capital gains tax liability
with respect to the unrealized appreciation on foreign securities for potential capital gains and repatriation taxes as of October 31,
2015. The accrual for capital gains and repatriation taxes is included in net unrealized appreciation (depreciation) on investments
in the Statements of Assets and Liabilities. The amounts related to capital gains and repatriation taxes are included in net realized
gain (loss) on investments in the Statements of Operations for the following Funds:
Deferred Capital | |||||
Gains Tax | Capital Gains | ||||
Liability | Taxes | ||||
Russell International Developed Markets Fund | $ | — | $ | 43,796 | |
Russell Emerging Markets Fund | 1,020,055 | 1,418,295 | |||
Russell Tax-Managed International Equity Fund | 6,457 | — | |||
Russell Global Opportunistic Credit Fund | — | 137,284 | |||
Russell Global Infrastructure Fund | — | 146,408 | |||
Russell Multi-Strategy Income Fund | 19,145 | 2,933 |
Derivatives
Certain Funds may invest in derivatives. Derivative securities are instruments or agreements whose value is derived from an
underlying security or index. They include options, futures, swaps and forwards. These instruments offer unique characteristics and
risks that facilitate the Funds’ investment strategies.
The Funds typically use derivatives in three ways: exposing cash to markets, hedging and return enhancement. In addition, certain
Funds may enter into foreign exchange contracts for trade settlement purposes. Certain Funds may pursue their strategy of being
fully invested by exposing cash to the performance of appropriate markets by purchasing securities and/or derivatives. This is
intended to cause the Funds to perform as though cash were actually invested in those markets.
Hedging may be used by certain 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, including using derivatives as a substitute for
holding physical securities, and using them to express various macro views (e.g., interest rate movements, currency movements,
and macro credit strategies). By purchasing certain instruments, the Funds may more effectively achieve the desired portfolio
characteristics that assist them in meeting their investment objectives. Depending on how the derivatives are structured and
utilized, the risks associated with them may vary widely. These risks include, but are not limited to, market risk, liquidity risk,
leveraging risk, counterparty risk, basis risk, reinvestment risk, political risk, prepayment risk, extension risk, valuation risk and
credit risk.
Futures, certain options and cleared swaps are traded or cleared on an exchange or central exchange clearing house. Exchange-
traded or exchange-cleared transactions generally present less counterparty risk to a Fund. The exchange’s clearinghouse stands
between the Fund and the broker to the contract and therefore, credit risk is generally limited to the failure of the clearing
house and the clearing member. Cleared swap contracts are subject to clearing house rules, including initial and variation margin
requirement, daily settlement of obligations and the clearing house guarantee of payments to the broker. There is, however, still
counterparty risk due to the insolvency of the broker with respect to any margin held in the brokers’ customer accounts. While
clearing members are required to segregate customer assets from their own assets, in the event of insolvency, there may be a
shortfall in the amount of margin held by the broker for its clients. Collateral and margin requirements for exchange-traded or
exchange-cleared derivatives are established through regulation, as well as set by the broker or applicable clearinghouse. Margin
for exchange-traded and exchange-cleared transactions are detailed in the Statements of Assets and Liabilities as cash held at the
Notes to Financial Statements 775
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
broker for futures contracts and cash held at the broker for swap contracts, respectively. Securities pledged by a Fund for exchange-
traded and exchange-cleared transactions are noted as collateral or margin requirements in the Schedule of Investments.
The effects of derivative instruments, categorized by risk exposure, on the Statements of Assets and Liabilities and the Statements
of Operations, for the period ended October 31, 2015, if applicable, are disclosed in the Fair Value of Derivative Instruments table
following each applicable Fund’s Schedule of Investments.
Foreign Currency Exchange Contracts
In connection with investment transactions consistent with the Funds’ investment objectives and strategies, certain Funds may
enter into foreign currency exchange spot contracts and forward foreign currency exchange contracts (“FX contracts”). From time
to time, certain Funds may enter into FX contracts to hedge certain foreign currency-denominated assets. FX contracts are recorded
at fair value. Certain risks may arise upon entering into these FX contracts from the potential inability of counterparties to meet the
terms of their FX contracts and are generally limited to the amount of unrealized gain on the FX contracts, if any, that are disclosed
in the Statements of Assets and Liabilities.
For the period ended October 31, 2015, the following Funds entered into foreign currency exchange contracts primarily for the
strategies listed below:
Funds | Strategies |
Russell International Developed Markets Fund | Return enhancement, hedging, exposing cash to markets, and trade settlement |
Russell Global Equity Fund | Return enhancement, hedging, exposing cash to markets, and trade settlement |
Russell Emerging Markets Fund | Exposing cash to markets and trade settlement |
Russell Tax-Managed International Equity Fund | Exposing cash to markets and trade settlement |
Russell Global Opportunistic Credit Fund | Return enhancement and hedging |
Russell Strategic Bond Fund | Return enhancement and hedging |
Russell Investment Grade Bond Fund | Return enhancement and hedging |
Russell Short Duration Bond Fund | Return enhancement and hedging |
Russell Global Infrastructure Fund | Exposing cash to markets and trade settlement |
Russell Global Real Estate Securities Fund | Exposing cash to markets and trade settlement |
Russell Multi-Strategy Alternative Fund | Return enhancement and hedging |
Russell Multi-Strategy Income Fund | Return enhancement, hedging, and exposing cash to markets |
Select International Equity Fund | Return enhancement, hedging, exposing cash to markets, and trade settlement |
The Funds’ foreign currency contract notional dollar values outstanding fluctuate throughout the fiscal year as required to meet
strategic requirements. The following tables illustrate the quarterly volume of foreign currency contracts. For the purpose of this
disclosure, volume is measured by the amounts bought and sold in USD.
Outstanding Contract Amounts Sold | ||||||||||||
Quarter Ended | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | ||||||||
Russell International Developed Markets Fund | $ | 1,061,467,472 | $ | 1,000,580,215 | $ | 1,344,173,128 | $ | 662,980,375 | ||||
Russell Global Equity Fund | 293,760,104 | 297,201,503 | 271,729,635 | 597,389,331 | ||||||||
Russell Emerging Markets Fund | 404,268,851 | 793,986,955 | 377,019,103 | 331,201,218 | ||||||||
Russell Tax-Managed International Equity Fund | — | — | 2,015,088 | 1,101,088 | ||||||||
Russell Global Opportunistic Credit Fund | 410,858,727 | 362,360,171 | 379,786,266 | 389,715,427 | ||||||||
Russell Strategic Bond Fund | 3,629,567,694 | 2,930,720,939 | 3,269,748,684 | 2,065,090,181 | ||||||||
Russell Investment Grade Bond Fund | 480,873,081 | 406,706,689 | 371,590,923 | 232,698,661 | ||||||||
Russell Short Duration Bond Fund | 172,172,714 | 161,707,345 | 123,363,839 | 53,308,181 | ||||||||
Russell Global Infrastructure Fund | 116,475,375 | 105,155,269 | 72,749,882 | 82,130,840 | ||||||||
Russell Global Real Estate Securities Fund | 63,357,888 | 65,746,338 | 58,343,107 | 63,020,810 | ||||||||
Russell Multi-Strategy Alternative Fund | 3,455,143,357 | 4,430,945,141 | 3,049,344,885 | 921,235,544 | ||||||||
Russell Multi-Strategy Income Fund | — | — | 31,506,784 | 28,358,173 | ||||||||
Select International Equity Fund | 1,042,757 | 111,495,928 | 96,764,764 | 87,350,690 |
776 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Outstanding Contract Amounts Bought | ||||||||||||
Quarter Ended | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | ||||||||
Russell International Developed Markets Fund | $ | 1,050,195,869 | $ | 1,008,476,538 | $ | 1,337,139,673 | $ | 665,117,574 | ||||
Russell Global Equity Fund | 298,793,625 | 291,614,406 | 273,927,421 | 597,991,618 | ||||||||
Russell Emerging Markets Fund | 402,782,165 | 800,248,274 | 377,132,002 | 331,661,700 | ||||||||
Russell Tax-Managed International Equity Fund | — | — | 2,007,687 | 1,090,925 | ||||||||
Russell Global Opportunistic Credit Fund | 420,300,520 | 358,801,572 | 383,628,620 | 392,971,690 | ||||||||
Russell Strategic Bond Fund | 3,639,522,789 | 2,916,915,237 | 3,291,516,670 | 2,063,672,499 | ||||||||
Russell Investment Grade Bond Fund | 478,882,905 | 405,960,167 | 372,797,092 | 233,699,385 | ||||||||
Russell Short Duration Bond Fund | 171,463,169 | 161,184,411 | 124,104,727 | 53,497,260 | ||||||||
Russell Global Infrastructure Fund | 114,594,622 | 106,151,861 | 71,958,398 | 82,055,313 | ||||||||
Russell Global Real Estate Securities Fund | 62,560,197 | 66,343,506 | 58,126,541 | 62,731,271 | ||||||||
Russell Multi-Strategy Alternative Fund | 3,435,764,505 | 4,438,648,155 | 3,043,784,519 | 921,686,385 | ||||||||
Russell Multi-Strategy Income Fund | — | — | 31,657,443 | 28,375,698 | ||||||||
Select International Equity Fund | 1,040,499 | 111,569,494 | 96,759,149 | 87,745,771 |
Options
Certain Funds may purchase and sell (write) call and put options on securities and securities indices. Such options are traded on
a national securities exchange or in an OTC market. The Funds may also purchase and sell (write) call and put options on foreign
currencies.
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 fair 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 the value of the underlying instrument 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 instrument.
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.
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.
Certain Funds may enter into a swaption (an option on a swap). In a swaption, in exchange for an option, 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.
As of October 31, 2015, the Russell Strategic Call Overwriting Fund pledged securities valued at $36,288,510 as collateral in
connection with options.
For the period ended October 31, 2015, the Funds purchased or sold options primarily for the strategies listed below:
Funds | Strategies |
Russell U.S. Defensive Equity Fund | Exposing cash to markets |
Russell Strategic Bond Fund | Return enhancement and hedging |
Russell Investment Grade Bond Fund | Return enhancement and hedging |
Russell Multi-Strategy Alternative Fund | Return enhancement and hedging |
Russell Multi-Strategy Income Fund | Return enhancement and hedging |
Russell Strategic Call Overwriting Fund | Return enhancement and hedging |
Notes to Financial Statements 777
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
The Funds’ options contracts notional amounts fluctuate throughout the fiscal year as required to meet strategic requirements. The
following table illustrates the quarterly activity of options contracts measured by notional in USD.
Notional of Options Contracts Opened or Closed | |||||||||||||
Funds | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | |||||||||
Russell U.S. Defensive Equity Fund | Opened | $ | 134,209,000 | $ | 140,388,500 | $ | 166,863,500 | $ | 211,648,500 | ||||
Closed | 118,650,500 | 139,020,500 | 166,060,500 | 219,220,500 | |||||||||
Russell Strategic Bond Fund | Opened | — | 429,715 | 964,043 | — | ||||||||
Closed | — | 156,690,849 | 1,408,639 | — | |||||||||
Russell Investment Grade Bond Fund | Closed | — | 32,310,193 | — | — | ||||||||
Russell Multi-Strategy Alternative Fund | Opened | 67,255,723,370 | 83,409,438,425 | 52,268,855,058 | 941,879,590 | ||||||||
Closed | 29,128,541,006 | 65,698,178,129 | 22,694,225,717 | 36,953,850,999 | |||||||||
Russell Multi-Strategy Income Fund | Opened | — | — | 2,683,370 | — | ||||||||
Closed | — | — | 2,683,370 | — | |||||||||
Russell Strategic Call Overwriting Fund | Opened | 2,031,498,000 | 640,409,000 | 775,338,400 | 1,300,861,850 | ||||||||
Closed | 2,032,653,000 | 640,109,500 | 776,934,500 | 1,299,617,750 |
Futures Contracts
Certain Funds may invest in futures contracts (i.e., interest rate, foreign currency, index futures contracts) and commodity futures
contracts (Russell Commodity Strategies Fund and Russell Multi-Strategy Alternative Fund only). The face or contract value 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 fair value of the securities held by the Funds 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% to 10% of the purchase price indicated in the
futures contract. Payments to and from the broker, known as variation margin, are typically 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 October 31, 2015, the following Funds entered into futures contracts primarily for the strategies listed below:
Funds | Strategies |
Russell U.S. Core Equity Fund | Exposing cash to markets |
Russell U.S. Defensive Equity Fund | Exposing cash to markets |
Russell U.S. Dynamic Equity Fund | Exposing cash to markets |
Russell U.S. Strategic Equity Fund | Exposing cash to markets |
Russell U.S. Large Cap Equity Fund | Exposing cash to markets |
Russell U.S. Mid Cap Equity Fund | Exposing cash to markets |
Russell U.S. Small Cap Equity Fund | Exposing cash to markets |
Russell International Developed Markets Fund | Return enhancement, hedging and exposing cash to markets |
Russell Global Equity Fund | Return enhancement, hedging and exposing cash to markets |
Russell Emerging Markets Fund | Exposing cash to markets |
Russell Tax-Managed U.S. Large Cap Fund | Exposing cash to markets |
Russell Tax-Managed U.S. Mid & Small Cap Fund | Exposing cash to markets |
Russell Tax-Managed International Equity Fund | Exposing cash to markets |
Russell Global Opportunistic Credit Fund | Return enhancement, hedging and exposing cash to markets |
Russell Strategic Bond Fund | Return enhancement, hedging and exposing cash to markets |
Russell Investment Grade Bond Fund | Return enhancement, hedging and exposing cash to markets |
Russell Short Duration Bond Fund | Return enhancement, hedging and exposing cash to markets |
Russell Commodity Strategies Fund | Return enhancement |
Russell Global Infrastructure Fund | Exposing cash to markets |
Russell Global Real Estate Securities Fund | Exposing cash to markets |
Russell Multi-Strategy Alternative Fund | Return enhancement and hedging |
Russell Multi-Strategy Income Fund | Return enhancement, hedging and exposing cash to markets |
Russell Strategic Call Overwriting Fund | Hedging and exposing cash to markets |
Select U.S. Equity Fund | Exposing cash to markets |
Select International Equity Fund | Return enhancement, hedging and exposing cash to markets |
The Funds' futures contracts notional amounts fluctuate throughout the fiscal year as required to meet strategic requirements. The
following table illustrates the quarterly activity of futures contracts measured by notional in USD.
778 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Notional of Futures Contracts Opened or Closed | |||||||||||||
Funds | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | |||||||||
Russell U.S. Core Equity Fund | Opened | $ | 204,693,036 | $ | 771,309,807 | $ | 107,139,493 | $ | 68,136,058 | ||||
Closed | 194,711,548 | 795,189,835 | 108,631,908 | 85,908,777 | |||||||||
Russell U.S. Defensive Equity Fund | Opened | 95,893,876 | 70,520,007 | 82,014,875 | 99,261,327 | ||||||||
Closed | 107,540,977 | 67,917,569 | 81,767,234 | 82,979,794 | |||||||||
Russell U.S. Dynamic Equity Fund | Opened | 85,283,162 | 73,448,794 | 67,002,029 | 68,730,473 | ||||||||
Closed | 82,878,508 | 76,902,018 | 68,705,128 | 70,650,927 | |||||||||
Russell U.S. Strategic Equity Fund | Opened | 228,365,497 | 585,959,211 | 226,747,363 | 255,039,918 | ||||||||
Closed | 273,009,591 | 457,209,666 | 306,233,157 | 272,649,251 | |||||||||
Russell U.S. Large Cap Equity Fund | Opened | 40,776,021 | 39,495,650 | 41,365,760 | 45,840,290 | ||||||||
Closed | 40,753,984 | 39,368,562 | 47,633,752 | 45,078,393 | |||||||||
Russell U.S. Mid Cap Equity Fund | Opened | 19,563,229 | 19,008,241 | 14,331,411 | 22,155,236 | ||||||||
Closed | 15,537,947 | 24,606,064 | 15,227,039 | 21,094,795 | |||||||||
Russell U.S. Small Cap Equity Fund | Opened | 252,811,645 | 241,165,947 | 197,623,415 | 163,529,180 | ||||||||
Closed | 273,795,486 | 277,329,412 | 187,668,601 | 168,509,259 | |||||||||
Russell International Developed Markets Fund | Opened | 1,234,777,945 | 1,686,499,791 | 1,516,451,874 | 1,004,662,779 | ||||||||
Closed | 1,204,961,680 | 1,822,650,335 | 1,468,838,035 | 1,096,855,726 | |||||||||
Russell Global Equity Fund | Opened | 622,697,110 | 727,509,360 | 575,203,536 | 849,540,341 | ||||||||
Closed | 895,000,529 | 660,603,283 | 657,939,711 | 633,876,282 | |||||||||
Russell Emerging Markets Fund | Opened | 290,354,095 | 844,559,361 | 387,841,018 | 264,593,654 | ||||||||
Closed | 293,203,357 | 822,266,730 | 402,925,478 | 263,301,183 | |||||||||
Russell Tax-Managed U.S. Large Cap Fund | Opened | 201,074,563 | 145,009,781 | 157,741,342 | 170,826,702 | ||||||||
Closed | 212,678,544 | 155,246,318 | 122,178,928 | 187,083,366 | |||||||||
Russell Tax-Managed U.S. Mid & Small Cap Fund | Opened | 36,734,554 | 45,256,340 | 58,973,229 | 37,643,066 | ||||||||
Closed | 34,027,739 | 50,156,088 | 61,183,481 | 37,579,318 | |||||||||
Russell Tax-Managed International Equity Fund | Opened | — | — | 448,829,942 | 90,051,321 | ||||||||
Closed | — | — | 418,887,236 | 93,085,498 | |||||||||
Russell Global Opportunistic Credit Fund | Opened | 176,606,847 | 750,740,454 | 284,791,165 | 159,836,854 | ||||||||
Closed | 176,552,969 | 497,314,208 | 458,709,776 | 304,923,430 | |||||||||
Russell Strategic Bond Fund | Opened | 4,109,597,413 | 6,379,245,942 | 3,496,405,277 | 2,420,164,678 | ||||||||
Closed | 4,172,773,143 | 6,085,603,170 | 4,190,704,652 | 3,243,172,212 | |||||||||
Russell Investment Grade Bond Fund | Opened | 356,540,000 | 989,767,468 | 274,628,030 | 162,785,262 | ||||||||
Closed | 363,278,287 | 846,159,483 | 484,386,729 | 304,543,626 | |||||||||
Russell Short Duration Bond Fund | Opened | 386,686,385 | 555,008,121 | 549,896,121 | 178,736,912 | ||||||||
Closed | 402,624,507 | 617,566,587 | 581,937,250 | 288,149,509 | |||||||||
Russell Commodity Strategies Fund | Opened | 20,908,693 | — | 8,565,931 | 2,857,795 | ||||||||
Closed | 5,811,870 | 13,373,917 | 8,415,310 | — | |||||||||
Russell Global Infrastructure Fund | Opened | 154,524,269 | 343,710,780 | 148,686,321 | 123,658,582 | ||||||||
Closed | 169,971,921 | 356,641,151 | 123,361,135 | 138,157,180 | |||||||||
Russell Global Real Estate Securities Fund | Opened | 82,800,955 | 183,637,097 | 83,232,411 | 100,071,367 | ||||||||
Closed | 68,666,823 | 211,417,819 | 57,525,696 | 98,285,251 | |||||||||
Russell Multi-Strategy Alternative Fund | Opened | 2,352,431,339 | 1,902,879,726 | 2,301,535,246 | 1,382,883,870 | ||||||||
Closed | 1,794,250,027 | 2,391,121,125 | 2,612,619,354 | 1,366,627,381 | |||||||||
Russell Multi-Strategy Income Fund | Opened | — | — | 189,240,143 | 78,797,572 | ||||||||
Closed | — | — | 137,984,598 | 70,101,601 | |||||||||
Russell Strategic Call Overwriting Fund | Opened | 375,895,673 | 17,616,044 | 9,018,359 | 27,617,241 | ||||||||
Closed | 373,671,247 | 18,887,782 | 13,716,065 | 23,778,024 | |||||||||
Select U.S. Equity Fund | Opened | 29,217,465 | 301,133,946 | 65,037,164 | 160,149,305 |
Notes to Financial Statements 779
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Notional of Futures Contracts Opened or Closed | ||||||||||
Closed | 29,854,233 | 155,572,869 | 194,776,667 | 147,663,829 | ||||||
Select International Equity Fund | Opened | 27,886,411 | 140,208,339 | 37,655,120 | 33,359,255 | |||||
Closed | 31,429,944 | 117,346,038 | 52,419,609 | 37,234,627 |
Swap Agreements
Certain 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 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 swap agreements including credit default, interest rate, commodity-linked
(Russell Commodity Strategies Fund and Russell Multi-Strategy Alternative Fund only), total return (equity and/or index) and
currency swaps. Credit default swaps are a counterparty agreement which allows the transfer of third party credit risk (the
possibility that an issuer will default on its 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. Interest rate swaps are a counterparty agreement, can be customized to meet each party’s needs,
and involve the exchange of a fixed or variable payment per period for a payment that is not fixed. Equity swaps are a counterparty
agreement where two parties exchange two sets of cash flows on predetermined dates for an agreed upon amount of time. The cash
flows will typically be an equity index value swapped with a floating rate such as LIBOR plus or minus a pre-defined spread. Index
swap agreements are a counterparty agreement intended to expose cash to markets or to effect investment transactions consistent
with those Funds’ investment objectives and strategies. Currency swaps are a counterparty agreement where two parties exchange
specified amounts of different currencies which are followed by each paying the other a series of interest payments that are based
on the principal cash flow. At maturity the principal amounts are returned.
The Funds generally expect to enter into these transactions primarily to preserve a return or spread on a particular investment or
portion of their portfolios or to protect against any increase in the price of securities they anticipate purchasing at a later date, or for
return enhancement. Under most swap agreements entered into by a Fund, the parties' obligations are determined on a "net basis".
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 assets having an aggregate NAV at least equal to the accrued excess will be segregated.
To the extent that the Funds enter into swaps on other than a net basis, the amount maintained in a segregated account will be the
full amount of the Funds’ obligations, if any, with respect to such 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.
Credit Default Swaps
Certain Funds may enter into credit default swaps. A credit default swap can refer to corporate issues, asset-backed securities or an
index of assets, each known as the reference entity or underlying asset. Funds 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 Funds may be unable
to deliver the underlying debt security to the other party to the agreement. Additionally, the Funds 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, Funds enter into a credit default swap without owning the underlying asset or debt issued by the reference entity. Credit
default swaps allow Funds to acquire or reduce credit exposure to a particular issuer, asset or basket of assets.
As the seller of protection in a credit default swap, a 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) and 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
780 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
credit event occurs, the Fund would keep the stream of payments and would have no payment obligations. As a seller of protection,
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.
Certain Funds may also purchase protection via credit default swap contracts in order to offset the risk of default of debt securities
held their portfolios or to take a short position in a debt security, in which case the Fund would function as the counterparty
referenced in the preceding paragraph.
If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of
the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer
of protection’s right to choose the deliverable obligation with the lowest value following a credit event). Certain Funds may use
credit default swaps to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where Funds own or have
exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood (as measured by the
credit default swap’s spread) of a particular issuer’s default.
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 writedown
or loss events on the underlying mortgage loans will reduce the 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. Certain Funds may use credit default swaps on asset-backed
securities to provide a measure of protection against defaults (or other defined credit events) of the referenced obligation or to take
an active long or short position with respect to the likelihood of a particular referenced obligation’s default (or another 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 a basket of credit instruments or exposures designed to be
representative of some part of the credit market as a whole. These indices are made up of reference credits that are judged by a
poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the
indices may include, but are not limited to, investment grade securities, high yield securities, asset-backed securities, emerging
markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized
terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and
if there is a default, the credit event is settled based on that name’s weight in the index. The composition of the indices changes
periodically, usually every six months, and, for most indices, each name has an equal weight in the index. Traders may use credit
default swaps on indices to speculate on changes in credit quality.
Implied credit spreads, represented in absolute terms, utilized in determining the fair value of credit default swap agreements on
corporate issues as of period-end are disclosed in the Schedules of Investments and generally serve as an indicator of the current
status of the payment/performance risk and represent the likelihood or risk of default (or other defined credit event) for the credit
derivative. The implied credit spread of a particular referenced entity reflects the cost of entering into a credit default swap and
may include upfront payments required to be made to enter into the agreement. For credit default swap agreements on asset-
backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of
the payment/performance risk. Wider credit spreads and increasing fair 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 Funds as a seller of protection could be required to make under a credit default swap agreement
equals the notional amount of the agreement. Notional amounts of all credit default swap agreements outstanding as of October 31,
2015, for which a Fund is the seller of protection are disclosed in the Schedules of Investments. These potential amounts would be
partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the
agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by a Fund for
the same referenced entity or entities.
Credit default swaps could result in losses if the Funds do not correctly evaluate the creditworthiness of the company or companies
on which the credit default swap is based. Credit default swap agreements may involve greater risks than if the Funds had invested
in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject
to illiquidity and counterparty risk. A Fund will generally incur a greater degree of risk when it sells a credit default swap than
Notes to Financial Statements 781
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
when it purchases a credit default swap. As a buyer of a credit default swap, a 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 a 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 a 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 Funds will only enter
into swap agreements with counterparties that meet certain standards of creditworthiness. Although there can be no assurance that
the Funds will be able to do so, the Funds may be able to reduce or eliminate their 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 Funds may have limited ability to eliminate their exposure under a credit default swap if the credit quality of the reference
entity or underlying asset has declined.
For the period ended October 31, 2015, the Funds entered into credit default swaps primarily for the strategies listed below:
Funds | Strategies |
Russell Global Opportunistic Credit Fund | Return enhancement and exposing cash to markets |
Russell Strategic Bond Fund | Return enhancement, hedging and exposing cash to markets |
Russell Investment Grade Bond Fund | Return enhancement, hedging and exposing cash to markets |
Russell Short Duration Bond Fund | Return enhancement and hedging |
Russell Multi-Strategy Alternative Fund | Return enhancement and hedging |
Russell Multi-Strategy Income Fund | Return enhancement and hedging |
The Funds' credit default swap contract notional amounts outstanding fluctuate throughout the fiscal year as required to meet
strategic requirements. The following table illustrates the quarterly volume of credit default swap contracts. For the purpose of this
disclosure, the volume is measured by the base notional amounts outstanding at each quarter end.
Credit Default Swap Notional Amounts Outstanding | ||||||||||||
Quarter Ended | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | ||||||||
Russell Global Opportunistic Credit Fund | $ | 75,689,996 | $ | 158,685,496 | $ | 74,075,508 | $ | 91,934,055 | ||||
Russell Strategic Bond Fund | 61,010,000 | 10,245,000 | 12,784,000 | 3,460,000 | ||||||||
Russell Investment Grade Bond Fund | 1,000,000 | — | — | — | ||||||||
Russell Short Duration Bond Fund | 4,570,000 | — | — | — | ||||||||
Russell Multi-Strategy Alternative Fund | 939,198,914 | 411,663,360 | 487,003,973 | 410,468,962 | ||||||||
Russell Multi-Strategy Income Fund | — | — | 6,930,000 | 10,600,000 |
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 RIMCo or a money manager using this technique is incorrect in its
forecast of fair values, interest rates and other applicable factors, the investment performance of a Fund might diminish compared
to what it would have been if this investment technique were not used.
Interest rate swaps do not involve the delivery of securities or other underlying assets or principal. Accordingly, the risk of loss
with respect to interest rate swaps is limited to the net amount of interest payments that the Funds are contractually obligated to
make. Interest rate swaps are traded on exchanges and are subject to central clearing. If the clearing house or futures commission
merchant defaults, the Funds' risk of loss consists of the net amount of interest payments that the Funds are contractually entitled
to receive. The counterparty risk for cleared derivatives is generally lower than for uncleared derivatives. However, clearing may
subject the Fund to increased costs or margin requirements.
For the period ended October 31, 2015, the Funds entered into interest rate swaps primarily for the strategies listed below: | |
Funds | Strategies |
Russell Global Opportunistic Credit Fund | Return enhancement and hedging |
Russell Strategic Bond Fund | Return enhancement and hedging |
Russell Investment Grade Bond Fund | Return enhancement and hedging |
Russell Tax Exempt High Yield Bond Fund | Return enhancement and hedging |
Russell Multi-Strategy Alternative Fund | Return enhancement and hedging |
The Funds’ interest rate swap contract notional amounts outstanding fluctuate throughout the fiscal year as required to meet
782 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
strategic requirements. The following table illustrates the quarterly volume of interest rate swap contracts. For the purpose of this
disclosure, the volume is measured by the base notional amounts outstanding at each quarter end.
Interest Rate Swap Notional Amounts Outstanding | ||||||||||||
Quarter Ended | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | ||||||||
Russell Global Opportunistic Credit Fund | $ | 19,206,214 | $ | — | $ | — | $ | — | ||||
Russell Strategic Bond Fund | 118,715,643 | 174,317,030 | 231,916,705 | 67,798,394 | ||||||||
Russell Investment Grade Bond Fund | 14,330,000 | 3,840,000 | 3,840,000 | 3,840,000 | ||||||||
Russell Tax Exempt High Yield Bond Fund | — | — | — | 7,400,000 | ||||||||
Russell Multi-Strategy Alternative Fund | 507,786,368 | 344,862,505 | 326,196,184 | 272,158,347 |
Total Return Swaps
Certain Funds may enter into index swap agreements to expose cash to markets or to effect investment transactions. Index 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 index 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).
The Russell Multi-Strategy Alternative Fund may invest in certain types of equity swaps. Equity swaps allow the parties to a swap
agreement to exchange the dividend income or other components of return on a basket of equity securities (an “equity basket swap”)
or individual equity security for another payment stream. An equity swap may be used by the Fund to invest in a market without
owning or taking physical custody of securities in circumstances in which direct investment may be restricted for various reasons
or is otherwise deemed impractical or disadvantageous. The Fund will receive all of the economic benefits and risks equivalent to
direct investments in the reference equity positions such as capital appreciation (depreciation), corporate actions, and dividends
and interest received and paid, all of which are reflected in the swap value. The swap value may also include interest charges and
credits related to the notional values of the equity positions and any cash balances within the swap. These interest charges and
credits are based on defined market rates plus or minus a specified spread. Equity basket swaps provide the Fund exposure to a
portfolio of long and/or short equity securities. These swaps are designed to function as a portfolio of direct investments in long and
short equity positions and the Fund has the ability to trade in and out of long and short positions within the swap. Equity swaps
normally do not involve the delivery of securities or other underlying assets. Accordingly, the risk of loss with respect to equity
swaps is normally limited to the net amount of payments that the Fund is contractually obligated to make. If the other party to an
equity swap defaults, the Fund’s risk of loss consists of the net amount of payments that the Fund is contractually entitled to receive,
if any.
For the period ended October 31, 2015, the Funds entered into total return swaps primarily for the strategies listed below: | |
Funds | Strategies |
Russell Emerging Markets Fund | Exposing cash to markets |
Russell Strategic Bond Fund | Exposing cash to markets |
Russell Investment Grade Bond Fund | Exposing cash to markets |
Russell Commodity Strategies Fund | Return enhancement |
Russell Global Real Estate Securities Fund | Exposing cash to markets |
Russell Multi-Strategy Alternative Fund | Return enhancement and hedging |
The Funds' total return swap contract notional amounts outstanding fluctuate throughout the fiscal year as required to meet strategic
requirements. The following table illustrates the quarterly volume of total return swap contracts. For the purpose of this disclosure,
volume is measured by base notional amounts outstanding at each quarter end.
Notes to Financial Statements 783
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Total Return Swap Notional Amounts Outstanding | ||||||||||||
Quarter Ended | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | ||||||||
Russell Emerging Markets Fund | $ | 12,759,527 | $ | 13,676,165 | $ | 9,218,044 | $ | 6,877,602 | ||||
Russell Strategic Bond Fund | 672,158,237 | 660,214,930 | 695,442,260 | 517,418,639 | ||||||||
Russell Investment Grade Bond Fund | 67,761,665 | 78,797,680 | 77,577,911 | 101,549,887 | ||||||||
Russell Commodity Strategies Fund | 907,859,662 | 1,004,523,925 | 885,313,525 | 752,471,476 | ||||||||
Russell Global Real Estate Securities Fund | 15,099,001 | 15,571,457 | 9,481,989 | — | ||||||||
Russell Multi-Strategy Alternative Fund | 1,993,620 | — | 211,407,642 | 218,719,008 |
Currency Swaps
Certain Funds may enter into currency swap agreements to enhance returns or for hedging purposes. Currency swap agreements are
agreements where two parties exchange specified amounts of different currencies which are followed by paying the other a series of
interest payments that are based on the principal cash flow. At maturity, the principal amounts are exchanged.
Commodity-Linked Instruments
The Russell Commodity Strategies and the Russell Multi-Strategy Alternative Funds invest in commodity-linked derivative
instruments, such as swap agreements and futures. At least part of their value is derived from the value of an underlying commodity
index, commodity futures or options contracts index, or other readily measurable economic variable. The prices of commodity-
linked derivative instruments may move in different directions than investments in traditional equity and debt securities. As an
example, during periods of rising inflation, debt securities have historically tended to decline in value due to the general increase
in prevailing interest rates. Conversely, during those same periods of rising inflation, historically the prices of certain commodities,
such as oil and metals, have tended to increase. Of course, there cannot be any guarantee that such commodity-linked derivative
instruments will perform in that manner in the future, and at certain times the price movements of commodity-linked derivative
investments have been parallel to those of debt and equity securities.
The Russell Commodity Strategies and the Russell Multi-Strategy Alternative Funds may invest in commodity-linked notes.
Commodity-linked notes pay a return linked to the performance of a commodity over a defined period. On the maturity date, the
note pays the initial principal amount plus return, if any, based on the percentage change in the underlying commodity.
Master Agreements
Certain Funds are parties to International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”)
with counterparties that govern transactions in OTC 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 and default include conditions that may entitle either party
to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement.
Any election to terminate early could be material to the financial statements. Since different types of forward and OTC financial
derivative transactions have different mechanics and are sometimes traded out of different legal entities of a particular counterparty
organization, each type of transaction may be covered by a different ISDA Master Agreement, resulting in the need for multiple
agreements with a single counterparty. As the ISDA Master Agreements are specific to unique operations of different asset types,
they allow a Fund to net its total exposure to a counterparty in the event of a default with respect to all the transactions governed
under a single agreement with a counterparty.
Master Repurchase Agreements (“Master Repo Agreements”) govern transactions between a Fund and select counterparties.
The Master Repo Agreements maintain provisions for, among other things, initiation, income payments, events of default, and
maintenance of collateral for repurchase and reverse repurchase agreements.
Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern the considerations and factors
surrounding the settlement of certain forward settling transactions, such as delayed delivery by and between a Fund and select
counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment
and transfer, events of default, termination, and maintenance of collateral.
784 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Disclosure about Offsetting Assets and Liabilities
Balance sheet disclosure is based on various netting agreements between brokers and counterparties, such as ISDA Master
Agreements, Master Repo Agreements and Master Forward Agreements. Certain funds utilize multiple counterparties. The
quantitative disclosure begins with disaggregation of counterparties by legal entity and the roll up of the data to reflect a single
counterparty in the table within the Funds’ financial statements. Net exposure represents the net receivable (payable) that would be
due from/to the counterparty in the event of default. Exposure from OTC derivatives can only be netted across transactions governed
under the same Master Agreement with the same legal entity.
Loan Agreements
Certain Funds may invest in direct debt instruments, which are interests in amounts owed by corporate, governmental, or other
borrowers to lenders or lending syndicates. The Funds' investments in loans may be in the form of participations in loans or
assignments of all or a portion of loans from third parties. A loan is often administered by a bank or other financial institution (the
“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 Funds have the right to receive payments of principal, interest and any fees to which they
are entitled only from the agent selling the loan agreement and only upon receipt by the agent of payments from the borrower. The
Funds generally have no right to enforce compliance with the terms of the loan agreement with the borrower. As a result, the Funds
may be subject to the credit risk of both the borrower and the agent that is selling the loan agreement. When the Funds purchase
assignments from agents they acquire direct rights against the borrower on the loan. As of October 31, 2015, the Russell Short
Duration Bond Fund had $3,592,000 and the Russell Multi-Strategy Income Fund had $1,993,000 in unfunded loan commitments.
Local Access Products
Certain Funds may invest in local access products, also known as certificates of participation, participation notes or participation
interest notes. Local access products are issued by banks or broker-dealers and are designed to replicate the performance of foreign
companies or foreign securities markets and can be used by the Fund as an alternative means to access the securities market of a
frontier emerging market country. The performance results of local access products will not replicate exactly the performance of
the foreign companies or foreign securities markets that they seek to replicate due to transaction and other expenses. Investments
in local access products involve certain risks in addition to those associated with a direct investment in the underlying foreign
companies or foreign securities markets whose return they seek to replicate. There can be no assurance that there will be a trading
market or that the trading price of local access products will equal the underlying value of the foreign company or foreign securities
market that it seeks to replicate. The Funds rely on the creditworthiness of the counterparty issuing the local access products and
have no rights against the issuer of the underlying security. The Funds minimize this risk by entering into agreements only with
counterparties that RIMCo deems creditworthy. Due to liquidity and transfer restrictions, the secondary markets on which the local
access products are traded may be less liquid than the markets for other securities, or may be completely illiquid.
Credit Linked Notes
The Russell Global Opportunistic Credit and Russell Multi-Strategy Alternative Funds may invest in credit linked notes. Credit
linked notes are obligations between two or more parties where the payment of principal and/or interest is based on the performance
of some obligation, basket of obligations, index or economic indicator (a “reference instrument”). In addition to the credit risk
associated with the reference instrument and interest rate risk, the buyer and seller of a credit linked note or similar structured
investment are subject to counterparty risk.
Short Sales
The Russell U.S. Dynamic Equity, Russell U.S. Strategic Equity and Russell Multi-Strategy Alternative Funds may enter into
short sale transactions. In a short sale, the seller sells a security that it does not own, typically a security borrowed from a broker
or dealer. Because the seller remains liable to return the underlying security that it borrowed from the broker or dealer, the seller
must purchase the security prior to the date on which delivery to the broker or dealer is required. The Funds will incur a loss as a
result of the short sale if the price of the security increases between the date of the short sale and the date on which the Funds must
return the borrowed security. The Funds will realize a gain if the security declines in price between those dates. Short sales expose
the Funds to the risk of liability for the fair value of the security that is sold (the amount of which increases as the fair value of the
underlying security increases), in addition to the costs associated with establishing, maintaining and closing out the short position.
Although the Funds’ potential for gain as a result of a short sale is limited to the price at which it sold the security short less the
cost of borrowing the security, its potential for loss is theoretically unlimited because there is no limit to the cost of replacing the
Notes to Financial Statements 785
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
borrowed security. When the Funds make a short sale, the Funds may use all or a portion of the cash proceeds of short sales to
purchase other securities or for any other permissible Fund purpose. To the extent necessary to meet collateral requirements,
the Funds are required to pledge assets in a segregated account maintained by the Funds’ custodian for the benefit of the broker.
The Funds also may use securities they own to meet any such collateral obligations. Until the Funds replace a borrowed security
in connection with a short sale, the Funds will: (a) maintain daily a segregated account, containing liquid assets at such a level
that the amount deposited in the segregated account will equal the current requirement under Regulation T promulgated by the
Board of Governors of the Federal Reserve System under the authority of Sections 7 and 8 of the Securities Exchange Act of
1934, as amended; or (b) otherwise cover its short position in accordance with positions taken by the staff of the Securities and
Exchange Commission (e.g., taking an offsetting long position in the security sold short). As of October 31, 2015, the Russell U.S.
Dynamic Equity Fund held $76,573,920, the Russell U.S. Strategic Equity Fund held $122,530,016 and the Russell Multi-Strategy
Alternative Fund held $38,582,693 as collateral for short sales.
Emerging Markets Securities
Certain Funds may invest in emerging markets securities. Investing in emerging markets securities can pose some risks different
from, and greater than, risks of investing in U.S. or developed markets securities. These risks include: a risk of loss due to
exposure to economic structures that are generally less diverse and mature, and to political systems which may have less stability,
than those of more developed countries; smaller market capitalization of securities markets, which may suffer periods of relative
illiquidity; significant price volatility; restrictions on foreign investment; and possible difficulties in the repatriation of investment
income and capital. In addition, foreign investors may be required to register the proceeds of sales and future economic or political
crises could lead to price controls, forced mergers, expropriation or confiscatory taxation, seizure, nationalization, or creation of
government monopolies. The currencies of emerging market countries may experience significant declines against the U.S. dollar,
and devaluation may occur subsequent to investments in these currencies by the Funds. Emerging market securities may be
subject to currency transfer restrictions and may experience delays and disruptions in settlement procedures. Inflation and rapid
fluctuations in inflation rates have had, and may continue to have, negative effects on the economies and securities markets of
certain emerging market countries.
Emerging Markets Debt
Certain Funds may invest in emerging markets debt. A Fund's emerging markets debt securities may include obligations of
governments and corporations. As with any fixed income securities, emerging markets debt securities are subject to the risk of
being downgraded in credit rating due to the risk of default. In the event of a default on any investments in foreign debt obligations,
it may be more difficult for a Fund to obtain or to enforce a judgment against the issuers of such securities. With respect to debt
issued by emerging market governments, such issuers may be unwilling to pay interest and repay principal when due, either due
to an inability to pay or submission to political pressure not to pay, and as a result may default, declare temporary suspensions of
interest payments or require that the conditions for payment be renegotiated.
Repurchase Agreements
Certain Funds may enter into repurchase agreements. A repurchase agreement is an agreement under which a 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 within a few days or weeks). The resale price reflects an agreed upon interest rate
effective for the period the security is held by a Fund and is unrelated to the interest rate on the security. The securities acquired
by a Fund constitute collateral for the repurchase obligation. In these transactions, the securities acquired by a 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. A Fund will not invest more than 15% of its net assets (taken at current fair value) in repurchase
agreements maturing in more than seven days.
Mortgage-Related and Other Asset-Backed Securities
Certain Funds may invest in mortgage or other asset-backed securities (“ABS”). These securities may include mortgage instruments
issued by U.S. government agencies (“agency mortgages”) or those issued by private entities (“non-agency mortgages”). Specific
types of instruments may include reverse mortgages, mortgage pass-through securities, collateralized mortgage obligations
(“CMO”), 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
786 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
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 mortgages underlying the securities may default or decline in quality or value. Through its
investments in MBS, a Fund has exposure to subprime loans, Alt-A loans and non-conforming loans as well as to the mortgage
and credit markets generally. Underlying collateral related to subprime, Alt-A and non-conforming mortgage loans has become
increasingly susceptible to defaults and declines in quality or value, especially in a declining residential real estate market. In
addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole.
Mortgage-Backed Securities
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 resulting in reinvestment risk.
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.
Agency Mortgage-Backed Securities
Certain MBS may be issued or guaranteed by the U.S. government or a government sponsored entity, such as Fannie Mae (the Federal
National Mortgage Association) or Freddie Mac (the Federal Home Loan Mortgage Corporation). Although these instruments may
be guaranteed by the U.S. government or a government sponsored entity, many such MBS are not backed by the full faith and credit
of the United States and are still exposed to the risk of non-payment.
Privately Issued Mortgage-Backed Securities
MBS held by a Fund may be issued by private issuers including 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-agency MBS may offer higher
yields than those issued by government agencies, but also may be subject to greater price changes than governmental issues.
Subprime loans refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments
on their loans. Alt-A loans refer to loans extended to borrowers who have incomplete documentation of income, assets, or other
variables that are important to the credit underwriting processes. 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 nonconforming
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 agency MBS issued or guaranteed by the U.S. government or a government-sponsored entity (e.g., Fannie Mae and Freddie
Mac), 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 mortgage loans. In addition, MBS
that are issued by private issuers are not subject to the underwriting requirements for the underlying mortgages 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
Notes to Financial Statements 787
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
government-sponsored MBS and have wider variances in a number of terms including interest rate, term, size, purpose and borrower
characteristics. Privately issued pools more frequently include second mortgages, high loan-to-value mortgages and manufactured
housing loans. The coupon rates and maturities of the underlying mortgage loans in a private-label MBS pool may vary to a greater
extent than those included in a government guaranteed pool, and the pool may include subprime mortgage loans.
Privately issued MBS are not traded on an exchange and there may be a limited market for the securities, especially when there is a
perceived weakness in the mortgage and real estate market sectors. Without an active trading market, MBS held in a Fund's portfolio
may be particularly difficult to value because of the complexities involved in assessing the value of the underlying mortgage loans.
Asset-Backed Securities
ABS may include MBS, loans, receivables or other assets. The value of the Funds’ ABS 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 ABS, 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 ABS have become an increasing risk for ABS 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.
ABS (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. ABS 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 ABS may be affected by legislative or regulatory developments. It is possible that such
developments may require the Funds to dispose of any then-existing holdings of such securities.
Forward Commitments
Certain Funds may contract to purchase securities for a fixed price at a future date beyond customary settlement time. 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 may
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
Fund's 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.
Certain funds and the Russell Multi-Strategy Alternative Fund may invest in to-be-announced ("TBA") mortgage-backed securities.
A TBA security is a forward mortgage-backed securities trade in which a seller agrees to issue a TBA mortgage-backed security
at a future date. 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. These securities are within the parameters of industry “good delivery” standards.
788 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Inflation-Indexed Bonds
The fixed income funds and the Russell Multi-Strategy Alternative 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 a U.S. Treasury Inflation-Protected Security (“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, Credit and Counterparty 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 also 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 relevant assets recorded in the financial
statements (the “Assets”). The Assets consist principally of cash due from counterparties and investments. The extent of the Funds'
exposure to market, credit and counterparty risks with respect to the Assets approximates their carrying value as recorded in the
Funds' Statements of Assets and Liabilities.
Global economies and financial markets are becoming increasingly interconnected and political and economic conditions (including
recent instability and volatility) and events (including natural disasters) in one country, region or financial market may adversely
impact issuers in a different country, region or financial market. As a result, issuers of securities held by a Fund may experience
significant declines in the value of their assets and even cease operations. Such conditions and/or events may not have the same
impact on all types of securities and may expose a Fund to greater market and liquidity risk and potential difficulty in valuing
portfolio instruments held. This could cause a Fund to underperform other types of investments.
3. Investment in Russell Cayman Commodity Strategies Fund Ltd. and Russell Cayman Multi-Strategy
Alternative Fund Ltd.
The Russell Cayman Commodity Strategies Fund Ltd. and Russell Cayman Multi-Strategy Alternative Fund Ltd. (each a
“Subsidiary”) are Cayman Island exempted companies and wholly owned subsidiaries of the Russell Commodity Strategies Fund
and Russell Multi-Strategy Alternative Fund, respectively. Each Subsidiary acts as an investment vehicle for its respective Fund
in order to effect certain investments on behalf of the Fund. Each Fund is the sole shareholder of its respective Subsidiary and it
is intended that each Fund will remain the sole shareholder and, as a result, will continue to control the Subsidiary. As of October
31, 2015, net assets of the Russell Commodity Strategies Fund were $779,705,323 of which $139,947,452 or approximately 18%,
represents the Fund’s ownership of the shares of its Subsidiary, and net assets of the Russell Multi-Strategy Alternative Fund were
$530,004,405 of which $17,600,956 or approximately 3%, represents the Fund’s ownership of the shares of its Subsidiary.
The Russell Commodity Strategies and Russell Multi-Strategy Alternative Funds may invest up to 25% of their total assets in their
Subsidiary, which may invest without limitation in commodity-linked derivative instruments, such as swaps and futures that provide
exposure to the performance of commodities markets. Each Subsidiary may also invest in fixed income securities. The financial
statements for each of the Russell Commodity Strategies Fund and Russell Multi-Strategy Alternative Fund have been consolidated
and include the accounts of both the Fund and its respective Subsidiary. All inter-company transactions and balances have been
eliminated upon consolidation.
4. Investment Transactions
Securities
During the period ended October 31, 2015, purchases and sales of investment securities (excluding U.S. Government and Agency
obligations, short-term investments, options, futures and repurchase agreements) were as follows:
Notes to Financial Statements 789
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Purchases | Sales | |||||
Russell U.S. Core Equity Fund | $ | 1,226,839,850 | $ | 2,126,679,738 | ||
Russell U.S. Defensive Equity Fund | 995,400,184 | 1,269,670,206 | ||||
Russell U.S. Dynamic Equity Fund | 976,635,583 | 1,139,443,747 | ||||
Russell U.S. Strategic Equity Fund | 4,682,663,921 | 4,435,738,301 | ||||
Russell U.S. Large Cap Equity Fund | 343,236,392 | 362,744,505 | ||||
Russell U.S. Mid Cap Equity Fund | 240,915,821 | 242,850,736 | ||||
Russell U.S. Small Cap Equity Fund | 2,159,201,732 | 2,440,732,469 | ||||
Russell International Developed Markets Fund | 3,230,666,487 | 4,301,057,243 | ||||
Russell Global Equity Fund | 1,484,906,543 | 2,102,417,453 | ||||
Russell Emerging Markets Fund | 1,817,919,705 | 1,974,106,976 | ||||
Russell Tax-Managed U.S. Large Cap Fund | 1,860,914,330 | 1,589,942,808 | ||||
Russell Tax-Managed U.S. Mid & Small Cap Fund | 457,530,129 | 402,521,374 | ||||
Russell Tax-Managed International Equity Fund | 740,395,118 | 288,362,670 | ||||
Russell Global Opportunistic Credit Fund | 1,939,822,212 | 3,342,620,634 | ||||
Russell Strategic Bond Fund | 2,864,574,996 | 2,373,348,227 | ||||
Russell Investment Grade Bond Fund | 789,501,699 | 1,180,181,011 | ||||
Russell Short Duration Bond Fund | 559,692,959 | 500,236,324 | ||||
Russell Tax Exempt High Yield Bond Fund | 282,191,953 | 47,854,399 | ||||
Russell Tax Exempt Bond Fund | 417,383,703 | 354,238,254 | ||||
Russell Global Infrastructure Fund | 1,326,551,526 | 1,576,156,002 | ||||
Russell Global Real Estate Securities Fund | 1,045,635,681 | 1,313,000,383 | ||||
Russell Multi-Strategy Alternative Fund | 729,024,259 | 876,548,365 | ||||
Russell Multi-Strategy Income Fund | 355,963,208 | 90,358,363 | ||||
Russell Strategic Call Overwriting Fund | 1,070,082 | 1,986,513 | ||||
Select U.S. Equity Fund | 876,183,988 | 231,807,756 | ||||
Select International Equity Fund | 965,083,903 | 145,751,651 |
Purchases and sales of U.S. Government and Agency obligations (excluding short-term investments, options, futures and repurchase
agreements) were as follows:
Purchases | Sales | |||||
Russell Global Opportunistic Credit Fund | $ | 1,504,922 | $ | — | ||
Russell Strategic Bond Fund | 6,840,333,338 | 7,053,488,764 | ||||
Russell Investment Grade Bond Fund | 1,698,455,000 | 1,773,369,305 | ||||
Russell Short Duration Bond Fund | 1,279,701,987 | 1,399,304,028 | ||||
Russell Multi-Strategy Alternative Fund | 139,935,322 | 157,877,674 | ||||
Russell Multi-Strategy Income Fund | 5,619,262 | 5,056,707 |
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 maturity associated with these securities is considered continuous. The Fund receives cash (U.S.
currency), U.S. Government or U.S. Government Agency obligations as collateral against the loaned securities. As of October
31, 2015, to the extent that a loan was collateralized by cash, such collateral was invested by the securities lending agent, Brown
Brothers Harriman & Co. (“BBH”), in the Russell U.S. Cash Collateral Fund, an unregistered fund advised by RIMCo. 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, is divided between
the Fund and BBH 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 BBH and are recorded as securities lending income
for the Fund. All collateral received will be in an amount at least equal to 102% (for loans of U.S. securities) or 105% (for loans of
non-U.S. securities) of the fair value of the loaned securities at the inception of each loan. The fair value of the loaned securities is
790 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
determined at the close of business of the Fund 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.
Brokerage Commissions
The Funds effect certain transactions through Recapture Services, a division of BNY ConvergeEX Execution Solutions LLC
(“BNY”) and its global network of unaffiliated correspondent brokers as well as State Street Global Markets, LLC (“SSGM”) and
its global network of unaffiliated correspondent brokers. BNY and SSGM are registered brokers and are not affiliates of the Funds
or RIMCo. Trades placed through Recapture Services and SSGM and their correspondents are used (i) to obtain brokerage and
research services for RIMCo to assist RIMCo in its investment decision-making process in its capacity as Adviser to the Funds or
(ii) to generate commission rebates to the Funds on whose behalf the trades were made. For purposes of trading to obtain brokerage
and research services for RIMCo or to generate commission rebates to the Funds, the Funds’ money managers are requested to,
and RIMCo may, with respect to transactions it places, effect transactions with or through Recapture Services, SSGM and their
correspondents or other brokers. In addition, RIMCo recommends targets for the amount of trading that money managers direct
through Recapture Services and SSGM based upon several factors including asset class and investment style, among others.
Research services provided to RIMCo by Recapture Services, SSGM or other brokers include performance measurement statistics,
fund analytics systems and market monitoring systems. Research services will generally be obtained from unaffiliated third parties
at market rates, which may be included in commission costs. Research provided to RIMCo may benefit the particular Funds
generating the trading activity and may also benefit other Funds within RIC and other funds and clients managed or advised by
RIMCo or its affiliates. Similarly, the Funds may benefit from research provided with respect to trading by those other funds and
clients.
Decisions concerning the acquisition of research services by RIMCo are approved and monitored by a Frank Russell Company
("FRC") Soft Commission Committee (“SCC”), which consists principally of employees in research and investment management
roles. The SCC acts as an oversight body with respect to purchases of research services acquired by RIMCo using soft commissions
generated by funds managed by FRC affiliates, including the Funds.
Recapture Services, SSGM or other brokers may also rebate to the Funds a portion of commissions earned on certain trading by the
Funds through Recapture Services, and SSGM and their correspondents in the form of commission recapture. Commission recapture
is paid solely to those Funds generating the applicable commission. Commission recapture is generated on the instructions of the
SCC once RIMCo’s research needs have been met, as determined annually in the Soft Money Commission budgeting process.
Recapture Services and SSGM retain a portion of all commissions generated, regardless of whether the trades were used to
provide research services to RIMCo or commission recapture to the Funds. Trades through Recapture Services, SSGM and their
correspondents for transition services and manager funding (i.e. brokerage arrangements designed to reduce costs and optimize
performance during the transition of Fund assets upon the hiring, termination or additional funding of a money manager) are
at ordinary and customary commission rates and do not result in commission rebates or accrued credits for the procurement of
research related services.
Additionally, a money manager may independently effect transactions through Recapture Services, SSGM and their correspondents
or a broker affiliated with the money manager or another broker to obtain research services for its own use. Research services
provided to a money manager may benefit the Fund generating the trading activity but may also benefit other funds and clients
managed or advised by the money manager. Similarly, the Funds may benefit from research services provided with respect to trading
by those other funds and clients.
Additionally the Funds paid brokerage commissions to non-affiliated brokers who provided brokerage and research services to
RIMCo.
5. Related Party Transactions, Fees and Expenses
Adviser and Administrator
RIMCo provides or oversees the provision of all investment advisory and portfolio management services for the Funds, including
developing the investment program for each Fund and managing each Fund's overall exposures. RFSC is the Funds’ administrator
and transfer and dividend disbursing agent and among other services, with the assistance of RIMCo and FRC, provides the Funds
with office space, equipment and personnel necessary to operate and administrate the Funds' business and to supervise the provision
of services by certain third parties. RFSC is a wholly-owned subsidiary of RIMCo. RIMCo is a wholly-owned subsidiary of FRC
Notes to Financial Statements 791
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
(which, effective December 2, 2014, is an indirect subsidiary of London Stock Exchange Group plc ("LSEG")). FRC provides
ongoing money manager research to RIC and RIMCo.
RIMCo has advised the Funds that, on October 8, 2015, Emerald Acquisition Limited, a company incorporated under the laws
of England and Wales (“Buyer”), entered into an agreement with FRC and LSEG through which Buyer will acquire FRC’s asset
management business (“Russell Investments”), including RIMCo, from LSEG (the “Transaction”). Buyer is a newly formed
acquisition vehicle through which private equity funds affiliated with TA Associates will acquire a majority ownership interest and
private equity funds affiliated with Reverence Capital Partners (“RCP”) will acquire a significant minority ownership interest in
Russell Investments. RIMCo expects that the Transaction will be consummated in the first half of 2016, subject to regulatory and
other approvals and confirmations, and other conditions being satisfied.
The Funds are permitted to invest their cash (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 October 31, 2015, the Funds
had invested $3,051,317,390 in the Russell U.S. Cash Management Fund. In addition, all or a portion of the collateral received
from the Investment Company’s securities lending program in the amount of $463,990,399 is invested in the Russell U.S. Cash
Collateral Fund, an unregistered fund advised by RIMCo.
The advisory fee and the administrative fee of up to 0.05% specified in the table below are based on the average daily net assets
of each Fund and are payable monthly.
Annual Rate % | |||||||
Funds | Adviser | Administrator* | |||||
Russell U.S. Core Equity Fund | .55 | % | .05 | % | |||
Russell U.S. Defensive Equity Fund | .55 | .05 | |||||
Russell U.S. Dynamic Equity Fund | .80 | .05 | |||||
Russell U.S. Strategic Equity Fund | .75 | .05 | |||||
Russell U.S. Large Cap Equity Fund | .70 | .05 | |||||
Russell U.S. Mid Cap Equity Fund | .80 | .05 | |||||
Russell U.S. Small Cap Equity Fund | .70 | .05 | |||||
Russell International Developed Markets Fund | .70 | .05 | |||||
Russell Global Equity Fund | .95 | .05 | |||||
Russell Emerging Markets Fund | 1.15 | .05 | |||||
Russell Tax-Managed U.S. Large Cap Fund | .70 | .05 | |||||
Russell Tax-Managed U.S. Mid & Small Cap Fund | .98 | .05 | |||||
Russell Tax-Managed International Equity Fund | .85 | .05 | |||||
Russell Global Opportunistic Credit Fund | 1.00 | .05 | |||||
Russell Strategic Bond Fund | .50 | .05 | |||||
Russell Investment Grade Bond Fund | .25 | .05 | |||||
Russell Short Duration Bond Fund | .45 | .05 | |||||
Russell Tax Exempt High Yield Bond Fund | .50 | .05 | |||||
Russell Tax Exempt Bond Fund | .30 | .05 | |||||
Russell Commodity Strategies Fund** | 1.25 | .05 | |||||
Russell Global Infrastructure Fund | 1.25 | .05 | |||||
Russell Global Real Estate Securities Fund | .80 | .05 | |||||
Russell Multi-Strategy Alternative Fund** | 1.50 | .05 | |||||
Russell Multi-Strategy Income Fund | .75 | .05 | |||||
Russell Strategic Call Overwriting Fund | .80 | .05 | |||||
Select U.S. Equity Fund | .30 | .05 | |||||
Select International Equity Fund | .45 | .05 |
* Administrative fees are assessed on total Fund assets based on a tiered fee schedule.
** Annual rates do not reflect the consolidated rates inclusive of fees paid by the Fund's Subsidiary.
792 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
The following shows the respective totals for advisory and administrative fees for the period ended October 31, 2015.
Advisory | Administrative | |||||
Russell U.S. Core Equity Fund | $ | 6,972,626 | $ | 603,629 | ||
Russell U.S. Defensive Equity Fund | 6,123,019 | 530,263 | ||||
Russell U.S. Dynamic Equity Fund | 5,219,885 | 310,779 | ||||
Russell U.S. Strategic Equity Fund | 29,744,006 | 1,889,476 | ||||
Russell U.S. Large Cap Equity Fund | 3,085,821 | 210,004 | ||||
Russell U.S. Mid Cap Equity Fund | 1,697,403 | 101,087 | ||||
Russell U.S. Small Cap Equity Fund | 16,199,391 | 1,102,330 | ||||
Russell International Developed Markets Fund | 24,179,052 | 1,644,896 | ||||
Russell Global Equity Fund | 29,725,650 | 1,490,399 | ||||
Russell Emerging Markets Fund | 31,296,186 | 1,296,122 | ||||
Russell Tax-Managed U.S. Large Cap Fund | 9,975,712 | 679,070 | ||||
Russell Tax-Managed U.S. Mid & Small Cap Fund | 3,463,360 | 168,386 | ||||
Russell Tax-Managed International Equity Fund | 1,397,805 | 78,497 | ||||
Russell Global Opportunistic Credit Fund | 17,600,386 | 838,568 | ||||
Russell Strategic Bond Fund | 34,224,486 | 3,260,596 | ||||
Russell Investment Grade Bond Fund | 3,552,520 | 676,852 | ||||
Russell Short Duration Bond Fund | 4,756,687 | 503,430 | ||||
Russell Tax Exempt High Yield Bond Fund | 450,878 | 43,239 | ||||
Russell Tax Exempt Bond Fund | 4,016,705 | 637,868 | ||||
Russell Commodity Strategies Fund | 13,888,595 | 533,115 | ||||
Russell Global Infrastructure Fund | 19,669,428 | 749,514 | ||||
Russell Global Real Estate Securities Fund | 13,610,324 | 810,368 | ||||
Russell Multi-Strategy Alternative Fund | 10,945,853 | 348,040 | ||||
Russell Multi-Strategy Income Fund | 1,028,553 | 65,527 | ||||
Russell Strategic Call Overwriting Fund | 700,756 | 41,726 | ||||
Select U.S. Equity Fund | 1,777,415 | 282,526 | ||||
Select International Equity Fund | 2,938,326 | 311,398 |
RIMCo has agreed to certain waivers of its advisory and administrative fees as follows:
For the Russell U.S. Strategic Equity Fund, RIMCo has contractually agreed, until February 29, 2016, to waive up to the full
amount of its 0.75% advisory fee and then to reimburse the Fund for other direct Fund-level expenses, excluding dividend and
interest expenses on short sales and extraordinary expenses, to the extent that direct Fund-level expenses exceed 0.59% of the
average daily net assets of that Fund on an annual basis. This waiver and reimbursement may not be terminated during the relevant
period except with Board approval. Direct Fund-level expenses for the Russell U.S. Strategic Equity Fund do not include 12b-1
fees, shareholder services fees, transfer agency fees or the expenses of other investment companies in which the Fund invests which
are borne indirectly by the Fund. The total amount of the waiver for the period ended October 31, 2015 was $9,536,716. There were
no reimbursements for the period ended October 31, 2015.
For the Russell U.S. Large Cap Equity Fund, RIMCo has contractually agreed, until February 29, 2016, to waive up to the full
amount of its 0.70% advisory fee and then to reimburse the Fund for other direct Fund-level expenses to the extent that direct Fund-
level expenses exceed 0.67% of the average daily net assets of that Fund on an annual basis. This waiver and reimbursement may
not be terminated during the relevant period except with Board approval. Direct Fund-level expenses for the Russell U.S. Large Cap
Equity Fund do not include 12b-1 fees, shareholder services fees, transfer agency fees, extraordinary expenses or the expenses of
other investment companies in which the Fund invests which are borne indirectly by the Fund. The total amount of the waiver for
the period ended October 31, 2015 was $598,906. There were no reimbursements for the period ended October 31, 2015.
For the Russell U.S. Mid Cap Equity Fund, RIMCo has contractually agreed, until February 29, 2016, to waive up to the full amount
of its 0.80% advisory fee and then to reimburse the Fund for other direct Fund-level expenses to the extent that direct Fund-level
expenses exceed 0.77% of the average daily net assets of that Fund on an annual basis. This waiver and reimbursement may not be
Notes to Financial Statements 793
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
terminated during the relevant period except with Board approval. Direct Fund-level expenses for the Russell U.S. Mid Cap Equity
Fund do not include 12b-1 fees, shareholder services fees, transfer agency fees, extraordinary expenses or the expenses of other
investment companies in which the Fund invests which are borne indirectly by the Fund. The total amount of the waiver for the
period ended October 31, 2015 was $373,361. There were no reimbursements for the period ended October 31, 2015.
For the Russell Tax Managed U.S. Mid & Small Cap Fund, RIMCo has contractually agreed, until February 29, 2016, to waive
up to the full amount of its 0.98% advisory fee and then to reimburse the Fund for other direct Fund-level expenses to the extent
that direct Fund-level expenses exceed 1.10% of the average daily net assets of that Fund on an annual basis. This waiver and
reimbursement may not be terminated during the relevant period except with Board approval. Direct Fund-level expenses for the
Russell Tax-Managed U.S. Mid & Small Cap Fund do not include 12b-1 fees, shareholder services fees, transfer agency fees,
extraordinary expenses or the expenses of other investment companies in which the Fund invests which are borne indirectly by the
Fund. The total amount of the waiver for the period ended October 31, 2015 was $73,035. There were no reimbursements for the
period ended October 31, 2015
For the Russell Tax Managed International Equity Fund, RIMCo has contractually agreed, until February 28, 2017, to waive up
to the full amount of its 0.85% advisory fee and then to reimburse the Fund for other direct Fund-level expenses to the extent
that direct Fund-level expenses exceed 0.89% of the average daily net assets of that Fund on an annual basis. This waiver and
reimbursement may not be terminated during the relevant period except with Board approval. Direct Fund-level expenses for
the Russell Tax-Managed International Equity Fund do not include 12b-1 fees, shareholder services fees, transfer agency fees,
extraordinary expenses or the expenses of other investment companies in which the Fund invests which are borne indirectly by the
Fund. The total amount of the waiver for the period ended October 31, 2015 was $283,441.There were no reimbursements for the
period ended October 31, 2015.
For the Russell Global Opportunistic Credit Fund, RIMCo has contractually agreed, until February 29, 2016, to waive 0.32% of its
1.00% advisory fee. This waiver may not be terminated during the relevant period except with Board approval. The total amount of
the waiver for the period ended October 31, 2015 was $5,477,123.
For the Russell Strategic Bond Fund, RIMCo has contractually agreed, until February 29, 2016, to waive 0.03% of its 0.50%
advisory fee. This waiver may not be terminated during the relevant period except with Board approval. The total amount of the
waiver for the period ended October 31, 2015 was $1,507,274.
For the Russell Short Duration Bond Fund, RIMCo has contractually agreed, until February 29, 2016, to waive 0.08% of its 0.45%
advisory fee. This waiver may not be terminated during the relevant period except with Board approval. The total amount of the
waiver for the period ended October 31, 2015 was $744,716.
For the Russell Tax Exempt High Yield Bond Fund, RIMCo has contractually agreed, until February 28, 2017, to waive up to the
full amount of its 0.50% advisory fee and then to reimburse the Fund for other direct Fund-level expenses, excluding extraordinary
expenses, to the extent that direct Fund-level expenses exceed 0.44% of the average daily net assets of that Fund on an annual
basis. This waiver and reimbursement may not be terminated during the relevant period except with Board approval. Direct Fund-
level expenses for the Russell Tax Exempt High Yield Bond Fund do not include 12b-1 fees, shareholder services fees, transfer
agency fees or the expenses of other investment companies in which the Fund invests which are borne indirectly by the Fund.
The total amount of the waiver for the period ended October 31, 2015 was $266,510. There were no reimbursements for the period
ended October 31, 2015.
For the Russell Commodity Strategies Fund, RIMCo has contractually agreed, until February 29, 2016, to waive 0.30% of its
1.25% advisory fee. Additionally, the Russell Cayman Commodity Strategies Fund Ltd. (the “Commodity Strategies Subsidiary”)
pays RIMCo an advisory fee at the annual rate of 1.25% and pays RFSC an administrative fee at the annual rate of 0.05% of the
Commodity Strategies Subsidiary’s net assets (the “Commodity Strategies Subsidiaries Fees”). Pursuant to a contractual agreement
with the Russell Commodity Strategies Fund, RIMCo and RFSC have contractually agreed to permanently waive all or a portion of
the advisory and administrative fees paid by the Russell Commodity Strategies Fund to RIMCo and RFSC in an amount equal to
the amount of the Commodity Strategies Subsidiary Fees received by RIMCo and RFSC, if any. This waiver may not be terminated
by RIMCo and RFSC. The total amount of the advisory waiver for the period ended October 31, 2015 was $5,540,863. The total
amount of the administrative fee waiver for the period ended October 31, 2015 was $82,584.
For the Russell Global Infrastructure Fund, RIMCo has contractually agreed, until February 29, 2016, to waive 0.33% of its 1.25%
advisory fee. This waiver may not be terminated during the relevant period except with Board approval. The total amount of the
waiver for the period ended October 31, 2015 was $5,192,729.
794 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
The Russell Cayman Multi-Strategy Alternative Fund Ltd., a wholly-owned subsidiary of the Russell Multi-Strategy Alternative
Fund (the “Multi-Strategy Alternative Subsidiary”), pays RIMCo an advisory fee at the annual rate of 1.50% and pays RFSC an
administrative fee at the rate of 0.05% of the Multi-Strategy Alternative Subsidiary’s net assets (the “Multi-Strategy Alternative
Subsidiary Fees”). Pursuant to a contractual agreement with the Russell Multi-Strategy Alternative Fund, RIMCo and RFSC have
agreed to permanently waive all or a portion of the advisory and administrative fees paid by the Russell Multi-Strategy Alternative
Fund to RIMCo and RFSC in the amount equal to the amount of the Multi-Strategy Alternative Subsidiary Fees received by RIMCo
and RFSC, if any. This waiver may not be terminated by RIMCo or RFSC. The total amount of the advisory fee waiver for the period
ended October 31, 2015 was $336,176. The total amount of the administrative fee waiver for the period ended October 31, 2015
was $11,206.
For the Russell Multi-Strategy Income Fund, RIMCo has contractually agreed, until February 28, 2017, to waive up to the full
amount of its 0.75% advisory fee and then to reimburse the Fund for other direct Fund-level expenses to the extent that direct Fund-
level expenses exceed 0.65% of the average daily net assets of that Fund on an annual basis. This waiver and reimbursement may
not be terminated during the relevant period except with Board approval. Direct Fund-level expenses for the Russell Multi-Strategy
Income Fund do not include 12b-1 fees, shareholder services fees, transfer agency fees, extraordinary expenses or the expenses of
other investment companies in which the Fund invests which are borne indirectly by the Fund. The total amount of the waiver for
the period ended October 31, 2015 was $492,335. There were no reimbursements for the period ended October 31, 2015.
For the Russell Strategic Call Overwriting Fund, RIMCo has contractually agreed, until February 29, 2016, to waive up to the full
amount of its 0.80% advisory fee and then to reimburse the Fund for other direct Fund-level expenses, excluding extraordinary
expenses to the extent such direct Fund-level expenses exceed 0.77% of the average daily net assets of that Fund on an annual
basis. This waiver and reimbursement may not be terminated during the relevant period except with Board approval. Direct Fund-
level expenses for the Russell Strategic Call Overwriting Fund do not include 12b-1 fees, shareholder services fees, transfer agency
fees or the expenses of other investment companies in which the Fund invests which are borne indirectly by the Fund. The total
amount of the waiver for the period ended October 31, 2015 was $193,138.
For the Select U.S. Equity Fund, RIMCo has contractually agreed, until February 29, 2016, to waive up to the full amount of its
0.30% advisory fee and then to reimburse the Fund for other direct Fund-level expenses, to the extent such direct Fund-level
expenses exceed 0.35% of the average daily net assets of that Fund on an annual basis. This waiver and reimbursement may not
be terminated during the relevant period except with Board approval. Direct Fund-level expenses for the Select U.S. Equity Fund
do not include 12b-1 fees, shareholder services fees, transfer agency fees or the expenses of other investment companies in which
the Fund invests which are borne indirectly by the Fund. The total amount of the waiver for the period ended October 31, 2015 was
$439,638. There were no reimbursements for the period ended October 31, 2015.
For the Select International Equity Fund, RIMCo has contractually agreed, until February 29, 2016, to waive up to the full amount
of its 0.45% advisory fee and then to reimburse the Fund for other direct Fund-level expenses, to the extent such direct Fund-level
expenses exceed 0.44% of the average daily net assets of that Fund on an annual basis. This waiver and reimbursement may not be
terminated during the relevant period except with Board approval. Direct Fund-level expenses for the Select International Equity
Fund do not include 12b-1 fees, shareholder services fees, transfer agency fees or the expenses of other investment companies in
which the Fund invests which are borne indirectly by the Fund. The total amount of the waiver for the period ended October 31,
2015 was $1,339,211. There were no reimbursements for the period ended October 31, 2015.
RIMCo does not have the ability to recover amounts waived or reimbursed from previous periods.
Transfer and Dividend Disbursing Agent
RFSC serves as transfer agent and provides dividend disbursing services to the Funds. For this service, RFSC is paid a fee based
upon the average daily net assets of the Funds for transfer agency and dividend disbursing services. Transfer agency fees are class-
level expenses and may differ by class. RFSC retains a portion of this fee for services provided to the Funds and pays the balance
to unaffiliated agents who assist in providing these services. Transfer agency fees paid by the Funds presented herein for the period
ended October 31, 2015 were as follows:
Notes to Financial Statements 795
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Amount | |||
Russell U.S. Core Equity Fund | $ | 1,641,107 | |
Russell U.S. Defensive Equity Fund | 929,570 | ||
Russell U.S. Dynamic Equity Fund | 161,751 | ||
Russell U.S. Strategic Equity Fund | 7,931,735 | ||
Russell U.S. Large Cap Equity Fund | 881,663 | ||
Russell U.S. Mid Cap Equity Fund | 424,351 | ||
Russell U.S. Small Cap Equity Fund | 3,393,707 | ||
Russell International Developed Markets Fund | 5,758,055 | ||
Russell Global Equity Fund | 4,495,808 | ||
Russell Emerging Markets Fund | 4,298,540 | ||
Russell Tax-Managed U.S. Large Cap Fund | 2,850,203 | ||
Russell Tax-Managed U.S. Mid & Small Cap Fund | 706,807 | ||
Russell Tax-Managed International Equity Fund | 328,896 | ||
Russell Global Opportunistic Credit Fund | 2,400,758 | ||
Russell Strategic Bond Fund | 9,416,730 | ||
Russell Investment Grade Bond Fund | 2,047,445 | ||
Russell Short Duration Bond Fund | 1,698,158 | ||
Russell Tax Exempt High Yield Bond Fund | 180,351 | ||
Russell Tax Exempt Bond Fund | 2,677,803 | ||
Russell Commodity Strategies Fund | 1,438,858 | ||
Russell Global Infrastructure Fund | 2,339,442 | ||
Russell Global Real Estate Securities Fund | 3,086,394 | ||
Russell Multi-Strategy Alternative Fund | 1,215,849 | ||
Russell Multi-Strategy Income Fund | 169,261 | ||
Russell Strategic Call Overwriting Fund | 175,189 | ||
Select U.S. Equity Fund | 30,725 | ||
Select International Equity Fund | 34,244 |
Effective January 1, 2014, RFSC had contractually agreed to waive, through February 28, 2015, a portion of its transfer agency fees
for certain classes of certain Funds as follows:
Funds/Classes | Waivers | |
Russell Global Opportunistic Credit Fund-Class A, C, E & S | .12 | % |
Russell Strategic Bond Fund-Class A, C, E & S | .04 | |
Russell Commodity Strategies Fund-Class A, C, E & S | .01 |
Effective March 1, 2014, RFSC had contractually agreed to waive, through February 28, 2015, a portion of its transfer agency fees
for certain classes of certain Funds as follows:
Funds/Classes | Waivers | |
Russell U.S. Strategic Equity Fund-Class A,C,E & S | .02 | % |
Russell Tax-Managed U.S.Mid & Small Cap Fund-Class C,E & S | .03 | |
Russell Short Duration Bond Fund-Class A,C,E & S | .09 | |
Russell Tax Exempt Bond Fund-Class C,E & S | .04 | |
Russell Global Infrastructure Fund-Class A,C,E & S | .02 |
Effective March 1, 2015, RFSC has contractually agreed to waive, through February 29, 2016, a portion of its transfer agency fees
for certain classes as follows:
796 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Funds/Classes | Waivers | |
Russell U.S. Strategic Equity Fund-Class A,C,E & S | .02 | % |
Russell Tax-Managed U.S. Mid & Small Cap Fund-Class C, E & S | .05 | |
Russell Tax-Managed U.S. Mid & Small Cap Fund-Class A | .02 | |
Russell Global Opportunistic Credit Fund-Class A, C, E & S | .12 | |
Russell Strategic Bond Fund-Class A, C, E & S | .04 | |
Russell Short Duration Bond Fund-Class A, C, E & S | .12 | |
Russell Tax Exempt Bond Fund-Class A | .02 | |
Russell Tax Exempt Bond Fund-Class C,E & S | .06 | |
Russell Commodity Strategies Fund-Class A,C,E & S | .01 | |
Russell Global Infrastructure Fund-Class A, C, E & S | .02 | |
Select U.S. Equity Fund-Class S, T & Y | .15 | |
Select International Fund-Class S, T & Y | .15 |
For the period ended October 31, 2015, the total transfer agent fee waivers are as follows:
Amount | ||
Russell U.S. Strategic Equity Fund | $ | 793,173 |
Russell Tax-Managed U.S. Mid & Small Cap Fund | 172,004 | |
Russell Global Opportunistic Credit Fund | 1,425,348 | |
Russell Strategic Bond Fund | 1,576,416 | |
Russell Short Duration Bond Fund | 1,013,282 | |
Russell Tax Exempt Bond Fund | 769,892 | |
Russell Commodity Strategies Fund | 71,433 | |
Russell Global Infrastructure Fund | 232,127 | |
Select U.S. Equity Fund | 805 | |
Select International Equity Fund | 2,324 |
Distributor and Shareholder Servicing
Russell Financial Services, Inc. (the “Distributor”), a wholly owned subsidiary of RIMCo, serves as a distributor for RIC, pursuant
to a distribution agreement with RIC.
The Investment Company has a distribution plan pursuant to Rule 12b-1 (the “Plan”) under the Investment Company Act. Under
this Plan, the Investment Company is authorized to make payments to the Distributor, or any selling agents, as defined in the Plan,
for sales support services provided and related expenses incurred which are primarily intended to result in the sale of the Class A
and Class C shares subject to the Plan. 12b-1 distribution payments are 0.25% or 0.75% of the average daily net assets of a Fund’s
Class A or Class C shares, respectively, on an annual basis.
In addition, the Investment Company has adopted a Shareholder Services Plan (the “Services Plan”) under which the Funds
may make payments to the Distributor or any servicing agent for any activities or expenses primarily intended to assist, support
or service the servicing agents’ clients who beneficially own Class C or Class E shares of the Funds. The shareholder servicing
payments shall not exceed 0.25% of the average daily net assets of a Fund’s Class C and Class E shares on an annual basis.
Pursuant to the rules of the Financial Industry Regulatory Authority (“FINRA”), these limitations are imposed at the class level of
each Fund rather than on a per shareholder basis. Therefore, long-term shareholders may pay more than the economic equivalent
of the maximum sales charges permitted by FINRA.
The aggregate initial sales charges, deferred sales charges and asset-based sales charges on Class A, Class C and Class
E Shares of the Funds may not exceed 7.25%, 6.25% and 6.25%, respectively, of total gross sales, and are subject to
certain exclusions. For the period ended October 31, 2015, the Distributor retained the following amounts in sales charges:
Notes to Financial Statements 797
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Contingent Deferred Sales Charges | Class A Shares | |
Russell U.S. Core Equity Fund | $ | 184 |
Russell U.S. Defensive Equity Fund | 549 | |
Russell U.S. Mid Cap Equity Fund | 25 | |
Russell U.S. Small Cap Equity Fund | 103 | |
Russell International Developed Markets Fund | 296 | |
Russell Global Equity Fund | 143 | |
Russell Emerging Markets Fund | 310 | |
Russell Tax-Managed U.S. Large Cap Fund | 300 | |
Russell Tax-Managed U.S. Mid & Small Cap Fund | 69 | |
Russell Global Opportunistic Credit Fund | 160 | |
Russell Strategic Bond Fund | 175 | |
Russell Investment Grade Bond Fund | 68 | |
Russell Short Duration Bond Fund | 5,728 | |
Russell Tax Exempt Bond Fund | 1,198 | |
Russell Commodity Strategies Fund | 61 | |
Russell Global Infrastructure Fund | 507 | |
Russell Global Real Estate Securities Fund | 66 | |
Russell Multi-Strategy Alternative Fund | 8 |
For the period ended October 31, 2015, the sales commissions paid to the selling agents for the sales of Class A shares were as
follows:
Aggregate | Class A Front-End | ||||
Front-End | Sales Charges | ||||
Sales Charges | Retained by | ||||
on Class A Shares | Distributor | ||||
Russell U.S. Core Equity Fund | $ | 68,277 | $ | 11,625 | |
Russell U.S. Defensive Equity Fund | 54,723 | 10,097 | |||
Russell U.S. Dynamic Equity Fund | 11,068 | 1,804 | |||
Russell U.S. Strategic Equity Fund | 14,269 | 2,557 | |||
Russell U.S. Large Cap Equity Fund | 48,418 | 8,893 | |||
Russell U.S. Mid Cap Equity Fund | 22,375 | 3,942 | |||
Russell U.S. Small Cap Equity Fund | 37,162 | 6,318 | |||
Russell International Developed Markets Fund | 77,940 | 14,515 | |||
Russell Global Equity Fund | 36,037 | 6,328 | |||
Russell Emerging Markets Fund | 49,297 | 8,695 | |||
Russell Tax-Managed U.S. Large Cap Fund | 98,972 | 18,698 | |||
Russell Tax-Managed U.S. Mid & Small Cap Fund | 45,781 | 8,494 | |||
Russell Tax-Managed International Equity Fund | 7,669 | 1,310 | |||
Russell Global Opportunistic Credit Fund | 8,126 | 1,590 | |||
Russell Strategic Bond Fund | 59,745 | 12,361 | |||
Russell Investment Grade Bond Fund | 25,644 | 5,183 | |||
Russell Short Duration Bond Fund | 19,260 | 3,822 | |||
Russell Tax Exempt High Yield Bond Fund | 773 | 161 | |||
Russell Tax Exempt Bond Fund | 31,001 | 5,857 | |||
Russell Commodity Strategies Fund | 26,181 | 4,377 | |||
Russell Global Infrastructure Fund | 16,166 | 2,790 | |||
Russell Global Real Estate Securities Fund | 50,326 | 8,419 | |||
Russell Multi-Strategy Alternative Fund | 5,696 | 950 | |||
Russell Multi-Strategy Income Fund | 117,197 | 20,715 |
Accrued Fees Payable to Affiliates
Accrued fees payable to affiliates for the period ended October 31, 2015, were as follows:
Russell U.S. | Russell U.S. | Russell U.S. | |||||||||
Russell U.S. Core | Defensive Equity | Dynamic Equity | Strategic Equity | Russell U.S. Large | |||||||
Equity Fund | Fund | Fund | Fund | Cap Equity Fund | |||||||
Advisory fees | $ | 436,381 | $ | 459,455 | $ | 392,123 | $ | 1,636,925 | $ | 196,410 | |
Administration fees | 38,088 | 40,886 | 23,528 | 159,392 | 16,939 | ||||||
Distribution fees | 38,620 | 33,391 | 7,207 | 15,301 | 2,739 | ||||||
Shareholder servicing fees | 12,129 | 10,919 | 2,308 | 26,344 | 303 | ||||||
Transfer agent fees | 125,434 | 67,319 | 11,575 | 594,201 | 70,028 |
798 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Russell U.S. | Russell U.S. | Russell U.S. | ||||||||
Russell U.S. Core | Defensive Equity | Dynamic Equity | Strategic Equity | Russell U.S. Large | ||||||
Equity Fund | Fund | Fund | Fund | Cap Equity Fund | ||||||
Trustee fees | 8,260 | 3,894 | 2,389 | 7,637 | 1,031 | |||||
$ | 658,912 | $ | 615,864 | $ | 439,130 | $ | 2,439,800 | $ | 287,450 | |
Russell | ||||||||||
International | ||||||||||
Russell U.S. Mid | Russell U.S. Small | Developed | Russell Global | Russell Emerging | ||||||
Cap Equity Fund | Cap Equity Fund | Markets Fund | Equity Fund | Markets Fund | ||||||
Advisory fees | $ | 108,067 | $ | 1,225,083 | $ | 1,656,748 | $ | 2,254,422 | $ | 2,295,069 |
Administration fees | 8,229 | 84,012 | 113,679 | 113,967 | 95,889 | |||||
Distribution fees | 2,887 | 22,743 | 26,901 | 11,275 | 16,797 | |||||
Shareholder servicing fees | 604 | 12,800 | 17,842 | 12,465 | 12,426 | |||||
Transfer agent fees | 34,143 | 257,634 | 429,911 | 343,080 | 313,615 | |||||
Trustee fees | 453 | 6,611 | 15,529 | 9,809 | 10,121 | |||||
$ | 154,383 | $ | 1,608,883 | $ | 2,260,610 | $ | 2,745,018 | $ | 2,743,917 | |
Russell Tax- | ||||||||||
Russell Tax- | Russell Tax- | Managed | Russell Global | |||||||
Managed U.S. | Managed U.S. Mid | International | Opportunistic | Russell Strategic | ||||||
Large Cap Fund | & Small Cap Fund | Equity Fund | Credit Fund | Bond Fund | ||||||
Advisory fees | $ | 908,406 | $ | 276,919 | $ | 231,384 | $ | 998,013 | $ | 2,474,988 |
Administration fees | 62,295 | 14,846 | 17,695 | 70,872 | 254,968 | |||||
Distribution fees | 20,017 | 9,677 | 729 | 7,312 | 51,657 | |||||
Shareholder servicing fees | 15,985 | 4,233 | 6,306 | 8,663 | 39,132 | |||||
Transfer agent fees | 257,867 | 46,266 | 73,727 | 80,205 | 617,848 | |||||
Trustee fees | 2,100 | 575 | 2,282 | 3,404 | 21,593 | |||||
$ | 1,266,670 | $ | 352,516 | $ | 332,123 | $ | 1,168,469 | $ | 3,460,186 | |
Russell Short | Russell Tax Exempt | Russell | ||||||||
Russell Investment | Duration Bond | High Yield Bond | Russell Tax Exempt | Commodity | ||||||
Grade Bond Fund | Fund | Fund | Bond Fund | Strategies Fund | ||||||
Advisory fees | $ | 269,680 | $ | 278,971 | $ | 34,630 | $ | 331,759 | $ | 596,851 |
Administration fees | 51,783 | 36,392 | 9,978 | 53,087 | 32,433 | |||||
Distribution fees | 13,484 | 41,815 | 447 | 21,193 | 4,978 | |||||
Shareholder servicing fees | 9,078 | 17,801 | 3,547 | 16,406 | 3,842 | |||||
Transfer agent fees | 163,590 | 51,588 | 41,566 | 155,828 | 100,946 | |||||
Trustee fees | 5,248 | 4,028 | 1,470 | 2,781 | 3,635 | |||||
$ | 512,863 | $ | 430,595 | $ | 91,638 | $ | 581,054 | $ | 742,685 | |
Russell Global Real | Russell Multi- | Russell Multi- | Russell Strategic | |||||||
Russell Global | Estate Securities | Strategy | Strategy Income | Call Overwriting | ||||||
Infrastructure Fund | Fund | Alternative Fund | Fund | Fund | ||||||
Advisory fees | $ | 1,106,518 | $ | 1,062,118 | $ | 678,216 | $ | 104,952 | $ | 50,229 |
Administration fees | 57,735 | 63,732 | 21,706 | 11,212 | 3,536 | |||||
Distribution fees | 6,759 | 30,045 | 3,804 | 2,075 | — | |||||
Shareholder servicing fees | 6,887 | 13,507 | 4,046 | 2,005 | — | |||||
Transfer agent fees | 163,218 | 239,894 | 90,260 | 30,011 | 14,729 | |||||
Trustee fees | 5,564 | 5,284 | 4,198 | 1,564 | 219 | |||||
$ | 1,346,681 | $ | 1,414,580 | $ | 802,230 | $ | 151,819 | $ | 68,713 | |
Select U.S. Equity | Select International | |||||||||
Fund | Equity Fund | |||||||||
Advisory fees | $ | 173,381 | $ | 205,586 | ||||||
Administration fees | 32,478 | 35,339 | ||||||||
Transfer agent fees | 3,515 | 3,616 | ||||||||
Trustee fees | 3,574 | 3,543 | ||||||||
$ | 212,948 | $ | 248,084 |
Notes to Financial Statements 799
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Affiliated Brokerage Commissions
The Funds effect certain transactions through Russell Implementation Services Inc. (“RIS”). RIS is a registered broker and investment
adviser and an affiliate of RIMCo. RIS uses a multi-venue trade management approach whereby RIS allocates trades among RIS’
network of independent brokers for execution, clearing and other services. Trades placed through RIS and its independent brokers
are made (i) to manage trading associated with changes in money managers, rebalancing across existing money managers, cash
flows and other portfolio transitions, (ii) to execute portfolio securities transactions for the portion of each Fund’s assets that RIMCo
determines not to allocate to money managers, including assets RIMCo may manage to effect a Fund’s investment strategies and/or
to modify a Fund's overall portfolio characteristics and for each Fund’s cash reserves or (iii) to execute a money manager’s portfolio
securities transactions for the segment of a Fund’s portfolio assigned to the money manager. RIMCo has authorized RIS to effect
certain futures, swaps, OTC derivatives transactions, and cleared swaps, including foreign currency spot, forwards and options
trading on behalf of the Funds.
The Funds are permitted to purchase or sell securities from or to certain related affiliated funds under specified conditions outlined
in procedures adopted by the Board. The procedures have been designed to ensure that any purchase or sale of securities by the
Funds from or to another fund or portfolio that are, or could be, considered an affiliate by virtue of having a common investment
adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a -7 of the Act.
During the period ended October 31, 2015, the Funds have engaged in purchases and sales of securities pursuant to Rule 17a -7
of the Act. As defined by the procedures, each transaction is effected at the current market price.
Board of Trustees
The Russell Fund Complex consists of RIC, which has 41 funds and Russell Investment Funds ("RIF"), which has 9 funds. Each of
the Trustees is a Trustee of RIC and RIF. During the period, the Funds paid each of their independent Trustees a retainer of $102,000
per year (prior to January 1, 2015, $96,000); and each Trustee $7,000 for each regularly scheduled meeting attended in person
and $3,500 for each special meeting and the Annual 38a-1 meeting attended in person, and for each Audit Committee meeting,
Nominating and Governance Committee meeting, Investment Committee meeting or any other committee meeting established and
approved by the Board attended in person. Each Trustee receives $1,000 for attendance of telephonic board meetings, except for
telephonic board meetings called pursuant to RIC and RIF’s Security Valuation and Pricing Procedures; and $500 for attendance
of telephonic Committee meetings. Each independent Trustee is also paid $200 per hour for time spent for formal deposition
preparation and in depositions related to the McClure litigation (see note 9). The Audit Committee Chair and Investment Committee
Chair are each paid a fee of $15,000 per year and the Nominating and Governance Committee Chair is paid a fee of $12,000 per
year. The chairman of the Board receives additional annual compensation of $85,000. Ms. Cavanaugh and the Trustee Emeritus
are not compensated by the Russell Fund Complex for service as a Trustee. Trustees’ out of pocket expenses are also paid by the
Russell Fund Complex.
6. Federal Income Taxes
At October 31, 2015, the following Funds had net tax basis capital loss carryforwards which may be applied against any net realized
taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first. Available capital loss
carryforwards and expiration dates are as follows:
No Expiration | ||||||||||||||||
Funds | 10/31/2015 | 10/31/2016 | 10/31/2017 | 10/31/2018 | 10/31/2019 | Short Term | Long-Term | Totals | ||||||||
Russell U.S. Defensive | ||||||||||||||||
Equity Fund | $ | — | $ | 1,436,741 | $ | — | $ | 21,987,752 | $ | — | $ | — | $ | — | $ | 23,424,493 |
Russell International | ||||||||||||||||
Developed Markets | — | — | 113,721,193 | 51,503,855 | — | — | — | 165,225,048 | ||||||||
Fund | ||||||||||||||||
Russell Emerging | ||||||||||||||||
Markets Fund | ||||||||||||||||
— | — | — | — | — | 29,576,214 | — | 29,576,214 | |||||||||
Russell Tax-Managed | ||||||||||||||||
U.S. Large Cap Fund | — | — | — | — | — | 4,669,760 | — | 4,669,760 | ||||||||
Russell Tax-Managed | ||||||||||||||||
International Equity | — | — | — | — | — | 35,981,657 | 1,048,728 | 37,030,385 | ||||||||
Fund |
800 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
No Expiration | ||||||||
Funds | 10/31/2015 | 10/31/2016 | 10/31/2017 | 10/31/2018 | 10/31/2019 | Short Term | Long-Term | Totals |
Russell Global | ||||||||
Opportunistic Credit | — | — | — | — | — | 21,112,294 | — | 21,112,294 |
Fund | ||||||||
Russell Tax Exempt | ||||||||
Bond Fund | — | 187,332 | — | — | 525,860 | — | — | 713,192 |
Russell Multi-Strategy | ||||||||
Alternative Fund | — | — | — | — | — | 57,621,833 | — | 57,621,833 |
Russell Multi-Strategy | ||||||||
Income Fund | — | — | — | — | — | 666,330 | — | 666,330 |
Russell Strategic Call | ||||||||
Overwriting Fund | — | — | — | — | — | 7,275,756 | 7,676,552 | 14,952,308 |
Select International | ||||||||
Equity Fund | — | — | — | — | — | 6,503,737 | 1,994,752 | 8,498,489 |
Under the Regulated Investment Company Modernization Act of 2010, the Funds will be permitted to carry forward capital losses
incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those
future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of
this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment
capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being
considered all short-term as under previous law.
At October 31, 2015, the cost of investments and net unrealized appreciation (depreciation), undistributed ordinary income and
undistributed long-term gains for income tax purposes were as follows:
Russell U.S. Core | Russell U.S. Defensive | Russell U.S. Dynamic | Russell U.S. Strategic | Russell U.S. Large | |||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Equity Fund | Cap Equity Fund | |||||||||||||||
Cost of Investments | $ | 800,252,265 | $ | 907,968,474 | $ | 570,939,208 | $ | 3,657,022,188 | $ | 369,684,553 | |||||||||
Unrealized Appreciation | $ | 168,762,593 | $ | 101,583,381 | $ | 68,198,682 | $ | 479,823,757 | $ | 58,482,677 | |||||||||
Unrealized Depreciation | (21,810,409 | ) | (17,594,908 | ) | (22,189,546 | ) | (108,584,333 | ) | (9,759,251 | ) | |||||||||
Net Unrealized Appreciation (Depreciation) | $ | 146,952,184 | $ | 83,988,473 | $ | 46,009,136 | $ | 371,239,424 | $ | 48,723,426 | |||||||||
Undistributed Ordinary Income | $ | 30,793,643 | $ | 371,929 | $ | 21,793,915 | $ | 22,975,241 | $ | 4,133,935 | |||||||||
Undistributed Long-Term Capital Gains | |||||||||||||||||||
(Capital Loss Carryforward) | $ | 137,829,524 | $ | (23,424,493 | ) $ | 53,240,715 | $ | 177,564,589 | $ | 28,559,944 | |||||||||
Tax Composition of Distributions | |||||||||||||||||||
Ordinary Income | $ | 52,038,075 | $ | 15,448,538 | $ | 43,767,340 | $ | 149,751,266 | $ | 13,907,442 | |||||||||
Long-Term Capital Gains | $ | 211,363,042 | $ | — | $ | 61,804,750 | $ | 212,685,954 | $ | 29,057,025 |
Russell International | ||||||||||||||||
Russell U.S. Mid Cap | Russell U.S. Small | Developed Markets | Russell Global Equity | Russell Emerging | ||||||||||||
Equity Fund | Cap Equity Fund | Fund | Fund | Markets Fund | ||||||||||||
Cost of Investments | $ | 199,541,648 | $ | 2,163,112,520 | $ | 2,876,397,755 | $ | 2,380,382,768 | $ | 2,634,151,041 | ||||||
Unrealized Appreciation | $ | 15,337,724 | $ | 177,727,232 | $ | 502,268,720 | $ | 605,118,247 | $ | 445,682,433 | ||||||
Unrealized Depreciation | (8,691,305 | ) | (114,536,886 | ) | (536,355,532 | ) | (101,489,216 | ) | (664,764,988 | ) | ||||||
Net Unrealized Appreciation (Depreciation) | $ | 6,646,419 | $ | 63,190,346 | $ | (34,086,812 | ) $ | 503,629,031 | $ | (219,082,555 | ) | |||||
Undistributed Ordinary Income | $ | 4,404,597 | $ | 8,792,169 | $ | 30,069,714 | $ | 40,811,646 | $ | 2,726,998 | ||||||
Undistributed Long-Term Capital Gains | ||||||||||||||||
(Capital Loss Carryforward) | $ | 21,898,311 | $ | 133,163,095 | $ | (165,225,048 | ) $ | 226,378,350 | $ | (29,576,214 | ) | |||||
Tax Composition of Distributions | ||||||||||||||||
Ordinary Income | $ | 6,857,663 | $ | 24,943,044 | $ | 74,841,952 | $ | 91,158,059 | $ | 50,758,541 | ||||||
Long-Term Capital Gains | $ | 10,736,275 | $ | 147,904,474 | $ | — | $ | 120,948,522 | $ | 34,792,045 |
Notes to Financial Statements 801
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
Russell Tax-Managed | Russell Tax-Managed | Russell Global | ||||||||||||||||||||||
Russell Tax-Managed | U.S. Mid & Small Cap | International Equity | Opportunistic Credit | Russell Strategic Bond | ||||||||||||||||||||
U.S. Large Cap Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||
Cost of Investments | $ | 1,253,168,186 | $ | 308,025,653 | $ | 440,743,064 | $ | 1,858,505,458 | $ | 6,687,794,887 | ||||||||||||||
Unrealized Appreciation | $ | 346,538,595 | $ | 88,960,194 | $ | 8,055,882 | $ | 21,703,558 | $ | 253,202,343 | ||||||||||||||
Unrealized Depreciation | (10,802,512 | ) | (7,075,111 | ) | (7,390,616 | ) | (159,335,784 | ) | (273,463,596 | ) | ||||||||||||||
Net Unrealized Appreciation (Depreciation) | $ | 335,736,083 | $ | 81,885,083 | $ | 665,266 | $ | (137,632,226 | ) $ | (20,261,253 | ) | |||||||||||||
Undistributed Ordinary Income | $ | 8,558,612 | $ | — | $ | 2,337,394 | $ | 2,138,083 | $ | 96,600,847 | ||||||||||||||
Undistributed Long-Term Capital Gains | ||||||||||||||||||||||||
(Capital Loss Carryforward) | $ | (4,669,760 | ) $ | 1,876,536 | $ | (37,030,385 | ) $ | (21,112,294 | ) $ | 34,113,349 | ||||||||||||||
Tax Composition of Distributions | ||||||||||||||||||||||||
Ordinary Income | $ | 8,092,263 | $ | — | $ | — | $ | 90,650,130 | $ | 216,228,805 | ||||||||||||||
Long-Term Capital Gains | $ | 56,729,949 | $ | 18,436,661 | $ | — | $ | 9,075,517 | $ | 53,640,128 | ||||||||||||||
Russell Investment | Russell Short Duration | Russell Tax Exempt | Russell Tax Exempt | Russell Commodity | ||||||||||||||||||||
Grade Bond Fund | Bond Fund | High Yield Bond Fund | Bond Fund | Strategies Fund | ||||||||||||||||||||
Cost of Investments | $ | 1,401,562,042 | $ | 897,172,313 | $ | 243,637,724 | $ | 1,245,652,170 | $ | 735,853,781 | ||||||||||||||
Unrealized Appreciation | $ | 35,444,597 | $ | 2,232,453 | $ | 3,574,065 | $ | 46,148,100 | $ | — | ||||||||||||||
Unrealized Depreciation | (35,080,276 | ) | (10,082,035 | ) | (1,579,162 | ) | (2,978,425 | ) | (120,294 | ) | ||||||||||||||
Net Unrealized Appreciation (Depreciation) | $ | 364,321 | $ | (7,849,582 | ) $ | 1,994,903 | $ | 43,169,675 | $ | (120,294 | ) | |||||||||||||
Undistributed Ordinary Income | $ | 28,573,962 | $ | 669,764 | $ | 1,071,819 | $ | 3,075,331 | $ | — | ||||||||||||||
Undistributed Long-Term Capital Gains | ||||||||||||||||||||||||
(Capital Loss Carryforward) | $ | 1,898,205 | $ | 479,583 | $ | 203,278 | $ | (713,192 | ) $ | — | ||||||||||||||
Tax Composition of Distributions | ||||||||||||||||||||||||
Ordinary Income | $ | 36,986,210 | $ | 18,467,096 | $ | — | $ | 49,826 | $ | — | ||||||||||||||
Tax-Exempt Income | $ | — | $ | — | $ | 2,367,662 | $ | 34,236,217 | $ | — | ||||||||||||||
Long-Term Capital Gains | $ | 10,985,540 | $ | 3,205,421 | $ | — | $ | — | $ | — | ||||||||||||||
Russell Global | Russell Global Real | Russell Multi-Strategy | Russell Multi-Strategy | Russell Strategic Call | ||||||||||||||||||||
Infrastructure Fund | Estate Securities Fund | Alternative Fund | Income Fund | Overwriting Fund | ||||||||||||||||||||
Cost of Investments | $ | 1,391,110,491 | $ | 1,402,936,522 | $ | 485,738,245 | $ | 284,522,498 | $ | 61,658,829 | ||||||||||||||
Unrealized Appreciation | $ | 97,175,156 | $ | 227,056,343 | $ | 74,592,713 | $ | 4,856,819 | $ | 26,733,894 | ||||||||||||||
Unrealized Depreciation | (41,655,779 | ) | (30,702,837 | ) | (84,008,226 | ) | (17,131,603 | ) | (2,097,976 | ) | ||||||||||||||
Net Unrealized Appreciation (Depreciation) | $ | 55,519,377 | $ | 196,353,506 | $ | (9,415,513 | ) $ | (12,274,784 | ) $ | 24,635,918 | ||||||||||||||
Undistributed Ordinary Income | $ | 5,503,684 | $ | 9,490,919 | $ | 6,516,204 | $ | 643,072 | $ | 22,920 | ||||||||||||||
Undistributed Long-Term Capital Gains | ||||||||||||||||||||||||
(Capital Loss Carryforward) | $ | 34,493,718 | $ | 71,975,739 | $ | (57,621,833 | ) $ | (666,330 | ) $ | (14,952,308 | ) | |||||||||||||
Tax Composition of Distributions | ||||||||||||||||||||||||
Ordinary Income | $ | 79,765,044 | $ | 57,105,214 | $ | 27,108,039 | $ | 4,153,491 | $ | 761,466 | ||||||||||||||
Long-Term Capital Gains | $ | 69,900,301 | $ | 89,209,239 | $ | — | $ | — | $ | — | ||||||||||||||
Select U.S. Equity | Select International | |||||||||||||||||||||||
Fund | Equity Fund | |||||||||||||||||||||||
Cost of Investments | $ | 815,866,623 | $ | 927,440,668 | ||||||||||||||||||||
Unrealized Appreciation | $ | 42,397,789 | $ | 24,714,758 | ||||||||||||||||||||
Unrealized Depreciation | (53,184,977 | ) | (89,910,843 | ) | ||||||||||||||||||||
Net Unrealized Appreciation (Depreciation) | $ | (10,787,188 | ) $ | (65,196,085 | ) | |||||||||||||||||||
Undistributed Ordinary Income | $ | 7,678,470 | $ | 19,659,622 | ||||||||||||||||||||
Undistributed Long-Term Capital Gains | ||||||||||||||||||||||||
(Capital Loss Carryforward) | $ | 1,065,331 | $ | (8,498,489 | ) | |||||||||||||||||||
Tax Composition of Distributions | ||||||||||||||||||||||||
Ordinary Income | $ | 8,698,331 | $ | 755,165 | ||||||||||||||||||||
Long-Term Capital Gains | $ | 38,871 | $ | — |
As permitted by tax regulations, the Funds intend to defer a late year ordinary loss incurred from January 1, 2015 to October 31,
2015 and treat it as arising in the fiscal year 2016. As of October 31, 2015, Russell Tax-Managed U.S. Mid and Small Cap, Russell
Global Opportunistic Credit and Russell Commodity Strategies Funds had deferred ordinary losses of $899,849, $4,334,300 and
6,574,817 respectively.
802 Notes to Financial Statements
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
7. Record Ownership
As of October 31, 2015, the following table includes shareholders of record with greater than 10% of the total outstanding shares
of each respective Fund:
# of Shareholders | % | |||
Russell U.S. Core Equity Fund | 3 | 74.7 | ||
Russell U.S. Defensive Equity Fund | 4 | 60.0 | ||
Russell U.S. Dynamic Equity Fund | 3 | 73.9 | ||
Russell U.S. Strategic Equity Fund | 2 | 61.2 | ||
Russell U.S. Large Cap Equity Fund | 1 | 99.1 | ||
Russell U.S. Mid Cap Equity Fund | 2 | 97.5 | ||
Russell U.S. Small Cap Equity Fund | 3 | 53.4 | ||
Russell International Developed Markets Fund | 4 | 81.9 | ||
Russell Global Equity Fund | 2 | 39.5 | ||
Russell Emerging Markets Fund | 3 | 56.1 | ||
Russell Tax-Managed U.S. Large Cap Fund | 4 | 74.8 | ||
Russell Tax-Managed U.S. Mid & Small Cap Fund | 4 | 75.8 | ||
Russell Tax-Managed International Equity Fund | 4 | 78.0 | ||
Russell Global Opportunistic Credit Fund | 3 | 52.0 | ||
Russell Strategic Bond Fund | 3 | 57.9 | ||
Russell Investment Grade Bond Fund | 3 | 63.7 | ||
Russell Short Duration Bond Fund | 4 | 73.3 | ||
Russell Tax Exempt High Yield Bond Fund | 4 | 79.4 | ||
Russell Tax Exempt Bond Fund | 4 | 80.9 | ||
Russell Commodity Strategies Fund | 2 | 49.6 | ||
Russell Global Infrastructure Fund | 4 | 63.0 | ||
Russell Global Real Estate Securities Fund | 3 | 67.3 | ||
Russell Multi-Strategy Alternative Fund | 3 | 71.5 | ||
Russell Multi-Strategy Income Fund | 2 | 73.1 | ||
Russell Strategic Call Overwriting Fund | 1 | 92.8 | ||
Select U.S. Equity Fund | 3 | 75.9 | ||
Select International Equity Fund | 4 | 87.9 |
8. 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, as amended (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.
See each Fund’s Schedule of Investments for a list of restricted securities held by a Fund that are illiquid.
9. Pending Legal Proceedings
On October 17, 2013, Fred McClure filed a derivative lawsuit against RIMCo on behalf of ten funds: the Russell Commodity
Strategies Fund, Russell Emerging Markets Fund, Russell Global Equity Fund, Russell Global Infrastructure Fund, Russell Global
Opportunistic Credit Fund, Russell International Developed Markets Fund, Russell Multi-Strategy Alternative Fund, Russell
Strategic Bond Fund, Russell U.S. Small Cap Equity Fund and Russell Global Real Estate Securities Fund. The lawsuit, which
was filed in the United States District Court for the District of Massachusetts, seeks recovery under Section 36(b) of the Investment
Company Act, as amended, for the funds’ alleged payment of excessive investment management fees to RIMCo. On December 8,
2014, Fred McClure filed a second derivative lawsuit in the United States District Court for the District of Massachusetts. This
second suit involves the same ten funds, and the allegations are similar, although the second suit adds a claim alleging that RFSC
charged the funds excessive administrative fees under Section 36(b). The plaintiff seeks recovery of the amount of the allegedly
excessive compensation or payments received from these ten funds and earnings that would have accrued to plaintiff had that
Notes to Financial Statements 803
Russell Investment Company
Russell Funds
Notes to Financial Statements, continued — October 31, 2015
compensation not been paid or, alternatively, rescission of the contracts and restitution of all excessive fees paid, for a period
commencing one year prior to the filing of the lawsuit through the date of the trial. RIMCo is defending the actions.
10. Subsequent Events
Management has evaluated the events and/or transactions that have occurred through the date the financial statements were issued
and noted no items requiring adjustments of the financial statements or additional disclosures.
On November 2, 2015, the Board declared dividends payable from net investment income. Dividends were paid on November 4,
2015, to shareholders of record on November 3, 2015.
On December 1, 2015, the Board declared dividends payable from net investment income. Dividends were paid on December 3,
2015, to shareholder of record effective with the opening of business on December 2, 2015.
804 Notes to Financial Statements
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders
of Russell Investment Company
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments and the related statements
of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position
of Russell U.S. Core Equity Fund, Russell U.S. Defensive Equity Fund, Russell U.S. Dynamic Equity Fund, Russell U.S. Strategic
Equity Fund, Russell U.S. Large Cap Equity Fund, Russell U.S. Mid Cap Equity Fund, Russell U.S. Small Cap Equity Fund, Russell
International Developed Markets Fund, Russell Global Equity Fund, Russell Emerging Markets Fund, Russell Tax-Managed U.S.
Large Cap Fund, Russell Tax-Managed U.S. Mid & Small Cap Fund, Russell Tax-Managed International Equity Fund, Russell
Global Opportunistic Credit Fund, Russell Strategic Bond Fund, Russell Investment Grade Bond Fund, Russell Short Duration Bond
Fund, Russell Tax Exempt High Yield Bond Fund, Russell Tax Exempt Bond Fund, Russell Commodity Strategies Fund and its
subsidiary, Russell Global Infrastructure Fund, Russell Global Real Estate Securities Fund, Russell Multi-Strategy Alternative Fund
and its subsidiary, Russell Multi-Strategy Income Fund, Russell Strategic Call Overwriting Fund, Select U.S. Equity Fund and Select
International Equity Fund, (twenty seven of the portfolios constituting Russell Investment Company, hereafter collectively referred to
as the “Funds”) at October 31, 2015, the results of each of their operations for the period then ended, the changes in each of their net
assets and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the
responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities
at October 31, 2015 by correspondence with the custodian, brokers and transfer agent, provide a reasonable basis for our opinion.
Report of Independent Registered Public Accounting Firm 805
Russell Investment Company
Russell Funds
Tax Information — October 31, 2015 (Unaudited)
For the tax year ended October 31, 2015, the Funds hereby designate 100%, or the maximum amount allowable, of its net taxable
income as qualified dividends taxed at individual net capital gain rates.
For the tax year ended October 31, 2015, the Funds hereby designate under Section 871(k)(2)(c) of the Internal Revenue Code,
the maximum amount allowable as a short-term capital gains dividend for purposes of the tax imposed under Section 871(a)(1)(A)
of the Code. This applies to nonresident alien shareholders only.
The Form 1099 you receive in January 2016 will show the tax status of all distributions paid to your account in calendar year
2015.
The Funds designate dividends distributed during the fiscal year as qualifying for the dividends received deduction for corporate
shareholders as follows:
Russell U.S Core Equity Fund | 43.6 | % |
Russell U.S. Defensive Equity Fund | 100.0 | % |
Russell U.S. Dynamic Equity Fund | 33.1 | % |
Russell U.S. Strategic Equity Fund | 100.0 | % |
Russell U.S. Large Cap Equity Fund | 87.9 | % |
Russell U.S. Mid Cap Equity Fund | 42.7 | % |
Russell U.S. Small Cap Equity Fund | 100.0 | % |
Russell International Developed Markets Fund | 0.0 | % |
Russell Global Equity Fund | 45.4 | % |
Russell Emerging Markets Fund | 0.0 | % |
Russell Tax-Managed U.S. Large Cap Fund | 100.0 | % |
Russell Tax-Managed U.S. Mid & Small Cap Fund | 0 | % |
Russell Tax-Managed International Fund | 0 | % |
Russell Global Opportunistic Credit Fund | 0 | % |
Russell Strategic Bond Fund | 0 | % |
Russell Investment Grade Bond Fund | 0 | % |
Russell Short Duration Bond Fund | 0 | % |
Russell Tax Exempt High Yield Bond Fund | 0 | % |
Russell Tax Exempt Bond Fund | 0 | % |
Russell Commodity Strategies Fund | 0 | % |
Russell Global Infrastructure Fund | 37.7 | % |
Russell Global Real Estate Securities Fund | 0 | % |
Russell Multi-Strategy Alternative Fund | 43.1 | % |
Russell Multi-Strategy Income Fund | 11.9 | % |
Russell Strategic Call Overwriting Fund | 100.0 | % |
Select U.S. Equity Fund | 62.9 | % |
Select International Equity Fund | 0.0 | % |
Pursuant to Section 852 of the Internal Revenue Code, the Funds designate the following amounts as long-term capital gain
dividends for their taxable year ended October 31, 2015:
Russell U.S. Small Cap Fund | $ | 147,904,474 |
Russell U.S. Core Equity Fund | 211,363,042 |
806 Tax Information
Russell Investment Company
Russell Funds
Tax Information — October 31, 2015 (Unaudited)
Russell U.S. Strategic Equity Fund | 212,685,954 |
Russell U.S. Mid Cap Equity Fund | 10,736,275 |
Russell U.S. Large Cap Equity Fund | 29,057,025 |
Russell U.S. Dynamic Equity Fund | 61,804,750 |
Russell Tax-Managed U.S. Mid & Small Cap Fund | 18,436,661 |
Russell Tax-Managed Large Cap Fund | 56,729,949 |
Russell Global Opportunistic Credit Fund | 9,075,517 |
Russell Strategic Bond Fund | 53,640,128 |
Russell Investment Grade Bond Fund | 10,985,540 |
Russell Short Duration Bond Fund | 3,205,421 |
Russell Global Infrastructure Fund | 69,900,301 |
Russell Global Equity Fund | 120,948,522 |
Russell Global Real Estate Securities Fund | 89,209,239 |
Russell Emerging Markets Fund | 34,792,045 |
Russell Commodity Strategies Fund | 38,871 |
Please consult a tax adviser for any questions about federal or state income tax laws.
The Funds listed below paid foreign taxes and recognized foreign source income during the taxable year ended October 31, 2015.
Pursuant to Section 853 of the Internal Revenue Code, the Funds designate the following per share amounts of foreign taxes paid
and income earned from foreign sources:
Foreign | Foreign | |||||||
Taxes | Source | |||||||
Foreign | Paid | Foreign Source | Income Per | |||||
Fund Name | Taxes Paid | Per Share | Income | Share | ||||
Russell International Developed Markets Fund | $ | 4,772,198 | $ | 0.0596 | $ | 93,683,612 | $ | 1.1691 |
Russell Global Equity Fund | 2,787,406 | 0.0113 | 41,971,742 | 0.1694 | ||||
Russell Emerging Markets Fund | 6,592,926 | 0.0427 | 54,916,754 | 0.3554 | ||||
Russell Global Infrastructure Fund | 2,188,651 | 0.0178 | 33,671,266 | 0.2734 | ||||
Russell Global Real Estate Securities Fund | 1,619,419 | 0.0396 | 24,519,713 | 0.5989 | ||||
Select International Equity Fund | 2,106,649 | 0.0222 | 24,509,524 | 0.2584 | ||||
Select Tax Managed International Equity Fund | 315,840 | 0.0064 | 3,083,343 | 0.0629 |
Pursuant to Section 852(b)(5)(A) of the Internal Revenue Code, the following Funds designate distributions from net investment
income as exempt interest dividends during the taxable year ended October 31, 2015:
Russell Tax Exempt Bond Fund | $ | 34,236,217 |
Russell Tax Exempt High Yield Bond Fund | 2,367,662 |
Tax Information 807
Russell Investment Company
Russell Funds
Affiliated Brokerage Transactions — October 31, 2015 (Unaudited)
As mentioned in the Note 5 in the Notes to Financial Statements contained in this annual report, the Funds utilize RIS and its
independent brokers. RIS is a registered broker dealer and investment adviser and an affiliate with RIMCo. Trades placed through
RIS and its independent brokers are made (i) to manage trading associated with changes in money manager, rebalancing across
existing money managers, cash flows and other portfolio transitions, (ii) to execute portfolio securities transactions for each Fund’s
assets that RIMCo determines not to allocate to money managers including assets RIMCo may manage to manage risk in a Fund’s
investment portfolio and for each Fund’s cash reserves or (iii) to execute a money manager’s portfolio securities transactions for the
segment of a Fund’s portfolio assigned to the money manager. RIMCo has authorized RIS to effect certain futures, swaps, over-the-
counter derivatives transactions, and cleared swaps, including foreign currency spot, forwards and options trading on behalf of the
Funds.
Amounts retained by RIS for the period ended October 31, 2015 were as follows:
Affiliated Broker | Fund Name | 2015 | |
RIMCo | |||
Russell U.S. Core Equity Fund | $ | 250,086 | |
Russell U.S. Defensive Equity Fund | 89,996 | ||
Russell U.S. Dynamic Equity Fund | 81,152 | ||
Russell U.S. Strategic Equity Fund | 443,105 | ||
Russell U.S. Large Cap Equity Fund | 1,269 | ||
Russell U.S. Mid Cap Equity Fund | 46,077 | ||
Russell U.S. Small Cap Equity Fund | 878,965 | ||
Russell International Developed Markets Fund | 974,425 | ||
Russell Global Equity Fund | 380,645 | ||
Russell Emerging Markets Fund | 592,237 | ||
Russell Tax-Managed U.S. Large Cap Fund | 74,143 | ||
Russell Tax-Managed U.S. Mid & Small Cap Fund | 33,575 | ||
Russell Strategic Bond Fund | 1,363 | ||
Russell Short Duration Bond Fund | 71 | ||
Russell Global Infrastructure Fund | 240,145 | ||
Russell Global Real Estate Securities Fund | 208,638 | ||
Russell Multi-Strategy Income Fund | 59,324 |
808 Affiliated Brokerage Transactions
Russell Investment Company
Russell Funds
Basis for Approval of Investment Advisory Contracts — (Unaudited)
Initial Approval of the Investment Advisory Agreements for the Russell Tax-Managed International Equity Fund, Russell
Multi-Strategy Income Fund and Russell Tax Exempt High Yield Bond Fund
In the case of new Funds, the Investment Company Act of 1940, as amended (the “1940 Act”), requires that the Board of Trustees (the
“Board”), including a majority of its members who are not considered to be “interested persons” under the 1940 Act (the “Independent
Trustees”) voting separately, initially approve the advisory agreements with RIMCo (the “New Fund RIMCo Agreements”) and the
portfolio management contract with each Money Manager of the Funds (collectively, the “New Fund Money Manager Agreements,”
and together with the New Fund RIMCo Agreements, the “New Fund Agreements” or, individually, a “New Fund Agreement”) and,
thereafter, to approve the continuation of each such New Fund Agreement on at least an annual basis, and that the terms and conditions
of each New Fund Agreement provide for its termination if continuation is not approved annually. The Board, including all of the
Independent Trustees, initially considered and approved the adoption of the New Fund Agreements for the Russell Tax-Managed
International Equity Fund (the “Tax-Managed International Fund”) and the Russell Multi-Strategy Income Fund (the “Multi-Strategy
Income Fund”) at a meeting held in person on December 3, 2014 (the “December New Fund Agreement Evaluation Meeting”).
Subsequently, the Board, including all of the Independent Trustees, initially considered and approved the adoption of the New Fund
Agreement for the Russell Tax Exempt High Yield Bond Fund (the “Tax Exempt High Yield Fund,” and together with the Tax-Managed
International Fund and the Multi-Strategy Income Fund, the “New Funds” or, individually, a “New Fund”) at a meeting held in
person on February 24, 2015 (the “February New Fund Agreement Evaluation Meeting,” and together with the December New Fund
Agreement Evaluation Meeting, the “New Fund Agreement Evaluation Meetings” or, individually, a “New Fund Agreement Evaluation
Meeting”).
In preparation for the reviews, the Board, including the Independent Trustees, considered (1) information and reports prepared by
RIMCo relating to the services proposed to be provided by RIMCo (and its affiliates) and each Money Manager to the New Funds; and
(2) information prepared by RIMCo, not an independent source, comparing the proposed fees and expenses of each New Fund with
other peer funds not managed by RIMCo, identified and presented by RIMCo as generally comparable in investment objectives to the
New Funds (the “RIMCo Comparable Funds” and, with the New Fund, in the case of operating expense comparisons, the New Fund’s
“RIMCo Expense Universe”). The foregoing and other information received by the Board, including the Independent Trustees, in
connection with its evaluations of the New Fund Agreements are collectively called the “New Fund Agreement Evaluation Information.”
The Trustees’ evaluations also reflected the knowledge and familiarity gained as Board members of the other RIMCo-managed funds
for which the Board has supervisory responsibility with respect to services provided by RIMCo and RIMCo’s affiliates, and advice
previously received from counsel to the Funds and counsel to the Independent Trustees regarding the Trustees’ responsibilities in
considering the New Fund Agreements.
At the December New Fund Agreement Evaluation Meeting, the Board was advised that RIMCo created the Tax-Managed International
Fund to be included in the Russell Tax-Managed Model Strategies, an asset allocation model maintained by RIMCo and provided to
investment advisers, to increase the number of tax-managed funds and thereby improve the tax efficiency of the Tax-Managed Model
Strategies. The Board considered RIMCo’s advice that the Tax-Managed International Fund would replace two non-U.S. equity funds
that are not tax-managed in the Tax-Managed Model Strategies. The Board further considered that RIMCo would manage most of
the Tax-Managed International Fund’s assets based upon model portfolios provided by multiple unaffiliated non-discretionary Money
Managers with distinct investment styles, and that RIMCo also would manage a portion of the Fund’s assets directly. The Board was
advised that the Tax-Managed International Fund would have gross advisory fees (i.e., not giving effect to waivers) that were higher
(i.e., worse) than the third quintile of its Fund’s RIMCo Expense Universe, which RIMCo attributed to the Fund’s greater exposure to
emerging markets, which are more expensive, than its RIMCo Comparable Funds. The Board considered that RIMCo had contractually
agreed to waive up to the full amount of its advisory fee and reimburse the Fund for other direct fund-level expenses, excluding
extraordinary expenses, to the extent that the Fund’s direct fund-level expenses exceed 0.95% of the Fund’s average daily net assets
on an annual basis.
At the December New Fund Agreement Evaluation Meeting, the Board was advised that RIMCo’s goal with respect to the Multi-Strategy
Income Fund was to use the Fund initially as a stand-alone product and potentially as a component fund in certain asset allocation
models provided by a third-party investment adviser. RIMCo also advised the Board that the Multi-Strategy Income Fund may in the
future be added as an underlying fund for certain strategic allocation funds-of-funds managed by RIMCo. The Board considered that
the Multi-Strategy Income Fund would seek to achieve its investment objective through asset allocations across a wide range of asset
classes, which may change over time. The Board also considered that after taking account of RIMCo’s contractual agreement to limit
the Fund’s direct fund-level expenses to 0.65% of the Fund’s average daily net assets, the Fund would have a total expense ratio that
ranked in the third quintile of its RIMCo Expense Universe.
Basis for Approval of Investment Advisory Contracts 809
Russell Investment Company
Russell Funds
Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)
At the February New Fund Agreement Evaluation Meeting, the Board was advised that, like the Tax-Managed International Fund
presented at the December New Fund Agreement Evaluation Meeting, RIMCo created the Tax Exempt High Yield Fund to be included
in the Russell Tax-Managed Model Strategies, an asset allocation model maintained by RIMCo and provided to investment advisers,
to increase the number of tax-managed funds and thereby improve the tax efficiency of the Tax-Managed Model Strategies. The Board
considered RIMCo’s advice that the Tax Exempt High Yield Fund would replace a less diversified fixed income fund that is not tax
managed in certain Tax-Managed Model Strategies. The Board further considered that RIMCo would manage most of the Tax Exempt
High Yield Fund’s assets based upon model portfolios provided by two unaffiliated non-discretionary Money Managers, and that RIMCo
also would manage a portion of the Fund’s assets directly. The Board was advised that the Tax Exempt High Yield Fund would have
advisory fees that ranked in the third quintile of its RIMCo Expense Universe. The Board was further advised that after taking account
of RIMCo’s contractual agreement to waive up to the full amount of its advisory fee and reimburse the Tax Exempt High Yield Fund
for other direct fund-level expenses, excluding extraordinary expenses, to the extent that the Fund’s direct fund-level expenses exceed
0.48% of the Fund’s average daily net assets, the Fund would have a total expense ratio that ranked in the third quintile of its RIMCo
Expense Universe.
Based upon the New Fund Agreement Evaluation Information, including presentations by RIMCo at the respective New Fund Agreement
Evaluation Meetings, the Trustees considered, with respect to each New Fund, various specific factors in evaluating approval of the
New Fund RIMCo Agreements, including the following:
1. The nature, scope and overall quality of the investment management and other services provided, and expected to be provided, to
the Fund by RIMCo;
2. The advisory fee paid by the Fund to RIMCo (the “Advisory Fee”) and the fact that it encompasses all investment advisory fees paid
by the Fund, including the fees for any Money Managers of such Fund;
3. Information provided by RIMCo as to other fees and benefits received by RIMCo or its affiliates from the Fund, including any
administrative or transfer agent fees and any fees received for management or administration of securities lending cash collateral, soft
dollar arrangements and commissions in connection with portfolio securities transactions;
4. Information provided by RIMCo as to expenses incurred by the Fund;
5. Information provided by RIMCo as to the profits that RIMCo expects to derive from its operations with respect to the New Fund.
The Board noted, among other things, that as newly organized funds, the New Funds, at the time of the New Fund Agreement Evaluation
Meetings, had no historical operating, performance, expense ratio or profitability information. Moreover, the Board noted, in considering
the structure of the Advisory Fee and whether economies of scale are reflected appropriately, the uncertainties as to the New Funds’
ability to attract assets.
On the basis of the New Fund Agreement Evaluation Information, and other information previously received by the Board from RIMCo
during the course of the current year or prior years, or presented at or in connection with the New Fund Agreement Evaluation Meetings
by RIMCo, the Board, in respect of each New Fund, found, after giving effect to any applicable waivers and/or reimbursements (1)
the Advisory Fee rate and structure to be charged by RIMCo was reasonable in light of the nature, scope and overall quality of the
investment management and other services expected to be provided to the New Fund; (2) the projected relative expense ratio of the New
Fund was comparable to those of its RIMCo Comparable Funds; (3) other benefits and fees expected to be received by RIMCo or its
affiliates from the New Fund were not excessive; and (4) RIMCo’ projected profitability with respect to the New Fund was not excessive
in light of the expected nature, scope and overall quality of the investment management and other services to be provided by RIMCo.
After considering the foregoing and other relevant factors, the Board concluded that approval of the New Fund RIMCo Agreements
would be in the best interests of each New Fund and voted to approve the New Fund RIMCo Agreement for each New Fund.
At the New Fund Agreement Evaluation Meetings, with respect to the evaluation of the terms of the New Fund Money Manager
Agreements, the Board received and considered information from RIMCo reporting, among other things, for each Money Manager:
RIMCo’s assessment of the investment capabilities, philosophy and approach of the Money Manager; any significant business
relationships between the Money Manager and RIMCo or Russell Financial Services, Inc., the New Funds’ underwriter; and RIMCo’s
recommendation with respect to the Money Manager’s fee rate. The Board also received reports regarding each Money Manager’s
compliance program and certification from the New Funds’ Chief Compliance Officer that its compliance program would meet applicable
810 Basis for Approval of Investment Advisory Contracts
Russell Investment Company
Russell Funds
Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)
legal and regulatory requirements. RIMCo has advised the Board that it does not regard Money Manager profitability as relevant to
its evaluation of the New Fund Money Manager Agreements because the willingness of Money Managers to serve in such capacity
depends upon arm’s-length negotiations with RIMCo; RIMCo is aware of the standard fees charged by Money Managers to other clients;
and RIMCo believes that the fees agreed upon with Money Managers are reasonable in light of the anticipated quality of investment
advisory services to be rendered. The Board accepted RIMCo’s explanation in light of the Board’s findings as to the reasonableness of
the Advisory Fee to be paid by each New Fund and the fact that each Money Manager’s fee will be paid by RIMCo.
Based substantially upon RIMCo’s recommendations, together with the New Fund Agreement Evaluation Information, the Board
concluded that the fees proposed to be paid to the Money Managers of each New Fund are reasonable in light of the expected quality
of the investment advisory services to be provided and that approval of the New Fund Money Manager Agreement with each Money
Manager of each New Fund would be in the best interests of the New Fund and its shareholders.
Subsequent to the New Fund Agreement Evaluation Meetings, the Board received the following proposals from RIMCo: (1) at a meeting
held on April 14, 2015, to effect a Money Manager change for the Multi-Strategy Income Fund; and (2) at a meeting held on May 19,
2015, to effect a Money Manager change for the Tax-Managed International Fund. In the case of each proposed change, the Trustees
approved the terms of the proposed portfolio management contract based upon RIMCo’s recommendation to hire the Money Manager at
the proposed fee rate; information as to reason for the proposed change; information as to the Money Manager’s role in the management
of the New Fund’s investment portfolio (including the amount of New Fund assets to be allocated to the Money Manager) and RIMCo’s
evaluation of the anticipated quality of the investment advisory services to be provided by the Money Manager; information as to
any significant business relationships between the Money Manager and RIMCo or Russell Financial Services, Inc., the New Fund’s
underwriter; the CCO’s evaluation of the Money Manager’s compliance program, policies and procedures, and certification that they
were consistent with applicable legal standards; RIMCo’s explanation as to the lack of relevance of Money Manager profitability to
the evaluation of portfolio management contracts with Money Managers because the willingness of Money Managers to serve in such
capacity depends upon arm’s-length negotiations with RIMCo; RIMCo’s awareness of the standard fee rates charged by the Money
Manager to other clients; RIMCo’s belief that the proposed investment advisory fees would be reasonable in light of the anticipated
quality of investment advisory services to be rendered; and the increase or decrease in aggregate Money Manager fees to be paid by
RIMCo from its Advisory Fee as a result of the engagement of the Money Manager. The Trustees also considered their findings at the
New Fund Agreement Evaluation Meetings as to the reasonableness of the aggregate Advisory Fees paid by the New Funds, and the fact
that the aggregate Advisory Fees paid by the New Funds would not increase as a result of the implementation of the proposed Money
Manager changes because the Money Managers’ investment advisory fees are paid by RIMCo.
Approval of Money Manager Contracts (for all Funds)
At a meeting held on August 25, 2015, the Board received a proposal from RIMCo to effect Money Manager changes for the Russell
U.S Core Equity Fund, Russell U.S Defensive Equity Fund, Russell U.S. Dynamic Equity Fund, Russell U.S. Strategic Equity Fund
and Russell U.S. Mid Cap Equity Fund. In the case of each proposed change, the Trustees approved the terms of the proposed portfolio
management contract based upon RIMCo’s recommendation to hire the Money Manager at the proposed fee rate; information as to
reason for the proposed change; information as to the Money Manager’s role in the management of the Fund’s investment portfolio
(including the amount of Fund assets to be allocated to the Money Manager) and RIMCo’s evaluation of the anticipated quality of the
investment advisory services to be provided by the Money Manager; information as to any significant business relationships between
the Money Manager and RIMCo or Russell Financial Services, Inc., the Fund’s underwriter; the CCO’s evaluation of the Money
Manager’s compliance program, policies and procedures, and certification that they were consistent with applicable legal standards;
RIMCo’s explanation as to the lack of relevance of Money Manager profitability to the evaluation of portfolio management contracts with
Money Managers because the willingness of Money Managers to serve in such capacity depends upon arm’s-length negotiations with
RIMCo; RIMCo’s awareness of the standard fee rates charged by the Money Manager to other clients; RIMCo’s belief that the proposed
investment advisory fees would be reasonable in light of the anticipated quality of investment advisory services to be rendered; the
increase or decrease in aggregate Money Manager fees to be paid by RIMCo from its Advisory Fee as a result of the engagement of the
Money Manager; and the expected costs of transitioning Fund assets to the Money Manager. The Trustees also considered their findings
at a meeting held in person on May 19-20, 2014 as to the reasonableness of the aggregate Advisory Fees paid by the Funds, and the
fact that the aggregate Advisory Fees paid by the Funds would not increase as a result of the implementation of the proposed Money
Manager changes because the Money Managers’ investment advisory fees are paid by RIMCo.
Basis for Approval of Investment Advisory Contracts 811
Russell Investment Company
Russell Funds
Shareholder Requests for Additional Information — October 31, 2015 (Unaudited)
A complete unaudited schedule of investments is made available generally no later than 60 days after the end of the first and third
quarters of each fiscal year. These reports are available (i) free of charge, upon request, by calling the Funds at (800) 787-7354; (ii) at
www.russell.com; (iii) on the Securities and Exchange Commission’s website at www.sec.gov; and (iv) at the Securities and Exchange
Commission’s public reference room.
The Board has delegated to RIMCo, as RIC’s investment adviser, the primary responsibility for monitoring, evaluating and voting
proxies solicited by or with respect to issuers of securities in which assets of the Funds may be invested. RIMCo has established a proxy
voting committee 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 and information regarding how the Funds voted proxies relating to portfolio securities during the most
recent 12-month period ended June 30, 2015 are available (i) free of charge, upon request, by calling the Funds at (800) 787-7354; (ii)
at www.russell.com; and (iii) on the Securities and Exchange Commission’s website at www. sec.gov.
To reduce expenses, we may mail only one copy of the Funds’ prospectuses and each annual and semi-annual report to those addresses
shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your Financial Intermediary.
Some Financial Intermediaries may offer electronic delivery of the Funds prospectuses and annual and semi-annual reports. Please
contact your Financial Intermediary for further details.
Financial statements of the Funds can be obtained at no charge by calling the Funds at (800) 787-7354.
812 Shareholder Requests for Additional Information
Russell Investment Company
Russell Funds
Disclosure of Information about Fund Trustees and Officers — October 31, 2015
(Unaudited)
The following tables provide information for each officer and trustee of the Russell Fund Complex. The Russell Fund Complex consists
of Russell Investment Company (“RIC”), which has 41 funds, Russell Investment Funds (“RIF”), which has 9 funds. Each of the trustees
is a trustee of RIC and RIF. The first table provides information for the interested trustees. The second table provides information for the
independent trustees. The third table provides information for the Trustee Emeritus. The fourth table provides information for the officers.
Furthermore, each Trustee possesses the following specific attributes: Mr. Alston has business, financial and investment experience
as a senior executive of an international real estate firm and is trained as a lawyer; Ms. Blake has had experience as a certified public
accountant and has had experience as a member of boards of directors/trustees of other investment companies; Ms. Burgermeister has had
experience as a certified public accountant and as a member of boards of directors/trustees of other investment companies; Mr. Connealy
has had experience with other investment companies and their investment advisers first as a partner in the investment management
practice of PricewaterhouseCoopers LLP and, subsequently, as the senior financial executive of two other investment organizations
sponsoring and managing investment companies, and has been determined by the Board to be an audit committee financial expert; Ms.
Krysty has had business, financial and investment experience as the founder and senior executive of a registered investment adviser
focusing on high net worth individuals as well as a certified public accountant and a member of the boards of other corporations and
non-profit organizations; Mr. Tennison has had business, financial and investment experience as a senior executive of a corporation with
international activities and was trained as an accountant; and Mr. Thompson has had experience in business, governance, investment
and financial reporting matters as a senior executive of an organization sponsoring and managing other investment companies, and,
subsequently, has served as a board member of other investment companies. Ms. Cavanaugh has had experience with other financial
services companies, including companies engaged in the sponsorship, management and distribution of investment companies. As a senior
officer and/or director of the Funds, the Adviser and various affiliates of the Adviser providing services to the Funds, Ms. Cavanaugh
is in a position to provide the Board with such parties’ perspectives on the management, operations and distribution of the Funds.
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office* | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
INTERESTED TRUSTEE | |||||
# Sandra Cavanaugh, | President and Chief | Until successor | • President and CEO RIC and RIF | 50 | • Trustee, |
Born May 10, 1954 | Executive Officer | is chosen and | • Chairman of the Board, Co-President | Russell | |
1301 Second Avenue, | since 2010 | qualified by | and CEO, Russell Financial Services, | Exchange | |
18th Floor, Seattle, WA | Trustee since 2010 | Trustees | Inc. (“RFS”) | Traded Funds | |
98101 | Appointed until | • Chairman of the Board, President | Trust | ||
successor is | and CEO, Russell Fund Services | ||||
duly elected and | Company (“RFSC”) | ||||
qualified | • Director, RIMCo | ||||
• Chairman of the Board, President and | |||||
CEO Russell Insurance Agency, Inc. | |||||
(“RIA”) (insurance agency) |
* Each Trustee is subject to mandatory retirement at age 72.
# Ms. Cavanaugh is also an officer and/or director of one or more affiliates of RIC and RIF and is therefore classified as an Interested Trustee.
Disclosure of Information about Fund Trustees and Officers 813
Russell Investment Company
Russell Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
INDEPENDENT TRUSTEES | |||||
Thaddas L. Alston, | Trustee since 2006 | Appointed until | Senior Vice President, Larco | 50 | • Until October |
Born April 7, 1945 | successor is | Investments, Ltd. (real estate firm) | 2015, Trustee, | ||
1301 Second Avenue, | duly elected and | Russell | |||
18th Floor, Seattle, WA | qualified | Exchange | |||
98101 | Traded Funds | ||||
Trust |
814 Disclosure of Information about Fund Trustees and Officers
Russell Investment Company
Russell Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
Kristianne Blake, | Trustee since 2000 | Appointed until | • Director and Chairman of the Audit | 50 | • Director, |
Born January 22, 1954 | Chairman since 2005 | successor is | Committee, Avista Corp (electric | Avista Corp | |
1301 Second Avenue, | duly elected and | utilities) | (electric | ||
18th Floor, Seattle, WA | qualified | • Regent, University of Washington | utilities) | ||
98101 | Approved | • President, Kristianne Gates Blake, | • Until June | ||
annually | P.S. (accounting services) | 30, 2014, | |||
• Until June 30, 2014, Director, Ecova | Director, | ||||
(total energy and sustainability | Ecova (total | ||||
management) | energy and | ||||
• Until December 31, 2013, Trustee | sustainability | ||||
and Chairman of the Operations | management) | ||||
Committee, Principal Investors Funds | • Until | ||||
and Principal Variable Contracts | December 31, | ||||
Funds (investment company) | 2013, Trustee, | ||||
• From April 2004 through December | Principal | ||||
2012, Director, Laird Norton Wealth | Investors | ||||
Management and Laird Norton Tyee | Funds | ||||
Trust (investment company) | (investment | ||||
company) | |||||
• Until | |||||
December 31, | |||||
2013, Trustee | |||||
Principal | |||||
Variable | |||||
Contracts | |||||
Funds | |||||
(investment | |||||
company) | |||||
• From April | |||||
2004 through | |||||
December | |||||
2012, | |||||
Director, Laird | |||||
Norton Wealth | |||||
Management | |||||
and Laird | |||||
Norton | |||||
Tyee Trust | |||||
(investment | |||||
company) | |||||
• Until October | |||||
2015, Trustee, | |||||
Russell | |||||
Exchange | |||||
Traded Funds | |||||
Trust |
* Each Trustee is subject to mandatory retirement at age 72.
Disclosure of Information about Fund Trustees and Officers 815
Russell Investment Company
Russell Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
INDEPENDENT TRUSTEES (continued) | |||||
Cheryl Burgermeister, | Trustee since 2012 | Appointed until | • Retired | 50 | • Trustee and |
Born June 26, 1951 | successor is | • Trustee and Chairperson of Select | Chairperson of | ||
1301 Second Avenue, | duly elected and | Sector SPDR Funds (investment | Select Sector | ||
18th Floor, Seattle, WA | qualified | company) | SPDR Funds | ||
98101 | • Until December 31, 2014, | (investment | |||
Chairperson of Audit Committee, | company) | ||||
Select Sector SPDR Funds | • Trustee, ALPS | ||||
(investment company) | Series Trust | ||||
(investment | |||||
company) | |||||
• Until | |||||
December | |||||
31, 2014, | |||||
Chairperson | |||||
of Audit | |||||
Committee, | |||||
Select Sector | |||||
SPDR Funds | |||||
(investment | |||||
company) | |||||
• Until October | |||||
2015, Trustee, | |||||
Russell | |||||
Exchange | |||||
Traded Funds | |||||
Trust | |||||
Daniel P. Connealy, | Trustee since 2003 | Appointed until | • Retired | 50 | • Until October |
Born June 6, 1946 | Chairman of the | successor is | • June 2004 to June 2014, Senior Vice | 2015, Trustee, | |
1301 Second Avenue, | Audit Committee | duly elected and | President and Chief Financial Officer, | Russell | |
18th Floor, Seattle, WA | since 2015 | qualified | Waddell & Reed Financial, Inc. | Exchange | |
98101 | Appointed until | (investment company) | Traded Funds | ||
successor is | Trust | ||||
duly elected and | |||||
qualified | |||||
Katherine W. Krysty, | Trustee since 2014 | Appointed until | • Retired | 50 | • Until October |
Born December 3, 1951 | successor is | • January 2011 through March 2013, | 2015, Trustee, | ||
1301 Second Avenue | duly elected and | President Emerita, Laird Norton | Russell | ||
18th Floor, Seattle, WA | qualified | Wealth Management (investment | Exchange | ||
98101 | company) | Traded Funds | |||
Trust |
* Each Trustee is subject to mandatory retirement at age 72.
816 Disclosure of Information about Fund Trustees and Officers
Russell Investment Company
Russell Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
INDEPENDENT TRUSTEES (continued) | |||||
Raymond P. Tennison, Jr., | Trustee since 2000 | Appointed until | • Retired | 50 | • Until October |
Born December 21, 1955 | Chairman of | successor is | • From January 2008 to December | 2015, Trustee, | |
1301 Second Avenue | the Nominating | duly elected and | 2011, Vice Chairman of the Board, | Russell | |
18th Floor, Seattle, WA | and Governance | qualified | Simpson Investment Company (paper | Exchange | |
98101 | Committee since | Appointed until | and forest products) | Traded Funds | |
2007 | successor is | Trust | |||
duly elected and | |||||
qualified | |||||
Jack R. Thompson, | Trustee since 2005 | Appointed until | • Retired | 50 | • Until October |
Born March 21, 1949 | Chairman of | successor is | 2015, Trustee, | ||
1301 Second Avenue, | the Investment | duly elected and | Russell | ||
18th Floor, Seattle, WA | Committee since | qualified | Exchange | ||
98101 | 2015 | Appointed until | Traded Funds | ||
successor is | Trust | ||||
duly elected and | |||||
qualified |
* Each Trustee is subject to mandatory retirement at age 72.
Disclosure of Information about Fund Trustees and Officers 817
Russell Investment Company
Russell Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
TRUSTEE EMERITUS | |||||
George F. Russell, Jr., | Trustee Emeritus and | Until resignation | • Director Emeritus, Frank Russell | 50 | None |
Born July 3, 1932 | Chairman Emeritus | or removal | Company (investment consultant to | ||
1301 Second Avenue, | since 1999 | institutional investors (“FRC”)) and | |||
18th Floor, Seattle, WA | RIMCo | ||||
98101 | • Chairman Emeritus, RIC and RIF; | ||||
Russell Implementation Services Inc. | |||||
(broker-dealer and investment adviser | |||||
(“RIS”)); Russell 20-20 Association | |||||
(non-profit corporation); and Russell | |||||
Trust Company (non-depository trust | |||||
company (“RTC”)) | |||||
• Chairman, Sunshine Management | |||||
Services, LLC (investment adviser) |
Name, | Positions(s) Held | Term | Principal Occupation(s) |
Age, | With Fund and | of | During the |
Address | Length of | Office | Past 5 Years |
Time Served | |||
OFFICERS | |||
Cheryl Wichers, | Chief Compliance | Until removed | • Chief Compliance Officer, RIC and RIF |
Born December 16, 1966 | Officer since 2005 | by Independent | • Chief Compliance Officer, RFSC and U.S. One Inc. |
1301 Second Avenue | Trustees | • 2005 to 2011 Chief Compliance Officer, RIMCo | |
18th Floor, Seattle, WA | |||
98101 | |||
Sandra Cavanaugh, | President and Chief | Until successor | • CEO, U.S. Private Client Services, Russell Investments |
Born May 10, 1954 | Executive Officer | is chosen and | • President and CEO, RIC and RIF |
1301 Second Avenue, | since 2010 | qualified by | • Chairman of the Board, Co-President and CEO, RFS |
18th Floor, Seattle, WA | Trustees | • Chairman of the Board, President and CEO, RFSC | |
98101 | • Director, RIMCo | ||
• Chairman of the Board, President and CEO, RIA | |||
Mark E. Swanson, | Treasurer and Chief | Until successor | • Treasurer, Chief Accounting Officer and CFO, RIC and RIF |
Born November 26, 1963 | Accounting Officer | is chosen and | • Director, RIMCo, RFSC, Russell Trust Company (“RTC”) and RFS |
1301 Second Avenue | since 1998 | qualified by | • Global Head of Fund Services, Russell Investments |
18th Floor, Seattle, WA | Trustees | • October 2011 to December 2013, Head of North America Operations | |
98101 | Russell Investments | ||
• May 2009 to October 2011, Global Head of Fund Operations, Russell | |||
Investments |
818 Disclosure of Information about Fund Trustees and Officers
Russell Investment Company
Russell Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Positions(s) Held | Term | Principal Occupation(s) |
Age, | With Fund and | of | During the |
Address | Length of | Office | Past 5 Years |
Time Served | |||
OFFICERS (continued) | |||
Jeffrey T. Hussey, | Chief Investment | Until removed by | • Global Chief Investment Officer, Russell Investments |
Born May 2, 1969 | Officer since 2013 | Trustees | • Chief Investment Officer, RIC and RIF |
1301 Second Avenue, | • Chairman of the Board, President and CEO, RIMCo | ||
18th Floor, Seattle WA | • Director, RTC, RIS and Russell Investments Delaware, Inc. | ||
98101 | • Board of Managers, Russell Institutional Funds Management, Inc. | ||
• 2003 to 2013 Chief Investment Officer, Fixed Income, Russell | |||
Investments | |||
Mary Beth R. Albaneze, | Secretary since 2010 | Until successor | • Associate General Counsel, Russell Investments |
Born April 25, 1969 | is chosen and | • Secretary, RIMCo, RFSC and RFS | |
1301 Second Avenue, | qualified by | • Secretary and Chief Legal Officer, RIC and RIF | |
18th Floor, Seattle, WA | Trustees | • Assistant Secretary, RFS, RIA and U.S. One Inc. | |
98101 |
Disclosure of Information about Fund Trustees and Officers 819
Russell Investment Company
Russell Funds
Adviser, Money Manager and Service Providers — October 31, 2015
Interested Trustee | Jacobs Levy Equity Management, Inc., Florham Park, NJ |
Sandra Cavanaugh | PanAgora Asset Management Inc, Boston, MA |
Independent Trustees | Russell U.S. Dynamic Equity Fund |
Thaddas L. Alston | AJO, LP, Philadelphia, PA |
Kristianne Blake | Cornerstone Capital Management, LLC, Minneapolis, MN |
Cheryl Burgermeister | Jacobs Levy Equity Management, Inc., Florham Park, NJ |
Daniel P. Connealy | Pzena Investment Management, LLC, New York, NY |
Katherine W. Krysty | Suffolk Capital Management, LLC, New York, NY |
Raymond P. Tennison, Jr. | Russell U.S. Strategic Equity Fund |
Jack R. Thompson | AJO, LP, Philadelphia, PA |
Trustee Emeritus | Barrow, Hanley, Mewhinney & Strauss, LLC, Dallas, TX |
George F. Russell, Jr. | Brandywine Global Investment Management, LLC, |
Officers | Philadelphia, PA |
Columbus Circle Investors, Stamford, CT | |
Sandra Cavanaugh, President and Chief Executive Officer | Cornerstone Capital Management, LLC, Minneapolis, MN |
Cheryl Wichers, Chief Compliance Officer | Jacobs Levy Equity Management, Inc., Florham Park, NJ |
Jeffrey T. Hussey, Chief Investment Officer | PanAgora Asset Management Inc, Boston, MA |
Mark E. Swanson, Treasurer and Chief Accounting Officer | Suffolk Capital Management, LLC, New York, NY |
Mary Beth Rhoden Albaneze, Secretary | |
Adviser | Russell U.S. Large Cap Equity Fund |
Ceredex Value Advisors LLC, Orlando, FL | |
Russell Investment Management Company | Columbus Circle Investors, Stamford, CT |
1301 Second Avenue | Institutional Capital LLC, Chicago, IL |
Seattle, WA 98101 | Jacobs Levy Equity Management Inc., Florham Park, NJ |
Administrator and Transfer and Dividend Disbursing | Sustainable Growth Advisers, LP, Stamford, CT |
Agent | Russell U.S. Mid Cap Equity Fund |
Russell Fund Services Company | Ceredex Value Advisors LLC, Orlando, FL |
1301 Second Avenue | Elk Creek Partners, LLC, Denver, CO |
Seattle, WA 98101 | Jacobs Levy Equity Management Inc., Florham Park, NJ |
Custodian | Russell U.S. Small Cap Equity Fund |
State Street Bank and Trust Company | Ancora Advisors LLC, Mayfield Heights, OH |
1 Heritage Drive | Cardinal Capital Management, L.L.C., Greenwich, CT |
North Quincy, MA 021171 | Chartwell Investment Partners, Berwyn, PA |
Office of Shareholder Inquiries | Copeland Capital Management, LLC, Conshohocken, PA |
1301 Second Avenue | DePrince, Race & Zollo, Inc., Winter Park, FL |
Seattle, WA 98101 | EAM Investors, LLC, Cardiff by the Sea, CA |
(800) 787-7354 | Falcon Point Capital, LLC, San Francisco, CA |
Legal Counsel | Jacobs Levy Equity Management Inc., Florham Park, NJ |
Dechert LLP | Netols Asset Management, Inc., Mequon, WI |
One International Place, 40th Floor | Next Century Growth Investors, LLC, Minneapolis, MN |
100 Oliver Street | PENN Capital Management Company, Inc., Philadelphia, PA |
Boston, MA 02110 | Robeco Investments Management, Inc., New York, NY |
Distributor | Russell International Developed Markets Fund |
Russell Financial Services, Inc. | Barrow, Hanley, Mewhinney & Strauss, LLC, Dallas, TX |
1301 Second Avenue | MFS Institutional Advisors Inc., Boston, MA |
Seattle, WA 98101 | Numeric Investors LLC, Boston, MA |
Pzena Investment Management, LLC, New York, NY | |
Independent Registered Public Accounting Firm | Wellington Management Company, LLP, Boston, MA |
PricewaterhouseCoopers LLP | Russell Global Equity Fund |
1420 5th Avenue, Suite 2800 | |
Seattle, WA 98101 | Harris Associates L.P., Chicago, IL |
MFS Institutional Advisors Inc., Boston, MA | |
Money Managers | Polaris Capital Management, LLC, Boston, MA |
Russell U.S. Core Equity Fund | Sanders Capital, LLC, New York, NY |
Barrow, Hanley, Mewhinney & Strauss, LLC, Dallas, TX | Wellington Management Company, LLP, Boston, MA |
Brandywine Global Investment Management, LLC, | Russell Emerging Markets Fund |
Philadelphia, PA | AllianceBernstein L.P., New York, NY |
Columbus Circle Investors, Stamford, CT | Consillium Investment Management, LLC, Fort Lauderdale, |
Jacobs Levy Equity Management, Inc., Florham Park, NJ | FL |
Suffolk Capital Management, LLC, New York, NY | Delaware Management Company, a Series of Delaware |
Sustainable Growth Advisers, LP, Stamford, CT | Management Business Trust, Philadelphia, PA |
Russell U.S. Defensive Equity Fund | Genesis Asset Managers, LLP, Guernsey, Channel Islands |
Coho Partners, Ltd., Berwyn, PA | Harding Loevner LP, Bridgewater, NJ |
J.P. Morgan Investment Management Inc., New York, NY | Numeric Investors LLC, Boston, MA |
820 Adviser, Money Manager and Service Providers
Russell Investment Company
Russell Funds
Adviser, Money Manager and Service Providers — October 31, 2015
Oaktree Capital Management, L.P., Los Angeles, CA | Russell Tax Exempt High Yield Bond Fund |
Westwood Management Corporation, Dallas, TX | Goldman Sachs Asset Management, New York, NY |
Russell Tax-Managed U.S. Large Cap Fund | MacKay Shields LLC, New York, NY |
Armstrong Shaw Associates Inc., New Canaan, CT | Russell Tax Exempt Bond Fund |
Barrow, Hanley, Mewhinney & Strauss, LLC, Dallas, TX | AllianceBernstein L.P., New York, NY |
J.P. Morgan Investment Management Inc., New York, NY | MacKay Shields LLC, New York, NY |
MarVista Investment Partners LLC, Los Angeles, CA | Russell Commodity Strategies Fund |
Sustainable Growth Advisers, LP, Stamford, CT | CoreCommodity Management, LLC, Stamford, CT |
Russell Tax-Managed U.S. Mid & Small Cap Fund | Credit Suisse Asset Management, LLC, New York, NY |
Chartwell Investment Partners, Berwyn, PA | Goldman Sachs Asset Management, New York, NY |
Luther King Capital Management Corporation, Fort Worth, | Russell Global Infrastructure Fund |
TX | |
Netols Asset Management Inc., Mequon, WI | Cohen & Steers Capital Management, Inc., New York, NY |
Summit Creek Advisors LLC, Minneapolis, MN | Colonial First State Asset Management (Australia) Limited, |
Sydney, Australia | |
Russell Tax-Managed International Equity Fund | Lazard Asset Management LLC, New York, NY |
AllianceBernstein L.P., New York, NY | Nuveen Asset Management, LLC, Chicago, IL |
Bel Air Investment Advisors, LLC, Los Angeles, CA | Russell Global Real Estate Securities Fund |
Delaware Investment Fund Advisers, a Series of Delaware | |
Management Business Trust, Philadelphia, PA | Cohen & Steers Capital Management, Inc., New York, NY |
Janus Capital Management LLC, Denver, CO | INVESCO Advisers, Inc. which acts as a money manager |
Pzena Investment Management, LLC, New York, NY | to the Fund through its INVESCO Real Estate Division, |
RWC Asset Advisors (US) LLC, London, United Kingdom | Dallas, TX |
Morgan Stanley Investment Management Inc., New York, NY | |
Russell Global Opportunistic Credit Fund | Russell Multi-Strategy Alternative Fund |
DDJ Capital Management LLC, Waltham, MA | |
Dupont Capital Management Corporation, Wilmington, DE | AQR Capital Management, LLC, Greenwich, CT |
Lazard Asset Management LLC, New York, NY | Brigade Capital Management, LLC, New York, NY |
Oaktree Capital Management, L.P., Los Angeles, CA | DCI, LLC, San Francisco, CA |
THL Credit Advisors, LLC, Boston, MA | Omega Advisors, Inc., New York, NY |
Pacific Investment Management Company LLC, Newport | |
Russell Strategic Bond Fund | Beach, CA |
Brookfield Investment Management Inc., New York, NY | Passport Capital, LLC, San Francisco, CA |
Colchester Global Investors Limited, London, United | TCW/Scoggin LLC, Los Angeles, CA |
Kingdom | The Cambridge Strategy (Asset Mgmt) Limited, London, |
Logan Circle Partners, L.P., Philadelphia, PA | United Kingdom |
Macro Currency Group — an investment group within | Russell Multi-Strategy Income Fund |
Principal Global Investors LLC, Des Moines, IA* | |
Metropolitan West Asset Management, LLC, Los Angeles, CA | Cohen & Steers Capital Management, Inc., New York, NY |
Scout Investments, Inc, Kansas City, MO | DDJ Capital Management LLC, Waltham, MA |
Wellington Management Company, LLP, Boston, MA | Epoch Investment Partners, Inc., New York, NY |
Janus Capital Management LLC, Denver, CO | |
Russell Investment Grade Bond Fund | Lazard Asset Management LLC, New York, NY |
Logan Circle Partners, L.P., Philadelphia, PA | Loomis, Sayles & Company, L.P., Boston, MA |
Loomis, Sayles & Company, L.P., Boston, MA | THL Credit Advisors, LLC, Boston, MA |
Macro Currency Group — an investment group within | *Principal Global Investors LLC is the asset management arm of the Principal |
Principal Global Investors LLC, Des Moines, IA* | Financial Group® (The Principal®), which includes various member com- |
Metropolitan West Asset Management, LLC, Los Angeles, CA | panies including Principal Global Investors, LLC, Principal Global Investors |
Neuberger Berman Fixed Income LLC, Chicago, IL | (Europe) Limited, and others. The Macro Currency Group is the specialist cur- |
Russell Short Duration Bond Fund | rency investment group within Principal Global Investors. Where used herein, |
Logan Circle Partners, L.P., Philadelphia, PA | Macro Currency Group means Principal Global Investors, LLC. |
Scout Investments, Inc, Kansas City, MO | |
THL Credit Advisors, LLC, Boston, MA | Note: Select U.S. Equity, Select International Equity and Russell Strategic Call |
Overwriting Funds are directly managed by RIMCo. |
This report is prepared from the books and records of the Funds and is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless accompanied or preceded by an effective Prospectus. Nothing herein contained is
to be considered an offer of sale or a solicitation of an offer to buy shares of Russell Investment Company. Such offering is made only by
Prospectus, which includes details as to offering price and other material information.
Adviser, Money Manager and Service Providers 821
2015 ANNUAL REPORT
LifePoints® Funds
OCTOBER 31, 2015
Russell Investment
Company
Russell Investment Company is a
series investment company with
41 different investment portfolios
referred to as Funds. These
financial statements report on 14
of these Funds.
Russell Investment Company
LifePoints® Funds
Annual Report
October 31, 2015
Table of Contents
Page | |
To Our Shareholders | 3 |
Market Summary | 4 |
Conservative Strategy Fund | 10 |
Moderate Strategy Fund | 30 |
Balanced Strategy Fund | 50 |
Growth Strategy Fund | 70 |
Equity Growth Strategy Fund | 90 |
2020 Strategy Fund | 110 |
2025 Strategy Fund | 124 |
2030 Strategy Fund | 136 |
2035 Strategy Fund | 150 |
2040 Strategy Fund | 162 |
2045 Strategy Fund | 176 |
2050 Strategy Fund | 188 |
2055 Strategy Fund | 200 |
In Retirement Fund | 212 |
Notes to Schedule of Investments | 226 |
Notes to Financial Highlights | 227 |
Notes to Financial Statements | 228 |
Report of Independent Registered Public Accounting Firm | 250 |
Tax Information | 251 |
Shareholder Requests for Additional Information | 253 |
Disclosure of Information about Fund Trustees and Officers | 254 |
Adviser and Service Providers | 261 |
Russell Investment Company - LifePoints® Funds.
Copyright © Russell Investments 2015. All rights reserved.
Russell Investments is a trade name and registered trademark of Frank Russell Company, a Washington USA
corporation, which operates through subsidiaries worldwide and is part of London Stock Exchange Group.
Fund objectives, risks, charges and expenses should be carefully considered before in-
vesting. A prospectus containing this and other important information must precede or
accompany this material. Please read the prospectus carefully before investing.
Securities distributed through Russell Financial Services, Inc., member FINRA and part of Russell
Investments.
Indices and benchmarks are unmanaged and cannot be invested in directly. Returns represent past performance,
are not a guarantee of future performance, and are not indicative of any specific investment. Index return
information is provided by vendors and although deemed reliable, is not guaranteed by Russell Investments or its
affiliates.
Russell Investments is the owner of the trademarks, service marks, and copyrights related to its respective indexes.
Performance quoted represents past performance and does not guarantee future results. The investment return and
principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their
original cost. Current performance may be lower or higher than the performance data quoted. Current to the most
recent month-end performance data may be obtained by visiting www.russell.com/us/fundperformance.
To Our Shareholders
Fellow Shareholders,
The redeeming aspect of this year’s market volatility is its underscoring the importance of shareholders having solid, long-
term financial plans, realistic goals, and regular check-ins with personal financial advisors to collaborate on how best to
achieve the outcomes that matter most to shareholders. Understanding these outcomes and the tools we need to reach them
remains a central focus at Russell Investments.
Staying steady in stormy markets is vital – we see more volatility ahead.
After strong U.S. equity performance in 2014, markets experienced muted returns in 2015. The broad-based Russell 3000®
Index was up 2.02% year-to-date as of October 31, 2015, and its one-year total return as of October 31, 2015 was 4.49%.
Markets collectively sought guidance from a cautious U.S. Federal Reserve (the “Fed”) regarding the timing of the initial
interest rate increase. It’s hard to believe the last time the Fed increased the Fed Funds rate was June 2006 – more than
nine years ago. Trying to anticipate the initial rate increase and related market impacts was a primary driver of both equity
and fixed income returns, not only in the U.S., but globally as well.
The ‘abundance of caution’ evidenced by the Fed mirrored central bank sentiment worldwide to protect the fragility of the
hard fought, lengthy, and mainly tepid recovery from the global financial crisis.
The European Central Bank expanded their Quantitative Easing (QE) Program throughout the year as they maintained
their contribution to positive economic growth. This stimulus coupled with the anticipation of increasing interest rates in
the U.S. contributed to the strengthening U.S. dollar. Additionally in August, China made an unexpected devaluation of its
currency to project recalibrated and more modest growth expectations.
U.S. unemployment decreased throughout the fiscal year, from 5.7% in October 2014 to 5.0% at the end of October 2015
and the annual inflation rate was 0.2% as of October 2015. As of this writing, U.S. unemployment claims are at the lowest
point in 40 years. The U.S. economy has led the world out of the recession. As it approaches a more mature stage in its
economic cycle, our belief in the primacy of global diversification deepens.
The following pages provide additional insights on the markets and the performance of Russell Investments mutual funds
for the fiscal year ending October 31, 2015.
Thank you for your continued trust. All of us at Russell Investments appreciate our duties to help you achieve financial
security.
Best regards,
Sandra Cavanaugh
CEO, U.S. Private Client Services
To Our Shareholders 3
Russell Investment Company
Market Summary as of October 31, 2015 (Unaudited)
U.S. Equity Markets
Broadly measured by the Russell 3000® Index, U.S. stocks returned 4.49% for the one year period which is the seventh
straight fiscal year ending October 31st that the Russell 3000® Index has finished with a positive absolute return. The
Russell 3000® Index finished with a positive absolute return in seven of the fiscal year’s twelve months.
Within U.S. large capitalization stocks, the Russell 1000® Growth Index outperformed the Russell 1000® Value Index by
8.65% over the fiscal year, as stocks with lower valuations (lower price-to-book, price-to-earnings and price-to-cash flow
ratios) lagged significantly. In addition, high dividend yield stocks trailed the broader market. Factors that were rewarded
during the fiscal year included lower earnings variability and high forecasted growth. From a sector perspective, consumer
discretionary outperformed the Russell 1000® Index by over 11% and energy trailed the Russell 1000® Index by over 25%.
Similarly, within U.S. small capitalization stocks, the Russell 2000® Growth Index outperformed the Russell 2000® Value
Index. The fiscal year was led by larger capitalization stocks as the Russell Top 200® Index returned 5.75% compared with
the Russell Midcap® Index and the Russell 2000® Index, which returned 2.77% and 0.34%, respectively. Defensive stocks
outperformed dynamic stocks across all market capitalization tiers.
Toward the end of calendar year 2014, the U.S. equity market performed well as the Russell 3000® Index returned 2.42%
in November and was approximately flat in December. Declining oil prices briefly threatened the rally in early December
as investors were concerned over the potential ripple effects of excess supply and associated falling prices. Given the Fed
ended its quantitative easing program in October, the Fed’s December policy statement was at the forefront of investors’
minds. In December, the central bank stated that it would be “patient” in judging when to start raising interest rates, rather
than keeping them low for a “considerable time” as had been previously reported. Investors interpreted this change of
language as a sign of central bank confidence in the strength of the U.S. economy, but it also was clear that multiple months
without rate increases were still ahead.
In January 2015, U.S. equities got off to a rocky start with broadly disappointing corporate earnings, mixed economic
data and volatile oil prices weighing on investor sentiment. One of the more disappointing pieces of macro-economic
data was fourth-quarter gross domestic product (“GDP”) growth coming in at an annualized rate of 2.2%, which marked
both a big drop from the third-quarter figure (5.0%) and was a shortfall on consensus forecasts. Considering all data
inputs, investors sought areas of the market with more perceived safety and yield, causing interest rate sensitive stocks,
specifically real estate investment trusts (“REITs”) and utilities to be significantly bid up in January. In February, there
was an unwinding of some of those same interest rate sensitive valuations in the market, most notably within electric
utilities. The information about January non-farm payroll growth, which was released in early February, helped to spur a
risk-on equity rally as the Russell 3000® Index finished up 5.79% in February. While the word “patient” with regard to the
normalization of U.S. monetary policy was removed from Fed chair Yellen’s statement in March, Yellen declared that this
did not mean that the central bank was becoming “impatient.” The central bank chair emphasized that any interest-rate
decision remained dependent on “further improvement in the labor market” and on the committee becoming “reasonably
confident” of increases in inflation toward its 2.0% target.
The Russell 3000® Index edged up 0.14% from April through June, with a sell-off at the end of the period reversing most
of April and May’s gains. Severe winter weather and labor disruptions at major ports had caused a pause in U.S. economic
activity in the early part of 2015, however the contraction was less severe than originally reported with the final first-
quarter GDP estimate upwardly revised to -0.2% annualized from -0.7% annualized due to better personal consumption
figures. The period ended with uncertainty over another potential Greek bailout dominating the headlines which in part,
contributed to the selloff in equities in June.
During the third quarter, the Russell 3000® Index declined 7.25%. The severe selloff in U.S. and global equity markets
was driven in part by China’s currency devaluation and concerns over slowing global economic growth. Heightened levels
4 Market Summary
Russell Investment Company
Market Summary as of October 31, 2015, continued — (Unaudited)
of market volatility led defensive stocks to outperform dynamic stocks at all market capitalization levels. In the Fed’s
September meeting, a decision was made to keep interest rates unchanged. Chair Yellen stated that, despite recent
international developments, domestically “the economy has been performing well, and we expect it to continue to do
so.” At the time, second-quarter GDP growth had been revised upwards to 3.7%, and was later revised higher to 3.9%.
Unemployment declined to 5.1% for August, its lowest level in seven years, assisted by a decline in the participation rate.
However, non-farm payroll growth missed expectations at 173,000 in August, following upwardly revised readings for June
245,000 and July 223,000.
In October, there was a large equity rally that followed the selloffs in both August and September as the Russell 3000®
Index returned 7.90%. Larger capitalization was rewarded during the month as the Russell Top 50 Index returned 9.77%
compared with the Russell 1000® Index, Russell Midcap® Index and the Russell 2000® Index, which returned 8.09%,
6.20% and 5.63%, respectively. Within all market capitalization tiers, dynamic stocks led defensive stocks. More dynamic
cyclical sectors led the way in October as both materials & processing and energy outperformed the Russell 1000® Index
by 4.20% and 3.35%, respectively. On the other hand, the utilities sector underperformed the Russell 1000® Index by
4.32%, which was in contrast to strong performance in August and September.
Non-U.S. Developed Equity Markets
For the fiscal year ended October 31, 2015, the non-U.S. equity market, as measured by the Russell Developed ex-U.S.
Large Cap Index (the “Index”), was down 1.36%.
After a strong first half of the period, which saw the Index return 6.25%, the second half the period experienced a large sell-
off during which the Index dropped by 7.0%. The major market drivers for non-U.S. markets during the fiscal year were a
sell-off in China and uncertainty around the possibility of a Fed interest rate hike. In August 2015, the Chinese government
and the People’s Bank of China attempted to stem equity market losses and shore up confidence in the economy by
devaluing the Renminbi. This action could not contain the market turmoil, which in turn drove major emerging markets
and currencies lower. In the U.S., despite uncertainty around the timing of a Fed rate hike, investors remained positive on
the economy due to relative recovery in macro-economic trends.
Japan was the stand out market over the period, while Europe also outperformed though more modestly. Both benefited from
accommodative policies and cheaper valuations. Slightly better than expected earnings results in Europe, coupled with the
European Central Bank’s willingness to continue with quantitative easing and the renewed bailout deal with Greece during
the second part of the fiscal year, brought a degree of harmony in Europe. High levels of central bank liquidity leading
to ultra-low returns on bonds pushed investors towards equities in Japan. Broadly, performance in commodity heavy
economies like Canada and Australia lagged significantly due to a demand slowdown, particularly from China.
Commodity driven sectors, particularly energy and materials, were the worst hit in the fiscal year ended October 31, 2015
as oil prices tumbled to the lowest levels since 2009 and a demand slowdown in emerging markets caused commodity prices
to plunge significantly. Defensive sectors, led by consumer staples, held up well as uncertainty about global economic
growth prevailed for most of the fiscal year.
In terms of factor returns, growth significantly outperformed value and small/mid-capitalization stocks modestly
outperformed large capitalization stocks during the fiscal year. Stocks with lower leverage held up well amid the market
volatility. Return spreads in other factors were not significant during the period.
Emerging Markets
The Russell Emerging Markets Index, as measured in U.S. dollar terms (the “Index”) lost 13.6% over the fiscal year ended
October 31, 2015. In what was a difficult year for the emerging markets asset class, macroeconomic events continued to
impact emerging market equities against a backdrop of interest rate uncertainty and geopolitical headwinds.
Market Summary 5
Russell Investment Company
Market Summary as of October 31, 2015, continued — (Unaudited)
In November and December of 2014, the Index declined 5.8%. The bulk of this sell-off came in December. Russia
underperformed due to factors such as decreased oil prices and Western sanctions. The fall in the price of oil was also
negative for emerging markets such as Brazil and Malaysia. In contrast, it was beneficial for emerging countries such as
Turkey. In addition, Greece was a significant laggard over the period driven by the rise in popularity of the far-left, anti-
austerity Syriza party. More positively, Chinese markets gained, driven by financials. The country’s stock market continued
to rise significantly after investors became convinced that the Chinese government would implement even more aggressive
stimulus measures.
In the first quarter of 2015, emerging markets made a positive start to the year, with the Index returning 2.1%. The
prospect of sustained loose central bank policy outside the U.S. was a tailwind to emerging markets. In addition, the
Fed’s increased flexibility regarding the timing of an interest rate rise helped sustain a lower rate outlook in the U.S.
which, in turn, helped to increase investor appetite for riskier emerging markets investments. In contrast, dollar strength
negatively impacted several countries’ returns, with considerable disparity between them. Asia was the best-performing
region. Chinese markets had another strong quarter, ending 5.6% higher as measured by the Index. India was up 5.3%
for the quarter despite slipping in March. Buoyed by the country’s improving prospects, including cheaper oil improving
the country’s balance of payments, India’s central bank twice unexpectedly cut interest rates. Rate-cutting also helped
South Korea’s market outperform (5.0%), while Taiwan (4.0%), Thailand (2.1%) and Indonesia (1.3%) also ended in
positive territory. Meanwhile, Russia went from being the Index’s worst-performer in the fourth quarter of 2014 to the best-
performing country. The market climbed 20.6%, predominantly driven by a rebound in the rouble, while less volatility in
oil prices and a ceasefire agreement in Ukraine also aided market sentiment. In contrast, Greece slumped 21.5% over a
volatile quarter. Debt repayment negotiations between the newly-elected Syriza government and “troika” of the European
Union, the European Central Bank and the International Monetary Fund wildly fluctuated. Brazil maintained its slide with
a further 15.2% fall as the real continued to plummet. Within the Index, the health care sector recorded the highest gains.
The energy sector rebounded, while utilities ended behind its sector counterparts.
In the second quarter of 2015, the Index returned 1.7%. A weakening of the U.S. dollar and the sustained equity rally in
China drove a significantly strong start. However, the Chinese equity surge sharply reversed towards the end of the quarter
which weighed on the broader Index. Additionally, positive U.S. economic data and Fed statements strengthened the
case for at least one U.S. interest rate rise later this year, which dampened investor appetite for riskier emerging markets
investments. China (8.1%) remained one of the strongest performing regions over the quarter despite experiencing erratic
movements in the latter part of the period. The increase was a contrast to the country’s disappointing economic data.
Notably, urban investment, retail sales and industrial output data was weak while consumer price inflation moved further
away from the central bank’s target. Russia (8.0%), Brazil (6.3%), Greece (6.0%) and Colombia (3.6%) were other notable
countries that outperformed despite also experiencing sharp sell-offs during the quarter. The rouble, real and euro all
appreciated against the U.S. dollar. Select Asian markets were the worst performers over the quarter, with Indonesia being
the worst performing country within the Index (-14.1%) despite gaining ground in June. In Indonesia, exports continued
to disappoint while first-quarter gross domestic product (“GDP”) also missed estimates. Malaysia slipped 7.2% as exports
contracted more steeply than expected. Thailand declined 3.4% as the country remained in deflation. Meanwhile in India
(-3.1%), the central bank cut its lending rate as expected to 7.25% in an effort to increase investment. South Korea
marginally underperformed the Index return (-0.3%) as trade numbers remained negative. Taiwan finished flat with the
benchmark (0.1%). Within the Index, the energy and health care sectors outperformed. Technology was the only sector to
decline over the quarter.
In the third quarter of 2015, the Index slumped 18.1% in the worst quarter for emerging markets equities in four years.
China’s growth slowdown caused significant volatility, while the strong U.S. dollar and instability in commodity markets
weighed on investor sentiment. The market sell-off slowed in September, however, as emerging markets edged slightly
higher following the Fed’s decision to keep interest rates steady. China (-23.9%) dragged down the Index return despite
attempts by the government and central bank to stem the sliding bear market. The PBoC twice unexpectedly lowered its
6 Market Summary
Russell Investment Company
Market Summary as of October 31, 2015, continued — (Unaudited)
currency fix against the U.S. dollar, which caused nearly all emerging markets currencies to depreciate. Investors remained
concerned about a “hard landing” for the economy. Industrial production, urban investments, house prices and retail sales
figures confirmed that the domestic economy continued to slow. In addition, Brazil was the weakest-performing country
over the quarter, slumping 33.6% with the real falling 21.5%, as a result of factors such as the commodity sell-off, a
struggling economy and political corruption. Investors were increasingly concerned about Brazil’s economic ties to China.
Elsewhere in Latin America, oil exporter Colombia slipped 22.5% and metal exporter Peru declined 26.4%. Countries with
large current account deficits sold-off over the quarter, including Turkey (-19.5%), South Africa (-18.3%) and, to a lesser
extent, Indonesia (-24.8%). Mexico ended 10.9% lower. Russia (-13.2%) outperformed the broader Index return despite a
15.7% depreciation of the ruble over the period. In South Korea (-11.8%), second-quarter GDP slowed over the previous
quarter. In Thailand (-15.9%), inflation continued to decline. In Taiwan (-16.5%), a growth slowdown and weak price
pressures forced the central bank to unexpectedly cut interest rates to 1.75%. Malaysia decreased 17.5% as the ringgit
depreciated 14.6% against the U.S. dollar. Eastern Europe was the best-performing region, including the Czech Republic
(-2.7%), Hungary (-3.6%) and Poland (-9.4%). All sectors declined in absolute terms. On a relative basis, financials and
energy lagged behind, while safer haven sectors including consumer staples outperformed.
October of 2015 proved to be beneficial with the Index up 7.9%. The sell-off in the third quarter, driven by China concerns,
reversed course. China’s economy reported an expansion as services grew and GDP was slightly higher than expected. In
addition, a number of companies posted positive earnings surprises bringing up the asset class. Net inflows into emerging
markets also turned positive with a large number of investors returning. In addition, steady U.S. interest rates added an
element of much-needed stability to the investment environment.
U.S./Global Fixed Income Markets
The fiscal year ended October 31, 2015 was characterized by slowing global growth and commodity price weakness.
Overall, this was modestly positive for fixed income assets, as yields fell, particularly among sovereign bonds. On the
other hand, credit sectors, primarily within the U.S., were challenged in this environment. Corporate bonds saw the largest
drawdowns as sharply reduced commodity prices (oil in particular), weakening earnings growth and elevated new issuance
weighed on returns. A key indicator of global fixed income performance, the Barclays Global Aggregate Index, returned
3.07% for the fiscal year, in U.S. dollar -hedged terms, as yields fell modestly and spreads widened during a fiscal year
where growth fell somewhat short of expectations.
Regionally, Europe outperformed the U.S., bolstered by the launch of a relatively aggressive quantitative easing program
and generally lower exposure to commodity-related sectors, particularly energy. The Barclays Pan-European Aggregate
Index returned 5.56% during the period (in U.S. dollar -hedged terms), led by Swiss and northern European sovereigns,
reflecting more accommodative central bank policy, pervasive low inflation/deflation in the region and the economies’ “safe
haven” status. The U.S., in comparison, returned 1.96% during the fiscal year as measured by the Barclays Aggregate
Index as U.S. Treasury yields fell less sharply and U.S. corporate credit underperformed European corporate credit, largely
due to greater exposure to falling commodity prices. Australian and New Zealand bonds generally outperformed other
developed markets, as both central banks eased monetary policy amid a slowdown in China and falling commodity prices.
In the U.S., economic data remained broadly positive, with solid nonfarm payroll gains and a steady decline in the
unemployment rate to just above 5.00% by fiscal year-end, near long-term lows. Gross domestic product growth slowed
modestly from earlier in the recovery, but held in around the 1.50%-2.50% range, on average, during the fiscal year. On the
other hand, inflation and wage growth came in weak, driven partially by sharply lower commodity prices (including a 58%
drop in oil prices during the first quarter of the fiscal year). Combined with global growth headwinds, these were significant
contributors to the Fed’s decisions, in successive meetings, not to raise interest rates. This pushing out of rate hike timing
expectations drove yields lower during the period, bolstering U.S. Treasury returns.
Market Summary 7
Russell Investment Company
Market Summary as of October 31, 2015, continued — (Unaudited)
In Europe, uncertainty over the future of Greece’s debt position and potential bailout captured headline risk and drove
market volatility during the first half of the fiscal year. This, combined with the European Central Bank’s launch of an
unexpectedly aggressive quantitative easing program, saw yields among “core” European sovereign bonds fall markedly.
Peripheral spreads also tightened later on as a Greek bailout agreement was eventually reached. As European growth and
inflation turned more positive (albeit still weak) in the second half of the fiscal year, yields came back slightly, but remained
well below their levels at the beginning of the fiscal year.
Emerging markets experienced a meaningful, and relatively broad-based, slowdown in growth during the fiscal year,
contributing to the sharp decline in commodity prices. China and Brazil were most notable. A slowdown in China’s
manufacturing and trade sectors rattled markets despite successive moves to ease monetary policy and credit conditions.
In Brazil, growth continued to disappoint, as it has for the past few years, contracting by 2.60% in the second calendar
quarter of 2015, and with a quickly deteriorating fiscal position and accelerating inflation.
Strong new issuance volumes characterized most credit sectors, particularly in the U.S., over the fiscal year, in both
corporate and securitized markets. Overall, corporate credit detracted globally (the Barclays Global Aggregate Corporate
Index returned 1.75% below equivalent-duration U.S. Treasuries), particularly among industrials, and namely commodity-
related industries, primarily within the U.S. Securitized assets also underperformed U.S. Treasuries in aggregate (the
Barclays Global Aggregate Securitized Index returned 0.32% below equivalent-duration U.S. Treasuries), as mortgage-
backed securities were held back by lackluster housing data and slowing institutional demand.
High yield corporate credit was among the worst-performing segments of the market (the Barclays Global High Yield Index
returned 1.97% below equivalent-duration Treasuries), due in large part to the strong sell-off among U.S. energy companies
as the price of oil fell sharply and stayed low, significantly raising the likelihood of defaults across the sector. Emerging
market (EM) debt underperformed developed markets (the Barclays EM Hard Currency Aggregate Index underperformed
equivalent-duration U.S. Treasuries by 2.74%) as growth disappointed, particularly in key markets China and Brazil. Local
currency EM bonds (those issued in the issuing country’s own currency) saw much larger declines (the Barclays EM Local
Currency Government Index returned -12.42%) as currencies were hit by both the slowdown in emerging market growth
and the broader U.S. Dollar rally that occurred during the fiscal year.
8 Market Summary
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Russell Investment Company
Conservative Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Conservative Strategy Fund - Class A‡ | Conservative Strategy Fund - Class R5‡‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (5.64 | )% | 1 Year | (0.03 | )% | ||
5 Years | 2.07 | %§ | 5 Years | 3.18 | %§ | ||
10 Years | 3.51 | %§ | 10 Years | 3.94 | %§ | ||
Conservative Strategy Fund - Class C | Conservative Strategy Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.64 | )% | 1 Year | 0.36 | % | ||
5 Years | 2.52 | %§ | 5 Years | 3.55 | %§ | ||
10 Years | 3.34 | %§ | 10 Years | 4.38 | %§ | ||
Conservative Strategy Fund - Class E | Barclays U.S. Aggregate Bond Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.12 | % | 1 Year | 1.96 | % | ||
5 Years | 3.30 | %§ | 5 Years | 3.03 | %§ | ||
10 Years | 4.12 | %§ | 10 Years | 4.72 | %§ | ||
Conservative Strategy Fund - Class R1‡‡ | BofA Merrill Lynch 1-3 Yr U.S. Treasuries Index*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.50 | % | 1 Year | 0.78 | % | ||
5 Years | 3.72 | %§ | 5 Years | 0.69 | %§ | ||
10 Years | 4.46 | %§ | 10 Years | 2.53 | %§ | ||
Conservative Strategy Fund - Class R4‡‡‡ | |||||||
Total | |||||||
Return | |||||||
1 Year | 0.23 | % | |||||
5 Years | 3.45 | %§ | |||||
10 Years | 4.19 | %§ |
10 Conservative Strategy Fund
Russell Investment Company
Conservative Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Conservative Strategy Fund (the “Fund”) is a fund of funds | How did the market conditions described in the Market |
that invests principally in other Russell Investment Company | Summary report affect the Fund’s performance? |
mutual funds (the “Underlying Funds”). The Underlying Funds | The fiscal year ended October 31, 2015 was characterized by |
employ a multi-manager approach whereby portions of the | slowing global growth and commodity price weakness. Overall, |
Underlying Funds are allocated to different money managers. | this was modestly positive for fixed income assets, as yields fell. |
Underlying Fund assets not allocated to money managers | However, the Fund’s exposure to the fixed income asset class had |
are managed by Russell Investment Management Company | a modestly negative effect on benchmark-relative performance |
(“RIMCo”), the Fund’s and Underlying Funds’ advisor. RIMCo, | due to the Fund’s allocation to the Russell Global Opportunistic |
as the Underlying Funds’ advisor, may change the allocation of | Credit Fund and the Russell Short Duration Bond Fund. The |
the Underlying Funds’ assets among money managers at any | Fund’s strategic exposure to U.S. equities and global real estate |
time. An exemptive order from the Securities and Exchange | was positive, as these asset classes outperformed fixed income. |
Commission (“SEC”) permits RIMCo to engage or terminate a | |
money manager in an Underlying Fund at any time, subject to | It was a mixed equity market for the fiscal year ending October |
approval by the Underlying Fund’s Board, without a shareholder | 31, 2015. U.S. stocks (as measured by the Russell 3000® Index) |
vote. Pursuant to the terms of the exemptive order, an Underlying | returned 4.49% over the period, while non-U.S. equities returned |
Fund is required to notify its shareholders within 90 days of when | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® |
a money manager begins providing services. | Index) and emerging markets returned -13.58% (as measured by |
the Russell Emerging Markets Index). The underperformance of | |
What is the Fund’s investment objective? | non-U.S. equities versus fixed income was a key negative driver |
TheFundseekstoprovidecurrentincomeandcapitalpreservation, | to the Fund’s benchmark-relative performance, as fixed income |
and as a secondary objective, long term capital appreciation. | markets finished at 1.96% for the fiscal year as measured by the |
Fund’s benchmark. | |
How did the Fund perform relative to its benchmark for the | |
fiscal year ended October 31, 2015? | Within alternative strategies, commodities exposure had the |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | largest negative impact on the Fund, as the asset class (as |
Class E, Class R1, Class R4 and Class S Shares gained 0.11%, | measured by the Bloomberg Commodity Index Total Return) lost |
0.12%, 0.50%, 0.23%, and 0.36%, respectively and the Fund’s | 25.72% during the period, significantly underperforming fixed |
Class C and Class R5 shares lost 0.64% and 0.03%, respectively. | income. Global REITs and listed infrastructure (as represented by |
This is compared to the Fund’s primary benchmark, the Barclays | the FTSE EPRA/NAREIT Developed Real Estate Index (Net) and |
U.S. Aggregate Bond Index, which gained 1.96% during the same | S&P Global Infrastructure Index (Net)) finished the fiscal year up |
period. The Fund’s performance includes operating expenses, | 2.68% and down 6.29% respectively. REITs outperformed fixed |
whereas index returns are unmanaged and do not include | income markets, which was beneficial to the Fund’s performance |
expenses of any kind. | through its allocation to the Russell Global Real Estate Securities |
Fund. Infrastructure underperformed fixed income, which | |
For the fiscal year ended October 31, 2015, the Morningstar® | negatively impacted the Fund through its allocation to the Russell |
Conservative Allocation, a group of funds that Morningstar | Global Infrastructure Fund. |
considers to have investment strategies similar to those of the | |
Fund, lost 0.77%. This result serves as a peer comparison and is | How did the investment strategies and techniques employed |
expressed net of operating expenses. | by the Fund and the Underlying Funds affect the Fund’s |
The Fund underperformed the Barclays U.S. Aggregate Bond | performance? |
Index for the year. The Fund’s strategic allocation to non-U.S. | The Fund is a fund of funds and its performance is based on |
equity Underlying Funds negatively impacted benchmark-relative | RIMCo’s strategic asset allocations and the performance of the |
performance, with the Fund’s allocation to the Russell Emerging | Underlying Funds in which the Fund invests. |
Markets Fund and Select International Equity Fund having the | The Fund’s strategic allocation to fixed income Underlying |
largest detrimental impact. Benchmark-relative performance | Funds generally had a negative impact on its benchmark-relative |
was aided by the Fund’s mix of out-of-benchmark allocations | performance. Allocations to the Russell Global Opportunistic |
to U.S. equity and global real estate Underlying Funds, which | Credit Fund and Russell Short Duration Bond Fund detracted, as |
outperformed fixed income Underlying Funds during the period. | these Underlying Funds underperformed the Fund’s benchmark. |
From an active management perspective, the Russell Global | |
Opportunistic Credit Fund underperformed its benchmark largely | |
because of an ex-benchmark allocation to local currency emerging |
Conservative Strategy Fund 11
Russell Investment Company
Conservative Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
market debt and the associated currency risk as the U.S. dollar | commodities and global infrastructure underperformed the | ||||
appreciated strongly versus emerging market currencies. The | Fund’s benchmark. From an active management standpoint, | ||||
Russell Short Duration Bond Fund underperformed its benchmark | performance of these Underlying Funds was mixed. The Russell | ||||
due mostly to ex-benchmark corporate credit exposure, as this | Global Infrastructure Fund and the Russell Global Real Estate | ||||
sector saw the largest drawdowns during the period. Allocations | Securities Fund outperformed their respective benchmarks | ||||
to the Russell Strategic Bond Fund and Russell Investment Grade | throughout the fiscal year while the Russell Commodity | ||||
Bond Fund were slightly positive from a benchmark-relative | Strategies Fund underperformed its benchmark through May 1, | ||||
perspective. While both Funds were negatively impacted by their | 2015, when it was removed as an Underlying Fund. The Russell | ||||
overweight to credit, currency positioning drove excess return. | Global Infrastructure Fund and the Russell Global Real Estate | ||||
With respect to the Fund’s global equity exposure, the Fund’s | Securities Fund both benefited from strong stock selection by | ||||
strategic allocation to the Russell International Developed | underlying money managers. The Russell Commodity Strategies | ||||
Markets Fund and the Russell Global Equity Fund through | Fund underperformed its benchmark due largely to exposure to | ||||
May 1, 2015 positively impacted the Fund’s benchmark-relative | the energy sector. | ||||
performance, while its allocation to the Russell Emerging | The Fund’s strategic allocation to the Russell Multi-Strategy | ||||
Markets Fund detracted. The Russell International Developed | Income Fund, a multi-asset Fund with allocations to diversified | ||||
Markets Fund outperformed its benchmark due to underweights | fixed income, equities and real assets, negatively impacted | ||||
to Asia Pacific ex-Japan and Canada and the materials and | Fund performance as this Underlying Fund underperformed the | ||||
energy sectors, which were the worst hit regions and sectors in the | Fund’s fixed income benchmark. While diversification within | ||||
period. An underweight to energy and an overweight to consumer | its fixed income allocation benefited the Russell Multi-Strategy | ||||
discretionary in the Russell Global Equity Fund contributed to | Income Fund, out-of-benchmark exposure to global equities and | ||||
positive excess return. For the Russell Emerging Markets Fund, | real assets had a negative impact and was the primary driver of | ||||
unsuccessful stock selection in China and Brazil was the main | underperformance. | ||||
driver of the Fund’s underperformance. Chinese stocks fell sharply | |||||
and broader emerging markets also lost significant value during | Describe any changes to the Fund’s structure or allocation | ||||
the period due to growth concerns. The Select International Equity | to the Underlying Funds. | ||||
Fund replaced the Russell International Developed Markets Fund | RIMCo has the discretion to vary the Fund’s actual allocation from | ||||
on May 1, 2015, and a valuation bias in this Underlying Fund led | the target strategic asset allocation by up to +/- 5% at the equity, | ||||
to benchmark-relative underperformance as lower price-to-book | fixed income or alternative category level based on RIMCo’s | ||||
stocks strongly underperformed. | capital markets research. RIMCo’s asset allocation modifications | ||||
benefited the Fund’s performance relative to the Fund’s long-term | |||||
The Fund’s strategic allocation to U.S. large cap equity Underlying | strategic allocation. | ||||
Funds benefited the Fund’s benchmark-relative performance, as | |||||
broad U.S. equities outperformed core fixed income during the | Entering the fiscal year, relative to the target strategic asset | ||||
period. However, most of the large cap U.S. equity Underlying | allocation, the Fund had a broad overweight to equity Underlying | ||||
Funds underperformed their respective U.S. equity market | Funds, an underweight to alternative Underlying Funds, and an | ||||
segment as represented by their respective primary benchmark. | overweight to the Russell Short Duration Bond Fund. Overall | ||||
From an active management perspective, the Russell U.S. Core | positioning was based on a cautious outlook for commodities | ||||
Equity Fund (an Underlying Fund through May 1, 2015) and the | and anticipated rise in interest rates, which could negatively | ||||
Select U.S. Equity Fund (added as an Underlying Fund on May | impact interest rate sensitive securities such as REITs and longer | ||||
1, 2015) both underperformed the Russell 1000® Index due to | duration fixed income. | ||||
an underweight to growth stocks, which outperformed during the | On May 1, 2015, RIMCo implemented a new target strategic asset | ||||
period. In addition, the Fund’s strategic allocation to the Russell | allocation that replaced the Russell U.S. Core Equity Fund with the | ||||
U.S. Small Cap Equity Fund (an Underlying Fund through May | Select U.S. Equity Fund and the Russell International Developed | ||||
1, 2015) also detracted from the Fund’s benchmark-relative | Markets Fund with the Select International Equity Fund. The | ||||
performance, as U.S. small cap equity generally underperformed | Fund’s target strategic asset allocation to various Underlying | ||||
core fixed income and the Underlying Fund underperformed its | Funds was modified. In addition to replacing certain Underlying | ||||
Russell 2000® Index benchmark due to an overweight to micro- | Funds, the strategic allocations to the Russell U.S. Small Cap | ||||
capitalization stocks which underperformed during the period. | Equity Fund, Russell Global Equity Fund, Russell Commodity | ||||
The Fund’s strategic allocation to alternative Underlying Funds | Strategies Fund and Russell Multi-Strategy Alternative Fund | ||||
had a negative impact on benchmark-relative performance as | were removed. RIMCo also added the Russell Multi-Strategy |
12 Conservative Strategy Fund
Russell Investment Company
Conservative Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Income Fund as an Underlying Fund, which has exposure to U.S. | At the end of the fiscal year, the Fund was positioned for |
and non-U.S. equities as well as other asset classes. Additionally, | rising interest rates, with an underweight to core fixed income |
RIMCo added a RIMCo-managed positioning strategy at a | Underlying Funds funding an overweight to the Russell Global |
2.00% weight. The addition of the positioning strategy resulted | Opportunistic Credit Fund. |
in a 2.00% reduction in the Fund’s allocation to the Select U.S. | |
Equity Fund. The strategy had a U.S. large cap strategic exposure | The views expressed in this report reflect those of the portfolio |
through the use of index futures contracts, and did not result in a | managers only through the end of the period covered by |
change to the Fund’s overall U.S. equity exposure. | the report. These views do not necessarily represent the |
views of RIMCo, or any other person in RIMCo or any other | |
In connection with this reallocation, RIMCo also shifted the | affiliated organization. These views are subject to change |
Fund’s tactical allocations relative to the new target strategic | at any time based upon market conditions or other events, |
asset allocation as follows: | and RIMCo disclaims any responsibility to update the views |
- 2.00% underweight to the Russell Investment Grade Bond | contained herein. These views should not be relied on as |
Fund resulting in a 2.00% overweight to the Russell Global | investment advice and, because investment decisions for |
Opportunistic Credit Fund. This tactical change was intended to | a Russell Investment Company (“RIC”) Fund are based on |
reduce exposure to asset classes sensitive to anticipated rising | numerous factors, should not be relied on as an indication |
interest rates. | of investment decisions of any RIC Fund. |
^ In preceding years, the performance of the Fund’s Class E Shares was used in the line graph, but Class S Shares are considered to be a better representation to
shareholders as Class S Shares are the primary retail share class of the Fund.
* Assumes initial investment on November 1, 2005.
** The Barclays U.S. Aggregate Bond Index is an index, with income reinvested, generally representative of intermediate-term government bonds, investment-grade
corporate debt securities and mortgage-backed securities.
*** BofA Merrill Lynch 1-3 Yr U.S. Treasuries Index is an index composed of approximately 160 issues in the form of publicly placed, coupon-bearing U.S. Treasury
debt. Issues must carry a term to maturity of at least one year and par amounts outstanding must be no less than $10 million at the start and at the close of the
performance measurement periods.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
‡‡ The Fund first issued Class R1 Shares on December 29, 2006. The returns shown for Class R1 Shares prior to that date are the returns of the Fund’s Class S
Shares.
‡‡‡ The Fund first issued Class R4 Shares on October 1, 2014. The returns shown for Class R4 Shares prior to that date are the returns of the Fund’s Class E Shares
from January 1, 2005 to March 28, 2006 and the returns of Class R2 Shares from March 29, 2006 to September 30, 2014.
‡‡‡‡ The Fund first issued Class R5 Shares on October 1, 2014. The returns shown for Class R5 Shares prior to that date are the returns of the Fund’s Class R3
Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Conservative Strategy Fund 13
Russell Investment Company
Conservative Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 982.50 | $ | 1,022.43 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 2.75 | $ | 2.80 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.55% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 978.60 | $ | 1,018.65 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 6.48 | $ | 6.61 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.30% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 982.50 | $ | 1,022.43 | |
Expenses Paid During Period* | $ | 2.75 | $ | 2.80 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.55% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
14 Conservative Strategy Fund
Russell Investment Company
Conservative Strategy Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R1 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 984.50 | $ | 1,024.35 | ||
Expenses Paid During Period* | $ | 0.85 | $ | 0.87 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.17% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R4 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 983.10 | $ | 1,023.09 | ||
Expenses Paid During Period* | $ | 2.10 | $ | 2.14 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.42% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R5 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 981.90 | $ | 1,021.83 | ||
Expenses Paid During Period* | $ | 3.35 | $ | 3.41 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.67% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 983.90 | $ | 1,023.69 | ||
Expenses Paid During Period* | $ | 1.50 | $ | 1.53 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.30% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Conservative Strategy Fund 15
Russell Investment Company
Conservative Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||
Fair | ||||
Value | ||||
Shares | $ | |||
Investments in Russell Affiliated Mutual Funds - 97.8% | ||||
Alternative - 7.9% | ||||
Russell Global Infrastructure Fund Class Y | 1,501,420 | 17,176 | ||
Russell Global Real Estate Securities Fund Class Y | 449,758 | 17,266 | ||
34,442 | ||||
Domestic Equities - 5.0% | ||||
Russell U.S. Defensive Equity Fund Class Y | 136,912 | 6,538 | ||
Russell U.S. Dynamic Equity Fund Class Y | 577,982 | 6,566 | ||
Select U.S. Equity Fund Class Y | 813,039 | 8,731 | ||
21,835 | ||||
Fixed Income - 57.9% | ||||
Russell Global Opportunistic Credit Fund Class Y | 950,471 | 8,687 | ||
Russell Investment Grade Bond Fund Class Y | 1,949,866 | 43,326 | ||
Russell Short Duration Bond Fund Class Y | 5,227,375 | 99,896 | ||
Russell Strategic Bond Fund Class Y | 9,119,710 | 99,679 | ||
251,588 | ||||
International Equities - 4.0% | ||||
Russell Emerging Markets Fund Class Y | 564,072 | 8,596 | ||
Select International Equity Fund Class Y | 948,964 | 8,664 | ||
17,260 | ||||
Specialty - 23.0% | ||||
Russell Multi-Strategy Income Fund Class Y | 10,483,852 | 100,016 | ||
Total Investments in Russell Affiliated Mutual Funds | ||||
(cost $410,029) | 425,141 | |||
Short-Term Investments - 2.0% | ||||
Russell U.S. Cash Management Fund | 8,871,817 | (8) | 8,872 | |
Total Short-Term Investments | ||||
(cost $8,872) | 8,872 | |||
Total Investments 99.8% | ||||
(identified cost $418,901) | 434,013 | |||
Other Assets and Liabilities, Net - 0.2% | 700 | |||
Net Assets - 100.0% | 434,713 |
See accompanying notes which are an integral part of the financial statements.
16 Conservative Strategy Fund
Russell Investment Company
Conservative Strategy Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||||||
Amounts in thousands (except contract amounts) | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||||
Contracts | Amount | Date | $ | ||||||||
Long Positions | |||||||||||
Russell 1000 Index Mini Futures | 2 | USD | 230 | 12/15 | 12 | ||||||
S&P 500 E-Mini Index Futures | 40 | USD | 4,148 | 12/15 | 259 | ||||||
S&P Mid 400 E-Mini Index Futures | 3 | USD | 432 | 12/15 | 10 | ||||||
Short Positions | |||||||||||
MSCI EAFE Mini Index Futures | 22 | USD | 1,933 | 12/15 | (51 | ) | |||||
MSCI Emerging Markets Mini Index Futures | 14 | USD | 590 | 12/15 | (30 | ) | |||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 200 | ||||||||||
Options Written | |||||||||||
Amounts in thousands (except contract amounts) | |||||||||||
Transactions in options written contracts for the period ended October 31, 2015 were as follows: | |||||||||||
Number of | Premiums | ||||||||||
Contracts | Received | ||||||||||
Outstanding October 31, 2014 | — | $ | — | ||||||||
Opened | 49 | 122 | |||||||||
Closed | (49 | ) | (122 | ) | |||||||
Expired | — | — | |||||||||
Outstanding October 31, 2015 | — | $ | — | ||||||||
Foreign Currency Exchange Contracts | |||||||||||
Amounts in thousands | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Amount | Amount | (Depreciation) | |||||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||||
State Street | USD | 349 | AUD | 492 | 11/06/15 | 1 | |||||
State Street | USD | 490 | CAD | 645 | 11/06/15 | 3 | |||||
State Street | USD | 531 | CHF | 525 | 11/06/15 | — | |||||
State Street | USD | 1,876 | EUR | 1,703 | 11/06/15 | (3 | ) | ||||
State Street | USD | 1,114 | GBP | 726 | 11/06/15 | 5 | |||||
State Street | USD | 148 | HKD | 1,146 | 11/06/15 | — | |||||
State Street | USD | 1,145 | JPY | 138,077 | 11/06/15 | (1 | ) | ||||
State Street | USD | 190 | SEK | 1,622 | 11/06/15 | (1 | ) | ||||
State Street | USD | 70 | SGD | 98 | 11/06/15 | — | |||||
State Street | AUD | 1,011 | USD | 710 | 11/06/15 | (11 | ) | ||||
State Street | AUD | 492 | USD | 348 | 12/07/15 | (1 | ) | ||||
State Street | CAD | 1,314 | USD | 980 | 11/06/15 | (25 | ) | ||||
State Street | CAD | 645 | USD | 490 | 12/07/15 | (3 | ) | ||||
State Street | CHF | 1,052 | USD | 1,081 | 11/06/15 | 17 | |||||
State Street | CHF | 525 | USD | 531 | 12/07/15 | (1 | ) | ||||
State Street | EUR | 3,456 | USD | 3,876 | 11/06/15 | 76 | |||||
State Street | EUR | 1,703 | USD | 1,877 | 12/07/15 | 3 | |||||
State Street | GBP | 1,448 | USD | 2,199 | 11/06/15 | (33 | ) | ||||
State Street | GBP | 726 | USD | 1,114 | 12/07/15 | (5 | ) | ||||
State Street | HKD | 2,259 | USD | 291 | 11/06/15 | — | |||||
State Street | HKD | 1,146 | USD | 148 | 12/07/15 | — | |||||
State Street | JPY | 296,510 | USD | 2,466 | 11/06/15 | 9 | |||||
State Street | JPY | 138,077 | USD | 1,146 | 12/07/15 | 1 | |||||
State Street | SEK | 3,340 | USD | 398 | 11/06/15 | 7 | |||||
State Street | SEK | 1,622 | USD | 191 | 12/07/15 | 1 | |||||
State Street | SGD | 197 | USD | 138 | 11/06/15 | (2 | ) | ||||
State Street | SGD | 98 | USD | 70 | 12/07/15 | — | |||||
UBS | USD | 20 | AUD | 28 | 11/06/15 | — | |||||
UBS | USD | 349 | AUD | 492 | 11/06/15 | 2 | |||||
UBS | USD | 18 | CAD | 24 | 11/06/15 | — | |||||
UBS | USD | 490 | CAD | 645 | 11/06/15 | 4 |
See accompanying notes which are an integral part of the financial statements.
Conservative Strategy Fund 17
Russell Investment Company
Conservative Strategy Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||||||
Amounts in thousands | ||||||||||||
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Amount | Amount | (Depreciation) | ||||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||||
UBS | USD | 2 | CHF | 2 | 11/06/15 | — | ||||||
UBS | USD | 530 | CHF | 525 | 11/06/15 | 1 | ||||||
UBS | USD | 56 | EUR | 50 | 11/06/15 | (1 | ) | |||||
UBS | USD | 1,875 | EUR | 1,703 | 11/06/15 | (3 | ) | |||||
UBS | USD | 1,114 | GBP | 726 | 11/06/15 | 5 | ||||||
UBS | USD | 148 | HKD | 1,146 | 11/06/15 | — | ||||||
UBS | USD | 170 | JPY | 20,356 | 11/06/15 | (2 | ) | |||||
UBS | USD | 1,144 | JPY | 138,077 | 11/06/15 | — | ||||||
UBS | USD | 12 | SEK | 96 | 11/06/15 | — | ||||||
UBS | USD | 191 | SEK | 1,622 | 11/06/15 | (1 | ) | |||||
UBS | USD | 1 | SGD | 1 | 11/06/15 | — | ||||||
UBS | USD | 70 | SGD | 98 | 11/06/15 | — | ||||||
UBS | AUD | 492 | USD | 348 | 12/07/15 | (2 | ) | |||||
UBS | CAD | 645 | USD | 489 | 12/07/15 | (4 | ) | |||||
UBS | CHF | 525 | USD | 531 | 12/07/15 | (1 | ) | |||||
UBS | EUR | 1,703 | USD | 1,876 | 12/07/15 | 3 | ||||||
UBS | GBP | 4 | USD | 6 | 11/06/15 | — | ||||||
UBS | GBP | 726 | USD | 1,114 | 12/07/15 | (5 | ) | |||||
UBS | HKD | 33 | USD | 4 | 11/06/15 | — | ||||||
UBS | HKD | 1,146 | USD | 148 | 12/07/15 | — | ||||||
UBS | JPY | 138,077 | USD | 1,145 | 12/07/15 | — | ||||||
UBS | SEK | 1,622 | USD | 191 | 12/07/15 | 1 | ||||||
UBS | SGD | 98 | USD | 70 | 12/07/15 | — | ||||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 34 | |||||||||||
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Investments in Russell Affiliated Mutual Funds | $ | 425,141 | $ | — | $ | — | $ | 425,141 | 97.8 | |||
Short-Term Investments | — | 8,872 | — | 8,872 | 2.0 | |||||||
Total Investments | 425,141 | 8,872 | — | 434,013 | 99.8 | |||||||
Other Assets and Liabilities, Net | 0.2 | |||||||||||
100.0 | ||||||||||||
Other Financial Instruments | ||||||||||||
Futures Contracts | 200 | — | — | 200 | —* | |||||||
Foreign Currency Exchange Contracts | 6 | 28 | — | 34 | —* | |||||||
Total Other Financial Instruments** | $ | 206 | $ | 28 | $ | — | $ | 234 | ||||
* Less than .05% of net assets. | ||||||||||||
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments. | ||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
18 Conservative Strategy Fund
Russell Investment Company
Conservative Strategy Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 139 | ||
Variation margin on futures contracts* | 281 | — | ||||
Total | $ | 281 | $ | 139 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | 81 | $ | — | ||
Unrealized depreciation on foreign currency exchange contracts | — | 105 | ||||
Total | $ | 81 | $ | 105 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Investments** | $ | (91 | ) | $ | — | |
Futures contracts | 9 | — | ||||
Options written | (65 | ) | — | |||
Foreign currency-related transactions*** | — | 258 | ||||
Total | $ | (147 | ) | $ | 258 | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | 200 | $ | — | ||
Foreign currency-related transactions**** | — | 34 | ||||
Total | $ | 200 | $ | 34 | ||
* | Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the | |||||
Statement of Assets and Liabilities. | ||||||
** | Includes net realized gain (loss) on purchased options as reported in the Statement of Operations. | |||||
*** | Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported | |||||
within the Statement of Operations. | ||||||
**** | Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related | |||||
transactions reported within the Statement of Operations. | ||||||
For further disclosure on derivatives see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Conservative Strategy Fund 19
Russell Investment Company
Conservative Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | |||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||
Gross | Net Amounts | ||||||||||
Amounts | of Assets | ||||||||||
Gross | Offset in the | Presented in | |||||||||
Amounts of | Statement of | the Statement | |||||||||
Recognized | Assets and | of Assets and | |||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | $ | 139 | $ | — | $ | 139 | ||||
Futures Contracts | Variation margin on futures contracts | 4 | — | 4 | |||||||
Total Financial and Derivative Assets | 143 | — | 143 | ||||||||
Financial and Derivative Assets not subject to a netting agreement | (15) | — | (15 | ) | |||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 128 | $ | — | $ | 128 | |||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Assets | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||
State Street | 113 | $ | 82 | $ | — | $ | 31 | ||||
UBS | 15 | 15 | — | — | |||||||
Total | $ | 128 | $ | 97 | $ | — | $ | 31 |
See accompanying notes which are an integral part of the financial statements.
20 Conservative Strategy Fund
Russell Investment Company
Conservative Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||
Gross | Net Amounts | ||||||||||
Amounts | of Liabilities | ||||||||||
Gross | Offset in the | Presented in | |||||||||
Amounts of | Statement of | the Statement | |||||||||
Recognized | Assets and | of Assets and | |||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||||
Futures Contracts | Variation margin on futures contracts | $ | 21 | $ | — | $ | 21 | ||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 105 | — | 105 | |||||||
Total Financial and Derivative Liabilities | 126 | — | 126 | ||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (26) | — | (26 | ) | |||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 100 | $ | — | $ | 100 | |||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Liabilities | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||
State Street | 82 | $ | 82 | $ — | $ | — | |||||
UBS | 18 | 15 | — | 3 | |||||||
Total | $ | 100 | $ | 97 | $ — | $ | 3 | ||||
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance | |||||||||||
Sheet collateral and adjustments made to exclude overcollateralization. | |||||||||||
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Conservative Strategy Fund 21
Russell Investment Company
Conservative Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 418,901 |
Investments, at fair value(>) | 434,013 | |
Cash (restricted)(a) | 1,170 | |
Unrealized appreciation on foreign currency exchange contracts | 139 | |
Receivables: | ||
Dividends from affiliated Russell funds | 1 | |
Investments sold | 204 | |
Fund shares sold | 504 | |
From affiliates | 3 | |
Variation margin on futures contracts | 4 | |
Total assets | 436,038 | |
Liabilities | ||
Payables: | ||
Investments purchased | 181 | |
Fund shares redeemed | 682 | |
Accrued fees to affiliates | 277 | |
Other accrued expenses | 59 | |
Variation margin on futures contracts | 21 | |
Unrealized depreciation on foreign currency exchange contracts | 105 | |
Total liabilities | 1,325 | |
Net Assets | $ | 434,713 |
See accompanying notes which are an integral part of the financial statements.
22 Conservative Strategy Fund
Russell Investment Company
Conservative Strategy Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | ||
Net Assets Consist of: | ||
Undistributed (overdistributed) net investment income | $ | 208 |
Accumulated net realized gain (loss) | 30,915 | |
Unrealized appreciation (depreciation) on: | ||
Investments | 15,112 | |
Futures contracts | 200 | |
Foreign currency-related transactions | 34 | |
Shares of beneficial interest | 409 | |
Additional paid-in capital | 387,835 | |
Net Assets | $ | 434,713 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class A(#) | $ | 10.65 |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 11.30 |
Class A — Net assets | $ | 106,603,014 |
Class A — Shares outstanding ($.01 par value) | 10,007,391 | |
Net asset value per share: Class C(#) | $ | 10.55 |
Class C — Net assets | $ | 188,011,852 |
Class C — Shares outstanding ($.01 par value) | 17,816,555 | |
Net asset value per share: Class E(#) | $ | 10.70 |
Class E — Net assets | $ | 17,016,690 |
Class E — Shares outstanding ($.01 par value) | 1,590,807 | |
Net asset value per share: Class R1(#) | $ | 10.72 |
Class R1 — Net assets | $ | 28,783,791 |
Class R1 — Shares outstanding ($.01 par value) | 2,685,674 | |
Net asset value per share: Class R4(#) | $ | 10.67 |
Class R4 — Net assets | $ | 16,189,218 |
Class R4 — Shares outstanding ($.01 par value) | 1,517,610 | |
Net asset value per share: Class R5(#) | $ | 10.74 |
Class R5 — Net assets | $ | 20,284,771 |
Class R5 — Shares outstanding ($.01 par value) | 1,888,258 | |
Net asset value per share: Class S(#) | $ | 10.73 |
Class S — Net assets | $ | 57,823,810 |
Class S — Shares outstanding ($.01 par value) | 5,390,828 | |
Amounts in thousands | ||
(>) Investments in affiliated Russell funds | $ | 434,013 |
(a) Cash Collateral for Futures | $ | 1,170 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
Conservative Strategy Fund 23
Russell Investment Company
Conservative Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 14,904 | |
Expenses | |||
Advisory fees | 976 | ||
Administrative fees | 207 | ||
Custodian fees | 36 | ||
Distribution fees - Class A | 285 | ||
Distribution fees - Class C | 1,511 | ||
Distribution fees - Class R5 | 60 | ||
Transfer agent fees - Class A | 228 | ||
Transfer agent fees - Class C | 403 | ||
Transfer agent fees - Class E | 41 | ||
Transfer agent fees - Class R1 | 62 | ||
Transfer agent fees - Class R4 | 40 | ||
Transfer agent fees - Class R5 | 48 | ||
Transfer agent fees - Class S | 154 | ||
Professional fees | 40 | ||
Registration fees | 120 | ||
Shareholder servicing fees - Class C | 504 | ||
Shareholder servicing fees - Class E | 50 | ||
Shareholder servicing fees - Class R4 | 50 | ||
Shareholder servicing fees - Class R5 | 60 | ||
Trustees’ fees | 12 | ||
Printing fees | 61 | ||
Miscellaneous | 23 | ||
Expenses before reductions | 4,971 | ||
Expense reductions | (1,084 | ) | |
Net expenses | 3,887 | ||
Net investment income (loss) | 11,017 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 27,523 | ||
Futures contracts | 9 | ||
Options written | (65 | ) | |
Foreign currency-related transactions | 258 | ||
Capital gain distributions from Underlying Funds | 7,079 | ||
Net realized gain (loss) | 34,804 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (46,738 | ) | |
Futures contracts | 200 | ||
Foreign currency-related transactions | 34 | ||
Net change in unrealized appreciation (depreciation) | (46,504 | ) | |
Net realized and unrealized gain (loss) | (11,700 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (683 | ) |
See accompanying notes which are an integral part of the financial statements.
24 Conservative Strategy Fund
Russell Investment Company
Conservative Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 11,017 | $ | 5,472 | ||
Net realized gain (loss) | 34,804 | 11,953 | ||||
Net change in unrealized appreciation (depreciation) | (46,504 | ) | 2,655 | |||
Net increase (decrease) in net assets from operations | (683 | ) | 20,080 | |||
Distributions | ||||||
From net investment income | ||||||
Class A | (2,910 | ) | (1,571 | ) | ||
Class C | (3,553 | ) | (1,119 | ) | ||
Class E | (523 | ) | (264 | ) | ||
Class R1 | (908 | ) | (635 | ) | ||
Class R2 | — | (351 | ) | |||
Class R3 | — | (351 | ) | |||
Class R4 | (540 | ) | (46 | ) | ||
Class R5 | (584 | ) | (30 | ) | ||
Class S | (2,128 | ) | (1,196 | ) | ||
From net realized gain | ||||||
Class A | (2,759 | ) | (2,625 | ) | ||
Class C | (4,706 | ) | (4,395 | ) | ||
Class E | (497 | ) | (433 | ) | ||
Class R1 | (760 | ) | (819 | ) | ||
Class R2 | — | (641 | ) | |||
Class R3 | — | (767 | ) | |||
Class R4 | (510 | ) | — | |||
Class R5 | (596 | ) | — | |||
Class S | (1,843 | ) | (1,563 | ) | ||
Net decrease in net assets from distributions | (22,817 | ) | (16,806 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (71,922 | ) | (64,398 | ) | ||
Total Net Increase (Decrease) in Net Assets | (95,422 | ) | (61,124 | ) | ||
Net Assets | ||||||
Beginning of period | 530,135 | 591,259 | ||||
End of period | $ | 434,713 | $ | 530,135 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 208 | $ | 80 |
See accompanying notes which are an integral part of the financial statements.
Conservative Strategy Fund 25
Russell Investment Company
Conservative Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 1,145 | $ | 12,384 | 1,512 | $ | 16,753 | ||||||
Proceeds from reinvestment of distributions | 520 | 5,596 | 382 | 4,148 | ||||||||
Payments for shares redeemed | (2,790 | ) | (30,202 | ) | (3,066 | ) | (33,814 | ) | ||||
Net increase (decrease) | (1,125 | ) | (12,222 | ) | (1,172 | ) | (12,913 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 3,357 | 36,006 | 3,965 | 43,476 | ||||||||
Proceeds from reinvestment of distributions | 770 | 8,214 | 507 | 5,443 | ||||||||
Payments for shares redeemed | (5,293 | ) | (56,663 | ) | (6,141 | ) | (67,176 | ) | ||||
Net increase (decrease) | (1,166 | ) | (12,443 | ) | (1,669 | ) | (18,257 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 481 | 5,294 | 471 | 5,223 | ||||||||
Proceeds from reinvestment of distributions | 94 | 1,017 | 63 | 694 | ||||||||
Payments for shares redeemed | (849 | ) | (9,208 | ) | (842 | ) | (9,345 | ) | ||||
Net increase (decrease) | (274 | ) | (2,897 | ) | (308 | ) | (3,428 | ) | ||||
Class R1 | ||||||||||||
Proceeds from shares sold | 1,135 | 12,331 | 928 | 10,320 | ||||||||
Proceeds from reinvestment of distributions | 154 | 1,668 | 133 | 1,454 | ||||||||
Payments for shares redeemed | (1,994 | ) | (21,699 | ) | (1,539 | ) | (17,041 | ) | ||||
Net increase (decrease) | (705 | ) | (7,700 | ) | (478 | ) | (5,267 | ) | ||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 885 | 9,789 | ||||||||
Proceeds from reinvestment of distributions | — | — | 91 | 992 | ||||||||
Payments for shares redeemed | — | — | (4,168 | ) | (46,122 | ) | ||||||
Net increase (decrease) | — | — | (3,192 | ) | (35,341 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 475 | 5,294 | ||||||||
Proceeds from reinvestment of distributions | — | — | 102 | 1,118 | ||||||||
Payments for shares redeemed | — | — | (4,367 | ) | (48,637 | ) | ||||||
Net increase (decrease) | — | — | (3,790 | ) | (42,225 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 598 | 6,517 | 2,341 | 25,961 | ||||||||
Proceeds from reinvestment of distributions | 97 | 1,050 | 4 | 45 | ||||||||
Payments for shares redeemed | (1,459 | ) | (15,909 | ) | (63 | ) | (703 | ) | ||||
Net increase (decrease) | (764 | ) | (8,342 | ) | 2,282 | 25,303 | ||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 347 | 3,790 | 2,568 | 28,651 | ||||||||
Proceeds from reinvestment of distributions | 109 | 1,180 | 3 | 30 | ||||||||
Payments for shares redeemed | (1,035 | ) | (11,288 | ) | (103 | ) | (1,147 | ) | ||||
Net increase (decrease) | (579 | ) | (6,318 | ) | 2,468 | 27,534 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 1,938 | 21,080 | 3,132 | 34,774 | ||||||||
Proceeds from reinvestment of distributions | 364 | 3,941 | 249 | 2,726 | ||||||||
Payments for shares redeemed | (4,349 | ) | (47,021 | ) | (3,354 | ) | (37,304 | ) | ||||
Net increase (decrease) | (2,047 | ) | (22,000 | ) | 27 | 196 | ||||||
Total increase (decrease) | (6,660 | ) | $ | (71,922 | ) | (5,832 | ) | $ | (64,398 | ) |
See accompanying notes which are an integral part of the financial statements.
26 Conservative Strategy Fund
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Russell Investment Company
Conservative Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||||
$ | |||||||||||||||
$ | Net | $ | $ | $ | $ | ||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | ||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | ||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||
Class A | |||||||||||||||
October 31, 2015 | 11.16 | .27 | (.26 | ) | .01 | (.27 | ) | (.25 | ) | ||||||
October 31, 2014 | 11.09 | .14 | .28 | .42 | (.13 | ) | (.22 | ) | |||||||
October 31, 2013 | 11.02 | .28 | .08 | .36 | (.27 | ) | (.02 | ) | |||||||
October 31, 2012 | 10.53 | .24 | .50 | .74 | (.25 | ) | — | ||||||||
October 31, 2011 | 10.71 | .39 | (.19 | ) | .20 | (.38 | ) | — | |||||||
Class C | |||||||||||||||
October 31, 2015 | 11.06 | .18 | (.25 | ) | (.07) | (.19 | ) | (.25 | ) | ||||||
October 31, 2014 | 10.99 | .05 | .30 | .35 | (.06 | ) | (.22 | ) | |||||||
October 31, 2013 | 10.94 | .19 | .09 | .28 | (.21 | ) | (.02 | ) | |||||||
October 31, 2012 | 10.46 | .16 | .49 | .65 | (.17 | ) | — | ||||||||
October 31, 2011 | 10.64 | .31 | (.17 | ) | .14 | (.32 | ) | — | |||||||
Class E | |||||||||||||||
October 31, 2015 | 11.21 | .26 | (.25 | ) | .01 | (.27 | ) | (.25 | ) | ||||||
October 31, 2014 | 11.13 | .14 | .29 | .43 | (.13 | ) | (.22 | ) | |||||||
October 31, 2013 | 11.05 | .30 | .07 | .37 | (.27 | ) | (.02 | ) | |||||||
October 31, 2012 | 10.56 | .25 | .49 | .74 | (.25 | ) | — | ||||||||
October 31, 2011 | 10.73 | .47 | (.26 | ) | .21 | (.38 | ) | — | |||||||
Class R1 | |||||||||||||||
October 31, 2015 | 11.23 | .32 | (.26 | ) | .06 | (.32 | ) | (.25 | ) | ||||||
October 31, 2014 | 11.15 | .18 | .30 | .48 | (.18 | ) | (.22 | ) | |||||||
October 31, 2013 | 11.08 | .31 | .10 | .41 | (.32 | ) | (.02 | ) | |||||||
October 31, 2012 | 10.59 | .28 | .51 | .79 | (.30 | ) | — | ||||||||
October 31, 2011 | 10.76 | .40 | (.14 | ) | .26 | (.43 | ) | — | |||||||
Class R4(3) | |||||||||||||||
October 31, 2015 | 11.18 | .29 | (.26 | ) | .03 | (.29 | ) | (.25 | ) | ||||||
October 31, 2014 | 11.10 | .15 | .30 | .45 | (.15 | ) | (.22 | ) | |||||||
October 31, 2013 | 11.03 | .32 | .06 | .38 | (.29 | ) | (.02 | ) | |||||||
October 31, 2012 | 10.54 | .27 | .49 | .76 | (.27 | ) | — | ||||||||
October 31, 2011 | 10.72 | .30 | (.07 | ) | .23 | (.41 | ) | — | |||||||
Class R5(4) | |||||||||||||||
October 31, 2015 | 11.25 | .27 | (.27 | ) | — | (.26 | ) | (.25 | ) | ||||||
October 31, 2014 | 11.17 | .13 | .29 | .42 | (.12 | ) | (.22 | ) | |||||||
October 31, 2013 | 11.09 | .30 | .06 | .36 | (.26 | ) | (.02 | ) | |||||||
October 31, 2012 | 10.60 | .28 | .44 | .72 | (.23 | ) | — | ||||||||
October 31, 2011 | 10.77 | .41 | (.20 | ) | .21 | (.38 | ) | — | |||||||
Class S | |||||||||||||||
October 31, 2015 | 11.24 | .30 | (.26 | ) | .04 | (.30 | ) | (.25 | ) | ||||||
October 31, 2014 | 11.16 | .16 | .30 | .46 | (.16 | ) | (.22 | ) | |||||||
October 31, 2013 | 11.09 | .31 | .08 | .39 | (.30 | ) | (.02 | ) | |||||||
October 31, 2012 | 10.60 | .28 | .49 | .77 | (.28 | ) | — | ||||||||
October 31, 2011 | 10.77 | .44 | (.20 | ) | .24 | (.41 | ) | — | |||||||
See accompanying notes which are an integral part of the financial statements.
28 Conservative Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(d) | (000 | ) | Gross(g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | |||||||||
(.52 | ) | 10.65 | .11 | 106,603 | .75 | .55 | 2.54 | 39 | |||||||||
(.35 | ) | 11.16 | 3.92 | 124,288 | .75 | .56 | 1.22 | 26 | |||||||||
(.29 | ) | 11.09 | 3.35 | 136,433 | .73 | .57 | 2.55 | 21 | |||||||||
(.25 | ) | 11.02 | 7.15 | 133,172 | .72 | .56 | 2.28 | 22 | |||||||||
(.38 | ) | 10.53 | 1.98 | 110,375 | .74 | .55 | 3.55 | 19 | |||||||||
(.44 | ) | 10.55 | (.64 | ) | 188,011 | 1.50 | 1.30 | 1.71 | 39 | ||||||||
(.28 | ) | 11.06 | 3.21 | 210,015 | 1.50 | 1.31 | .47 | 26 | |||||||||
(.23 | ) | 10.99 | 2.61 | 227,048 | 1.48 | 1.32 | 1.76 | 21 | |||||||||
(.17 | ) | 10.94 | 6.28 | 230,038 | 1.47 | 1.31 | 1.51 | 22 | |||||||||
(.32 | ) | 10.46 | 1.33 | 191,953 | 1.49 | 1.30 | 2.83 | 19 | |||||||||
(.52 | ) | 10.70 | .12 | 17,017 | .75 | .55 | 2.43 | 39 | |||||||||
(.35 | ) | 11.21 | 3.99 | 20,901 | .75 | .56 | 1.22 | 26 | |||||||||
(.29 | ) | 11.13 | 3.40 | 24,180 | .74 | .57 | 2.75 | 21 | |||||||||
(.25 | ) | 11.05 | 7.11 | 39,156 | .72 | .56 | 2.32 | 22 | |||||||||
(.38 | ) | 10.56 | 2.01 | 42,668 | .74 | .55 | 4.21 | 19 | |||||||||
(.57 | ) | 10.72 | .50 | 28,784 | .50 | .17 | 2.96 | 39 | |||||||||
(.40 | ) | 11.23 | 4.40 | 38,079 | .50 | .17 | 1.63 | 26 | |||||||||
(.34 | ) | 11.15 | 3.79 | 43,145 | .48 | .17 | 2.81 | 21 | |||||||||
(.30 | ) | 11.08 | 7.57 | 40,536 | .47 | .14 | 2.59 | 22 | |||||||||
(.43 | ) | 10.59 | 2.51 | 29,187 | .49 | .12 | 3.66 | 19 | |||||||||
(.54 | ) | 10.67 | .23 | 16,189 | .75 | .42 | 2.70 | 39 | |||||||||
(.37 | ) | 11.18 | 4.14 | 25,502 | .75 | .42 | 1.38 | 26 | |||||||||
(.31 | ) | 11.10 | 3.51 | 35,427 | .73 | .42 | 2.95 | 21 | |||||||||
(.27 | ) | 11.03 | 7.32 | 44,214 | .72 | .39 | 2.51 | 22 | |||||||||
(.41 | ) | 10.54 | 2.19 | 40,304 | .74 | .37 | 2.74 | 19 | |||||||||
(.51 | ) | 10.74 | (.03 | ) | 20,285 | 1.00 | .67 | 2.45 | 39 | ||||||||
(.34 | ) | 11.25 | 3.83 | 27,768 | 1.00 | .67 | 1.16 | 26 | |||||||||
(.28 | ) | 11.17 | 3.30 | 42,335 | .98 | .67 | 2.76 | 21 | |||||||||
(.23 | ) | 11.09 | 6.91 | 63,878 | .98 | .64 | 2.60 | 22 | |||||||||
(.38 | ) | 10.60 | 1.99 | 183,681 | .99 | .62 | 3.66 | 19 | |||||||||
(.55 | ) | 10.73 | .36 | 57,824 | .50 | .30 | 2.78 | 39 | |||||||||
(.38 | ) | 11.24 | 4.25 | 83,582 | .50 | .31 | 1.46 | 26 | |||||||||
(.32 | ) | 11.16 | 3.59 | 82,691 | .48 | .32 | 2.82 | 21 | |||||||||
(.28 | ) | 11.09 | 7.37 | 95,523 | .47 | .31 | 2.61 | 22 | |||||||||
(.41 | ) | 10.60 | 2.32 | 92,126 | .49 | .30 | 4.00 | 19 |
See accompanying notes which are an integral part of the financial statements.
Conservative Strategy Fund 29
Russell Investment Company
Moderate Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Moderate Strategy Fund - Class A‡ | Moderate Strategy Fund - Class R5‡‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (5.77 | )% | 1 Year | (0.27 | )% | ||
5 Years | 3.14 | %§ | 5 Years | 4.23 | %§ | ||
10 Years | 3.90 | %§ | 10 Years | 4.32 | %§ | ||
Moderate Strategy Fund - Class C | Moderate Strategy Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.80 | )% | 1 Year | 0.16 | % | ||
5 Years | 3.58 | %§ | 5 Years | 4.60 | %§ | ||
10 Years | 3.73 | %§ | 10 Years | 4.77 | %§ | ||
Moderate Strategy Fund - Class E | Barclays U.S. Aggregate Bond Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.14 | )% | 1 Year | 1.96 | % | ||
5 Years | 4.35 | %§ | 5 Years | 3.03 | %§ | ||
10 Years | 4.50 | %§ | 10 Years | 4.72 | %§ | ||
Moderate Strategy Fund - Class R1‡‡ | Russell 1000® Index*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.18 | % | 1 Year | 4.86 | % | ||
5 Years | 4.76 | %§ | 5 Years | 14.32 | %§ | ||
10 Years | 4.78 | %§ | 10 Years | 7.98 | %§ | ||
Moderate Strategy Fund - Class R4‡‡‡ | |||||||
Total | |||||||
Return | |||||||
1 Year | (0.01 | )% | |||||
5 Years | 4.50 | %§ | |||||
10 Years | 4.58 | %§ |
30 Moderate Strategy Fund
Russell Investment Company
Moderate Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Moderate Strategy Fund (the “Fund”) is a fund of funds that | How did the market conditions described in the Market |
invests principally in other Russell Investment Company mutual | Summary report affect the Fund’s performance? |
funds (the “Underlying Funds”). The Underlying Funds employ | The fiscal year ended October 31, 2015 was characterized by |
a multi-manager approach whereby portions of the Underlying | slowing global growth and commodity price weakness. Overall, |
Funds are allocated to different money managers. Underlying | this was modestly positive for fixed income assets, as yields fell. |
Fund assets not allocated to money managers are managed by | However, the Fund’s exposure to the fixed income asset class had |
Russell Investment Management Company (“RIMCo”), the Fund’s | a modestly negative effect on benchmark-relative performance |
and Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | due to the Fund’s allocation to the Russell Global Opportunistic |
advisor, may change the allocation of the Underlying Funds’ | Credit Fund. The Fund’s strategic exposure to U.S. equities and |
assets among money managers at any time. An exemptive order | global real estate was positive, as these asset classes outperformed |
from the Securities and Exchange Commission (“SEC”) permits | fixed income. |
RIMCo to engage or terminate a money manager in an Underlying | |
Fund at any time, subject to approval by the Underlying Fund’s | It was a mixed equity market for the fiscal year ending October |
Board, without a shareholder vote. Pursuant to the terms of the | 31, 2015. U.S. stocks (as measured by the Russell 3000® Index) |
exemptive order, an Underlying Fund is required to notify its | returned 4.49% over the period, while non-U.S. equities returned |
shareholders within 90 days of when a money manager begins | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® |
providing services. | Index) and emerging markets returned -13.58% (as measured by |
the Russell Emerging Markets Index). The underperformance of | |
What is the Fund’s investment objective? | non-U.S. equities versus fixed income was a key negative driver |
The Fund seeks to provide current income and moderate long | to the Fund’s benchmark-relative performance, as fixed income |
term capital appreciation. | markets finished at 1.96% for the fiscal year as measured by the |
Fund’s benchmark. | |
How did the Fund perform relative to its benchmark for the | |
fiscal year ended October 31, 2015? | Within alternative strategies, commodities exposure had the |
For the fiscal year ended October 31, 2015, the Fund’s Class | largest negative impact on the Fund, as the asset class (as |
R1 and Class S Shares gained 0.18% and 0.16%, respectively, | measured by the Bloomberg Commodity Index Total Return) lost |
and the Fund’s Class A, Class C, Class E, Class R4 and Class | 25.72% during the period, significantly underperforming fixed |
R5 Shares lost 0.04%, 0.80%, 0.14%, 0.01% and 0.27%, | income. Global REITs and listed infrastructure (as represented by |
respectively. This is compared to the Fund’s primary benchmark, | the FTSE EPRA/NAREIT Developed Real Estate Index (Net) and |
the Barclays U.S. Aggregate Bond Index, which gained 1.96% | S&P Global Infrastructure Index (Net)) finished the fiscal year up |
during the same period. The Fund’s performance includes | 2.68% and down 6.29% respectively. REITs outperformed fixed |
operating expenses, whereas index returns are unmanaged and | income markets, which was beneficial to the Fund’s performance |
do not include expenses of any kind. | through its allocation to the Russell Global Real Estate Securities |
Fund. Infrastructure underperformed fixed income, which | |
For the fiscal year ended October 31, 2015, the Morningstar® | negatively impacted the Fund through its allocation to the Russell |
Conservative Allocation, a group of funds that Morningstar | Global Infrastructure Fund. |
considers to have investment strategies similar to those of the | |
Fund, lost -0.77%. This result serves as a peer comparison and is | How did the investment strategies and techniques employed |
expressed net of operating expenses. | by the Fund and the Underlying Funds affect the Fund’s |
The Fund underperformed the Barclays U.S. Aggregate Bond | performance? |
Index for the year. The Fund’s strategic allocation to commodities | The Fund is a fund of funds and its performance is based on |
and non-U.S. equity Underlying Funds negatively impacted | RIMCo’s strategic asset allocations and the performance of the |
benchmark-relative performance, with the Fund’s allocation to | Underlying Funds in which the Fund invests. |
the Russell Emerging Markets Fund and Russell Commodity | The Fund’s strategic allocation to fixed income Underlying |
Strategies Fund having the largest detrimental impact. | Funds generally had a negative impact on its benchmark-relative |
Benchmark-relative performance was aided by the Fund’s mix of | performance. An allocation to the Russell Global Opportunistic |
out-of-benchmark allocations to U.S. equity and global real estate | Credit Fund detracted, as this Underlying Fund underperformed |
Underlying Funds, which outperformed fixed income Underlying | the Fund’s benchmark. From an active management perspective, |
Funds during the period. | the Russell Global Opportunistic Credit Fund underperformed |
its benchmark largely because of an ex-benchmark allocation to | |
local currency emerging market debt and the associated currency |
Moderate Strategy Fund 31
Russell Investment Company
Moderate Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
risk as the U.S. dollar appreciated strongly versus emerging | Fund’s benchmark. From an active management standpoint, |
market currencies. Allocations to the Russell Strategic Bond | performance of these Underlying Funds was mixed. The Russell |
Fund and Russell Investment Grade Bond Fund were slightly | Global Infrastructure Fund and the Russell Global Real Estate |
positive from a benchmark-relative perspective. While both | Securities Fund outperformed their respective benchmarks |
Funds were negatively impacted by their overweight to credit, | while the Russell Commodity Strategies Fund underperformed |
currency positioning drove excess return. | its benchmark. The Russell Global Infrastructure Fund and the |
With respect to the Fund’s global equity exposure, the Fund’s | Russell Global Real Estate Securities Fund both benefited from |
strategic allocation to the Russell International Developed | strong stock selection by underlying money managers. The Russell |
Markets Fund through March 3, 2015 and Russell Global | Commodity Strategies Fund underperformed its benchmark due |
Equity Fund throughout the fiscal year positively impacted the | largely to exposure to the energy sector. |
Fund’s benchmark-relative performance, while its allocation | Describe any changes to the Fund’s structure or allocation |
to the Russell Emerging Markets Fund detracted. The Russell | to the Underlying Funds. |
International Developed Markets Fund outperformed its | RIMCo has the discretion to vary the Fund’s actual allocation from |
benchmark due to underweights to Asia Pacific ex-Japan and | the target strategic asset allocation by up to +/- 5% at the equity, |
Canada and the materials and energy sectors, which were the | fixed income or alternative category level based on RIMCo’s |
worst hit regions and sectors in the period. An underweight to | capital markets research. RIMCo’s asset allocation modifications |
energy and an overweight to consumer discretionary in the | benefited the Fund’s performance relative to the Fund’s long-term |
Russell Global Equity Fund contributed to positive excess return. | strategic allocation. |
For the Russell Emerging Markets Fund, unsuccessful stock | |
selection in China and Brazil was the main driver of the Fund’s | Entering the fiscal year, relative to the target strategic asset |
underperformance. Chinese stocks fell sharply and broader | allocation, the Fund had a broad overweight to equity Underlying |
emerging markets also lost significant value during the period | Funds and an underweight to alternative Underlying Funds. |
due to growth concerns. The Select International Equity Fund | Overall positioning was based on a cautious outlook for |
replaced the Russell International Developed Markets Fund on | commodities and anticipated rise in interest rates, which could |
March 3, 2015, and a valuation bias in this Underlying Fund led | negatively impact interest rate sensitive securities such as REITs. |
to benchmark-relative underperformance as lower price-to-book | On March 3, 2015, RIMCo implemented a new target strategic |
stocks strongly underperformed. | asset allocation that replaced the Russell U.S. Core Equity Fund |
The Fund’s strategic allocation to U.S. large cap equity Underlying | with the Select U.S. Equity Fund and the Russell International |
Funds benefited the Fund’s benchmark-relative performance, as | Developed Markets Fund with the Select International Equity |
broad U.S. equities outperformed core fixed income during the | Fund. The Fund’s target strategic asset allocation to various |
period. However, most of the large cap U.S. equity Underlying | Underlying Funds was modified, and the strategic allocation to |
Funds underperformed their respective U.S. equity market | the Russell Multi-Strategy Alternative Fund was removed. |
segment as represented by their respective primary benchmark. | In connection with this reallocation, RIMCo also shifted the |
From an active management perspective, the Russell U.S. Core | Fund’s tactical allocations relative to the new target strategic |
Equity Fund (an Underlying Fund through March 3, 2015) and | asset allocation as follows: |
the Select U.S. Equity Fund (added as an Underlying Fund on | - 1.00% underweight to the Russell Global Real Estate Securities |
March 3, 2015) both underperformed the Russell 1000® Index | Fund and 1.00% underweight the Russell U.S. Dynamic Equity |
due to an underweight to growth stocks, which outperformed | Fund resulting in a 2.00% overweight to the Russell Global |
during the period. In addition, the Fund’s strategic allocation | Opportunistic Credit Fund. This tactical change was intended to |
to the Russell U.S. Small Cap Equity Fund also detracted from | reduce exposure to asset classes sensitive to anticipated rising |
the Fund’s benchmark-relative performance, as U.S. small cap | interest rates. |
equity generally underperformed core fixed income and the | |
Underlying Fund underperformed its Russell 2000® Index | On May 1, 2015, RIMCo added a RIMCo-managed positioning |
benchmark due to an overweight to micro-capitalization stocks | strategy at a 2.00% weight. The addition of the positioning |
which underperformed during the period. | strategy resulted in a 2.00% reduction in the Fund’s allocation |
to the Select U.S. Equity Fund. The strategy had a U.S. large cap | |
The Fund’s strategic allocation to alternative Underlying Funds | strategic exposure through the use of index futures contracts, |
had a negative impact on benchmark-relative performance as | and did not result in a change to the Fund’s overall U.S. equity |
commodities and global infrastructure underperformed the | exposure. |
32 Moderate Strategy Fund
Russell Investment Company
Moderate Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
On September 3, 2015, RIMCo implemented a 0.50% | funding overweights to the Russell Global Opportunistic Credit |
underweight to the Russell Commodity Strategies Fund due to | Fund and the Select U.S. Equity Fund. |
limited commodity price appreciation expectations over the | |
medium term. This resulted in a 0.50% overweight to the Select | The views expressed in this report reflect those of the portfolio |
U.S. Equity Fund. | managers only through the end of the period covered by |
the report. These views do not necessarily represent the | |
On October 13, 2015, RIMCo implemented a 3.00% underweight | views of RIMCo, or any other person in RIMCo or any other |
to the Russell Strategic Bond Fund and added an overweight to | affiliated organization. These views are subject to change |
the Russell Global Opportunistic Credit Fund. This was intended | at any time based upon market conditions or other events, |
to position the Fund for rising interest rates as well as take | and RIMCo disclaims any responsibility to update the views |
advantage of discounted valuations in opportunistic sectors such | contained herein. These views should not be relied on as |
as high yield credit following the market sell-off in October. | investment advice and, because investment decisions for |
At the end of the fiscal year, the Fund was positioned for rising | a Russell Investment Company (“RIC”) Fund are based on |
interest rates, with underweights to the Russell Global Real | numerous factors, should not be relied on as an indication |
Estate Securities Fund and Russell Commodity Strategies Fund | of investment decisions of any RIC Fund. |
^ In preceding years, the performance of the Fund’s Class E Shares was used in the line graph, but Class S Shares are considered to be a better representation to
shareholders as Class S Shares are the primary retail share class of the Fund.
* Assumes initial investment on November 1, 2005.
** The Barclays U.S. Aggregate Bond Index is an index, with income reinvested, generally representative of intermediate-term government bonds, investment grade
corporate debt securities and mortgage-backed securities.
*** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
‡‡ The Fund first issued Class R1 Shares on October 3, 2006. The returns shown for Class R1 Shares prior to that date are the returns of the Fund’s Class S Shares.
‡‡‡ The Fund first issued Class R4 Shares on October 1, 2014. The returns shown for Class R4 Shares prior to that date are the returns of the Fund’s Class E Shares
from January 1, 2005 to March 28, 2006 and the returns of Class R2 Shares from March 29, 2006 to September 30, 2014.
‡‡‡‡ The Fund first issued Class R5 Shares on October 1, 2014. The returns shown for Class R5 Shares prior to that date are the returns of the Fund’s Class R3
Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Moderate Strategy Fund 33
Russell Investment Company
Moderate Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 974.80 | $ | 1,022.74 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 2.44 | $ | 2.50 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.49% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 970.70 | $ | 1,018.95 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 6.16 | $ | 6.31 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.24% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 974.00 | $ | 1,022.33 | |
Expenses Paid During Period* | $ | 2.84 | $ | 2.91 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.57% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
34 Moderate Strategy Fund
Russell Investment Company
Moderate Strategy Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R1 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 975.30 | $ | 1,024.00 | ||
Expenses Paid During Period* | $ | 1.19 | $ | 1.22 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.24% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R4 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 974.70 | $ | 1,022.74 | ||
Expenses Paid During Period* | $ | 2.44 | $ | 2.50 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.49% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R5 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 973.50 | $ | 1,021.48 | ||
Expenses Paid During Period* | $ | 3.68 | $ | 3.77 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.74% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 975.70 | $ | 1,023.59 | ||
Expenses Paid During Period* | $ | 1.59 | $ | 1.63 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.32% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Moderate Strategy Fund 35
Russell Investment Company
Moderate Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||
Fair | ||||
Value | ||||
Shares | $ | |||
Investments in Russell Affiliated Mutual Funds - 97.7% | ||||
Alternative - 5.4% | ||||
Russell Commodity Strategies Fund Class Y | 1,746,251 | 9,919 | ||
Russell Global Infrastructure Fund Class Y | 1,825,791 | 20,886 | ||
Russell Global Real Estate Securities Fund Class Y | 182,328 | 7,000 | ||
37,805 | ||||
Domestic Equities - 15.6% | ||||
Russell U.S. Defensive Equity Fund Class Y | 592,748 | 28,304 | ||
Russell U.S. Dynamic Equity Fund Class Y | 1,869,767 | 21,241 | ||
Russell U.S. Small Cap Equity Fund Class Y | 965,486 | 27,652 | ||
Select U.S. Equity Fund Class Y | 2,964,603 | 31,839 | ||
109,036 | ||||
Fixed Income - 60.8% | ||||
Russell Global Opportunistic Credit Fund Class Y | 9,950,474 | 90,947 | ||
Russell Investment Grade Bond Fund Class Y | 5,022,371 | 111,597 | ||
Russell Strategic Bond Fund Class Y | 20,381,197 | 222,767 | ||
425,311 | ||||
International Equities - 15.9% | ||||
Russell Emerging Markets Fund Class Y | 1,785,886 | 27,217 | ||
Russell Global Equity Fund Class Y | 3,678,848 | 42,233 | ||
Select International Equity Fund Class Y | 4,562,070 | 41,652 | ||
111,102 | ||||
Total Investments in Russell Affiliated Mutual Funds | ||||
(cost $643,946) | 683,254 | |||
Short-Term Investments - 1.9% | ||||
Russell U.S. Cash Management Fund | 13,188,039 | (8) | 13,188 | |
Total Short-Term Investments | ||||
(cost $13,188) | 13,188 | |||
Total Investments 99.6% | ||||
(identified cost $657,134) | 696,442 | |||
Other Assets and Liabilities, Net - 0.4% | 3,017 | |||
Net Assets - 100.0% | 699,459 |
See accompanying notes which are an integral part of the financial statements.
36 Moderate Strategy Fund
Russell Investment Company
Moderate Strategy Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Number of | Notional | Expiration | (Depreciation) | |||||||||
Contracts | Amount | Date | $ | |||||||||
Long Positions | ||||||||||||
Amsterdam Index Futures | 10 | EUR | 923 | 11/15 | 63 | |||||||
CAC40 10 EURO Index Futures | 62 | EUR | 3,035 | 11/15 | 196 | |||||||
DAX Index Futures | 10 | EUR | 2,705 | 12/15 | 164 | |||||||
Euro STOXX Index 50 Futures | 55 | EUR | 1,872 | 12/15 | 116 | |||||||
FTSE/MIB Index Futures | 7 | EUR | 785 | 12/15 | 29 | |||||||
IBEX 35 Index Futures | 10 | EUR | 1,029 | 11/15 | 38 | |||||||
MSCI Emerging Markets Mini Index Futures | 7 | USD | 295 | 12/15 | (8 | ) | ||||||
OMXS30 Index Futures | 44 | SEK | 6,582 | 11/15 | 20 | |||||||
Russell 1000 Index Mini Futures | 9 | USD | 1,035 | 12/15 | 46 | |||||||
Russell 2000 Mini Index Futures | 5 | USD | 579 | 12/15 | (1 | ) | ||||||
S&P 500 E-Mini Index Futures | 101 | USD | 10,472 | 12/15 | 566 | |||||||
S&P Mid 400 E-Mini Index Futures | 10 | USD | 1,442 | 12/15 | 23 | |||||||
Short Positions | ||||||||||||
FTSE 100 Index Futures | 41 | GBP | 2,591 | 12/15 | (97 | ) | ||||||
MSCI EAFE Mini Index Futures | 43 | USD | 3,778 | 12/15 | (100 | ) | ||||||
MSCI Emerging Markets Mini Index Futures | 26 | USD | 1,097 | 12/15 | (58 | ) | ||||||
S&P/TSX 50 Index Futures | 26 | CAD | 4,121 | 12/15 | (19 | ) | ||||||
SPI 200 Index Futures | 21 | AUD | 2,749 | 12/15 | (62 | ) | ||||||
TOPIX Index Futures | 10 | JPY | 155,849 | 12/15 | (105 | ) | ||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 811 | |||||||||||
Options Written | ||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||
Transactions in options written contracts for the period ended October 31, 2015 were as follows: | ||||||||||||
Number of | Premiums | |||||||||||
Contracts | Received | |||||||||||
Outstanding October 31, 2014 | — | $ | — | |||||||||
Opened | 95,411 | 229 | ||||||||||
Closed | (95,411 | ) | (229 | ) | ||||||||
Outstanding October 31, 2015 | — | $ | — | |||||||||
Foreign Currency Exchange Contracts | ||||||||||||
Amounts in thousands | ||||||||||||
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Amount | Amount | (Depreciation) | ||||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||||
Bank of Montreal | EUR | 1,474 | USD | 1,651 | 11/06/15 | 30 | ||||||
Bank of Montreal | JPY | 505,986 | USD | 4,209 | 11/06/15 | 16 | ||||||
BNP Paribas | CHF | 1,795 | USD | 1,846 | 11/06/15 | 30 | ||||||
BNP Paribas | EUR | 1,474 | USD | 1,654 | 11/06/15 | 34 | ||||||
BNP Paribas | SEK | 5,700 | USD | 680 | 11/06/15 | 13 | ||||||
Royal Bank of Canada | USD | 397 | AUD | 558 | 11/06/15 | 2 | ||||||
Royal Bank of Canada | USD | 557 | CAD | 733 | 11/06/15 | 4 | ||||||
Royal Bank of Canada | USD | 603 | CHF | 596 | 11/06/15 | 1 | ||||||
Royal Bank of Canada | USD | 2,131 | EUR | 1,935 | 11/06/15 | (4 | ) | |||||
Royal Bank of Canada | USD | 1,266 | GBP | 825 | 11/06/15 | 6 | ||||||
Royal Bank of Canada | USD | 92 | GBP | 60 | 12/16/15 | 1 | ||||||
Royal Bank of Canada | USD | 168 | HKD | 1,302 | 11/06/15 | — | ||||||
Royal Bank of Canada | USD | 1,301 | JPY | 156,873 | 11/06/15 | (1 | ) | |||||
Royal Bank of Canada | USD | 3,206 | JPY | 385,000 | 12/16/15 | (14 | ) | |||||
Royal Bank of Canada | USD | 216 | SEK | 1,843 | 11/06/15 | (1 | ) | |||||
Royal Bank of Canada | USD | 79 | SGD | 111 | 11/06/15 | — | ||||||
Royal Bank of Canada | AUD | 558 | USD | 396 | 12/07/15 | (2 | ) | |||||
Royal Bank of Canada | AUD | 800 | USD | 560 | 12/16/15 | (9 | ) | |||||
Royal Bank of Canada | CAD | 733 | USD | 557 | 12/07/15 | (4 | ) |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 37
Russell Investment Company
Moderate Strategy Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Royal Bank of Canada | CAD | 1,810 | USD | 1,363 | 12/16/15 | (21 | ) |
Royal Bank of Canada | CHF | 596 | USD | 603 | 12/07/15 | (1 | ) |
Royal Bank of Canada | EUR | 1,474 | USD | 1,653 | 11/06/15 | 32 | |
Royal Bank of Canada | EUR | 1,935 | USD | 2,132 | 12/07/15 | 4 | |
Royal Bank of Canada | EUR | 2,300 | USD | 2,587 | 12/16/15 | 56 | |
Royal Bank of Canada | GBP | 2,471 | USD | 3,749 | 11/06/15 | (61 | ) |
Royal Bank of Canada | GBP | 825 | USD | 1,265 | 12/07/15 | (6 | ) |
Royal Bank of Canada | HKD | 1,302 | USD | 168 | 12/07/15 | — | |
Royal Bank of Canada | JPY | 156,873 | USD | 1,302 | 12/07/15 | 1 | |
Royal Bank of Canada | SEK | 1,843 | USD | 217 | 12/07/15 | 1 | |
Royal Bank of Canada | SGD | 336 | USD | 236 | 11/06/15 | (4 | ) |
Royal Bank of Canada | SGD | 111 | USD | 79 | 12/07/15 | — | |
State Street | USD | 397 | AUD | 558 | 11/06/15 | 2 | |
State Street | USD | 557 | CAD | 733 | 11/06/15 | 4 | |
State Street | USD | 603 | CHF | 596 | 11/06/15 | 1 | |
State Street | USD | 2,131 | EUR | 1,935 | 11/06/15 | (4 | ) |
State Street | USD | 1,266 | GBP | 825 | 11/06/15 | 6 | |
State Street | USD | 168 | HKD | 1,302 | 11/06/15 | — | |
State Street | USD | 1,301 | JPY | 156,873 | 11/06/15 | (1 | ) |
State Street | USD | 216 | SEK | 1,843 | 11/06/15 | (1 | ) |
State Street | USD | 79 | SGD | 111 | 11/06/15 | — | |
State Street | AUD | 1,725 | USD | 1,211 | 11/06/15 | (19 | ) |
State Street | AUD | 558 | USD | 396 | 12/07/15 | (2 | ) |
State Street | CAD | 2,242 | USD | 1,672 | 11/06/15 | (42 | ) |
State Street | CAD | 733 | USD | 557 | 12/07/15 | (4 | ) |
State Street | CHF | 596 | USD | 603 | 12/07/15 | (1 | ) |
State Street | EUR | 1,474 | USD | 1,653 | 11/06/15 | 32 | |
State Street | EUR | 1,935 | USD | 2,132 | 12/07/15 | 3 | |
State Street | GBP | 825 | USD | 1,265 | 12/07/15 | (6 | ) |
State Street | HKD | 3,855 | USD | 497 | 11/06/15 | — | |
State Street | HKD | 1,302 | USD | 168 | 12/07/15 | — | |
State Street | JPY | 156,873 | USD | 1,302 | 12/07/15 | 1 | |
State Street | SEK | 1,843 | USD | 216 | 12/07/15 | 1 | |
State Street | SGD | 111 | USD | 79 | 12/07/15 | — | |
UBS | USD | 35 | AUD | 50 | 11/06/15 | — | |
UBS | USD | 396 | AUD | 558 | 11/06/15 | 2 | |
UBS | USD | 33 | CAD | 44 | 11/06/15 | — | |
UBS | USD | 556 | CAD | 733 | 11/06/15 | 4 | |
UBS | USD | 6 | CHF | 6 | 11/06/15 | — | |
UBS | USD | 602 | CHF | 596 | 11/06/15 | 1 | |
UBS | USD | 104 | EUR | 93 | 11/06/15 | (2 | ) |
UBS | USD | 2,130 | EUR | 1,935 | 11/06/15 | (3 | ) |
UBS | USD | 1,266 | GBP | 825 | 11/06/15 | 6 | |
UBS | USD | 168 | HKD | 1,302 | 11/06/15 | — | |
UBS | USD | 296 | JPY | 35,368 | 11/06/15 | (3 | ) |
UBS | USD | 1,300 | JPY | 156,873 | 11/06/15 | — | |
UBS | USD | 21 | SEK | 172 | 11/06/15 | — | |
UBS | USD | 216 | SEK | 1,843 | 11/06/15 | (1 | ) |
UBS | USD | 1 | SGD | 2 | 11/06/15 | — | |
UBS | USD | 79 | SGD | 111 | 11/06/15 | — | |
UBS | AUD | 558 | USD | 395 | 12/07/15 | (2 | ) |
UBS | CAD | 733 | USD | 556 | 12/07/15 | (4 | ) |
UBS | CHF | 596 | USD | 603 | 12/07/15 | (1 | ) |
UBS | EUR | 1,935 | USD | 2,131 | 12/07/15 | 3 | |
UBS | GBP | 4 | USD | 6 | 11/06/15 | — | |
UBS | GBP | 825 | USD | 1,266 | 12/07/15 | (6 | ) |
UBS | HKD | 51 | USD | 7 | 11/06/15 | — | |
UBS | HKD | 1,302 | USD | 168 | 12/07/15 | — | |
UBS | JPY | 156,873 | USD | 1,301 | 12/07/15 | — | |
UBS | SEK | 1,843 | USD | 217 | 12/07/15 | 1 | |
UBS | SGD | 111 | USD | 79 | 12/07/15 | — | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 68 |
See accompanying notes which are an integral part of the financial statements.
38 Moderate Strategy Fund
Russell Investment Company
Moderate Strategy Fund
Schedule of Investments, continued — October 31, 2015
Total Return Swap Contracts (*) | |||||||||||||
Amounts in thousands | |||||||||||||
Fund Receives/(Pays) | Notional | Termination | Fair Value | ||||||||||
Underlying Reference Entity | Counterparty | Amount | Date | $ | |||||||||
Long Reference Entity | |||||||||||||
Dow Jones U.S. Real Estate Index | Bank of America | USD | 6,800 | 03/07/16 | (662 | ) | |||||||
Total Fair Value of Open Total Return Swap Contracts Premiums Paid (Received) - $— (å) | (662 | ) | |||||||||||
(*) Total return swaps (which includes index swaps) are agreements between counterparties to exchange cash flows, one based on a market-linked | |||||||||||||
returns of an individual asset or a basket of assets (i.e. an index), and the other on a fixed or floating rate. The floating rate fee was based on the | |||||||||||||
3 Month LIBOR rate plus a fee of 0.120%. | |||||||||||||
Presentation of Portfolio Holdings | |||||||||||||
Amounts in thousands | |||||||||||||
Fair Value | |||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||
Investments in Russell Affiliated Mutual Funds | $ | 683,254 | $ | — | $ | — | $ | 683,254 | 97.7 | ||||
Short-Term Investments | — | 13,188 | — | 13,188 | 1.9 | ||||||||
Total Investments | 683,254 | 13,188 | — | 696,442 | 99.6 | ||||||||
Other Assets and Liabilities, Net | 0.4 | ||||||||||||
100.0 | |||||||||||||
Other Financial Instruments | |||||||||||||
Futures Contracts | 811 | — | — | 811 | 0.1 | ||||||||
Foreign Currency Exchange Contracts | 7 | 61 | — | 68 | —* | ||||||||
Total Return Swap Contracts | — | (662 | ) | — | (662 | ) | (0.1 | ) | |||||
Total Other Financial Instruments** | $ | 818 | $ | (601 | ) | $ | — | $ | 217 | ||||
* Less than .05% of net assets. | |||||||||||||
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments. | |||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | |||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | |||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 39
Russell Investment Company
Moderate Strategy Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 298 | ||
Variation margin on futures contracts* | 1,261 | — | ||||
Total | $ | 1,261 | $ | 298 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | 450 | $ | — | ||
Unrealized depreciation on foreign currency exchange contracts | — | 230 | ||||
Total return swap contracts, at fair value | 662 | — | ||||
Total | $ | 1,112 | $ | 230 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Investments** | $ | (178 | ) | $ | — | |
Futures contracts | (55 | ) | — | |||
Options written | (131 | ) | — | |||
Foreign currency-related transactions*** | — | 455 | ||||
Total | $ | (364 | ) | $ | 455 | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | 811 | $ | — | ||
Total return swap contracts | (662 | ) | — | |||
Foreign currency-related transactions**** | — | 68 | ||||
Total | $ | 149 | $ | 68 | ||
* | Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the | |||||
Statement of Assets and Liabilities. | ||||||
** | Includes net realized gain (loss) on purchased options as reported in the Statement of Operations. | |||||
*** | Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported | |||||
within the Statement of Operations. | ||||||
**** | Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related | |||||
transactions reported within the Statement of Operations. | ||||||
For further disclosure on derivatives see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
40 Moderate Strategy Fund
Russell Investment Company
Moderate Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||||||||
Offsetting of Financial Assets and Derivative Assets | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Assets | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | $ | 298 | $ | — | $ | 298 | |||||
Futures Contracts | Variation margin on futures contracts | 138 | — | 138 | ||||||||
Total Financial and Derivative Assets | 436 | — | 436 | |||||||||
Financial and Derivative Assets not subject to a netting agreement | (150) | — | (150 | ) | ||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 286 | $ | — | $ | 286 | ||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Assets | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | ||||||||
Bank of Montreal | $ | 46 | $ | — | $ — | $ | 46 | |||||
BNP Paribas | 76 | — | — | 76 | ||||||||
Royal Bank of Canada | 109 | 93 | — | 16 | ||||||||
State Street | 37 | 37 | — | — | ||||||||
UBS | 18 | 18 | — | — | ||||||||
Total | $ | 286 | $ | 148 | $ — | $ | 138 |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 41
Russell Investment Company
Moderate Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||
Gross | Net Amounts | ||||||||||
Amounts | of Liabilities | ||||||||||
Gross | Offset in the | Presented in | |||||||||
Amounts of | Statement of | the Statement | |||||||||
Recognized | Assets and | of Assets and | |||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||||
Futures Contracts | Variation margin on futures contracts | $ | 68 | $ — | $ | 68 | |||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 230 | — | 230 | |||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 662 | — | 662 | |||||||
Total Financial and Derivative Liabilities | 960 | — | 960 | ||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (73) | — | (73 | ) | |||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 887 | $ — | $ | 887 | ||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Liabilities | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||
Bank of America | $ | 662 | $ | — | $ | — $ | 662 | ||||
Royal Bank of Canada | 129 | 93 | — | 36 | |||||||
State Street | 74 | 37 | — | 37 | |||||||
UBS | 22 | 18 | — | 4 | |||||||
Total | $ | 887 | $ | 148 | $ | — $ | 739 | ||||
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance | |||||||||||
Sheet collateral and adjustments made to exclude overcollateralization. | |||||||||||
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
42 Moderate Strategy Fund
Russell Investment Company
Moderate Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 657,134 |
Investments, at fair value(>) | 696,442 | |
Cash (restricted)(a)(b) | 4,200 | |
Unrealized appreciation on foreign currency exchange contracts | 298 | |
Receivables: | ||
Dividends from affiliated Russell Funds | 1 | |
Investments sold | 277 | |
Fund shares sold | 239 | |
Variation margin on futures contracts | 138 | |
Total assets | 701,595 | |
Liabilities | ||
Payables: | ||
Investments purchased | 351 | |
Fund shares redeemed | 343 | |
Accrued fees to affiliates | 412 | |
Other accrued expenses | 70 | |
Variation margin on futures contracts | 68 | |
Unrealized depreciation on foreign currency exchange contracts | 230 | |
Total return swap contracts, at fair value(8) | 662 | |
Total liabilities | 2,136 | |
Net Assets | $ | 699,459 |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 43
Russell Investment Company
Moderate Strategy Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 598 | |
Accumulated net realized gain (loss) | 62,287 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | 39,308 | ||
Futures contracts | 811 | ||
Total return swap contracts | (662 | ) | |
Foreign currency-related transactions | 68 | ||
Shares of beneficial interest | 606 | ||
Additional paid-in capital | 596,443 | ||
Net Assets | $ | 699,459 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 11.58 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 12.29 | |
Class A — Net assets | $ | 202,107,195 | |
Class A — Shares outstanding ($.01 par value) | 17,457,233 | ||
Net asset value per share: Class C(#) | $ | 11.46 | |
Class C — Net assets | $ | 265,697,973 | |
Class C — Shares outstanding ($.01 par value) | 23,177,105 | ||
Net asset value per share: Class E(#) | $ | 11.60 | |
Class E — Net assets | $ | 13,559,333 | |
Class E — Shares outstanding ($.01 par value) | 1,168,547 | ||
Net asset value per share: Class R1(#) | $ | 11.62 | |
Class R1 — Net assets | $ | 36,010,600 | |
Class R1 — Shares outstanding ($.01 par value) | 3,097,764 | ||
Net asset value per share: Class R4(#) | $ | 11.59 | |
Class R4 — Net assets | $ | 32,894,452 | |
Class R4 — Shares outstanding ($.01 par value) | 2,837,498 | ||
Net asset value per share: Class R5(#) | $ | 11.64 | |
Class R5 — Net assets | $ | 23,914,532 | |
Class R5 — Shares outstanding ($.01 par value) | 2,053,810 | ||
Net asset value per share: Class S(#) | $ | 11.62 | |
Class S — Net assets | $ | 125,274,433 | |
Class S — Shares outstanding ($.01 par value) | 10,779,892 | ||
Amounts in thousands | |||
(>) Investments in affiliated Russell funds | $ | 696,442 | |
(8) Total return contracts – premiums paid (received) | $ — | ||
(a) Cash Collateral for Futures | $ | 4,000 | |
(b) Cash Collateral for Swaps | $ | 200 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. | |||
See accompanying notes which are an integral part of the financial statements.
44 Moderate Strategy Fund
Russell Investment Company
Moderate Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 24,878 | |
Expenses | |||
Advisory fees | 1,561 | ||
Administrative fees | 332 | ||
Custodian fees | 35 | ||
Distribution fees - Class A | 544 | ||
Distribution fees - Class C | 2,163 | ||
Distribution fees - Class R5 | 74 | ||
Transfer agent fees - Class A | 435 | ||
Transfer agent fees - Class C | 577 | ||
Transfer agent fees - Class E | 55 | ||
Transfer agent fees - Class R1 | 82 | ||
Transfer agent fees - Class R4 | 79 | ||
Transfer agent fees - Class R5 | 59 | ||
Transfer agent fees - Class S | 274 | ||
Professional fees | 45 | ||
Registration fees | 130 | ||
Shareholder servicing fees - Class C | 721 | ||
Shareholder servicing fees - Class E | 69 | ||
Shareholder servicing fees - Class R4 | 99 | ||
Shareholder servicing fees - Class R5 | 74 | ||
Trustees’ fees | 19 | ||
Printing fees | 79 | ||
Miscellaneous | 27 | ||
Expenses before reductions | 7,533 | ||
Expense reductions | (1,722 | ) | |
Net expenses | 5,811 | ||
Net investment income (loss) | 19,067 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 53,682 | ||
Futures contracts | (55 | ) | |
Options written | (131 | ) | |
Foreign currency-related transactions | 455 | ||
Capital gain distributions from Underlying Funds | 16,627 | ||
Net realized gain (loss) | 70,578 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (90,708 | ) | |
Futures contracts | 811 | ||
Total return swap contracts | (662 | ) | |
Foreign currency-related transactions | 68 | ||
Net change in unrealized appreciation (depreciation) | (90,491 | ) | |
Net realized and unrealized gain (loss) | (19,913 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (846 | ) |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 45
Russell Investment Company
Moderate Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 19,067 | $ | 11,523 | ||
Net realized gain (loss) | 70,578 | 29,176 | ||||
Net change in unrealized appreciation (depreciation) | (90,491 | ) | 3,053 | |||
Net increase (decrease) in net assets from operations | (846 | ) | 43,752 | |||
Distributions | ||||||
From net investment income | ||||||
Class A | (5,692 | ) | (3,305 | ) | ||
Class C | (5,593 | ) | (2,454 | ) | ||
Class E | (798 | ) | (624 | ) | ||
Class R1 | (1,261 | ) | (1,092 | ) | ||
Class R2 | — | (869 | ) | |||
Class R3 | — | (633 | ) | |||
Class R4 | (1,101 | ) | (50 | ) | ||
Class R5 | (791 | ) | (13 | ) | ||
Class S | (3,968 | ) | (2,574 | ) | ||
From net realized gain | ||||||
Class A | (2,315 | ) | — | |||
Class C | (3,181 | ) | — | |||
Class E | (353 | ) | — | |||
Class R1 | (478 | ) | — | |||
Class R4 | (460 | ) | — | |||
Class R5 | (368 | ) | — | |||
Class S | (1,527 | ) | — | |||
Net decrease in net assets from distributions | (27,886 | ) | (11,614 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (116,926 | ) | (137,187 | ) | ||
Total Net Increase (Decrease) in Net Assets | (145,658 | ) | (105,049 | ) | ||
Net Assets | ||||||
Beginning of period | 845,117 | 950,166 | ||||
End of period | $ | 699,459 | $ | 845,117 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 598 | $ | 127 |
See accompanying notes which are an integral part of the financial statements.
46 Moderate Strategy Fund
Russell Investment Company
Moderate Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 1,839 | $ | 21,674 | 2,832 | $ | 33,368 | ||||||
Proceeds from reinvestment of distributions | 674 | 7,906 | 280 | 3,269 | ||||||||
Payments for shares redeemed | (3,603 | ) | (42,415 | ) | (4,908 | ) | (57,900 | ) | ||||
Net increase (decrease) | (1,090 | ) | (12,835 | ) | (1,796 | ) | (21,263 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 3,204 | 37,484 | 4,472 | 52,299 | ||||||||
Proceeds from reinvestment of distributions | 750 | 8,714 | 211 | 2,424 | ||||||||
Payments for shares redeemed | (6,104 | ) | (71,131 | ) | (7,046 | ) | (82,235 | ) | ||||
Net increase (decrease) | (2,150 | ) | (24,933 | ) | (2,363 | ) | (27,512 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 424 | 5,024 | 825 | 9,699 | ||||||||
Proceeds from reinvestment of distributions | 98 | 1,146 | 53 | 623 | ||||||||
Payments for shares redeemed | (2,467 | ) | (29,119 | ) | (1,825 | ) | (21,496 | ) | ||||
Net increase (decrease) | (1,945 | ) | (22,949 | ) | (947 | ) | (11,174 | ) | ||||
Class R1 | ||||||||||||
Proceeds from shares sold | 616 | 7,300 | 1,180 | 14,006 | ||||||||
Proceeds from reinvestment of distributions | 148 | 1,739 | 93 | 1,092 | ||||||||
Payments for shares redeemed | (2,060 | ) | (24,514 | ) | (2,834 | ) | (33,336 | ) | ||||
Net increase (decrease) | (1,296 | ) | (15,475 | ) | (1,561 | ) | (18,238 | ) | ||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 733 | 8,630 | ||||||||
Proceeds from reinvestment of distributions | — | — | 74 | 869 | ||||||||
Payments for shares redeemed | — | — | (6,612 | ) | (78,318 | ) | ||||||
Net increase (decrease) | — | — | (5,805 | ) | (68,819 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 550 | 6,494 | ||||||||
Proceeds from reinvestment of distributions | — | — | 54 | 633 | ||||||||
Payments for shares redeemed | — | — | (5,568 | ) | (66,109 | ) | ||||||
Net increase (decrease) | — | — | (4,964 | ) | (58,982 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 478 | 5,656 | 3,907 | 46,370 | ||||||||
Proceeds from reinvestment of distributions | 133 | 1,561 | 4 | 50 | ||||||||
Payments for shares redeemed | (1,582 | ) | (18,747 | ) | (102 | ) | (1,208 | ) | ||||
Net increase (decrease) | (971 | ) | (11,530 | ) | 3,809 | 45,212 | ||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 250 | 2,962 | 3,104 | 36,976 | ||||||||
Proceeds from reinvestment of distributions | 99 | 1,159 | 1 | 13 | ||||||||
Payments for shares redeemed | (1,324 | ) | (15,667 | ) | (76 | ) | (901 | ) | ||||
Net increase (decrease) | (975 | ) | (11,546 | ) | 3,029 | 36,088 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 2,655 | 31,197 | 4,075 | 48,156 | ||||||||
Proceeds from reinvestment of distributions | 459 | 5,404 | 215 | 2,528 | ||||||||
Payments for shares redeemed | (4,594 | ) | (54,259 | ) | (5,346 | ) | (63,183 | ) | ||||
Net increase (decrease) | (1,480 | ) | (17,658 | ) | (1,056 | ) | (12,499 | ) | ||||
Total increase (decrease) | (9,907 | ) | $ | (116,926 | ) | (11,654 | ) | $ | (137,187 | ) |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 47
Russell Investment Company
Moderate Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | ||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class A | ||||||||||||||||
October 31, 2015 | 12.02 | .31 | (.31 | ) | — | (.31 | ) | (.13 | ) | |||||||
October 31, 2014 | 11.59 | .17 | .43 | .60 | (.17 | ) | — | |||||||||
October 31, 2013 | 11.06 | .26 | .53 | .79 | (.26 | ) | — | |||||||||
October 31, 2012 | 10.51 | .24 | .55 | .79 | (.24 | ) | — | |||||||||
October 31, 2011 | 10.68 | .38 | (.18 | ) | .20 | (.37 | ) | — | ||||||||
Class C | ||||||||||||||||
October 31, 2015 | 11.90 | .22 | (.31 | ) | (.09) | (.22 | ) | (.13 | ) | |||||||
October 31, 2014 | 11.49 | .08 | .42 | .50 | (.09 | ) | — | |||||||||
October 31, 2013 | 10.99 | .18 | .52 | .70 | (.20 | ) | — | |||||||||
October 31, 2012 | 10.44 | .16 | .55 | .71 | (.16 | ) | — | |||||||||
October 31, 2011 | 10.62 | .28 | (.15 | ) | .13 | (.31 | ) | — | ||||||||
Class E | ||||||||||||||||
October 31, 2015 | 12.04 | .36 | (.37 | ) | (.01) | (.30 | ) | (.13 | ) | |||||||
October 31, 2014 | 11.61 | .18 | .42 | .60 | (.17 | ) | — | |||||||||
October 31, 2013 | 11.08 | .29 | .50 | .79 | (.26 | ) | — | |||||||||
October 31, 2012 | 10.52 | .23 | .57 | .80 | (.24 | ) | — | |||||||||
October 31, 2011 | 10.68 | .45 | (.24 | ) | .21 | (.37 | ) | — | ||||||||
Class R1 | ||||||||||||||||
October 31, 2015 | 12.07 | .36 | (.34 | ) | .02 | (.34 | ) | (.13 | ) | |||||||
October 31, 2014 | 11.63 | .23 | .42 | .65 | (.21 | ) | — | |||||||||
October 31, 2013 | 11.11 | .31 | .51 | .82 | (.30 | ) | — | |||||||||
October 31, 2012 | 10.56 | .27 | .57 | .84 | (.29 | ) | — | |||||||||
October 31, 2011 | 10.72 | .38 | (.12 | ) | .26 | (.42 | ) | — | ||||||||
Class R4(3) | ||||||||||||||||
October 31, 2015 | 12.03 | .33 | (.33 | ) | — | (.31 | ) | (.13 | ) | |||||||
October 31, 2014 | 11.60 | .20 | .41 | .61 | (.18 | ) | — | |||||||||
October 31, 2013 | 11.08 | .29 | .51 | .80 | (.28 | ) | — | |||||||||
October 31, 2012 | 10.52 | .26 | .56 | .82 | (.26 | ) | — | |||||||||
October 31, 2011 | 10.69 | .23 | — (h) | .23 | (.40 | ) | — | |||||||||
Class R5(4) | ||||||||||||||||
October 31, 2015 | 12.08 | .32 | (.35 | ) | (.03) | (.28 | ) | (.13 | ) | |||||||
October 31, 2014 | 11.64 | .17 | .42 | .59 | (.15 | ) | — | |||||||||
October 31, 2013 | 11.12 | .30 | .47 | .77 | (.25 | ) | — | |||||||||
October 31, 2012 | 10.56 | .27 | .51 | .78 | (.22 | ) | — | |||||||||
October 31, 2011 | 10.72 | .38 | (.17 | ) | .21 | (.37 | ) | — | ||||||||
Class S | ||||||||||||||||
October 31, 2015 | 12.06 | .34 | (.32 | ) | .02 | (.33 | ) | (.13 | ) | |||||||
October 31, 2014 | 11.63 | .20 | .43 | .63 | (.20 | ) | — | |||||||||
October 31, 2013 | 11.11 | .30 | .51 | .81 | (.29 | ) | — | |||||||||
October 31, 2012 | 10.55 | .27 | .56 | .83 | (.27 | ) | — | |||||||||
October 31, 2011 | 10.72 | .37 | (.14 | ) | .23 | (.40 | ) | — | ||||||||
See accompanying notes which are an integral part of the financial statements.
48 Moderate Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(d) | (000 | ) | Gross(g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | |||||||||
(.44 | ) | 11.58 | (.04 | ) | 202,107 | .74 | .51 | 2.61 | 32 | ||||||||
(.17 | ) | 12.02 | 5.19 | 222,875 | .73 | .56 | 1.45 | 14 | |||||||||
(.26 | ) | 11.59 | 7.22 | 235,684 | .72 | .57 | 2.35 | 13 | |||||||||
(.24 | ) | 11.06 | 7.67 | 232,467 | .71 | .56 | 2.21 | 23 | |||||||||
(.37 | ) | 10.51 | 1.95 | 207,292 | .73 | .55 | 3.53 | 15 | |||||||||
(.35 | ) | 11.46 | (.80 | ) | 265,698 | 1.49 | 1.26 | 1.88 | 32 | ||||||||
(.09 | ) | 11.90 | 4.39 | 301,445 | 1.48 | 1.31 | .70 | 14 | |||||||||
(.20 | ) | 11.49 | 6.42 | 318,120 | 1.47 | 1.32 | 1.60 | 13 | |||||||||
(.16 | ) | 10.99 | 6.91 | 314,391 | 1.46 | 1.31 | 1.48 | 23 | |||||||||
(.31 | ) | 10.44 | 1.20 | 288,055 | 1.48 | 1.30 | 2.66 | 15 | |||||||||
(.43 | ) | 11.60 | (.14 | ) | 13,559 | .73 | .56 | 3.07 | 32 | ||||||||
(.17 | ) | 12.04 | 5.18 | 37,485 | .73 | .56 | 1.51 | 14 | |||||||||
(.26 | ) | 11.61 | 7.17 | 47,129 | .72 | .57 | 2.56 | 13 | |||||||||
(.24 | ) | 11.08 | 7.75 | 74,240 | .71 | .56 | 2.14 | 23 | |||||||||
(.37 | ) | 10.52 | 2.00 | 72,800 | .73 | .55 | 4.21 | 15 | |||||||||
(.47 | ) | 11.62 | .18 | 36,011 | .49 | .21 | 3.07 | 32 | |||||||||
(.21 | ) | 12.07 | 5.67 | 53,016 | .48 | .17 | 1.92 | 14 | |||||||||
(.30 | ) | 11.63 | 7.57 | 69,274 | .47 | .17 | 2.71 | 13 | |||||||||
(.29 | ) | 11.11 | 8.10 | 66,823 | .46 | .14 | 2.48 | 23 | |||||||||
(.42 | ) | 10.56 | 2.49 | 44,486 | .48 | .12 | 3.55 | 15 | |||||||||
(.44 | ) | 11.59 | (.01 | ) | 32,895 | .74 | .46 | 2.80 | 32 | ||||||||
(.18 | ) | 12.03 | 5.31 | 45,828 | .73 | .42 | 1.68 | 14 | |||||||||
(.28 | ) | 11.60 | 7.31 | 67,330 | .72 | .42 | 2.56 | 13 | |||||||||
(.26 | ) | 11.08 | 7.95 | 73,019 | .71 | .39 | 2.38 | 23 | |||||||||
(.40 | ) | 10.52 | 2.17 | 60,610 | .73 | .37 | 2.14 | 15 | |||||||||
(.41 | ) | 11.64 | (.27 | ) | 23,915 | .99 | .71 | 2.70 | 32 | ||||||||
(.15 | ) | 12.08 | 5.10 | 36,598 | .98 | .67 | 1.46 | 14 | |||||||||
(.25 | ) | 11.64 | 7.01 | 57,788 | .97 | .67 | 2.63 | 13 | |||||||||
(.22 | ) | 11.12 | 7.55 | 86,756 | .97 | .64 | 2.56 | 23 | |||||||||
(.37 | ) | 10.56 | 1.97 | 248,661 | .98 | .62 | 3.51 | 15 | |||||||||
(.46 | ) | 11.62 | .16 | 125,274 | .49 | .31 | 2.89 | 32 | |||||||||
(.20 | ) | 12.06 | 5.44 | 147,870 | .48 | .31 | 1.71 | 14 | |||||||||
(.29 | ) | 11.63 | 7.41 | 154,841 | .47 | .32 | 2.63 | 13 | |||||||||
(.27 | ) | 11.11 | 8.02 | 155,433 | .46 | .31 | 2.52 | 23 | |||||||||
(.40 | ) | 10.55 | 2.21 | 153,148 | .48 | .30 | 3.49 | 15 |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 49
Russell Investment Company
Balanced Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Balanced Strategy Fund - Class A‡ | Balanced Strategy Fund - Class R5‡‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (6.05 | )% | 1 Year | (0.48 | )% | ||
5 Years | 4.24 | %§ | 5 Years | 5.38 | %§ | ||
10 Years | 4.18 | %§ | 10 Years | 4.61 | %§ | ||
Balanced Strategy Fund - Class C | Balanced Strategy Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.05 | )% | 1 Year | (0.13 | )% | ||
5 Years | 4.69 | %§ | 5 Years | 5.71 | %§ | ||
10 Years | 4.02 | %§ | 10 Years | 5.05 | %§ | ||
Balanced Strategy Fund - Class E | Barclays U.S. Aggregate Bond Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.32 | )% | 1 Year | 1.96 | % | ||
5 Years | 5.47 | %§ | 5 Years | 3.03 | %§ | ||
10 Years | 4.80 | %§ | 10 Years | 4.72 | %§ | ||
Balanced Strategy Fund - Class R1‡‡ | Russell 1000® Index*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.04 | % | 1 Year | 4.86 | % | ||
5 Years | 5.89 | %§ | 5 Years | 14.32 | %§ | ||
10 Years | 5.13 | %§ | 10 Years | 7.98 | %§ | ||
Balanced Strategy Fund - Class R4‡‡‡ | Russell Developed ex-U.S. Large Cap® Index Net**** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.31 | )% | 1 Year | (1.36 | )% | ||
5 Years | 5.60 | %§ | 5 Years | 4.48 | %§ | ||
10 Years | 4.87 | %§ | 10 Years | 4.32 | %§ |
50 Balanced Strategy Fund
Russell Investment Company
Balanced Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Balanced Strategy Fund (the “Fund”) is a fund of funds that | The fiscal year ended October 31, 2015 was characterized by |
invests principally in other Russell Investment Company mutual | slowing global growth and commodity price weakness. Overall, |
funds (the “Underlying Funds”). The Underlying Funds employ | this was modestly positive for fixed income assets, as yields fell. |
a multi-manager approach whereby portions of the Underlying | However, the Fund’s exposure to the fixed income asset class had |
Funds are allocated to different money managers. Underlying | a modestly negative effect on benchmark-relative performance |
Fund assets not allocated to money managers are managed by | due to the Fund’s allocation to the Russell Global Opportunistic |
Russell Investment Management Company (“RIMCo”), the Fund’s | Credit Fund. The Fund’s strategic exposure to U.S. equities and |
and Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | global real estate was positive, as these asset classes outperformed |
advisor, may change the allocation of the Underlying Funds’ | fixed income. |
assets among money managers at any time. An exemptive order | It was a mixed equity market for the fiscal year ending October |
from the Securities and Exchange Commission (“SEC”) permits | 31, 2015. U.S. stocks (as measured by the Russell 3000® Index) |
RIMCo to engage or terminate a money manager in an Underlying | returned 4.49% over the period, while non-U.S. equities returned |
Fund at any time, subject to approval by the Underlying Fund’s | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® |
Board, without a shareholder vote. Pursuant to the terms of the | Index) and emerging markets returned -13.58% (as measured by |
exemptive order, an Underlying Fund is required to notify its | the Russell Emerging Markets Index). The underperformance of |
shareholders within 90 days of when a money manager begins | non-U.S. equities versus fixed income was a key negative driver |
providing services. | to the Fund’s benchmark-relative performance, as fixed income |
What is the Fund’s investment objective? | markets finished at 1.96% for the fiscal year as measured by the |
The Fund seeks to provide above average long term capital | Fund’s benchmark. |
appreciation and a moderate level of current income. | Within alternative strategies, commodities exposure had the |
largest negative impact on the Fund, as the asset class (as | |
How did the Fund perform relative to its benchmark for the | measured by the Bloomberg Commodity Index Total Return) lost |
fiscal year ended October 31, 2015? | 25.72% during the period, significantly underperforming fixed |
For the fiscal year ended October 31, 2015, the Fund’s Class | income. Global REITs and listed infrastructure (as represented by |
R1 Shares gained 0.04% and the Fund’s Class A, Class C, Class | the FTSE EPRA/NAREIT Developed Real Estate Index (Net) and |
E, Class R4, Class R5 and Class S Shares lost 0.31%, 1.05%, | S&P Global Infrastructure Index (Net)) finished the fiscal year up |
0.32%, 0.31%, 0.48% and 0.13%, respectively. This is compared | 2.68% and down 6.29% respectively. REITs outperformed fixed |
to the Fund’s primary benchmark, the Barclays U.S. Aggregate | income markets, which was beneficial to the Fund’s performance |
Bond Index, which gained 1.96% during the same period. The | through its allocation to the Russell Global Real Estate Securities |
Fund’s performance includes operating expenses, whereas index | Fund. Infrastructure underperformed fixed income, which |
returns are unmanaged and do not include expenses of any kind. | negatively impacted the Fund through its allocation to the Russell |
For the fiscal year ended October 31, 2015, the Morningstar® | Global Infrastructure Fund. |
Moderate Allocation, a group of funds that Morningstar considers | |
to have investment strategies similar to those of the Fund, gained | How did the investment strategies and techniques employed |
0.61%. This result serves as a peer comparison and is expressed | by the Fund and the Underlying Funds affect the Fund’s |
net of operating expenses. | performance? |
The Fund is a fund of funds and its performance is based on | |
The Fund underperformed the Barclays U.S. Aggregate Bond | RIMCo’s strategic asset allocations and the performance of the |
Index for the year. The Fund’s strategic allocation to commodities | Underlying Funds in which the Fund invests. |
and non-U.S. equity Underlying Funds negatively impacted | |
benchmark-relative performance, with the Fund’s allocation to | The Fund’s strategic allocation to fixed income Underlying |
the Russell Emerging Markets Fund and Russell Commodity | Funds generally had a negative impact on its benchmark-relative |
Strategies Fund having the largest detrimental impact. | performance. An allocation to the Russell Global Opportunistic |
Benchmark-relative performance was aided by the Fund’s mix of | Credit Fund detracted, as this Underlying Fund underperformed |
out-of-benchmark allocations to U.S. equity and global real estate | the Fund’s benchmark. From an active management perspective, |
Underlying Funds, which outperformed fixed income Underlying | the Russell Global Opportunistic Credit Fund underperformed |
Funds during the period. | its benchmark largely because of an ex-benchmark allocation |
to local currency emerging market debt and the associated | |
How did the market conditions described in the Market | currency risk as the U.S. dollar appreciated strongly versus |
Summary report affect the Fund’s performance? | emerging market currencies. The Fund’s allocation to the Russell |
Balanced Strategy Fund 51
Russell Investment Company
Balanced Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Strategic Bond Fund was slightly positive from a benchmark- | Securities Fund outperformed their respective benchmarks | |
relative perspective. While this Underlying Fund was negatively | while the Russell Commodity Strategies Fund underperformed | |
impacted by its overweight to credit, currency positioning drove | its benchmark. The Russell Global Infrastructure Fund and the | |
excess return. | Russell Global Real Estate Securities Fund both benefited from | |
With respect to the Fund’s global equity exposure, the Fund’s | strong stock selection by underlying money managers. The Russell | |
strategic allocation to the Russell International Developed | Commodity Strategies Fund underperformed its benchmark due | |
Markets Fund through March 3, 2015 and the Russell Global | largely to exposure to the energy sector. | |
Equity Fund throughout the fiscal year positively impacted the | Describe any changes to the Fund’s structure or allocation | |
Fund’s benchmark-relative performance, while its allocation | to the Underlying Funds. | |
to the Russell Emerging Markets Fund detracted. The Russell | RIMCo has the discretion to vary the Fund’s actual allocation from | |
International Developed Markets Fund outperformed its | the target strategic asset allocation by up to +/- 5% at the equity, | |
benchmark due to underweights to Asia Pacific ex-Japan and | fixed income or alternative category level based on RIMCo’s | |
Canada and the materials and energy sectors, which were the | capital markets research. RIMCo’s asset allocation modifications | |
worst hit regions and sectors in the period. An underweight to | benefited the Fund’s performance relative to the Fund’s long-term | |
energy and an overweight to consumer discretionary in the | strategic allocation. | |
Russell Global Equity Fund contributed to positive excess return. | ||
For the Russell Emerging Markets Fund, unsuccessful stock | Entering the fiscal year, relative to the target strategic asset | |
selection in China and Brazil was the main driver of the Fund’s | allocation, the Fund had a broad overweight to equity Underlying | |
underperformance. Chinese stocks fell sharply and broader | Funds, an underweight to alternative Underlying Funds, and an | |
emerging markets also lost significant value during the period | overweight to the Russell Short Duration Bond Fund. Overall | |
due to growth concerns. The Select International Equity Fund | positioning was based on a cautious outlook for commodities and | |
replaced the Russell International Developed Markets Fund on | anticipated rise in interest rates, which could negatively impact | |
March 3, 2015, and a valuation bias in this Underlying Fund led | interest rate sensitive securities such as REITs. | |
to benchmark-relative underperformance as lower price-to-book | On March 3, 2015, RIMCo implemented a new target strategic | |
stocks strongly underperformed. | asset allocation that replaced the Russell U.S. Core Equity Fund | |
The Fund’s strategic allocation to U.S. large cap equity Underlying | with the Select U.S. Equity Fund and the Russell International | |
Funds benefited the Fund’s benchmark-relative performance, as | Developed Markets Fund with the Select International Equity | |
broad U.S. equities outperformed core fixed income during the | Fund. The Fund’s target strategic asset allocation to various | |
period. However, most of the large cap U.S. equity Underlying | Underlying Funds was modified, and the strategic allocation to | |
Funds underperformed their respective U.S. equity market | the Russell Multi-Strategy Alternative Fund was removed. | |
segment as represented by their respective primary benchmark. | In connection with this reallocation, RIMCo also shifted the | |
From an active management perspective, the Russell U.S. Core | Fund’s tactical allocations relative to the new target strategic | |
Equity Fund (an Underlying Fund through March 3, 2015) and | asset allocation as follows: | |
the Select U.S. Equity Fund (added as an Underlying Fund on | - 2.00% underweight to the Russell Global Real Estate Securities | |
March 3, 2015) both underperformed the Russell 1000® Index | Fund resulting in a 2.00% overweight to the Russell Global | |
due to an underweight to growth stocks, which outperformed | Opportunistic Credit Fund. This tactical change was intended to | |
during the period. In addition, the Fund’s strategic allocation | reduce exposure to asset classes sensitive to anticipated rising | |
to the Russell U.S. Small Cap Equity Fund also detracted from | interest rates. | |
the Fund’s benchmark-relative performance, as U.S. small cap | ||
equity generally underperformed core fixed income and the | On May 1, 2015, RIMCo added a RIMCo-managed positioning | |
Underlying Fund underperformed its Russell 2000® Index | strategy at a 2.00% weight. The addition of the positioning | |
benchmark due to an overweight to micro-capitalization stocks | strategy resulted in a 2.00% reduction in the Fund’s allocation | |
which underperformed during the period. | to the Select U.S. Equity Fund. The strategy had a U.S. large cap | |
strategic exposure through the use of index futures contracts, | ||
The Fund’s strategic allocation to alternative Underlying Funds | and did not result in a change to the Fund’s overall U.S. equity | |
had a negative impact on benchmark-relative performance as | exposure. | |
commodities and global infrastructure underperformed the | ||
Fund’s benchmark. From an active management standpoint, | On September 3, 2015, RIMCo implemented a 0.75% | |
performance of these Underlying Funds was mixed. The Russell | underweight to the Russell Commodity Strategies Fund due to | |
Global Infrastructure Fund and the Russell Global Real Estate | limited commodity price appreciation expectations over the |
52 Balanced Strategy Fund
Russell Investment Company
Balanced Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
medium term. This resulted in a 0.75% overweight to the Select | The views expressed in this report reflect those of the portfolio |
U.S. Equity Fund. | managers only through the end of the period covered by |
At the end of the fiscal year, the Fund was positioned for rising | the report. These views do not necessarily represent the |
interest rates, with underweights to the Russell Global Real | views of RIMCo, or any other person in RIMCo or any other |
Estate Securities Fund and the Russell Commodity Strategies | affiliated organization. These views are subject to change |
Fund funding an overweight to the Russell Global Opportunistic | at any time based upon market conditions or other events, |
Credit Fund. | and RIMCo disclaims any responsibility to update the views |
contained herein. These views should not be relied on as | |
investment advice and, because investment decisions for | |
a Russell Investment Company (“RIC”) Fund are based on | |
numerous factors, should not be relied on as an indication | |
of investment decisions of any RIC Fund. |
^ In preceding years, the performance of the Fund’s Class E Shares was used in the line graph, but Class S Shares are considered to be a better representation to
shareholders as Class S Shares are the primary retail share class of the Fund.
* Assumes initial investment on November 1, 2005.
** The Barclays U.S. Aggregate Bond Index is an index, with income reinvested, generally representative of intermediate-term government bonds, investment-grade
corporate debt securities and mortgage-backed securities.
*** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
**** Russell Developed ex-U.S. Large Cap® Index (net of tax on dividends from foreign holdings) is an index which offers investors access to the large-cap segment
of the global equity market, excluding companies assigned to the United States. It is constructed to provide a comprehensive and unbiased barometer for the
large-cap segment and is completely reconstituted annually to accurately reflect the changes in the market over time.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
‡‡ The Fund first issued Class R1 Shares on June 6, 2006. The returns shown for Class R1 Shares prior to that date are the returns of the Fund’s Class S Shares.
‡‡‡ The Fund first issued Class R4 Shares on October 1, 2014. The returns shown for Class R4 Shares prior to that date are the returns of the Fund’s Class E Shares
from January 1, 2005 to April 2, 2006 and the returns of Class R2 Shares from April 3, 2006 to September 30, 2014.
‡‡‡‡ The Fund first issued Class R5 Shares on October 1, 2014. The returns shown for Class R5 Shares prior to that date are the returns of the Fund’s Class R3
Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Balanced Strategy Fund 53
Russell Investment Company
Balanced Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 964.30 | $ | 1,022.99 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 2.18 | $ | 2.24 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.44% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 961.00 | $ | 1,019.21 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 5.88 | $ | 6.06 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.19% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 964.40 | $ | 1,022.33 | |
Expenses Paid During Period* | $ | 2.82 | $ | 2.91 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.57% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
54 Balanced Strategy Fund
Russell Investment Company
Balanced Strategy Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R1 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 966.30 | $ | 1,023.89 | ||
Expenses Paid During Period* | $ | 1.29 | $ | 1.33 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.26% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R4 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 964.00 | $ | 1,022.63 | ||
Expenses Paid During Period* | $ | 2.52 | $ | 2.60 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.51% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R5 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 963.50 | $ | 1,021.37 | ||
Expenses Paid During Period* | $ | 3.76 | $ | 3.87 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.76% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 965.20 | $ | 1,023.59 | ||
Expenses Paid During Period* | $ | 1.59 | $ | 1.63 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.32% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Balanced Strategy Fund 55
Russell Investment Company
Balanced Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||
Fair | ||||
Value | ||||
Shares | $ | |||
Investments in Russell Affiliated Mutual Funds - 97.6% | ||||
Alternative - 7.1% | ||||
Russell Commodity Strategies Fund Class Y | 11,250,377 | 63,902 | ||
Russell Global Infrastructure Fund Class Y | 10,330,021 | 118,176 | ||
Russell Global Real Estate Securities Fund Class Y | 775,931 | 29,788 | ||
211,866 | ||||
Domestic Equities - 28.1% | ||||
Russell U.S. Defensive Equity Fund Class Y | 4,427,711 | 211,423 | ||
Russell U.S. Dynamic Equity Fund Class Y | 18,666,689 | 212,054 | ||
Russell U.S. Small Cap Equity Fund Class Y | 6,197,196 | 177,488 | ||
Select U.S. Equity Fund Class Y | 21,821,036 | 234,357 | ||
835,322 | ||||
Fixed Income - 36.6% | ||||
Russell Global Opportunistic Credit Fund Class Y | 29,174,561 | 266,655 | ||
Russell Strategic Bond Fund Class Y | 75,047,066 | 820,265 | ||
1,086,920 | ||||
International Equities - 25.8% | ||||
Russell Emerging Markets Fund Class Y | 11,062,362 | 168,590 | ||
Russell Global Equity Fund Class Y | 26,246,075 | 301,305 | ||
Select International Equity Fund Class Y | 32,516,753 | 296,878 | ||
766,773 | ||||
Total Investments in Russell Affiliated Mutual Funds | ||||
(cost $2,721,577) | 2,900,881 | |||
Short-Term Investments - 1.7% | ||||
Russell U.S. Cash Management Fund | 50,456,867 | (8) | 50,457 | |
Total Short-Term Investments | ||||
(cost $50,457) | 50,457 | |||
Total Investments 99.3% | ||||
(identified cost $2,772,034) | 2,951,338 | |||
Other Assets and Liabilities, Net - 0.7% | 20,920 | |||
Net Assets - 100.0% | 2,972,258 |
See accompanying notes which are an integral part of the financial statements.
56 Balanced Strategy Fund
Russell Investment Company
Balanced Strategy Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Number of | Notional | Expiration | (Depreciation) | |||||||||
Contracts | Amount | Date | $ | |||||||||
Long Positions | ||||||||||||
Amsterdam Index Futures | 73 | EUR | 6,735 | 11/15 | 463 | |||||||
CAC40 10 EURO Index Futures | 468 | EUR | 22,911 | 11/15 | 1,413 | |||||||
DAX Index Futures | 79 | EUR | 21,369 | 12/15 | 1,460 | |||||||
Euro STOXX Index 50 Futures | 420 | EUR | 14,293 | 12/15 | 971 | |||||||
FTSE/MIB Index Futures | 53 | EUR | 5,947 | 12/15 | 243 | |||||||
IBEX 35 Index Futures | 77 | EUR | 7,920 | 11/15 | 209 | |||||||
OMXS30 Index Futures | 329 | SEK | 49,218 | 11/15 | 146 | |||||||
Russell 1000 Index Mini Futures | 21 | USD | 2,417 | 12/15 | 100 | |||||||
S&P 500 E-Mini Index Futures | 360 | USD | 37,327 | 12/15 | 2,068 | |||||||
S&P Mid 400 E-Mini Index Futures | 24 | USD | 3,459 | 12/15 | 72 | |||||||
Short Positions | ||||||||||||
FTSE 100 Index Futures | 330 | GBP | 20,856 | 12/15 | (926 | ) | ||||||
MSCI EAFE Mini Index Futures | 340 | USD | 29,871 | 12/15 | (794 | ) | ||||||
MSCI Emerging Markets Mini Index Futures | 206 | USD | 8,690 | 12/15 | (461 | ) | ||||||
Russell 1000 Index Mini Futures | 10 | USD | 1,151 | 12/15 | (61 | ) | ||||||
S&P 500 E-Mini Index Futures | 185 | USD | 19,182 | 12/15 | (1,264 | ) | ||||||
S&P Mid 400 E-Mini Index Futures | 12 | USD | 1,730 | 12/15 | (37 | ) | ||||||
S&P/TSX 60 Index Futures | 230 | CAD | 36,451 | 12/15 | (166 | ) | ||||||
SPI 200 Index Futures | 231 | AUD | 30,238 | 12/15 | (692 | ) | ||||||
TOPIX Index Futures | 81 | JPY | 1,262,385 | 12/15 | (847 | ) | ||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 1,897 | |||||||||||
Options Written | ||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||
Transactions in options written contracts for the period ended October 31, 2015 were as follows: | ||||||||||||
Number of | Premiums | |||||||||||
Contracts | Received | |||||||||||
Outstanding October 31, 2014 | — | $ | — | |||||||||
Opened | 752,803 | 1,645 | ||||||||||
Closed | (752,803 | ) | (1,645 | ) | ||||||||
Expired | — | — | ||||||||||
Outstanding October 31, 2015 | — | $ | — | |||||||||
Foreign Currency Exchange Contracts | ||||||||||||
Amounts in thousands | ||||||||||||
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Amount | Amount | (Depreciation) | ||||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||||
Bank of Montreal | AUD | 3,268 | USD | 2,292 | 11/06/15 | (39 | ) | |||||
Bank of Montreal | CAD | 4,247 | USD | 3,165 | 11/06/15 | (83 | ) | |||||
Bank of Montreal | CHF | 3,400 | USD | 3,494 | 11/06/15 | 54 | ||||||
Bank of Montreal | EUR | 11,171 | USD | 12,513 | 11/06/15 | 230 | ||||||
Bank of Montreal | GBP | 4,680 | USD | 7,093 | 11/06/15 | (121 | ) | |||||
Bank of Montreal | HKD | 7,302 | USD | 942 | 11/06/15 | — | ||||||
Bank of Montreal | JPY | 958,479 | USD | 7,973 | 11/06/15 | 30 | ||||||
Bank of Montreal | SEK | 10,798 | USD | 1,287 | 11/06/15 | 23 | ||||||
BNP Paribas | AUD | 3,268 | USD | 2,294 | 11/06/15 | (37 | ) | |||||
BNP Paribas | CAD | 4,247 | USD | 3,170 | 11/06/15 | (78 | ) | |||||
BNP Paribas | CHF | 3,400 | USD | 3,496 | 11/06/15 | 57 | ||||||
BNP Paribas | EUR | 11,171 | USD | 12,532 | 11/06/15 | 247 | ||||||
BNP Paribas | GBP | 4,680 | USD | 7,106 | 11/06/15 | (109 | ) | |||||
BNP Paribas | HKD | 7,302 | USD | 942 | 11/06/15 | — | ||||||
BNP Paribas | JPY | 958,479 | USD | 7,973 | 11/06/15 | 30 | ||||||
BNP Paribas | SEK | 10,798 | USD | 1,289 | 11/06/15 | 25 | ||||||
Brown Brothers Harriman | USD | 2,186 | AUD | 3,077 | 11/06/15 | 8 |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 57
Russell Investment Company
Balanced Strategy Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Brown Brothers Harriman | USD | 3,069 | CAD | 4,039 | 11/06/15 | 20 | |
Brown Brothers Harriman | USD | 3,322 | CHF | 3,287 | 11/06/15 | 4 | |
Brown Brothers Harriman | USD | 11,745 | EUR | 10,663 | 11/06/15 | (19 | ) |
Brown Brothers Harriman | USD | 6,975 | GBP | 4,547 | 11/06/15 | 34 | |
Brown Brothers Harriman | USD | 7,172 | JPY | 864,624 | 11/06/15 | (7 | ) |
Brown Brothers Harriman | AUD | 3,077 | USD | 2,182 | 12/07/15 | (8 | ) |
Brown Brothers Harriman | CAD | 4,039 | USD | 3,068 | 12/07/15 | (20 | ) |
Brown Brothers Harriman | CHF | 3,287 | USD | 3,325 | 12/07/15 | (4 | ) |
Brown Brothers Harriman | EUR | 10,663 | USD | 11,749 | 12/07/15 | 19 | |
Brown Brothers Harriman | GBP | 4,547 | USD | 6,974 | 12/07/15 | (34 | ) |
Brown Brothers Harriman | JPY | 864,624 | USD | 7,174 | 12/07/15 | 6 | |
Commonwealth Bank of Australia | AUD | 3,268 | USD | 2,292 | 11/06/15 | (38 | ) |
Commonwealth Bank of Australia | CAD | 4,247 | USD | 3,168 | 11/06/15 | (80 | ) |
Commonwealth Bank of Australia | CHF | 3,400 | USD | 3,496 | 11/06/15 | 56 | |
Commonwealth Bank of Australia | EUR | 11,171 | USD | 12,535 | 11/06/15 | 250 | |
Commonwealth Bank of Australia | GBP | 4,680 | USD | 7,103 | 11/06/15 | (111 | ) |
Commonwealth Bank of Australia | HKD | 7,302 | USD | 942 | 11/06/15 | — | |
Commonwealth Bank of Australia | JPY | 958,479 | USD | 7,977 | 11/06/15 | 34 | |
Commonwealth Bank of Australia | SEK | 10,798 | USD | 1,291 | 11/06/15 | 27 | |
Royal Bank of Canada | USD | 2,185 | AUD | 3,077 | 11/06/15 | 8 | |
Royal Bank of Canada | USD | 3,069 | CAD | 4,039 | 11/06/15 | 20 | |
Royal Bank of Canada | USD | 3,322 | CHF | 3,287 | 11/06/15 | 3 | |
Royal Bank of Canada | USD | 11,746 | EUR | 10,663 | 11/06/15 | (20 | ) |
Royal Bank of Canada | USD | 6,976 | GBP | 4,547 | 11/06/15 | 34 | |
Royal Bank of Canada | USD | 7,172 | JPY | 864,624 | 11/06/15 | (7 | ) |
Royal Bank of Canada | USD | 23,181 | JPY | 2,783,450 | 12/16/15 | (100 | ) |
Royal Bank of Canada | USD | 4,770 | SEK | 40,626 | 11/06/15 | (15 | ) |
Royal Bank of Canada | AUD | 3,077 | USD | 2,182 | 12/07/15 | (8 | ) |
Royal Bank of Canada | AUD | 16,060 | USD | 11,248 | 12/16/15 | (180 | ) |
Royal Bank of Canada | CAD | 4,039 | USD | 3,068 | 12/07/15 | (20 | ) |
Royal Bank of Canada | CAD | 19,680 | USD | 14,819 | 12/16/15 | (227 | ) |
Royal Bank of Canada | CHF | 3,287 | USD | 3,325 | 12/07/15 | (4 | ) |
Royal Bank of Canada | EUR | 10,663 | USD | 11,750 | 12/07/15 | 19 | |
Royal Bank of Canada | EUR | 28,970 | USD | 32,579 | 12/16/15 | 700 | |
Royal Bank of Canada | GBP | 4,547 | USD | 6,975 | 12/07/15 | (34 | ) |
Royal Bank of Canada | GBP | 620 | USD | 948 | 12/16/15 | (7 | ) |
Royal Bank of Canada | JPY | 864,624 | USD | 7,174 | 12/07/15 | 7 | |
Royal Bank of Canada | SEK | 40,626 | USD | 4,773 | 12/07/15 | 15 | |
State Street | USD | 2,185 | AUD | 3,077 | 11/06/15 | 9 | |
State Street | USD | 3,068 | CAD | 4,039 | 11/06/15 | 20 | |
State Street | USD | 3,322 | CHF | 3,287 | 11/06/15 | 3 | |
State Street | USD | 11,745 | EUR | 10,663 | 11/06/15 | (20 | ) |
State Street | USD | 6,976 | GBP | 4,547 | 11/06/15 | 34 | |
State Street | USD | 3,704 | HKD | 28,708 | 11/06/15 | — | |
State Street | USD | 7,172 | JPY | 864,624 | 11/06/15 | (7 | ) |
State Street | USD | 1,753 | SGD | 2,456 | 11/06/15 | — | |
State Street | AUD | 3,268 | USD | 2,294 | 11/06/15 | (37 | ) |
State Street | AUD | 3,077 | USD | 2,182 | 12/07/15 | (9 | ) |
State Street | CAD | 4,247 | USD | 3,168 | 11/06/15 | (80 | ) |
State Street | CAD | 4,039 | USD | 3,068 | 12/07/15 | (20 | ) |
State Street | CHF | 3,400 | USD | 3,494 | 11/06/15 | 54 | |
State Street | CHF | 3,287 | USD | 3,325 | 12/07/15 | (4 | ) |
State Street | EUR | 11,171 | USD | 12,527 | 11/06/15 | 244 | |
State Street | EUR | 10,663 | USD | 11,749 | 12/07/15 | 19 | |
State Street | GBP | 4,680 | USD | 7,107 | 11/06/15 | (107 | ) |
State Street | GBP | 4,547 | USD | 6,975 | 12/07/15 | (34 | ) |
State Street | HKD | 7,302 | USD | 942 | 11/06/15 | — | |
State Street | HKD | 28,708 | USD | 3,705 | 12/07/15 | — | |
State Street | JPY | 958,479 | USD | 7,973 | 11/06/15 | 30 | |
State Street | JPY | 864,624 | USD | 7,174 | 12/07/15 | 6 | |
State Street | SEK | 10,798 | USD | 1,288 | 11/06/15 | 24 | |
State Street | SGD | 2,548 | USD | 1,788 | 11/06/15 | (30 | ) |
State Street | SGD | 2,456 | USD | 1,751 | 12/07/15 | — |
See accompanying notes which are an integral part of the financial statements.
58 Balanced Strategy Fund
Russell Investment Company
Balanced Strategy Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||||||||
Amounts in thousands | ||||||||||||||
Unrealized | ||||||||||||||
Appreciation | ||||||||||||||
Amount | Amount | (Depreciation) | ||||||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||||||
UBS | USD | 538 | AUD | 765 | 11/06/15 | 7 | ||||||||
UBS | USD | 2,182 | AUD | 3,077 | 11/06/15 | 12 | ||||||||
UBS | USD | 630 | CAD | 834 | 11/06/15 | 8 | ||||||||
UBS | USD | 3,065 | CAD | 4,039 | 11/06/15 | 23 | ||||||||
UBS | USD | 462 | CHF | 450 | 11/06/15 | (7 | ) | |||||||
UBS | USD | 3,320 | CHF | 3,287 | 11/06/15 | 6 | ||||||||
UBS | USD | 2,279 | EUR | 2,033 | 11/06/15 | (44 | ) | |||||||
UBS | USD | 11,742 | EUR | 10,663 | 11/06/15 | (16 | ) | |||||||
UBS | USD | 803 | GBP | 530 | 11/06/15 | 14 | ||||||||
UBS | USD | 6,979 | GBP | 4,547 | 11/06/15 | 31 | ||||||||
UBS | USD | 64 | HKD | 499 | 11/06/15 | — | ||||||||
UBS | USD | 3,139 | JPY | 375,420 | 11/06/15 | (28 | ) | |||||||
UBS | USD | 7,166 | JPY | 864,624 | 11/06/15 | (1 | ) | |||||||
UBS | USD | 308 | SEK | 2,565 | 11/06/15 | (7 | ) | |||||||
UBS | USD | 64 | SGD | 92 | 11/06/15 | 1 | ||||||||
UBS | AUD | 3,077 | USD | 2,179 | 12/07/15 | (12 | ) | |||||||
UBS | CAD | 4,039 | USD | 3,065 | 12/07/15 | (23 | ) | |||||||
UBS | CHF | 3,287 | USD | 3,323 | 12/07/15 | (6 | ) | |||||||
UBS | EUR | 10,663 | USD | 11,747 | 12/07/15 | 16 | ||||||||
UBS | GBP | 4,547 | USD | 6,978 | 12/07/15 | (31 | ) | |||||||
UBS | JPY | 864,624 | USD | 7,168 | 12/07/15 | 1 | ||||||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 589 | |||||||||||||
Total Return Swap Contracts (*) | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fund Receives/(Pays) | Notional | Termination | Fair Value | |||||||||||
Underlying Reference Entity | Counterparty | Amount | Date | $ | ||||||||||
Long Reference Entity | ||||||||||||||
Dow Jones U.S. Real Estate Index | Bank of America | USD | 30,000 | 03/07/16 | (2,921 | ) | ||||||||
Total Fair Value of Open Total Return Swap Contracts Premiums Paid (Received) - $— (å) | (2,921 | ) | ||||||||||||
(*) Total return swaps (which includes index swaps) are agreements between counterparties to exchange cash flows, one based on a market-linked | ||||||||||||||
returns of an individual asset or a basket of assets (i.e. an index), and the other on a fixed or floating rate. The floating rate fee is based on the 3 | ||||||||||||||
Month LIBOR rate plus a fee of 0.120%. | ||||||||||||||
Presentation of Portfolio Holdings | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fair Value | ||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||||
Investments in Russell Affiliated Mutual Funds | $ | 2,900,881 | $ | — | $ | — | $ | 2,900,881 | 97.6 | |||||
Short-Term Investments | — | 50,457 | — | 50,457 | 1.7 | |||||||||
Total Investments | 2,900,881 | 50,457 | — | 2,951,338 | 99.3 | |||||||||
Other Assets and Liabilities, Net | 0.7 | |||||||||||||
100.0 | ||||||||||||||
Other Financial Instruments | ||||||||||||||
Futures Contracts | 1,897 | — | — | 1,897 | 0.1 | |||||||||
Foreign Currency Exchange Contracts | 40 | 549 | — | 589 | —* | |||||||||
Total Return Swap Contracts | — | (2,921 | ) | — | (2,921 | ) | (0.1 | ) | ||||||
Total Other Financial Instruments** | $ | 1,937 | $ | (2,372 | ) | $ | — | $ | (435 | ) | ||||
* Less than .05% of net assets. | ||||||||||||||
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments. | ||||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 59
Russell Investment Company
Balanced Strategy Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 2,522 | ||
Variation margin on futures contracts* | 7,145 | — | ||||
Total | $ | 7,145 | $ | 2,522 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | 5,248 | $ | — | ||
Unrealized depreciation on foreign currency exchange contracts | — | 1,933 | ||||
Total return swap contracts, at fair value | 2,921 | — | ||||
Total | $ | 8,169 | $ | 1,933 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Investments** | $ | (1,425 | ) | $ | — | |
Futures contracts | 3,172 | — | ||||
Options written | (1,213 | ) | — | |||
Foreign currency-related transactions*** | — | 3,350 | ||||
Total | $ | 534 | $ | 3,350 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | 1,897 | $ | — | ||
Total return swap contracts | (2,921 | ) | — | |||
Foreign currency-related transactions**** | — | 589 | ||||
Total | $ | (1,024 | ) | $ | 589 | |
* | Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the | |||||
Statement of Assets and Liabilities. | ||||||
** | Includes net realized gain (loss) on purchased options as reported in the Statement of Operations. | |||||
*** | Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported | |||||
within the Statement of Operations. | ||||||
**** | Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related | |||||
transactions reported within the Statement of Operations. | ||||||
For further disclosure on derivatives see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
60 Balanced Strategy Fund
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Balanced Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||||||||
Offsetting of Financial Assets and Derivative Assets | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Assets | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | $ | 2,522 | $ — | $ | 2,522 | ||||||
Futures Contracts | Variation margin on futures contracts | 1,248 | — | 1,248 | ||||||||
Total Financial and Derivative Assets | 3,770 | — | 3,770 | |||||||||
Financial and Derivative Assets not subject to a netting agreement | (1,314) | — | (1,314 | ) | ||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 2,456 | $ — | $ | 2,456 | |||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Assets | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | ||||||||
Bank of Montreal | $ | 336 | $ | 242 | $ | — $ | 94 | |||||
BNP Paribas | 359 | 224 | — | 135 | ||||||||
Brown Brothers Harriman | 91 | 91 | — | — | ||||||||
Commonwealth Bank of Australia | 367 | 229 | — | 138 | ||||||||
Royal Bank of Canada | 809 | 623 | — | 186 | ||||||||
State Street | 376 | 320 | — | 56 | ||||||||
UBS | 118 | 118 | — | — | ||||||||
Total | $ | 2,456 | $ | 1,847 | $ | — $ | 609 |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 61
Russell Investment Company
Balanced Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | |||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||||
Gross | Net Amounts | ||||||||||||
Amounts | of Liabilities | ||||||||||||
Gross | Offset in the | Presented in | |||||||||||
Amounts of | Statement of | the Statement | |||||||||||
Recognized | Assets and | of Assets and | |||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||||||
Futures Contracts | Variation margin on futures contracts | $ | 311 | $ | — $ | 311 | |||||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 1,933 | — | 1,933 | |||||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 2,921 | — | 2,921 | |||||||||
Total Financial and Derivative Liabilities | 5,165 | — | 5,165 | ||||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (338 | ) | — | (338 | ) | ||||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 4,827 | $ | — $ | 4,827 | ||||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||||
Gross Amounts Not Offset in | |||||||||||||
the Statement of Assets and | |||||||||||||
Liabilities | |||||||||||||
Net Amounts | |||||||||||||
of Liabilities | |||||||||||||
Presented in | |||||||||||||
the Statement | Financial and | ||||||||||||
of Assets and | Derivative | Collateral | |||||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||||
Bank of America | $ | 2,921 | $ | — | $ | 1,800 | $ | 1,121 | |||||
Bank of Montreal | 242 | 242 | — | — | |||||||||
BNP Paribas | 224 | 224 | — | — | |||||||||
Brown Brothers Harriman | 92 | 91 | — | 1 | |||||||||
Commonwealth Bank of Australia | 229 | 229 | — | — | |||||||||
Royal Bank of Canada | 625 | 623 | — | 2 | |||||||||
State Street | 320 | 320 | — | — | |||||||||
UBS | 174 | 118 | — | 56 | |||||||||
Total | $ | 4,827 | $ | 1,847 | $ | 1,800 | $ | 1,180 | |||||
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance | |||||||||||||
Sheet collateral and adjustments made to exclude overcollateralization. | |||||||||||||
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
62 Balanced Strategy Fund
Russell Investment Company
Balanced Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 2,772,034 |
Investments, at fair value(>) | 2,951,338 | |
Cash (restricted)(a)(b) | 26,230 | |
Unrealized appreciation on foreign currency exchange contracts | 2,522 | |
Receivables: | ||
Dividends from affiliated Russell funds | 5 | |
Investments sold | 1,309 | |
Fund shares sold | 2,308 | |
Variation margin on futures contracts | 1,248 | |
Total assets | 2,984,960 | |
Liabilities | ||
Payables: | ||
Investments purchased | 2,821 | |
Fund shares redeemed | 2,863 | |
Accrued fees to affiliates | 1,708 | |
Other accrued expenses | 145 | |
Variation margin on futures contracts | 311 | |
Unrealized depreciation on foreign currency exchange contracts | 1,933 | |
Total return swap contracts, at fair value(8) | 2,921 | |
Total liabilities | 12,702 | |
Net Assets | $ | 2,972,258 |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 63
Russell Investment Company
Balanced Strategy Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | ||||
Net Assets Consist of: | ||||
Undistributed (overdistributed) net investment income | $ | 3,290 | ||
Accumulated net realized gain (loss) | 195,352 | |||
Unrealized appreciation (depreciation) on: | ||||
Investments | 179,304 | |||
Futures contracts | 1,897 | |||
Total return swap contracts | (2,921 | ) | ||
Foreign currency-related transactions | 589 | |||
Shares of beneficial interest | 2,469 | |||
Additional paid-in capital | 2,592,278 | |||
Net Assets | $ | 2,972,258 | ||
Net Asset Value, offering and redemption price per share: | ||||
Net asset value per share: Class A(#) | $ | 12.07 | ||
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 12.81 | ||
Class A — Net assets | $ | 909,827,289 | ||
Class A — Shares outstanding ($.01 par value) | 75,351,933 | |||
Net asset value per share: Class C(#) | $ | 11.89 | ||
Class C — Net assets | $ 1,089,188,677 | |||
Class C — Shares outstanding ($.01 par value) | 91,575,408 | |||
Net asset value per share: Class E(#) | $ | 12.13 | ||
Class E — Net assets | $ | 37,183,913 | ||
Class E — Shares outstanding ($.01 par value) | 3,066,268 | |||
Net asset value per share: Class R1(#) | $ | 12.20 | ||
Class R1 — Net assets | $ | 200,990,964 | ||
Class R1 — Shares outstanding ($.01 par value) | 16,479,684 | |||
Net asset value per share: Class R4(#) | $ | 12.10 | ||
Class R4 — Net assets | $ | 153,931,208 | ||
Class R4 — Shares outstanding ($.01 par value) | 12,717,757 | |||
Net asset value per share: Class R5(#) | $ | 12.13 | ||
Class R5 — Net assets | $ | 101,554,953 | ||
Class R5 — Shares outstanding ($.01 par value) | 8,375,586 | |||
Net asset value per share: Class S(#) | $ | 12.19 | ||
Class S — Net assets | $ | 479,581,224 | ||
Class S — Shares outstanding ($.01 par value) | 39,328,329 | |||
Amounts in thousands | ||||
(>) | Investments in affiliated Russell funds | $ | 2,951,338 | |
(8) | Total return swap contracts – premiums paid (received) | $ | — | |
(a) Cash Collateral for Futures | $ | 19,300 | ||
(b) Cash Collateral for Swaps | $ | 6,930 | ||
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
64 Balanced Strategy Fund
Russell Investment Company
Balanced Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions affiliated Russell funds | $ | 107,282 | |
Expenses | |||
Advisory fees | 6,641 | ||
Administrative fees | 1,411 | ||
Custodian fees | 38 | ||
Distribution fees - Class A | 2,509 | ||
Distribution fees - Class C | 8,886 | ||
Distribution fees - Class R5 | 301 | ||
Transfer agent fees - Class A | 2,007 | ||
Transfer agent fees - Class C | 2,370 | ||
Transfer agent fees - Class E | 105 | ||
Transfer agent fees - Class R1 | 477 | ||
Transfer agent fees - Class R4 | 357 | ||
Transfer agent fees - Class R5 | 241 | ||
Transfer agent fees - Class S | 1,084 | ||
Professional fees | 100 | ||
Registration fees | 197 | ||
Shareholder servicing fees - Class C | 2,962 | ||
Shareholder servicing fees - Class E | 132 | ||
Shareholder servicing fees - Class R4 | 447 | ||
Shareholder servicing fees - Class R5 | 301 | ||
Trustees’ fees | 82 | ||
Printing fees | 312 | ||
Miscellaneous | 75 | ||
Expenses before reductions | 31,035 | ||
Expense reductions | (7,427 | ) | |
Net expenses | 23,608 | ||
Net investment income (loss) | 83,674 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 106,543 | ||
Futures contracts | 3,172 | ||
Options written | (1,213 | ) | |
Foreign currency-related transactions | 3,350 | ||
Capital gain distributions from Underlying Funds | 102,608 | ||
Net realized gain (loss) | 214,460 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (310,462 | ) | |
Futures contracts | 1,897 | ||
Total return swap contracts | (2,921 | ) | |
Foreign currency-related transactions | 589 | ||
Net change in unrealized appreciation (depreciation) | (310,897 | ) | |
Net realized and unrealized gain (loss) | (96,437 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (12,763 | ) |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 65
Russell Investment Company
Balanced Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 83,674 | $ | 59,262 | ||
Net realized gain (loss) | 214,460 | 160,782 | ||||
Net change in unrealized appreciation (depreciation) | (310,897 | ) | 1,410 | |||
Net increase (decrease) in net assets from operations | (12,763 | ) | 221,454 | |||
Distributions | ||||||
From net investment income | ||||||
Class A | (27,056 | ) | (18,205 | ) | ||
Class C | (24,672 | ) | (15,502 | ) | ||
Class E | (1,511 | ) | (1,317 | ) | ||
Class R1 | (7,007 | ) | (5,758 | ) | ||
Class R2 | — | (4,638 | ) | |||
Class R3 | — | (3,049 | ) | |||
Class R4 | (5,009 | ) | — | |||
Class R5 | (3,183 | ) | — | |||
Class S | (15,364 | ) | (11,365 | ) | ||
Net decrease in net assets from distributions | (83,802 | ) | (59,834 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (489,691 | ) | (495,609 | ) | ||
Total Net Increase (Decrease) in Net Assets | (586,256 | ) | (333,989 | ) | ||
Net Assets | ||||||
Beginning of period | 3,558,514 | 3,892,503 | ||||
End of period | $ | 2,972,258 | $ | 3,558,514 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 3,290 | $ | 69 |
See accompanying notes which are an integral part of the financial statements.
66 Balanced Strategy Fund
Russell Investment Company
Balanced Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 5,840 | $ | 71,827 | 9,587 | $ | 116,453 | ||||||
Proceeds from reinvestment of distributions | 2,181 | 26,745 | 1,508 | 18,065 | ||||||||
Payments for shares redeemed | (17,883 | ) | (218,947 | ) | (17,848 | ) | (216,878 | ) | ||||
Net increase (decrease) | (9,862 | ) | (120,375 | ) | (6,753 | ) | (82,360 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 9,415 | 114,123 | 14,256 | 171,050 | ||||||||
Proceeds from reinvestment of distributions | 2,023 | 24,485 | 1,301 | 15,337 | ||||||||
Payments for shares redeemed | (22,027 | ) | (266,650 | ) | (23,915 | ) | (287,105 | ) | ||||
Net increase (decrease) | (10,589 | ) | (128,042 | ) | (8,358 | ) | (100,718 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 443 | 5,481 | 761 | 9,246 | ||||||||
Proceeds from reinvestment of distributions | 121 | 1,497 | 109 | 1,312 | ||||||||
Payments for shares redeemed | (2,644 | ) | (32,647 | ) | (3,176 | ) | (38,737 | ) | ||||
Net increase (decrease) | (2,080 | ) | (25,669 | ) | (2,306 | ) | (28,179 | ) | ||||
Class R1 | ||||||||||||
Proceeds from shares sold | 3,580 | 44,545 | 4,136 | 50,681 | ||||||||
Proceeds from reinvestment of distributions | 566 | 7,007 | 475 | 5,758 | ||||||||
Payments for shares redeemed | (8,831 | ) | (108,883 | ) | (8,952 | ) | (109,134 | ) | ||||
Net increase (decrease) | (4,685 | ) | (57,331 | ) | (4,341 | ) | (52,695 | ) | ||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 1,953 | 23,694 | ||||||||
Proceeds from reinvestment of distributions | — | — | 386 | 4,637 | ||||||||
Payments for shares redeemed | — | — | (25,555 | ) | (311,696 | ) | ||||||
Net increase (decrease) | — | — | (23,216 | ) | (283,365 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 1,637 | 19,960 | ||||||||
Proceeds from reinvestment of distributions | — | — | 254 | 3,049 | ||||||||
Payments for shares redeemed | — | — | (19,686 | ) | (239,955 | ) | ||||||
Net increase (decrease) | — | — | (17,795 | ) | (216,946 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 1,336 | 16,501 | 16,937 | 206,514 | ||||||||
Proceeds from reinvestment of distributions | 407 | 5,004 | — | — | ||||||||
Payments for shares redeemed | (5,610 | ) | (69,422 | ) | (352 | ) | (4,277 | ) | ||||
Net increase (decrease) | (3,867 | ) | (47,917 | ) | 16,585 | 202,237 | ||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 1,069 | 13,204 | 11,750 | 143,535 | ||||||||
Proceeds from reinvestment of distributions | 258 | 3,183 | — | — | ||||||||
Payments for shares redeemed | (4,527 | ) | (55,905 | ) | (175 | ) | (2,123 | ) | ||||
Net increase (decrease) | (3,200 | ) | (39,518 | ) | 11,575 | 141,412 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 7,550 | 93,912 | 12,171 | 148,836 | ||||||||
Proceeds from reinvestment of distributions | 1,218 | 15,086 | 922 | 11,161 | ||||||||
Payments for shares redeemed | (14,575 | ) | (179,837 | ) | (19,157 | ) | (234,992 | ) | ||||
Net increase (decrease) | (5,807 | ) | (70,839 | ) | (6,064 | ) | (74,995 | ) | ||||
Total increase (decrease) | (40,090 | ) | $ | (489,691 | ) | (40,673 | ) | $ | (495,609 | ) |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 67
Russell Investment Company
Balanced Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||
$ | |||||||||||||
$ | Net | $ | $ | $ | |||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | |||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | |||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | |||||||||
Class A | |||||||||||||
October 31, 2015 | 12.43 | .34 | (.37 | ) | (.03 | ) | (.33 | ) | |||||
October 31, 2014 | 11.89 | .21 | .53 | .74 | (.20 | ) | |||||||
October 31, 2013 | 10.78 | .22 | 1.10 | 1.32 | (.21 | ) | |||||||
October 31, 2012 | 10.20 | .22 | .57 | .79 | (.21 | ) | |||||||
October 31, 2011 | 10.33 | .29 | (.13 | ) | .16 | (.29 | ) | ||||||
Class C | |||||||||||||
October 31, 2015 | 12.26 | .24 | (.36 | ) | (.12 | ) | (.25 | ) | |||||
October 31, 2014 | 11.76 | .12 | .52 | .64 | (.14 | ) | |||||||
October 31, 2013 | 10.69 | .14 | 1.09 | 1.23 | (.16 | ) | |||||||
October 31, 2012 | 10.11 | .14 | .58 | .72 | (.14 | ) | |||||||
October 31, 2011 | 10.27 | .21 | (.14 | ) | .07 | (.23 | ) | ||||||
Class E | |||||||||||||
October 31, 2015 | 12.48 | .36 | (.40 | ) | (.04 | ) | (.31 | ) | |||||
October 31, 2014 | 11.94 | .22 | .52 | .74 | (.20 | ) | |||||||
October 31, 2013 | 10.82 | .25 | 1.08 | 1.33 | (.21 | ) | |||||||
October 31, 2012 | 10.23 | .22 | .58 | .80 | (.21 | ) | |||||||
October 31, 2011 | 10.36 | .39 | (.24 | ) | .15 | (.28 | ) | ||||||
Class R1 | |||||||||||||
October 31, 2015 | 12.55 | .38 | (.37 | ) | .01 | (.36 | ) | ||||||
October 31, 2014 | 12.00 | .27 | .52 | .79 | (.24 | ) | |||||||
October 31, 2013 | 10.86 | .27 | 1.12 | 1.39 | (.25 | ) | |||||||
October 31, 2012 | 10.28 | .25 | .59 | .84 | (.26 | ) | |||||||
October 31, 2011 | 10.41 | .30 | (.10 | ) | .20 | (.33 | ) | ||||||
Class R4(3) | |||||||||||||
October 31, 2015 | 12.46 | .35 | (.38 | ) | (.03 | ) | (.33 | ) | |||||
October 31, 2014 | 11.92 | .24 | .51 | .75 | (.21 | ) | |||||||
October 31, 2013 | 10.80 | .24 | 1.11 | 1.35 | (.23 | ) | |||||||
October 31, 2012 | 10.21 | .23 | .59 | .82 | (.23 | ) | |||||||
October 31, 2011 | 10.36 | .17 | (.01 | ) | .16 | (.31 | ) | ||||||
Class R5(4) | |||||||||||||
October 31, 2015 | 12.48 | .33 | (.39 | ) | (.06 | ) | (.29 | ) | |||||
October 31, 2014 | 11.94 | .22 | .51 | .73 | (.19 | ) | |||||||
October 31, 2013 | 10.83 | .23 | 1.08 | 1.31 | (.20 | ) | |||||||
October 31, 2012 | 10.23 | .24 | .56 | .80 | (.20 | ) | |||||||
October 31, 2011 | 10.36 | .30 | (.15 | ) | .15 | (.28 | ) | ||||||
Class S | |||||||||||||
October 31, 2015 | 12.55 | .36 | (.37 | ) | (.01 | ) | (.35 | ) | |||||
October 31, 2014 | 12.00 | .25 | .52 | .77 | (.22 | ) | |||||||
October 31, 2013 | 10.87 | .25 | 1.12 | 1.37 | (.24 | ) | |||||||
October 31, 2012 | 10.28 | .24 | .59 | .83 | (.24 | ) | |||||||
October 31, 2011 | 10.42 | .32 | (.15 | ) | .17 | (.31 | ) | ||||||
See accompanying notes which are an integral part of the financial statements.
68 Balanced Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(d) | (000 | ) | Gross(g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | |||||||||
(.33 | ) | 12.07 | (.31 | ) | 909,827 | .72 | .48 | 2.75 | 35 | ||||||||
(.20 | ) | 12.43 | 6.30 | 1,058,976 | .72 | .56 | 1.74 | 19 | |||||||||
(.21 | ) | 11.89 | 12.47 | 1,093,788 | .71 | .57 | 1.99 | 11 | |||||||||
(.21 | ) | 10.78 | 7.94 | 1,068,990 | .70 | .56 | 2.07 | 20 | |||||||||
(.29 | ) | 10.20 | 1.51 | 1,058,489 | .71 | .55 | 2.79 | 9 | |||||||||
(.25 | ) | 11.89 | (1.05 | ) | 1,089,189 | 1.47 | 1.23 | 1.95 | 35 | ||||||||
(.14 | ) | 12.26 | 5.51 | 1,252,253 | 1.47 | 1.31 | .98 | 19 | |||||||||
(.16 | ) | 11.76 | 11.60 | 1,300,173 | 1.46 | 1.32 | 1.22 | 11 | |||||||||
(.14 | ) | 10.69 | 7.22 | 1,283,125 | 1.45 | 1.31 | 1.32 | 20 | |||||||||
(.23 | ) | 10.11 | .64 | 1,264,734 | 1.46 | 1.30 | 2.03 | 9 | |||||||||
(.31 | ) | 12.13 | (.32 | ) | 37,184 | .72 | .56 | 2.93 | 35 | ||||||||
(.20 | ) | 12.48 | 6.26 | 64,210 | .72 | .56 | 1.81 | 19 | |||||||||
(.21 | ) | 11.94 | 12.50 | 88,974 | .71 | .57 | 2.22 | 11 | |||||||||
(.21 | ) | 10.82 | 7.98 | 129,301 | .70 | .56 | 2.16 | 20 | |||||||||
(.28 | ) | 10.23 | 1.42 | 167,108 | .71 | .55 | 3.64 | 9 | |||||||||
(.36 | ) | 12.20 | .04 | 200,991 | .47 | .23 | 3.03 | 35 | |||||||||
(.24 | ) | 12.55 | 6.63 | 265,650 | .47 | .17 | 2.24 | 19 | |||||||||
(.25 | ) | 12.00 | 13.00 | 306,020 | .46 | .17 | 2.36 | 11 | |||||||||
(.26 | ) | 10.86 | 8.36 | 279,572 | .45 | .14 | 2.34 | 20 | |||||||||
(.33 | ) | 10.28 | 1.94 | 207,763 | .47 | .12 | 2.84 | 9 | |||||||||
(.33 | ) | 12.10 | (.31 | ) | 153,931 | .72 | .48 | 2.86 | 35 | ||||||||
(.21 | ) | 12.46 | 6.39 | 206,600 | .72 | .42 | 1.99 | 19 | |||||||||
(.23 | ) | 11.92 | 12.67 | 276,656 | .71 | .42 | 2.15 | 11 | |||||||||
(.23 | ) | 10.80 | 8.23 | 267,734 | .70 | .39 | 2.24 | 20 | |||||||||
(.31 | ) | 10.21 | 1.52 | 250,510 | .72 | .37 | 1.64 | 9 | |||||||||
(.29 | ) | 12.13 | (.48 | ) | 101,555 | .97 | .73 | 2.71 | 35 | ||||||||
(.19 | ) | 12.48 | 6.17 | 144,430 | .97 | .67 | 1.82 | 19 | |||||||||
(.20 | ) | 11.94 | 12.32 | 212,516 | .96 | .67 | 2.01 | 11 | |||||||||
(.20 | ) | 10.83 | 7.95 | 261,491 | .95 | .64 | 2.34 | 20 | |||||||||
(.28 | ) | 10.23 | 1.43 | 697,038 | .96 | .62 | 2.82 | 9 | |||||||||
(.35 | ) | 12.19 | (.13 | ) | 479,581 | .47 | .31 | 2.93 | 35 | ||||||||
(.22 | ) | 12.55 | 6.52 | 566,395 | .47 | .31 | 2.03 | 19 | |||||||||
(.24 | ) | 12.00 | 12.77 | 614,376 | .46 | .32 | 2.20 | 11 | |||||||||
(.24 | ) | 10.87 | 8.26 | 548,418 | .45 | .31 | 2.30 | 20 | |||||||||
(.31 | ) | 10.28 | 1.65 | 526,437 | .47 | .30 | 3.03 | 9 |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 69
Russell Investment Company
Growth Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Growth Strategy Fund - Class A‡ | Growth Strategy Fund - Class R5‡‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (7.15 | )% | 1 Year | (1.71 | )% | ||
5 Years | 4.56 | %§ | 5 Years | 5.69 | %§ | ||
10 Years | 3.85 | %§ | 10 Years | 4.27 | %§ | ||
Growth Strategy Fund - Class C | Growth Strategy Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (2.31 | )% | 1 Year | (1.23 | )% | ||
5 Years | 5.01 | %§ | 5 Years | 6.09 | %§ | ||
10 Years | 3.67 | %§ | 10 Years | 4.73 | %§ | ||
Growth Strategy Fund - Class E | Barclays U.S. Aggregate Bond Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.51 | )% | 1 Year | 1.96 | % | ||
5 Years | 5.84 | %§ | 5 Years | 3.03 | %§ | ||
10 Years | 4.47 | %§ | 10 Years | 4.72 | %§ | ||
Growth Strategy Fund - Class R1‡‡ | Russell 1000® Index*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.15 | )% | 1 Year | 4.86 | % | ||
5 Years | 6.24 | %§ | 5 Years | 14.32 | %§ | ||
10 Years | 4.79 | %§ | 10 Years | 7.98 | %§ | ||
Growth Strategy Fund - Class R4‡‡‡ | Russell Developed ex-U.S. Large Cap® Index Net**** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.42 | )% | 1 Year | (1.36 | )% | ||
5 Years | 5.97 | %§ | 5 Years | 4.48 | %§ | ||
10 Years | 4.54 | %§ | 10 Years | 4.32 | %§ |
70 Growth Strategy Fund
Russell Investment Company
Growth Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Growth Strategy Fund (the “Fund”) is a fund of funds that | returned 4.49% over the period, while non-U.S. equities returned |
invests principally in other Russell Investment Company mutual | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® |
funds (the “Underlying Funds”). The Underlying Funds employ | Index) and emerging markets returned -13.58% (as measured by |
a multi-manager approach whereby portions of the Underlying | the Russell Emerging Markets Index). The underperformance of |
Funds are allocated to different money managers. Underlying | non-U.S. equities versus U.S. equities was a key negative driver |
Fund assets not allocated to money managers are managed by | to the Fund’s benchmark-relative performance, as U.S. equities |
Russell Investment Management Company (“RIMCo”), the Fund’s | finished at 4.86% for the fiscal year as measured by the Fund’s |
and Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | benchmark. |
advisor, may change the allocation of the Underlying Funds’ | The fiscal year ended October 31, 2015 was characterized by |
assets among money managers at any time. An exemptive order | slowing global growth and commodity price weakness. Overall, |
from the Securities and Exchange Commission (“SEC”) permits | this was modestly positive for fixed income assets, as yields fell. |
RIMCo to engage or terminate a money manager in an Underlying | However, the Fund’s exposure to the fixed income asset class had |
Fund at any time, subject to approval by the Underlying Fund’s | a negative effect on benchmark-relative performance as core fixed |
Board, without a shareholder vote. Pursuant to the terms of the | income underperformed U.S. equities. |
exemptive order, an Underlying Fund is required to notify its | |
shareholders within 90 days of when a money manager begins | Within alternative strategies, commodities exposure had the |
providing services. | largest negative impact on the Fund, as the asset class (as |
measured by the Bloomberg Commodity Index Total Return) lost | |
What is the Fund’s investment objective? | 25.72% during the period, significantly underperforming U.S. |
The Fund seeks to provide high long term capital appreciation, | equities. Global REITs and listed infrastructure (as represented |
and as a secondary objective, current income. | by the FTSE EPRA/NAREIT Developed Real Estate Index (Net) |
and S&P Global Infrastructure Index (Net)) finished the fiscal | |
How did the Fund perform relative to its benchmark for the | year up 2.68% and down 6.29%, respectively. Both of these asset |
fiscal year ended October 31, 2015? | classes underperformed U.S. equities, which negatively impacted |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | the Fund’s benchmark-relative performance. |
Class C, Class E, Class R1, Class R4, Class R5 and Class S Shares | |
lost 1.50%, 2.31%, 1.51%, 1.15%, 1.42%, 1.71% and 1.23%, | How did the investment strategies and techniques employed |
respectively. This is compared to the Fund’s primary benchmark, | by the Fund and the money managers of the Underlying |
the Russell 1000® Index, which gained 4.86% during the same | Funds affect the Fund’s performance? |
period. The Fund’s performance includes operating expenses, | The Fund is a fund of funds and its performance is based on |
whereas the index returns are unmanaged and do not include | RIMCo’s strategic asset allocations and the performance of the |
expenses of any kind. | Underlying Funds in which the Fund invests. |
For the fiscal year ended October 31, 2015, the Morningstar® | With respect to the Fund’s global equity exposure, the Fund’s |
Aggressive Allocation, a group of funds that Morningstar considers | strategic allocation to the Russell International Developed Markets |
to have investment strategies similar to those of the Fund, lost | Fund through March 3, 2015 and the Russell Global Equity Fund |
0.21%. This result serves as a peer comparison and is expressed | and Russell Emerging Markets Fund throughout the fiscal year |
net of operating expenses. | negatively impacted the Fund’s benchmark-relative performance |
The Fund’s strategic allocation to commodities and non-U.S. | given that non-U.S. equities underperformed the Fund’s U.S. |
equity Underlying Funds negatively impacted benchmark-relative | equity benchmark. From an active management standpoint, the |
performance, with the Fund’s allocation to the Russell Emerging | Russell International Developed Markets Fund outperformed |
Markets Fund and Russell Commodity Strategies Fund having | its benchmark due to underweights to Asia Pacific ex-Japan |
the largest detrimental impact. Benchmark-relative performance | and Canada and the materials and energy sectors, which were |
was also negatively impacted by the Fund’s out-of-benchmark | the worst hit regions and sectors in the period. An underweight |
allocations to fixed income and alternative Underlying Funds, as | to energy and an overweight to consumer discretionary in the |
these asset classes generally underperformed U.S. equities. | Russell Global Equity Fund contributed to positive excess return. |
For the Russell Emerging Markets Fund, unsuccessful stock | |
How did the market conditions described in the Market | selection in China and Brazil was the main driver of the Fund’s |
Summary report affect the Fund’s performance? | underperformance. Chinese stocks fell sharply and broader |
It was a mixed equity market for the fiscal year ending October | emerging markets also lost significant value during the period |
31, 2015. U.S. stocks (as measured by the Russell 3000® Index) | due to growth concerns. The Select International Equity Fund |
Growth Strategy Fund 71
Russell Investment Company
Growth Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
replaced the Russell International Developed Markets Fund on | Describe any changes to the Fund’s structure or allocation |
March 3, 2015, and a valuation bias in this Underlying Fund led | to the Underlying Funds. |
to benchmark-relative underperformance as lower price-to-book | RIMCo has the discretion to vary the Fund’s actual allocation from |
stocks strongly underperformed. | the target strategic asset allocation by up to +/- 5% at the equity, |
The Fund’s allocation to U.S. equity Underlying Funds had a | fixed income or alternative category level based on RIMCo’s |
negative effect on the Fund’s benchmark-relative performance. | capital markets research. RIMCo’s asset allocation modifications |
Underlying active management within the U.S. equity Underlying | benefited the Fund’s performance relative to the Fund’s long-term |
Funds detracted, as most of the U.S. equity Underlying Funds | strategic allocation. |
underperformed their respective U.S. equity market segment as | Entering the fiscal year, relative to the target strategic asset |
represented by their primary benchmarks. The Russell U.S. Core | allocations, the Fund maintained a broad overweight to equity |
Equity Fund (an Underlying Fund through March 3, 2015) and | Underlying Funds and an underweight to alternative Underlying |
the Select U.S. Equity Fund (added as an Underlying Fund on | Funds. Overall positioning was based on a cautious outlook for |
March 3, 2015) both underperformed the Russell 1000® Index | commodities and anticipated rise in interest rates, which could |
through March 3, 2015 due to an underweight to growth stocks, | negatively impact interest rate sensitive securities such as REITs. |
which outperformed during the period. In addition, the Fund’s | |
strategic allocation to the Russell U.S. Small Cap Equity Fund | On March 3, 2015, RIMCo implemented a new target strategic |
also detracted from the Fund’s benchmark-relative performance, | asset allocation that replaced the Russell U.S. Core Equity Fund |
as U.S. small cap equity underperformed the Fund’s benchmark | with the Select U.S. Equity Fund and the Russell International |
and the Underlying Fund underperformed its Russell 2000® | Developed Markets Fund with the Select International Equity |
Index benchmark due to an overweight to micro-capitalization | Fund. The Fund’s target strategic asset allocation to various |
stocks which underperformed during the period. | Underlying Funds was modified, and the strategic allocation to |
the Russell Multi-Strategy Alternative Fund was removed. | |
The Fund’s strategic allocation to fixed income Underlying | |
Funds generally had a negative impact on its benchmark-relative | In connection with this reallocation, RIMCo also shifted the |
performance as fixed income underperformed U.S. equity. An | Fund’s tactical allocations relative to the new target strategic |
allocation to the Russell Global Opportunistic Credit Fund | asset allocation as follows: |
detracted, as this Underlying Fund underperformed the Fund’s | - 1.00% underweight to the Russell Global Real Estate Securities |
benchmark. From an active management perspective, the Russell | Fund resulting in a 1.00% overweight to the Russell Global |
Global Opportunistic Credit Fund underperformed its benchmark | Opportunistic Credit Fund. This tactical change was intended to |
largely because of an ex-benchmark allocation to local currency | reduce exposure to asset classes sensitive to anticipated rising |
emerging market debt and the associated currency risk as the U.S. | interest rates. |
dollar appreciated strongly versus emerging market currencies. | On May 1, 2015, RIMCo added a RIMCo-managed positioning |
The allocation to the Russell Strategic Bond Fund was slightly | strategy at a 2.00% weight. The addition of the positioning |
positive from a benchmark-relative perspective. The Russell | strategy resulted in a 2.00% reduction in the Fund’s allocation |
Strategic Bond Fund was negatively impacted by its overweight | to the Select U.S. Equity Fund. The strategy had a U.S. large cap |
to credit, but its currency positioning drove excess return relative | strategic exposure through the use of index futures contracts, |
to its benchmark. | and did not result in a change to the Fund’s overall U.S. equity |
The Fund’s strategic allocation to alternative Underlying Funds | exposure. |
had a negative impact on benchmark-relative performance | On September 3, 2015, RIMCo reduced the Fund’s underweight |
as each of these asset classes underperformed the Fund’s U.S. | to the Russell Commodity Strategies Fund by 1.00% due to |
equity benchmark. From an active management standpoint, | limited commodity price appreciation expectations over the |
performance of these Underlying Funds was mixed. The Russell | medium term. This resulted in a 1.00% overweight to the Select |
Global Infrastructure Fund and the Russell Global Real Estate | U.S. Equity Fund. |
Securities Fund outperformed their respective benchmarks | |
while the Russell Commodity Strategies Fund underperformed | At the end of the fiscal year, the Fund was positioned with less |
its benchmark. The Russell Global Infrastructure Fund and the | than benchmark risk levels and for rising interest rates, with |
Russell Global Real Estate Securities Fund both benefited from | underweights to the Russell Global Real Estate Securities Fund |
strong stock selection by underlying money managers. The Russell | and Russell Commodity Strategies Fund funding an overweight to |
Commodity Strategies Fund underperformed its benchmark due | the Russell Global Opportunistic Credit Fund and the Select U.S. |
largely to exposure to the energy sector. | Equity Fund. |
72 Growth Strategy Fund
Russell Investment Company
Growth Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The views expressed in this report reflect those of the portfolio
managers only through the end of the period covered by
the report. These views do not necessarily represent the
views of RIMCo, or any other person in RIMCo or any other
affiliated organization. These views are subject to change
at any time based upon market conditions or other events,
and RIMCo disclaims any responsibility to update the views
contained herein. These views should not be relied on as
investment advice and, because investment decisions for
a Russell Investment Company (“RIC”) Fund are based on
numerous factors, should not be relied on as an indication
of investment decisions of any RIC Fund.
^ In preceding years, the performance of the Fund’s Class E Shares was used in the line graph, but Class S Shares are considered to be a better representation to
shareholders as Class S Shares are the primary retail share class of the Fund.
* Assumes initial investment on November 1, 2005.
** The Barclays U.S. Aggregate Bond Index is an index, with income reinvested, generally representative of intermediate-term government bonds, investment grade
corporate debt securities and mortgage-backed securities.
*** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
**** Russell Developed ex-U.S. Large Cap® Index (net of tax on dividends from foreign holdings) is an index which offers investors access to the large-cap segment
of the global equity market, excluding companies assigned to the United States. It is constructed to provide a comprehensive and unbiased barometer for the
large-cap segment and is completely reconstituted annually to accurately reflect the changes in the market over time.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
‡‡ The Fund first issued Class R1 Shares on May 19, 2006. The returns shown for Class R1 Shares prior to that date are the returns of the Fund’s Class S Shares.
‡‡‡ The Fund first issued Class R4 Shares on October 1, 2014. The returns shown for Class R4 Shares prior to that date are the returns of the Fund’s Class E Shares
from January 1, 2005 to March 28, 2006 and the returns of Class R2 Shares from March 29, 2006 to September 30, 2014.
‡‡‡‡ The Fund first issued Class R5 Shares on October 1, 2014. The returns shown for Class R5 Shares prior to that date are the returns of the Fund’s Class R3
Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Growth Strategy Fund 73
Russell Investment Company
Growth Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 952.50 | $ | 1,022.33 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 2.81 | $ | 2.91 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.57% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 949.00 | $ | 1,018.55 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 6.48 | $ | 6.72 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.32% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 953.30 | $ | 1,022.33 | |
Expenses Paid During Period* | $ | 2.81 | $ | 2.91 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.57% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
74 Growth Strategy Fund
Russell Investment Company
Growth Strategy Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R1 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 954.50 | $ | 1,023.84 | ||
Expenses Paid During Period* | $ | 1.33 | $ | 1.38 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.27% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R4 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 952.90 | $ | 1,022.58 | ||
Expenses Paid During Period* | $ | 2.56 | $ | 2.65 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.52% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R5 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 951.30 | $ | 1,021.32 | ||
Expenses Paid During Period* | $ | 3.79 | $ | 3.92 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.77% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 954.20 | $ | 1,023.59 | ||
Expenses Paid During Period* | $ | 1.58 | $ | 1.63 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.32% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Growth Strategy Fund 75
Russell Investment Company
Growth Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||
Fair | ||||
Value | ||||
Shares | $ | |||
Investments in Russell Affiliated Mutual Funds - 97.6% | ||||
Alternative - 10.8% | ||||
Russell Commodity Strategies Fund Class Y | 9,508,809 | 54,010 | ||
Russell Global Infrastructure Fund Class Y | 8,176,990 | 93,545 | ||
Russell Global Real Estate Securities Fund Class Y | 1,477,732 | 56,730 | ||
204,285 | ||||
Domestic Equities - 36.3% | ||||
Russell U.S. Defensive Equity Fund Class Y | 3,207,249 | 153,146 | ||
Russell U.S. Dynamic Equity Fund Class Y | 13,504,607 | 153,412 | ||
Russell U.S. Small Cap Equity Fund Class Y | 5,880,982 | 168,431 | ||
Select U.S. Equity Fund Class Y | 19,607,458 | 210,585 | ||
685,574 | ||||
Fixed Income - 16.8% | ||||
Russell Global Opportunistic Credit Fund Class Y | 10,285,237 | 94,007 | ||
Russell Strategic Bond Fund Class Y | 20,434,187 | 223,346 | ||
317,353 | ||||
International Equities - 33.7% | ||||
Russell Emerging Markets Fund Class Y | 10,613,831 | 161,755 | ||
Russell Global Equity Fund Class Y | 19,936,071 | 228,866 | ||
Select International Equity Fund Class Y | 26,807,275 | 244,750 | ||
635,371 | ||||
Total Investments in Russell Affiliated Mutual Funds | ||||
(cost $1,760,625) | 1,842,583 | |||
Short-Term Investments - 1.8% | ||||
Russell U.S. Cash Management Fund | 33,266,044 | (8) | 33,266 | |
Total Short-Term Investments | ||||
(cost $33,266) | 33,266 | |||
Total Investments 99.4% | ||||
(identified cost $1,793,891) | 1,875,849 | |||
Other Assets and Liabilities, Net - 0.6% | 12,555 | |||
Net Assets - 100.0% | 1,888,404 |
See accompanying notes which are an integral part of the financial statements.
76 Growth Strategy Fund
Russell Investment Company
Growth Strategy Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | ||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Number of | Notional | Expiration | (Depreciation) | |||||||||
Contracts | Amount | Date | $ | |||||||||
Long Positions | ||||||||||||
Amsterdam Index Futures | 33 | EUR | 3,045 | 11/15 | 209 | |||||||
CAC40 10 EURO Index Futures | 210 | EUR | 10,281 | 11/15 | 634 | |||||||
DAX Index Futures | 36 | EUR | 9,738 | 12/15 | 675 | |||||||
Euro STOXX Index 50 Futures | 189 | EUR | 6,432 | 12/15 | 441 | |||||||
FTSE/MIB Index Futures | 24 | EUR | 2,693 | 12/15 | 110 | |||||||
IBEX 35 Index Futures | 35 | EUR | 3,600 | 11/15 | 95 | |||||||
MSCI EAFE Mini Index Futures | 197 | USD | 17,307 | 12/15 | 518 | |||||||
MSCI Emerging Markets Mini Index Futures | 90 | USD | 3,797 | 12/15 | 203 | |||||||
OMXS30 Index Futures | 149 | SEK | 22,290 | 11/15 | 66 | |||||||
Russell 1000 Index Mini Futures | 30 | USD | 3,452 | 12/15 | 154 | |||||||
Russell 2000 Mini Index Futures | 36 | USD | 4,170 | 12/15 | 39 | |||||||
S&P 500 E-Mini Index Futures | 488 | USD | 50,599 | 12/15 | 3,093 | |||||||
S&P Mid 400 E-Mini Index Futures | 35 | USD | 5,045 | 12/15 | 108 | |||||||
TOPIX Index Futures | 25 | JPY | 389,624 | 12/15 | 254 | |||||||
Short Positions | ||||||||||||
FTSE 100 Index Futures | 146 | GBP | 9,227 | 12/15 | (410 | ) | ||||||
MSCI EAFE Mini Index Futures | 205 | USD | 18,010 | 12/15 | (479 | ) | ||||||
MSCI Emerging Markets Mini Index Futures | 124 | USD | 5,231 | 12/15 | (277 | ) | ||||||
S&P/TSX 50 Index Futures | 136 | CAD | 21,554 | 12/15 | (98 | ) | ||||||
SPI 200 Index Futures | 151 | AUD | 19,766 | 12/15 | (452 | ) | ||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 4,883 | |||||||||||
Options Written | ||||||||||||
Amounts in thousands (except contract amounts) | ||||||||||||
Transactions in options written contracts for the period ended October 31, 2015 were as follows: | ||||||||||||
Number of | Premiums | |||||||||||
Contracts | Received | |||||||||||
Outstanding October 31, 2014 | — | $ | — | |||||||||
Opened | 452,394 | 995 | ||||||||||
Closed | (452,394 | ) | (995 | ) | ||||||||
Expired | — | — | ||||||||||
Outstanding October 31, 2015 | — | $ | — | |||||||||
Foreign Currency Exchange Contracts | ||||||||||||
Amounts in thousands | ||||||||||||
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Amount | Amount | (Depreciation) | ||||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||||
Bank of Montreal | CAD | 10,094 | USD | 7,523 | 11/06/15 | (197 | ) | |||||
Bank of Montreal | EUR | 6,637 | USD | 7,435 | 11/06/15 | 136 | ||||||
Bank of Montreal | GBP | 2,781 | USD | 4,215 | 11/06/15 | (72 | ) | |||||
Bank of Montreal | JPY | 569,462 | USD | 4,737 | 11/06/15 | 18 | ||||||
Bank of Montreal | SGD | 1,514 | USD | 1,062 | 11/06/15 | (18 | ) | |||||
BNP Paribas | CHF | 8,079 | USD | 8,309 | 11/06/15 | 135 | ||||||
BNP Paribas | EUR | 6,637 | USD | 7,445 | 11/06/15 | 147 | ||||||
BNP Paribas | GBP | 2,781 | USD | 4,222 | 11/06/15 | (65 | ) | |||||
BNP Paribas | JPY | 569,462 | USD | 4,737 | 11/06/15 | 18 | ||||||
Brown Brothers Harriman | USD | 1,309 | AUD | 1,842 | 11/06/15 | 5 | ||||||
Brown Brothers Harriman | USD | 1,837 | CAD | 2,418 | 11/06/15 | 12 | ||||||
Brown Brothers Harriman | USD | 1,989 | CHF | 1,968 | 11/06/15 | 2 | ||||||
Brown Brothers Harriman | USD | 7,032 | EUR | 6,384 | 11/06/15 | (12 | ) | |||||
Brown Brothers Harriman | USD | 4,176 | GBP | 2,723 | 11/06/15 | 21 | ||||||
Brown Brothers Harriman | USD | 4,294 | JPY | 517,682 | 11/06/15 | (4 | ) | |||||
Brown Brothers Harriman | AUD | 1,842 | USD | 1,307 | 12/07/15 | (5 | ) | |||||
Brown Brothers Harriman | CAD | 2,418 | USD | 1,837 | 12/07/15 | (12 | ) |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 77
Russell Investment Company
Growth Strategy Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Brown Brothers Harriman | CHF | 1,968 | USD | 1,991 | 12/07/15 | (2 | ) |
Brown Brothers Harriman | EUR | 6,384 | USD | 7,035 | 12/07/15 | 11 | |
Brown Brothers Harriman | GBP | 2,723 | USD | 4,176 | 12/07/15 | (21 | ) |
Brown Brothers Harriman | JPY | 517,682 | USD | 4,295 | 12/07/15 | 4 | |
Royal Bank of Canada | USD | 1,308 | AUD | 1,842 | 11/06/15 | 5 | |
Royal Bank of Canada | USD | 1,837 | CAD | 2,418 | 11/06/15 | 12 | |
Royal Bank of Canada | USD | 1,989 | CHF | 1,968 | 11/06/15 | 2 | |
Royal Bank of Canada | USD | 7,033 | EUR | 6,384 | 11/06/15 | (12 | ) |
Royal Bank of Canada | USD | 4,177 | GBP | 2,723 | 11/06/15 | 20 | |
Royal Bank of Canada | USD | 2,432 | GBP | 1,590 | 12/16/15 | 19 | |
Royal Bank of Canada | USD | 4,267 | GBP | 2,790 | 12/16/15 | 33 | |
Royal Bank of Canada | USD | 4,294 | JPY | 517,682 | 11/06/15 | (4 | ) |
Royal Bank of Canada | USD | 10,927 | JPY | 1,312,020 | 12/16/15 | (47 | ) |
Royal Bank of Canada | USD | 22,856 | JPY | 2,744,400 | 12/16/15 | (98 | ) |
Royal Bank of Canada | USD | 2,856 | SEK | 24,325 | 11/06/15 | (9 | ) |
Royal Bank of Canada | AUD | 1,842 | USD | 1,306 | 12/07/15 | (5 | ) |
Royal Bank of Canada | AUD | 4,890 | USD | 3,425 | 12/16/15 | (55 | ) |
Royal Bank of Canada | AUD | 11,350 | USD | 7,949 | 12/16/15 | (127 | ) |
Royal Bank of Canada | CAD | 2,418 | USD | 1,837 | 12/07/15 | (12 | ) |
Royal Bank of Canada | CAD | 4,900 | USD | 3,690 | 12/16/15 | (57 | ) |
Royal Bank of Canada | CAD | 11,580 | USD | 8,720 | 12/16/15 | (134 | ) |
Royal Bank of Canada | CHF | 1,968 | USD | 1,991 | 12/07/15 | (2 | ) |
Royal Bank of Canada | EUR | 6,637 | USD | 7,442 | 11/06/15 | 143 | |
Royal Bank of Canada | EUR | 6,384 | USD | 7,035 | 12/07/15 | 12 | |
Royal Bank of Canada | EUR | 7,020 | USD | 7,895 | 12/16/15 | 170 | |
Royal Bank of Canada | EUR | 17,610 | USD | 19,804 | 12/16/15 | 426 | |
Royal Bank of Canada | GBP | 2,781 | USD | 4,219 | 11/06/15 | (68 | ) |
Royal Bank of Canada | GBP | 2,723 | USD | 4,176 | 12/07/15 | (20 | ) |
Royal Bank of Canada | HKD | 17,353 | USD | 2,239 | 11/06/15 | — | |
Royal Bank of Canada | JPY | 569,462 | USD | 4,739 | 11/06/15 | 19 | |
Royal Bank of Canada | JPY | 517,682 | USD | 4,296 | 12/07/15 | 4 | |
Royal Bank of Canada | SEK | 24,325 | USD | 2,858 | 12/07/15 | 9 | |
State Street | USD | 1,308 | AUD | 1,842 | 11/06/15 | 5 | |
State Street | USD | 1,837 | CAD | 2,418 | 11/06/15 | 12 | |
State Street | USD | 1,989 | CHF | 1,968 | 11/06/15 | 2 | |
State Street | USD | 7,032 | EUR | 6,384 | 11/06/15 | (12 | ) |
State Street | USD | 4,176 | GBP | 2,723 | 11/06/15 | 21 | |
State Street | USD | 2,218 | HKD | 17,188 | 11/06/15 | — | |
State Street | USD | 4,294 | JPY | 517,682 | 11/06/15 | (4 | ) |
State Street | USD | 1,049 | SGD | 1,470 | 11/06/15 | — | |
State Street | AUD | 7,767 | USD | 5,451 | 11/06/15 | (87 | ) |
State Street | AUD | 1,842 | USD | 1,306 | 12/07/15 | (5 | ) |
State Street | CAD | 2,418 | USD | 1,837 | 12/07/15 | (12 | ) |
State Street | CHF | 1,968 | USD | 1,991 | 12/07/15 | (2 | ) |
State Street | EUR | 6,637 | USD | 7,443 | 11/06/15 | 143 | |
State Street | EUR | 6,384 | USD | 7,035 | 12/07/15 | 11 | |
State Street | GBP | 2,781 | USD | 4,223 | 11/06/15 | (63 | ) |
State Street | GBP | 2,723 | USD | 4,176 | 12/07/15 | (20 | ) |
State Street | HKD | 17,188 | USD | 2,218 | 12/07/15 | — | |
State Street | JPY | 569,462 | USD | 4,737 | 11/06/15 | 18 | |
State Street | JPY | 517,682 | USD | 4,295 | 12/07/15 | 3 | |
State Street | SEK | 25,661 | USD | 3,060 | 11/06/15 | 57 | |
State Street | SGD | 1,470 | USD | 1,048 | 12/07/15 | — | |
UBS | USD | 280 | AUD | 398 | 11/06/15 | 4 | |
UBS | USD | 1,306 | AUD | 1,842 | 11/06/15 | 7 | |
UBS | USD | 319 | CAD | 422 | 11/06/15 | 4 | |
UBS | USD | 1,835 | CAD | 2,418 | 11/06/15 | 14 | |
UBS | USD | 213 | CHF | 207 | 11/06/15 | (3 | ) |
UBS | USD | 1,988 | CHF | 1,968 | 11/06/15 | 4 | |
UBS | USD | 1,133 | EUR | 1,011 | 11/06/15 | (22 | ) |
UBS | USD | 7,030 | EUR | 6,384 | 11/06/15 | (10 | ) |
UBS | USD | 352 | GBP | 232 | 11/06/15 | 6 | |
UBS | USD | 4,179 | GBP | 2,723 | 11/06/15 | 18 |
See accompanying notes which are an integral part of the financial statements.
78 Growth Strategy Fund
Russell Investment Company
Growth Strategy Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | ||||||||||||||
Amounts in thousands | ||||||||||||||
Unrealized | ||||||||||||||
Appreciation | ||||||||||||||
Amount | Amount | (Depreciation) | ||||||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||||||
UBS | USD | 21 | HKD | 165 | 11/06/15 | — | ||||||||
UBS | USD | 1,732 | JPY | 207,122 | 11/06/15 | (15 | ) | |||||||
UBS | USD | 4,291 | JPY | 517,682 | 11/06/15 | (1 | ) | |||||||
UBS | USD | 160 | SEK | 1,336 | 11/06/15 | (4 | ) | |||||||
UBS | USD | 31 | SGD | 44 | 11/06/15 | 1 | ||||||||
UBS | AUD | 1,842 | USD | 1,304 | 12/07/15 | (7 | ) | |||||||
UBS | CAD | 2,418 | USD | 1,835 | 12/07/15 | (14 | ) | |||||||
UBS | CHF | 1,968 | USD | 1,989 | 12/07/15 | (4 | ) | |||||||
UBS | EUR | 6,384 | USD | 7,033 | 12/07/15 | 10 | ||||||||
UBS | GBP | 2,723 | USD | 4,178 | 12/07/15 | (18 | ) | |||||||
UBS | JPY | 517,682 | USD | 4,292 | 12/07/15 | — | ||||||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 362 | |||||||||||||
Total Return Swap Contracts (*) | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fund Receives/(Pays) | Notional | Termination | Fair Value | |||||||||||
Underlying Reference Entity | Counterparty | Amount | Date | $ | ||||||||||
Long Reference Entity | ||||||||||||||
Dow Jones U.S. Real Estate Index | Bank of America | USD | 56,401 | 03/07/16 | (5,492 | ) | ||||||||
Total Fair Value of Open Total Return Swap Contracts Premiums Paid (Received) - $— (å) | (5,492 | ) | ||||||||||||
(*) Total return swaps (which includes index swaps) are agreements between counterparties to exchange cash flows, one based on a market-linked | ||||||||||||||
returns of an individual asset or a basket of assets (i.e. an index), and the other on a fixed or floating rate. The floating rate fees were all based on the | ||||||||||||||
3-month LIBOR rate plus a fee of 0.120%. | ||||||||||||||
Presentation of Portfolio Holdings | ||||||||||||||
Amounts in thousands | ||||||||||||||
Fair Value | ||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||||
Investments in Russell Affiliated Mutual Funds | $ | 1,842,583 | $ | — | $ | — | $ | 1,842,583 | 97.6 | |||||
Short-Term Investments | — | 33,266 | — | 33,266 | 1.8 | |||||||||
Total Investments | 1,842,583 | 33,266 | — | 1,875,849 | 99.4 | |||||||||
Other Assets and Liabilities, Net | 0.6 | |||||||||||||
100.0 | ||||||||||||||
Other Financial Instruments | ||||||||||||||
Futures Contracts | 4,883 | — | — | 4,883 | 0.3 | |||||||||
Foreign Currency Exchange Contracts | 24 | 338 | — | 362 | —* | |||||||||
Total Return Swap Contracts | — | (5,492 | ) | — | (5,492 | ) | (0.3 | ) | ||||||
Total Other Financial Instruments** | $ | 4,907 | $ | (5,154 | ) | $ | — | $ | (247 | ) | ||||
* Less than .05% of net assets. | ||||||||||||||
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments. | ||||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 79
Russell Investment Company
Growth Strategy Fund
Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 1,723 | ||
Variation margin on futures contracts* | 6,599 | — | ||||
Total | $ | 6,599 | $ | 1,723 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | 1,716 | $ | — | ||
Unrealized depreciation on foreign currency exchange contracts | — | 1,361 | ||||
Total return swap contracts, at fair value | 5,492 | — | ||||
Total | $ | 7,208 | $ | 1,361 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Investments** | $ | (855 | ) | $ | — | |
Futures contracts | 1,867 | — | ||||
Options written | (722 | ) | — | |||
Foreign currency-related transactions*** | — | 1,999 | ||||
Total | $ | 290 | $ | 1,999 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | 4,883 | $ | — | ||
Total return swap contracts | (5,492 | ) | — | |||
Foreign currency-related transactions**** | — | 362 | ||||
Total | $ | (609 | ) | $ | 362 | |
* | Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the | |||||
Statement of Assets and Liabilities. | ||||||
** | Includes net realized gain (loss) on purchased options as reported in the Statement of Operations. | |||||
*** | Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported | |||||
within the Statement of Operations. | ||||||
**** | Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related | |||||
transactions reported within the Statement of Operations. | ||||||
For further disclosure on derivatives see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
80 Growth Strategy Fund
Russell Investment Company
Growth Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||||||||
Offsetting of Financial Assets and Derivative Assets | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Assets | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | $ | 1,723 | $ | — $ | 1,723 | ||||||
Futures Contracts | Variation margin on futures contracts | 663 | — | 663 | ||||||||
Total Financial and Derivative Assets | 2,386 | — | 2,386 | |||||||||
Financial and Derivative Assets not subject to a netting agreement | (703) | — | (703 | ) | ||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 1,683 | $ | — $ | 1,683 | |||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Assets | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | ||||||||
Bank of Montreal | $ | 154 | $ | 154 | $ | — $ | — | |||||
BNP Paribas | 299 | 65 | — | 234 | ||||||||
Brown Brothers Harriman | 55 | 55 | — | — | ||||||||
Royal Bank of Canada | 875 | 650 | — | 225 | ||||||||
State Street | 233 | 190 | — | 43 | ||||||||
UBS | 67 | 67 | — | — | ||||||||
Total | $ | 1,683 | $ | 1,181 | $ | — $ | 502 |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 81
Russell Investment Company
Growth Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | ||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Liabilities | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | ||||||||
Futures Contracts | Variation margin on futures contracts | $ | 311 | $ | — $ | 311 | ||||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 1,361 | — | 1,361 | ||||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 5,492 | — | 5,492 | ||||||||
Total Financial and Derivative Liabilities | 7,164 | — | 7,164 | |||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (327) | — | (327 | ) | ||||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 6,837 | $ | — $ | 6,837 | |||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | ||||||||||||
Gross Amounts Not Offset in | �� | |||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Liabilities | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | ||||||||
Bank of America | $ | 5,492 | $ | — | $ | — $ | 5,492 | |||||
Bank of Montreal | 288 | 154 | — | 134 | ||||||||
BNP Paribas | 65 | 65 | — | — | ||||||||
Brown Brothers Harriman | 55 | 55 | — | — | ||||||||
Royal Bank of Canada | 650 | 650 | — | — | ||||||||
State Street | 190 | 190 | — | — | ||||||||
UBS | 97 | 67 | — | 30 | ||||||||
Total | $ | 6,837 | $ | 1,181 | $ | — $ | 5,656 | |||||
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance | ||||||||||||
Sheet collateral and adjustments made to exclude overcollateralization. | ||||||||||||
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
82 Growth Strategy Fund
Russell Investment Company
Growth Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 1,793,891 |
Investments, at fair value(>) | 1,875,849 | |
Cash (restricted)(a)(b) | 19,260 | |
Unrealized appreciation on foreign currency exchange contracts | 1,723 | |
Receivables: | ||
Dividends from affiliated Russell funds | 3 | |
Investments sold | 2,731 | |
Fund shares sold | 1,985 | |
Variation margin on futures contracts | 663 | |
Total assets | 1,902,214 | |
Liabilities | ||
Payables: | ||
Investments purchased | 1,693 | |
Fund shares redeemed | 3,645 | |
Accrued fees to affiliates | 1,200 | |
Other accrued expenses | 108 | |
Variation margin on futures contracts | 311 | |
Unrealized depreciation on foreign currency exchange contracts | 1,361 | |
Total return swap contracts, at fair value(8) | 5,492 | |
Total liabilities | 13,810 | |
Net Assets | $ | 1,888,404 |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 83
Russell Investment Company
Growth Strategy Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 5,132 | |
Accumulated net realized gain (loss) | (15,769 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | 81,958 | ||
Futures contracts | 4,883 | ||
Total return swap contracts | (5,492 | ) | |
Foreign currency-related transactions | 362 | ||
Shares of beneficial interest | 1,628 | ||
Additional paid-in capital | 1,815,702 | ||
Net Assets | $ | 1,888,404 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 11.68 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 12.39 | |
Class A — Net assets | $ | 664,817,181 | |
Class A — Shares outstanding ($.01 par value) | 56,901,400 | ||
Net asset value per share: Class C(#) | $ | 11.36 | |
Class C — Net assets | $ | 652,441,545 | |
Class C — Shares outstanding ($.01 par value) | 57,440,844 | ||
Net asset value per share: Class E(#) | $ | 11.73 | |
Class E — Net assets | $ | 25,868,265 | |
Class E — Shares outstanding ($.01 par value) | 2,205,407 | ||
Net asset value per share: Class R1(#) | $ | 11.81 | |
Class R1 — Net assets | $ | 99,618,319 | |
Class R1 — Shares outstanding ($.01 par value) | 8,435,597 | ||
Net asset value per share: Class R4(#) | $ | 11.72 | |
Class R4 — Net assets | $ | 110,915,997 | |
Class R4 — Shares outstanding ($.01 par value) | 9,462,645 | ||
Net asset value per share: Class R5(#) | $ | 11.73 | |
Class R5 — Net assets | $ | 63,730,614 | |
Class R5 — Shares outstanding ($.01 par value) | 5,433,836 | ||
Net asset value per share: Class S(#) | $ | 11.81 | |
Class S — Net assets | $ | 271,011,799 | |
Class S — Shares outstanding ($.01 par value) | 22,949,244 | ||
Amounts in thousands | |||
(>) Investments in affiliated Russell funds | $ | 1,875,849 | |
(8) Total return swap contracts – premium paid (received) | $ | — | |
(a) Cash Collateral for Futures | $ | 13,600 | |
(b) Cash Collateral for Swaps | $ | 5,660 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
84 Growth Strategy Fund
Russell Investment Company
Growth Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 64,906 | |
Expenses | |||
Advisory fees | 4,209 | ||
Administrative fees | 894 | ||
Custodian fees | 38 | ||
Distribution fees - Class A | 1,806 | ||
Distribution fees - Class C | 5,347 | ||
Distribution fees - Class R5 | 195 | ||
Transfer agent fees - Class A | 1,445 | ||
Transfer agent fees - Class C | 1,426 | ||
Transfer agent fees - Class E | 82 | ||
Transfer agent fees - Class R1 | 238 | ||
Transfer agent fees - Class R4 | 261 | ||
Transfer agent fees - Class R5 | 156 | ||
Transfer agent fees - Class S | 601 | ||
Professional fees | 75 | ||
Registration fees | 165 | ||
Shareholder servicing fees - Class C | 1,782 | ||
Shareholder servicing fees - Class E | 103 | ||
Shareholder servicing fees - Class R4 | 326 | ||
Shareholder servicing fees - Class R5 | 195 | ||
Trustees’ fees | 53 | ||
Printing fees | 258 | ||
Miscellaneous | 50 | ||
Expenses before reductions | 19,705 | ||
Expense reductions | (3,622 | ) | |
Net expenses | 16,083 | ||
Net investment income (loss) | 48,823 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 87,148 | ||
Futures contracts | 1,867 | ||
Options written | (722 | ) | |
Foreign currency-related transactions | 1,999 | ||
Capital gain distributions from Underlying Funds | 74,902 | ||
Net realized gain (loss) | 165,194 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (245,938 | ) | |
Futures contracts | 4,883 | ||
Total return swap contracts | (5,492 | ) | |
Foreign currency-related transactions | 362 | ||
Net change in unrealized appreciation (depreciation) | (246,185 | ) | |
Net realized and unrealized gain (loss) | (80,991 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (32,168 | ) |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 85
Russell Investment Company
Growth Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 48,823 | $ | 41,427 | ||
Net realized gain (loss) | 165,194 | 126,040 | ||||
Net change in unrealized appreciation (depreciation) | (246,185 | ) | (20,561 | ) | ||
Net increase (decrease) in net assets from operations | (32,168 | ) | 146,906 | |||
Distributions | ||||||
From net investment income | ||||||
Class A | (15,921 | ) | (13,746 | ) | ||
Class C | (13,333 | ) | (10,736 | ) | ||
Class E | (1,026 | ) | (1,171 | ) | ||
Class R1 | (3,046 | ) | (3,452 | ) | ||
Class R2 | — | (3,542 | ) | |||
Class R3 | — | (2,050 | ) | |||
Class R4 | (3,089 | ) | (71 | ) | ||
Class R5 | (1,791 | ) | — | |||
Class S | (7,269 | ) | (6,291 | ) | ||
Distribution in excess | ||||||
Class A | (1,608 | ) | — | |||
Class C | (1,347 | ) | — | |||
Class E | (104 | ) | — | |||
Class R1 | (307 | ) | — | |||
Class R4 | (312 | ) | — | |||
Class R5 | (181 | ) | — | |||
Class S | (734 | ) | — | |||
Net decrease in net assets from distributions | (50,068 | ) | (41,059 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (311,093 | ) | (231,318 | ) | ||
Total Net Increase (Decrease) in Net Assets | (393,329 | ) | (125,471 | ) | ||
Net Assets | ||||||
Beginning of period | 2,281,733 | 2,407,204 | ||||
End of period | $ | 1,888,404 | $ | 2,281,733 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 5,132 | $ | 368 |
See accompanying notes which are an integral part of the financial statements.
86 Growth Strategy Fund
Russell Investment Company
Growth Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 4,192 | $ | 50,206 | 6,504 | $ | 77,288 | ||||||
Proceeds from reinvestment of distributions | 1,456 | 17,454 | 1,166 | 13,678 | ||||||||
Payments for shares redeemed | (11,284 | ) | (134,983 | ) | (11,364 | ) | (135,185 | ) | ||||
Net increase (decrease) | (5,636 | ) | (67,323 | ) | (3,694 | ) | (44,219 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 5,813 | 67,853 | 9,321 | 108,245 | ||||||||
Proceeds from reinvestment of distributions | 1,246 | 14,566 | 928 | 10,629 | ||||||||
Payments for shares redeemed | (13,887 | ) | (161,705 | ) | (13,211 | ) | (153,923 | ) | ||||
Net increase (decrease) | (6,828 | ) | (79,286 | ) | (2,962 | ) | (35,049 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 461 | 5,566 | 644 | 7,635 | ||||||||
Proceeds from reinvestment of distributions | 93 | 1,124 | 99 | 1,167 | ||||||||
Payments for shares redeemed | (2,524 | ) | (30,334 | ) | (2,541 | ) | (30,300 | ) | ||||
Net increase (decrease) | (1,970 | ) | (23,644 | ) | (1,798 | ) | (21,498 | ) | ||||
Class R1 | ||||||||||||
Proceeds from shares sold | 1,497 | 18,136 | 2,426 | 29,121 | ||||||||
Proceeds from reinvestment of distributions | 277 | 3,353 | 290 | 3,452 | ||||||||
Payments for shares redeemed | (5,558 | ) | (67,070 | ) | (4,677 | ) | (55,804 | ) | ||||
Net increase (decrease) | (3,784 | ) | (45,581 | ) | (1,961 | ) | (23,231 | ) | ||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 1,396 | 16,665 | ||||||||
Proceeds from reinvestment of distributions | — | — | 301 | 3,542 | ||||||||
Payments for shares redeemed | — | — | (18,804 | ) | (223,963 | ) | ||||||
Net increase (decrease) | — | — | (17,107 | ) | (203,756 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 869 | 10,368 | ||||||||
Proceeds from reinvestment of distributions | — | — | 174 | 2,049 | ||||||||
Payments for shares redeemed | — | — | (12,713 | ) | (151,231 | ) | ||||||
Net increase (decrease) | — | — | (11,670 | ) | (138,814 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 813 | 9,759 | 12,581 | 149,479 | ||||||||
Proceeds from reinvestment of distributions | 283 | 3,401 | 6 | 71 | ||||||||
Payments for shares redeemed | (3,837 | ) | (46,192 | ) | (383 | ) | (4,512 | ) | ||||
Net increase (decrease) | (2,741 | ) | (33,032 | ) | 12,204 | 145,038 | ||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 593 | 7,106 | 7,811 | 92,873 | ||||||||
Proceeds from reinvestment of distributions | 164 | 1,972 | — | — | ||||||||
Payments for shares redeemed | (3,044 | ) | (36,588 | ) | (90 | ) | (1,064 | ) | ||||
Net increase (decrease) | (2,287 | ) | (27,510 | ) | 7,721 | 91,809 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 4,632 | 56,042 | 7,643 | 91,934 | ||||||||
Proceeds from reinvestment of distributions | 654 | 7,914 | 524 | 6,225 | ||||||||
Payments for shares redeemed | (8,195 | ) | (98,673 | ) | (8,269 | ) | (99,757 | ) | ||||
Net increase (decrease) | (2,909 | ) | (34,717 | ) | (102 | ) | (1,598 | ) | ||||
Total increase (decrease) | (26,155 | ) | $ | (311,093 | ) | (19,369 | ) | $ | (231,318 | ) |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 87
Russell Investment Company
Growth Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||||||
$ | |||||||||||||||||
$ | Net | $ | $ | $ | |||||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | |||||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | $ | ||||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Distributions in Excess | ||||||||||||
Class A | |||||||||||||||||
October 31, 2015 | 12.14 | .30 | (.48 | ) | (.18 | ) | (.25 | ) | (.03 | ) | |||||||
October 31, 2014 | 11.60 | .23 | .52 | .75 | (.21 | ) | — | ||||||||||
October 31, 2013 | 10.11 | .17 | 1.48 | 1.65 | (.16 | ) | — | ||||||||||
October 31, 2012 | 9.56 | .17 | .55 | .72 | (.17 | ) | — | ||||||||||
October 31, 2011 | 9.68 | .21 | (.13 | ) | .08 | (.20 | ) | — | |||||||||
Class C | |||||||||||||||||
October 31, 2015 | 11.85 | .20 | (.46 | ) | (.26 | ) | (.21 | ) | (.02 | ) | |||||||
October 31, 2014 | 11.36 | .13 | .52 | .65 | (.16 | ) | — | ||||||||||
October 31, 2013 | 9.93 | .08 | 1.46 | 1.54 | (.11 | ) | — | ||||||||||
October 31, 2012 | 9.41 | .10 | .53 | .63 | (.11 | ) | — | ||||||||||
October 31, 2011 | 9.57 | .13 | (.12 | ) | .01 | (.17 | ) | — | |||||||||
Class E | |||||||||||||||||
October 31, 2015 | 12.19 | .35 | (.53 | ) | (.18 | ) | (.25 | ) | (.03 | ) | |||||||
October 31, 2014 | 11.64 | .24 | .52 | .76 | (.21 | ) | — | ||||||||||
October 31, 2013 | 10.15 | .18 | 1.47 | 1.65 | (.16 | ) | — | ||||||||||
October 31, 2012 | 9.59 | .18 | .54 | .72 | (.16 | ) | — | ||||||||||
October 31, 2011 | 9.69 | .29 | (.20 | ) | .09 | (.19 | ) | — | |||||||||
Class R1 | |||||||||||||||||
October 31, 2015 | 12.27 | .36 | (.50 | ) | (.14 | ) | (.29 | ) | (.03 | ) | |||||||
October 31, 2014 | 11.72 | .29 | .52 | .81 | (.26 | ) | — | ||||||||||
October 31, 2013 | 10.21 | .20 | 1.50 | 1.70 | (.19 | ) | — | ||||||||||
October 31, 2012 | 9.65 | .21 | .56 | .77 | (.21 | ) | — | ||||||||||
October 31, 2011 | 9.75 | .22 | (.09 | ) | .13 | (.23 | ) | — | |||||||||
Class R4(3) | |||||||||||||||||
October 31, 2015 | 12.18 | .33 | (.50 | ) | (.17 | ) | (.26 | ) | (.03 | ) | |||||||
October 31, 2014 | 11.64 | .26 | .50 | .76 | (.22 | ) | — | ||||||||||
October 31, 2013 | 10.14 | .19 | 1.48 | 1.67 | (.17 | ) | — | ||||||||||
October 31, 2012 | 9.59 | .19 | .54 | .73 | (.18 | ) | — | ||||||||||
October 31, 2011 | 9.70 | .10 | — (h) | .10 | (.21 | ) | — | ||||||||||
Class R5(4) | |||||||||||||||||
October 31, 2015 | 12.19 | .31 | (.50 | ) | (.19 | ) | (.25 | ) | (.02 | ) | |||||||
October 31, 2014 | 11.65 | .24 | .49 | .73 | (.19 | ) | — | ||||||||||
October 31, 2013 | 10.16 | .17 | 1.47 | 1.64 | (.15 | ) | — | ||||||||||
October 31, 2012 | 9.59 | .20 | .52 | .72 | (.15 | ) | — | ||||||||||
October 31, 2011 | 9.71 | .21 | (.14 | ) | .07 | (.19 | ) | — | |||||||||
Class S | |||||||||||||||||
October 31, 2015 | 12.27 | .34 | (.49 | ) | (.15 | ) | (.28 | ) | (.03 | ) | |||||||
October 31, 2014 | 11.72 | .26 | .53 | .79 | (.24 | ) | — | ||||||||||
October 31, 2013 | 10.21 | .19 | 1.50 | 1.69 | (.18 | ) | — | ||||||||||
October 31, 2012 | 9.65 | .20 | .55 | .75 | (.19 | ) | — | ||||||||||
October 31, 2011 | 9.76 | .24 | (.14 | ) | .10 | (.21 | ) | — | |||||||||
See accompanying notes which are an integral part of the financial statements.
88 Growth Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(d) | (000 | ) | Gross(g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | |||||||||
(.28 | ) | 11.68 | (1.50 | ) | 664,817 | .72 | .56 | 2.51 | 39 | ||||||||
(.21 | ) | 12.14 | 6.52 | 759,361 | .72 | .56 | 1.91 | 22 | |||||||||
(.16 | ) | 11.60 | 16.55 | 768,352 | .71 | .57 | 1.53 | 11 | |||||||||
(.17 | ) | 10.11 | 7.64 | 713,412 | .70 | .56 | 1.79 | 23 | |||||||||
(.20 | ) | 9.56 | .75 | 734,024 | .73 | .55 | 2.12 | 7 | |||||||||
(.23 | ) | 11.36 | (2.31 | ) | 652,442 | 1.47 | 1.31 | 1.68 | 39 | ||||||||
(.16 | ) | 11.85 | 5.77 | 761,495 | 1.47 | 1.31 | 1.12 | 22 | |||||||||
(.11 | ) | 11.36 | 15.62 | 763,893 | 1.46 | 1.32 | .76 | 11 | |||||||||
(.11 | ) | 9.93 | 6.84 | 704,704 | 1.45 | 1.31 | 1.05 | 23 | |||||||||
(.17 | ) | 9.41 | .05 | 738,624 | 1.48 | 1.30 | 1.36 | 7 | |||||||||
(.28 | ) | 11.73 | (1.51 | ) | 25,868 | .72 | .56 | 2.89 | 39 | ||||||||
(.21 | ) | 12.19 | 6.57 | 50,878 | .72 | .56 | 2.04 | 22 | |||||||||
(.16 | ) | 11.64 | 16.47 | 69,531 | .71 | .57 | 1.67 | 11 | |||||||||
(.16 | ) | 10.15 | 7.69 | 95,667 | .70 | .56 | 1.87 | 23 | |||||||||
(.19 | ) | 9.59 | .88 | 130,274 | .72 | .55 | 2.92 | 7 | |||||||||
(.32 | ) | 11.81 | (1.15 | ) | 99,618 | .47 | .23 | 2.96 | 39 | ||||||||
(.26 | ) | 12.27 | 6.95 | 149,940 | .47 | .17 | 2.43 | 22 | |||||||||
(.19 | ) | 11.72 | 16.93 | 166,211 | .46 | .17 | 1.87 | 11 | |||||||||
(.21 | ) | 10.21 | 8.15 | 143,252 | .45 | .14 | 2.08 | 23 | |||||||||
(.23 | ) | 9.65 | 1.23 | 116,928 | .48 | .12 | 2.22 | 7 | |||||||||
(.29 | ) | 11.72 | (1.42 | ) | 110,916 | .72 | .48 | 2.72 | 39 | ||||||||
(.22 | ) | 12.18 | 6.63 | 148,650 | .72 | .42 | 2.19 | 22 | |||||||||
(.17 | ) | 11.64 | 16.73 | 199,046 | .71 | .42 | 1.74 | 11 | |||||||||
(.18 | ) | 10.14 | 7.81 | 200,007 | .70 | .39 | 1.97 | 23 | |||||||||
(.21 | ) | 9.59 | 1.00 | 196,374 | .73 | .37 | 1.03 | 7 | |||||||||
(.27 | ) | 11.73 | (1.71 | ) | 63,731 | .97 | .73 | 2.60 | 39 | ||||||||
(.19 | ) | 12.19 | 6.37 | 94,141 | .97 | .67 | 2.01 | 22 | |||||||||
(.15 | ) | 11.65 | 16.37 | 135,920 | .96 | .67 | 1.57 | 11 | |||||||||
(.15 | ) | 10.16 | 7.65 | 171,237 | .95 | .64 | 2.03 | 23 | |||||||||
(.19 | ) | 9.59 | .70 | 500,954 | .98 | .62 | 2.12 | 7 | |||||||||
(.31 | ) | 11.81 | (1.23 | ) | 271,012 | .47 | .31 | 2.81 | 39 | ||||||||
(.24 | ) | 12.27 | 6.81 | 317,268 | .47 | .31 | 2.16 | 22 | |||||||||
(.18 | ) | 11.72 | 16.80 | 304,251 | .46 | .32 | 1.71 | 11 | |||||||||
(.19 | ) | 10.21 | 7.96 | 258,600 | .45 | .31 | 2.01 | 23 | |||||||||
(.21 | ) | 9.65 | 1.01 | 254,107 | .48 | .30 | 2.37 | 7 |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 89
Russell Investment Company
Equity Growth Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
Equity Growth Strategy Fund - Class A‡ | Equity Growth Strategy Fund - Class R5‡‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (7.47 | )% | 1 Year | (1.94 | )% | ||
5 Years | 5.11 | %§ | 5 Years | 6.25 | %§ | ||
10 Years | 3.52 | %§ | 10 Years | 3.94 | %§ | ||
Equity Growth Strategy Fund - Class C | Equity Growth Strategy Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (2.51 | )% | 1 Year | (1.54 | )% | ||
5 Years | 5.56 | %§ | 5 Years | 6.63 | %§ | ||
10 Years | 3.35 | %§ | 10 Years | 4.40 | %§ | ||
Equity Growth Strategy Fund - Class E | Russell 1000®Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.78 | )% | 1 Year | 4.86 | % | ||
5 Years | 6.37 | %§ | 5 Years | 14.32 | %§ | ||
10 Years | 4.13 | %§ | 10 Years | 7.98 | %§ | ||
Equity Growth Strategy Fund - Class R1‡‡ | Russell Developed ex-U.S. Large Cap® Index Net*** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (1.45 | )% | 1 Year | (1.36 | )% | ||
5 Years | 6.79 | %§ | 5 Years | 4.48 | %§ | ||
10 Years | 4.47 | %§ | 10 Years | 4.32 | %§ | ||
Equity Growth Strategy Fund - Class R4‡‡‡ | |||||||
Total | |||||||
Return | |||||||
1 Year | (1.66 | )% | |||||
5 Years | 6.53 | %§ | |||||
10 Years | 4.22 | %§ |
90 Equity Growth Strategy Fund
Russell Investment Company
Equity Growth Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Equity Growth Strategy Fund (the “Fund”) is a fund of funds | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® | ||||
that invests principally in other Russell Investment Company | Index) and emerging markets returned -13.58% (as measured by | ||||
mutual funds (the “Underlying Funds”). The Underlying Funds | the Russell Emerging Markets Index). The underperformance of | ||||
employ a multi-manager approach whereby portions of the | non-U.S. equities versus U.S. equities was a key negative driver | ||||
Underlying Funds are allocated to different money managers. | to the Fund’s benchmark-relative performance, as U.S. equities | ||||
Underlying Fund assets not allocated to money managers | finished at 4.86% for the fiscal year as measured by the Fund’s | ||||
are managed by Russell Investment Management Company | benchmark. | ||||
(“RIMCo”), the Fund’s and Underlying Funds’ advisor. RIMCo, | The fiscal year ended October 31, 2015 was characterized by | ||||
as the Underlying Funds’ advisor, may change the allocation of | slowing global growth and commodity price weakness. Overall, | ||||
the Underlying Funds’ assets among money managers at any | this was modestly positive for fixed income assets, as yields fell. | ||||
time. An exemptive order from the Securities and Exchange | However, the Fund’s exposure to the fixed income asset class had | ||||
Commission (“SEC”) permits RIMCo to engage or terminate a | a negative effect on benchmark-relative performance as core fixed | ||||
money manager in an Underlying Fund at any time, subject to | income underperformed U.S. equities. | ||||
approval by the Underlying Fund’s Board, without a shareholder | |||||
vote. Pursuant to the terms of the exemptive order, an Underlying | Within alternative strategies, commodities exposure had the | ||||
Fund is required to notify its shareholders within 90 days of when | largest negative impact on the Fund, as the asset class (as | ||||
a money manager begins providing services. | measured by the Bloomberg Commodity Index Total Return) lost | ||||
25.72% during the period, significantly underperforming U.S. | |||||
What is the Fund’s investment objective? | equities. Global REITs and listed infrastructure (as represented | ||||
The Fund seeks to provide high long term capital appreciation. | by the FTSE EPRA/NAREIT Developed Real Estate Index (Net) | ||||
and S&P Global Infrastructure Index (Net)) finished the fiscal | |||||
How did the Fund perform relative to its benchmark for the | year up 2.68% and down 6.29%, respectively. Both of these asset | ||||
fiscal year ended October 31, 2015? | classes underperformed U.S. equities, which negatively impacted | ||||
For the fiscal year ended October 31, 2015, the Fund’s Class A, | the Fund’s benchmark-relative performance. | ||||
Class C, Class E, Class R1, Class R4, Class R5 and Class S Shares | |||||
lost 1.80%, 2.51%, 1.78%, 1.45%, 1.66%, 1.94% and 1.54%, | How did the investment strategies and techniques employed | ||||
respectively. This is compared to the Fund’s primary benchmark, | by the Fund and the money managers of the Underlying | ||||
the Russell 1000® Index, which gained 4.86% during the same | Funds affect the Fund’s performance? | ||||
period. The Fund’s performance includes operating expenses, | The Fund is a fund of funds and its performance is based on | ||||
whereas the Index returns are unmanaged and do not include | RIMCo’s strategic asset allocations and the performance of the | ||||
expenses of any kind. | Underlying Funds in which the Fund invests. | ||||
For the fiscal year ended October 31, 2015, the Morningstar® | With respect to the Fund’s global equity exposure, the Fund’s | ||||
World Stock Allocation, a group of funds that Morningstar | strategic allocation to the Russell International Developed Markets | ||||
considers to have investment strategies similar to those of the | Fund through March 3, 2015 and the Russell Global Equity Fund | ||||
Fund, gained 0.34%. This result serves as a peer comparison and | and Russell Emerging Markets Fund throughout the fiscal year | ||||
is expressed net of operating expenses. | negatively impacted the Fund’s benchmark-relative performance | ||||
The Fund’s strategic allocation to commodities and non-U.S. | given that non-U.S. equities underperformed the Fund’s U.S. | ||||
equity Underlying Funds negatively impacted benchmark-relative | equity benchmark. From an active management standpoint, the | ||||
performance, with the Fund’s allocation to the Russell Emerging | Russell International Developed Markets Fund outperformed | ||||
Markets Fund and Russell Commodity Strategies Fund having | its benchmark due to underweights to Asia Pacific ex-Japan | ||||
the largest detrimental impact. Benchmark-relative performance | and Canada and the materials and energy sectors, which were | ||||
was also negatively impacted by the Fund’s out-of-benchmark | the worst hit regions and sectors in the period. An underweight | ||||
allocations to fixed income and alternative Underlying Funds, as | to energy and an overweight to consumer discretionary in the | ||||
these asset classes generally underperformed U.S. equities. | Russell Global Equity Fund contributed to positive excess return. | ||||
For the Russell Emerging Markets Fund, unsuccessful stock | |||||
How did the market conditions described in the Market | selection in China and Brazil was the main driver of the Fund’s | ||||
Summary report affect the Fund’s performance? | underperformance. Chinese stocks fell sharply and broader | ||||
It was a mixed equity market for the fiscal year ending October | emerging markets also lost significant value during the period | ||||
31, 2015. U.S. stocks (as measured by the Russell 3000® Index) | due to growth concerns. The Select International Equity Fund | ||||
returned 4.49% over the period, while non-U.S. equities returned | replaced the Russell International Developed Markets Fund on |
Equity Growth Strategy Fund 91
Russell Investment Company
Equity Growth Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
March 3, 2015, and a valuation bias in this Underlying Fund led | RIMCo has the discretion to vary the Fund’s actual allocation from |
to benchmark-relative underperformance as lower price-to-book | the target strategic asset allocation by up to +/- 5% at the equity, |
stocks strongly underperformed. | fixed income or alternative category level based on RIMCo’s |
The Fund’s allocation to U.S. equity Underlying Funds had a | capital markets research. RIMCo’s asset allocation modifications |
negative effect on the Fund’s benchmark-relative performance. | benefited the Fund’s performance relative to the Fund’s long-term |
Underlying active management within the U.S. equity Underlying | strategic allocation. |
Funds detracted, as most of the U.S. equity Underlying Funds | Entering the fiscal year, relative to the target strategic asset |
underperformed their respective U.S. equity market segment as | allocations, the Fund maintained a broad overweight to equity |
represented by their primary benchmarks. The Russell U.S. Core | Underlying Funds and an underweight to alternative Underlying |
Equity Fund (an Underlying Fund through March 3, 2015) and | Funds. Overall positioning was based on a cautious outlook for |
the Select U.S. Equity Fund (added as an Underlying Fund on | commodities and anticipated rise in interest rates, which could |
March 3, 2015) both underperformed the Russell 1000® Index | negatively impact interest rate sensitive securities such as REITs. |
through March 3, 2015 due to an underweight to growth stocks, | On March 3, 2015, RIMCo implemented a new target strategic |
which outperformed during the period. In addition, the Fund’s | asset allocation that replaced the Russell U.S. Core Equity Fund |
strategic allocation to the Russell U.S. Small Cap Equity Fund | with the Select U.S. Equity Fund and the Russell International |
also detracted from the Fund’s benchmark-relative performance, | Developed Markets Fund with the Select International Equity |
as U.S. small cap equity underperformed the Fund’s benchmark | Fund. The Fund’s target strategic asset allocation to various |
and the Underlying Fund underperformed its Russell 2000® | Underlying Funds was modified, and the strategic allocation to |
Index benchmark due to an overweight to micro-capitalization | the Russell Multi-Strategy Alternative Fund was removed. |
stocks which underperformed during the period. | |
In connection with this reallocation, RIMCo also shifted the | |
The Fund’s strategic allocation to fixed income Underlying | Fund’s tactical allocations relative to the new target strategic |
Funds generally had a negative impact on its benchmark-relative | asset allocation as follows: |
performance as fixed income underperformed U.S. equity. An | |
allocation to the Russell Global Opportunistic Credit Fund | - 1.00% underweight to the Russell Global Real Estate Securities |
detracted, as this Underlying Fund underperformed the Fund’s | Fund resulting in a 1.00% overweight to the Russell Global |
benchmark. From an active management perspective, the Russell | Opportunistic Credit Fund. This tactical change was intended to |
Global Opportunistic Credit Fund underperformed its benchmark | reduce exposure to asset classes sensitive to anticipated rising |
largely because of an ex-benchmark allocation to local currency | interest rates. |
emerging market debt and the associated currency risk as the U.S. | On May 1, 2015, RIMCo added a RIMCo-managed positioning |
dollar appreciated strongly versus emerging market currencies. | strategy at a 2.00% weight. The addition of the positioning |
The Fund’s strategic allocation to alternative Underlying Funds | strategy resulted in a 2.00% reduction in the Fund’s allocation |
had a negative impact on benchmark-relative performance | to the Select U.S. Equity Fund. The strategy had a U.S. large cap |
as each of these asset classes underperformed the Fund’s U.S. | strategic exposure through the use of index futures contracts, |
equity benchmark. From an active management standpoint, | and did not result in a change to the Fund’s overall U.S. equity |
performance of these Underlying Funds was mixed. The Russell | exposure. |
Global Infrastructure Fund and the Russell Global Real Estate | On September 3, 2015, RIMCo reduced the Fund’s underweight |
Securities Fund outperformed their respective benchmarks | to the Russell Commodity Strategies Fund by 1.00% due to |
while the Russell Commodity Strategies Fund underperformed | limited commodity price appreciation expectations over the |
its benchmark. The Russell Global Infrastructure Fund and the | medium term. This resulted in a 1.00% overweight to the Select |
Russell Global Real Estate Securities Fund both benefited from | U.S. Equity Fund. |
strong stock selection by underlying money managers. The Russell | At the end of the fiscal year, the Fund was positioned with less |
Commodity Strategies Fund underperformed its benchmark due | than benchmark risk levels and for rising interest rates, with |
largely to exposure to the energy sector. | underweights to the Russell Global Real Estate Securities Fund |
Describe any changes to the Fund’s structure or allocation | and Russell Commodity Strategies Fund funding an overweight to |
to the Underlying Funds. | the Russell Global Opportunistic Credit Fund and the Select U.S. |
Equity Fund. |
92 Equity Growth Strategy Fund
Russell Investment Company
Equity Growth Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The views expressed in this report reflect those of the portfolio
managers only through the end of the period covered by
the report. These views do not necessarily represent the
views of RIMCo, or any other person in RIMCo or any other
affiliated organization. These views are subject to change
at any time based upon market conditions or other events,
and RIMCo disclaims any responsibility to update the views
contained herein. These views should not be relied on as
investment advice and, because investment decisions for
a Russell Investment Company (“RIC”) Fund are based on
numerous factors, should not be relied on as an indication
of investment decisions of any RIC Fund.
^ In preceding years, the performance of the Fund’s Class E Shares was used in the line graph, but Class S Shares are considered to be a better representation to
shareholders as Class S Shares are the primary retail share class of the Fund.
* Assumes initial investment on November 1, 2005.
** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
*** Russell Developed ex-U.S. Large Cap Index® (net of tax on dividends from foreign holdings) is an index which offers investors access to the large-cap segment
of the global equity market, excluding companies assigned to the United States. It is constructed to provide a comprehensive and unbiased barometer for the
large-cap segment and is completely reconstituted annually to accurately reflect the changes in the market over time.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
‡‡ The Fund first issued Class R1 Shares on May 19, 2006. The returns shown for Class R1 Shares prior to that date are the returns of the Fund’s Class S Shares.
‡‡‡ The Fund first issued Class R4 Shares on October 1, 2014. The returns shown for Class R4 Shares prior to that date are the returns of the Fund’s Class E
Shares from January 1, 2005 to March 28, 2006 and the returns of Class R2 Shares from March 29, 2006 to September 30, 2014.
‡‡‡‡ The Fund first issued Class R5 Shares on October 1, 2014. The returns shown for Class R5 Shares prior to that date are the returns of the Fund’s Class R3
Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Equity Growth Strategy Fund 93
Russell Investment Company
Equity Growth Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | |||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. | |||||
administrative fees; distribution (12b-1) and/or service fees; | Hypothetical | |||||
and other Fund expenses. The Example is intended to help | Performance (5% | |||||
you understand your ongoing costs (in dollars) of investing in | Actual | return before | ||||
the Fund and to compare these costs with the ongoing costs of | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
investing in other mutual funds. The Example is based on an | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
investment of $1,000 invested at the beginning of the period and | Ending Account Value | |||||
held for the entire period indicated, which for this Fund is from | October 31, 2015 | $ | 945.60 | $ | 1,022.33 | |
May 1, 2015 to October 31, 2015. | Expenses Paid During Period* | $ | 2.80 | $ | 2.91 | |
Actual Expenses | * Expenses are equal to the Fund's annualized expense ratio of 0.57% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
The information in the table under the heading “Actual | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
Performance” provides information about actual account values | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
and actual expenses. You may use the information in this column, | waivers and/or reimbursements, expenses would have been higher. | |||||
together with the amount you invested, to estimate the expenses | ||||||
Hypothetical | ||||||
that you paid over the period. Simply divide your account value by | Performance (5% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Actual | return before | ||||
= 8.6), then multiply the result by the number in the first column | Class C | Performance | expenses) | |||
Beginning Account Value | ||||||
in the row entitled “Expenses Paid During Period” to estimate | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
the expenses you paid on your account during this period. | Ending Account Value | |||||
October 31, 2015 | $ | 941.90 | $ | 1,018.55 | ||
Hypothetical Example for Comparison Purposes | Expenses Paid During Period* | $ | 6.46 | $ | 6.72 | |
The information in the table under the heading “Hypothetical | ||||||
Performance (5% return before expenses)” provides information | * Expenses are equal to the Fund's annualized expense ratio of 1.32% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
about hypothetical account values and hypothetical expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
based on the Fund’s actual expense ratio and an assumed rate of | year period). May reflect amounts waived and/or reimbursed. Without any | |||||
return of 5% per year before expenses, which is not the Fund’s | waivers and/or reimbursements, expenses would have been higher. | |||||
actual return. The hypothetical account values and expenses | ||||||
Hypothetical | ||||||
may not be used to estimate the actual ending account balance or | Performance (5% | |||||
expenses you paid for the period. You may use this information | Actual | return before | ||||
to compare the ongoing costs of investing in the Fund and other | Class E | Performance | expenses) | |||
funds. To do so, compare this 5% hypothetical example with the | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
5% hypothetical examples that appear in the shareholder reports | Ending Account Value | |||||
of other funds. | October 31, 2015 | $ | 945.80 | $ | 1,022.33 | |
Expenses Paid During Period* | $ | 2.80 | $ | 2.91 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.57% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
94 Equity Growth Strategy Fund
Russell Investment Company
Equity Growth Strategy Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R1 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 947.50 | $ | 1,024.00 | ||
Expenses Paid During Period* | $ | 1.18 | $ | 1.22 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.24% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R4 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 946.60 | $ | 1,022.74 | ||
Expenses Paid During Period* | $ | 2.40 | $ | 2.50 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.49% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class R5 | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 944.70 | $ | 1,021.48 | ||
Expenses Paid During Period* | $ | 3.63 | $ | 3.77 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.74% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. | ||||||
Hypothetical | ||||||
Performance (5% | ||||||
Actual | return before | |||||
Class S | Performance | expenses) | ||||
Beginning Account Value | ||||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | ||||||
October 31, 2015 | $ | 947.10 | $ | 1,023.59 | ||
Expenses Paid During Period* | $ | 1.57 | $ | 1.63 | ||
* Expenses are equal to the Fund's annualized expense ratio of 0.32% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). May reflect amounts waived and/or reimbursed. Without any | ||||||
waivers and/or reimbursements, expenses would have been higher. |
Equity Growth Strategy Fund 95
Russell Investment Company
Equity Growth Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||
Fair | ||||
Value | ||||
Shares | $ | |||
Investments in Russell Affiliated Mutual Funds - 97.6% | ||||
Alternative - 10.8% | ||||
Russell Commodity Strategies Fund Class Y | 3,912,722 | 22,224 | ||
Russell Global Infrastructure Fund Class Y | 3,355,287 | 38,384 | ||
Russell Global Real Estate Securities Fund Class Y | 607,337 | 23,316 | ||
83,924 | ||||
Domestic Equities - 39.2% | ||||
Russell U.S. Defensive Equity Fund Class Y | 1,485,559 | 70,935 | ||
Russell U.S. Dynamic Equity Fund Class Y | 6,260,317 | 71,117 | ||
Russell U.S. Small Cap Equity Fund Class Y | 2,944,366 | 84,328 | ||
Select U.S. Equity Fund Class Y | 7,341,071 | 78,843 | ||
305,223 | ||||
Fixed Income - 8.9% | ||||
Russell Global Opportunistic Credit Fund Class Y | 7,579,465 | 69,276 | ||
International Equities - 38.7% | ||||
Russell Emerging Markets Fund Class Y | 5,466,291 | 83,306 | ||
Russell Global Equity Fund Class Y | 10,269,225 | 117,891 | ||
Select International Equity Fund Class Y | 11,023,697 | 100,646 | ||
301,843 | ||||
Total Investments in Russell Affiliated Mutual Funds | ||||
(cost $726,872) | 760,266 | |||
Short-Term Investments - 1.7% | ||||
Russell U.S. Cash Management Fund | 13,142,964 | (8) | 13,143 | |
Total Short-Term Investments | ||||
(cost $13,143) | 13,143 | |||
Total Investments 99.3% | ||||
(identified cost $740,015) | 773,409 | |||
Other Assets and Liabilities, Net - 0.7% | 5,580 | |||
Net Assets - 100.0% | 778,989 |
See accompanying notes which are an integral part of the financial statements.
96 Equity Growth Strategy Fund
Russell Investment Company
Equity Growth Strategy Fund
Schedule of Investments, continued — October 31, 2015
Futures Contracts | |||||||||||||
Amounts in thousands (except contract amounts) | |||||||||||||
Unrealized | |||||||||||||
Appreciation | |||||||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||||||
Contracts | Amount | Date | $ | ||||||||||
Long Positions | |||||||||||||
Amsterdam Index Futures | 12 | EUR | 1,107 | 11/15 | 76 | ||||||||
CAC40 10 EURO Index Futures | 73 | EUR | 3,574 | 11/15 | 231 | ||||||||
DAX Index Futures | 13 | EUR | 3,516 | 12/15 | 207 | ||||||||
Euro STOXX Index 50 Futures | 65 | EUR | 2,212 | 12/15 | 141 | ||||||||
FTSE/MIB Index Futures | 9 | EUR | 1,010 | 12/15 | 41 | ||||||||
IBEX 35 Index Futures | 12 | EUR | 1,234 | 11/15 | 45 | ||||||||
MSCI EAFE Mini Index Futures | 80 | USD | 7,028 | 12/15 | 210 | ||||||||
MSCI Emerging Markets Mini Index Futures | 36 | USD | 1,519 | 12/15 | 77 | ||||||||
OMXS30 Index Futures | 51 | SEK | 7,630 | 11/15 | 24 | ||||||||
Russell 1000 Index Mini Futures | 12 | USD | 1,381 | 12/15 | 67 | ||||||||
Russell 2000 Mini Index Futures | 14 | USD | 1,622 | 12/15 | 18 | ||||||||
S&P 500 E-Mini Index Futures | 200 | USD | 20,737 | 12/15 | 1,274 | ||||||||
S&P Mid 400 E-Mini Index Futures | 15 | USD | 2,162 | 12/15 | 46 | ||||||||
TOPIX Index Futures | 26 | JPY | 405,210 | 12/15 | 265 | ||||||||
Short Positions | |||||||||||||
FTSE 100 Index Futures | 57 | GBP | 3,602 | 12/15 | (134 | ) | |||||||
MSCI EAFE Mini Index Futures | 95 | USD | 8,346 | 12/15 | (221 | ) | |||||||
MSCI Emerging Markets Mini Index Futures | 58 | USD | 2,447 | 12/15 | (130 | ) | |||||||
S&P/TSX 60 Index Futures | 59 | CAD | 9,350 | 12/15 | (43 | ) | |||||||
SPI 200 Index Futures | 58 | AUD | 7,592 | 12/15 | (174 | ) | |||||||
Total Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 2,020 | ||||||||||||
Options Written | |||||||||||||
Amounts in thousands (except contract amounts) | |||||||||||||
Transactions in options written contracts for the period ended October 31, 2015 were as follows: | |||||||||||||
Number of | Premiums | ||||||||||||
Contracts | Received | ||||||||||||
Outstanding October 31, 2014 | — | $ | — | ||||||||||
Opened | 209,209 | 454 | |||||||||||
Closed | (209,209 | ) | (454 | ) | |||||||||
Expired | — | — | |||||||||||
Outstanding October 31, 2015 | — | $ | — | ||||||||||
Foreign Currency Exchange Contracts | |||||||||||||
Amounts in thousands | |||||||||||||
Unrealized | |||||||||||||
Appreciation | |||||||||||||
Amount | Amount | (Depreciation) | |||||||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||||||
Bank of Montreal | CAD | 4,556 | USD | 3,395 | 11/06/15 | (89 | ) | ||||||
Bank of Montreal | EUR | 2,996 | USD | 3,356 | 11/06/15 | 61 | |||||||
Bank of Montreal | GBP | 1,255 | USD | 1,903 | 11/06/15 | (32 | ) | ||||||
Bank of Montreal | JPY | 257,069 | USD | 2,138 | 11/06/15 | 8 | |||||||
Bank of Montreal | SGD | 683 | USD | 479 | 11/06/15 | (8 | ) | ||||||
BNP Paribas | CHF | 3,647 | USD | 3,751 | 11/06/15 | 61 | |||||||
BNP Paribas | EUR | 2,996 | USD | 3,361 | 11/06/15 | 67 | |||||||
BNP Paribas | GBP | 1,255 | USD | 1,906 | 11/06/15 | (29 | ) | ||||||
BNP Paribas | JPY | 257,069 | USD | 2,138 | 11/06/15 | 8 | |||||||
Brown Brothers Harriman | USD | 587 | AUD | 827 | 11/06/15 | 2 | |||||||
Brown Brothers Harriman | USD | 825 | CAD | 1,085 | 11/06/15 | 5 | |||||||
Brown Brothers Harriman | USD | 893 | CHF | 883 | 11/06/15 | 1 | |||||||
Brown Brothers Harriman | USD | 3,156 | EUR | 2,865 | 11/06/15 | (5 | ) | ||||||
Brown Brothers Harriman | USD | 1,874 | GBP | 1,222 | 11/06/15 | 9 | |||||||
Brown Brothers Harriman | USD | 1,927 | JPY | 232,326 | 11/06/15 | (2 | ) | ||||||
Brown Brothers Harriman | AUD | 827 | USD | 586 | 12/07/15 | (2 | ) | ||||||
Brown Brothers Harriman | CAD | 1,085 | USD | 824 | 12/07/15 | (5 | ) |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 97
Russell Investment Company
Equity Growth Strategy Fund
Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Brown Brothers Harriman | CHF | 883 | USD | 893 | 12/07/15 | (1 | ) |
Brown Brothers Harriman | EUR | 2,865 | USD | 3,157 | 12/07/15 | 5 | |
Brown Brothers Harriman | GBP | 1,222 | USD | 1,874 | 12/07/15 | (9 | ) |
Brown Brothers Harriman | JPY | 232,326 | USD | 1,928 | 12/07/15 | 2 | |
Royal Bank of Canada | USD | 587 | AUD | 827 | 11/06/15 | 2 | |
Royal Bank of Canada | USD | 825 | CAD | 1,085 | 11/06/15 | 5 | |
Royal Bank of Canada | USD | 893 | CHF | 883 | 11/06/15 | 1 | |
Royal Bank of Canada | USD | 3,156 | EUR | 2,865 | 11/06/15 | (5 | ) |
Royal Bank of Canada | USD | 1,874 | GBP | 1,222 | 11/06/15 | 9 | |
Royal Bank of Canada | USD | 1,927 | JPY | 232,326 | 11/06/15 | (2 | ) |
Royal Bank of Canada | USD | 1,282 | SEK | 10,916 | 11/06/15 | (4 | ) |
Royal Bank of Canada | AUD | 827 | USD | 586 | 12/07/15 | (2 | ) |
Royal Bank of Canada | CAD | 1,085 | USD | 824 | 12/07/15 | (5 | ) |
Royal Bank of Canada | CHF | 883 | USD | 894 | 12/07/15 | (1 | ) |
Royal Bank of Canada | EUR | 2,996 | USD | 3,359 | 11/06/15 | 64 | |
Royal Bank of Canada | EUR | 2,865 | USD | 3,157 | 12/07/15 | 5 | |
Royal Bank of Canada | GBP | 1,255 | USD | 1,904 | 11/06/15 | (31 | ) |
Royal Bank of Canada | GBP | 1,222 | USD | 1,874 | 12/07/15 | (9 | ) |
Royal Bank of Canada | HKD | 7,833 | USD | 1,011 | 11/06/15 | — | |
Royal Bank of Canada | JPY | 257,069 | USD | 2,139 | 11/06/15 | 9 | |
Royal Bank of Canada | JPY | 232,326 | USD | 1,928 | 12/07/15 | 2 | |
Royal Bank of Canada | SEK | 10,916 | USD | 1,283 | 12/07/15 | 4 | |
State Street | USD | 587 | AUD | 827 | 11/06/15 | 2 | |
State Street | USD | 825 | CAD | 1,085 | 11/06/15 | 5 | |
State Street | USD | 893 | CHF | 883 | 11/06/15 | 1 | |
State Street | USD | 3,156 | EUR | 2,865 | 11/06/15 | (5 | ) |
State Street | USD | 1,874 | GBP | 1,222 | 11/06/15 | 9 | |
State Street | USD | 995 | HKD | 7,714 | 11/06/15 | — | |
State Street | USD | 1,927 | JPY | 232,326 | 11/06/15 | (2 | ) |
State Street | USD | 471 | SGD | 660 | 11/06/15 | — | |
State Street | AUD | 3,506 | USD | 2,460 | 11/06/15 | (39 | ) |
State Street | AUD | 827 | USD | 586 | 12/07/15 | (2 | ) |
State Street | CAD | 1,085 | USD | 824 | 12/07/15 | (5 | ) |
State Street | CHF | 883 | USD | 894 | 12/07/15 | (1 | ) |
State Street | EUR | 2,996 | USD | 3,360 | 11/06/15 | 64 | |
State Street | EUR | 2,865 | USD | 3,157 | 12/07/15 | 5 | |
State Street | GBP | 1,255 | USD | 1,906 | 11/06/15 | (29 | ) |
State Street | GBP | 1,222 | USD | 1,874 | 12/07/15 | (9 | ) |
State Street | HKD | 7,714 | USD | 995 | 12/07/15 | — | |
State Street | JPY | 257,069 | USD | 2,138 | 11/06/15 | 8 | |
State Street | JPY | 232,326 | USD | 1,928 | 12/07/15 | 2 | |
State Street | SEK | 11,584 | USD | 1,382 | 11/06/15 | 26 | |
State Street | SGD | 660 | USD | 471 | 12/07/15 | — | |
UBS | USD | 140 | AUD | 199 | 11/06/15 | 2 | |
UBS | USD | 586 | AUD | 827 | 11/06/15 | 3 | |
UBS | USD | 162 | CAD | 215 | 11/06/15 | 2 | |
UBS | USD | 824 | CAD | 1,085 | 11/06/15 | 6 | |
UBS | USD | 117 | CHF | 114 | 11/06/15 | (2 | ) |
UBS | USD | 892 | CHF | 883 | 11/06/15 | 2 | |
UBS | USD | 587 | EUR | 524 | 11/06/15 | (12 | ) |
UBS | USD | 3,155 | EUR | 2,865 | 11/06/15 | (4 | ) |
UBS | USD | 203 | GBP | 134 | 11/06/15 | 4 | |
UBS | USD | 1,875 | GBP | 1,222 | 11/06/15 | 8 | |
UBS | USD | 15 | HKD | 119 | 11/06/15 | — | |
UBS | USD | 828 | JPY | 98,972 | 11/06/15 | (7 | ) |
UBS | USD | 1,926 | JPY | 232,326 | 11/06/15 | — | |
UBS | USD | 80 | SEK | 668 | 11/06/15 | (2 | ) |
UBS | USD | 16 | SGD | 23 | 11/06/15 | — | |
UBS | AUD | 827 | USD | 585 | 12/07/15 | (3 | ) |
UBS | CAD | 1,085 | USD | 824 | 12/07/15 | (6 | ) |
UBS | CHF | 883 | USD | 893 | 12/07/15 | (2 | ) |
UBS | EUR | 2,865 | USD | 3,156 | 12/07/15 | 4 | |
UBS | GBP | 1,222 | USD | 1,875 | 12/07/15 | (8 | ) |
See accompanying notes which are an integral part of the financial statements.
98 Equity Growth Strategy Fund
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Schedule of Investments, continued — October 31, 2015
Foreign Currency Exchange Contracts | |||||||||||||
Amounts in thousands | |||||||||||||
Unrealized | |||||||||||||
Appreciation | |||||||||||||
Amount | Amount | (Depreciation) | |||||||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||||||
UBS | JPY | 232,326 | USD | 1,926 | 12/07/15 | — | |||||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 104 | ||||||||||||
Total Return Swap Contracts (*) | |||||||||||||
Amounts in thousands | |||||||||||||
Fund Receives/(Pays) | Notional | Termination | Fair Value | ||||||||||
Underlying Reference Entity | Counterparty | Amount | Date | $ | |||||||||
Long Reference Entity | |||||||||||||
Dow Jones U.S. Real Estate Index | Bank of America | USD | 23,100 | 03/07/16 | (2,249 | ) | |||||||
Total Fair Value of Open Total Return Swap Contracts Premiums Paid (Received) - $— (å) | (2,249 | ) | |||||||||||
(*) Total return swaps (which includes index swaps) are agreements between counterparties to exchange cash flows, one based on a market-linked | |||||||||||||
returns of an individual asset or a basket of assets (i.e. an index), and the other on a fixed or floating rate. The floating rate fees were based on 3 | |||||||||||||
Month LIBOR rate plus a fee of 0.120%. | |||||||||||||
Presentation of Portfolio Holdings | |||||||||||||
Amounts in thousands | |||||||||||||
Fair Value | |||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||
Investments in Russell Affiliated Mutual Funds | $ | 760,266 | $ | — | $ | — | $ | 760,266 | 97.6 | ||||
Short-Term Investments | — | 13,143 | — | 13,143 | 1.7 | ||||||||
Total Investments | 760,266 | 13,143 | — | 773,409 | 99.3 | ||||||||
Other Assets and Liabilities, Net | 0.7 | ||||||||||||
100.0 | |||||||||||||
Other Financial Instruments | |||||||||||||
Futures Contracts | 2,020 | — | — | 2,020 | 0.3 | ||||||||
Foreign Currency Exchange Contracts | 11 | 93 | — | 104 | —* | ||||||||
Total Return Swap Contracts | — | (2,249 | ) | — | (2,249 | ) | (0.3 | ) | |||||
Total Other Financial Instruments** | $ | 2,031 | $ | (2,156 | ) | $ | — | $ | (125 | ) | |||
* Less than .05% of net assets. | |||||||||||||
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the instruments. | |||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | |||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | |||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
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Fair Value of Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Assets and Liabilities - Assets | ||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 483 | ||
Variation margin on futures contracts* | 2,722 | — | ||||
Total | $ | 2,722 | $ | 483 | ||
Location: Statement of Assets and Liabilities - Liabilities | ||||||
Variation margin on futures contracts* | $ | 702 | $ | — | ||
Unrealized depreciation on foreign currency exchange contracts | — | 379 | ||||
Total return swap contracts, at fair value | 2,249 | — | ||||
Total | $ | 2,951 | $ | 379 | ||
Foreign | ||||||
Equity | Currency | |||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | ||||
Location: Statement of Operations - Net realized gain (loss) | ||||||
Investments** | $ | (397 | ) | $ | — | |
Futures contracts | 914 | — | ||||
Options written | (340 | ) | — | |||
Foreign currency-related transactions*** | — | 900 | ||||
Total | $ | 177 | $ | 900 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||||
Futures contracts | $ | 2,020 | $ | — | ||
Total return swap contracts | (2,249 | ) | — | |||
Foreign currency-related transactions**** | — | 104 | ||||
Total | $ | (229 | ) | $ | 104 | |
* | Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the | |||||
Statement of Assets and Liabilities. | ||||||
** | Includes net realized gain (loss) on purchased options as reported in the Statement of Operations. | |||||
*** | Only includes net realized gain (loss) on forward and spot contracts. May differ from the net realized gain (loss) on foreign currency-related transactions reported | |||||
within the Statement of Operations. | ||||||
**** | Only includes change in unrealized gain (loss) on forward and spot contracts. May differ from the net change in unrealized gain (loss) on foreign currency-related | |||||
transactions reported within the Statement of Operations. | ||||||
For further disclosure on derivatives see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
100 Equity Growth Strategy Fund
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Balance Sheet Offsetting of Financial and Derivative Instruments — October 31, 2015
Amounts in thousands | ||||||||||||
Offsetting of Financial Assets and Derivative Assets | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Assets | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | $ | 483 | $ | — $ | 483 | ||||||
Futures Contracts | Variation margin on futures contracts | 292 | — | 292 | ||||||||
Total Financial and Derivative Assets | 775 | — | 775 | |||||||||
Financial and Derivative Assets not subject to a netting agreement | (309) | — | (309 | ) | ||||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 466 | $ | — $ | 466 | |||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Assets | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | ||||||||
Bank of Montreal | $ | 69 | $ | 69 | $ | — $ | — | |||||
BNP Paribas | 133 | 29 | — | 104 | ||||||||
Brown Brothers Harriman | 24 | 24 | — | — | ||||||||
Royal Bank of Canada | 103 | 59 | — | 44 | ||||||||
State Street | 106 | 86 | — | 20 | ||||||||
UBS | 31 | 31 | — | — | ||||||||
Total | $ | 466 | $ | 298 | $ | — $ | 168 |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 101
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Equity Growth Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
October 31, 2015
Amounts in thousands | ||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Liabilities | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | ||||||||
Futures Contracts | Variation margin on futures contracts | $ | 127 | $ | — $ | 127 | ||||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 379 | — | 379 | ||||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 2,249 | — | 2,249 | ||||||||
Total Financial and Derivative Liabilities | 2,755 | — | 2,755 | |||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (134) | — | (134 | ) | ||||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 2,621 | $ | — $ | 2,621 | |||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Liabilities | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | ||||||||
Bank of America | $ | 2,249 | $ | — | $ | — $ | 2,249 | |||||
Bank of Montreal | 127 | 69 | — | 58 | ||||||||
BNP Paribas | 29 | 29 | — | — | ||||||||
Brown Brothers Harriman | 25 | 24 | — | 1 | ||||||||
Royal Bank of Canada | 59 | 59 | — | — | ||||||||
State Street | 86 | 86 | — | — | ||||||||
UBS | 46 | 31 | — | 15 | ||||||||
Total | $ | 2,621 | $ | 298 | $ | — $ | 2,323 | |||||
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance | ||||||||||||
Sheet collateral and adjustments made to exclude overcollateralization. | ||||||||||||
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
102 Equity Growth Strategy Fund
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Equity Growth Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 740,015 |
Investments, at fair value(>) | 773,409 | |
Cash (restricted)(a)(b) | 8,780 | |
Unrealized appreciation on foreign currency exchange contracts | 483 | |
Receivables: | ||
Investments sold | 700 | |
Fund shares sold | 408 | |
Variation margin on futures contracts | 292 | |
Total assets | 784,072 | |
Liabilities | ||
Payables: | ||
Investments purchased | 785 | |
Fund shares redeemed | 1,006 | |
Accrued fees to affiliates | 469 | |
Other accrued expenses | 68 | |
Variation margin on futures contracts | 127 | |
Unrealized depreciation on foreign currency exchange contracts | 379 | |
Total return swap contracts, at fair value(8) | 2,249 | |
Total liabilities | 5,083 | |
Net Assets | $ | 778,989 |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 103
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Equity Growth Strategy Fund
Statement of Assets and Liabilities, continued — October 31, 2015
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 2,136 | |
Accumulated net realized gain (loss) | (124,069 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | 33,394 | ||
Futures contracts | 2,020 | ||
Total return swap contracts | (2,249 | ) | |
Foreign currency-related transactions | 104 | ||
Shares of beneficial interest | 719 | ||
Additional paid-in capital | 866,934 | ||
Net Assets | $ | 778,989 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 11.26 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 11.95 | |
Class A — Net assets | $ | 206,436,061 | |
Class A — Shares outstanding ($.01 par value) | 18,331,103 | ||
Net asset value per share: Class C(#) | $ | 10.17 | |
Class C — Net assets | $ | 280,879,950 | |
Class C — Shares outstanding ($.01 par value) | 27,614,714 | ||
Net asset value per share: Class E(#) | $ | 11.01 | |
Class E — Net assets | $ | 10,664,876 | |
Class E — Shares outstanding ($.01 par value) | 968,522 | ||
Net asset value per share: Class R1(#) | $ | 11.32 | |
Class R1 — Net assets | $ | 34,770,296 | |
Class R1 — Shares outstanding ($.01 par value) | 3,071,800 | ||
Net asset value per share: Class R4(#) | $ | 11.05 | |
Class R4 — Net assets | $ | 38,242,767 | |
Class R4 — Shares outstanding ($.01 par value) | 3,460,931 | ||
Net asset value per share: Class R5(#) | $ | 10.92 | |
Class R5 — Net assets | $ | 30,620,158 | |
Class R5 — Shares outstanding ($.01 par value) | 2,803,186 | ||
Net asset value per share: Class S(#) | $ | 11.30 | |
Class S — Net assets | $ | 177,374,418 | |
Class S — Shares outstanding ($.01 par value) | 15,698,297 | ||
Amounts in thousands | |||
(>) Investments in affiliated Russell funds | $ | 773,409 | |
(8) Total return swap contracts - premiums paid (received) | $ | — | |
(a) Cash Collateral for Futures | $ | 6,800 | |
(b) Cash Collateral for Swaps | $ | 1,980 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
104 Equity Growth Strategy Fund
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Equity Growth Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 27,623 | |
Expenses | |||
Advisory fees | 1,730 | ||
Administrative fees | 368 | ||
Custodian fees | 36 | ||
Distribution fees - Class A | 557 | ||
Distribution fees - Class C | 2,304 | ||
Distribution fees - Class R5 | 102 | ||
Transfer agent fees - Class A | 446 | ||
Transfer agent fees - Class C | 614 | ||
Transfer agent fees - Class E | 37 | ||
Transfer agent fees - Class R1 | 86 | ||
Transfer agent fees - Class R4 | 95 | ||
Transfer agent fees - Class R5 | 81 | ||
Transfer agent fees - Class S | 371 | ||
Professional fees | 48 | ||
Registration fees | 120 | ||
Shareholder servicing fees - Class C | 768 | ||
Shareholder servicing fees - Class E | 46 | ||
Shareholder servicing fees - Class R4 | 119 | ||
Shareholder servicing fees - Class R5 | 102 | ||
Trustees’ fees | 22 | ||
Printing fees | 62 | ||
Miscellaneous | 29 | ||
Expenses before reductions | 8,143 | ||
Expense reductions | (1,567 | ) | |
Net expenses | 6,576 | ||
Net investment income (loss) | 21,047 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 24,863 | ||
Futures contracts | 914 | ||
Options written | (340 | ) | |
Foreign currency-related transactions | 900 | ||
Capital gain distributions from Underlying Funds | 33,658 | ||
Net realized gain (loss) | 59,995 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (97,193 | ) | |
Futures contracts | 2,020 | ||
Total return swap contracts | (2,249 | ) | |
Foreign currency-related transactions | 104 | ||
Net change in unrealized appreciation (depreciation) | (97,318 | ) | |
Net realized and unrealized gain (loss) | (37,323 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (16,276 | ) |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 105
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Equity Growth Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 21,047 | $ | 21,137 | ||
Net realized gain (loss) | 59,995 | 64,633 | ||||
Net change in unrealized appreciation (depreciation) | (97,318 | ) | (21,360 | ) | ||
Net increase (decrease) in net assets from operations | (16,276 | ) | 64,410 | |||
Distributions | ||||||
From net investment income | ||||||
Class A | (5,196 | ) | (4,936 | ) | ||
Class C | (5,914 | ) | (5,972 | ) | ||
Class E | (481 | ) | (590 | ) | ||
Class R1 | (1,335 | ) | (1,940 | ) | ||
Class R2 | — | (1,843 | ) | |||
Class R3 | — | (1,300 | ) | |||
Class R4 | (1,251 | ) | (71 | ) | ||
Class R5 | (1,037 | ) | (39 | ) | ||
Class S | (4,597 | ) | (4,296 | ) | ||
Distribution in excess | ||||||
Class A | (333 | ) | — | |||
Class C | (379 | ) | — | |||
Class E | (31 | ) | — | |||
Class R1 | (86 | ) | — | |||
Class R4 | (80 | ) | — | |||
Class R5 | (66 | ) | — | |||
Class S | (294 | ) | — | |||
Net decrease in net assets from distributions | (21,080 | ) | (20,987 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (123,235 | ) | (149,281 | ) | ||
Total Net Increase (Decrease) in Net Assets | (160,591 | ) | (105,858 | ) | ||
Net Assets | ||||||
Beginning of period | 939,580 | 1,045,438 | ||||
End of period | $ | 778,989 | $ | 939,580 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 2,136 | $ | — |
See accompanying notes which are an integral part of the financial statements.
106 Equity Growth Strategy Fund
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Equity Growth Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 1,439 | $ | 16,759 | 2,106 | $ | 24,222 | ||||||
Proceeds from reinvestment of distributions | 476 | 5,510 | 428 | 4,887 | ||||||||
Payments for shares redeemed | (3,435 | ) | (39,824 | ) | (4,203 | ) | (48,408 | ) | ||||
Net increase (decrease) | (1,520 | ) | (17,555 | ) | (1,669 | ) | (19,299 | ) | ||||
Class C | ||||||||||||
Proceeds from shares sold | 2,861 | 29,995 | 4,395 | 45,746 | ||||||||
Proceeds from reinvestment of distributions | 593 | 6,228 | 570 | 5,897 | ||||||||
Payments for shares redeemed | (6,578 | ) | (69,011 | ) | (6,685 | ) | (69,992 | ) | ||||
Net increase (decrease) | (3,124 | ) | (32,788 | ) | (1,720 | ) | (18,349 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 232 | 2,644 | 383 | 4,297 | ||||||||
Proceeds from reinvestment of distributions | 45 | 510 | 53 | 588 | ||||||||
Payments for shares redeemed | (1,315 | ) | (15,020 | ) | (1,156 | ) | (12,993 | ) | ||||
Net increase (decrease) | (1,038 | ) | (11,866 | ) | (720 | ) | (8,108 | ) | ||||
Class R1 | ||||||||||||
Proceeds from shares sold | 616 | 7,173 | 900 | 10,457 | ||||||||
Proceeds from reinvestment of distributions | 122 | 1,421 | 169 | 1,940 | ||||||||
Payments for shares redeemed | (3,268 | ) | (37,665 | ) | (3,231 | ) | (37,049 | ) | ||||
Net increase (decrease) | (2,530 | ) | (29,071 | ) | (2,162 | ) | (24,652 | ) | ||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 794 | 9,007 | ||||||||
Proceeds from reinvestment of distributions | — | — | 164 | 1,843 | ||||||||
Payments for shares redeemed | — | — | (9,379 | ) | (106,077 | ) | ||||||
Net increase (decrease) | — | — | (8,421 | ) | (95,227 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 547 | 6,123 | ||||||||
Proceeds from reinvestment of distributions | — | — | 118 | 1,300 | ||||||||
Payments for shares redeemed | — | — | (7,101 | ) | (78,999 | ) | ||||||
Net increase (decrease) | — | — | (6,436 | ) | (71,576 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 601 | 6,877 | 5,079 | 57,055 | ||||||||
Proceeds from reinvestment of distributions | 117 | 1,331 | 6 | 71 | ||||||||
Payments for shares redeemed | (2,229 | ) | (25,526 | ) | (113 | ) | (1,277 | ) | ||||
Net increase (decrease) | (1,511 | ) | (17,318 | ) | 4,972 | 55,849 | ||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 302 | 3,406 | 4,796 | 53,263 | ||||||||
Proceeds from reinvestment of distributions | 98 | 1,103 | 4 | 39 | ||||||||
Payments for shares redeemed | (2,268 | ) | (25,618 | ) | (129 | ) | (1,418 | ) | ||||
Net increase (decrease) | (1,868 | ) | (21,109 | ) | 4,671 | 51,884 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 5,110 | 60,171 | 3,281 | 37,891 | ||||||||
Proceeds from reinvestment of distributions | 385 | 4,470 | 362 | 4,148 | ||||||||
Payments for shares redeemed | (5,018 | ) | (58,169 | ) | (5,357 | ) | (61,842 | ) | ||||
Net increase (decrease) | 477 | 6,472 | (1,714 | ) | (19,803 | ) | ||||||
Total increase (decrease) | (11,114 | ) | $ | (123,235 | ) | (13,199 | ) | $ | (149,281 | ) |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 107
Russell Investment Company
Equity Growth Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||||||
$ | |||||||||||||||||
$ | Net | $ | $ | $ | |||||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | $ | ||||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | Distributions in | ||||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Excess | ||||||||||||
Class A | |||||||||||||||||
October 31, 2015 | 11.75 | .32 | (.53 | ) | (.21 | ) | (.26 | ) | (.02 | ) | |||||||
October 31, 2014 | 11.24 | .26 | .49 | .75 | (.24 | ) | — | ||||||||||
October 31, 2013 | 9.50 | .12 | 1.75 | 1.87 | (.13 | ) | — | ||||||||||
October 31, 2012 | 8.93 | .15 | .54 | .69 | (.12 | ) | — | ||||||||||
October 31, 2011 | 9.00 | .14 | (.09 | ) | .05 | (.12 | ) | — | |||||||||
Class C | |||||||||||||||||
October 31, 2015 | 10.64 | .17 | (.43 | ) | (.26 | ) | (.20 | ) | (.01 | ) | |||||||
October 31, 2014 | 10.23 | .14 | .46 | .60 | (.19 | ) | — | ||||||||||
October 31, 2013 | 8.69 | .04 | 1.59 | 1.63 | (.09 | ) | — | ||||||||||
October 31, 2012 | 8.21 | .07 | .51 | .58 | (.10 | ) | — | ||||||||||
October 31, 2011 | 8.34 | .07 | (.09 | ) | (.02 | ) | (.11 | ) | — | ||||||||
Class E | |||||||||||||||||
October 31, 2015 | 11.49 | .34 | (.54 | ) | (.20 | ) | (.26 | ) | (.02 | ) | |||||||
October 31, 2014 | 10.99 | .26 | .48 | .74 | (.24 | ) | — | ||||||||||
October 31, 2013 | 9.30 | .13 | 1.69 | 1.82 | (.13 | ) | — | ||||||||||
October 31, 2012 | 8.75 | .14 | .53 | .67 | (.12 | ) | — | ||||||||||
October 31, 2011 | 8.81 | .20 | (.14 | ) | .06 | (.12 | ) | — | |||||||||
Class R1 | |||||||||||||||||
October 31, 2015 | 11.81 | .44 | (.60 | ) | (.16 | ) | (.31 | ) | (.02 | ) | |||||||
October 31, 2014 | 11.29 | .34 | .46 | .80 | (.28 | ) | — | ||||||||||
October 31, 2013 | 9.53 | .15 | 1.77 | 1.92 | (.16 | ) | — | ||||||||||
October 31, 2012 | 8.95 | .18 | .55 | .73 | (.15 | ) | — | ||||||||||
October 31, 2011 | 8.99 | .16 | (.08 | ) | .08 | (.12 | ) | — | |||||||||
Class R4(3) | |||||||||||||||||
October 31, 2015 | 11.53 | .34 | (.52 | ) | (.18 | ) | (.28 | ) | (.02 | ) | |||||||
October 31, 2014 | 11.03 | .30 | .45 | .75 | (.25 | ) | — | ||||||||||
October 31, 2013 | 9.32 | .14 | 1.71 | 1.85 | (.14 | ) | — | ||||||||||
October 31, 2012 | 8.77 | .16 | .52 | .68 | (.13 | ) | — | ||||||||||
October 31, 2011 | 8.82 | .09 | (.02 | ) | .07 | (.12 | ) | — | |||||||||
Class R5(4) | |||||||||||||||||
October 31, 2015 | 11.40 | .32 | (.53 | ) | (.21 | ) | (.25 | ) | (.02 | ) | |||||||
October 31, 2014 | 10.91 | .26 | .45 | .71 | (.22 | ) | — | ||||||||||
October 31, 2013 | 9.23 | .11 | 1.69 | 1.80 | (.12 | ) | — | ||||||||||
October 31, 2012 | 8.68 | .16 | .51 | .67 | (.12 | ) | — | ||||||||||
October 31, 2011 | 8.76 | .13 | (.09 | ) | .04 | (.12 | ) | — | |||||||||
Class S | |||||||||||||||||
October 31, 2015 | 11.79 | .33 | (.51 | ) | (.18 | ) | (.29 | ) | (.02 | ) | |||||||
October 31, 2014 | 11.27 | .30 | .48 | .78 | (.26 | ) | — | ||||||||||
October 31, 2013 | 9.52 | .15 | 1.75 | 1.90 | (.15 | ) | — | ||||||||||
October 31, 2012 | 8.95 | .17 | .54 | .71 | (.14 | ) | — | ||||||||||
October 31, 2011 | 9.00 | .17 | (.10 | ) | .07 | (.12 | ) | — | |||||||||
See accompanying notes which are an integral part of the financial statements.
108 Equity Growth Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(d) | (000 | ) | Gross(g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | |||||||||
(.28 | ) | 11.26 | (1.80 | ) | 206,436 | .73 | .56 | 2.72 | 47 | ||||||||
(.24 | ) | 11.75 | 6.70 | 233,233 | .72 | .56 | 2.28 | 23 | |||||||||
(.13 | ) | 11.24 | 19.86 | 241,814 | .71 | .57 | 1.17 | 14 | |||||||||
(.12 | ) | 9.50 | 7.90 | 218,585 | .71 | .56 | 1.61 | 24 | |||||||||
(.12 | ) | 8.93 | .46 | 232,317 | .74 | .55 | 1.52 | 7 | |||||||||
(.21 | ) | 10.17 | (2.51 | ) | 280,881 | 1.48 | 1.31 | 1.60 | 47 | ||||||||
(.19 | ) | 10.64 | 5.87 | 327,125 | 1.47 | 1.31 | 1.37 | 23 | |||||||||
(.09 | ) | 10.23 | 18.95 | 331,940 | 1.46 | 1.32 | .42 | 14 | |||||||||
(.10 | ) | 8.69 | 7.12 | 311,910 | 1.46 | 1.31 | .86 | 24 | |||||||||
(.11 | ) | 8.21 | (.34 | ) | 347,822 | 1.49 | 1.30 | .76 | 7 | ||||||||
(.28 | ) | 11.01 | (1.78 | ) | 10,665 | .73 | .56 | 3.01 | 47 | ||||||||
(.24 | ) | 11.49 | 6.76 | 23,055 | .72 | .56 | 2.35 | 23 | |||||||||
(.13 | ) | 10.99 | 19.74 | 29,977 | .72 | .57 | 1.29 | 14 | |||||||||
(.12 | ) | 9.30 | 7.84 | 42,548 | .71 | .56 | 1.60 | 24 | |||||||||
(.12 | ) | 8.75 | .59 | 56,276 | .73 | .55 | 2.12 | 7 | |||||||||
(.33 | ) | 11.32 | (1.45 | ) | 34,770 | .48 | .21 | 3.81 | 47 | ||||||||
(.28 | ) | 11.81 | 7.17 | 66,147 | .47 | .17 | 2.97 | 23 | |||||||||
(.16 | ) | 11.29 | 20.37 | 87,682 | .46 | .17 | 1.40 | 14 | |||||||||
(.15 | ) | 9.53 | 8.29 | 64,614 | .46 | .14 | 1.95 | 24 | |||||||||
(.12 | ) | 8.95 | .87 | 53,489 | .49 | .12 | 1.76 | 7 | |||||||||
(.30 | ) | 11.05 | (1.66 | ) | 38,243 | .73 | .46 | 3.02 | 47 | ||||||||
(.25 | ) | 11.53 | 6.87 | 57,343 | .72 | .42 | 2.61 | 23 | |||||||||
(.14 | ) | 11.03 | 20.07 | 92,890 | .71 | .42 | 1.34 | 14 | |||||||||
(.13 | ) | 9.32 | 7.94 | 88,307 | .71 | .39 | 1.83 | 24 | |||||||||
(.12 | ) | 8.77 | .75 | 85,039 | .75 | .37 | .96 | 7 | |||||||||
(.27 | ) | 10.92 | (1.94 | ) | 30,620 | .98 | .71 | 2.87 | 47 | ||||||||
(.22 | ) | 11.40 | 6.61 | 53,253 | .97 | .67 | 2.34 | 23 | |||||||||
(.12 | ) | 10.91 | 19.71 | 70,233 | .97 | .67 | 1.14 | 14 | |||||||||
(.12 | ) | 9.23 | 7.81 | 78,384 | .96 | .64 | 1.78 | 24 | |||||||||
(.12 | ) | 8.68 | .37 | 239,637 | .99 | .62 | 1.47 | 7 | |||||||||
(.31 | ) | 11.30 | (1.54 | ) | 177,374 | .48 | .31 | 2.84 | 47 | ||||||||
(.26 | ) | 11.79 | 7.04 | 179,424 | .47 | .31 | 2.56 | 23 | |||||||||
(.15 | ) | 11.27 | 20.15 | 190,902 | .46 | .32 | 1.46 | 14 | |||||||||
(.14 | ) | 9.52 | 8.06 | 192,200 | .47 | .31 | 1.82 | 24 | |||||||||
(.12 | ) | 8.95 | .74 | 179,547 | .49 | .30 | 1.81 | 7 |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 109
Russell Investment Company
2020 Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
2020 Strategy Fund - Class A‡ | 2020 Strategy Fund - Class R5‡‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (5.20 | )% | 1 Year | 0.38 | % | ||
5 Years | 4.07 | %§ | 5 Years | 5.05 | %§ | ||
10 Years | 4.20 | %§ | 10 Years | 4.58 | %§ | ||
2020 Strategy Fund - Class E | 2020 Strategy Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.52 | % | 1 Year | 0.78 | % | ||
5 Years | 5.35 | %§ | 5 Years | 5.57 | %§ | ||
10 Years | 4.85 | %§ | 10 Years | 5.09 | %§ | ||
2020 Strategy Fund - Class R1‡‡ | Barclays U.S. Aggregate Bond Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.78 | % | 1 Year | 1.96 | % | ||
5 Years | 5.57 | %§ | 5 Years | 3.03 | %§ | ||
10 Years | 5.09 | %§ | 10 Years | 4.72 | %§ | ||
2020 Strategy Fund - Class R4‡‡‡ | |||||||
Total | |||||||
Return | |||||||
1 Year | 0.52 | % | |||||
5 Years | 5.32 | %§ | |||||
10 Years | 4.83 | %§ |
110 2020 Strategy Fund
Russell Investment Company
2020 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The 2020 Strategy Fund (the “Fund”) is a fund of funds that | The fiscal year ended October 31, 2015 was characterized by |
invests in other Russell Investment Company mutual funds (the | slowing global growth and commodity price weakness. Overall, |
“Underlying Funds”). The Underlying Funds employ a multi- | this was modestly positive for fixed income assets, as yields fell. |
manager approach whereby portions of the Underlying Funds | However, the Fund’s exposure to the fixed income asset class had |
are allocated to different money managers. Underlying Fund | a modestly negative effect on benchmark-relative performance |
assets not allocated to money managers are managed by Russell | due to the Fund’s allocation to the Russell Global Opportunistic |
Investment Management Company (“RIMCo”), the Fund’s and | Credit Fund and the Russell Short Duration Bond Fund. The |
Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | Fund’s strategic exposure to U.S. equities and global real estate |
advisor, may change the allocation of the Underlying Funds’ | was positive, as these asset classes outperformed fixed income. |
assets among money managers at any time. An exemptive order | It was a mixed equity market for the fiscal year ending October |
from the Securities and Exchange Commission (“SEC”) permits | 31, 2015. U.S. stocks (as measured by the Russell 3000® Index) |
RIMCo to engage or terminate a money manager in an Underlying | returned 4.49% over the period, while non-U.S. equities returned |
Fund at any time, subject to approval by the Underlying Fund’s | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap |
Board, without a shareholder vote. Pursuant to the terms of the | Index) and emerging markets returned -13.58% (as measured by |
exemptive order, an Underlying Fund is required to notify its | the Russell Emerging Markets Index). The underperformance of |
shareholders within 90 days of when a money manager begins | non-U.S. equities versus fixed income was a key negative driver |
providing services. | to the Fund’s benchmark-relative performance, as fixed income |
What is the Fund’s investment objective? | markets finished at 1.96% for the fiscal year as measured by the |
The Fund seeks to provide capital growth and income consistent | Fund’s benchmark. |
with its current asset allocation which will change over time, with | Within alternative strategies, commodities exposure had the |
an increasing allocation to fixed income funds. | largest negative impact on the Fund, as the asset class (as |
The Fund pursues this objective by investing in a diversified | measured by the Bloomberg Commodity Index Total Return) lost |
portfolio that, as of October 31, 2015, consisted of approximately | 25.72% during the period, significantly underperforming fixed |
36.9% equity Underlying Funds, 56.2% fixed income Underlying | income. Global REITs and listed infrastructure (as represented by |
Funds and 6.9% alternative Underlying Funds. The Fund’s | the FTSE EPRA/NAREIT Developed Real Estate Index (Net) and |
allocation to fixed income Underlying Funds will be fixed at | S&P Global Infrastructure Index (Net)) finished the fiscal year up |
66.3% in approximately the year 2020. | 2.68% and down 6.29% respectively. REITs outperformed fixed |
income markets, which was beneficial to the Fund’s performance | |
How did the Fund perform relative to its benchmark for the | through its allocation to the Russell Global Real Estate Securities |
fiscal year ended October 31, 2015? | Fund. Infrastructure underperformed fixed income, which |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | negatively impacted the Fund through its allocation to the Russell |
Class E, Class R1, Class R4, Class R5 and Class S Shares gained | Global Infrastructure Fund. |
0.59%, 0.52%, 0.78%, 0.52%, 0.38% and 0.78%, respectively. | |
This is compared to the Fund’s primary benchmark, the Barclays | How did the investment strategies and techniques employed |
U.S. Aggregate Bond Index, which gained 1.96% during the same | by the Fund and the Underlying Funds affect the Fund’s |
period. The Fund’s performance includes operating expenses, | performance? |
whereas index returns are unmanaged and do not include | The Fund is a fund of funds and its performance is based on |
expenses of any kind. | RIMCo’s strategic asset allocations and the performance of the |
Underlying Funds in which the Fund invests. | |
For the fiscal year ended October 31, 2015, the Morningstar® | |
Target Date 2016-2020 gained 0.21%. This result serves as a | The Fund’s strategic allocation to fixed income Underlying |
peer comparison and is expressed net of operating expenses. | Funds generally had a negative impact on its benchmark-relative |
performance. Allocations to the Russell Global Opportunistic | |
The Fund’s underperformance relative to the Barclays U.S. | Credit Fund and Russell Short Duration Bond Fund detracted, as |
Aggregate Bond Index was due to the Fund’s allocation to non- | these Underlying Funds underperformed the Fund’s benchmark. |
U.S. equity Underlying Funds, which underperformed fixed | From an active management perspective, the Russell Global |
income Underlying Funds over the period. | Opportunistic Credit Fund underperformed its benchmark largely |
How did the market conditions described in the Market | because of an ex-benchmark allocation to local currency emerging |
Summary report affect the Fund’s performance? | market debt and the associated currency risk as the U.S. dollar |
appreciated strongly versus emerging market currencies. The |
2020 Strategy Fund 111
Russell Investment Company
2020 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Russell Short Duration Bond Fund underperformed its benchmark | underlying money managers. The Russell Commodity Strategies | |
due mostly to ex-benchmark corporate credit exposure, as this | Fund underperformed its benchmark due largely to exposure to | |
sector saw the largest drawdowns during the period. Allocations | the energy sector. | |
to the Russell Strategic Bond Fund and Russell Investment Grade | ||
Bond Fund were slightly positive from a benchmark-relative | Describe any changes to the Fund’s structure or allocation | |
perspective. While both Funds were negatively impacted by their | to the Underlying Funds. | |
overweight to credit, currency positioning drove excess return. | RIMCo has the discretion to vary the Fund’s actual allocation from | |
the target strategic asset allocation by up to +/- 5% at the equity, | ||
With respect to the Fund’s global equity exposure, the Fund’s | fixed income or alternative category level based on RIMCo’s | |
strategic allocation to the Russell Global Equity Fund positively | capital markets research. RIMCo’s asset allocation modifications | |
impacted the Fund’s benchmark-relative performance, while its | benefited the Fund’s performance relative to the Fund’s target | |
allocation to the Select International Equity Fund and the Russell | strategic asset allocation. | |
Emerging Markets Fund detracted. From an active management | ||
standpoint, performance of these Underlying Funds was mixed. | On November 21, 2014, RIMCo reduced the Fund’s overweight to | |
An underweight to energy and an overweight to consumer | the Russell Global Equity Fund by 1.30%. This was offset by a | |
discretionary in the Russell Global Equity Fund contributed to the | 1.00% increase to the Russell Global Opportunistic Credit Fund | |
Fund’s outperformance of its respective benchmark. A valuation | and 0.30% increase to the Russell Commodity Strategies Fund. | |
bias in the Select International Equity Fund led to benchmark- | This position was implemented after strong performance in the | |
relative underperformance as lower price-to-book stocks strongly | equity market and to position the Fund for rising interest rates. | |
underperformed. For the Russell Emerging Markets Fund, | On December 31, 2014, RIMCo modified the Fund’s target | |
unsuccessful stock selection in China and Brazil and was the | strategic asset allocation and as a result, the Fund increased its | |
main driver of the Fund’s underperformance. Chinese stocks fell | exposure to fixed income Underlying Funds and decreased its | |
sharply and broader emerging markets also lost significant value | exposure to equity and alternative Underlying Funds. | |
during the period due to growth concerns. | On February 19, 2015, RIMCo removed the Fund’s overweight to | |
The Fund’s strategic allocation to U.S. large cap equity Underlying | U.S. equities by reducing the Fund’s allocation to the Select U.S. | |
Funds benefited the Fund’s benchmark-relative performance, | Equity Fund by 0.30%. This was offset by a 0.30% increase in | |
as broad U.S. equities outperformed core fixed income during | the Fund’s allocation to the Russell Commodity Strategies Fund, | |
the period. However, most of the U.S. equity Underlying Funds | which neutralized the previous underweight to commodities. This | |
underperformed their respective U.S. equity market segment as | position was implemented after strong U.S. equity performance | |
represented by their respective primary benchmark. From an | and a sharp decline in commodities. | |
active management perspective, the Select U.S. Equity Fund | On August 10, 2015, RIMCo reduced the Fund’s allocation to | |
underperformed the Russell 1000® Index due to an underweight to | the Russell Emerging Markets Fund by 0.50% as concerns | |
growth stocks, which outperformed during the period. In addition, | over emerging markets growth intensified. This was offset by an | |
the Fund’s strategic allocation to the Russell U.S. Small Cap | increase in the allocation to large cap developed equities through | |
Equity Fund also detracted from the Fund’s benchmark-relative | a 0.30% increase in the Fund’s allocation to the Select U.S. | |
performance, as U.S. small cap equity generally underperformed | Equity Fund and a 0.20% increase in the Fund’s allocation to the | |
core fixed income and the Underlying Fund underperformed its | Select International Equity Fund. | |
Russell 2000® Index benchmark due to an overweight to micro- | ||
capitalization stocks which underperformed during the period. | The views expressed in this report reflect those of the portfolio | |
The Fund’s strategic allocation to alternative Underlying | managers only through the end of the period covered by | |
Funds generally had a negative impact on benchmark- | the report. These views do not necessarily represent the | |
relative performance as commodities and global infrastructure | views of RIMCo, or any other person in RIMCo or any other | |
underperformed the Fund’s benchmark. From an active | affiliated organization. These views are subject to change | |
management standpoint, performance of these Underlying | at any time based upon market conditions or other events, | |
Funds was mixed. The Russell Global Infrastructure Fund and | and RIMCo disclaims any responsibility to update the views | |
the Russell Global Real Estate Securities Fund outperformed | contained herein. These views should not be relied on as | |
their respective benchmarks while the Russell Commodity | investment advice and, because investment decisions for | |
Strategies Fund underperformed its benchmark. The Russell | a Russell Investment Company (“RIC”) Fund are based on | |
Global Infrastructure Fund and the Russell Global Real Estate | numerous factors, should not be relied on as an indication | |
Securities Fund both benefited from strong stock selection by | of investment decisions of any RIC Fund. |
112 2020 Strategy Fund
Russell Investment Company
2020 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* Assumes initial investment on November 1, 2005.
** The Barclays U.S. Aggregate Bond Index is an index, with income reinvested, generally representative of intermediate-term government bonds, investment grade
corporate debt securities and mortgage-backed securities.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
‡‡ The Fund first issued Class R1 Shares on June 7, 2006. The returns shown for Class R1 Shares prior to that date are the returns of the Fund’s Class S Shares.
‡‡‡ The Fund first issued Class R4 Shares on October 1, 2014. The returns shown for Class R4 Shares prior to that date are the returns of the Fund's Class E Shares
from January 3, 2005 to September 7, 2006 and the returns of Class R2 Shares from September 8, 2006 to September 30, 2014.
‡‡‡‡ The Fund first issued Class R5 Shares on October 1, 2014. The returns shown for Class R5 Shares prior to that date are the returns of the Fund’s Class R3
Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
2020 Strategy Fund 113
Russell Investment Company
2020 Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Hypothetical | |||||
The following disclosure provides important information | Performance (5% | |||||
Actual | return before | |||||
regarding the Fund’s Shareholder Expense Example | Class A | Performance | expenses) | |||
(“Example”). | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Example | Ending Account Value | |||||
As a shareholder of the Fund, you incur ongoing costs, including | October 31, 2015 | $ | 977.60 | $ | 1,023.95 | |
distribution (12b-1) and/or service fees and other Fund expenses. | Expenses Paid During Period* | $ | 1.25 | $ | 1.28 | |
The Example is intended to help you understand your ongoing | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
costs (in dollars) of investing in the Fund and to compare these | (representing the six month period annualized), multiplied by the average | |||||
costs with the ongoing costs of investing in other mutual funds. | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | ||||||
The Example is based on an investment of $1,000 invested at the | ||||||
beginning of the period and held for the entire period indicated, | Hypothetical | |||||
which for this Fund is from May 1, 2015 to October 31, 2015. | Performance (5% | |||||
Actual | return before | |||||
Actual Expenses | Class E | Performance | expenses) | |||
Beginning Account Value | ||||||
The information in the table under the heading “Actual | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Performance” provides information about actual account values | Ending Account Value | |||||
and actual expenses. You may use the information in this column, | October 31, 2015 | $ | 977.60 | $ | 1,023.95 | |
together with the amount you invested, to estimate the expenses | Expenses Paid During Period* | $ | 1.25 | $ | 1.28 | |
that you paid over the period. Simply divide your account value by | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | (representing the six month period annualized), multiplied by the average | |||||
= 8.6), then multiply the result by the number in the first column | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
in the row entitled “Expenses Paid During Period” to estimate | year period). | |||||
the expenses you paid on your account during this period. | Hypothetical | |||||
Performance (5% | ||||||
Hypothetical Example for Comparison Purposes | Actual | return before | ||||
The information in the table under the heading “Hypothetical | Class R1 | Performance | expenses) | |||
Performance (5% return before expenses)” provides information | Beginning Account Value | |||||
about hypothetical account values and hypothetical expenses | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
based on the Fund’s actual expense ratio and an assumed rate of | October 31, 2015 | $ | 978.80 | $ | 1,025.21 | |
return of 5% per year before expenses, which is not the Fund’s | Expenses Paid During Period* | $ | — | $ | — | |
actual return. The hypothetical account values and expenses | ||||||
may not be used to estimate the actual ending account balance or | * There were no expenses charged to the Class. | |||||
expenses you paid for the period. You may use this information | Hypothetical | |||||
to compare the ongoing costs of investing in the Fund and other | Performance (5% | |||||
funds. To do so, compare this 5% hypothetical example with the | Actual | return before | ||||
Class R4 | Performance | expenses) | ||||
5% hypothetical examples that appear in the shareholder reports | Beginning Account Value | |||||
of other funds. | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Please note that the expenses shown in the table are meant | Ending Account Value | |||||
to highlight your ongoing costs only and do not reflect any | October 31, 2015 | $ | 977.50 | $ | 1,023.95 | |
Expenses Paid During Period* | $ | 1.25 | $ | 1.28 | ||
transactional costs. Therefore, the information under the heading | ||||||
“Hypothetical Performance (5% return before expenses)” is | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
useful in comparing ongoing costs only, and will not help you | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
determine the relative total costs of owning different funds. In | year period). | |||||
addition, if these transactional costs were included, your costs | ||||||
would have been higher. |
114 2020 Strategy Fund
Russell Investment Company
2020 Strategy Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class R5 | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 977.00 | $ | 1,022.68 | |
Expenses Paid During Period* | $ | 2.49 | $ | 2.55 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.50% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 978.80 | $ | 1,025.21 | |
Expenses Paid During Period* | $ | — | $ | — | |
* There were no expenses charged to the Class. |
2020 Strategy Fund 115
Russell Investment Company
2020 Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||
Fair | ||||
Value | ||||
Shares | $ | |||
Investments in Russell Affiliated Mutual Funds - 100.0% | ||||
Alternative - 6.3% | ||||
Russell Commodity Strategies Fund Class Y | 295,236 | 1,677 | ||
Russell Global Infrastructure Fund Class Y | 126,080 | 1,442 | ||
Russell Global Real Estate Securities Fund Class Y | 37,548 | 1,442 | ||
4,561 | ||||
Domestic Equities - 19.8% | ||||
Russell U.S. Defensive Equity Fund Class Y | 39,176 | 1,871 | ||
Russell U.S. Dynamic Equity Fund Class Y | 113,382 | 1,288 | ||
Russell U.S. Small Cap Equity Fund Class Y | 72,344 | 2,072 | ||
Select U.S. Equity Fund Class Y | 848,002 | 9,107 | ||
14,338 | ||||
Fixed Income - 57.2% | ||||
Russell Global Opportunistic Credit Fund Class Y | 333,066 | 3,044 | ||
Russell Investment Grade Bond Fund Class Y | 454,716 | 10,104 | ||
Russell Short Duration Bond Fund Class Y | 246,996 | 4,720 | ||
Russell Strategic Bond Fund Class Y | 2,157,711 | 23,584 | ||
41,452 | ||||
International Equities - 16.7% | ||||
Russell Emerging Markets Fund Class Y | 115,855 | 1,766 | ||
Russell Global Equity Fund Class Y | 316,218 | 3,630 | ||
Select International Equity Fund Class Y | 739,043 | 6,747 | ||
12,143 | ||||
Total Investments in Russell Affiliated Mutual Funds | ||||
(cost $63,292) | 72,494 | |||
Total Investments 100.0% | ||||
(identified cost $63,292) | 72,494 | |||
Other Assets and Liabilities, Net - (0.0%) | (7 | ) | ||
Net Assets - 100.0% | 72,487 |
Presentation of Portfolio Holdings | ||||||||||
Amounts in thousands | ||||||||||
Fair Value | ||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||
Investments in Russell Affiliated Mutual Funds | $ | 72,494 | $ | — | $ | — | $ | 72,494 | 100.0 | |
Total Investments | 72,494 | — | — | 72,494 | 100.0 | |||||
Other Assets and Liabilities, Net | (—)* | |||||||||
100.0 | ||||||||||
* Less than .05% of net assets. | ||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
116 2020 Strategy Fund
Russell Investment Company
2020 Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | |||
Assets | |||
Investments, at identified cost | $ | 63,292 | |
Investments, at fair value(>) | 72,494 | ||
Receivables: | |||
Investments sold | 17 | ||
Fund shares sold | 31 | ||
Total assets | 72,542 | ||
Liabilities | |||
Payables: | |||
Fund shares redeemed | 45 | ||
Accrued fees to affiliates | 10 | ||
Total liabilities | 55 | ||
Net Assets | $ | 72,487 | |
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 1 | |
Accumulated net realized gain (loss) | 5,644 | ||
Unrealized appreciation (depreciation) on investments | 9,202 | ||
Shares of beneficial interest | 85 | ||
Additional paid-in capital | 57,555 | ||
Net Assets | $ | 72,487 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class A(#) | $ | 8.51 | |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 9.03 | |
Class A — Net assets | $ | 252,717 | |
Class A — Shares outstanding ($.01 par value) | 29,710 | ||
Net asset value per share: Class E(#) | $ | 8.52 | |
Class E — Net assets | $ | 1,946,950 | |
Class E — Shares outstanding ($.01 par value) | 228,574 | ||
Net asset value per share: Class R1(#) | $ | 8.50 | |
Class R1 — Net assets | $ | 38,454,749 | |
Class R1 — Shares outstanding ($.01 par value) | 4,524,466 | ||
Net asset value per share: Class R4(#) | $ | 8.50 | |
Class R4 — Net assets | $ | 9,340,519 | |
Class R4 — Shares outstanding ($.01 par value) | 1,099,189 | ||
Net asset value per share: Class R5(#) | $ | 8.49 | |
Class R5 — Net assets | $ | 16,268,939 | |
Class R5 — Shares outstanding ($.01 par value) | 1,917,214 | ||
Net asset value per share: Class S(#) | $ | 8.50 | |
Class S — Net assets | $ | 6,223,191 | |
Class S — Shares outstanding ($.01 par value) | 732,171 | ||
Amounts in thousands | |||
(>) Investments in affiliated Russell funds | $ | 72,494 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
2020 Strategy Fund 117
Russell Investment Company
2020 Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 2,470 | |
Expenses | |||
Distribution fees - Class A | 1 | ||
Distribution fees - Class R5 | 60 | ||
Shareholder servicing fees - Class E | 5 | ||
Shareholder servicing fees - Class R4 | 29 | ||
Shareholder servicing fees - Class R5 | 60 | ||
Total expenses | 155 | ||
Net investment income (loss) | 2,315 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 5,175 | ||
Capital gain distributions from Underlying Funds | 1,169 | ||
Net realized gain (loss) | 6,344 | ||
Net change in unrealized appreciation (depreciation) on investments | (7,746 | ) | |
Net realized and unrealized gain (loss) | (1,402 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | 913 |
See accompanying notes which are an integral part of the financial statements.
118 2020 Strategy Fund
Russell Investment Company
2020 Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 2,315 | $ | 3,232 | ||
Net realized gain (loss) | 6,344 | 30,677 | ||||
Net change in unrealized appreciation (depreciation) | (7,746 | ) | (24,957 | ) | ||
Net increase (decrease) in net assets from operations | 913 | 8,952 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (10 | ) | (21 | ) | ||
Class E | (47 | ) | (42 | ) | ||
Class R1 | (1,192 | ) | (1,711 | ) | ||
Class R2 | — | (244 | ) | |||
Class R3 | — | (750 | ) | |||
Class R4 | (280 | ) | (32 | ) | ||
Class R5 | (561 | ) | (69 | ) | ||
Class S | (226 | ) | (362 | ) | ||
From net realized gain | ||||||
Class A | (152 | ) | (28 | ) | ||
Class E | (577 | ) | (42 | ) | ||
Class R1 | (12,846 | ) | (1,733 | ) | ||
Class R2 | — | (289 | ) | |||
Class R3 | — | (1,084 | ) | |||
Class R4 | (3,500 | ) | — | |||
Class R5 | (8,665 | ) | — | |||
Class S | (2,714 | ) | (389 | ) | ||
Net decrease in net assets from distributions | (30,770 | ) | (6,796 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (12,169 | ) | (81,283 | ) | ||
Total Net Increase (Decrease) in Net Assets | (42,026 | ) | (79,127 | ) | ||
Net Assets | ||||||
Beginning of period | 114,513 | 193,640 | ||||
End of period | $ | 72,487 | $ | 114,513 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 1 | $ | 2 |
See accompanying notes which are an integral part of the financial statements.
2020 Strategy Fund 119
Russell Investment Company
2020 Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | — | $ | — | — | $ | — | ||||||
Proceeds from reinvestment of distributions | 19 | 160 | 4 | 49 | ||||||||
Payments for shares redeemed | (34 | ) | (290 | ) | (82 | ) | (977 | ) | ||||
Net increase (decrease) | (15 | ) | (130 | ) | (78 | ) | (928 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 31 | 268 | 31 | 372 | ||||||||
Proceeds from reinvestment of distributions | 73 | 624 | 7 | 84 | ||||||||
Payments for shares redeemed | (66 | ) | (654 | ) | (35 | ) | (419 | ) | ||||
Net increase (decrease) | 38 | 238 | 3 | 37 | ||||||||
Class R1 | ||||||||||||
Proceeds from shares sold | 2,175 | 19,668 | 1,226 | 14,626 | ||||||||
Proceeds from reinvestment of distributions | 1,634 | 14,022 | 293 | 3,442 | ||||||||
Payments for shares redeemed | (3,517 | ) | (33,000 | ) | (5,079 | ) | (60,796 | ) | ||||
Net increase (decrease) | 292 | 690 | (3,560 | ) | (42,728 | ) | ||||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 416 | 4,962 | ||||||||
Proceeds from reinvestment of distributions | — | — | 46 | 533 | ||||||||
Payments for shares redeemed | — | — | (1,902 | ) | (22,754 | ) | ||||||
Net increase (decrease) | — | — | (1,440 | ) | (17,259 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 711 | 8,460 | ||||||||
Proceeds from reinvestment of distributions | — | — | 157 | 1,834 | ||||||||
Payments for shares redeemed | — | — | (5,849 | ) | (69,696 | ) | ||||||
Net increase (decrease) | — | — | (4,981 | ) | (59,402 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 182 | 1,623 | 1,066 | 12,744 | ||||||||
Proceeds from reinvestment of distributions | 440 | 3,780 | 3 | 32 | ||||||||
Payments for shares redeemed | (584 | ) | (5,210 | ) | (8 | ) | (91 | ) | ||||
Net increase (decrease) | 38 | 193 | 1,061 | 12,685 | ||||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 637 | 5,959 | 3,176 | 37,886 | ||||||||
Proceeds from reinvestment of distributions | 1,076 | 9,226 | 6 | 69 | ||||||||
Payments for shares redeemed | (2,889 | ) | (27,154 | ) | (89 | ) | (1,068 | ) | ||||
Net increase (decrease) | (1,176 | ) | (11,969 | ) | 3,093 | 36,887 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 161 | 1,447 | 223 | 2,666 | ||||||||
Proceeds from reinvestment of distributions | 342 | 2,935 | 64 | 751 | ||||||||
Payments for shares redeemed | (612 | ) | (5,573 | ) | (1,169 | ) | (13,992 | ) | ||||
Net increase (decrease) | (109 | ) | (1,191 | ) | (882 | ) | (10,575 | ) | ||||
Total increase (decrease) | (932 | ) | $ | (12,169 | ) | (6,784 | ) | $ | (81,283 | ) |
See accompanying notes which are an integral part of the financial statements.
120 2020 Strategy Fund
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Russell Investment Company
2020 Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||||
$ | |||||||||||||||
$ | Net | $ | $ | $ | $ | ||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | ||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | ||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||
Class A | |||||||||||||||
October 31, 2015 | 12.11 | .28 | (.21 | ) | .07 | (.25 | ) | (3.42 | ) | ||||||
October 31, 2014 | 11.92 | .27 | .37 | .64 | (.22 | ) | (.23 | ) | |||||||
October 31, 2013 | 11.17 | .24 | .80 | 1.04 | (.29 | ) | — | ||||||||
October 31, 2012 | 10.55 | .32 | .54 | .86 | (.24 | ) | — | ||||||||
October 31, 2011 | 10.63 | .42 | (.11 | ) | .31 | (.39 | ) | — | |||||||
Class E | |||||||||||||||
October 31, 2015 | 12.13 | .21 | (.14 | ) | .07 | (.26 | ) | (3.42 | ) | ||||||
October 31, 2014 | 11.94 | .22 | .42 | .64 | (.22 | ) | (.23 | ) | |||||||
October 31, 2013 | 11.19 | .30 | .74 | 1.04 | (.29 | ) | — | ||||||||
October 31, 2012 | 10.57 | .25 | .62 | .87 | (.25 | ) | — | ||||||||
October 31, 2011 | 10.63 | .88 | (.56 | ) | .32 | (.38 | ) | — | |||||||
Class R1 | |||||||||||||||
October 31, 2015 | 12.11 | .23 | (.14 | ) | .09 | (.28 | ) | (3.42 | ) | ||||||
October 31, 2014 | 11.93 | .27 | .39 | .66 | (.25 | ) | (.23 | ) | |||||||
October 31, 2013 | 11.18 | .34 | .73 | 1.07 | (.32 | ) | — | ||||||||
October 31, 2012 | 10.56 | .27 | .63 | .90 | (.28 | ) | — | ||||||||
October 31, 2011 | 10.64 | .40 | (.07 | ) | .33 | (.41 | ) | — | |||||||
Class R4(3) | |||||||||||||||
October 31, 2015 | 12.11 | .22 | (.15 | ) | .07 | (.26 | ) | (3.42 | ) | ||||||
October 31, 2014 | 11.92 | .22 | .42 | .64 | (.22 | ) | (.23 | ) | |||||||
October 31, 2013 | 11.17 | .30 | .74 | 1.04 | (.29 | ) | — | ||||||||
October 31, 2012 | 10.54 | .27 | .60 | .87 | (.24 | ) | — | ||||||||
October 31, 2011 | 10.62 | .36 | (.06 | ) | .30 | (.38 | ) | — | |||||||
Class R5(4) | |||||||||||||||
October 31, 2015 | 12.08 | .22 | (.16 | ) | .06 | (.23 | ) | (3.42 | ) | ||||||
October 31, 2014 | 11.90 | .21 | .39 | .60 | (.19 | ) | (.23 | ) | |||||||
October 31, 2013 | 11.15 | .27 | .74 | 1.01 | (.26 | ) | — | ||||||||
October 31, 2012 | 10.52 | .23 | .62 | .85 | (.22 | ) | — | ||||||||
October 31, 2011 | 10.61 | .35 | (.08 | ) | .27 | (.36 | ) | — | |||||||
Class S | |||||||||||||||
October 31, 2015 | 12.11 | .25 | (.16 | ) | .09 | (.28 | ) | (3.42 | ) | ||||||
October 31, 2014 | 11.93 | .28 | .38 | .66 | (.25 | ) | (.23 | ) | |||||||
October 31, 2013 | 11.18 | .32 | .75 | 1.07 | (.32 | ) | — | ||||||||
October 31, 2012 | 10.56 | .27 | .63 | .90 | (.28 | ) | — | ||||||||
October 31, 2011 | 10.64 | .39 | (.06 | ) | .33 | (.41 | ) | — | |||||||
See accompanying notes which are an integral part of the financial statements.
122 2020 Strategy Fund
% | % | % | ||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||
Total Distributions | Period | Return(d) | (000 | ) | Gross(g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | ||||||||
(3.67 | ) | 8.51 | .59 | 253 | .25 | .25 | 3.03 | 28 | ||||||||
(.45 | ) | 12.11 | 5.48 | 540 | .25 | .25 | 2.24 | 42 | ||||||||
(.29 | ) | 11.92 | 9.52 | 1,460 | .25 | .25 | 2.11 | 15 | ||||||||
(.24 | ) | 11.17 | 8.33 | 902 | .25 | .25 | 3.02 | 21 | ||||||||
(.39 | ) | 10.55 | 2.89 | 1,913 | .25 | .25 | 3.85 | 24 | ||||||||
(3.68 | ) | 8.52 | .52 | 1,947 | .25 | .25 | 2.37 | 28 | ||||||||
(.45 | ) | 12.13 | 5.52 | 2,312 | .25 | .25 | 1.80 | 42 | ||||||||
(.29 | ) | 11.94 | 9.48 | 2,240 | .25 | .25 | 2.62 | 15 | ||||||||
(.25 | ) | 11.19 | 8.39 | 2,380 | .25 | .25 | 2.30 | 21 | ||||||||
(.38 | ) | 10.57 | 3.07 | 2,455 | .25 | .25 | 8.23 | 24 | ||||||||
(3.70 | ) | 8.50 | .78 | 38,455 | — | — | 2.56 | 28 | ||||||||
(.48 | ) | 12.11 | 5.70 | 51,257 | — | — | 2.24 | 42 | ||||||||
(.32 | ) | 11.93 | 9.77 | 92,947 | — | — | 2.95 | 15 | ||||||||
(.28 | ) | 11.18 | 8.68 | 121,239 | — | — | 2.51 | 21 | ||||||||
(.41 | ) | 10.56 | 3.17 | 111,545 | — | — | 3.63 | 24 | ||||||||
(3.68 | ) | 8.50 | .52 | 9,340 | .25 | .25 | 2.41 | 28 | ||||||||
(.45 | ) | 12.11 | 5.51 | 12,844 | .25 | .25 | 1.82 | 42 | ||||||||
(.29 | ) | 11.92 | 9.48 | 17,172 | .25 | .25 | 2.65 | 15 | ||||||||
(.24 | ) | 11.17 | 8.46 | 24,126 | .25 | .25 | 2.55 | 21 | ||||||||
(.38 | ) | 10.54 | 2.88 | 44,217 | .25 | .25 | 3.25 | 24 | ||||||||
(3.65 | ) | 8.49 | .38 | 16,269 | .50 | .50 | 2.37 | 28 | ||||||||
(.42 | ) | 12.08 | 5.15 | 37,373 | .50 | .50 | 1.73 | 42 | ||||||||
(.26 | ) | 11.90 | 9.23 | 59,271 | .50 | .50 | 2.38 | 15 | ||||||||
(.22 | ) | 11.15 | 8.19 | 67,605 | .50 | .50 | 2.17 | 21 | ||||||||
(.36 | ) | 10.52 | 2.56 | 91,714 | .50 | .50 | 3.20 | 24 | ||||||||
(3.70 | ) | 8.50 | .78 | 6,223 | — | — | 2.78 | 28 | ||||||||
(.48 | ) | 12.11 | 5.70 | 10,187 | — | — | 2.32 | 42 | ||||||||
(.32 | ) | 11.93 | 9.77 | 20,550 | — | — | 2.80 | 15 | ||||||||
(.28 | ) | 11.18 | 8.68 | 22,285 | — | — | 2.53 | 21 | ||||||||
(.41 | ) | 10.56 | 3.17 | 18,962 | — | — | 3.60 | 24 |
See accompanying notes which are an integral part of the financial statements.
2020 Strategy Fund 123
Russell Investment Company
2025 Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
2025 Strategy Fund - Class R1 | 2025 Strategy Fund - Class R5‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.52 | % | 1 Year | 0.07 | % | ||
5 Years | 6.21 | %§ | 5 Years | 5.70 | %§ | ||
Inception* | 4.13 | %§ | Inception* | 3.61 | %§ | ||
2025 Strategy Fund - Class R4‡ | Russell 1000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.37 | % | 1 Year | 4.86 | % | ||
5 Years | 5.98 | %§ | 5 Years | 14.32 | %§ | ||
Inception* | 3.89 | %§ | Inception* | 8.64 | %§ |
124 2025 Strategy Fund
Russell Investment Company
2025 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The 2025 Strategy Fund (the “Fund”) is a fund of funds that | returned 4.49% over the period, while non-U.S. equities returned |
invests in other Russell Investment Company mutual funds (the | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap |
“Underlying Funds”). The Underlying Funds employ a multi- | Index) and emerging markets returned -13.58% (as measured by |
manager approach whereby portions of the Underlying Funds | the Russell Emerging Markets Index). The underperformance of |
are allocated to different money managers. Underlying Fund | non-U.S. equities versus U.S. equities was a key negative driver |
assets not allocated to money managers are managed by Russell | to the Fund’s benchmark-relative performance, as U.S. equities |
Investment Management Company (“RIMCo”), the Fund’s and | finished at 4.86% for the fiscal year as measured by the Fund’s |
Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | benchmark. |
advisor, may change the allocation of the Underlying Funds’ | The fiscal year ended October 31, 2015 was characterized by |
assets among money managers at any time. An exemptive order | slowing global growth and commodity price weakness. Overall, |
from the Securities and Exchange Commission (“SEC”) permits | this was modestly positive for fixed income assets, as yields fell. |
RIMCo to engage or terminate a money manager in an Underlying | However, the Fund’s exposure to the fixed income asset class had |
Fund at any time, subject to approval by the Underlying Fund’s | a negative effect on benchmark-relative performance as core fixed |
Board, without a shareholder vote. Pursuant to the terms of the | income underperformed U.S. equities. |
exemptive order, an Underlying Fund is required to notify its | |
shareholders within 90 days of when a money manager begins | Within alternative strategies, commodities exposure had the |
providing services. | largest negative impact on the Fund, as the asset class (as |
measured by the Bloomberg Commodity Index Total Return) lost | |
What is the Fund’s investment objective? | 25.72% during the period, significantly underperforming U.S. |
The Fund seeks to provide capital growth and income consistent | equities. Global REITs and listed infrastructure (as represented |
with its current asset allocation which will change over time, with | by the FTSE EPRA/NAREIT Developed Real Estate Index (Net) |
an increasing allocation to fixed income funds. | and S&P Global Infrastructure Index (Net)) finished the fiscal |
The Fund pursues this objective by investing in a diversified | year up 2.68% and down 6.29%, respectively. Both of these asset |
portfolio that, as of October 31, 2015, consisted of approximately | classes underperformed U.S. equities, which negatively impacted |
47% equity Underlying Funds, 45.5% fixed income Underlying | the Fund’s benchmark-relative performance. |
Funds and 7.5% alternative Underlying Funds. The Fund’s | How did the investment strategies and techniques employed |
allocation to fixed income Underlying Funds will be fixed at | by the Fund and the Underlying Funds affect the Fund’s |
66.3% in approximately the year 2025. | performance? |
How did the Fund perform relative to its benchmark for the | The Fund is a fund of funds and its performance is based on |
fiscal year ended October 31, 2015? | RIMCo’s strategic asset allocations and the performance of the |
For the fiscal year ended October 31, 2015, the Fund’s Class R1, | Underlying Funds in which the Fund invests. |
Class R4 and Class R5 Shares gained 0.52%, 0.37% and 0.07%, | With respect to the Fund’s global equity exposure, the Fund’s |
respectively. This is compared to the Fund’s primary benchmark, | strategic allocation to the Russell Global Equity Fund, Select |
the Russell 1000® Index, which gained 4.86% during the same | International Equity Fund and the Russell Emerging Markets |
period. The Fund’s performance includes operating expenses, | Fund detracted as these all underperformed the Fund’s U.S. |
whereas index returns are unmanaged and do not include | equity benchmark. From an active management perspective, an |
expenses of any kind. | underweighttoenergyandanoverweighttoconsumerdiscretionary |
For the fiscal year ended October 31, 2015, the Morningstar® | in the Russell Global Equity Fund contributed to positive excess |
Target Date 2021-2025 gained 0.36%. This result serves as a | return versus its benchmark. For the Russell Emerging Markets |
peer comparison and is expressed net of operating expenses. | Fund, unsuccessful stock selection in China and Brazil was the |
main driver of the Fund’s benchmark-relative underperformance. | |
The Fund’s underperformance relative to the Russell 1000® | Chinese stocks fell sharply and broader emerging markets also |
Index was due to the Fund’s allocation to non-U.S. equity and | lost significant value during the period due to growth concerns. |
commodity Underlying Funds, which underperformed large cap | A valuation bias in the Select International Equity Fund led to |
U.S. equity over the period. | benchmark-relative underperformance as lower price-to-book |
How did the market conditions described in the Market | stocks strongly underperformed. |
Summary report affect the Fund’s performance? | The Fund’s allocation to U.S. equity Underlying Funds had a |
It was a mixed equity market for the fiscal year ending October | negative effect on the Fund’s benchmark-relative performance. |
31, 2015. U.S. stocks (as measured by the Russell 3000® Index) | Underlying active management within the U.S. equity Underlying |
2025 Strategy Fund 125
Russell Investment Company
2025 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Funds detracted, as most of the U.S. equity Underlying Funds | RIMCo has the discretion to vary the Fund’s actual allocation from |
underperformed their respective U.S. equity market segment | the target strategic asset allocation by up to +/- 5% at the equity, |
as represented by their primary benchmarks. The Select U.S. | fixed income or alternative category level based on RIMCo’s |
Equity Fund underperformed the Russell 1000® Index due to | capital markets research. RIMCo’s asset allocation modifications |
an underweight to growth stocks, which outperformed during | benefited the Fund’s performance relative to the Fund’s target |
the period. In addition, the Fund’s strategic allocation to the | strategic asset allocation. |
Russell U.S. Small Cap Equity Fund also detracted from the | On November 21, 2014, RIMCo reduced the Fund’s overweight to |
Fund’s benchmark-relative performance, as U.S. small cap equity | the Russell Global Equity Fund by 1.30%. This was offset by a |
underperformed the Fund’s benchmark and the Underlying Fund | 1.00% increase to the Russell Global Opportunistic Credit Fund |
underperformed its Russell 2000® Index benchmark due to an | and 0.30% increase to the Russell Commodity Strategies Fund. |
overweight to micro-capitalization stocks which underperformed | This position was implemented after strong performance in the |
during the period. | equity market and to position the Fund for rising interest rates. |
The Fund’s strategic allocation to fixed income Underlying Funds | On December 31, 2014, RIMCo modified the Fund’s target |
had a negative impact on its benchmark-relative performance | strategic asset allocation and as a result, the Fund increased its |
as fixed income underperformed U.S. equity. From an active | exposure to fixed income Underlying Funds and decreased its |
management perspective, the Russell Global Opportunistic | exposure to equity and alternative Underlying Funds. |
Credit Fund underperformed its benchmark largely because of an | |
ex-benchmark allocation to local currency emerging market debt | On February 19, 2015, RIMCo removed the Fund’s overweight to |
and the associated currency risk as the U.S. dollar appreciated | U.S. equities by reducing the Fund’s allocation to the Select U.S. |
strongly versus emerging market currencies. The Russell Short | Equity Fund by 0.30%. This was offset by a 0.30% increase in |
Duration Bond Fund underperformed its benchmark due mostly | the Fund’s allocation to the Russell Commodity Strategies Fund, |
to ex-benchmark corporate credit exposure, as this sector saw | which neutralized the previous underweight to commodities. This |
the largest drawdowns during the period. While the Russell | position was implemented after strong U.S. equity performance |
Strategic Bond Fund and Russell Investment Grade Bond Fund | and a sharp decline in commodities |
were negatively impacted by their overweight to credit, currency | On August 10, 2015, RIMCo reduced the Fund’s allocation to |
positioning drove excess return relative to their respective | the Russell Emerging Markets Fund by 0.60% as concerns |
benchmarks. | over emerging markets growth intensified. This was offset by an |
The Fund’s strategic allocation to alternative Underlying Funds | increase in the allocation to large cap developed equities through |
had a negative impact on benchmark-relative performance | a 0.40% increase in the Fund’s allocation to the Select U.S. |
as each of these asset classes underperformed the Fund’s U.S. | Equity Fund and a 0.20% increase in the Fund’s allocation to the |
equity benchmark. From an active management standpoint, | Select International Equity Fund. |
performance of these Underlying Funds was mixed. The Russell | The views expressed in this report reflect those of the portfolio |
Global Infrastructure Fund and the Russell Global Real Estate | managers only through the end of the period covered by |
Securities Fund outperformed their respective benchmarks | the report. These views do not necessarily represent the |
while the Russell Commodity Strategies Fund underperformed | views of RIMCo, or any other person in RIMCo or any other |
its benchmark. The Russell Global Infrastructure Fund and the | affiliated organization. These views are subject to change |
Russell Global Real Estate Securities Fund both benefited from | at any time based upon market conditions or other events, |
strong stock selection by underlying money managers. The Russell | and RIMCo disclaims any responsibility to update the views |
Commodity Strategies Fund underperformed its benchmark due | contained herein. These views should not be relied on as |
largely to exposure to the energy sector. | investment advice and, because investment decisions for |
Describe any changes to the Fund’s structure or allocation | a Russell Investment Company (“RIC”) Fund are based on |
to the Underlying Funds. | numerous factors, should not be relied on as an indication |
of investment decisions of any RIC Fund. |
126 2025 Strategy Fund
Russell Investment Company
2025 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* Assumes initial investment on March 31, 2008.
** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
‡ The Fund first issued Class R4 and Class R5 Shares on October 1, 2014. The returns shown for Class R4 and Class R5 Shares prior to that date are the returns
of the Fund’s Class R2 and Class R3 Shares, respectively.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
2025 Strategy Fund 127
Russell Investment Company
2025 Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Hypothetical | |||||
The following disclosure provides important information | Performance (5% | |||||
Actual | return before | |||||
regarding the Fund’s Shareholder Expense Example | Class R1 | Performance | expenses) | |||
(“Example”). | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Example | Ending Account Value | |||||
As a shareholder of the Fund, you incur ongoing costs, including | October 31, 2015 | $ | 972.10 | $ | 1,025.21 | |
distribution (12b-1) and/or service fees and other Fund expenses. | Expenses Paid During Period* | $ | — | $ | — | |
The Example is intended to help you understand your ongoing | * There were no expenses charged to the Class. | |||||
costs (in dollars) of investing in the Fund and to compare these | ||||||
costs with the ongoing costs of investing in other mutual funds. | Hypothetical | |||||
Performance (5% | ||||||
The Example is based on an investment of $1,000 invested at the | Actual | return before | ||||
beginning of the period and held for the entire period indicated, | Class R4 | Performance | expenses) | |||
which for this Fund is from May 1, 2015 to October 31, 2015. | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | |||||
The information in the table under the heading “Actual | October 31, 2015 | $ | 972.00 | $ | 1,023.95 | |
Expenses Paid During Period* | $ | 1.24 | $ | 1.28 | ||
Performance” provides information about actual account values | ||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
that you paid over the period. Simply divide your account value by | year period). | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | ||||||
= 8.6), then multiply the result by the number in the first column | Hypothetical | |||||
in the row entitled “Expenses Paid During Period” to estimate | Performance (5% | |||||
Actual | return before | |||||
the expenses you paid on your account during this period. | Class R5 | Performance | expenses) | |||
Beginning Account Value | ||||||
Hypothetical Example for Comparison Purposes | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
The information in the table under the heading “Hypothetical | Ending Account Value | |||||
Performance (5% return before expenses)” provides information | October 31, 2015 | $ | 970.40 | $ | 1,022.68 | |
about hypothetical account values and hypothetical expenses | Expenses Paid During Period* | $ | 2.48 | $ | 2.55 | |
based on the Fund’s actual expense ratio and an assumed rate of | * Expenses are equal to the Fund's annualized expense ratio of 0.50% | |||||
return of 5% per year before expenses, which is not the Fund’s | (representing the six month period annualized), multiplied by the average | |||||
actual return. The hypothetical account values and expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
may not be used to estimate the actual ending account balance or | year period). | |||||
expenses you paid for the period. You may use this information | ||||||
to compare the ongoing costs of investing in the Fund and other | ||||||
funds. To do so, compare this 5% hypothetical example with the | ||||||
5% hypothetical examples that appear in the shareholder reports | ||||||
of other funds. | ||||||
Please note that the expenses shown in the table are meant | ||||||
to highlight your ongoing costs only and do not reflect any | ||||||
transactional costs. Therefore, the information under the heading | ||||||
“Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | ||||||
determine the relative total costs of owning different funds. In | ||||||
addition, if these transactional costs were included, your costs | ||||||
would have been higher. |
128 2025 Strategy Fund
Russell Investment Company
2025 Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||
Fair | ||||
Value | ||||
Shares | $ | |||
Investments in Russell Affiliated Mutual Funds - 100.0% | ||||
Alternative - 6.8% | ||||
Russell Commodity Strategies Fund Class Y | 137,388 | 780 | ||
Russell Global Infrastructure Fund Class Y | 59,831 | 685 | ||
Russell Global Real Estate Securities Fund Class Y | 17,801 | 683 | ||
2,148 | ||||
Domestic Equities - 24.7% | ||||
Russell U.S. Defensive Equity Fund Class Y | 17,873 | 854 | ||
Russell U.S. Dynamic Equity Fund Class Y | 68,753 | 781 | ||
Russell U.S. Small Cap Equity Fund Class Y | 45,463 | 1,302 | ||
Select U.S. Equity Fund Class Y | 458,315 | 4,922 | ||
7,859 | ||||
Fixed Income - 46.5% | ||||
Russell Global Opportunistic Credit Fund Class Y | 140,514 | 1,284 | ||
Russell Investment Grade Bond Fund Class Y | 176,955 | 3,932 | ||
Russell Short Duration Bond Fund Class Y | 20,826 | 398 | ||
Russell Strategic Bond Fund Class Y | 838,983 | 9,170 | ||
14,784 | ||||
International Equities - 22.0% | ||||
Russell Emerging Markets Fund Class Y | 73,009 | 1,113 | ||
Russell Global Equity Fund Class Y | 183,444 | 2,106 | ||
Select International Equity Fund Class Y | 412,165 | 3,763 | ||
6,982 | ||||
Total Investments in Russell Affiliated Mutual Funds | ||||
(cost $28,818) | 31,773 | |||
Total Investments 100.0% | ||||
(identified cost $28,818) | 31,773 | |||
Other Assets and Liabilities, Net - (0.0%) | (4 | ) | ||
Net Assets - 100.0% | 31,769 |
Presentation of Portfolio Holdings | ||||||||||
Amounts in thousands | ||||||||||
Fair Value | ||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||
Investments in Russell Affiliated Mutual Funds | $ | 31,773 | $ | — | $ | — | $ | 31,773 | 100.0 | |
Total Investments | 31,773 | — | — | 31,773 | 100.0 | |||||
Other Assets and Liabilities, Net | (—)* | |||||||||
100.0 | ||||||||||
* Less than .05% of net assets. | ||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
2025 Strategy Fund 129
Russell Investment Company
2025 Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 28,818 |
Investments, at fair value(>) | 31,773 | |
Receivables: | ||
Fund shares sold | 18 | |
Total assets | 31,791 | |
Liabilities | ||
Payables: | ||
Investments purchased | 14 | |
Fund shares redeemed | 3 | |
Accrued fees to affiliates | 5 | |
Total liabilities | 22 | |
Net Assets | $ | 31,769 |
Net Assets Consist of: | ||
Accumulated net realized gain (loss) | $ | 326 |
Unrealized appreciation (depreciation) on investments | 2,955 | |
Shares of beneficial interest | 38 | |
Additional paid-in capital | 28,450 | |
Net Assets | $ | 31,769 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class R1(#) | $ | 8.39 |
Class R1 — Net assets | $ | 16,835,936 |
Class R1 — Shares outstanding ($.01 par value) | 2,005,917 | |
Net asset value per share: Class R4(#) | $ | 8.40 |
Class R4 — Net assets | $ | 7,540,262 |
Class R4 — Shares outstanding ($.01 par value) | 897,775 | |
Net asset value per share: Class R5(#) | $ | 8.37 |
Class R5 — Net assets | $ | 7,392,588 |
Class R5 — Shares outstanding ($.01 par value) | 883,127 | |
Amounts in thousands | ||
(>) Investments in affiliated Russell funds | $ | 31,773 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
130 2025 Strategy Fund
Russell Investment Company
2025 Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 865 | |
Expenses | |||
Distribution fees - Class R5 | 24 | ||
Shareholder servicing fees - Class R4 | 19 | ||
Shareholder servicing fees - Class R5 | 24 | ||
Total expenses | 67 | ||
Net investment income (loss) | 798 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 64 | ||
Capital gain distributions from Underlying Funds | 458 | ||
Net realized gain (loss) | 522 | ||
Net change in unrealized appreciation (depreciation) on investments | (1,110 | ) | |
Net realized and unrealized gain (loss) | (588 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | 210 |
See accompanying notes which are an integral part of the financial statements.
2025 Strategy Fund 131
Russell Investment Company
2025 Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | |||||||
Amounts in thousands | 2015 | 2014 | |||||
Increase (Decrease) in Net Assets | |||||||
Operations | |||||||
Net investment income (loss) | $ | 798 | $ | 845 | |||
Net realized gain (loss) | 522 | 7,045 | |||||
Net change in unrealized appreciation (depreciation) | (1,110 | ) | (5,480 | ) | |||
Net increase (decrease) in net assets from operations | 210 | 2,410 | |||||
Distributions | |||||||
From net investment income | |||||||
Class R1 | (424 | ) | (464 | ) | |||
Class R2 | — | (112 | ) | ||||
Class R3 | — | (238 | ) | ||||
Class R4 | (176 | ) | (15 | ) | |||
Class R5 | (199 | ) | (15 | ) | |||
From net realized gain | |||||||
Class R1 | (3,163 | ) | (1,048 | ) | |||
Class R2 | — | (292 | ) | ||||
Class R3 | — | (727 | ) | ||||
Class R4 | (1,537 | ) | — | ||||
Class R5 | (2,105 | ) | — | ||||
Net decrease in net assets from distributions | (7,604 | ) | (2,911 | ) | |||
Share Transactions* | |||||||
Net increase (decrease) in net assets from share transactions | 4,967 | (11,341 | ) | ||||
Total Net Increase (Decrease) in Net Assets | (2,427 | ) | (11,842 | ) | |||
Net Assets | |||||||
Beginning of period | 34,196 | 46,038 | |||||
End of period | $ | 31,769 | $ | 34,196 | |||
Undistributed (overdistributed) net investment income included in net assets | $ | — | $ | 1 |
See accompanying notes which are an integral part of the financial statements.
132 2025 Strategy Fund
Russell Investment Company
2025 Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class R1 | ||||||||||||
Proceeds from shares sold | 1,597 | $ | 13,886 | 499 | $ | 5,244 | ||||||
Proceeds from reinvestment of distributions | 423 | 3,588 | 146 | 1,512 | ||||||||
Payments for shares redeemed | (1,380 | ) | (11,770 | ) | (1,382 | ) | (14,628 | ) | ||||
Net increase (decrease) | 640 | 5,704 | (737 | ) | (7,872 | ) | ||||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 239 | 2,529 | ||||||||
Proceeds from reinvestment of distributions | — | — | 39 | 404 | ||||||||
Payments for shares redeemed | — | — | (901 | ) | (9,509 | ) | ||||||
Net increase (decrease) | — | — | (623 | ) | (6,576 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 359 | 3,786 | ||||||||
Proceeds from reinvestment of distributions | — | — | 94 | 965 | ||||||||
Payments for shares redeemed | — | — | (1,992 | ) | (20,945 | ) | ||||||
Net increase (decrease) | — | — | (1,539 | ) | (16,194 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 182 | 1,576 | 733 | 7,700 | ||||||||
Proceeds from reinvestment of distributions | 201 | 1,712 | 1 | 15 | ||||||||
Payments for shares redeemed | (211 | ) | (1,804 | ) | (9 | ) | (95 | ) | ||||
Net increase (decrease) | 172 | 1,484 | 725 | 7,620 | ||||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 298 | 2,611 | 1,207 | 12,632 | ||||||||
Proceeds from reinvestment of distributions | 272 | 2,304 | 1 | 15 | ||||||||
Payments for shares redeemed | (803 | ) | (7,136 | ) | (92 | ) | (966 | ) | ||||
Net increase (decrease) | (233 | ) | (2,221 | ) | 1,116 | 11,681 | ||||||
Total increase (decrease) | 579 | $ | 4,967 | (1,058 | ) | $ | (11,341 | ) |
See accompanying notes which are an integral part of the financial statements.
2025 Strategy Fund 133
Russell Investment Company
2025 Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | ||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class R1 | ||||||||||||||||
October 31, 2015 | 10.67 | .21 | (.15 | ) | .06 | (.25 | ) | (2.09 | ) | |||||||
October 31, 2014 | 10.80 | .25 | .39 | .64 | (.24 | ) | (.53 | ) | ||||||||
October 31, 2013 | 10.01 | .28 | .96 | 1.24 | (.26 | ) | (.19 | ) | ||||||||
October 31, 2012 | 9.44 | .22 | .61 | .83 | (.23 | ) | (.03 | ) | ||||||||
October 31, 2011 | 9.49 | .30 | (.02 | ) | .28 | (.33 | ) | — (h) | ||||||||
Class R4 (3) | ||||||||||||||||
October 31, 2015 | 10.67 | .20 | (.15 | ) | .05 | (.23 | ) | (2.09 | ) | |||||||
October 31, 2014 | 10.81 | .19 | .42 | .61 | (.22 | ) | (.53 | ) | ||||||||
October 31, 2013 | 10.01 | .23 | 1.00 | 1.23 | (.24 | ) | (.19 | ) | ||||||||
October 31, 2012 | 9.44 | .22 | .58 | .80 | (.20 | ) | (.03 | ) | ||||||||
October 31, 2011 | 9.48 | .30 | (.04 | ) | .26 | (.30 | ) | — (h) | ||||||||
Class R5 (4) | ||||||||||||||||
October 31, 2015 | 10.64 | .19 | (.17 | ) | .02 | (.20 | ) | (2.09 | ) | |||||||
October 31, 2014 | 10.77 | .19 | .40 | .59 | (.19 | ) | (.53 | ) | ||||||||
October 31, 2013 | 9.98 | .20 | .99 | 1.19 | (.21 | ) | (.19 | ) | ||||||||
October 31, 2012 | 9.41 | .19 | .58 | .77 | (.17 | ) | (.03 | ) | ||||||||
October 31, 2011 | 9.46 | .25 | (.02 | ) | .23 | (.28 | ) | — (h) | ||||||||
See accompanying notes which are an integral part of the financial statements.
134 2025 Strategy Fund
% | % | % | ||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||
Total Distributions | Period | Return | (000 | ) | Gross (g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | ||||||||
(2.34 | ) | 8.39 | .52 | 16,836 | — | — | 2.35 | 53 | ||||||||
(.77 | ) | 10.67 | 6.23 | 14,573 | — | — | 2.41 | 67 | ||||||||
(.45 | ) | 10.80 | 12.93 | 22,717 | — | — | 2.75 | 28 | ||||||||
(.26 | ) | 10.01 | 9.00 | 34,875 | — | — | 2.32 | 37 | ||||||||
(.33 | ) | 9.44 | 2.91 | 28,255 | — | — | 3.07 | 27 | ||||||||
(2.32 | ) | 8.40 | .37 | 7,540 | .25 | .25 | 2.27 | 53 | ||||||||
(.75 | ) | 10.67 | 5.87 | 7,743 | .25 | .25 | 1.83 | 67 | ||||||||
(.43 | ) | 10.81 | 12.68 | 6,736 | .25 | .25 | 2.20 | 28 | ||||||||
(.23 | ) | 10.01 | 8.67 | 6,235 | .25 | .25 | 2.28 | 37 | ||||||||
(.30 | ) | 9.44 | 2.74 | 8,188 | .25 | .25 | 3.05 | 27 | ||||||||
(2.29 | ) | 8.37 | .07 | 7,393 | .50 | .50 | 2.14 | 53 | ||||||||
(.72 | ) | 10.64 | 5.70 | 11,880 | .50 | .50 | 1.84 | 67 | ||||||||
(.40 | ) | 10.77 | 12.41 | 16,585 | .50 | .50 | 1.99 | 28 | ||||||||
(.20 | ) | 9.98 | 8.40 | 14,350 | .50 | .50 | 2.00 | 37 | ||||||||
(.28 | ) | 9.41 | 2.42 | 16,037 | .50 | .50 | 2.57 | 27 |
See accompanying notes which are an integral part of the financial statements.
2025 Strategy Fund 135
Russell Investment Company
2030 Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
2030 Strategy Fund - Class A‡ | 2030 Strategy Fund - Class R5‡‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (5.85 | )% | 1 Year | (0.35 | )% | ||
5 Years | 5.28 | %§ | 5 Years | 6.28 | %§ | ||
10 Years | 3.81 | %§ | 10 Years | 4.11 | %§ | ||
2030 Strategy Fund - Class E | 2030 Strategy Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.08 | )% | 1 Year | 0.22 | % | ||
5 Years | 6.49 | %§ | 5 Years | 6.80 | %§ | ||
10 Years | 4.34 | %§ | 10 Years | 4.62 | %§ | ||
2030 Strategy Fund - Class R1‡‡ | Russell 1000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.22 | % | 1 Year | 4.86 | % | ||
5 Years | 6.82 | %§ | 5 Years | 14.32 | %§ | ||
10 Years | 4.63 | %§ | 10 Years | 7.98 | %§ | ||
2030 Strategy Fund - Class R4‡‡‡ | |||||||
Total | |||||||
Return | |||||||
1 Year | (0.05 | )% | |||||
5 Years | 6.54 | %§ | |||||
10 Years | 4.35 | %§ |
136 2030 Strategy Fund
Russell Investment Company
2030 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The 2030 Strategy Fund (the “Fund”) is a fund of funds that | It was a mixed equity market for the fiscal year ending October |
invests in other Russell Investment Company mutual funds (the | 31, 2015. U.S. stocks (as measured by the Russell 3000® Index) |
“Underlying Funds”). The Underlying Funds employ a multi- | returned 4.49% over the period, while non-U.S. equities returned |
manager approach whereby portions of the Underlying Funds | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® |
are allocated to different money managers. Underlying Fund | Index) and emerging markets returned -13.58% (as measured by |
assets not allocated to money managers are managed by Russell | the Russell Emerging Markets Index). The underperformance of |
Investment Management Company (“RIMCo”), the Fund’s and | non-U.S. equities versus U.S. equities was a key negative driver |
Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | to the Fund’s benchmark-relative performance, as U.S. equities |
advisor, may change the allocation of the Underlying Funds’ | finished at 4.86% for the fiscal year as measured by the Fund’s |
assets among money managers at any time. An exemptive order | benchmark. |
from the Securities and Exchange Commission (“SEC”) permits | The fiscal year ended October 31, 2015 was characterized by |
RIMCo to engage or terminate a money manager in an Underlying | slowing global growth and commodity price weakness. Overall, |
Fund at any time, subject to approval by the Underlying Fund’s | this was modestly positive for fixed income assets, as yields fell. |
Board, without a shareholder vote. Pursuant to the terms of the | However, the Fund’s exposure to the fixed income asset class had |
exemptive order, an Underlying Fund is required to notify its | a negative effect on benchmark-relative performance as core fixed |
shareholders within 90 days of when a money manager begins | income underperformed U.S. equities. |
providing services. | |
Within alternative strategies, commodities exposure had the | |
What is the Fund’s investment objective? | largest negative impact on the Fund, as the asset class (as |
The Fund seeks to provide capital growth and income consistent | measured by the Bloomberg Commodity Index Total Return) lost |
with its current asset allocation which will change over time, with | 25.72% during the period, significantly underperforming U.S. |
an increasing allocation to fixed income funds. | equities. Global REITs and listed infrastructure (as represented |
The Fund pursues this objective by investing in a diversified | by the FTSE EPRA/NAREIT Developed Real Estate Index (Net) |
portfolio that, as of October 31, 2015, consisted of approximately | and S&P Global Infrastructure Index (Net)) finished the fiscal |
59.1% equity Underlying Funds, 32.5% fixed income Underlying | year up 2.68% and down 6.29%, respectively. Both of these asset |
Funds and 8.4% alternative Underlying Funds. The Fund’s | classes underperformed U.S. equities, which negatively impacted |
allocation to fixed income Underlying Funds will be fixed at | the Fund’s benchmark-relative performance. |
66.3% in approximately the year 2030. | How did the investment strategies and techniques employed |
How did the Fund perform relative to its benchmark for the | by the Fund and the Underlying Funds affect the Fund’s |
fiscal year ended October 31, 2015? | performance? |
For the fiscal year ended October 31, 2015, the Fund’s Class | The Fund is a fund of funds and its performance is based on |
A, Class E, Class R4 and R5 Shares lost 0.07%, 0.08%, | RIMCo’s strategic asset allocations and the performance of the |
0.05% and 0.35%, respectively, and the Fund’s Class R1, and | Underlying Funds in which the Fund invests. |
Class S Shares gained 0.22% and 0.22%, respectively. This is | With respect to the Fund’s global equity exposure, the Fund’s |
compared to the Fund’s primary benchmark, the Russell 1000® | strategic allocation to the Russell Global Equity Fund, Select |
Index, which gained 4.86% during the same period. The Fund’s | International Equity Fund and the Russell Emerging Markets |
performance includes operating expenses, whereas index returns | Fund detracted as these all underperformed the Fund’s U.S. |
are unmanaged and do not include expenses of any kind. | equity benchmark. From an active management perspective, an |
For the fiscal year ended October 31, 2015, the Morningstar® | underweighttoenergyandanoverweighttoconsumerdiscretionary |
Target Date 2026-2030 gained 0.30%. This result serves as a | in the Russell Global Equity Fund contributed to positive excess |
peer comparison and is expressed net of operating expenses. | return versus its benchmark. For the Russell Emerging Markets |
Fund, unsuccessful stock selection in China and Brazil was the | |
The Fund’s underperformance relative to the Russell 1000® | main driver of the Fund’s benchmark-relative underperformance. |
Index was due to the Fund’s allocation to non-U.S. equity and | Chinese stocks fell sharply and broader emerging markets also |
commodity Underlying Funds, which underperformed large cap | lost significant value during the period due to growth concerns. |
U.S. equity over the period. | A valuation bias in the Select International Equity Fund led to |
How did the market conditions described in the Market | benchmark-relative underperformance as lower price-to-book |
Summary report affect the Fund’s performance? | stocks strongly underperformed. |
2030 Strategy Fund 137
Russell Investment Company
2030 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The Fund’s allocation to U.S. equity Underlying Funds had a | RIMCo has the discretion to vary the Fund’s actual allocation from |
negative effect on the Fund’s benchmark-relative performance. | the target strategic asset allocation by up to +/- 5% at the equity, |
Underlying active management within the U.S. equity Underlying | fixed income or alternative category level based on RIMCo’s |
Funds detracted, as most of the U.S. equity Underlying Funds | capital markets research. RIMCo’s asset allocation modifications |
underperformed their respective U.S. equity market segment | benefited the Fund’s performance relative to the Fund’s target |
as represented by their primary benchmarks. The Select U.S. | strategic asset allocation. |
Equity Fund underperformed the Russell 1000® Index due to | On November 21, 2014, RIMCo reduced the Fund’s overweight to |
an underweight to growth stocks, which outperformed during | the Russell Global Equity Fund by 1.50%. This was offset by a |
the period. In addition, the Fund’s strategic allocation to the | 1.00% increase to the Russell Global Opportunistic Credit Fund |
Russell U.S. Small Cap Equity Fund also detracted from the | and 0.50% increase to the Russell Commodity Strategies Fund. |
Fund’s benchmark-relative performance, as U.S. small cap equity | This position was implemented after strong performance in the |
underperformed the Fund’s benchmark and the Underlying Fund | equity market and to position the Fund for rising interest rates. |
underperformed its Russell 2000® Index benchmark due to an | |
overweight to micro-capitalization stocks which underperformed | On December 31, 2014, RIMCo modified the Fund’s target |
during the period. | strategic asset allocation and as a result, the Fund increased its |
exposure to fixed income Underlying Funds and decreased its | |
The Fund’s strategic allocation to fixed income Underlying Funds | exposure to equity and alternative Underlying Funds. |
had a negative impact on its benchmark-relative performance | |
as fixed income underperformed U.S. equity. From an active | On February 19, 2015, RIMCo removed the Fund’s overweight to |
management perspective, the Russell Global Opportunistic | U.S. equities by reducing the Fund’s allocation to the Select U.S. |
Credit Fund underperformed its benchmark largely because of an | Equity Fund by 0.50%. This was offset by a 0.50% increase in |
ex-benchmark allocation to local currency emerging market debt | the Fund’s allocation to the Russell Commodity Strategies Fund, |
and the associated currency risk as the U.S. dollar appreciated | which neutralized the previous underweight to commodities. This |
strongly versus emerging market currencies. While the Russell | position was implemented after strong U.S. equity performance |
Strategic Bond Fund and Russell Investment Grade Bond Fund | and a sharp decline in commodities. |
were negatively impacted by their overweight to credit, currency | On August 10, 2015, RIMCo reduced the Fund’s allocation to |
positioning drove excess return relative to their respective | the Russell Emerging Markets Fund by 0.75% as concerns |
benchmarks. | over emerging markets growth intensified. This was offset by an |
The Fund’s strategic allocation to alternative Underlying Funds | increase in the allocation to large cap developed equities through |
had a negative impact on benchmark-relative performance | a 0.50% increase in the Fund’s allocation to the Select U.S. |
as each of these asset classes underperformed the Fund’s U.S. | Equity Fund and a 0.25% increase in the Fund’s allocation to the |
equity benchmark. From an active management standpoint, | Select International Equity Fund. |
performance of these Underlying Funds was mixed. The Russell | The views expressed in this report reflect those of the portfolio |
Global Infrastructure Fund and the Russell Global Real Estate | managers only through the end of the period covered by |
Securities Fund outperformed their respective benchmarks | the report. These views do not necessarily represent the |
while the Russell Commodity Strategies Fund underperformed | views of RIMCo, or any other person in RIMCo or any other |
its benchmark. The Russell Global Infrastructure Fund and the | affiliated organization. These views are subject to change |
Russell Global Real Estate Securities Fund both benefited from | at any time based upon market conditions or other events, |
strong stock selection by underlying money managers. The Russell | and RIMCo disclaims any responsibility to update the views |
Commodity Strategies Fund underperformed its benchmark due | contained herein. These views should not be relied on as |
largely to exposure to the energy sector. | investment advice and, because investment decisions for |
Describe any changes to the Fund’s structure or allocation | a Russell Investment Company (“RIC”) Fund are based on |
to the Underlying Funds. | numerous factors, should not be relied on as an indication |
of investment decisions of any RIC Fund. |
138 2030 Strategy Fund
Russell Investment Company
2030 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* Assumes initial investment on November 1, 2005.
** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
‡‡ The Fund first issued Class R1 Shares on June 7, 2006. The returns shown for Class R1 Shares prior to that date are the returns of the Fund’s Class S Shares.
‡‡‡ The Fund first issued Class R4 Shares on October 1, 2014. The returns shown for Class R4 Shares prior to that date are the returns of the Fund’s Class E Shares
from January 3, 2005 to September 7, 2006 and the returns of Class R2 Shares from September 8, 2006 to September 30, 2014.
‡‡‡‡ The Fund first issued Class R5 Shares on October 1, 2014. The returns shown for Class R4 and Class R5 Shares prior to that date are the returns of the Fund’s
Class R3 Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
2030 Strategy Fund 139
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2030 Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Hypothetical | |||||
The following disclosure provides important information | Performance (5% | |||||
Actual | return before | |||||
regarding the Fund’s Shareholder Expense Example | Class A | Performance | expenses) | |||
(“Example”). | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Example | Ending Account Value | |||||
As a shareholder of the Fund, you incur ongoing costs, including | October 31, 2015 | $ | 964.30 | $ | 1,023.95 | |
distribution (12b-1) and/or service fees and other Fund expenses. | Expenses Paid During Period* | $ | 1.24 | $ | 1.28 | |
The Example is intended to help you understand your ongoing | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
costs (in dollars) of investing in the Fund and to compare these | (representing the six month period annualized), multiplied by the average | |||||
costs with the ongoing costs of investing in other mutual funds. | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | ||||||
The Example is based on an investment of $1,000 invested at the | ||||||
beginning of the period and held for the entire period indicated, | Hypothetical | |||||
which for this Fund is from May 1, 2015 to October 31, 2015. | Performance (5% | |||||
Actual | return before | |||||
Actual Expenses | Class E | Performance | expenses) | |||
Beginning Account Value | ||||||
The information in the table under the heading “Actual | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Performance” provides information about actual account values | Ending Account Value | |||||
and actual expenses. You may use the information in this column, | October 31, 2015 | $ | 964.00 | $ | 1,023.95 | |
together with the amount you invested, to estimate the expenses | Expenses Paid During Period* | $ | 1.24 | $ | 1.28 | |
that you paid over the period. Simply divide your account value by | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | (representing the six month period annualized), multiplied by the average | |||||
= 8.6), then multiply the result by the number in the first column | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
in the row entitled “Expenses Paid During Period” to estimate | year period). | |||||
the expenses you paid on your account during this period. | Hypothetical | |||||
Performance (5% | ||||||
Hypothetical Example for Comparison Purposes | Actual | return before | ||||
The information in the table under the heading “Hypothetical | Class R1 | Performance | expenses) | |||
Performance (5% return before expenses)” provides information | Beginning Account Value | |||||
about hypothetical account values and hypothetical expenses | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
based on the Fund’s actual expense ratio and an assumed rate of | October 31, 2015 | $ | 966.40 | $ | 1,025.21 | |
return of 5% per year before expenses, which is not the Fund’s | Expenses Paid During Period* | $ | — | $ | — | |
actual return. The hypothetical account values and expenses | ||||||
may not be used to estimate the actual ending account balance or | * There were no expenses charged to the Class. | |||||
expenses you paid for the period. You may use this information | Hypothetical | |||||
to compare the ongoing costs of investing in the Fund and other | Performance (5% | |||||
funds. To do so, compare this 5% hypothetical example with the | Actual | return before | ||||
Class R4 | Performance | expenses) | ||||
5% hypothetical examples that appear in the shareholder reports | Beginning Account Value | |||||
of other funds. | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Please note that the expenses shown in the table are meant | Ending Account Value | |||||
to highlight your ongoing costs only and do not reflect any | October 31, 2015 | $ | 965.10 | $ | 1,023.95 | |
Expenses Paid During Period* | $ | 1.24 | $ | 1.28 | ||
transactional costs. Therefore, the information under the heading | ||||||
“Hypothetical Performance (5% return before expenses)” is | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
useful in comparing ongoing costs only, and will not help you | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
determine the relative total costs of owning different funds. In | year period). | |||||
addition, if these transactional costs were included, your costs | ||||||
would have been higher. |
140 2030 Strategy Fund
Russell Investment Company
2030 Strategy Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class R5 | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 963.70 | $ | 1,022.68 | |
Expenses Paid During Period* | $ | 2.47 | $ | 2.55 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.50% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 965.30 | $ | 1,025.21 | |
Expenses Paid During Period* | $ | — | $ | — | |
* There were no expenses charged to the Class. |
2030 Strategy Fund 141
Russell Investment Company
2030 Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||||||
Fair | ||||||||||||
Value | ||||||||||||
Shares | $ | |||||||||||
Investments in Russell Affiliated Mutual Funds - 100.0% | ||||||||||||
Alternative - 7.3% | ||||||||||||
Russell Commodity Strategies Fund Class Y | 420,218 | 2,387 | ||||||||||
Russell Global Infrastructure Fund Class Y | 169,796 | 1,943 | ||||||||||
Russell Global Real Estate Securities Fund Class Y | 50,178 | 1,926 | ||||||||||
6,256 | ||||||||||||
Domestic Equities - 30.9% | ||||||||||||
Russell U.S. Defensive Equity Fund Class Y | 51,581 | 2,463 | ||||||||||
Russell U.S. Dynamic Equity Fund Class Y | 252,786 | 2,872 | ||||||||||
Russell U.S. Small Cap Equity Fund Class Y | 173,974 | 4,983 | ||||||||||
Select U.S. Equity Fund Class Y | 1,526,296 | 16,392 | ||||||||||
26,710 | ||||||||||||
Fixed Income - 33.4% | ||||||||||||
Russell Global Opportunistic Credit Fund Class Y | 330,460 | 3,020 | ||||||||||
Russell Investment Grade Bond Fund Class Y | 232,391 | 5,164 | ||||||||||
Russell Strategic Bond Fund Class Y | 1,890,134 | 20,659 | ||||||||||
28,843 | ||||||||||||
International Equities - 28.4% | ||||||||||||
Russell Emerging Markets Fund Class Y | 282,505 | 4,305 | ||||||||||
Russell Global Equity Fund Class Y | 656,360 | 7,535 | ||||||||||
Select International Equity Fund Class Y | 1,390,054 | 12,691 | ||||||||||
24,531 | ||||||||||||
Total Investments in Russell Affiliated Mutual Funds | ||||||||||||
(cost $75,806) | 86,340 | |||||||||||
Total Investments 100.0% | ||||||||||||
(identified cost $75,806) | 86,340 | |||||||||||
Other Assets and Liabilities, Net - (0.0%) | (10 | ) | ||||||||||
Net Assets - 100.0% | 86,330 | |||||||||||
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Investments in Russell Affiliated Mutual Funds | $ | 86,340 | $ | — | $ | — | $ | 86,340 | 100.0 | |||
Total Investments | 86,340 | — | — | 86,340 | 100.0 | |||||||
Other Assets and Liabilities, Net | (—)* | |||||||||||
100.0 | ||||||||||||
* Less than .05% of net assets. | ||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
142 2030 Strategy Fund
Russell Investment Company
2030 Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 75,806 |
Investments, at fair value(>) | 86,340 | |
Receivables: | ||
Investments sold | 29 | |
Fund shares sold | 39 | |
Total assets | 86,408 | |
Liabilities | ||
Payables: | ||
Fund shares redeemed | 67 | |
Accrued fees to affiliates | 11 | |
Total liabilities | 78 | |
Net Assets | $ | 86,330 |
Net Assets Consist of: | ||
Accumulated net realized gain (loss) | $ | 3,965 |
Unrealized appreciation (depreciation) on investments | 10,534 | |
Shares of beneficial interest | 101 | |
Additional paid-in capital | 71,730 | |
Net Assets | $ | 86,330 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class A(#) | $ | 8.61 |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 9.14 |
Class A — Net assets | $ | 756,739 |
Class A — Shares outstanding ($.01 par value) | 87,851 | |
Net asset value per share: Class E(#) | $ | 8.52 |
Class E — Net assets | $ | 269,434 |
Class E — Shares outstanding ($.01 par value) | 31,612 | |
Net asset value per share: Class R1(#) | $ | 8.54 |
Class R1 — Net assets | $ | 45,444,955 |
Class R1 — Shares outstanding ($.01 par value) | 5,323,421 | |
Net asset value per share: Class R4(#) | $ | 8.52 |
Class R4 — Net assets | $ | 10,545,379 |
Class R4 — Shares outstanding ($.01 par value) | 1,237,968 | |
Net asset value per share: Class R5(#) | $ | 8.53 |
Class R5 — Net assets | $ | 20,120,156 |
Class R5 — Shares outstanding ($.01 par value) | 2,358,763 | |
Net asset value per share: Class S(#) | $ | 8.53 |
Class S — Net assets | $ | 9,193,314 |
Class S — Shares outstanding ($.01 par value) | 1,077,707 | |
Amounts in thousands | ||
(>) Investments in affiliated Russell funds | $ | 86,340 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
2030 Strategy Fund 143
Russell Investment Company
2030 Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 2,558 | |
Expenses | |||
Distribution fees - Class A | 2 | ||
Distribution fees - Class R5 | 67 | ||
Shareholder servicing fees - Class E | 1 | ||
Shareholder servicing fees - Class R4 | 37 | ||
Shareholder servicing fees - Class R5 | 67 | ||
Total expenses | 174 | ||
Net investment income (loss) | 2,384 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 3,169 | ||
Capital gain distributions from Underlying Funds | 1,700 | ||
Net realized gain (loss) | 4,869 | ||
Net change in unrealized appreciation (depreciation) on investments | (7,054 | ) | |
Net realized and unrealized gain (loss) | (2,185 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | 199 |
See accompanying notes which are an integral part of the financial statements.
144 2030 Strategy Fund
Russell Investment Company
2030 Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 2,384 | $ | 3,730 | ||
Net realized gain (loss) | 4,869 | 38,413 | ||||
Net change in unrealized appreciation (depreciation) | (7,054 | ) | (32,008 | ) | ||
Net increase (decrease) in net assets from operations | 199 | 10,135 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (35 | ) | (43 | ) | ||
Class E | (6 | ) | (11 | ) | ||
Class R1 | (1,205 | ) | (1,851 | ) | ||
Class R2 | — | (384 | ) | |||
Class R3 | — | (906 | ) | |||
Class R4 | (333 | ) | (25 | ) | ||
Class R5 | (527 | ) | (34 | ) | ||
Class S | (281 | ) | (474 | ) | ||
From net realized gain | ||||||
Class A | (599 | ) | — | |||
Class E | (76 | ) | — | |||
Class R1 | (14,989 | ) | — | |||
Class R4 | (4,908 | ) | — | |||
Class R5 | (9,219 | ) | — | |||
Class S | (3,747 | ) | — | |||
Net decrease in net assets from distributions | (35,925 | ) | (3,728 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (1,386 | ) | (61,941 | ) | ||
Total Net Increase (Decrease) in Net Assets | (37,112 | ) | (55,534 | ) | ||
Net Assets | ||||||
Beginning of period | 123,442 | 178,976 | ||||
End of period | $ | 86,330 | $ | 123,442 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | — | $ | 2 |
See accompanying notes which are an integral part of the financial statements.
2030 Strategy Fund 145
Russell Investment Company
2030 Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | 3 | $ | 29 | 2 | $ | 29 | ||||||
Proceeds from reinvestment of distributions | 72 | 630 | 4 | 43 | ||||||||
Payments for shares redeemed | (147 | ) | (1,294 | ) | (38 | ) | (467 | ) | ||||
Net increase (decrease) | (72 | ) | (635 | ) | (32 | ) | (395 | ) | ||||
Class E | ||||||||||||
Proceeds from shares sold | 10 | 94 | 19 | 235 | ||||||||
Proceeds from reinvestment of distributions | 9 | 81 | 1 | 11 | ||||||||
Payments for shares redeemed | (17 | ) | (185 | ) | (35 | ) | (436 | ) | ||||
Net increase (decrease) | 2 | (10 | ) | (15 | ) | (190 | ) | |||||
Class R1 | ||||||||||||
Proceeds from shares sold | 2,654 | 24,599 | 1,289 | 15,782 | ||||||||
Proceeds from reinvestment of distributions | 1,868 | 16,192 | 153 | 1,851 | ||||||||
Payments for shares redeemed | (3,254 | ) | (29,966 | ) | (4,362 | ) | (53,588 | ) | ||||
Net increase (decrease) | 1,268 | 10,825 | (2,920 | ) | (35,955 | ) | ||||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 243 | 2,983 | ||||||||
Proceeds from reinvestment of distributions | — | — | 32 | 384 | ||||||||
Payments for shares redeemed | — | — | (1,959 | ) | (23,939 | ) | ||||||
Net increase (decrease) | — | — | (1,684 | ) | (20,572 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 706 | 8,631 | ||||||||
Proceeds from reinvestment of distributions | — | — | 75 | 906 | ||||||||
Payments for shares redeemed | — | — | (5,085 | ) | (62,031 | ) | ||||||
Net increase (decrease) | — | — | (4,304 | ) | (52,494 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 207 | 1,866 | 1,357 | 16,576 | ||||||||
Proceeds from reinvestment of distributions | 606 | 5,241 | 2 | 25 | ||||||||
Payments for shares redeemed | (926 | ) | (8,193 | ) | (8 | ) | (100 | ) | ||||
Net increase (decrease) | (113 | ) | (1,086 | ) | 1,351 | 16,501 | ||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 563 | 5,170 | 3,289 | 40,186 | ||||||||
Proceeds from reinvestment of distributions | 1,125 | 9,747 | 3 | 34 | ||||||||
Payments for shares redeemed | (2,496 | ) | (24,345 | ) | (126 | ) | (1,545 | ) | ||||
Net increase (decrease) | (808 | ) | (9,428 | ) | 3,166 | 38,675 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 277 | 2,531 | 321 | 3,940 | ||||||||
Proceeds from reinvestment of distributions | 465 | 4,028 | 39 | 474 | ||||||||
Payments for shares redeemed | (800 | ) | (7,611 | ) | (970 | ) | (11,925 | ) | ||||
Net increase (decrease) | (58 | ) | (1,052 | ) | (610 | ) | (7,511 | ) | ||||
Total increase (decrease) | 219 | $ | (1,386 | ) | (5,048 | ) | $ | (61,941 | ) |
See accompanying notes which are an integral part of the financial statements.
146 2030 Strategy Fund
(This page intentionally left blank)
Russell Investment Company
2030 Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | ||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class A | ||||||||||||||||
October 31, 2015 | 12.55 | .31 | (.28 | ) | .03 | (.24 | ) | (3.73 | ) | |||||||
October 31, 2014 | 12.05 | .26 | .50 | .76 | (.26 | ) | — | |||||||||
October 31, 2013 | 10.55 | .21 | 1.50 | 1.71 | (.21 | ) | — | |||||||||
October 31, 2012 | 9.92 | .17 | .64 | .81 | (.18 | ) | — | |||||||||
October 31, 2011 | 9.92 | .23 | .01 | .24 | (.24 | ) | — | |||||||||
Class E | ||||||||||||||||
October 31, 2015 | 12.46 | .18 | (.15 | ) | .03 | (.24 | ) | (3.73 | ) | |||||||
October 31, 2014 | 11.96 | .28 | .48 | .76 | (.26 | ) | — | |||||||||
October 31, 2013 | 10.48 | .21 | 1.48 | 1.69 | (.21 | ) | — | |||||||||
October 31, 2012 | 9.84 | .19 | .63 | .82 | (.18 | ) | — | |||||||||
October 31, 2011 | 9.87 | .79 | (.59 | ) | .20 | (.23 | ) | — | ||||||||
Class R1 | ||||||||||||||||
October 31, 2015 | 12.48 | .21 | (.16 | ) | .05 | (.26 | ) | (3.73 | ) | |||||||
October 31, 2014 | 11.98 | .33 | .47 | .80 | (.30 | ) | — | |||||||||
October 31, 2013 | 10.49 | .24 | 1.49 | 1.73 | (.24 | ) | — | |||||||||
October 31, 2012 | 9.86 | .20 | .64 | .84 | (.21 | ) | — | |||||||||
October 31, 2011 | 9.87 | .24 | .02 | .26 | (.27 | ) | — | |||||||||
Class R4(3) | ||||||||||||||||
October 31, 2015 | 12.46 | .20 | (.17 | ) | .03 | (.24 | ) | (3.73 | ) | |||||||
October 31, 2014 | 11.96 | .27 | .49 | .76 | (.26 | ) | — | |||||||||
October 31, 2013 | 10.48 | .21 | 1.48 | 1.69 | (.21 | ) | — | |||||||||
October 31, 2012 | 9.84 | .20 | .61 | .81 | (.17 | ) | — | |||||||||
October 31, 2011 | 9.85 | .21 | .02 | .23 | (.24 | ) | — | |||||||||
Class R5(4) | ||||||||||||||||
October 31, 2015 | 12.47 | .19 | (.19 | ) | — | (.21 | ) | (3.73 | ) | |||||||
October 31, 2014 | 11.97 | .26 | .47 | .73 | (.23 | ) | — | |||||||||
October 31, 2013 | 10.48 | .19 | 1.48 | 1.67 | (.18 | ) | — | |||||||||
October 31, 2012 | 9.84 | .16 | .63 | .79 | (.15 | ) | — | |||||||||
October 31, 2011 | 9.85 | .21 | (.01 | ) | .20 | (.21 | ) | — | ||||||||
Class S | ||||||||||||||||
October 31, 2015 | 12.47 | .23 | (.18 | ) | .05 | (.26 | ) | (3.73 | ) | |||||||
October 31, 2014 | 11.98 | .33 | .46 | .79 | (.30 | ) | — | |||||||||
October 31, 2013 | 10.49 | .24 | 1.49 | 1.73 | (.24 | ) | — | |||||||||
October 31, 2012 | 9.86 | .20 | .64 | .84 | (.21 | ) | — | |||||||||
October 31, 2011 | 9.87 | .25 | .01 | .26 | (.27 | ) | — | |||||||||
See accompanying notes which are an integral part of the financial statements.
148 2030 Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(d) | (000 | ) | Gross(g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | |||||||||
(3.97 | ) | 8.61 | (.07 | ) | 757 | .25 | .25 | 3.23 | 32 | ||||||||
(.26 | ) | 12.55 | 6.40 | 2,011 | .25 | .25 | 2.14 | 60 | |||||||||
(.21 | ) | 12.05 | 16.42 | 2,321 | .25 | .25 | 1.85 | 16 | |||||||||
(.18 | ) | 10.55 | 8.32 | 2,033 | .25 | .25 | 1.70 | 26 | |||||||||
(.24 | ) | 9.92 | 2.39 | 1,820 | .25 | .25 | 2.21 | 28 | |||||||||
(3.97 | ) | 8.52 | (.08 | ) | 270 | .25 | .25 | 2.01 | 32 | ||||||||
(.26 | ) | 12.46 | 6.43 | 362 | .25 | .25 | 2.25 | 60 | |||||||||
(.21 | ) | 11.96 | 16.34 | 527 | .25 | .25 | 1.84 | 16 | |||||||||
(.18 | ) | 10.48 | 8.46 | 589 | .25 | .25 | 1.90 | 26 | |||||||||
(.23 | ) | 9.84 | 2.02 | 975 | .25 | .25 | 7.79 | 28 | |||||||||
(3.99 | ) | 8.54 | .22 | 45,445 | — | — | 2.29 | 32 | |||||||||
(.30 | ) | 12.48 | 6.72 | 50,599 | — | — | 2.66 | 60 | |||||||||
(.24 | ) | 11.98 | 16.71 | 83,569 | — | — | 2.18 | 16 | |||||||||
(.21 | ) | 10.49 | 8.65 | 87,265 | — | — | 1.99 | 26 | |||||||||
(.27 | ) | 9.86 | 2.55 | 79,046 | — | — | 2.39 | 28 | |||||||||
(3.97 | ) | 8.52 | (.05 | ) | 10,545 | .25 | .25 | 2.22 | 32 | ||||||||
(.26 | ) | 12.46 | 6.45 | 16,830 | .25 | .25 | 2.21 | 60 | |||||||||
(.21 | ) | 11.96 | 16.33 | 20,147 | .25 | .25 | 1.86 | 16 | |||||||||
(.17 | ) | 10.48 | 8.43 | 21,520 | .25 | .25 | 1.96 | 26 | |||||||||
(.24 | ) | 9.84 | 2.27 | 38,352 | .25 | .25 | 2.03 | 28 | |||||||||
(3.94 | ) | 8.53 | (.35 | ) | 20,120 | .50 | .50 | 2.02 | 32 | ||||||||
(.23 | ) | 12.47 | 6.17 | 39,472 | .50 | .50 | 2.12 | 60 | |||||||||
(.18 | ) | 11.97 | 16.13 | 51,507 | .50 | .50 | 1.66 | 16 | |||||||||
(.15 | ) | 10.48 | 8.15 | 50,961 | .50 | .50 | 1.64 | 26 | |||||||||
(.21 | ) | 9.84 | 2.03 | 71,140 | .50 | .50 | 2.09 | 28 | |||||||||
(3.99 | ) | 8.53 | .22 | 9,193 | — | — | 2.46 | 32 | |||||||||
(.30 | ) | 12.47 | 6.63 | 14,168 | — | — | 2.68 | 60 | |||||||||
(.24 | ) | 11.98 | 16.71 | 20,905 | — | — | 2.15 | 16 | |||||||||
(.21 | ) | 10.49 | 8.65 | 24,300 | — | — | 1.98 | 26 | |||||||||
(.27 | ) | 9.86 | 2.55 | 22,043 | — | — | 2.48 | 28 |
See accompanying notes which are an integral part of the financial statements.
2030 Strategy Fund 149
Russell Investment Company
2035 Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
2035 Strategy Fund - Class R1 | 2035 Strategy Fund - Class R5‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.34 | )% | 1 Year | (0.89 | )% | ||
5 Years | 7.46 | %§ | 5 Years | 6.94 | %§ | ||
Inception* | 4.20 | %§ | Inception* | 3.68 | %§ | ||
2035 Strategy Fund - Class R4‡ | Russell 1000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.59 | )% | 1 Year | 4.86 | % | ||
5 Years | 7.19 | %§ | 5 Years | 14.32 | %§ | ||
Inception* | 3.93 | %§ | Inception* | 8.64 | %§ |
150 2035 Strategy Fund
Russell Investment Company
2035 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The 2035 Strategy Fund (the “Fund”) is a fund of funds that | returned 4.49% over the period, while non-U.S. equities returned |
invests in other Russell Investment Company mutual funds (the | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® |
“Underlying Funds”). The Underlying Funds employ a multi- | Index) and emerging markets returned -13.58% (as measured by |
manager approach whereby portions of the Underlying Funds | the Russell Emerging Markets Index). The underperformance of |
are allocated to different money managers. Underlying Fund | non-U.S. equities versus U.S. equities was a key negative driver |
assets not allocated to money managers are managed by Russell | to the Fund’s benchmark-relative performance, as U.S. equities |
Investment Management Company (“RIMCo”), the Fund’s and | finished at 4.86% for the fiscal year as measured by the Fund’s |
Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | benchmark. |
advisor, may change the allocation of the Underlying Funds’ | The fiscal year ended October 31, 2015 was characterized by |
assets among money managers at any time. An exemptive order | slowing global growth and commodity price weakness. Overall, |
from the Securities and Exchange Commission (“SEC”) permits | this was modestly positive for fixed income assets, as yields fell. |
RIMCo to engage or terminate a money manager in an Underlying | However, the Fund’s exposure to the fixed income asset class had |
Fund at any time, subject to approval by the Underlying Fund’s | a negative effect on benchmark-relative performance as core fixed |
Board, without a shareholder vote. Pursuant to the terms of the | income underperformed U.S. equities. |
exemptive order, an Underlying Fund is required to notify its | |
shareholders within 90 days of when a money manager begins | Within alternative strategies, commodities exposure had the |
providing services. | largest negative impact on the Fund, as the asset class (as |
measured by the Bloomberg Commodity Index Total Return) lost | |
What is the Fund’s investment objective? | 25.72% during the period, significantly underperforming U.S. |
The Fund seeks to provide capital growth and income consistent | equities. Global REITs and listed infrastructure (as represented |
with its current asset allocation which will change over time, with | by the FTSE EPRA/NAREIT Developed Real Estate Index (Net) |
an increasing allocation to fixed income funds. | and S&P Global Infrastructure Index (Net)) finished the fiscal |
The Fund pursues this objective by investing in a diversified | year up 2.68% and down 6.29%, respectively. Both of these asset |
portfolio that, as of October 31, 2015, consisted of approximately | classes underperformed U.S. equities, which negatively impacted |
73.3% equity Underlying Funds, 17.4% fixed income Underlying | the Fund’s benchmark-relative performance. |
Funds and 9.3% alternative Underlying Funds. The Fund’s | How did the investment strategies and techniques employed |
allocation to fixed income Underlying Funds will be fixed at | by the Fund and the Underlying Funds affect the Fund’s |
66.3% in approximately the year 2035. | performance? |
How did the Fund perform relative to its benchmark for the | The Fund is a fund of funds and its performance is based on |
fiscal year ended October 31, 2015? | RIMCo’s strategic asset allocations and the performance of the |
For the fiscal year ended October 31, 2015, the Fund’s Class R1, | Underlying Funds in which the Fund invests. |
Class R4 and Class R5 Shares lost 0.34%, 0.59% and 0.89%, | With respect to the Fund’s global equity exposure, the Fund’s |
respectively. This is compared to the Fund’s primary benchmark, | strategic allocation to the Russell Global Equity Fund, Select |
the Russell 1000® Index, which gained 4.86% during the same | International Equity Fund and the Russell Emerging Markets |
period. The Fund’s performance includes operating expenses, | Fund detracted as these all underperformed the Fund’s U.S. |
whereas index returns are unmanaged and do not include | equity benchmark. From an active management perspective, an |
expenses of any kind. | underweighttoenergyandanoverweighttoconsumerdiscretionary |
For the fiscal year ended October 31, 2015, the Morningstar® | in the Russell Global Equity Fund contributed to positive excess |
Target Date 2031-2035 gained 0.42%. This result serves as a | return versus its benchmark. For the Russell Emerging Markets |
peer comparison and is expressed net of operating expenses. | Fund, unsuccessful stock selection in China and Brazil was the |
main driver of the Fund’s benchmark-relative underperformance. | |
The Fund’s underperformance relative to the Russell 1000® | Chinese stocks fell sharply and broader emerging markets also |
Index was due to the Fund’s allocation to non-U.S. equity and | lost significant value during the period due to growth concerns. |
commodity Underlying Funds, which underperformed large cap | A valuation bias in the Select International Equity Fund led to |
U.S. equity over the period. | benchmark-relative underperformance as lower price-to-book |
How did the market conditions described in the Market | stocks strongly underperformed. |
Summary report affect the Fund’s performance? | The Fund’s allocation to U.S. equity Underlying Funds had a |
It was a mixed equity market for the fiscal year ending October | negative effect on the Fund’s benchmark-relative performance. |
31, 2015. U.S. stocks (as measured by the Russell 3000® Index) | Underlying active management within the U.S. equity Underlying |
2035 Strategy Fund 151
Russell Investment Company
2035 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Funds detracted, as most of the U.S. equity Underlying Funds | fixed income or alternative category level based on RIMCo’s |
underperformed their respective U.S. equity market segment | capital markets research. RIMCo’s asset allocation modifications |
as represented by their primary benchmarks. The Select U.S. | benefited the Fund’s performance relative to the Fund’s target |
Equity Fund underperformed the Russell 1000® Index due to | strategic asset allocation. |
an underweight to growth stocks, which outperformed during | On November 21, 2014, RIMCo reduced the Fund’s overweight to |
the period. In addition, the Fund’s strategic allocation to the | the Russell Global Equity Fund by 1.50%. This was offset by a |
Russell U.S. Small Cap Equity Fund also detracted from the | 1.00% increase to the Russell Global Opportunistic Credit Fund |
Fund’s benchmark-relative performance, as U.S. small cap equity | and 0.50% increase to the Russell Commodity Strategies Fund. |
underperformed the Fund’s benchmark and the Underlying Fund | This position was implemented after strong performance in the |
underperformed its Russell 2000® Index benchmark due to an | equity market and to position the Fund for rising interest rates. |
overweight to micro-capitalization stocks which underperformed | |
during the period. | On December 31, 2014, RIMCo modified the Fund’s target |
strategic asset allocation and as a result, the Fund increased its | |
The Fund’s strategic allocation to fixed income Underlying Funds | exposure to fixed income Underlying Funds and decreased its |
had a negative impact on its benchmark-relative performance | exposure to equity and alternative Underlying Funds. |
as fixed income underperformed U.S. equity. From an active | |
management perspective, the Russell Global Opportunistic | On February 19, 2015, RIMCo removed the Fund’s overweight to |
Credit Fund underperformed its benchmark largely because of an | U.S. equities by reducing the Fund’s allocation to the Select U.S. |
ex-benchmark allocation to local currency emerging market debt | Equity Fund by 0.50%. This was offset by a 0.50% increase in |
and the associated currency risk as the U.S. dollar appreciated | the Fund’s allocation to the Russell Commodity Strategies Fund, |
strongly versus emerging market currencies. The Russell | which neutralized the previous underweight to commodities. This |
Strategic Bond Fund was negatively impacted by its overweight | position was implemented after strong U.S. equity performance |
to credit, but its currency positioning drove excess return relative | and a sharp decline in commodities. |
to its benchmark. | On August 10, 2015, RIMCo reduced the Fund’s allocation to |
The Fund’s strategic allocation to alternative Underlying Funds | the Russell Emerging Markets Fund by 0.75% as concerns |
had a negative impact on benchmark-relative performance | over emerging markets growth intensified. This was offset by an |
as each of these asset classes underperformed the Fund’s U.S. | increase in the allocation to large cap developed equities through |
equity benchmark. From an active management standpoint, | a 0.50% increase in the Fund’s allocation to the Select U.S. |
performance of these Underlying Funds was mixed. The Russell | Equity Fund and a 0.25% increase in the Fund’s allocation to the |
Global Infrastructure Fund and the Russell Global Real Estate | Select International Equity Fund. |
Securities Fund outperformed their respective benchmarks | The views expressed in this report reflect those of the portfolio |
while the Russell Commodity Strategies Fund underperformed | managers only through the end of the period covered by |
its benchmark. The Russell Global Infrastructure Fund and the | the report. These views do not necessarily represent the |
Russell Global Real Estate Securities Fund both benefited from | views of RIMCo, or any other person in RIMCo or any other |
strong stock selection by underlying money managers. The Russell | affiliated organization. These views are subject to change |
Commodity Strategies Fund underperformed its benchmark due | at any time based upon market conditions or other events, |
largely to exposure to the energy sector. | and RIMCo disclaims any responsibility to update the views |
Describe any changes to the Fund’s structure or allocation | contained herein. These views should not be relied on as |
to the Underlying Funds. | investment advice and, because investment decisions for |
RIMCo has the discretion to vary the Fund’s actual allocation from | a Russell Investment Company (“RIC”) Fund are based on |
the target strategic asset allocation by up to +/- 5% at the equity, | numerous factors, should not be relied on as an indication |
of investment decisions of any RIC Fund. |
152 2035 Strategy Fund
Russell Investment Company
2035 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* Assumes initial investment on March 31, 2008.
** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
‡ The Fund first issued Class R4 and Class R5 Shares on October 1, 2014. The returns shown for Class R4 and Class R5 Shares prior to that date are the returns
of the Fund’s Class R2 Shares and Class R3 Shares, respectively.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
2035 Strategy Fund 153
Russell Investment Company
2035 Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Hypothetical | |||||
The following disclosure provides important information | Performance (5% | |||||
Actual | return before | |||||
regarding the Fund’s Shareholder Expense Example | Class R1 | Performance | expenses) | |||
(“Example”). | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Example | Ending Account Value | |||||
As a shareholder of the Fund, you incur ongoing costs, including | October 31, 2015 | $ | 956.70 | $ | 1,025.21 | |
distribution (12b-1) and/or service fees and other Fund expenses. | Expenses Paid During Period* | $ | — | $ | — | |
The Example is intended to help you understand your ongoing | * There were no expenses charged to the Class. | |||||
costs (in dollars) of investing in the Fund and to compare these | ||||||
costs with the ongoing costs of investing in other mutual funds. | Hypothetical | |||||
Performance (5% | ||||||
The Example is based on an investment of $1,000 invested at the | Actual | return before | ||||
beginning of the period and held for the entire period indicated, | Class R4 | Performance | expenses) | |||
which for this Fund is from May 1, 2015 to October 31, 2015. | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | |||||
The information in the table under the heading “Actual | October 31, 2015 | $ | 955.40 | $ | 1,023.95 | |
Expenses Paid During Period* | $ | 1.23 | $ | 1.28 | ||
Performance” provides information about actual account values | ||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
that you paid over the period. Simply divide your account value by | year period). | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | ||||||
= 8.6), then multiply the result by the number in the first column | Hypothetical | |||||
in the row entitled “Expenses Paid During Period” to estimate | Performance (5% | |||||
Actual | return before | |||||
the expenses you paid on your account during this period. | Class R5 | Performance | expenses) | |||
Beginning Account Value | ||||||
Hypothetical Example for Comparison Purposes | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
The information in the table under the heading “Hypothetical | Ending Account Value | |||||
Performance (5% return before expenses)” provides information | October 31, 2015 | $ | 955.00 | $ | 1,022.68 | |
about hypothetical account values and hypothetical expenses | Expenses Paid During Period* | $ | 2.46 | $ | 2.55 | |
based on the Fund’s actual expense ratio and an assumed rate of | * Expenses are equal to the Fund's annualized expense ratio of 0.50% | |||||
return of 5% per year before expenses, which is not the Fund’s | (representing the six month period annualized), multiplied by the average | |||||
actual return. The hypothetical account values and expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
may not be used to estimate the actual ending account balance or | year period). | |||||
expenses you paid for the period. You may use this information | ||||||
to compare the ongoing costs of investing in the Fund and other | ||||||
funds. To do so, compare this 5% hypothetical example with the | ||||||
5% hypothetical examples that appear in the shareholder reports | ||||||
of other funds. | ||||||
Please note that the expenses shown in the table are meant | ||||||
to highlight your ongoing costs only and do not reflect any | ||||||
transactional costs. Therefore, the information under the heading | ||||||
“Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | ||||||
determine the relative total costs of owning different funds. In | ||||||
addition, if these transactional costs were included, your costs | ||||||
would have been higher. |
154 2035 Strategy Fund
Russell Investment Company
2035 Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||||||
Fair | ||||||||||||
Value | ||||||||||||
Shares | $ | |||||||||||
Investments in Russell Affiliated Mutual Funds - 100.0% | ||||||||||||
Alternative - 8.5% | ||||||||||||
Russell Commodity Strategies Fund Class Y | 139,590 | 793 | ||||||||||
Russell Global Infrastructure Fund Class Y | 58,156 | 665 | ||||||||||
Russell Global Real Estate Securities Fund Class Y | 17,245 | 662 | ||||||||||
2,120 | ||||||||||||
Domestic Equities - 38.0% | ||||||||||||
Russell U.S. Defensive Equity Fund Class Y | 15,707 | 750 | ||||||||||
Russell U.S. Dynamic Equity Fund Class Y | 95,155 | 1,081 | ||||||||||
Russell U.S. Small Cap Equity Fund Class Y | 65,205 | 1,868 | ||||||||||
Select U.S. Equity Fund Class Y | 540,817 | 5,808 | ||||||||||
9,507 | ||||||||||||
Fixed Income - 18.4% | ||||||||||||
Russell Global Opportunistic Credit Fund Class Y | 65,188 | 596 | ||||||||||
Russell Strategic Bond Fund Class Y | 366,770 | 4,008 | ||||||||||
4,604 | ||||||||||||
International Equities - 35.1% | ||||||||||||
Russell Emerging Markets Fund Class Y | 110,858 | 1,690 | ||||||||||
Russell Global Equity Fund Class Y | 231,487 | 2,657 | ||||||||||
Select International Equity Fund Class Y | 487,923 | 4,455 | ||||||||||
8,802 | ||||||||||||
Total Investments in Russell Affiliated Mutual Funds | ||||||||||||
(cost $22,633) | 25,033 | |||||||||||
Total Investments 100.0% | �� | |||||||||||
(identified cost $22,633) | 25,033 | |||||||||||
Other Assets and Liabilities, Net - (0.0%) | (3 | ) | ||||||||||
Net Assets - 100.0% | 25,030 | |||||||||||
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Investments in Russell Affiliated Mutual Funds | $ | 25,033 | $ | — | $ | — | $ | 25,033 | 100.0 | |||
Total Investments | 25,033 | — | — | 25,033 | 100.0 | |||||||
Other Assets and Liabilities, Net | (—)* | |||||||||||
100.0 | ||||||||||||
* Less than .05% of net assets. | ||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
2035 Strategy Fund 155
Russell Investment Company
2035 Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 22,633 |
Investments, at fair value(>) | 25,033 | |
Receivables: | ||
Fund shares sold | 27 | |
Total assets | 25,060 | |
Liabilities | ||
Payables: | ||
Investments purchased | 24 | |
Fund shares redeemed | 2 | |
Accrued fees to affiliates | 4 | |
Total liabilities | 30 | |
Net Assets | $ | 25,030 |
Net Assets Consist of: | ||
Accumulated net realized gain (loss) | $ | 206 |
Unrealized appreciation (depreciation) on investments | 2,400 | |
Shares of beneficial interest | 29 | |
Additional paid-in capital | 22,395 | |
Net Assets | $ | 25,030 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class R1(#) | $ | 8.74 |
Class R1 — Net assets | $ | 10,865,241 |
Class R1 — Shares outstanding ($.01 par value) | 1,243,066 | |
Net asset value per share: Class R4(#) | $ | 8.73 |
Class R4 — Net assets | $ | 7,634,318 |
Class R4 — Shares outstanding ($.01 par value) | 874,447 | |
Net asset value per share: Class R5(#) | $ | 8.73 |
Class R5 — Net assets | $ | 6,530,530 |
Class R5 — Shares outstanding ($.01 par value) | 748,109 | |
Amounts in thousands | ||
(>) Investments in affiliated Russell funds | $ | 25,033 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
156 2035 Strategy Fund
Russell Investment Company
2035 Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 579 | |
Expenses | |||
Distribution fees - Class R5 | 20 | ||
Shareholder servicing fees - Class R4 | 21 | ||
Shareholder servicing fees - Class R5 | 20 | ||
Total expenses | 61 | ||
Net investment income (loss) | 518 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (85 | ) | |
Capital gain distributions from Underlying Funds | 468 | ||
Net realized gain (loss) | 383 | ||
Net change in unrealized appreciation (depreciation) on investments | (977 | ) | |
Net realized and unrealized gain (loss) | (594 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (76 | ) |
See accompanying notes which are an integral part of the financial statements.
2035 Strategy Fund 157
Russell Investment Company
2035 Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | |||||||
Amounts in thousands | 2015 | 2014 | |||||
Increase (Decrease) in Net Assets | |||||||
Operations | |||||||
Net investment income (loss) | $ | 518 | $ | 688 | |||
Net realized gain (loss) | 383 | 5,889 | |||||
Net change in unrealized appreciation (depreciation) | (977 | ) | (4,673 | ) | |||
Net increase (decrease) in net assets from operations | (76 | ) | 1,904 | ||||
Distributions | |||||||
From net investment income | |||||||
Class R1 | (218 | ) | (297 | ) | |||
Class R2 | — | (140 | ) | ||||
Class R3 | — | (245 | ) | ||||
Class R4 | (153 | ) | (5 | ) | |||
Class R5 | (148 | ) | (—)** | ||||
From net realized gain | |||||||
Class R1 | (1,980 | ) | (254 | ) | |||
Class R2 | — | (132 | ) | ||||
Class R3 | — | (256 | ) | ||||
Class R4 | (1,702 | ) | — | ||||
Class R5 | (2,029 | ) | — | ||||
Net decrease in net assets from distributions | (6,230 | ) | (1,329 | ) | |||
Share Transactions* | |||||||
Net increase (decrease) in net assets from share transactions | 4,486 | (3,663 | ) | ||||
Total Net Increase (Decrease) in Net Assets | (1,820 | ) | (3,088 | ) | |||
Net Assets | |||||||
Beginning of period | 26,850 | 29,938 | |||||
End of period | $ | 25,030 | $ | 26,850 | |||
Undistributed (overdistributed) net investment income included in net assets | $ | — | $ | 1 | |||
** Less than $500. |
See accompanying notes which are an integral part of the financial statements.
158 2035 Strategy Fund
Russell Investment Company
2035 Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class R1 | ||||||||||||
Proceeds from shares sold | 918 | $ | 8,457 | 405 | $ | 4,535 | ||||||
Proceeds from reinvestment of distributions | 246 | 2,197 | 50 | 551 | ||||||||
Payments for shares redeemed | (609 | ) | (5,439 | ) | (779 | ) | (8,750 | ) | ||||
Net increase (decrease) | 555 | 5,215 | (324 | ) | (3,664 | ) | ||||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 197 | 2,223 | ||||||||
Proceeds from reinvestment of distributions | — | — | 25 | 272 | ||||||||
Payments for shares redeemed | — | — | (783 | ) | (8,720 | ) | ||||||
Net increase (decrease) | — | — | (561 | ) | (6,225 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 303 | 3,388 | ||||||||
Proceeds from reinvestment of distributions | — | — | 45 | 500 | ||||||||
Payments for shares redeemed | — | — | (1,459 | ) | (16,194 | ) | ||||||
Net increase (decrease) | — | — | (1,111 | ) | (12,306 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 170 | 1,588 | 680 | 7,552 | ||||||||
Proceeds from reinvestment of distributions | 208 | 1,854 | —** | 5 | ||||||||
Payments for shares redeemed | (180 | ) | (1,610 | ) | (4 | ) | (49 | ) | ||||
Net increase (decrease) | 198 | 1,832 | 676 | 7,508 | ||||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 253 | 2,336 | 1,039 | 11,528 | ||||||||
Proceeds from reinvestment of distributions | 245 | 2,177 | —** | 1 | ||||||||
Payments for shares redeemed | (744 | ) | (7,074 | ) | (44 | ) | (505 | ) | ||||
Net increase (decrease) | (246 | ) | (2,561 | ) | 995 | 11,024 | ||||||
Total increase (decrease) | 507 | $ | 4,486 | (325 | ) | $ | (3,663 | ) | ||||
** Less than 500 shares. |
See accompanying notes which are an integral part of the financial statements.
2035 Strategy Fund 159
Russell Investment Company
2035 Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||||
$ | ||||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||||
Class R1 | ||||||||||||||||||
October 31, 2015 | 11.39 | .18 | (.18 | ) | — | (.23 | ) | (2.42 | ) | |||||||||
October 31, 2014 | 11.16 | .33 | .45 | .78 | (.30 | ) | (.25 | ) | ||||||||||
October 31, 2013 | 9.68 | .17 | 1.75 | 1.92 | (.18 | ) | (.26 | ) | ||||||||||
October 31, 2012 | 9.10 | .17 | .63 | .80 | (.17 | ) | (.05 | ) | ||||||||||
October 31, 2011 | 9.13 | .20 | — (h) | .20 | (.23 | ) | — | |||||||||||
Class R4(3) | ||||||||||||||||||
October 31, 2015 | 11.38 | .18 | (.21 | ) | (.03 | ) | (.20 | ) | (2.42 | ) | ||||||||
October 31, 2014 | 11.15 | .24 | .51 | .75 | (.27 | ) | (.25 | ) | ||||||||||
October 31, 2013 | 9.67 | .16 | 1.74 | 1.90 | (.16 | ) | (.26 | ) | ||||||||||
October 31, 2012 | 9.09 | .14 | .63 | .77 | (.14 | ) | (.05 | ) | ||||||||||
October 31, 2011 | 9.12 | .20 | (.03 | ) | .17 | (.20 | ) | — | ||||||||||
Class R5(4) | ||||||||||||||||||
October 31, 2015 | 11.38 | .17 | (.22 | ) | (.05 | ) | (.18 | ) | (2.42 | ) | ||||||||
October 31, 2014 | 11.15 | .24 | .48 | .72 | (.24 | ) | (.25 | ) | ||||||||||
October 31, 2013 | 9.67 | .12 | 1.75 | 1.87 | (.13 | ) | (.26 | ) | ||||||||||
October 31, 2012 | 9.08 | .13 | .62 | .75 | (.11 | ) | (.05 | ) | ||||||||||
October 31, 2011 | 9.11 | .15 | — (h) | .15 | (.18 | ) | — | |||||||||||
See accompanying notes which are an integral part of the financial statements.
160 2035 Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return | (000 | ) | Gross(g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | |||||||||
(2.65 | ) | 8.74 | (.34 | ) | 10,865 | — | — | 1.94 | 46 | ||||||||
(.55 | ) | 11.39 | 7.12 | 7,843 | — | — | 2.91 | 80 | |||||||||
(.44 | ) | 11.16 | 20.63 | 11,299 | — | — | 1.68 | 44 | |||||||||
(.22 | ) | 9.68 | 8.99 | 11,495 | — | — | 1.78 | 47 | |||||||||
(.23 | ) | 9.10 | 2.10 | 9,728 | — | — | 2.13 | 42 | |||||||||
(2.62 | ) | 8.73 | (.59 | ) | 7,634 | .25 | .25 | 1.90 | 46 | ||||||||
(.52 | ) | 11.38 | 6.86 | 7,695 | .25 | .25 | 2.14 | 80 | |||||||||
(.42 | ) | 11.15 | 20.36 | 6,258 | .25 | .25 | 1.52 | 44 | |||||||||
(.19 | ) | 9.67 | 8.72 | 5,457 | .25 | .25 | 1.49 | 47 | |||||||||
(.20 | ) | 9.09 | 1.81 | 4,944 | .25 | .25 | 2.12 | 42 | |||||||||
(2.60 | ) | 8.73 | (.89 | ) | 6,531 | .50 | .50 | 1.84 | 46 | ||||||||
(.49 | ) | 11.38 | 6.60 | 11,312 | .50 | .50 | 2.18 | 80 | |||||||||
(.39 | ) | 11.15 | 20.06 | 12,381 | .50 | .50 | 1.21 | 44 | |||||||||
(.16 | ) | 9.67 | 8.50 | 9,014 | .50 | .50 | 1.36 | 47 | |||||||||
(.18 | ) | 9.08 | 1.60 | 9,473 | .50 | .50 | 1.64 | 42 |
See accompanying notes which are an integral part of the financial statements.
2035 Strategy Fund 161
Russell Investment Company
2040 Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
2040 Strategy Fund - Class A‡ | 2040 Strategy Fund - Class R5‡‡‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (6.63 | )% | 1 Year | (1.07 | )% | ||
5 Years | 5.85 | %§ | 5 Years | 6.87 | %§ | ||
10 Years | 4.07 | %§ | 10 Years | 4.42 | %§ | ||
2040 Strategy Fund - Class E | 2040 Strategy Fund - Class S | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.97 | )% | 1 Year | (0.65 | )% | ||
5 Years | 7.09 | %§ | 5 Years | 7.39 | %§ | ||
10 Years | 4.66 | %§ | 10 Years | 4.95 | %§ | ||
2040 Strategy Fund - Class R1‡‡ | Russell 1000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.61 | )% | 1 Year | 4.86 | % | ||
5 Years | 7.40 | %§ | 5 Years | 14.32 | %§ | ||
10 Years | 4.95 | %§ | 10 Years | 7.98 | %§ | ||
2040 Strategy Fund - Class R4‡‡‡ | |||||||
Total | |||||||
Return | |||||||
1 Year | (0.91 | )% | |||||
5 Years | 7.14 | %§ | |||||
10 Years | 4.67 | %§ |
162 2040 Strategy Fund
Russell Investment Company
2040 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The 2040 Strategy Fund (the “Fund”) is a fund of funds that | returned 4.49% over the period, while non-U.S. equities returned |
invests in other Russell Investment Company mutual funds (the | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® |
“Underlying Funds”). The Underlying Funds employ a multi- | Index) and emerging markets returned -13.58% (as measured by |
manager approach whereby portions of the Underlying Funds | the Russell Emerging Markets Index). The underperformance of |
are allocated to different money managers. Underlying Fund | non-U.S. equities versus U.S. equities was a key negative driver |
assets not allocated to money managers are managed by Russell | to the Fund’s benchmark-relative performance, as U.S. equities |
Investment Management Company (“RIMCo”), the Fund’s and | finished at 4.86% for the fiscal year as measured by the Fund’s |
Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | benchmark. |
advisor, may change the allocation of the Underlying Funds’ | The fiscal year ended October 31, 2015 was characterized by |
assets among money managers at any time. An exemptive order | slowing global growth and commodity price weakness. Overall, |
from the Securities and Exchange Commission (“SEC”) permits | this was modestly positive for fixed income assets, as yields fell. |
RIMCo to engage or terminate a money manager in an Underlying | However, the Fund’s exposure to the fixed income asset class had |
Fund at any time, subject to approval by the Underlying Fund’s | a negative effect on benchmark-relative performance as core fixed |
Board, without a shareholder vote. Pursuant to the terms of the | income underperformed U.S. equities. |
exemptive order, an Underlying Fund is required to notify its | |
shareholders within 90 days of when a money manager begins | Within alternative strategies, commodities exposure had the |
providing services. | largest negative impact on the Fund, as the asset class (as |
measured by the Bloomberg Commodity Index Total Return) lost | |
What is the Fund’s investment objective? | 25.72% during the period, significantly underperforming U.S. |
The Fund seeks to provide capital growth and income consistent | equities. Global REITs and listed infrastructure (as represented |
with its current asset allocation which will change over time, with | by the FTSE EPRA/NAREIT Developed Real Estate Index (Net) |
an increasing allocation to fixed income funds. | and S&P Global Infrastructure Index (Net)) finished the fiscal |
The Fund pursues this objective by investing in a diversified | year up 2.68% and down 6.29%, respectively. Both of these asset |
portfolio that, as of October 31, 2015, consisted of approximately | classes underperformed U.S. equities, which negatively impacted |
82.5% equity Underlying Funds, 10.5% fixed income Underlying | the Fund’s benchmark-relative performance. |
Funds and 7% alternative Underlying Funds. The Fund’s | How did the investment strategies and techniques employed |
allocation to fixed income Underlying Funds will be fixed at | by the Fund and the Underlying Funds affect the Fund’s |
66.3% in approximately the year 2040. | performance? |
How did the Fund perform relative to its benchmark for the | The Fund is a fund of funds and its performance is based on |
fiscal year ended October 31, 2015? | RIMCo’s strategic asset allocations and the performance of the |
For the fiscal year ended October 31, 2015, the Fund’s Class A, | Underlying Funds in which the Fund invests. |
Class E, Class R1, Class R4, Class R5 and Class S Shares lost | With respect to the Fund’s global equity exposure, the Fund’s |
0.92%, 0.97%, 0.61%, 0.91%, 1.07% and 0.65%, respectively. | strategic allocation to the Russell Global Equity Fund, Select |
This is compared to the Fund’s primary benchmark, the Russell | International Equity Fund and the Russell Emerging Markets |
1000® Index, which gained 4.86% during the same period. The | Fund detracted as these all underperformed the Fund’s U.S. |
Fund’s performance includes operating expenses, whereas index | equity benchmark. From an active management perspective, an |
returns are unmanaged and do not include expenses of any kind. | underweighttoenergyandanoverweighttoconsumerdiscretionary |
For the fiscal year ended October 31, 2015, the Morningstar® | in the Russell Global Equity Fund contributed to positive excess |
Target Date 2036-2040 gained 0.27%. This result serves as a | return versus its benchmark. For the Russell Emerging Markets |
peer comparison and is expressed net of operating expenses. | Fund, unsuccessful stock selection in China and Brazil was the |
main driver of the Fund’s benchmark-relative underperformance. | |
The Fund’s underperformance relative to the Russell 1000® | Chinese stocks fell sharply and broader emerging markets also |
Index was due to the Fund’s allocation to non-U.S. equity and | lost significant value during the period due to growth concerns. |
commodity Underlying Funds, which underperformed large cap | A valuation bias in the Select International Equity Fund led to |
U.S. equity over the period. | benchmark-relative underperformance as lower price-to-book |
How did the market conditions described in the Market | stocks strongly underperformed. |
Summary report affect the Fund’s performance? | The Fund’s allocation to U.S. equity Underlying Funds had a |
It was a mixed equity market for the fiscal year ending October | negative effect on the Fund’s benchmark-relative performance. |
31, 2015. U.S. stocks (as measured by the Russell 3000® Index) | Underlying active management within the U.S. Equity Underlying |
2040 Strategy Fund 163
Russell Investment Company
2040 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Funds detracted, as most of the U.S. equity Underlying Funds | fixed income or alternative category level based on RIMCo’s |
underperformed their respective U.S. equity market segment | capital markets research. RIMCo’s asset allocation modifications |
as represented by their primary benchmarks. The Select U.S. | benefited the Fund’s performance relative to the Fund’s target |
Equity Fund underperformed the Russell 1000® Index due to | strategic asset allocation. |
an underweight to growth stocks, which outperformed during | On November 21, 2014, RIMCo reduced the Fund’s overweight to |
the period. In addition, the Fund’s strategic allocation to the | the Russell Global Equity Fund by 0.50%. This was offset by a |
Russell U.S. Small Cap Equity Fund also detracted from the | 0.50% increase to the Russell Commodity Strategies Fund. This |
Fund’s benchmark-relative performance, as U.S. small cap equity | position was implemented after strong performance in the equity |
underperformed the Fund’s benchmark and the Underlying Fund | market and to position the Fund for rising interest rates. |
underperformed its Russell 2000® Index benchmark due to an | |
overweight to micro-capitalization stocks which underperformed | On February 19, 2015, RIMCo removed the Fund’s overweight to |
during the period. | U.S. equities by reducing the Fund’s allocation to the Select U.S. |
Equity Fund by 0.50%. This was offset by a 0.50% increase in | |
The Fund’s strategic allocation to fixed income Underlying Funds | the Fund’s allocation to the Russell Commodity Strategies Fund, |
had a negative impact on its benchmark-relative performance as | which neutralized the previous underweight to commodities. This |
fixed income underperformed U.S. equity. The Russell Strategic | position was implemented after strong U.S. equity performance |
Bond Fund was negatively impacted by its overweight to credit, | and a sharp decline in commodities. |
but its currency positioning drove excess return relative to its | |
benchmark. | On August 10, 2015, RIMCo reduced the Fund’s allocation to |
the Russell Emerging Markets Fund by 0.75% as concerns | |
The Fund’s strategic allocation to alternative Underlying Funds | over emerging markets growth intensified. This was offset by an |
had a negative impact on benchmark-relative performance | increase in the allocation to large cap developed equities through |
as each of these asset classes underperformed the Fund’s U.S. | a 0.50% increase in the Fund’s allocation to the Select U.S. |
equity benchmark. From an active management standpoint, | Equity Fund and a 0.25% increase in the Fund’s allocation to the |
performance of these Underlying Funds was mixed. The Russell | Select International Equity Fund. |
Global Infrastructure Fund and the Russell Global Real Estate | |
Securities Fund outperformed their respective benchmarks | The views expressed in this report reflect those of the portfolio |
while the Russell Commodity Strategies Fund underperformed | managers only through the end of the period covered by |
its benchmark. The Russell Global Infrastructure Fund and the | the report. These views do not necessarily represent the |
Russell Global Real Estate Securities Fund both benefited from | views of RIMCo, or any other person in RIMCo or any other |
strong stock selection by underlying money managers. The Russell | affiliated organization. These views are subject to change |
Commodity Strategies Fund underperformed its benchmark due | at any time based upon market conditions or other events, |
largely to exposure to the energy sector. | and RIMCo disclaims any responsibility to update the views |
contained herein. These views should not be relied on as | |
Describe any changes to the Fund’s structure or allocation | investment advice and, because investment decisions for |
to the Underlying Funds. | a Russell Investment Company (“RIC”) Fund are based on |
RIMCo has the discretion to vary the Fund’s actual allocation from | numerous factors, should not be relied on as an indication |
the target strategic asset allocation by up to +/- 5% at the equity, | of investment decisions of any RIC Fund. |
164 2040 Strategy Fund
Russell Investment Company
2040 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* Assumes initial investment on November 1, 2005.
** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
‡ The performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
‡‡ The Fund first issued Class R1 Shares on June 7, 2006. The returns shown for Class R1 Shares prior to that date are the returns of the Fund’s Class S Shares.
‡‡‡ The Fund first issued Class R4 Shares on October 1, 2014. The returns shown for Class R4 Shares prior to that date are the returns of the Fund’s Class E Shares
from January 3, 2005 to March 16, 2006 and the returns of Class R2 Shares from March 17, 2006 to September 30, 2014.
‡‡‡‡ The Fund first issued Class R5 Shares on October 1, 2014. The returns shown for Class R5 Shares prior to that date are the returns of the Fund’s Class R3
Shares.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
2040 Strategy Fund 165
Russell Investment Company
2040 Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Hypothetical | |||||
The following disclosure provides important information | Performance (5% | |||||
Actual | return before | |||||
regarding the Fund’s Shareholder Expense Example | Class A | Performance | expenses) | |||
(“Example”). | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Example | Ending Account Value | |||||
As a shareholder of the Fund, you incur ongoing costs, including | October 31, 2015 | $ | 950.20 | $ | 1,023.95 | |
distribution (12b-1) and/or service fees and other Fund expenses. | Expenses Paid During Period* | $ | 1.23 | $ | 1.28 | |
The Example is intended to help you understand your ongoing | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
costs (in dollars) of investing in the Fund and to compare these | (representing the six month period annualized), multiplied by the average | |||||
costs with the ongoing costs of investing in other mutual funds. | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | ||||||
The Example is based on an investment of $1,000 invested at the | ||||||
beginning of the period and held for the entire period indicated, | Hypothetical | |||||
which for this Fund is from May 1, 2015 to October 31, 2015. | Performance (5% | |||||
Actual | return before | |||||
Actual Expenses | Class E | Performance | expenses) | |||
Beginning Account Value | ||||||
The information in the table under the heading “Actual | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Performance” provides information about actual account values | Ending Account Value | |||||
and actual expenses. You may use the information in this column, | October 31, 2015 | $ | 950.30 | $ | 1,023.95 | |
together with the amount you invested, to estimate the expenses | Expenses Paid During Period* | $ | 1.23 | $ | 1.28 | |
that you paid over the period. Simply divide your account value by | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | (representing the six month period annualized), multiplied by the average | |||||
= 8.6), then multiply the result by the number in the first column | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
in the row entitled “Expenses Paid During Period” to estimate | year period). | |||||
the expenses you paid on your account during this period. | Hypothetical | |||||
Performance (5% | ||||||
Hypothetical Example for Comparison Purposes | Actual | return before | ||||
The information in the table under the heading “Hypothetical | Class R1 | Performance | expenses) | |||
Performance (5% return before expenses)” provides information | Beginning Account Value | |||||
about hypothetical account values and hypothetical expenses | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | ||||||
based on the Fund’s actual expense ratio and an assumed rate of | October 31, 2015 | $ | 951.70 | $ | 1,025.21 | |
return of 5% per year before expenses, which is not the Fund’s | Expenses Paid During Period* | $ | — | $ | — | |
actual return. The hypothetical account values and expenses | ||||||
may not be used to estimate the actual ending account balance or | * There were no expenses charged to the Class. | |||||
expenses you paid for the period. You may use this information | Hypothetical | |||||
to compare the ongoing costs of investing in the Fund and other | Performance (5% | |||||
funds. To do so, compare this 5% hypothetical example with the | Actual | return before | ||||
Class R4 | Performance | expenses) | ||||
5% hypothetical examples that appear in the shareholder reports | Beginning Account Value | |||||
of other funds. | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Please note that the expenses shown in the table are meant | Ending Account Value | |||||
to highlight your ongoing costs only and do not reflect any | October 31, 2015 | $ | 950.40 | $ | 1,023.95 | |
Expenses Paid During Period* | $ | 1.23 | $ | 1.28 | ||
transactional costs. Therefore, the information under the heading | ||||||
“Hypothetical Performance (5% return before expenses)” is | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
useful in comparing ongoing costs only, and will not help you | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
determine the relative total costs of owning different funds. In | year period). | |||||
addition, if these transactional costs were included, your costs | ||||||
would have been higher. |
166 2040 Strategy Fund
Russell Investment Company
2040 Strategy Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class R5 | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 949.90 | $ | 1,022.68 | |
Expenses Paid During Period* | $ | 2.46 | $ | 2.55 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.50% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). | |||||
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class S | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 951.70 | $ | 1,025.21 | |
Expenses Paid During Period* | $ | — | $ | — | |
* There were no expenses charged to the Class. |
2040 Strategy Fund 167
Russell Investment Company
2040 Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||||||
Fair | ||||||||||||
Value | ||||||||||||
Shares | $ | |||||||||||
Investments in Russell Affiliated Mutual Funds - 100.0% | ||||||||||||
Alternative - 9.5% | ||||||||||||
Russell Commodity Strategies Fund Class Y | 399,232 | 2,268 | ||||||||||
Russell Global Infrastructure Fund Class Y | 169,883 | 1,943 | ||||||||||
Russell Global Real Estate Securities Fund Class Y | 50,345 | 1,933 | ||||||||||
6,144 | ||||||||||||
Domestic Equities - 42.8% | ||||||||||||
Russell U.S. Defensive Equity Fund Class Y | 40,665 | 1,942 | ||||||||||
Russell U.S. Dynamic Equity Fund Class Y | 285,300 | 3,241 | ||||||||||
Russell U.S. Small Cap Equity Fund Class Y | 192,684 | 5,518 | ||||||||||
Select U.S. Equity Fund Class Y | 1,582,791 | 16,999 | ||||||||||
27,700 | ||||||||||||
Fixed Income - 7.0% | ||||||||||||
Russell Strategic Bond Fund Class Y | 414,623 | 4,532 | ||||||||||
International Equities - 40.7% | ||||||||||||
Russell Emerging Markets Fund Class Y | 337,443 | 5,143 | ||||||||||
Russell Global Equity Fund Class Y | 733,313 | 8,418 | ||||||||||
Select International Equity Fund Class Y | 1,398,371 | 12,767 | ||||||||||
26,328 | ||||||||||||
Total Investments in Russell Affiliated Mutual Funds | ||||||||||||
(cost $55,149) | 64,704 | |||||||||||
Total Investments 100.0% | ||||||||||||
(identified cost $55,149) | 64,704 | |||||||||||
Other Assets and Liabilities, Net - (0.0%) | (5 | ) | ||||||||||
Net Assets - 100.0% | 64,699 | |||||||||||
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Investments in Russell Affiliated Mutual Funds | $ | 64,704 | $ | — | $ | — | $ | 64,704 | 100.0 | |||
Total Investments | 64,704 | — | — | 64,704 | 100.0 | |||||||
Other Assets and Liabilities, Net | (—)* | |||||||||||
100.0 | ||||||||||||
* Less than .05% of net assets. | ||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
168 2040 Strategy Fund
Russell Investment Company
2040 Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 55,149 |
Investments, at fair value(>) | 64,704 | |
Receivables: | ||
Investments sold | 178 | |
Fund shares sold | 38 | |
Total assets | 64,920 | |
Liabilities | ||
Payables: | ||
Fund shares redeemed | 214 | |
Accrued fees to affiliates | 7 | |
Total liabilities | 221 | |
Net Assets | $ | 64,699 |
Net Assets Consist of: | ||
Undistributed (overdistributed) net investment income | $ | 2 |
Accumulated net realized gain (loss) | 4,099 | |
Unrealized appreciation (depreciation) on investments | 9,555 | |
Shares of beneficial interest | 77 | |
Additional paid-in capital | 50,966 | |
Net Assets | $ | 64,699 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class A(#) | $ | 8.38 |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 8.89 |
Class A — Net assets | $ | 736,396 |
Class A — Shares outstanding ($.01 par value) | 87,827 | |
Net asset value per share: Class E(#) | $ | 8.38 |
Class E — Net assets | $ | 116,145 |
Class E — Shares outstanding ($.01 par value) | 13,853 | |
Net asset value per share: Class R1(#) | $ | 8.39 |
Class R1 — Net assets | $ | 38,703,742 |
Class R1 — Shares outstanding ($.01 par value) | 4,612,347 | |
Net asset value per share: Class R4(#) | $ | 8.39 |
Class R4 — Net assets | $ | 6,639,963 |
Class R4 — Shares outstanding ($.01 par value) | 791,159 | |
Net asset value per share: Class R5(#) | $ | 8.37 |
Class R5 — Net assets | $ | 12,409,673 |
Class R5 — Shares outstanding ($.01 par value) | 1,483,141 | |
Net asset value per share: Class S(#) | $ | 8.39 |
Class S — Net assets | $ | 6,092,867 |
Class S — Shares outstanding ($.01 par value) | 725,820 | |
Amounts in thousands | ||
(>) Investments in affiliated Russell funds | $ | 64,704 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
2040 Strategy Fund 169
Russell Investment Company
2040 Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 1,796 | |
Expenses | |||
Distribution fees - Class A | 2 | ||
Distribution fees - Class R5 | 45 | ||
Shareholder servicing fees - Class E | 1 | ||
Shareholder servicing fees - Class R4 | 23 | ||
Shareholder servicing fees - Class R5 | 45 | ||
Total expenses | 116 | ||
Net investment income (loss) | 1,680 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 3,037 | ||
Capital gain distributions from Underlying Funds | 1,771 | ||
Net realized gain (loss) | 4,808 | ||
Net change in unrealized appreciation (depreciation) on investments | (6,447 | ) | |
Net realized and unrealized gain (loss) | (1,639 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | 41 |
See accompanying notes which are an integral part of the financial statements.
170 2040 Strategy Fund
Russell Investment Company
2040 Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 1,680 | $ | 3,298 | ||
Net realized gain (loss) | 4,808 | 34,273 | ||||
Net change in unrealized appreciation (depreciation) | (6,447 | ) | (28,866 | ) | ||
Net increase (decrease) in net assets from operations | 41 | 8,705 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (19 | ) | (25 | ) | ||
Class E | (6 | ) | (26 | ) | ||
Class R1 | (899 | ) | (1,693 | ) | ||
Class R2 | — | (277 | ) | |||
Class R3 | — | (735 | ) | |||
Class R4 | (182 | ) | (5 | ) | ||
Class R5 | (333 | ) | — | |||
Class S | (241 | ) | (536 | ) | ||
From net realized gain | ||||||
Class A | (380 | ) | — | |||
Class E | (137 | ) | — | |||
Class R1 | (15,255 | ) | — | |||
Class R4 | (3,650 | ) | — | |||
Class R5 | (7,836 | ) | — | |||
Class S | (4,503 | ) | — | |||
Net decrease in net assets from distributions | (33,441 | ) | (3,297 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (3,967 | ) | (43,151 | ) | ||
Total Net Increase (Decrease) in Net Assets | (37,367 | ) | (37,743 | ) | ||
Net Assets | ||||||
Beginning of period | 102,066 | 139,809 | ||||
End of period | $ | 64,699 | $ | 102,066 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 2 | $ | 2 |
See accompanying notes which are an integral part of the financial statements.
2040 Strategy Fund 171
Russell Investment Company
2040 Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | —** | $ | 2 | 1 | $ | 5 | ||||||
Proceeds from reinvestment of distributions | 47 | 398 | 2 | 25 | ||||||||
Payments for shares redeemed | (44 | ) | (384 | ) | (1 | ) | (10 | ) | ||||
Net increase (decrease) | 3 | 16 | 2 | 20 | ||||||||
Class E | ||||||||||||
Proceeds from shares sold | 8 | 73 | 26 | 340 | ||||||||
Proceeds from reinvestment of distributions | 16 | 143 | 2 | 26 | ||||||||
Payments for shares redeemed | (57 | ) | (568 | ) | (70 | ) | (925 | ) | ||||
Net increase (decrease) | (33 | ) | (352 | ) | (42 | ) | (559 | ) | ||||
Class R1 | ||||||||||||
Proceeds from shares sold | 2,026 | 18,574 | 1,254 | 16,093 | ||||||||
Proceeds from reinvestment of distributions | 1,885 | 16,153 | 133 | 1,693 | ||||||||
Payments for shares redeemed | (2,840 | ) | (26,110 | ) | (3,151 | ) | (40,713 | ) | ||||
Net increase (decrease) | 1,071 | 8,617 | (1,764 | ) | (22,927 | ) | ||||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 183 | 2,352 | ||||||||
Proceeds from reinvestment of distributions | — | — | 22 | 277 | ||||||||
Payments for shares redeemed | — | — | (1,182 | ) | (15,121 | ) | ||||||
Net increase (decrease) | — | — | (977 | ) | (12,492 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 513 | 6,570 | ||||||||
Proceeds from reinvestment of distributions | — | — | 58 | 735 | ||||||||
Payments for shares redeemed | — | — | (3,499 | ) | (44,490 | ) | ||||||
Net increase (decrease) | — | — | (2,928 | ) | (37,185 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 157 | 1,417 | 844 | 10,762 | ||||||||
Proceeds from reinvestment of distributions | 447 | 3,833 | —** | 5 | ||||||||
Payments for shares redeemed | (655 | ) | (5,779 | ) | (2 | ) | (28 | ) | ||||
Net increase (decrease) | (51 | ) | (529 | ) | 842 | 10,739 | ||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 426 | 3,913 | 2,014 | 25,607 | ||||||||
Proceeds from reinvestment of distributions | 955 | 8,169 | — | — | ||||||||
Payments for shares redeemed | (1,833 | ) | (16,641 | ) | (79 | ) | (1,007 | ) | ||||
Net increase (decrease) | (452 | ) | (4,559 | ) | 1,935 | 24,600 | ||||||
Class S | ||||||||||||
Proceeds from shares sold | 462 | 4,238 | 486 | 6,250 | ||||||||
Proceeds from reinvestment of distributions | 552 | 4,738 | 42 | 536 | ||||||||
Payments for shares redeemed | (1,641 | ) | (16,136 | ) | (946 | ) | (12,133 | ) | ||||
Net increase (decrease) | (627 | ) | (7,160 | ) | (418 | ) | (5,347 | ) | ||||
Total increase (decrease) | (89 | ) | $ | (3,967 | ) | (3,350 | ) | $ | (43,151 | ) | ||
** Less than 500 shares. |
See accompanying notes which are an integral part of the financial statements.
172 2040 Strategy Fund
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Russell Investment Company
2040 Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||||
$ | ||||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||||
Class A | ||||||||||||||||||
October 31, 2015 | 13.08 | .17 | (.20 | ) | (.03 | ) | (.22 | ) | (4.45 | ) | ||||||||
October 31, 2014 | 12.53 | .30 | .55 | .85 | (.30 | ) | — | |||||||||||
October 31, 2013 | 10.58 | .17 | 1.95 | 2.12 | (.17 | ) | — | |||||||||||
October 31, 2012 | 9.89 | .17 | .67 | .84 | (.15 | ) | — | |||||||||||
October 31, 2011 | 9.92 | .21 | (.02 | ) | .19 | (.22 | ) | — | ||||||||||
Class E | ||||||||||||||||||
October 31, 2015 | 13.08 | .23 | (.27 | ) | (.04 | ) | (.21 | ) | (4.45 | ) | ||||||||
October 31, 2014 | 12.53 | .32 | .52 | .84 | (.29 | ) | — | |||||||||||
October 31, 2013 | 10.57 | .17 | 1.96 | 2.13 | (.17 | ) | — | |||||||||||
October 31, 2012 | 9.89 | .16 | .68 | .84 | (.16 | ) | — | |||||||||||
October 31, 2011 | 9.92 | .79 | (.61 | ) | .18 | (.21 | ) | — | ||||||||||
Class R1 | ||||||||||||||||||
October 31, 2015 | 13.09 | .18 | (.18 | ) | — | (.25 | ) | (4.45 | ) | |||||||||
October 31, 2014 | 12.54 | .36 | .52 | .88 | (.33 | ) | — | |||||||||||
October 31, 2013 | 10.59 | .21 | 1.94 | 2.15 | (.20 | ) | — | |||||||||||
October 31, 2012 | 9.90 | .18 | .69 | .87 | (.18 | ) | — | |||||||||||
October 31, 2011 | 9.93 | .22 | — (h) | .22 | (.25 | ) | — | |||||||||||
Class R4 (3) | ||||||||||||||||||
October 31, 2015 | 13.09 | .18 | (.21 | ) | (.03 | ) | (.22 | ) | (4.45 | ) | ||||||||
October 31, 2014 | 12.54 | .31 | .54 | .85 | (.30 | ) | — | |||||||||||
October 31, 2013 | 10.58 | .18 | 1.95 | 2.13 | (.17 | ) | — | |||||||||||
October 31, 2012 | 9.89 | .18 | .66 | .84 | (.15 | ) | — | |||||||||||
October 31, 2011 | 9.91 | .18 | .02 | .20 | (.22 | ) | — | |||||||||||
Class R5 (4) | ||||||||||||||||||
October 31, 2015 | 13.06 | .17 | (.22 | ) | (.05 | ) | (.19 | ) | (4.45 | ) | ||||||||
October 31, 2014 | 12.52 | .32 | .49 | .81 | (.27 | ) | — | |||||||||||
October 31, 2013 | 10.56 | .15 | 1.95 | 2.10 | (.14 | ) | — | |||||||||||
October 31, 2012 | 9.87 | .14 | .67 | .81 | (.12 | ) | — | |||||||||||
October 31, 2011 | 9.90 | .19 | (.03 | ) | .16 | (.19 | ) | — | ||||||||||
Class S | ||||||||||||||||||
October 31, 2015 | 13.09 | .24 | (.24 | ) | — | (.25 | ) | (4.45 | ) | |||||||||
October 31, 2014 | 12.54 | .36 | .52 | .88 | (.33 | ) | — | |||||||||||
October 31, 2013 | 10.59 | .21 | 1.94 | 2.15 | (.20 | ) | — | |||||||||||
October 31, 2012 | 9.90 | .18 | .69 | .87 | (.18 | ) | — | |||||||||||
October 31, 2011 | 9.93 | .22 | — (h) | .22 | (.25 | ) | — | |||||||||||
See accompanying notes which are an integral part of the financial statements.
174 2040 Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(d) | (000 | ) | Gross(g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | |||||||||
(4.67 | ) | 8.38 | (.92 | ) | 736 | .25 | .25 | 1.89 | 25 | ||||||||
(.30 | ) | 13.08 | 6.85 | 1,114 | .25 | .25 | 2.29 | 64 | |||||||||
(.17 | ) | 12.53 | 20.33 | 1,048 | .25 | .25 | 1.52 | 14 | |||||||||
(.15 | ) | 10.58 | 8.69 | 902 | .25 | .25 | 1.71 | 26 | |||||||||
(.22 | ) | 9.89 | 1.86 | 1,062 | .25 | .25 | 2.03 | 23 | |||||||||
(4.66 | ) | 8.38 | (.97 | ) | 116 | .25 | .25 | 2.43 | 25 | ||||||||
(.29 | ) | 13.08 | 6.80 | 605 | .25 | .25 | 2.49 | 64 | |||||||||
(.17 | ) | 12.53 | 20.45 | 1,100 | .25 | .25 | 1.49 | 14 | |||||||||
(.16 | ) | 10.57 | 8.59 | 979 | .25 | .25 | 1.55 | 26 | |||||||||
(.21 | ) | 9.89 | 1.79 | 939 | .25 | .25 | 7.73 | 23 | |||||||||
(4.70 | ) | 8.39 | (.61 | ) | 38,704 | — | — | 2.01 | 25 | ||||||||
(.33 | ) | 13.09 | 7.11 | 46,351 | — | — | 2.83 | 64 | |||||||||
(.20 | ) | 12.54 | 20.61 | 66,546 | — | — | 1.79 | 14 | |||||||||
(.18 | ) | 10.59 | 8.99 | 59,225 | — | — | 1.76 | 26 | |||||||||
(.25 | ) | 9.90 | 2.12 | 52,962 | — | — | 2.19 | 23 | |||||||||
(4.67 | ) | 8.39 | (.91 | ) | 6,640 | .25 | .25 | 1.92 | 25 | ||||||||
(.30 | ) | 13.09 | 6.84 | 11,027 | .25 | .25 | 2.39 | 64 | |||||||||
(.17 | ) | 12.54 | 20.41 | 12,257 | .25 | .25 | 1.58 | 14 | |||||||||
(.15 | ) | 10.58 | 8.64 | 13,393 | .25 | .25 | 1.81 | 26 | |||||||||
(.22 | ) | 9.89 | 1.94 | 33,320 | .25 | .25 | 1.70 | 23 | |||||||||
(4.64 | ) | 8.37 | (1.07 | ) | 12,410 | .50 | .50 | 1.83 | 25 | ||||||||
(.27 | ) | 13.06 | 6.51 | 25,262 | .50 | .50 | 2.47 | 64 | |||||||||
(.14 | ) | 12.52 | 20.14 | 36,644 | .50 | .50 | 1.34 | 14 | |||||||||
(.12 | ) | 10.56 | 8.39 | 38,165 | .50 | .50 | 1.38 | 26 | |||||||||
(.19 | ) | 9.87 | 1.61 | 54,269 | .50 | .50 | 1.85 | 23 | |||||||||
(4.70 | ) | 8.39 | (.65 | ) | 6,093 | — | — | 2.49 | 25 | ||||||||
(.33 | ) | 13.09 | 7.11 | 17,707 | — | — | 2.79 | 64 | |||||||||
(.20 | ) | 12.54 | 20.61 | 22,214 | — | — | 1.87 | 14 | |||||||||
(.18 | ) | 10.59 | 8.99 | 24,994 | — | — | 1.75 | 26 | |||||||||
(.25 | ) | 9.90 | 2.12 | 21,638 | — | — | 2.18 | 23 |
See accompanying notes which are an integral part of the financial statements.
2040 Strategy Fund 175
Russell Investment Company
2045 Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
2045 Strategy Fund - Class R1 | 2045 Strategy Fund - Class R5‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.65 | )% | 1 Year | (1.06 | )% | ||
5 Years | 7.41 | %§ | 5 Years | 6.89 | %§ | ||
Inception* | 4.19 | %§ | Inception* | 3.67 | %§ | ||
2045 Strategy Fund - Class R4‡ | Russell 1000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.89 | )% | 1 Year | 4.86 | % | ||
5 Years | 7.17 | %§ | 5 Years | 14.32 | %§ | ||
Inception* | 3.94 | %§ | Inception* | 8.64 | %§ |
176 2045 Strategy Fund
Russell Investment Company
2045 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The 2045 Strategy Fund (the “Fund”) is a fund of funds that | returned 4.49% over the period, while non-U.S. equities returned |
invests in other Russell Investment Company mutual funds (the | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® |
“Underlying Funds”). The Underlying Funds employ a multi- | Index) and emerging markets returned -13.58% (as measured by |
manager approach whereby portions of the Underlying Funds | the Russell Emerging Markets Index). The underperformance of |
are allocated to different money managers. Underlying Fund | non-U.S. equities versus U.S. equities was a key negative driver |
assets not allocated to money managers are managed by Russell | to the Fund’s benchmark-relative performance, as U.S. equities |
Investment Management Company (“RIMCo”), the Fund’s and | finished at 4.86% for the fiscal year as measured by the Fund’s |
Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | benchmark. |
advisor, may change the allocation of the Underlying Funds’ | The fiscal year ended October 31, 2015 was characterized by |
assets among money managers at any time. An exemptive order | slowing global growth and commodity price weakness. Overall, |
from the Securities and Exchange Commission (“SEC”) permits | this was modestly positive for fixed income assets, as yields fell. |
RIMCo to engage or terminate a money manager in an Underlying | However, the Fund’s exposure to the fixed income asset class had |
Fund at any time, subject to approval by the Underlying Fund’s | a negative effect on benchmark-relative performance as core fixed |
Board, without a shareholder vote. Pursuant to the terms of the | income underperformed U.S. equities. |
exemptive order, an Underlying Fund is required to notify its | |
shareholders within 90 days of when a money manager begins | Within alternative strategies, commodities exposure had the |
providing services. | largest negative impact on the Fund, as the asset class (as |
measured by the Bloomberg Commodity Index Total Return) lost | |
What is the Fund’s investment objective? | 25.72% during the period, significantly underperforming U.S. |
The Fund seeks to provide capital growth and income consistent | equities. Global REITs and listed infrastructure (as represented |
with its current asset allocation which will change over time, with | by the FTSE EPRA/NAREIT Developed Real Estate Index (Net) |
an increasing allocation to fixed income funds. | and S&P Global Infrastructure Index (Net)) finished the fiscal |
The Fund pursues this objective by investing in a diversified | year up 2.68% and down 6.29%, respectively. Both of these asset |
portfolio that, as of October 31, 2015, consisted of approximately | classes underperformed U.S. equities, which negatively impacted |
82.5% equity Underlying Funds, 10.5% fixed income Underlying | the Fund’s benchmark-relative performance. |
Funds and 7% alternative Underlying funds. The Fund’s | How did the investment strategies and techniques employed |
allocation to fixed income Underlying Funds will be fixed at | by the Fund and the Underlying Funds affect the Fund’s |
66.3% in approximately the year 2045. | performance? |
How did the Fund perform relative to its benchmark for the | The Fund is a fund of funds and its performance is based on |
fiscal year ended October 31, 2015? | RIMCo’s strategic asset allocations and the performance of the |
For the fiscal year ended October 31, 2015, the Fund’s Class R1, | Underlying Funds in which the Fund invests. |
Class R4 and Class R5 Shares lost 0.65%, 0.89% and 1.06%, | With respect to the Fund’s global equity exposure, the Fund’s |
respectively. This is compared to the Fund’s primary benchmark, | strategic allocation to the Russell Global Equity Fund, Select |
the Russell 1000® Index, which gained 4.86% during the same | International Equity Fund and the Russell Emerging Markets |
period. The Fund’s performance includes operating expenses, | Fund detracted as these all underperformed the Fund’s U.S. |
whereas index returns are unmanaged and do not include | equity benchmark. From an active management perspective, an |
expenses of any kind. | underweighttoenergyandanoverweighttoconsumerdiscretionary |
For the fiscal year ended October 31, 2015, the Morningstar® | in the Russell Global Equity Fund contributed to positive excess |
Target Date 2041-2045 gained 0.45%. This result serves as a | return versus its benchmark. For the Russell Emerging Markets |
peer comparison and is expressed net of operating expenses. | Fund, unsuccessful stock selection in China and Brazil was the |
main driver of the Fund’s benchmark-relative underperformance. | |
The Fund’s underperformance relative to the Russell 1000® | Chinese stocks fell sharply and broader emerging markets also |
Index was due to the Fund’s allocation to non-U.S. equity and | lost significant value during the period due to growth concerns. |
commodity Underlying Funds, which underperformed large cap | A valuation bias in the Select International Equity Fund led to |
U.S. equity over the period. | benchmark-relative underperformance as lower price-to-book |
How did the market conditions described in the Market | stocks strongly underperformed. |
Summary report affect the Fund’s performance? | The Fund’s allocation to U.S. equity Underlying Funds had a |
It was a mixed equity market for the fiscal year ending October | negative effect on the Fund’s benchmark-relative performance. |
31, 2015. U.S. stocks (as measured by the Russell 3000® Index) | Underlying active management within the U.S. equity Underlying |
2045 Strategy Fund 177
Russell Investment Company
2045 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Funds detracted, as most of the large cap U.S. equity Underlying | fixed income or alternative category level based on RIMCo’s |
Funds underperformed their respective U.S. equity market | capital markets research. RIMCo’s asset allocation modifications |
segment as represented by their primary benchmarks. From an | benefited the Fund’s performance relative to the Fund’s target |
active management perspective, the Select U.S. Equity Fund | strategic asset allocation. |
underperformed the Russell 1000® Index due to an underweight | On November 21, 2014, RIMCo reduced the Fund’s overweight to |
to growth stocks, which outperformed during the period. In | the Russell Global Equity Fund by 0.50%. This was offset by a |
addition, the Fund’s strategic allocation to the Russell U.S. Small | 0.50% increase to the Russell Commodity Strategies Fund. This |
Cap Equity Fund also detracted from the Fund’s benchmark- | position was implemented after strong performance in the equity |
relative performance, as U.S. small cap equity underperformed | market and to position the Fund for rising interest rates. |
the Fund’s benchmark and the Underlying Fund underperformed | |
its Russell 2000® Index benchmark due to an overweight to micro- | On February 19, 2015, RIMCo removed the Fund’s overweight to |
capitalization stocks which underperformed during the period. | U.S. equities by reducing the Fund’s allocation to the Select U.S. |
Equity Fund by 0.50%. This was offset by a 0.50% increase in | |
The Fund’s strategic allocation to fixed income Underlying Funds | the Fund’s allocation to the Russell Commodity Strategies Fund, |
had a negative impact on its benchmark-relative performance as | which neutralized the previous underweight to commodities. This |
fixed income underperformed U.S. equity. The Russell Strategic | position was implemented after strong U.S. equity performance |
Bond Fund was negatively impacted by its overweight to credit, | and a sharp decline in commodities. |
but its currency positioning drove excess return relative to its | |
benchmark. | On August 10, 2015, RIMCo reduced the Fund’s allocation to |
the Russell Emerging Markets Fund by 0.75% as concerns | |
The Fund’s strategic allocation to alternative Underlying Funds | over emerging markets growth intensified. This was offset by an |
had a negative impact on benchmark-relative performance | increase in the allocation to large cap developed equities through |
as each of these asset classes underperformed the Fund’s U.S. | a 0.50% increase in the Fund’s allocation to the Select U.S. |
equity benchmark. From an active management standpoint, | Equity Fund and a 0.25% increase in the Fund’s allocation to the |
performance of these Underlying Funds was mixed. The Russell | Select International Equity Fund. |
Global Infrastructure Fund and the Russell Global Real Estate | |
Securities Fund outperformed their respective benchmarks | The views expressed in this report reflect those of the portfolio |
while the Russell Commodity Strategies Fund underperformed | managers only through the end of the period covered by |
its benchmark. The Russell Global Infrastructure Fund and the | the report. These views do not necessarily represent the |
Russell Global Real Estate Securities Fund both benefited from | views of RIMCo, or any other person in RIMCo or any other |
strong stock selection by underlying money managers. The Russell | affiliated organization. These views are subject to change |
Commodity Strategies Fund underperformed its benchmark due | at any time based upon market conditions or other events, |
largely to exposure to the energy sector. | and RIMCo disclaims any responsibility to update the views |
contained herein. These views should not be relied on as | |
Describe any changes to the Fund’s structure or allocation | investment advice and, because investment decisions for |
to the Underlying Funds. | a Russell Investment Company (“RIC”) Fund are based on |
RIMCo has the discretion to vary the Fund’s actual allocation from | numerous factors, should not be relied on as an indication |
the target strategic asset allocation by up to +/- 5% at the equity, | of investment decisions of any RIC Fund. |
* Assumes initial investment on March 31, 2008.
** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
‡ The Fund first issued Class R4 and Class R5 Shares on October 1, 2014. The returns shown for Class R4 and Class R5 Shares prior to that date are the returns
of the Fund’s Class R2 and Class R3 Shares, respectively.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
178 2045 Strategy Fund
Russell Investment Company
2045 Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Hypothetical | |||||
The following disclosure provides important information | Performance (5% | |||||
Actual | return before | |||||
regarding the Fund’s Shareholder Expense Example | Class R1 | Performance | expenses) | |||
(“Example”). | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Example | Ending Account Value | |||||
As a shareholder of the Fund, you incur ongoing costs, including | October 31, 2015 | $ | 951.20 | $ | 1,025.21 | |
distribution (12b-1) and/or service fees and other Fund expenses. | Expenses Paid During Period* | $ | — | $ | — | |
The Example is intended to help you understand your ongoing | * There were no expenses charged to the Class. | |||||
costs (in dollars) of investing in the Fund and to compare these | ||||||
costs with the ongoing costs of investing in other mutual funds. | Hypothetical | |||||
Performance (5% | ||||||
The Example is based on an investment of $1,000 invested at the | Actual | return before | ||||
beginning of the period and held for the entire period indicated, | Class R4 | Performance | expenses) | |||
which for this Fund is from May 1, 2015 to October 31, 2015. | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | |||||
The information in the table under the heading “Actual | October 31, 2015 | $ | 950.10 | $ | 1,023.95 | |
Expenses Paid During Period* | $ | 1.23 | $ | 1.28 | ||
Performance” provides information about actual account values | ||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
that you paid over the period. Simply divide your account value by | year period). | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | ||||||
= 8.6), then multiply the result by the number in the first column | Hypothetical | |||||
in the row entitled “Expenses Paid During Period” to estimate | Performance (5% | |||||
Actual | return before | |||||
the expenses you paid on your account during this period. | Class R5 | Performance | expenses) | |||
Beginning Account Value | ||||||
Hypothetical Example for Comparison Purposes | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
The information in the table under the heading “Hypothetical | Ending Account Value | |||||
Performance (5% return before expenses)” provides information | October 31, 2015 | $ | 948.70 | $ | 1,022.68 | |
about hypothetical account values and hypothetical expenses | Expenses Paid During Period* | $ | 2.46 | $ | 2.55 | |
based on the Fund’s actual expense ratio and an assumed rate of | * Expenses are equal to the Fund's annualized expense ratio of 0.50% | |||||
return of 5% per year before expenses, which is not the Fund’s | (representing the six month period annualized), multiplied by the average | |||||
actual return. The hypothetical account values and expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
may not be used to estimate the actual ending account balance or | year period). | |||||
expenses you paid for the period. You may use this information | ||||||
to compare the ongoing costs of investing in the Fund and other | ||||||
funds. To do so, compare this 5% hypothetical example with the | ||||||
5% hypothetical examples that appear in the shareholder reports | ||||||
of other funds. | ||||||
Please note that the expenses shown in the table are meant | ||||||
to highlight your ongoing costs only and do not reflect any | ||||||
transactional costs. Therefore, the information under the heading | ||||||
“Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | ||||||
determine the relative total costs of owning different funds. In | ||||||
addition, if these transactional costs were included, your costs | ||||||
would have been higher. |
2045 Strategy Fund 179
Russell Investment Company
2045 Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | ||||||||||||
Fair | ||||||||||||
Value | ||||||||||||
Shares | $ | |||||||||||
Investments in Russell Affiliated Mutual Funds - 100.0% | ||||||||||||
Alternative - 9.5% | ||||||||||||
Russell Commodity Strategies Fund Class Y | 79,504 | 452 | ||||||||||
Russell Global Infrastructure Fund Class Y | 33,603 | 384 | ||||||||||
Russell Global Real Estate Securities Fund Class Y | 9,997 | 384 | ||||||||||
1,220 | ||||||||||||
Domestic Equities - 42.9% | ||||||||||||
Russell U.S. Defensive Equity Fund Class Y | 8,089 | 386 | ||||||||||
Russell U.S. Dynamic Equity Fund Class Y | 57,016 | 648 | ||||||||||
Russell U.S. Small Cap Equity Fund Class Y | 38,446 | 1,101 | ||||||||||
Select U.S. Equity Fund Class Y | 315,280 | 3,386 | ||||||||||
5,521 | ||||||||||||
Fixed Income - 7.0% | ||||||||||||
Russell Strategic Bond Fund Class Y | 82,193 | 898 | ||||||||||
International Equities - 40.6% | ||||||||||||
Russell Emerging Markets Fund Class Y | 66,890 | 1,020 | ||||||||||
Russell Global Equity Fund Class Y | 145,657 | 1,672 | ||||||||||
Select International Equity Fund Class Y | 276,715 | 2,526 | ||||||||||
5,218 | ||||||||||||
Total Investments in Russell Affiliated Mutual Funds | ||||||||||||
(cost $11,498) | 12,857 | |||||||||||
Total Investments 100.0% | ||||||||||||
(identified cost $11,498) | 12,857 | |||||||||||
Other Assets and Liabilities, Net - (0.0%) | (1 | ) | ||||||||||
Net Assets - 100.0% | 12,856 | |||||||||||
Presentation of Portfolio Holdings | ||||||||||||
Amounts in thousands | ||||||||||||
Fair Value | ||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | |||||||
Investments in Russell Affiliated Mutual Funds | $ | 12,857 | $ | — | $ | — | $ | 12,857 | 100.0 | |||
Total Investments | 12,857 | — | — | 12,857 | 100.0 | |||||||
Other Assets and Liabilities, Net | (—)* | |||||||||||
100.0 | ||||||||||||
* Less than .05% of net assets. | ||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | ||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | ||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
180 2045 Strategy Fund
Russell Investment Company
2045 Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | |||
Assets | |||
Investments, at identified cost | $ | 11,498 | |
Investments, at fair value(>) | 12,857 | ||
Receivables: | |||
Fund shares sold | 23 | ||
Total assets | 12,880 | ||
Liabilities | |||
Payables: | |||
Investments purchased | 19 | ||
Fund shares redeemed | 3 | ||
Accrued fees to affiliates | 2 | ||
Total liabilities | 24 | ||
Net Assets | $ | 12,856 | |
Net Assets Consist of: | |||
Accumulated net realized gain (loss) | $ | (37 | ) |
Unrealized appreciation (depreciation) on investments | 1,359 | ||
Shares of beneficial interest | 15 | ||
Additional paid-in capital | 11,519 | ||
Net Assets | $ | 12,856 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: Class R1(#) | $ | 8.51 | |
Class R1 — Net assets | $ | 5,397,799 | |
Class R1 — Shares outstanding ($.01 par value) | 634,028 | ||
Net asset value per share: Class R4(#) | $ | 8.53 | |
Class R4 — Net assets | $ | 4,043,332 | |
Class R4 — Shares outstanding ($.01 par value) | 473,857 | ||
Net asset value per share: Class R5(#) | $ | 8.49 | |
Class R5 — Net assets | $ | 3,415,044 | |
Class R5 — Shares outstanding ($.01 par value) | 402,268 | ||
Amounts in thousands | |||
(>) Investments in affiliated Russell funds | $ | 12,857 | |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
2045 Strategy Fund 181
Russell Investment Company
2045 Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 279 | |
Expenses | |||
Distribution fees - Class R5 | 9 | ||
Shareholder servicing fees - Class R4 | 10 | ||
Shareholder servicing fees - Class R5 | 9 | ||
Total expenses | 28 | ||
Net investment income (loss) | 251 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (180 | ) | |
Capital gain distributions from Underlying Funds | 257 | ||
Net realized gain (loss) | 77 | ||
Net change in unrealized appreciation (depreciation) on investments | (400 | ) | |
Net realized and unrealized gain (loss) | (323 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (72 | ) |
See accompanying notes which are an integral part of the financial statements.
182 2045 Strategy Fund
Russell Investment Company
2045 Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | |||||||
Amounts in thousands | 2015 | 2014 | |||||
Increase (Decrease) in Net Assets | |||||||
Operations | |||||||
Net investment income (loss) | $ | 251 | $ | 359 | |||
Net realized gain (loss) | 77 | 3,106 | |||||
Net change in unrealized appreciation (depreciation) | (400 | ) | (2,491 | ) | |||
Net increase (decrease) in net assets from operations | (72 | ) | 974 | ||||
Distributions | |||||||
From net investment income | |||||||
Class R1 | (123 | ) | (181 | ) | |||
Class R2 | — | (78 | ) | ||||
Class R3 | — | (101 | ) | ||||
Class R4 | (71 | ) | (1 | ) | |||
Class R5 | (57 | ) | — | ||||
From net realized gain | |||||||
Class R1 | (1,274 | ) | (55 | ) | |||
Class R2 | — | (27 | ) | ||||
Class R3 | — | (38 | ) | ||||
Class R4 | (880 | ) | — | ||||
Class R5 | (847 | ) | — | ||||
Net decrease in net assets from distributions | (3,252 | ) | (481 | ) | |||
Share Transactions* | |||||||
Net increase (decrease) in net assets from share transactions | 2,520 | (3,110 | ) | ||||
Total Net Increase (Decrease) in Net Assets | (804 | ) | (2,617 | ) | |||
Net Assets | |||||||
Beginning of period | 13,660 | 16,277 | |||||
End of period | $ | 12,856 | $ | 13,660 |
See accompanying notes which are an integral part of the financial statements.
2045 Strategy Fund 183
Russell Investment Company
2045 Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class R1 | ||||||||||||
Proceeds from shares sold | 524 | $ | 4,667 | 291 | $ | 3,195 | ||||||
Proceeds from reinvestment of distributions | 161 | 1,397 | 22 | 236 | ||||||||
Payments for shares redeemed | (525 | ) | (4,550 | ) | (465 | ) | (5,113 | ) | ||||
Net increase (decrease) | 160 | 1,514 | (152 | ) | (1,682 | ) | ||||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 96 | 1,059 | ||||||||
Proceeds from reinvestment of distributions | — | — | 10 | 105 | ||||||||
Payments for shares redeemed | — | — | (421 | ) | (4,591 | ) | ||||||
Net increase (decrease) | — | — | (315 | ) | (3,427 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 132 | 1,444 | ||||||||
Proceeds from reinvestment of distributions | — | — | 13 | 139 | ||||||||
Payments for shares redeemed | — | — | (714 | ) | (7,727 | ) | ||||||
Net increase (decrease) | — | — | (569 | ) | (6,144 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 111 | 1,001 | 370 | 4,023 | ||||||||
Proceeds from reinvestment of distributions | 109 | 950 | —** | 1 | ||||||||
Payments for shares redeemed | (114 | ) | (1,038 | ) | (2 | ) | (21 | ) | ||||
Net increase (decrease) | 106 | 913 | 368 | 4,003 | ||||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 141 | 1,263 | 409 | 4,435 | ||||||||
Proceeds from reinvestment of distributions | 104 | 905 | — | — | ||||||||
Payments for shares redeemed | (225 | ) | (2,075 | ) | (27 | ) | (295 | ) | ||||
Net increase (decrease) | 20 | 93 | 382 | 4,140 | ||||||||
Total increase (decrease) | 286 | $ | 2,520 | (286 | ) | $ | (3,110 | ) | ||||
**Less than 500 shares. |
See accompanying notes which are an integral part of the financial statements.
184 2045 Strategy Fund
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Russell Investment Company
2045 Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | ||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class R1 | ||||||||||||||||
October 31, 2015 | 11.16 | .16 | (.19 | ) | (.03 | ) | (.21 | ) | (2.41 | ) | ||||||
October 31, 2014 | 10.78 | .30 | .45 | .75 | (.28 | ) | (.09 | ) | ||||||||
October 31, 2013 | 9.29 | .18 | 1.67 | 1.85 | (.17 | ) | (.19 | ) | ||||||||
October 31, 2012 | 9.10 | .14 | .62 | .76 | (.16 | ) | (.41 | ) | ||||||||
October 31, 2011 | 9.13 | .20 | —(h) | .20 | (.23 | ) | — | |||||||||
Class R4 (3) | ||||||||||||||||
October 31, 2015 | 11.18 | .16 | (.21 | ) | (.05 | ) | (.19 | ) | (2.41 | ) | ||||||
October 31, 2014 | 10.80 | .24 | .49 | .73 | (.26 | ) | (.09 | ) | ||||||||
October 31, 2013 | 9.30 | .15 | 1.69 | 1.84 | (.15 | ) | (.19 | ) | ||||||||
October 31, 2012 | 9.11 | .14 | .60 | .74 | (.14 | ) | (.41 | ) | ||||||||
October 31, 2011 | 9.12 | .23 | (.05 | ) | .18 | (.19 | ) | — | ||||||||
Class R5 (4) | ||||||||||||||||
October 31, 2015 | 11.13 | .14 | (.21 | ) | (.07 | ) | (.16 | ) | (2.41 | ) | ||||||
October 31, 2014 | 10.76 | .25 | .44 | .69 | (.23 | ) | (.09 | ) | ||||||||
October 31, 2013 | 9.27 | .12 | 1.69 | 1.81 | (.13 | ) | (.19 | ) | ||||||||
October 31, 2012 | 9.08 | .12 | .60 | .72 | (.12 | ) | (.41 | ) | ||||||||
October 31, 2011 | 9.11 | .15 | —(h) | .15 | (.18 | ) | — | |||||||||
See accompanying notes which are an integral part of the financial statements.
186 2045 Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return | (000 | ) | Gross (g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | |||||||||
(2.62 | ) | 8.51 | (.65 | ) | 5,398 | — | — | 1.82 | 39 | ||||||||
(.37 | ) | 11.16 | 7.08 | 5,297 | — | — | 2.78 | 84 | |||||||||
(.36 | ) | 10.78 | 20.59 | 6,750 | — | — | 1.77 | 28 | |||||||||
(.57 | ) | 9.29 | 9.13 | 5,391 | — | — | 1.59 | 57 | |||||||||
(.23 | ) | 9.10 | 2.12 | 3,791 | — | — | 2.06 | 77 | |||||||||
(2.60 | ) | 8.53 | (.89 | ) | 4,043 | .25 | .25 | 1.74 | 39 | ||||||||
(.35 | ) | 11.18 | 6.80 | 4,111 | .25 | .25 | 2.16 | 84 | |||||||||
(.34 | ) | 10.80 | 20.37 | 3,404 | .25 | .25 | 1.48 | 28 | |||||||||
(.55 | ) | 9.30 | 8.82 | 2,796 | .25 | .25 | 1.58 | 57 | |||||||||
(.19 | ) | 9.11 | 1.98 | 2,651 | .25 | .25 | 2.37 | 77 | |||||||||
(2.57 | ) | 8.49 | (1.06 | ) | 3,415 | .50 | .50 | 1.54 | 39 | ||||||||
(.32 | ) | 11.13 | 6.48 | 4,252 | .50 | .50 | 2.24 | 84 | |||||||||
(.32 | ) | 10.76 | 20.07 | 6,123 | .50 | .50 | 1.26 | 28 | |||||||||
(.53 | ) | 9.27 | 8.56 | 3,603 | .50 | .50 | 1.30 | 57 | |||||||||
(.18 | ) | 9.08 | 1.64 | 3,511 | .50 | .50 | 1.55 | 77 |
See accompanying notes which are an integral part of the financial statements.
2045 Strategy Fund 187
Russell Investment Company
2050 Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
2050 Strategy Fund - Class R1 | 2050 Strategy Fund - Class R5‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.66 | )% | 1 Year | (1.10 | )% | ||
5 Years | 7.43 | %§ | 5 Years | 6.91 | %§ | ||
Inception* | 4.43 | %§ | Inception* | 3.91 | %§ | ||
2050 Strategy Fund - Class R4‡ | Russell 1000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.90 | )% | 1 Year | 4.86 | % | ||
5 Years | 7.18 | %§ | 5 Years | 14.32 | %§ | ||
Inception* | 4.17 | %§ | Inception* | 8.64 | %§ |
188 2050 Strategy Fund
Russell Investment Company
2050 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The 2050 Strategy Fund (the “Fund”) is a fund of funds that | returned 4.49% over the period, while non-U.S. equities returned |
invests in other Russell Investment Company mutual funds (the | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap |
“Underlying Funds”). The Underlying Funds employ a multi- | Index) and emerging markets returned -13.58% (as measured by |
manager approach whereby portions of the Underlying Funds | the Russell Emerging Markets Index). The underperformance of |
are allocated to different money managers. Underlying Fund | non-U.S. equities versus U.S. equities was a key negative driver |
assets not allocated to money managers are managed by Russell | to the Fund’s benchmark-relative performance, as U.S. equities |
Investment Management Company (“RIMCo”), the Fund’s and | finished at 4.86% for the fiscal year as measured by the Fund’s |
Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | benchmark. |
advisor, may change the allocation of the Underlying Funds’ | The fiscal year ended October 31, 2015 was characterized by |
assets among money managers at any time. An exemptive order | slowing global growth and commodity price weakness. Overall, |
from the Securities and Exchange Commission (“SEC”) permits | this was modestly positive for fixed income assets, as yields fell. |
RIMCo to engage or terminate a money manager in an Underlying | However, the Fund’s exposure to the fixed income asset class had |
Fund at any time, subject to approval by the Underlying Fund’s | a negative effect on benchmark-relative performance as core fixed |
Board, without a shareholder vote. Pursuant to the terms of the | income underperformed U.S. equities. |
exemptive order, an Underlying Fund is required to notify its | |
shareholders within 90 days of when a money manager begins | Within alternative strategies, commodities exposure had the |
providing services. | largest negative impact on the Fund, as the asset class (as |
measured by the Bloomberg Commodity Index Total Return) lost | |
What is the Fund’s investment objective? | 25.72% during the period, significantly underperforming U.S. |
The Fund seeks to provide capital growth and income consistent | equities. Global REITs and listed infrastructure (as represented |
with its current asset allocation which will change over time, with | by the FTSE EPRA/NAREIT Developed Real Estate Index (Net) |
an increasing allocation to fixed income funds. | and S&P Global Infrastructure Index (Net)) finished the fiscal |
The Fund pursues this objective by investing in a diversified | year up 2.68% and down 6.29%, respectively. Both of these asset |
portfolio that, as of October 31, 2015, consisted of approximately | classes underperformed U.S. equities, which negatively impacted |
82.5% equity Underlying Funds, 10.5% fixed income Underlying | the Fund’s benchmark-relative performance. |
Funds and 7% alternative Underlying Funds. The Fund’s | How did the investment strategies and techniques employed |
allocation to fixed income Underlying Funds will be fixed at | by the Fund and the Underlying Funds affect the Fund’s |
66.3% in approximately the year 2050. | performance? |
How did the Fund perform relative to its benchmark for the | The Fund is a fund of funds and its performance is based on |
fiscal year ended October 31, 2015? | RIMCo’s strategic asset allocations and the performance of the |
For the fiscal year ended October 31, 2015, the Fund’s Class R1, | Underlying Funds in which the Fund invests. |
Class R4 and Class R5 Shares lost 0.66%, 0.90% and 1.10%, | With respect to the Fund’s global equity exposure, the Fund’s |
respectively. This is compared to the Fund’s primary benchmark, | strategic allocation to the Russell Global Equity Fund, Select |
the Russell 1000® Index, which gained 4.86% during the same | International Equity Fund and the Russell Emerging Markets |
period. The Fund’s performance includes operating expenses, | Fund detracted as these all underperformed the Fund’s U.S. |
whereas index returns are unmanaged and do not include | equity benchmark. From an active management perspective, an |
expenses of any kind. | underweighttoenergyandanoverweighttoconsumerdiscretionary |
For the fiscal year ended October 31, 2015, the Morningstar® | in the Russell Global Equity Fund contributed to positive excess |
Target Date 2046-2050 gained 0.36%. This result serves as a | return versus its benchmark. For the Russell Emerging Markets |
peer comparison and is expressed net of operating expenses. | Fund, unsuccessful stock selection in China and Brazil was the |
main driver of the Fund’s benchmark-relative underperformance. | |
The Fund’s underperformance relative to the Russell 1000® | Chinese stocks fell sharply and broader emerging markets also |
Index was due to the Fund’s allocation to non-U.S. equity and | lost significant value during the period due to growth concerns. |
commodity Underlying Funds, which underperformed large cap | A valuation bias in the Select International Equity Fund led to |
U.S. equity over the period. | benchmark-relative underperformance as lower price-to-book |
How did the market conditions described in the Market | stocks strongly underperformed. |
Summary report affect the Fund’s performance? | The Fund’s allocation to U.S. equity Underlying Funds had a |
It was a mixed equity market for the fiscal year ending October | negative effect on the Fund’s benchmark-relative performance. |
31, 2015. U.S. stocks (as measured by the Russell 3000® Index) | Underlying active management within the U.S. equity Underlying |
2050 Strategy Fund 189
Russell Investment Company
2050 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Funds detracted, as most of the U.S. equity Underlying Funds | fixed income or alternative category level based on RIMCo’s |
underperformed their respective U.S. equity market segment | capital markets research. RIMCo’s asset allocation modifications |
as represented by their primary benchmarks. The Select U.S. | benefited the Fund’s performance relative to the Fund’s target |
Equity Fund underperformed the Russell 1000® Index due to | strategic asset allocation. |
an underweight to growth stocks, which outperformed during | On November 21, 2014, RIMCo reduced the Fund’s overweight to |
the period. In addition, the Fund’s strategic allocation to the | the Russell Global Equity Fund by 0.50%. This was offset by a |
Russell U.S. Small Cap Equity Fund also detracted from the | 0.50% increase to the Russell Commodity Strategies Fund. This |
Fund’s benchmark-relative performance, as U.S. small cap equity | position was implemented after strong performance in the equity |
underperformed the Fund’s benchmark and the Underlying Fund | market and to position the Fund for rising interest rates. |
underperformed its Russell 2000® Index benchmark due to an | |
overweight to micro-capitalization stocks which underperformed | On February 19, 2015, RIMCo removed the Fund’s overweight to |
during the period. | U.S. equities by reducing the Fund’s allocation to the Select U.S. |
Equity Fund by 0.50%. This was offset by a 0.50% increase in | |
The Fund’s strategic allocation to fixed income Underlying Funds | the Fund’s allocation to the Russell Commodity Strategies Fund, |
had a negative impact on its benchmark-relative performance as | which neutralized the previous underweight to commodities. This |
fixed income underperformed U.S. equity. The Russell Strategic | position was implemented after strong U.S. equity performance |
Bond Fund was negatively impacted by its overweight to credit, | and a sharp decline in commodities |
but its currency positioning drove excess return relative to its | |
benchmark. | On August 10, 2015, RIMCo reduced the Fund’s allocation to |
the Russell Emerging Markets Fund by 0.75% as concerns | |
The Fund’s strategic allocation to alternative Underlying Funds | over emerging markets growth intensified. This was offset by an |
had a negative impact on benchmark-relative performance | increase in the allocation to large cap developed equities through |
as each of these asset classes underperformed the Fund’s U.S. | a 0.50% increase in the Fund’s allocation to the Select U.S. |
equity benchmark. From an active management standpoint, | Equity Fund and a 0.25% increase in the Fund’s allocation to the |
performance of these Underlying Funds was mixed. The Russell | Select International Equity Fund. |
Global Infrastructure Fund and the Russell Global Real Estate | |
Securities Fund outperformed their respective benchmarks | The views expressed in this report reflect those of the portfolio |
while the Russell Commodity Strategies Fund underperformed | managers only through the end of the period covered by |
its benchmark. The Russell Global Infrastructure Fund and the | the report. These views do not necessarily represent the |
Russell Global Real Estate Securities Fund both benefited from | views of RIMCo, or any other person in RIMCo or any other |
strong stock selection by underlying money managers. The Russell | affiliated organization. These views are subject to change |
Commodity Strategies Fund underperformed its benchmark due | at any time based upon market conditions or other events, |
largely to exposure to the energy sector. | and RIMCo disclaims any responsibility to update the views |
contained herein. These views should not be relied on as | |
Describe any changes to the Fund’s structure or allocation | investment advice and, because investment decisions for |
to the Underlying Funds. | a Russell Investment Company (“RIC”) Fund are based on |
RIMCo has the discretion to vary the Fund’s actual allocation from | numerous factors, should not be relied on as an indication |
the target strategic asset allocation by up to +/- 5% at the equity, | of investment decisions of any RIC Fund. |
* Assumes initial investment on March 31, 2008.
** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
‡ The Fund first issued Class R4 and Class R5 Shares on October 1, 2014. The returns shown for Class R4 and Class R5 Shares prior to that date are the returns
of the Fund’s Class R2 and Class R3 Shares, respectively.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
190 2050 Strategy Fund
Russell Investment Company
2050 Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Hypothetical | |||||
The following disclosure provides important information | Performance (5% | |||||
Actual | return before | |||||
regarding the Fund’s Shareholder Expense Example | Class R1 | Performance | expenses) | |||
(“Example”). | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Example | Ending Account Value | |||||
As a shareholder of the Fund, you incur ongoing costs, including | October 31, 2015 | $ | 951.10 | $ | 1,025.21 | |
distribution (12b-1) and/or service fees and other Fund expenses. | Expenses Paid During Period* | $ | — | $ | — | |
The Example is intended to help you understand your ongoing | * There were no expenses charged to the Class. | |||||
costs (in dollars) of investing in the Fund and to compare these | ||||||
costs with the ongoing costs of investing in other mutual funds. | Hypothetical | |||||
Performance (5% | ||||||
The Example is based on an investment of $1,000 invested at the | Actual | return before | ||||
beginning of the period and held for the entire period indicated, | Class R4 | Performance | expenses) | |||
which for this Fund is from May 1, 2015 to October 31, 2015. | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | |||||
The information in the table under the heading “Actual | October 31, 2015 | $ | 950.10 | $ | 1,023.95 | |
Expenses Paid During Period* | $ | 1.23 | $ | 1.28 | ||
Performance” provides information about actual account values | ||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
that you paid over the period. Simply divide your account value by | year period). | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | ||||||
= 8.6), then multiply the result by the number in the first column | Hypothetical | |||||
in the row entitled “Expenses Paid During Period” to estimate | Performance (5% | |||||
Actual | return before | |||||
the expenses you paid on your account during this period. | Class R5 | Performance | expenses) | |||
Beginning Account Value | ||||||
Hypothetical Example for Comparison Purposes | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
The information in the table under the heading “Hypothetical | Ending Account Value | |||||
Performance (5% return before expenses)” provides information | October 31, 2015 | $ | 948.40 | $ | 1,022.68 | |
about hypothetical account values and hypothetical expenses | Expenses Paid During Period* | $ | 2.46 | $ | 2.55 | |
based on the Fund’s actual expense ratio and an assumed rate of | * Expenses are equal to the Fund's annualized expense ratio of 0.50% | |||||
return of 5% per year before expenses, which is not the Fund’s | (representing the six month period annualized), multiplied by the average | |||||
actual return. The hypothetical account values and expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
may not be used to estimate the actual ending account balance or | year period). | |||||
expenses you paid for the period. You may use this information | ||||||
to compare the ongoing costs of investing in the Fund and other | ||||||
funds. To do so, compare this 5% hypothetical example with the | ||||||
5% hypothetical examples that appear in the shareholder reports | ||||||
of other funds. | ||||||
Please note that the expenses shown in the table are meant | ||||||
to highlight your ongoing costs only and do not reflect any | ||||||
transactional costs. Therefore, the information under the heading | ||||||
“Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | ||||||
determine the relative total costs of owning different funds. In | ||||||
addition, if these transactional costs were included, your costs | ||||||
would have been higher. |
2050 Strategy Fund 191
Russell Investment Company
2050 Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | |||||||||||
Fair | |||||||||||
Value | |||||||||||
Shares | $ | ||||||||||
Investments in Russell Affiliated Mutual Funds - 100.0% | |||||||||||
Alternative - 9.5% | |||||||||||
Russell Commodity Strategies Fund Class Y | 76,478 | 435 | |||||||||
Russell Global Infrastructure Fund Class Y | 32,353 | 370 | |||||||||
Russell Global Real Estate Securities Fund Class Y | 9,616 | 369 | |||||||||
1,174 | |||||||||||
Domestic Equities - 42.9% | |||||||||||
Russell U.S. Defensive Equity Fund Class Y | 7,778 | 371 | |||||||||
Russell U.S. Dynamic Equity Fund Class Y | 54,824 | 623 | |||||||||
Russell U.S. Small Cap Equity Fund Class Y | 36,994 | 1,060 | |||||||||
Select U.S. Equity Fund Class Y | 303,160 | 3,256 | |||||||||
5,310 | |||||||||||
Fixed Income - 7.0% | |||||||||||
Russell Strategic Bond Fund Class Y | 79,089 | 864 | |||||||||
International Equities - 40.6% | |||||||||||
Russell Emerging Markets Fund Class Y | 64,399 | 981 | |||||||||
Russell Global Equity Fund Class Y | 140,059 | 1,608 | |||||||||
Select International Equity Fund Class Y | 266,302 | 2,431 | |||||||||
5,020 | |||||||||||
Total Investments in Russell Affiliated Mutual Funds | |||||||||||
(cost $10,493) | 12,368 | ||||||||||
Total Investments 100.0% | |||||||||||
(identified cost $10,493) | 12,368 | ||||||||||
Other Assets and Liabilities, Net - (0.0%) | (—) | ||||||||||
Net Assets - 100.0% | 12,368 | ||||||||||
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Investments in Russell Affiliated Mutual Funds | $ | 12,368 | $ | — | $ | — | $ | 12,368 | 100.0 | ||
Total Investments | 12,368 | — | — | 12,368 | 100.0 | ||||||
Other Assets and Liabilities, Net | (—)* | ||||||||||
100.0 | |||||||||||
* Less than .05% of net assets. | |||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | |||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | |||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
192 2050 Strategy Fund
Russell Investment Company
2050 Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 10,493 |
Investments, at fair value(>) | 12,368 | |
Receivables: | ||
Fund shares sold | 30 | |
Total assets | 12,398 | |
Liabilities | ||
Payables: | ||
Investments purchased | 15 | |
Fund shares redeemed | 13 | |
Accrued fees to affiliates | 2 | |
Total liabilities | 30 | |
Net Assets | $ | 12,368 |
Net Assets Consist of: | ||
Accumulated net realized gain (loss) | $ | 170 |
Unrealized appreciation (depreciation) on investments | 1,875 | |
Shares of beneficial interest | 20 | |
Additional paid-in capital | 10,303 | |
Net Assets | $ | 12,368 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class R1(#) | $ | 6.32 |
Class R1 — Net assets | $ | 6,624,232 |
Class R1 — Shares outstanding ($.01 par value) | 1,047,709 | |
Net asset value per share: Class R4(#) | $ | 6.34 |
Class R4 — Net assets | $ | 2,421,296 |
Class R4 — Shares outstanding ($.01 par value) | 381,878 | |
Net asset value per share: Class R5(#) | $ | 6.32 |
Class R5 — Net assets | $ | 3,322,343 |
Class R5 — Shares outstanding ($.01 par value) | 525,504 | |
Amounts in thousands | ||
(>) Investments in affiliated Russell funds | $ | 12,368 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
2050 Strategy Fund 193
Russell Investment Company
2050 Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 278 | |
Expenses | |||
Distribution fees - Class R5 | 11 | ||
Shareholder servicing fees - Class R4 | 5 | ||
Shareholder servicing fees - Class R5 | 11 | ||
Total expenses | 27 | ||
Net investment income (loss) | 251 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 21 | ||
Capital gain distributions from Underlying Funds | 262 | ||
Net realized gain (loss) | 283 | ||
Net change in unrealized appreciation (depreciation) on investments | (643 | ) | |
Net realized and unrealized gain (loss) | (360 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (109 | ) |
See accompanying notes which are an integral part of the financial statements.
194 2050 Strategy Fund
Russell Investment Company
2050 Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | |||||||
Amounts in thousands | 2015 | 2014 | |||||
Increase (Decrease) in Net Assets | |||||||
Operations | |||||||
Net investment income (loss) | $ | 251 | $ | 477 | |||
Net realized gain (loss) | 283 | 4,584 | |||||
Net change in unrealized appreciation (depreciation) | (643 | ) | (3,804 | ) | |||
Net increase (decrease) in net assets from operations | (109 | ) | 1,257 | ||||
Distributions | |||||||
From net investment income | |||||||
Class R1 | (143 | ) | (277 | ) | |||
Class R2 | — | (81 | ) | ||||
Class R3 | — | (121 | ) | ||||
Class R4 | (39 | ) | (—)** | ||||
Class R5 | (69 | ) | — | ||||
From net realized gain | |||||||
Class R1 | (2,251 | ) | (96 | ) | |||
Class R2 | — | (30 | ) | ||||
Class R3 | — | (50 | ) | ||||
Class R4 | (693 | ) | — | ||||
Class R5 | (1,524 | ) | — | ||||
Net decrease in net assets from distributions | (4,719 | ) | (655 | ) | |||
Share Transactions* | |||||||
Net increase (decrease) in net assets from share transactions | 1,961 | (5,260 | ) | ||||
Total Net Increase (Decrease) in Net Assets | (2,867 | ) | (4,658 | ) | |||
Net Assets | |||||||
Beginning of period | 15,235 | 19,893 | |||||
End of period | $ | 12,368 | $ | 15,235 | |||
** Less than $500. |
See accompanying notes which are an integral part of the financial statements.
2050 Strategy Fund 195
Russell Investment Company
2050 Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class R1 | ||||||||||||
Proceeds from shares sold | 746 | $ | 4,986 | 623 | $ | 5,840 | ||||||
Proceeds from reinvestment of distributions | 371 | 2,395 | 40 | 373 | ||||||||
Payments for shares redeemed | (861 | ) | (5,949 | ) | (1,037 | ) | (9,732 | ) | ||||
Net increase (decrease) | 256 | 1,432 | (374 | ) | (3,519 | ) | ||||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 106 | 995 | ||||||||
Proceeds from reinvestment of distributions | — | — | 12 | 111 | ||||||||
Payments for shares redeemed | — | — | (499 | ) | (4,661 | ) | ||||||
Net increase (decrease) | — | — | (381 | ) | (3,555 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 213 | 1,993 | ||||||||
Proceeds from reinvestment of distributions | — | — | 18 | 171 | ||||||||
Payments for shares redeemed | — | — | (845 | ) | (7,839 | ) | ||||||
Net increase (decrease) | — | — | (614 | ) | (5,675 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 134 | 907 | 234 | 2,176 | ||||||||
Proceeds from reinvestment of distributions | 113 | 732 | — | — | ||||||||
Payments for shares redeemed | (93 | ) | (628 | ) | (7 | ) | (62 | ) | ||||
Net increase (decrease) | 154 | 1,011 | 227 | 2,114 | ||||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 290 | 2,006 | 603 | 5,586 | ||||||||
Proceeds from reinvestment of distributions | 247 | 1,593 | — | — | ||||||||
Payments for shares redeemed | (592 | ) | (4,081 | ) | (22 | ) | (211 | ) | ||||
Net increase (decrease) | (55 | ) | (482 | ) | 581 | 5,375 | ||||||
Total increase (decrease) | 355 | $ | 1,961 | (561 | ) | $ | (5,260 | ) |
See accompanying notes which are an integral part of the financial statements.
196 2050 Strategy Fund
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Russell Investment Company
2050 Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | ||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class R1 | ||||||||||||||||
October 31, 2015 | 9.52 | .13 | (.14 | ) | (.01 | ) | (.17 | ) | (3.02 | ) | ||||||
October 31, 2014 | 9.20 | .27 | .37 | .64 | (.24 | ) | (.08 | ) | ||||||||
October 31, 2013 | 7.84 | .15 | 1.43 | 1.58 | (.15 | ) | (.07 | ) | ||||||||
October 31, 2012 | 9.19 | .11 | .48 | .59 | (.16 | ) | (1.78 | ) | ||||||||
October 31, 2011 | 9.22 | .18 | .04 | .22 | (.23 | ) | (.02 | ) | ||||||||
Class R4(3) | ||||||||||||||||
October 31, 2015 | 9.54 | .11 | (.14 | ) | (.03 | ) | (.15 | ) | (3.02 | ) | ||||||
October 31, 2014 | 9.22 | .23 | .39 | .62 | (.22 | ) | (.08 | ) | ||||||||
October 31, 2013 | 7.85 | .12 | 1.45 | 1.57 | (.13 | ) | (.07 | ) | ||||||||
October 31, 2012 | 9.19 | .12 | .46 | .58 | (.14 | ) | (1.78 | ) | ||||||||
October 31, 2011 | 9.21 | .25 | (.07 | ) | .18 | (.18 | ) | (.02 | ) | |||||||
Class R5(4) | ||||||||||||||||
October 31, 2015 | 9.51 | .11 | (.15 | ) | (.04 | ) | (.13 | ) | (3.02 | ) | ||||||
October 31, 2014 | 9.20 | .21 | .38 | .59 | (.20 | ) | (.08 | ) | ||||||||
October 31, 2013 | 7.84 | .10 | 1.44 | 1.54 | (.11 | ) | (.07 | ) | ||||||||
October 31, 2012 | 9.18 | .11 | .44 | .55 | (.11 | ) | (1.78 | ) | ||||||||
October 31, 2011 | 9.21 | .16 | .01 | .17 | (.18 | ) | (.02 | ) | ||||||||
See accompanying notes which are an integral part of the financial statements.
198 2050 Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return | (000 | ) | Gross(g) | Net(e)(g) | Net Assets(b)(e) | Turnover Rate | |||||||||
(3.19 | ) | 6.32 | (.66 | ) | 6,625 | — | — | 1.91 | 44 | ||||||||
(.32 | ) | 9.52 | 7.12 | 7,542 | — | — | 2.89 | 84 | |||||||||
(.22 | ) | 9.20 | 20.61 | 10,729 | — | — | 1.75 | 27 | |||||||||
(1.94 | ) | 7.84 | 9.00 | 8,731 | — | — | 1.44 | 78 | |||||||||
(.25 | ) | 9.19 | 2.28 | 5,861 | — | — | 1.92 | 72 | |||||||||
(3.17 | ) | 6.34 | (.90 | ) | 2,421 | .25 | .25 | 1.66 | 44 | ||||||||
(.30 | ) | 9.54 | 6.81 | 2,170 | .25 | .25 | 2.45 | 84 | |||||||||
(.20 | ) | 9.22 | 20.42 | 3,515 | .25 | .25 | 1.44 | 27 | |||||||||
(1.92 | ) | 7.85 | 8.82 | 2,658 | .25 | .25 | 1.52 | 78 | |||||||||
(.20 | ) | 9.19 | 1.96 | 2,408 | .25 | .25 | 2.61 | 72 | |||||||||
(3.15 | ) | 6.32 | (1.10 | ) | 3,322 | .50 | .50 | 1.61 | 44 | ||||||||
(.28 | ) | 9.51 | 6.51 | 5,523 | .50 | .50 | 2.20 | 84 | |||||||||
(.18 | ) | 9.20 | 20.03 | 5,649 | .50 | .50 | 1.17 | 27 | |||||||||
(1.89 | ) | 7.84 | 8.50 | 3,482 | .50 | .50 | 1.43 | 78 | |||||||||
(.20 | ) | 9.18 | 1.78 | 4,877 | .50 | .50 | 1.65 | 72 |
See accompanying notes which are an integral part of the financial statements.
2050 Strategy Fund 199
Russell Investment Company
2055 Strategy Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
2055 Strategy Fund - Class R1 | 2055 Strategy Fund - Class R5‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.52 | )% | 1 Year | (1.00 | )% | ||
Inception* | 6.52 | %§ | Inception* | 6.00 | %§ | ||
2055 Strategy Fund - Class R4‡ | Russell 1000® Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (0.85 | )% | 1 Year | 4.86 | % | ||
Inception* | 6.25 | %§ | Inception* | 13.25 | %§ |
200 2055 Strategy Fund
Russell Investment Company
2055 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The 2055 Strategy Fund (the “Fund”) is a fund of funds that | returned 4.49% over the period, while non-U.S. equities returned |
invests in other Russell Investment Company mutual funds (the | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® |
“Underlying Funds”). The Underlying Funds employ a multi- | Index) and emerging markets returned -13.58% (as measured by |
manager approach whereby portions of the Underlying Funds | the Russell Emerging Markets Index). The underperformance of |
are allocated to different money managers. Underlying Fund | non-U.S. equities versus U.S. equities was a key negative driver |
assets not allocated to money managers are managed by Russell | to the Fund’s benchmark-relative performance, as U.S. equities |
Investment Management Company (“RIMCo”), the Fund’s and | finished at 4.86% for the fiscal year as measured by the Fund’s |
Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | benchmark |
advisor, may change the allocation of the Underlying Funds’ | The fiscal year ended October 31, 2015 was characterized by |
assets among money managers at any time. An exemptive order | slowing global growth and commodity price weakness. Overall, |
from the Securities and Exchange Commission (“SEC”) permits | this was modestly positive for fixed income assets, as yields fell. |
RIMCo to engage or terminate a money manager in an Underlying | However, the Fund’s exposure to the fixed income asset class had |
Fund at any time, subject to approval by the Underlying Fund’s | a negative effect on benchmark-relative performance as core fixed |
Board, without a shareholder vote. Pursuant to the terms of the | income underperformed U.S. equities. |
exemptive order, an Underlying Fund is required to notify its | |
shareholders within 90 days of when a money manager begins | Within alternative strategies, commodities exposure had the |
providing services. | largest negative impact on the Fund, as the asset class (as |
measured by the Bloomberg Commodity Index Total Return) lost | |
What is the Fund’s investment objective? | 25.72% during the period, significantly underperforming U.S. |
The Fund seeks to provide capital growth and income consistent | equities. Global REITs and listed infrastructure (as represented |
with its current asset allocation which will change over time, with | by the FTSE EPRA/NAREIT Developed Real Estate Index (Net) |
an increasing allocation to fixed income funds. | and S&P Global Infrastructure Index (Net)) finished the fiscal |
The Fund pursues this objective by investing in a diversified | year up 2.68% and down 6.29%, respectively. Both of these asset |
portfolio that, as of October 31, 2015, consisted of approximately | classes underperformed U.S. equities, which negatively impacted |
82.5% equity Underlying Funds, 10.5% fixed income Underlying | the Fund’s benchmark-relative performance. |
Funds and 7% alternative Underlying Funds. The Fund’s | How did the investment strategies and techniques employed |
allocation to fixed income Underlying Funds will be fixed at | by the Fund and the Underlying Funds affect the Fund’s |
66.3% in approximately the year 2055. | performance? |
How did the Fund perform relative to its benchmark for the | The Fund is a fund of funds and its performance is based on |
fiscal year ended October 31, 2015? | RIMCo’s strategic asset allocations and the performance of the |
For the fiscal year ended October 31, 2015, the Fund’s Class R1, | Underlying Funds in which the Fund invests. |
Class R4 and Class R5 Shares lost 0.52%, 0.85% and 1.00%, | With respect to the Fund’s global equity exposure, the Fund’s |
respectively. This is compared to the Fund’s primary benchmark, | strategic allocation to the Russell Global Equity Fund, Select |
the Russell 1000® Index, which gained 4.86% during the same | International Equity Fund and the Russell Emerging Markets |
period. The Fund’s performance includes operating expenses, | Fund detracted as these all underperformed the Fund’s U.S. |
whereas index returns are unmanaged and do not include | equity benchmark. From an active management perspective, an |
expenses of any kind. | underweighttoenergyandanoverweighttoconsumerdiscretionary |
For the fiscal year ended October 31, 2015, the Morningstar® | in the Russell Global Equity Fund contributed to positive excess |
Target Date 2051+ gained 0.85%. This result serves as a peer | return versus its benchmark. For the Russell Emerging Markets |
comparison and is expressed net of operating expenses. | Fund, unsuccessful stock selection in China and Brazil was the |
main driver of the Fund’s benchmark-relative underperformance. | |
The Fund’s underperformance relative to the Russell 1000® | Chinese stocks fell sharply and broader emerging markets also |
Index was due to the Fund’s allocation to non-U.S. equity and | lost significant value during the period due to growth concerns. |
commodity Underlying Funds, which underperformed large cap | A valuation bias in the Select International Equity Fund led to |
U.S. equity over the period. | benchmark-relative underperformance as lower price-to-book |
How did the market conditions described in the Market | stocks strongly underperformed. |
Summary report affect the Fund’s performance? | The Fund’s allocation to U.S. equity Underlying Funds had a |
It was a mixed equity market for the fiscal year ending October | negative effect on the Fund’s benchmark-relative performance. |
31, 2015. U.S. stocks (as measured by the Russell 3000® Index) | Underlying active management within the U.S. equity Underlying |
2055 Strategy Fund 201
Russell Investment Company
2055 Strategy Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
Funds detracted, as most of the U.S. equity Underlying Funds | fixed income or alternative category level based on RIMCo’s |
underperformed their respective U.S. equity market segment | capital markets research. RIMCo’s asset allocation modifications |
as represented by their primary benchmarks. The Select U.S. | benefited the Fund’s performance relative to the Fund’s target |
Equity Fund underperformed the Russell 1000® Index due to | strategic asset allocation. |
an underweight to growth stocks, which outperformed during | On November 21, 2014, RIMCo reduced the Fund’s overweight to |
the period. In addition, the Fund’s strategic allocation to the | the Russell Global Equity Fund by 0.50%. This was offset by a |
Russell U.S. Small Cap Equity Fund also detracted from the | 0.50% increase to the Russell Commodity Strategies Fund. This |
Fund’s benchmark-relative performance, as U.S. small cap equity | position was implemented after strong performance in the equity |
underperformed the Fund’s benchmark and the Underlying Fund | market and to position the Fund for rising interest rates. |
underperformed its Russell 2000® Index benchmark due to an | |
overweight to micro-capitalization stocks which underperformed | On February 19, 2015, RIMCo removed the Fund’s overweight to |
during the period. | U.S. equities by reducing the Fund’s allocation to the Select U.S. |
Equity Fund by 0.50%. This was offset by a 0.50% increase in | |
The Fund’s strategic allocation to fixed income Underlying Funds | the Fund’s allocation to the Russell Commodity Strategies Fund, |
had a negative impact on its benchmark-relative performance as | which neutralized the previous underweight to commodities. This |
fixed income underperformed U.S. equity. The Russell Strategic | position was implemented after strong U.S. equity performance |
Bond Fund was negatively impacted by its overweight to credit, | and a sharp decline in commodities |
but its currency positioning drove excess return relative to its | |
benchmark. | On August 10, 2015, RIMCo reduced the Fund’s allocation to |
the Russell Emerging Markets Fund by 0.75% as concerns | |
The Fund’s strategic allocation to alternative Underlying Funds | over emerging markets growth intensified. This was offset by an |
had a negative impact on benchmark-relative performance | increase in the allocation to large cap developed equities through |
as each of these asset classes underperformed the Fund’s U.S. | a 0.50% increase in the Fund’s allocation to the Select U.S. |
equity benchmark. From an active management standpoint, | Equity Fund and a 0.25% increase in the Fund’s allocation to the |
performance of these Underlying Funds was mixed. The Russell | Select International Equity Fund. |
Global Infrastructure Fund and the Russell Global Real Estate | |
Securities Fund outperformed their respective benchmarks | The views expressed in this report reflect those of the portfolio |
while the Russell Commodity Strategies Fund underperformed | managers only through the end of the period covered by |
its benchmark. The Russell Global Infrastructure Fund and the | the report. These views do not necessarily represent the |
Russell Global Real Estate Securities Fund both benefited from | views of RIMCo, or any other person in RIMCo or any other |
strong stock selection by underlying money managers. The Russell | affiliated organization. These views are subject to change |
Commodity Strategies Fund underperformed its benchmark due | at any time based upon market conditions or other events, |
largely to exposure to the energy sector. | and RIMCo disclaims any responsibility to update the views |
contained herein. These views should not be relied on as | |
Describe any changes to the Fund’s structure or allocation | investment advice and, because investment decisions for |
to the Underlying Funds. | a Russell Investment Company (“RIC”) Fund are based on |
RIMCo has the discretion to vary the Fund’s actual allocation from | numerous factors, should not be relied on as an indication |
the target strategic asset allocation by up to +/- 5% at the equity, | of investment decisions of any RIC Fund. |
* Assumes initial investment on December 31, 2010.
** Russell 1000® Index includes the 1,000 largest companies in the Russell 3000® Index. The Russell 1000® Index represents the universe of stocks from which
most active money managers typically select. The Russell 1000® Index return reflects adjustments from income dividends and capital gain distributions
reinvested as of the ex-dividend dates.
‡ The Fund first issued Class R4 and Class R5 Shares on October 1, 2014. The returns shown for Class R4 and Class R5 Shares prior to that date are the returns
of the Fund’s Class R2 and Class R3 Shares, respectively.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
202 2055 Strategy Fund
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2055 Strategy Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Hypothetical | |||||
The following disclosure provides important information | Performance (5% | |||||
Actual | return before | |||||
regarding the Fund’s Shareholder Expense Example | Class R1 | Performance | expenses) | |||
(“Example”). | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Example | Ending Account Value | |||||
As a shareholder of the Fund, you incur ongoing costs, including | October 31, 2015 | $ | 952.00 | $ | 1,025.21 | |
distribution (12b-1) and/or service fees and other Fund expenses. | Expenses Paid During Period* | $ | — | $ | — | |
The Example is intended to help you understand your ongoing | * There were no expenses charged to the Class. | |||||
costs (in dollars) of investing in the Fund and to compare these | ||||||
costs with the ongoing costs of investing in other mutual funds. | Hypothetical | |||||
Performance (5% | ||||||
The Example is based on an investment of $1,000 invested at the | Actual | return before | ||||
beginning of the period and held for the entire period indicated, | Class R4 | Performance | expenses) | |||
which for this Fund is from May 1, 2015 to October 31, 2015. | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | |||||
The information in the table under the heading “Actual | October 31, 2015 | $ | 950.80 | $ | 1,023.95 | |
Expenses Paid During Period* | $ | 1.23 | $ | 1.28 | ||
Performance” provides information about actual account values | ||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
that you paid over the period. Simply divide your account value by | year period). | |||||
$1,000 (for example, an $8,600 account value divided by $1,000 | ||||||
= 8.6), then multiply the result by the number in the first column | Hypothetical | |||||
in the row entitled “Expenses Paid During Period” to estimate | Performance (5% | |||||
Actual | return before | |||||
the expenses you paid on your account during this period. | Class R5 | Performance | expenses) | |||
Beginning Account Value | ||||||
Hypothetical Example for Comparison Purposes | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
The information in the table under the heading “Hypothetical | Ending Account Value | |||||
Performance (5% return before expenses)” provides information | October 31, 2015 | $ | 949.70 | $ | 1,022.68 | |
about hypothetical account values and hypothetical expenses | Expenses Paid During Period* | $ | 2.46 | $ | 2.55 | |
based on the Fund’s actual expense ratio and an assumed rate of | * Expenses are equal to the Fund's annualized expense ratio of 0.50% | |||||
return of 5% per year before expenses, which is not the Fund’s | (representing the six month period annualized), multiplied by the average | |||||
actual return. The hypothetical account values and expenses | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
may not be used to estimate the actual ending account balance or | year period). | |||||
expenses you paid for the period. You may use this information | ||||||
to compare the ongoing costs of investing in the Fund and other | ||||||
funds. To do so, compare this 5% hypothetical example with the | ||||||
5% hypothetical examples that appear in the shareholder reports | ||||||
of other funds. | ||||||
Please note that the expenses shown in the table are meant | ||||||
to highlight your ongoing costs only and do not reflect any | ||||||
transactional costs. Therefore, the information under the heading | ||||||
“Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | ||||||
determine the relative total costs of owning different funds. In | ||||||
addition, if these transactional costs were included, your costs | ||||||
would have been higher. |
2055 Strategy Fund 203
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2055 Strategy Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | |||||||||||
Fair | |||||||||||
Value | |||||||||||
Shares | $ | ||||||||||
Investments in Russell Affiliated Mutual Funds - 100.0% | |||||||||||
Alternative - 9.5% | |||||||||||
Russell Commodity Strategies Fund Class Y | 25,534 | 145 | |||||||||
Russell Global Infrastructure Fund Class Y | 10,832 | 124 | |||||||||
Russell Global Real Estate Securities Fund Class Y | 3,223 | 124 | |||||||||
393 | |||||||||||
Domestic Equities - 42.9% | |||||||||||
Russell U.S. Defensive Equity Fund Class Y | 2,614 | 125 | |||||||||
Russell U.S. Dynamic Equity Fund Class Y | 18,397 | 209 | |||||||||
Russell U.S. Small Cap Equity Fund Class Y | 12,354 | 354 | |||||||||
Select U.S. Equity Fund Class Y | 101,694 | 1,092 | |||||||||
1,780 | |||||||||||
Fixed Income - 7.0% | |||||||||||
Russell Strategic Bond Fund Class Y | 26,479 | 289 | |||||||||
International Equities - 40.6% | |||||||||||
Russell Emerging Markets Fund Class Y | 21,594 | 329 | |||||||||
Russell Global Equity Fund Class Y | 46,972 | 539 | |||||||||
Select International Equity Fund Class Y | 89,226 | 815 | |||||||||
1,683 | |||||||||||
Total Investments in Russell Affiliated Mutual Funds | |||||||||||
(cost $4,045) | 4,145 | ||||||||||
Total Investments 100.0% | |||||||||||
(identified cost $4,045) | 4,145 | ||||||||||
Other Assets and Liabilities, Net - 0.0% | 2 | ||||||||||
Net Assets - 100.0% | 4,147 | ||||||||||
Presentation of Portfolio Holdings | |||||||||||
Amounts in thousands | |||||||||||
Fair Value | |||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||
Investments in Russell Affiliated Mutual Funds | $ | 4,145 | $ | — | $ | — | $ | 4,145 | 100.0 | ||
Total Investments | 4,145 | — | — | 4,145 | 100.0 | ||||||
Other Assets and Liabilities, Net | —* | ||||||||||
100.0 | |||||||||||
* Less than .05% of net assets. | |||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | |||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | |||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
204 2055 Strategy Fund
Russell Investment Company
2055 Strategy Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 4,045 |
Investments, at fair value(>) | 4,145 | |
Receivables: | ||
Fund shares sold | 16 | |
Total assets | 4,161 | |
Liabilities | ||
Payables: | ||
Investments purchased | 7 | |
Fund shares redeemed | 6 | |
Accrued fees to affiliates | 1 | |
Total liabilities | 14 | |
Net Assets | $ | 4,147 |
Net Assets Consist of: | ||
Accumulated net realized gain (loss) | $ | 11 |
Unrealized appreciation (depreciation) on investments | 100 | |
Shares of beneficial interest | 4 | |
Additional paid-in capital | 4,032 | |
Net Assets | $ | 4,147 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class R1(#) | $ | 11.05 |
Class R1 — Net assets | $ | 1,381,297 |
Class R1 — Shares outstanding ($.01 par value) | 125,020 | |
Net asset value per share: Class R4(#) | $ | 11.05 |
Class R4 — Net assets | $ | 1,932,003 |
Class R4 — Shares outstanding ($.01 par value) | 174,765 | |
Net asset value per share: Class R5(#) | $ | 11.04 |
Class R5 — Net assets | $ | 833,511 |
Class R5 — Shares outstanding ($.01 par value) | 75,496 | |
Amounts in thousands | ||
(>) Investments in affiliated Russell funds | $ | 4,145 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
2055 Strategy Fund 205
Russell Investment Company
2055 Strategy Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 61 | |
Expenses | |||
Distribution fees - Class R5 | 2 | ||
Shareholder servicing fees - Class R4 | 4 | ||
Shareholder servicing fees - Class R5 | 2 | ||
Total expenses | 8 | ||
Net investment income (loss) | 53 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (28 | ) | |
Capital gain distributions from Underlying Funds | 53 | ||
Net realized gain (loss) | 25 | ||
Net change in unrealized appreciation (depreciation) on investments | (98 | ) | |
Net realized and unrealized gain (loss) | (73 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (20 | ) |
See accompanying notes which are an integral part of the financial statements.
206 2055 Strategy Fund
Russell Investment Company
2055 Strategy Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | |||||||
Amounts in thousands | 2015 | 2014 | |||||
Increase (Decrease) in Net Assets | |||||||
Operations | |||||||
Net investment income (loss) | $ | 53 | $ | 60 | |||
Net realized gain (loss) | 25 | 279 | |||||
Net change in unrealized appreciation (depreciation) | (98 | ) | (199 | ) | |||
Net increase (decrease) in net assets from operations | (20 | ) | 140 | ||||
Distributions | |||||||
From net investment income | |||||||
Class R1 | (16 | ) | (18 | ) | |||
Class R2 | — | (32 | ) | ||||
Class R3 | — | (10 | ) | ||||
Class R4 | (28 | ) | (—)** | ||||
Class R5 | (10 | ) | — | ||||
From net realized gain | |||||||
Class R1 | (65 | ) | (2 | ) | |||
Class R2 | — | (4 | ) | ||||
Class R3 | — | (2 | ) | ||||
Class R4 | (153 | ) | — | ||||
Class R5 | (67 | ) | — | ||||
Net decrease in net assets from distributions | (339 | ) | (68 | ) | |||
Share Transactions* | |||||||
Net increase (decrease) in net assets from share transactions | 1,661 | 428 | |||||
Total Net Increase (Decrease) in Net Assets | 1,302 | 500 | |||||
Net Assets | |||||||
Beginning of period | 2,845 | 2,345 | |||||
End of period | $ | 4,147 | $ | 2,845 | |||
Undistributed (overdistributed) net investment income included in net assets | $ | — | $ | — | |||
** Less than $500. |
See accompanying notes which are an integral part of the financial statements.
2055 Strategy Fund 207
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2055 Strategy Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class R1 | ||||||||||||
Proceeds from shares sold | 136 | $ | 1,515 | 146 | $ | 1,767 | ||||||
Proceeds from reinvestment of distributions | 7 | 81 | 2 | 20 | ||||||||
Payments for shares redeemed | (64 | ) | (727 | ) | (155 | ) | (1,855 | ) | ||||
Net increase (decrease) | 79 | 869 | (7 | ) | (68 | ) | ||||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 23 | 286 | ||||||||
Proceeds from reinvestment of distributions | — | — | 3 | 36 | ||||||||
Payments for shares redeemed | — | — | (133 | ) | (1,626 | ) | ||||||
Net increase (decrease) | — | — | (107 | ) | (1,304 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 28 | 347 | ||||||||
Proceeds from reinvestment of distributions | — | — | 1 | 12 | ||||||||
Payments for shares redeemed | — | — | (63 | ) | (766 | ) | ||||||
Net increase (decrease) | — | — | (34 | ) | (407 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 45 | 516 | 125 | 1,525 | ||||||||
Proceeds from reinvestment of distributions | 16 | 180 | — | —** | ||||||||
Payments for shares redeemed | (11 | ) | (119 | ) | (1 | ) | (11 | ) | ||||
Net increase (decrease) | 50 | 577 | 124 | 1,514 | ||||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 58 | 675 | 59 | 717 | ||||||||
Proceeds from reinvestment of distributions | 7 | 78 | — | — | ||||||||
Payments for shares redeemed | (46 | ) | (538 | ) | (2 | ) | (24 | ) | ||||
Net increase (decrease) | 19 | 215 | 57 | 693 | ||||||||
Total increase (decrease) | 148 | $ | 1,661 | 33 | $ | 428 | ||||||
** Less than $500. |
See accompanying notes which are an integral part of the financial statements.
208 2055 Strategy Fund
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Russell Investment Company
2055 Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | ||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class R1 | ||||||||||||||||
October 31, 2015 | 12.51 | .17 | (.21 | ) | (.04 | ) | (.24 | ) | (1.18 | ) | ||||||
October 31, 2014 | 12.04 | .34 | .49 | .83 | (.32 | ) | (.04 | ) | ||||||||
October 31, 2013 | 10.27 | .15 | 1.93 | 2.08 | (.19 | ) | (.12 | ) | ||||||||
October 31, 2012 | 9.63 | .16 | .68 | .84 | (.18 | ) | (.02 | ) | ||||||||
October 31, 2011(1) | 10.00 | .06 | (.37 | ) | (.31 | ) | (.06 | ) | — | |||||||
Class R4(3) | ||||||||||||||||
October 31, 2015 | 12.52 | .19 | (.27 | ) | (.08 | ) | (.21 | ) | (1.18 | ) | ||||||
October 31, 2014 | 12.03 | .28 | .54 | .82 | (.29 | ) | (.04 | ) | ||||||||
October 31, 2013 | 10.27 | .16 | 1.88 | 2.04 | (.16 | ) | (.12 | ) | ||||||||
October 31, 2012 | 9.63 | .15 | .66 | .81 | (.15 | ) | (.02 | ) | ||||||||
October 31, 2011(1) | 10.00 | .03 | (.36 | ) | (.33 | ) | (.04 | ) | — | |||||||
Class R5(4) | ||||||||||||||||
October 31, 2015 | 12.50 | .14 | (.24 | ) | (.10 | ) | (.18 | ) | (1.18 | ) | ||||||
October 31, 2014 | 12.03 | .22 | .56 | .78 | (.27 | ) | (.04 | ) | ||||||||
October 31, 2013 | 10.27 | .12 | 1.90 | 2.02 | (.14 | ) | (.12 | ) | ||||||||
October 31, 2012 | 9.63 | .11 | .68 | .79 | (.13 | ) | (.02 | ) | ||||||||
October 31, 2011(1) | 10.00 | .02 | (.37 | ) | (.35 | ) | (.02 | ) | — | |||||||
See accompanying notes which are an integral part of the financial statements.
210 2055 Strategy Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c) | (000 | ) | Gross(f)(g) | Net(e)(f)(g) | Net Assets(b)(c)(e) | Turnover Rate(c) | |||||||||
(1.42 | ) | 11.05 | (.52 | ) | 1,381 | — | — | 1.54 | 28 | ||||||||
(.36 | ) | 12.51 | 7.01 | 579 | — | — | 2.81 | 132 | |||||||||
(.31 | ) | 12.04 | 20.74 | 648 | — | — | 1.31 | 27 | |||||||||
(.20 | ) | 10.27 | 8.92 | 171 | — | — | 1.66 | 23 | |||||||||
(.06 | ) | 9.63 | (3.09 | ) | 97 | — | — | .63 | 47 | ||||||||
(1.39 | ) | 11.05 | (.85 | ) | 1,932 | .25 | .25 | 1.63 | 28 | ||||||||
(.33 | ) | 12.52 | 6.93 | 1,554 | .25 | .25 | 2.26 | 132 | |||||||||
(.28 | ) | 12.03 | 20.35 | 1,290 | .25 | .25 | 1.43 | 27 | |||||||||
(.17 | ) | 10.27 | 8.64 | 957 | .25 | .25 | 1.48 | 23 | |||||||||
(.04 | ) | 9.63 | (3.31 | ) | 793 | .25 | .25 | .28 | 47 | ||||||||
(1.36 | ) | 11.04 | (1.00 | ) | 834 | .50 | .50 | 1.25 | 28 | ||||||||
(.31 | ) | 12.50 | 6.55 | 712 | .50 | .50 | 1.80 | 132 | |||||||||
(.26 | ) | 12.03 | 20.09 | 407 | .50 | .50 | 1.04 | 27 | |||||||||
(.15 | ) | 10.27 | 8.41 | 233 | .50 | .50 | 1.08 | 23 | |||||||||
(.02 | ) | 9.63 | (3.49 | ) | 106 | .50 | .50 | .21 | 47 |
See accompanying notes which are an integral part of the financial statements.
2055 Strategy Fund 211
Russell Investment Company
In Retirement Fund
Portfolio Management Discussion and Analysis — October 31, 2015 (Unaudited)
In Retirement Fund - Class A‡ | In Retirement Fund - Class R5‡‡ | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | (5.07 | )% | 1 Year | 0.38 | % | ||
5 Years | 3.23 | %§ | 5 Years | 4.18 | %§ | ||
Inception* | 3.69 | %§ | Inception* | 4.22 | %§ | ||
In Retirement Fund - Class R1 | Barclays U.S. Aggregate Bond Index** | ||||||
Total | Total | ||||||
Return | Return | ||||||
1 Year | 0.96 | % | 1 Year | 1.96 | % | ||
5 Years | 4.73 | %§ | 5 Years | 3.03 | %§ | ||
Inception* | 4.76 | %§ | Inception* | 4.26 | %§ | ||
In Retirement Fund - Class R4‡‡ | |||||||
Total | |||||||
Return | |||||||
1 Year | 0.59 | % | |||||
5 Years | 4.46 | %§ | |||||
Inception* | 4.50 | %§ |
212 In Retirement Fund
Russell Investment Company
In Retirement Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
The In Retirement Fund (the “Fund”) is a fund of funds that | due to the Fund’s allocation to the Russell Global Opportunistic |
invests in other Russell Investment Company mutual funds (the | Credit Fund and the Russell Short Duration Bond Fund. The |
“Underlying Funds”). The Underlying Funds employ a multi- | Fund’s strategic exposure to U.S. equities and global real estate |
manager approach whereby portions of the Underlying Funds | was positive, as these asset classes outperformed fixed income. |
are allocated to different money managers. Underlying Fund | It was a mixed equity market for the fiscal year ending October |
assets not allocated to money managers are managed by Russell | 31, 2015. U.S. stocks (as measured by the Russell 3000® Index) |
Investment Management Company (“RIMCo”), the Fund’s and | returned 4.49% over the period, while non-U.S. equities returned |
Underlying Funds’ advisor. RIMCo, as the Underlying Funds’ | -1.36% (as measured by the Russell Developed ex-U.S. Large Cap® |
advisor, may change the allocation of the Underlying Funds’ | Index) and emerging markets returned -13.58% (as measured by |
assets among money managers at any time. An exemptive order | the Russell Emerging Markets Index). The underperformance of |
from the Securities and Exchange Commission (“SEC”) permits | non-U.S. equities versus fixed income was a key negative driver |
RIMCo to engage or terminate a money manager in an Underlying | to the Fund’s benchmark-relative performance, as fixed income |
Fund at any time, subject to approval by the Underlying Fund’s | markets finished at 1.96% for the fiscal year as measured by the |
Board, without a shareholder vote. Pursuant to the terms of the | Fund’s benchmark. |
exemptive order, an Underlying Fund is required to notify its | |
shareholders within 90 days of when a money manager begins | Within alternative strategies, commodities exposure had the |
providing services. | largest negative impact on the Fund, as the asset class (as |
measured by the Bloomberg Commodity Index Total Return) lost | |
What is the Fund’s investment objective? | 25.72% during the period, significantly underperforming fixed |
The Fund seeks to provide income and capital growth. | income. Global REITs and listed infrastructure (as represented by |
The Fund pursues this objective by investing in a diversified | the FTSE EPRA/NAREIT Developed Real Estate Index (Net) and |
portfolio that, as of October 31, 2015, consisted of approximately | S&P Global Infrastructure Index (Net)) finished the fiscal year up |
27% equity Underlying Funds, 66% fixed income Underlying | 2.68% and down 6.29% respectively. REITs outperformed fixed |
Funds and 7% alternative Underlying Funds. | income markets, which was beneficial to the Fund’s performance |
through its allocation to the Russell Global Real Estate Securities | |
How did the Fund perform relative to its benchmark for the | Fund. Infrastructure underperformed fixed income, which |
fiscal year ended October 31, 2015? | negatively impacted the Fund through its allocation to the Russell |
For the fiscal year ended October 31, 2015, the Fund’s Class | Global Infrastructure Fund. |
A, Class R1, Class R4 and Class R5 Shares gained 0.69%, | |
0.96%, 0.59% and 0.38%, respectively. This is compared to the | How did the investment strategies and techniques employed |
Fund’s primary benchmark, the Barclays U.S. Aggregate Bond | by the Fund and the Underlying Funds affect the Fund’s |
Index, which gained 1.96% during the same period. The Fund’s | performance? |
performance includes operating expenses, whereas index returns | The Fund is a fund of funds and its performance is based on |
are unmanaged and do not include expenses of any kind. | RIMCo’s strategic asset allocations and the performance of the |
Underlying Funds in which the Fund invests. | |
For the fiscal year ended October 31, 2015, the Morningstar® | |
Retirement Income lost 0.03%. This result serves as a peer | The Fund’s strategic allocation to fixed income Underlying |
comparison and is expressed net of operating expenses. | Funds generally had a negative impact on its benchmark-relative |
performance. Allocations to the Russell Global Opportunistic | |
The Fund’s underperformance relative to the Barclays U.S. | Credit Fund and Russell Short Duration Bond Fund detracted, as |
Aggregate Bond Index was due to the Fund’s allocation to non- | these Underlying Funds underperformed the Fund’s benchmark. |
U.S. equity Underlying Funds, which underperformed fixed | From an active management perspective, the Russell Global |
income Underlying Funds over the period. | Opportunistic Credit Fund underperformed its benchmark largely |
How did the market conditions described in the Market | because of an ex-benchmark allocation to local currency emerging |
Summary report affect the Fund’s performance? | market debt and the associated currency risk as the U.S. dollar |
The fiscal year ended October 31, 2015 was characterized by | appreciated strongly versus emerging market currencies. The |
slowing global growth and commodity price weakness. Overall, | Russell Short Duration Bond Fund underperformed its benchmark |
this was modestly positive for fixed income assets, as yields fell. | due mostly to ex-benchmark corporate credit exposure, as this |
However, the Fund’s exposure to the fixed income asset class had | sector saw the largest drawdowns during the period. Allocations |
a modestly negative effect on benchmark-relative performance | to the Russell Strategic Bond Fund and Russell Investment Grade |
Bond Fund were flat to slightly positive from a benchmark-relative |
In Retirement Fund 213
Russell Investment Company
In Retirement Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
perspective. While both Funds were negatively impacted by their | underlying money managers. The Russell Commodity Strategies | |
overweight to credit, currency positioning drove excess return. | Fund underperformed its benchmark due largely to exposure to | |
With respect to the Fund’s global equity exposure, the Fund’s | the energy sector. | |
strategic allocation to the Russell Global Equity Fund positively | Describe any changes to the Fund’s structure or allocation | |
impacted the Fund’s benchmark-relative performance, while its | to the Underlying Funds. | |
allocation to the Select International Equity Fund and the Russell | RIMCo has the discretion to vary the Fund’s actual allocation from | |
Emerging Markets Fund detracted. From an active management | the target strategic asset allocation by up to +/- 5% at the equity, | |
standpoint, performance of these Underlying Funds was mixed. | fixed income or alternative category level based on RIMCo’s | |
An underweight to energy and an overweight to consumer | capital markets research. RIMCo’s asset allocation modifications | |
discretionary in the Russell Global Equity Fund contributed to the | benefited the Fund’s performance relative to the Fund’s target | |
Fund’s outperformance of its respective benchmark. A valuation | strategic asset allocation. | |
bias in the Select International Equity Fund led to benchmark- | ||
relative underperformance as lower price-to-book stocks strongly | On November 21, 2014, RIMCo reduced the Fund’s overweight to | |
underperformed. For the Russell Emerging Markets Fund, | the Russell Global Equity Fund by 1.20%. This was offset by a | |
unsuccessful stock selection in China and Brazil and was the | 1.00% increase to the Russell Global Opportunistic Credit Fund | |
main driver of the Fund’s underperformance. Chinese stocks fell | and 0.20% increase to the Russell Commodity Strategies Fund. | |
sharply and broader emerging markets also lost significant value | This position was implemented after strong performance in the | |
during the period due to growth concerns. | equity market and to position the Fund for rising interest rates. | |
The Fund’s strategic allocation to U.S. large cap equity Underlying | On February 19, 2015, RIMCo removed the Fund’s overweight to | |
Funds benefited the Fund’s benchmark-relative performance, | U.S. equities by reducing the Fund’s allocation to the Select U.S. | |
as broad U.S. equities outperformed core fixed income during | Equity Fund by 0.20%. This was offset by a 0.20% increase in | |
the period. However, most of the U.S. equity Underlying Funds | the Fund’s allocation to the Russell Commodity Strategies Fund, | |
underperformed their respective U.S. equity market segment as | which neutralized the previous underweight to commodities. This | |
represented by their respective primary benchmark. From an | position was implemented after strong U.S. equity performance | |
active management perspective, the Select U.S. Equity Fund | and a sharp decline in commodities. | |
underperformed the Russell 1000® Index due to an underweight to | On August 10, 2015, RIMCo reduced the Fund’s allocation to | |
growth stocks, which outperformed during the period. In addition, | the Russell Emerging Markets Fund by 0.40% as concerns | |
the Fund’s strategic allocation to the Russell U.S. Small Cap | over emerging markets growth intensified. This was offset by an | |
Equity Fund also detracted from the Fund’s benchmark-relative | increase in the allocation to large cap developed equities through | |
performance, as U.S. small cap equity generally underperformed | a 0.25% increase in the Fund’s allocation to the Select U.S. | |
core fixed income and the Underlying Fund underperformed its | Equity Fund and a 0.15% increase in the Fund’s allocation to the | |
Russell 2000® Index benchmark due to an overweight to micro- | Select International Equity Fund. | |
capitalization stocks which underperformed during the period. | ||
The views expressed in this report reflect those of the portfolio | ||
The Fund’s strategic allocation to alternative Underlying | managers only through the end of the period covered by | |
Funds generally had a negative impact on benchmark- | the report. These views do not necessarily represent the | |
relative performance as commodities and global infrastructure | views of RIMCo, or any other person in RIMCo or any other | |
underperformed the Fund’s benchmark. From an active | affiliated organization. These views are subject to change | |
management standpoint, performance of these Underlying | at any time based upon market conditions or other events, | |
Funds was mixed. The Russell Global Infrastructure Fund and | and RIMCo disclaims any responsibility to update the views | |
the Russell Global Real Estate Securities Fund outperformed | contained herein. These views should not be relied on as | |
their respective benchmarks while the Russell Commodity | investment advice and, because investment decisions for | |
Strategies Fund underperformed its benchmark. The Russell | a Russell Investment Company (“RIC”) Fund are based on | |
Global Infrastructure Fund and the Russell Global Real Estate | numerous factors, should not be relied on as an indication | |
Securities Fund both benefited from strong stock selection by | of investment decisions of any RIC Fund. |
214 In Retirement Fund
Russell Investment Company
In Retirement Fund
Portfolio Management Discussion and Analysis, continued — October 31, 2015
(Unaudited)
* Assumes initial investment on March 31, 2008.
** The Barclays U.S. Aggregate Bond Index is an index, with income reinvested, generally representative of intermediate-term government bonds, investment grade
corporate debt securities and mortgage-backed securities.
‡ The Fund first issued Class A Shares on February 25, 2011. The returns shown for Class A Shares prior to that date are the returns of Class R2 Shares. The
performance shown has been adjusted to reflect the deduction of the maximum Class A sales charge of 5.75%.
‡‡ The Fund first issued Class R4 and Class R5 Shares on October 1, 2014. The returns shown for Class R4 and Class R5 Shares prior to that date are the returns
of the Fund’s Class R2 and Class R3 Shares, respectively.
§ Annualized.
Performance is historical and assumes reinvestment of all dividends and capital gains. Investment return and principal value will fluctuate so that an investor’s
shares, when redeemed, may be worth more or less than when purchased. Past performance is not indicative of future results. The returns shown do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
In Retirement Fund 215
Russell Investment Company
In Retirement Fund
Shareholder Expense Example — October 31, 2015 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | |||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | |||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | |||||
(“Example”). | “Hypothetical Performance (5% return before expenses)” is | |||||
useful in comparing ongoing costs only, and will not help you | ||||||
Example | determine the relative total costs of owning different funds. In | |||||
As a shareholder of the Fund, you incur ongoing costs, including | addition, if these transactional costs were included, your costs | |||||
distribution (12b-1) and/or service fees and other Fund expenses. | would have been higher. | |||||
The Example is intended to help you understand your ongoing | Hypothetical | |||||
costs (in dollars) of investing in the Fund and to compare these | Performance (5% | |||||
costs with the ongoing costs of investing in other mutual funds. | Actual | return before | ||||
The Example is based on an investment of $1,000 invested at the | Class A | Performance | expenses) | |||
Beginning Account Value | ||||||
beginning of the period and held for the entire period indicated, | May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
which for this Fund is from May 1, 2015 to October 31, 2015. | Ending Account Value | |||||
October 31, 2015 | $ | 982.50 | $ | 1,023.95 | ||
Actual Expenses | Expenses Paid During Period* | $ | 1.25 | $ | 1.28 | |
The information in the table under the heading “Actual | ||||||
Performance” provides information about actual account values | * Expenses are equal to the Fund's annualized expense ratio of 0.25% | |||||
(representing the six month period annualized), multiplied by the average | ||||||
and actual expenses. You may use the information in this column, | account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
together with the amount you invested, to estimate the expenses | year period). | |||||
that you paid over the period. Simply divide your account value by | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | Hypothetical | |||||
Performance (5% | ||||||
= 8.6), then multiply the result by the number in the first column | Actual | return before | ||||
in the row entitled “Expenses Paid During Period” to estimate | Class R1 | Performance | expenses) | |||
the expenses you paid on your account during this period. | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
Hypothetical Example for Comparison Purposes | Ending Account Value | |||||
October 31, 2015 | $ | 984.70 | $ | 1,025.21 | ||
The information in the table under the heading “Hypothetical | Expenses Paid During Period* | $ | — | $ | — | |
Performance (5% return before expenses)” provides information | ||||||
about hypothetical account values and hypothetical expenses | * There were no expenses charged to the Class. | |||||
based on the Fund’s actual expense ratio and an assumed rate of | ||||||
Hypothetical | ||||||
return of 5% per year before expenses, which is not the Fund’s | Performance (5% | |||||
actual return. The hypothetical account values and expenses | Actual | return before | ||||
may not be used to estimate the actual ending account balance or | Class R4 | Performance | expenses) | |||
expenses you paid for the period. You may use this information | Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | ||
to compare the ongoing costs of investing in the Fund and other | Ending Account Value | |||||
funds. To do so, compare this 5% hypothetical example with the | October 31, 2015 | $ | 982.10 | $ | 1,023.95 | |
5% hypothetical examples that appear in the shareholder reports | Expenses Paid During Period* | $ | 1.25 | $ | 1.28 | |
of other funds. | ||||||
* Expenses are equal to the Fund's annualized expense ratio of 0.25% | ||||||
(representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 184/365 (to reflect the one-half | ||||||
year period). |
216 In Retirement Fund
Russell Investment Company
In Retirement Fund
Shareholder Expense Example, continued — October 31, 2015 (Unaudited)
Hypothetical | |||||
Performance (5% | |||||
Actual | return before | ||||
Class R5 | Performance | expenses) | |||
Beginning Account Value | |||||
May 1, 2015 | $ | 1,000.00 | $ | 1,000.00 | |
Ending Account Value | |||||
October 31, 2015 | $ | 980.60 | $ | 1,022.68 | |
Expenses Paid During Period* | $ | 2.50 | $ | 2.55 | |
* Expenses are equal to the Fund's annualized expense ratio of 0.50% | |||||
(representing the six month period annualized), multiplied by the average | |||||
account value over the period, multiplied by 184/365 (to reflect the one-half | |||||
year period). |
Russell Investment Company
In Retirement Fund
Schedule of Investments — October 31, 2015
Amounts in thousands (except share amounts) | |||||||||||||
Fair | |||||||||||||
Value | |||||||||||||
Shares | $ | ||||||||||||
Investments in Russell Affiliated Mutual Funds - 100.0% | |||||||||||||
Alternative - 6.1% | |||||||||||||
Russell Commodity Strategies Fund Class Y | 148,415 | 843 | |||||||||||
Russell Global Infrastructure Fund Class Y | 66,898 | 766 | |||||||||||
Russell Global Real Estate Securities Fund Class Y | 19,932 | 765 | |||||||||||
2,374 | |||||||||||||
Domestic Equities - 14.9% | |||||||||||||
Russell U.S. Defensive Equity Fund Class Y | 20,012 | 956 | |||||||||||
Russell U.S. Dynamic Equity Fund Class Y | 40,351 | 458 | |||||||||||
Russell U.S. Small Cap Equity Fund Class Y | 24,141 | 691 | |||||||||||
Select U.S. Equity Fund Class Y | 341,430 | 3,667 | |||||||||||
5,772 | |||||||||||||
Fixed Income - 67.3% | |||||||||||||
Russell Global Opportunistic Credit Fund Class Y | 184,043 | 1,682 | |||||||||||
Russell Investment Grade Bond Fund Class Y | 288,475 | 6,410 | |||||||||||
Russell Short Duration Bond Fund Class Y | 233,886 | 4,469 | |||||||||||
Russell Strategic Bond Fund Class Y | 1,243,977 | 13,597 | |||||||||||
26,158 | |||||||||||||
International Equities - 11.7% | |||||||||||||
Russell Emerging Markets Fund Class Y | 39,504 | 602 | |||||||||||
Russell Global Equity Fund Class Y | 109,973 | 1,263 | |||||||||||
Select International Equity Fund Class Y | 293,561 | 2,680 | |||||||||||
4,545 | |||||||||||||
Total Investments in Russell Affiliated Mutual Funds | |||||||||||||
(cost $34,288) | 38,849 | ||||||||||||
Total Investments 100.0% | |||||||||||||
(identified cost $34,288) | 38,849 | ||||||||||||
Other Assets and Liabilities, Net - (0.0%) | (4 | ) | |||||||||||
Net Assets - 100.0% | 38,845 | ||||||||||||
Presentation of Portfolio Holdings | |||||||||||||
Amounts in thousands | |||||||||||||
Fair Value | |||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Total | % of Net Assets | ||||||||
Investments in Russell Affiliated Mutual Funds | $ | 38,849 | $ | — | $ | — | $ | 38,849 | 100.0 | ||||
Total Investments | 38,849 | — | — | 38,849 | 100.0 | ||||||||
Other Assets and Liabilities, Net | (—)* | ||||||||||||
100.0 | |||||||||||||
* Less than .05% of net assets. | |||||||||||||
For a description of the Levels see note 2 in the Notes to Financial Statements. | |||||||||||||
For disclosure on transfers between Levels 1, 2 and 3 during the period ended October 31, 2015, see note 2 in the Notes to Financial | |||||||||||||
Statements. |
See accompanying notes which are an integral part of the financial statements.
218 In Retirement Fund
Russell Investment Company
In Retirement Fund
Statement of Assets and Liabilities — October 31, 2015
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 34,288 |
Investments, at fair value(>) | 38,849 | |
Receivables: | ||
Fund shares sold | 123 | |
Total assets | 38,972 | |
Liabilities | ||
Payables: | ||
Investments purchased | 103 | |
Fund shares redeemed | 19 | |
Accrued fees to affiliates | 5 | |
Total liabilities | 127 | |
Net Assets | $ | 38,845 |
Net Assets Consist of: | ||
Accumulated net realized gain (loss) | $ | 764 |
Unrealized appreciation (depreciation) on investments | 4,561 | |
Shares of beneficial interest | 51 | |
Additional paid-in capital | 33,469 | |
Net Assets | $ | 38,845 |
Net Asset Value, offering and redemption price per share: | ||
Net asset value per share: Class A(#) | $ | 7.75 |
Maximum offering price per share (Net asset value plus sales charge of 5.75%): Class A | $ | 8.22 |
Class A — Net assets | $ | 459,157 |
Class A — Shares outstanding ($.01 par value) | 59,270 | |
Net asset value per share: Class R1(#) | $ | 7.59 |
Class R1 — Net assets | $ | 22,324,796 |
Class R1 — Shares outstanding ($.01 par value) | 2,943,257 | |
Net asset value per share: Class R4(#) | $ | 7.59 |
Class R4 — Net assets | $ | 8,788,838 |
Class R4 — Shares outstanding ($.01 par value) | 1,157,755 | |
Net asset value per share: Class R5(#) | $ | 7.57 |
Class R5 — Net assets | $ | 7,272,150 |
Class R5 — Shares outstanding ($.01 par value) | 960,150 | |
Amounts in thousands | ||
(>) Investments in affiliated Russell funds | $ | 38,849 |
(#) Net asset value per share equals class level net assets divided by class level shares of beneficial interest outstanding. |
See accompanying notes which are an integral part of the financial statements.
In Retirement Fund 219
Russell Investment Company
In Retirement Fund
Statement of Operations — For the Period Ended October 31, 2015
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated Russell funds | $ | 884 | |
Expenses | |||
Distribution fees - Class A | 1 | ||
Distribution fees - Class R5 | 22 | ||
Shareholder servicing fees - Class R4 | 23 | ||
Shareholder servicing fees - Class R5 | 22 | ||
Total expenses | 68 | ||
Net investment income (loss) | 816 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 1,039 | ||
Capital gain distributions from Underlying Funds | 255 | ||
Net realized gain (loss) | 1,294 | ||
Net change in unrealized appreciation (depreciation) on investments | (2,064 | ) | |
Net realized and unrealized gain (loss) | (770 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | 46 |
See accompanying notes which are an integral part of the financial statements.
220 In Retirement Fund
Russell Investment Company
In Retirement Fund
Statements of Changes in Net Assets
For the Periods Ended October 31, | ||||||
Amounts in thousands | 2015 | 2014 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 816 | $ | 763 | ||
Net realized gain (loss) | 1,294 | 7,856 | ||||
Net change in unrealized appreciation (depreciation) | (2,064 | ) | (6,489 | ) | ||
Net increase (decrease) in net assets from operations | 46 | 2,130 | ||||
Distributions | ||||||
From net investment income | ||||||
Class A | (11 | ) | (8 | ) | ||
Class R1 | (463 | ) | (486 | ) | ||
Class R2 | — | (91 | ) | |||
Class R3 | — | (179 | ) | |||
Class R4 | (171 | ) | (17 | ) | ||
Class R5 | (172 | ) | (24 | ) | ||
From net realized gain | ||||||
Class A | (132 | ) | (21 | ) | ||
Class R1 | (3,510 | ) | (1,259 | ) | ||
Class R2 | — | (273 | ) | |||
Class R3 | — | (729 | ) | |||
Class R4 | (1,475 | ) | — | |||
Class R5 | (2,175 | ) | — | |||
Net decrease in net assets from distributions | (8,109 | ) | (3,087 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 15,767 | (24,603 | ) | |||
Total Net Increase (Decrease) in Net Assets | 7,704 | (25,560 | ) | |||
Net Assets | ||||||
Beginning of period | 31,141 | 56,701 | ||||
End of period | $ | 38,845 | $ | 31,141 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | — | $ | 1 |
See accompanying notes which are an integral part of the financial statements.
In Retirement Fund 221
Russell Investment Company
In Retirement Fund
Statements of Changes in Net Assets, continued
* Share transaction amounts (in thousands) for the periods ended October 31, 2015 and October 31, 2014 were as follows: | ||||||||||||
2015 | 2014 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Class A | ||||||||||||
Proceeds from shares sold | — | $ | — | — | $ | — | ||||||
Proceeds from reinvestment of distributions | 18 | 142 | 3 | 29 | ||||||||
Payments for shares redeemed | (3 | ) | (30 | ) | (3 | ) | (29 | ) | ||||
Net increase (decrease) | 15 | 112 | — | — | ||||||||
Class R1 | ||||||||||||
Proceeds from shares sold | 1,186 | 9,149 | 494 | 5,253 | ||||||||
Shares issued in connection with acquisition | 1,111 | 8,590 | — | — | ||||||||
Proceeds from reinvestment of distributions | 516 | 3,943 | 167 | 1,739 | ||||||||
Payments for shares redeemed | (1,259 | ) | (10,350 | ) | (1,973 | ) | (21,007 | ) | ||||
Net increase (decrease) | 1,554 | 11,332 | (1,312 | ) | (14,015 | ) | ||||||
Class R2 | ||||||||||||
Proceeds from shares sold | — | — | 261 | 2,766 | ||||||||
Proceeds from reinvestment of distributions | — | — | 35 | 364 | ||||||||
Payments for shares redeemed | — | — | (1,013 | ) | (10,830 | ) | ||||||
Net increase (decrease) | — | — | (717 | ) | (7,700 | ) | ||||||
Class R3 | ||||||||||||
Proceeds from shares sold | — | — | 212 | 2,253 | ||||||||
Proceeds from reinvestment of distributions | — | — | 87 | 907 | ||||||||
Payments for shares redeemed | — | — | (2,041 | ) | (21,663 | ) | ||||||
Net increase (decrease) | — | — | (1,742 | ) | (18,503 | ) | ||||||
Class R4 | ||||||||||||
Proceeds from shares sold | 114 | 884 | 555 | 5,898 | ||||||||
Shares issued in connection with acquisition | 793 | 6,137 | — | — | ||||||||
Proceeds from reinvestment of distributions | 215 | 1,645 | 1 | 17 | ||||||||
Payments for shares redeemed | (505 | ) | (4,029 | ) | (15 | ) | (162 | ) | ||||
Net increase (decrease) | 617 | 4,637 | 541 | 5,753 | ||||||||
Class R5 | ||||||||||||
Proceeds from shares sold | 488 | 3,802 | 961 | 10,191 | ||||||||
Shares issued in connection with acquisition | 455 | 3,512 | — | — | ||||||||
Proceeds from reinvestment of distributions | 308 | 2,347 | 2 | 24 | ||||||||
Payments for shares redeemed | (1,221 | ) | (9,975 | ) | (33 | ) | (353 | ) | ||||
Net increase (decrease) | 30 | (314 | ) | 930 | 9,862 | |||||||
Total increase (decrease) | 2,216 | $ | 15,767 | (2,300 | ) | $ | (24,603 | ) |
See accompanying notes which are an integral part of the financial statements.
222 In Retirement Fund
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Russell Investment Company
In Retirement Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | ||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | (a)(b)(e) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
Class A | ||||||||||||||||
October 31, 2015 | 10.88 | .20 | (.13 | ) | .07 | (.23 | ) | (2.97 | ) | |||||||
October 31, 2014 | 11.05 | .17 | .33 | .50 | (.19 | ) | (.48 | ) | ||||||||
October 31, 2013 | 10.74 | .36 | .29 | .65 | (.29 | ) | (.05 | ) | ||||||||
October 31, 2012 | 10.10 | .25 | .55 | .80 | (.12 | ) | (.04 | ) | ||||||||
October 31, 2011(2) | 10.25 | .14 | (.15 | ) | (.01 | ) | (.14 | ) | — | |||||||
Class R1 | ||||||||||||||||
October 31, 2015 | 10.72 | .17 | (.08 | ) | .09 | (.25 | ) | (2.97 | ) | |||||||
October 31, 2014 | 10.90 | .21 | .31 | .52 | (.22 | ) | (.48 | ) | ||||||||
October 31, 2013 | 10.60 | .33 | .34 | .67 | (.32 | ) | (.05 | ) | ||||||||
October 31, 2012 | 10.10 | .27 | .55 | .82 | (.28 | ) | (.04 | ) | ||||||||
October 31, 2011 | 10.28 | .24 | .07 | .31 | (.45 | ) | (.04 | ) | ||||||||
Class R4(3) | ||||||||||||||||
October 31, 2015 | 10.73 | .15 | (.09 | ) | .06 | (.23 | ) | (2.97 | ) | |||||||
October 31, 2014 | 10.90 | .17 | .33 | .50 | (.19 | ) | (.48 | ) | ||||||||
October 31, 2013 | 10.60 | .32 | .32 | .64 | (.29 | ) | (.05 | ) | ||||||||
October 31, 2012 | 10.10 | .27 | .52 | .79 | (.25 | ) | (.04 | ) | ||||||||
October 31, 2011 | 10.28 | .27 | .01 | .28 | (.42 | ) | (.04 | ) | ||||||||
Class R5(4) | ||||||||||||||||
October 31, 2015 | 10.70 | .16 | (.12 | ) | .04 | (.20 | ) | (2.97 | ) | |||||||
October 31, 2014 | 10.88 | .16 | .30 | .46 | (.16 | ) | (.48 | ) | ||||||||
October 31, 2013 | 10.58 | .27 | .34 | .61 | (.26 | ) | (.05 | ) | ||||||||
October 31, 2012 | 10.08 | .24 | .53 | .77 | (.23 | ) | (.04 | ) | ||||||||
October 31, 2011 | 10.27 | .19 | .07 | .26 | (.41 | ) | (.04 | ) | ||||||||
See accompanying notes which are an integral part of the financial statements.
224 In Retirement Fund
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c)(d) | (000 | ) | Gross(f)(g) | Net(e)(f)(g) | Net Assets(b)(c)(e) | Turnover Rate(c) | |||||||||
(3.20 | ) | 7.75 | .69 | 459 | .25 | .25 | 2.39 | 56 | |||||||||
(.67 | ) | 10.88 | 4.75 | 486 | .25 | .25 | 1.60 | 34 | |||||||||
(.34 | ) | 11.05 | 6.15 | 493 | .25 | .25 | 3.30 | 19 | |||||||||
(.16 | ) | 10.74 | 8.01 | 1,035 | .25 | .25 | 2.43 | 20 | |||||||||
(.14 | ) | 10.10 | (.06 | ) | 1,012 | .25 | .25 | 1.40 | 43 | ||||||||
(3.22 | ) | 7.59 | .96 | 22,325 | — | — | 2.15 | 56 | |||||||||
(.70 | ) | 10.72 | 5.00 | 14,897 | — | — | 1.95 | 34 | |||||||||
(.37 | ) | 10.90 | 6.48 | 29,451 | — | — | 3.10 | 19 | |||||||||
(.32 | ) | 10.60 | 8.32 | 36,665 | — | — | 2.66 | 20 | |||||||||
(.49 | ) | 10.10 | 3.10 | 36,059 | — | — | 2.35 | 43 | |||||||||
(3.20 | ) | 7.59 | .59 | 8,789 | .25 | .25 | 1.95 | 56 | |||||||||
(.67 | ) | 10.73 | 4.81 | 5,804 | .25 | .25 | 1.56 | 34 | |||||||||
(.34 | ) | 10.90 | 6.16 | 7,818 | .25 | .25 | 2.95 | 19 | |||||||||
(.29 | ) | 10.60 | 8.05 | 10,996 | .25 | .25 | 2.59 | 20 | |||||||||
(.46 | ) | 10.10 | 2.84 | 17,288 | .25 | .25 | 2.60 | 43 | |||||||||
(3.17 | ) | 7.57 | .38 | 7,272 | .50 | .50 | 1.97 | 56 | |||||||||
(.64 | ) | 10.70 | 4.43 | 9,954 | .50 | .50 | 1.47 | 34 | |||||||||
(.31 | ) | 10.88 | 5.90 | 18,939 | .50 | .50 | 2.57 | 19 | |||||||||
(.27 | ) | 10.58 | 7.78 | 23,337 | .50 | .50 | 2.35 | 20 | |||||||||
(.45 | ) | 10.08 | 2.55 | 36,445 | .50 | .50 | 1.90 | 43 |
See accompanying notes which are an integral part of the financial statements.
In Retirement Fund 225
Russell Investment Company
LifePoints® Funds
Notes to Schedule of Investments — October 31, 2015
Footnotes:
(å) Currency balances were held in connection with futures contracts purchased (sold), options written, or swaps entered into by the
Fund. See Statement of Assets and Liabilities.
(8) Unrounded units.
226 Notes to Schedule of Investments
Russell Investment Company
LifePoints® Funds
Notes to Financial Highlights — October 31, 2015
(1) For the period January 1, 2011 (commencement of operations) to October 31, 2011.
(2) For the period February 28, 2011 (commencement of operations) to October 31, 2011.
(3) As of October 1, 2014, Class R2 shares were reclassified as Class R4 shares and all shareholders were issued shares of Class R4. Class R2 shares are
no longer offered. The financial highlights for the period ended October 31, 2014 reflect a consolidation of the financial activity of Class R2 shares for
the period November 1, 2013 through October 1, 2014 and the financial activity of Class R4 shares for the period October 2, 2014 through October
31, 2014. All prior periods reflect the financial activity of Class R2 shares.
(4) As of October 1, 2014, Class R3 shares were reclassified as Class R5 shares and all shareholders were issued shares of Class R5. Class R3 shares are
no longer offered. The financial highlights for the period ended October 31, 2014 reflect a consolidation of the financial activity of Class R3 shares for
the period November 1, 2013 through October 1, 2014 and the financial activity of Class R5 shares for the period October 2, 2014 through October
31, 2014. All prior periods reflect the financial activity of Class R3 shares.
(a) Average daily shares outstanding were used for this calculation.
(b) Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the Underlying Funds in which the
Fund invests.
(c) The ratios for periods less than one year are not annualized.
(d) Total return for Class A does not reflect a front-end sales charge. If sales charges were included, the total return would be lower.
(e) May reflect amounts waived and/or reimbursed by Russell Investment Management Company (“RIMCo”) and/or Russell Fund Services Company
(“RFSC”).
(f) The ratios for periods less than one year are annualized.
(g) The calculation includes only those expenses charged directly to the Fund and does not include expenses charged to the Underlying Funds in which
the Fund invests.
(h) Less than $.01 per share.
Notes to Financial Highlights 227
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements — October 31, 2015
1. Organization
Russell Investment Company (the “Investment Company” or “RIC”) is a series investment company with 41 different investment
portfolios referred to as funds (each a “Fund” and collectively the “Funds”). These financial statements report on 14 of these
Funds. The Investment Company is registered under the Investment Company Act of 1940, as amended (“Investment Company
Act”), as an open-end management investment company. It is organized and operated as a Massachusetts business trust under a
Second Amended and Restated Master Trust Agreement dated October 1, 2008, as amended (“Master Trust Agreement”), and the
provisions of Massachusetts law governing the operation of a Massachusetts business trust. The Investment Company’s Master Trust
Agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest.
Target Portfolio Funds
Each of the Target Portfolio Funds listed in the table below is a “fund of funds” and diversifies its assets by investing principally,
at present, in shares of several other RIC Funds (the “Underlying Funds”). Each Fund seeks to achieve its specific investment
objective by investing in different combinations of Underlying Funds. In addition to investing in the Underlying Funds, Russell
Investment Management Company ("RIMCo"), the Funds' investment adviser, may seek to actively manage the Funds' overall
exposure by investing in derivatives, including futures, options, forwards and swaps, that RIMCo believes will achieve the desired
risk/return profile for the Funds. The Funds may hold cash in connection with these investments. The Funds usually, but not
always, pursue a strategy of being fully invested by exposing their cash to the performance of segments of the global equity market
by purchasing index futures contracts (also known as "equitization"). The following table shows each Fund’s target strategic asset
allocation to equity Underlying Funds, fixed/other income Underlying Funds and alternative Underlying Funds. As of October
31, 2015, the equity Underlying Funds in which the Funds may invest include the Russell U.S. Defensive Equity, Russell U.S.
Dynamic Equity, Russell U.S. Small Cap Equity, Select U.S. Equity, Russell Global Equity, Russell Emerging Markets and Select
International Equity Funds. As of October 31, 2015, the fixed/other income Underlying Funds in which the Funds may invest
include the Russell Global Opportunistic Credit, Russell Strategic Bond, Russell Investment Grade Bond, Russell Short Duration
Bond and Russell Multi-Strategy Income Funds. As of October 31, 2015, the alternative Underlying Funds in which the Funds
may invest include the Russell Commodity Strategies, Russell Global Infrastructure and Russell Global Real Estate Securities
Funds. Each Fund intends its strategy of investing in combinations of equity, fixed/other income and alternative Underlying Funds
to result in investment diversification that an investor could otherwise achieve only by holding numerous individual investments.
A Fund’s actual allocation may vary from the target strategic asset allocation at any point in time (1) due to market movements, (2)
by up to +/- 5% at the equity, fixed/other income or alternative category level based on RIMCo’s capital markets research, and/or
(3) due to the implementation over a period of time of a change to the target strategic asset allocation including the addition of a
new Underlying Fund. There may be no changes in the asset allocation or to the Underlying Funds in a given year or such changes
may be made one or more times in a year.
The following table shows the Target Portfolio Funds’ approximate expected target strategic asset allocations to equity Underlying
Funds, fixed/other income Underlying Funds and alternative Underlying Funds on March 1, 2015 for the Moderate Strategy,
Balanced Strategy, Growth Strategy and Equity Growth Strategy and May 1, 2015 for the Conservative Strategy Fund.
Asset Allocation Targets* | |||||||||||
Conservative | Moderate | Balanced | Growth | Equity Growth | |||||||
Underlying Funds | Strategy Fund | Strategy Fund | Strategy Fund | Strategy Fund | Strategy Fund | ||||||
Alternative Underlying Funds** | 8 | % | 7 | % | 10 | % | 13 | % | 13 | % | |
Equity Underlying Funds | 11 | % | 34 | % | 55 | % | 71 | % | 79 | % | |
Fixed/Other Income Underlying Funds | 81 | % | 59 | % | 35 | % | 16 | % | 8 | % | |
* | Prospectus dated March 1, 2015, as supplemented November 6, 2015. Actual asset allocation may vary. | ||||||||||
** | Alternative Underlying Funds pursue investment strategies that differ from those of traditional broad market equity or fixed income funds or seek | ||||||||||
returns with a low correlation to global equity markets. |
Target Date Funds
Each of the Target Date Funds listed in the table below is a “fund of funds” and seeks to achieve its objective by investing in
shares of several of the Underlying Funds which represent various asset classes. Each Fund currently intends to invest only in the
Underlying Funds. The following table shows each Fund’s target strategic asset allocation to equity Underlying Funds, fixed income
Underlying Funds and alternative Underlying Funds. The equity Underlying Funds in which the Funds may invest include the
Russell U.S. Defensive Equity, Russell U.S. Dynamic Equity, Select U.S. Equity, Russell U.S. Small Cap Equity, Russell Global
228 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
Equity, Select International Equity and Russell Emerging Markets Funds. The fixed income Underlying Funds in which the Funds
may invest include the Russell Global Opportunistic Credit, Russell Strategic Bond, Russell Investment Grade Bond and Russell
Short Duration Bond Funds. The alternative Underlying Funds in which the Funds may invest include the Russell Commodity
Strategies, Russell Global Infrastructure and Russell Global Real Estate Securities Funds. The 2020 Strategy, 2025 Strategy, 2030
Strategy, 2035 Strategy, 2040 Strategy, 2045 Strategy, 2050 Strategy and 2055 Strategy Funds are referred to herein as the “Strategy
Funds.” The allocation of each Strategy Fund’s assets to the Underlying Funds in which it invests will become more conservative
over time until approximately the year indicated in the Fund name, the “target year,” at which time the allocation will remain fixed.
The Strategy Funds are designed for investors who plan to retire close to the target year indicated in the Fund name. The allocation
of the In Retirement Fund’s assets to the Underlying Funds in which it invests does not shift over time. The In Retirement Fund
is intended for investors who have reached retirement age and are no longer contributing to their retirement savings. A Fund’s
actual allocation may vary from the target strategic asset allocation at any point in time (1) due to market movements, (2) by up to
+/- 5% at the equity, fixed income or alternative category level based on RIMCo’s capital markets research, and/or (3) due to the
implementation over a period of time of a change to the target strategic asset allocation including the addition of a new Underlying
Fund. There may be no changes in the asset allocation or to the Underlying Funds in a given year or such changes may be made
one or more times in a year.
The following table shows the Target Date Funds’ approximate expected allocations to equity Underlying Funds, fixed income
Underlying Funds and alternative Underlying Funds effective on or about March 1, 2015.
Asset Allocation Targets* | |||||||||||
2020 | 2025 | 2030 | 2035 | ||||||||
Underlying Funds | Strategy Fund | Strategy Fund | Strategy Fund | Strategy Fund | |||||||
Alternative Underlying Funds** | 6.9 | % | 7.5 | % | 8.4 | % | 9.3 | % | |||
Equity Underlying Funds | 36.9 | % | 47 | % | 59.1 | % | 73.3 | % | |||
Fixed Income Underlying Funds | 56.2 | % | 45.5 | % | 32.5 | % | 17.4 | % | |||
Asset Allocation Targets* | |||||||||||
2040 | 2045 | 2050 | 2055 | In Retirement | |||||||
Underlying Funds | Strategy Fund | Strategy Fund | Strategy Fund | Strategy Fund | Fund | ||||||
Alternative Underlying Funds** | 10.5 | % | 10.5 | % | 10.5 | % | 10.5 | % | 6.6 | % | |
Equity Underlying Funds | 82.5 | % | 82.5 | % | 82.5 | % | 82.5 | % | 27.1 | % | |
Fixed Income Underlying Funds | 7 | % | 7 | % | 7 | % | 7 | % | 66.3 | % | |
* | Prospectus dated March 1, 2015 as supplemented November 6, 2015. Actual asset allocation may vary. | ||||||||||
** | Alternative Underlying Funds pursue investment strategies that differ from those of traditional broad market equity or fixed income funds or seek | ||||||||||
returns with a low correlation to global equity markets. |
2. Significant Accounting Policies
The Funds’ financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”)
which require the use of management estimates and assumptions at the date of the financial statements. Actual results could differ
from those estimates. The Funds are considered investment companies under U.S. GAAP and follow the accounting and reporting
guidance applicable to investment companies. The following is a summary of the significant accounting policies consistently
followed by each Fund in the preparation of its financial statements.
Security Valuation
The Funds value the shares of the Underlying Funds at the current net asset value ("NAV") per share of each Underlying Fund.
U.S. GAAP defines fair value as the price that a Fund would receive to sell an asset or pay to transfer a liability in an orderly
transaction between market participants at the measurement date. It establishes a fair value hierarchy that prioritizes inputs to
valuation methods and requires a separate disclosure of the fair value hierarchy for each major category of assets and liabilities,
that segregates fair value measurements into levels (Level 1, 2, and 3). The inputs or methodology used for valuing securities are
not necessarily an indication of the risk associated with investing in those securities. Levels 1, 2 and 3 of the fair value hierarchy
are defined as follows:
• Level 1 — Quoted prices (unadjusted) in active markets or exchanges for identical assets and liabilities.
Notes to Financial Statements 229
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
• Level 2 — Inputs other than quoted prices included within Level 1 that are observable, which may include, but are not
limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets
or liabilities in markets that are not active, and inputs such as interest rates, yield curves, implied volatilities, credit spreads
or other market corroborated inputs.
• Level 3 — Significant unobservable inputs based on the best information available in the circumstances, to the extent
observable inputs are not available, which may include assumptions made by Russell Fund Services Company ("RFSC"),
acting at the discretion of the Board, that are used in determining the fair value of investments.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for
example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and
other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or
unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised
in determining fair value is greatest for instruments categorized in Level 3. The inputs or methodology used for valuing securities
are not necessarily an indication of the risk associated with investing in those securities.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes,
the level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that
is significant to the fair value measurement in its entirety
The valuation techniques and significant inputs used in determining the fair market values of financial instruments categorized as
Level 1 and Level 2 of the fair value hierarchy are as follows:
Derivative instruments are instruments such as foreign currency contracts, futures contracts, options contracts, or swap agreements
that derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors.
Derivatives may be classified into two groups depending upon the way that they are traded: privately traded over-the-counter
(“OTC”) derivatives that do not go through an exchange or intermediary and exchange-traded derivatives that are traded through
specialized derivatives exchanges or other regulated exchanges. OTC derivatives are normally valued on the basis of broker dealer
quotations or pricing service providers. Depending on the product and the terms of the transaction, the value of the derivative
instrument can be estimated by a pricing service provider using a series of techniques, including simulation pricing models.
The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest
rates, yield curves, dividends and exchange rates. OTC derivatives that use these and similar valuation techniques and inputs as
described above are categorized as Level 2 of the fair value hierarchy, with the exception of foreign currency spot contracts which
are categorized as Level 1 of the fair value hierarchy. OTC derivatives that use broker dealer quotations are categorized as level 3 of
the fair value hierarchy. Exchange-traded derivatives are valued based on the last reported sales price on the day of valuation and
are categorized as Level 1 of the fair value hierarchy.
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at
the daily settlement price determined by the respective exchange. For centrally cleared credit default swaps, the clearing facility
requires its members to provide actionable levels across complete term structures. These levels along with external third party
prices are used to produce daily settlement prices. These securities are categorized as Level 2 of the fair value hierarchy. Centrally
cleared interest rate swaps are valued using a pricing model that references the underlying rates including the overnight index
swap rate and London Interbank Offered Rate (“LIBOR”) forward rate to produce the daily settlement price. These securities are
categorized as Level 2 of the fair value hierarchy.
Level 3 Fair Value Investments
The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of
the fair value hierarchy are as follows:
Securities and other assets for which market quotes are not readily available, or are not reliable, are valued at fair value as
determined in good faith by RFSC and are categorized as Level 3 of the fair value hierarchy. Market quotes are considered not
readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or
broker quotes). When RFSC applies fair valuation methods that use significant unobservable inputs to determine a Fund’s NAV,
securities will not be priced on the basis of quotes from the primary market in which they are traded, but instead may be priced by
another method that RFSC believes accurately reflects fair value and will be categorized as Level 3 of the fair value hierarchy. Fair
value pricing may require subjective determinations about the value of a security. While the securities valuation procedures are
intended to result in a calculation of a Fund’s NAV that fairly reflects security values as of the time of pricing, the process cannot
230 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
guarantee that fair values determined by RFSC would accurately reflect the price that a Fund could obtain for a security if it were to
dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ
from the value that would be realized if the security was sold.
RFSC employs third party pricing vendors to provide fair value measurements. RFSC oversees third-party pricing service providers
in order to support the valuation process throughout the year.
These significant unobservable inputs are further disclosed in the Presentation of Portfolio Holdings for each respective Fund as
applicable.
If third party evaluated vendor pricing is neither available nor deemed to be indicative of fair value, RFSC may elect to obtain
indicative market quotations (“broker quotes”) directly from the broker or passed through from a third party vendor. In the event
that the source of fair value is from a single source broker quote, these securities are classified as Level 3 per the fair value
hierarchy. Broker quotes are typically received from established market participants. Although independently received on a daily
basis, RFSC does not have the transparency to view the underlying inputs which support the broker quotes. Significant changes
in the broker quote would have direct and proportional changes in the fair value of the security. There is a third-party pricing
exception to the quantitative disclosure requirement when prices are not determined by the reporting entity. RFSC is exercising
this exception and has made a reasonable attempt to obtain quantitative information from the third party pricing vendors regarding
the unobservable inputs used.
For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances
for reported fair values that present changes attributable to total realized and unrealized gains or losses, purchases and sales, and
transfers in/out of the Level 3 category during the period. Additionally, U.S. GAAP requires quantitative information regarding the
significant unobservable inputs used in the determination of fair value of assets categorized as Level 3 in the fair value hierarchy. In
accordance with the requirements of U.S. GAAP, a fair value hierarchy, a Level 3 reconciliation and an additional disclosure about
fair value measurements, if any, has been included in the Presentation of Portfolio Holdings for each respective Fund.
Investment Transactions
Investment transactions are reflected as of the trade date for financial reporting purposes. This may cause the NAV stated in the
financial statements to be different from the NAV at which shareholders may transact. Realized gains and losses from securities
transactions, if applicable, are recorded on the basis of specific identified cost incurred within a particular Fund or Underlying
Fund.
Investment Income
Distributions of income and capital gains from the Underlying Funds are recorded on the ex-dividend date.
Federal Income Taxes
Since the Investment Company is a Massachusetts business trust, each Fund is a separate corporate taxpayer and determines its
net investment income and capital gains (or losses) and the amounts to be distributed to each Fund’s shareholders without regard
to the income and capital gains (or losses) of the other Funds.
For each year, each Fund intends to qualify or continue to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”) and intends to distribute all of its taxable income and capital gains.
Therefore, no federal income tax provision is required for the Funds.
Each Fund files a U.S. tax return. At October 31, 2015, the Funds had recorded no liabilities for net unrecognized tax benefits
relating to uncertain income tax positions they have taken or expect to take in future tax returns. While the statute of limitations
remains open to examine the Funds’ U.S. tax returns filed for the fiscal years ended October 31, 2012 through October 31, 2014,
no examinations are in progress or anticipated at this time. The Funds are not aware of any tax positions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
The Funds comply with the authoritative guidance for uncertainty in income taxes which requires management to determine whether
a tax position of the Funds is more likely than not to be sustained upon examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the
tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being
realized upon ultimate settlement with the relevant taxing authority. Management determined that no accruals need to be made in
Notes to Financial Statements 231
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
the financial statements due to uncertain tax positions. Management continually reviews and adjusts the Funds’ liability for income
taxes based on analyses of tax laws and regulations, as well as their interpretations, and other relevant factors.
Dividends and Distributions to Shareholders
Income dividends, capital gain distributions and return of capital, if any, are recorded on the ex-dividend date. Income dividends
are generally declared and paid quarterly. Capital gain distributions are generally declared and paid annually. An additional
distribution may be paid by the Funds to avoid imposition of federal income and excise tax on any remaining undistributed capital
gains and net investment income.
The timing and characterization of certain income and capital gain distributions are determined in accordance with federal tax
regulations which may differ from U.S. GAAP. As a result, net investment income and net realized gain (or loss) from investment
transactions for a reporting period may differ significantly from distributions during such period. The differences between tax
regulations and U.S. GAAP primarily relate to investments in the Underlying Funds sold at a loss, wash sale deferrals and capital
loss carryforwards. Accordingly, the Funds may periodically make reclassifications among certain of their capital accounts without
impacting their NAVs.
Expenses
Expenses included in the accompanying financial statements reflect the expenses of each Fund and do not include those expenses
incurred by the Underlying Funds. Because the Underlying Funds have varied expense and fee levels and the Funds may own
different proportions of the Underlying Funds at different times, the amount of the Underlying Funds’ fees and expenses incurred
indirectly by the Funds will vary.
The Funds pay their own expenses other than those expressly assumed by RIMCo, the Funds’ adviser, or RFSC. Most expenses can
be directly attributed to the individual Funds. Expenses which cannot be directly attributed to a specific Fund are allocated among
all Funds principally based on their relative net assets.
Derivatives
The Target Portfolio Funds may invest in derivatives. Derivative securities are instruments or agreements whose value is derived from
an underlying security or index. They include options, futures, swaps and forwards. These instruments offer unique characteristics
and risks that facilitate the Funds’ investment strategies.
The Target Portfolio Funds typically use derivatives in three ways: exposing cash to markets, hedging and return enhancement.
In addition, certain Funds may enter into foreign exchange contracts for trade settlement purposes. The Target Portfolio Funds
may pursue their strategy of being fully invested by exposing cash to the performance of segments of the global equity market by
purchasing index futures contracts. This is intended to cause the Funds to perform as though cash were actually invested in the
global equity market.
Hedging may be used by the Funds to limit or control risks, such as adverse movements in exchange rates and interest rates. Return
enhancement can be accomplished through the use of derivatives in a Fund, including using derivatives as a substitute for holding
physical securities, and using them to express various macro views (e.g., interest rate movements, currency movements, and macro
credit strategies). By purchasing certain instruments, the Funds may more effectively achieve the desired portfolio characteristics
that assist them in meeting their investment objectives. Depending on how the derivatives are structured and utilized, the risks
associated with them may vary widely. These risks include, but are not limited to, market risk, liquidity risk, leveraging risk,
counterparty risk, basis risk, reinvestment risk, political risk, prepayment risk, extension risk, valuation risk and credit risk.
Futures, certain options and cleared swaps are traded or cleared on an exchange or central exchange clearing house. Exchange-
traded or exchange-cleared transactions generally present less counterparty risk to a Fund. The exchange’s clearinghouse stands
between the Fund and the broker to the contract and therefore, credit risk is generally limited to the failure of the clearing
house and the clearing member. Cleared swap contracts are subject to clearing house rules, including initial and variation margin
requirement, daily settlement of obligations and the clearing house guarantee of payments to the broker. There is, however, still
counterparty risk due to the insolvency of the broker with respect to any margin held in the brokers’ customer accounts. While
clearing members are required to segregate customer assets from their own assets, in the event of insolvency, there may be a
shortfall in the amount of margin held by the broker for its clients. Collateral and margin requirements for exchange-traded or
exchange-cleared derivatives are established through regulation, as well as set by the broker or applicable clearinghouse. Margin
for exchange-traded and exchange-cleared transactions are detailed in the Statements of Assets and Liabilities as cash held at the
232 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
broker for futures contracts and cash held at the broker for swap contracts, respectively. Securities pledged by a Fund for exchange-
traded and exchange-cleared transactions are noted as collateral or margin requirements in the Schedule of Investments.
The effects of derivative instruments, categorized by risk exposure, on the Statements of Assets and Liabilities and the Statements
of Operations, for the period ended October 31, 2015, if applicable, are disclosed in the Fair Value of Derivative Instruments table
following each applicable Fund’s Schedule of Investments.
Foreign Currency Exchange Contracts
Certain Funds may enter into foreign currency exchange spot contracts and forward foreign currency exchange contracts (“FX
contracts”). From time to time, certain Funds may enter into FX contracts to hedge certain foreign currency-denominated assets.
FX contracts are recorded at fair value. Certain risks may arise upon entering into these FX contracts from the potential inability
of counterparties to meet the terms of their FX contracts and are generally limited to the amount of unrealized gain on the FX
contracts, if any, that are disclosed in the Statements of Assets and Liabilities.
For the period ended October 31, 2015, the following Funds entered into foreign currency exchange contracts primarily for the
strategies listed below:
Funds | Strategies |
Conservative Strategy Fund | Return enhancement and hedging |
Moderate Strategy Fund | Return enhancement and hedging |
Balanced Strategy Fund | Return enhancement and hedging |
Growth Strategy Fund | Return enhancement and hedging |
Equity Growth Strategy Fund | Return enhancement and hedging |
The Funds’ foreign currency contract notional dollar values outstanding fluctuate throughout the fiscal year as required to meet
strategic requirements. The following tables illustrate the quarterly volume of foreign currency contracts. For the purpose of this
disclosure, volume is measured by the amounts bought and sold in USD.
Outstanding Contract Amounts Sold | ||||||
Quarter Ended | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | ||
Conservative Strategy Fund | $ — | $ — | $ — | $ | 36,052,788 | |
Moderate Strategy Fund | — | — | — | 69,266,801 | ||
Balanced Strategy Fund | — | — | — | 543,604,056 | ||
Growth Strategy Fund | — | — | — | 366,387,605 | ||
Equity Growth Strategy Fund | — | — | — | 123,741,919 | ||
Outstanding Contract Amounts Bought | ||||||
Quarter Ended | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | ||
Conservative Strategy Fund | $ — | $ — | $ — | $ | 36,088,978 | |
Moderate Strategy Fund | — | — | — | 69,335,930 | ||
Balanced Strategy Fund | — | — | — | 544,196,637 | ||
Growth Strategy Fund | — | — | — | 366,734,767 | ||
Equity Growth Strategy Fund | — | — | — | 123,852,672 |
Options
The Target Portfolio Funds may purchase and sell (write) call and put options on securities and securities indices. Such options are
traded on a national securities exchange or in an OTC market. The Funds may also purchase and sell (write) call and put options
on foreign currencies.
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 fair 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 the value of the underlying instrument 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 instrument.
Notes to Financial Statements 233
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
When a Fund sells an uncovered call option, it does not simultaneously have a long position in the underlying security. When a
Fund sells an uncovered put option, it does not simultaneously have a short position in the underlying security. Uncovered options
are riskier than covered options because there is no underlying security held by the Fund that can act as a partial hedge.
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.
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.
Certain Funds may enter into a swaption (an option on a swap). In a swaption, in exchange for an option, 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.
For the period ended October 31, 2015, the Target Portfolio Funds purchased or sold options primarily for the strategies listed
below:
Funds | Strategies |
Conservative Strategy Fund | Return enhancement and hedging |
Moderate Strategy Fund | Return enhancement and hedging |
Balanced Strategy Fund | Return enhancement and hedging |
Growth Strategy Fund | Return enhancement and hedging |
Equity Growth Strategy Fund | Return enhancement and hedging |
The Funds’ options contracts notional amounts fluctuate throughout the fiscal year as required to meet strategic requirements. The
following table illustrates the quarterly activity of options contracts measured by notional in USD.
Notional of Options Contracts Opened or Closed | |||||||||
Funds | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | |||||
Conservative Strategy Fund | Opened | $ — | $ — | $ 14,135,241 | $ | — | |||
Closed | — | — | 4,224,770 | 9,910,471 | |||||
Moderate Strategy Fund | Opened | — | — | 26,396,936 | — | ||||
Closed | — | — | 7,201,810 | 19,195,126 | |||||
Balanced Strategy Fund | Opened | — | — | 184,927,789 | — | ||||
Closed | — | — | 30,725,600 | 154,202,189 | |||||
Growth Strategy Fund | Opened | — | — | 112,064,837 | — | ||||
Closed | — | — | 19,492,050 | 92,572,787 | |||||
Equity Growth Strategy Fund | Opened | — | — | 50,974,786 | — | ||||
Closed | — | — | 8,065,470 | 42,909,316 |
Futures Contracts
The Target Portfolio Funds may invest in futures contracts. The face or contract value 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 fair value of the securities held by the Funds 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
234 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
margin, which typically represents 5% to 10% of the purchase price indicated in the futures contract. Payments to and from the
broker, known as variation margin, are typically 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 October 31, 2015, the following Funds entered into futures contracts primarily for the strategies listed below: | |
Funds | Strategies |
Conservative Strategy Fund | Return enhancement, hedging, and exposing cash to markets |
Moderate Strategy Fund | Return enhancement, hedging, and exposing cash to markets |
Balanced Strategy Fund | Return enhancement, hedging, and exposing cash to markets |
Growth Strategy Fund | Return enhancement, hedging, and exposing cash to markets |
Equity Growth Strategy Fund | Return enhancement, hedging, and exposing cash to markets |
The Funds’ futures contracts notional amounts fluctuate throughout the fiscal year as required to meet strategic requirements. The
following table illustrates the quarterly activity of futures contracts measured by notional in USD.
Notional of Futures Contracts Opened or Closed | |||||||||
Funds | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | |||||
Conservative Strategy Fund | Opened | $ — | $ — | $ 28,198,631 | $ | 7,445,893 | |||
Closed | — | — | 21,121,418 | 7,188,574 | |||||
Moderate Strategy Fund | Opened | — | — | 52,338,774 | 78,726,202 | ||||
Closed | — | — | 38,163,480 | 52,572,905 | |||||
Balanced Strategy Fund | Opened | — | — | 265,800,954 | 532,802,139 | ||||
Closed | — | — | 187,790,740 | 331,325,521 | |||||
Growth Strategy Fund | Opened | — | — | 165,087,223 | 360,337,779 | ||||
Closed | — | — | 115,725,657 | 218,713,226 | |||||
Equity Growth Strategy Fund | Opened | — | — | 83,805,342 | 157,533,397 | ||||
Closed | — | — | 62,005,938 | 100,553,924 |
Swap Agreements
The Target Portfolio 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 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 to pay or rights to receive payments of another party
(i.e., an exchange of floating rate payments for fixed rate payments).
The Target Portfolio Funds may enter into several different types of swap agreements including credit default, interest rate, total
return swaps and currency swaps. Credit default swaps are a counterparty agreement which allows the transfer of third party
credit risk (the possibility that an issuer will default on its 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. Interest rate swaps are a counterparty agreement, can be customized to meet each
party’s needs, and involve the exchange of a fixed or variable payment per period for a payment that is not fixed. Equity swaps are
a counterparty agreement where two parties exchange two sets of cash flows on predetermined dates for an agreed upon amount
of time. The cash flows will typically be an equity index value swapped with a floating rate such as LIBOR plus or minus a pre-
defined spread. Index swap agreements are a counterparty agreement intended to expose cash to markets or to effect investment
transactions consistent with those Funds’ investment objectives and strategies. Currency swaps are a counterparty agreement where
two parties exchange specified amounts of different currencies which are followed by each paying the other a series of interest
payments that are based on the principal cash flow. At maturity the principal amounts are returned.
The Funds generally expect to enter into these transactions primarily to preserve a return or spread on a particular investment or
portion of their portfolios or to protect against any increase in the price of securities they anticipate purchasing at a later date, or for
return enhancement. Under most swap agreements entered into by a Fund, the parties' obligations are determined on a "net basis".
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 assets having an aggregate NAV at least equal to the accrued excess will be segregated.
Notes to Financial Statements 235
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
To the extent that the Funds enter into swaps on other than a net basis, the amount maintained in a segregated account will be the
full amount of the Funds’ obligations, if any, with respect to such 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.
Total Return Swaps
The Target Portfolio Funds may enter into index swap agreements to expose cash to markets or to effect investment transactions.
Index 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 index 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 October 31, 2015, the Funds entered into total return swaps primarily for the strategies listed below: | |
Funds | Strategies |
Conservative Strategy Fund | Return enhancement and hedging |
Moderate Strategy Fund | Return enhancement and hedging |
Balanced Strategy Fund | Return enhancement and hedging |
Growth Strategy Fund | Return enhancement and hedging |
Equity Growth Strategy Fund | Return enhancement and hedging |
The Funds’ period end total return swap contracts, as presented in the table following the Schedule of Investments, generally are
indicative of the volume of their derivative activity during the period ended October 31, 2015.
Total Return Swap Notional Amounts Outstanding | ||||||
Quarter Ended | January 31, 2015 | April 30, 2015 | July 31, 2015 | October 31, 2015 | ||
Moderate Strategy Fund | $ — | $ — | $ — | $ | 6,799,820 | |
Balanced Strategy Fund | — | — | — | 29,999,911 | ||
Growth Strategy Fund | — | — | — | 56,400,458 | ||
Equity Growth Strategy Fund | — | — | — | 23,099,673 |
Master Agreements
Certain Target Portfolio Funds are parties to International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA
Master Agreements”) with counterparties that govern transactions in OTC 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 and default include conditions that may entitle
either party to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master
Agreement. Any election to terminate early could be material to the financial statements. Since different types of forward and OTC
financial derivative transactions have different mechanics and are sometimes traded out of different legal entities of a particular
counterparty organization, each type of transaction may be covered by a different ISDA Master Agreement, resulting in the need
for multiple agreements with a single counterparty. As the ISDA Master Agreements are specific to unique operations of different
asset types, they allow a Fund to net its total exposure to a counterparty in the event of a default with respect to all the transactions
governed under a single agreement with a counterparty.
Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern the considerations and factors
surrounding the settlement of certain forward settling transactions, such as delayed delivery by and between a Fund and select
counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment
and transfer, events of default, termination, and maintenance of collateral.
236 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
Disclosure about Offsetting Assets and Liabilities
Balance sheet disclosure is based on various netting agreements between brokers and counterparties, such as ISDA Master
Agreements, Master Repo Agreements and Master Forward Agreements. Certain Target Portfolio Funds utilized multiple
counterparties. The quantitative disclosure begins with disaggregation of counterparties by legal entity and the roll up of the data
to reflect a single counterparty in the table within the Funds’ financial statements. Net exposure represents the net receivable
(payable) that would be due from/to the counterparty in the event of default. Exposure from OTC derivatives can only be netted
across transactions governed under the same Master Agreement with the same legal entity.
Class Allocation
Each of the Funds presented herein may offer certain of the following classes of shares: Class A, Class C, Class E, Class R1, Class
R4, Class R5 and Class S. All share classes have identical voting, dividend, liquidation and other rights, preferences, powers,
restrictions, limitations, qualifications and the same terms and conditions. The separate classes of shares differ principally in the
applicable sales charges, distribution fees and shareholder servicing fees. Shareholders of each class bear certain expenses that
pertain to that particular class. Realized and unrealized gains (losses), investment income, and expenses with the exception of class
level expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class.
Guarantees
In the normal course of business, the Funds enter into contracts that contain a variety of representations which provide general
indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that
may be made against the Funds that have not yet occurred. However, the Funds expect the risk of loss to be remote.
Market, Credit and Counterparty Risk
In the normal course of business, the Funds or Underlying 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 or Underlying Funds may also be exposed to counterparty risk or risk that an
institution or other entity with which the Funds or Underlying Funds have unsettled or open transactions will default. The potential
loss could exceed the value of the relevant assets recorded in the Funds' or Underlying Funds' financial statements (the “Assets”).
The Assets consist principally of cash due from counterparties and investments. The extent of the Funds' or Underlying Funds'
exposure to market, credit and counterparty risks with respect to the Assets approximates their carrying value as recorded in the
Funds' or Underlying Funds' Statements of Assets and Liabilities.
Global economies and financial markets are becoming increasingly interconnected and political and economic conditions (including
recent instability and volatility) and events (including natural disasters) in one country, region or financial market may adversely
impact issuers in a different country, region or financial market. As a result, issuers of securities held by an Underlying Fund may
experience significant declines in the value of their assets and even cease operations. Such conditions and/or events may not have
the same impact on all types of securities and may expose an Underlying Fund to greater market and liquidity risk and potential
difficulty in valuing portfolio instruments held. This could cause an Underlying Fund to underperform other types of investments.
3. Investment Transactions
Securities
During the period ended October 31, 2015, purchases and sales of investment securities (excluding short-term investments, options
and futures) were as follows:
Notes to Financial Statements 237
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
Purchases | Sales | |||
Conservative Strategy Fund | $ | 190,175,167 | $ | 276,013,513 |
Moderate Strategy Fund | 248,373,588 | 373,549,202 | ||
Balanced Strategy Fund | 1,142,431,263 | 1,598,624,863 | ||
Growth Strategy Fund | 816,354,843 | 1,098,365,478 | ||
Equity Growth Strategy Fund | 401,732,815 | 509,389,570 | ||
2020 Strategy Fund | 25,794,305 | 65,291,689 | ||
2025 Strategy Fund | 18,392,792 | 19,772,061 | ||
2030 Strategy Fund | 34,058,581 | 67,293,113 | ||
2035 Strategy Fund | 12,461,195 | 13,218,734 | ||
2040 Strategy Fund | 20,747,434 | 54,710,714 | ||
2045 Strategy Fund | 5,652,263 | 5,875,050 | ||
2050 Strategy Fund | 6,120,662 | 8,364,431 | ||
2055 Strategy Fund | 2,391,207 | 962,972 | ||
In Retirement Fund | 28,574,166 | 21,931,549 |
4. Related Party Transactions, Fees and Expenses
Adviser, Administrator, Transfer and Dividend Disbursing Agent
RIMCo provides or oversees the provision of all investment advisory and portfolio management services for the Funds, including
developing the investment program for each Fund and managing each Fund's overall exposure. RFSC is the Funds’ administrator
and transfer and dividend disbursing agent and among other services, with the assistance of RIMCo and Frank Russell Company
("FRC"), provides the Funds with office space, equipment and personnel necessary to operate and administrate the Funds' business
and to supervise the provision of services by certain third parties. RFSC is a wholly-owned subsidiary of RIMCo. RIMCo is a
wholly-owned subsidiary of FRC (which, effective December 2, 2014, is an indirect subsidiary of London Stock Exchange Group
plc ("LSEG")).
RIMCo has advised the Funds that, on October 8, 2015, Emerald Acquisition Limited, a company incorporated under the laws
of England and Wales (“Buyer”), entered into an agreement with FRC and LSEG through which Buyer will acquire FRC’s asset
management business (“Russell Investments”), including RIMCo, from LSEG (the “Transaction”). Buyer is a newly formed
acquisition vehicle through which private equity funds affiliated with TA Associates will acquire a majority ownership interest and
private equity funds affiliated with Reverence Capital Partners (“RCP”) will acquire a significant minority ownership interest in
Russell Investments. RIMCo expects that the Transaction will be consummated in the first half of 2016, subject to regulatory and
other approvals and confirmations, and other conditions being satisfied.
The Target Portfolio Funds are permitted to invest their cash (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 October
31, 2015, the Funds had invested $118,925,731 in the Russell U.S. Cash Management Fund.
Target Portfolio Funds
With respect to the Target Portfolio Funds, the advisory fee of 0.20% and administrative fee of up to 0.05% are based upon the
average daily net assets of the Funds and are payable monthly. The following shows the total amount of each of these fees paid by
the Funds for the period ended October 31, 2015:
Advisory | Administrative | |||
Conservative Strategy Fund | $ | 975,877 | $ | 207,375 |
Moderate Strategy Fund | 1,560,831 | 331,677 | ||
Balanced Strategy Fund | 6,640,929 | 1,411,197 | ||
Growth Strategy Fund | 4,208,782 | 894,366 | ||
Equity Growth Strategy Fund | 1,730,130 | 367,652 |
238 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
RFSC is paid a fee based upon the average daily net assets of the Funds for transfer agency and dividend disbursing services. RFSC
retains a portion of this fee for its services provided to the Funds and pays the balance to unaffiliated agents who assist in providing
these services. The following shows the total amount of this fee paid by the Funds for the period ended October 31, 2015:
Amount | ||
Conservative Strategy Fund | $ | 975,877 |
Moderate Strategy Fund | 1,560,831 | |
Balanced Strategy Fund | 6,640,929 | |
Growth Strategy Fund | 4,208,782 | |
Equity Growth Strategy Fund | 1,730,130 |
Target Date Funds
For the 2020 Strategy, 2025 Strategy, 2030 Strategy, 2035 Strategy, 2040 Strategy, 2045 Strategy, 2050 Strategy, 2055 Strategy and
In Retirement Funds, effective October 1, 2010, RIMCo agreed to assume the responsibility of payment for all operating expenses
other than Rule 12b-1 distribution fees, shareholder services fees, extraordinary expenses or the expenses of other investment
companies in which the Funds invest which are borne directly by the Funds.
Waivers and Reimbursements
Target Portfolio Funds
Until February 29, 2016, RIMCo has contractually agreed to waive up to the full amount of its 0.20% advisory fee and then
reimburse each Fund for other direct Fund-level expenses to the extent that direct Fund-level expenses exceed 0.12% of the
average daily net assets of the Fund on an annual basis. Direct Fund-level operating expenses do not include transfer agency fees,
Rule 12b-1 distribution fees, shareholder servicing fees, extraordinary expenses or the expenses of other investment companies
which the Funds invest which are borne indirectly by the Funds. These waivers and reimbursements may not be terminated during
the relevant period except with Board approval.
For the Conservative Strategy Fund, RFSC has contractually agreed, until February 29, 2016, to waive 0.15% of its transfer agency
fees for Class R1, R4 and R5 Shares. This waiver may not be terminated during the relevant period except with Board approval.
For the Conservative Strategy Fund, RFSC has contractually agreed, until February 29, 2016, to waive 0.02% of its transfer agency
fees for Class A, C, E and S Shares. This waiver may not be terminated during the relevant period except with Board approval.
For the Moderate Strategy Fund, RFSC has contractually agreed, until February 29, 2016, to waive 0.08% of its transfer agency fees
for Class A, C, R1, R4 and R5 Shares. This waiver may not be terminated during the relevant period except with Board approval.
For the Balanced Strategy Fund, RFSC has contractually agreed, until February 29, 2016, to waive 0.06% of its transfer agency
fees for Class R1, R4 and R5 Shares. This waiver may not be terminated during the relevant period except with Board approval.
For the Balanced Strategy Fund, RFSC has contractually agreed, until February 29, 2016, to waive 0.13% of its transfer agency fees
for Class A and C Shares. This waiver may not be terminated during the relevant period except with Board approval.
For the Growth Strategy Fund, RFSC has contractually agreed, until February 29, 2016, to waive 0.05% of its transfer agency fees
for Class R1, R4 and R5 Shares. This waiver may not be terminated during the relevant period except with Board approval.
For the Equity Growth Strategy Fund, RFSC has contractually agreed, until February 29, 2016, to waive 0.08% of its transfer agency
fees for Class R1, R4 and R5 Shares. This waiver may not be terminated during the relevant period except with Board approval.
As of October 31, 2015, RIMCo and RFSC waived the following expenses:
RIMCo Waiver | RFSC Waiver | Total | ||||
Conservative Strategy Fund | $ | 888,781 | $ | 195,317 | $ | 1,084,098 |
Moderate Strategy Fund | 1,292,408 | 429,966 | 1,722,374 | |||
Balanced Strategy Fund | 4,870,877 | 2,556,033 | 7,426,910 | |||
Growth Strategy Fund | 3,216,866 | 404,802 | 3,621,668 | |||
Equity Growth Strategy Fund | 1,376,598 | 190,100 | 1,566,698 |
Notes to Financial Statements 239
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
Distributor and Shareholder Servicing
Russell Financial Services, Inc. (the “Distributor”), a wholly owned subsidiary of RIMCo, is the distributor for the Investment
Company, pursuant to a distribution agreement with the Investment Company.
The Investment Company has distribution plans pursuant to Rule 12b-1 (the “Plans”) under the Investment Company Act. Under
the Plans, the Investment Company is authorized to make payments to the Distributor or any selling agents, as defined in the Plans,
for sales support services provided, and related expenses incurred which are primarily intended to result in the sale of the Class A,
Class C and Class R5 Shares subject to the Plans. The 12b-1 distribution payments shall not exceed 0.25% of the average daily net
assets of a Fund’s Class A or Class R5 Shares or 0.75% of the average daily net assets of a Fund’s Class C Shares on an annual basis.
Under the Plan for Class R4 and Class R5 Shares, the Funds may make payments to the Distributor or any servicing agent for any
activities or expenses primarily intended to assist, support or service the servicing agents’ clients who beneficially own Class R4
and Class R5 Shares of the Funds. The shareholder servicing payments shall not exceed 0.25% of the average daily net assets of a
Fund’s Class R4 and Class R5 Shares on an annual basis.
In addition, the Investment Company has adopted a Shareholder Services Plan under which the Funds may make payments to the
Distributor or any servicing agent for any activities or expenses primarily intended to assist, support or service the servicing agents’
clients who beneficially own Class C and Class E Shares of the Funds. The shareholder servicing payments shall not exceed 0.25%
of the average daily net assets of a Fund’s Class C and Class E Shares on an annual basis.
Pursuant to the rules of the Financial Industry Regulatory Authority (“FINRA”), the aggregate initial sales charges, deferred sales
charges and asset-based sales charges on Class A, Class C, Class E, Class R4 and Class R5 Shares of the Funds may not exceed
7.25%, 6.25%, 6.25%, 6.25% and 6.25%, respectively, of total gross sales, subject to certain exclusions. These limitations are
imposed at the class level on each class of shares of each Fund rather than on a per shareholder basis. Therefore, long-term
shareholders of the Class A, Class C, Class E, Class R4 or Class R5 Shares may pay more than the economic equivalent of the
maximum sales charges permitted by FINRA.
For the period ended October 31, 2015, the Distributor retained the following amounts in sales charges:
Contingent Deferred Sales Charges | Class A Shares | |
Moderate Strategy Fund | $ | 11,547 |
Balanced Strategy Fund | 37,356 | |
Growth Strategy Fund | 2,040 | |
Equity Growth Strategy Fund | 44 |
For the period ended October 31, 2015, the sales commissions paid to the selling agents for the sale of Class A Shares were as | |||||
follows: | |||||
Aggregate | Class A Front-End | ||||
Front-End | Sales Charges | ||||
Sales Charges | Retained by | ||||
on Class A Shares | Distributor | ||||
Conservative Strategy Fund | $ | 191,719 | $ | 33,419 | |
Moderate Strategy Fund | 349,070 | 61,078 | |||
Balanced Strategy Fund | 1,825,200 | 310,937 | |||
Growth Strategy Fund | 1,615,618 | 261,756 | |||
Equity Growth Strategy Fund | 460,979 | 75,175 | |||
2030 Strategy Fund | 218 | 28 | |||
2040 Strategy Fund | 91 | 10 |
Accrued Fees Payable to Affiliates | ||||||
Accrued fees payable to affiliates for the period ended October 31, 2015, were as follows: | ||||||
Conservative | Moderate Strategy | Balanced Strategy | ||||
Strategy Fund | Fund | Fund | ||||
Advisory fees | $ | — | $ | 14,095 | $ | 132,586 |
Administration fees | 15,748 | 25,133 | 106,609 | |||
Distribution fees | 147,283 | 217,047 | 904,161 | |||
Shareholder servicing fees | 51,498 | 71,331 | 292,135 | |||
Transfer agent fees | 60,711 | 81,624 | 261,817 | |||
Trustee fees | 1,622 | 2,731 | 10,888 |
240 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
Conservative | Moderate Strategy | Balanced Strategy | |||||
Strategy Fund | Fund | Fund | |||||
$ | 276,862 | $ | 411,961 | $ | 1,708,196 | ||
Growth Strategy | Equity Growth | 2020 Strategy | |||||
Fund | Strategy Fund | Fund | |||||
Advisory fees | $ | 73,787 | $ | 11,850 | $ | — | |
Administration fees | 67,513 | 27,817 | — | ||||
Distribution fees | 564,894 | 226,698 | 3,572 | ||||
Shareholder servicing fees | 179,463 | 75,618 | 5,942 | ||||
Transfer agent fees | 306,828 | 124,285 | — | ||||
Trustee fees | 7,117 | 3,003 | — | ||||
$ | 1,199,602 | $ | 469,271 | $ | 9,514 | ||
2025 Strategy | 2030 Strategy | 2035 Strategy | |||||
Fund | Fund | Fund | |||||
Distribution fees | $ | 1,555 | $ | 4,415 | $ | 1,345 | |
Shareholder servicing fees | 3,180 | 6,867 | 2,983 | ||||
$ | 4,735 | $ | 11,282 | $ | 4,328 | ||
2040 Strategy | 2045 Strategy | 2045 Strategy | |||||
Fund | Fund | Fund | |||||
Distribution fees | $ | 2,808 | $ | 711 | $ | 702 | |
Shareholder servicing fees | 4,252 | 1,560 | 1,203 | ||||
$ | 7,060 | $ | 2,271 | $ | 1,905 | ||
2055 Strategy | |||||||
Fund | In Retirement Fund | ||||||
Distribution fees | $ | 168 | $ | 1,642 | |||
Shareholder servicing fees | 567 | 3,482 | |||||
$ | 735 | $ | 5,124 |
Board of Trustees
The Russell Fund Complex consists of RIC, which has 41 funds and Russell Investment Funds ("RIF"), which has 9 funds. Each of
the Trustees is a Trustee of RIC and RIF. During the period, the Funds paid each of their independent Trustees a retainer of $102,000
per year (prior to January 1, 2015, $96,000); and each Trustee $7,000 for each regularly scheduled meeting attended in person
and $3,500 for each special meeting and the Annual 38a-1 meeting attended in person, and for each Audit Committee meeting,
Nominating and Governance Committee meeting, Investment Committee meeting or any other committee meeting established and
approved by the Board attended in person. Each Trustee receives $1,000 for attendance of telephonic board meetings, except for
telephonic board meetings called pursuant to RIC and RIF’s Security Valuation and Pricing Procedures; and $500 for attendance
of telephonic Committee meetings. Each independent Trustee is also paid $200 per hour for time spent for formal deposition
preparation and in depositions related to the McClure litigation (see note 8). The Audit Committee Chair and Investment Committee
Chair are each paid a fee of $15,000 per year and the Nominating and Governance Committee Chair is paid a fee of $12,000 per
year. The chairman of the Board receives additional annual compensation of $85,000. Ms. Cavanaugh and the Trustee Emeritus
are not compensated by the Russell Fund Complex for service as a Trustee. Trustees’ out of pocket expenses are also paid by the
Russell Fund Complex.
Transactions with Affiliated Companies (amounts in thousands)
An affiliated company is a company in which a Fund has ownership of at least 5% of the voting securities or which the Fund
controls, is controlled by or is under common control with. Transactions during the period ended October 31, 2015 with Underlying
Funds which are, or were, an affiliated company are as follows:
Realized Gain | Income | Capital Gains | |||||||||||
Fair Value | Purchases Cost | Sales Cost | (Loss) | Distributions | Distributions | ||||||||
Conservative Strategy Fund | |||||||||||||
Russell Commodity Strategies Fund | $ | — | $ | 1,134 | $ | 10,834 | $ | (2,928 | ) | $ | — | $ | — |
Russell Global Infrastructure Fund | 17,176 | 4,102 | 4,689 | (43 | ) | 937 | 770 | ||||||
Russell Global Real Estate Securities Fund | 17,266 | 15,392 | 4,032 | 112 | 349 | 316 | |||||||
Russell Multi-Strategy Alternative Fund | — | 552 | 11,087 | (270 | ) | 306 | — |
Notes to Financial Statements 241
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
Realized Gain | Income | Capital Gains | |||||||||||||
Fair Value | Purchases Cost | Sales Cost | (Loss) | Distributions | Distributions | ||||||||||
Russell U.S. Core Equity Fund | — | 2,278 | 7,334 | 7,165 | 381 | 1,523 | |||||||||
Russell U.S. Defensive Equity Fund | 6,538 | 884 | 7,631 | 6,081 | 193 | — | |||||||||
Russell U.S. Dynamic Equity Fund | 6,566 | 2,167 | 5,444 | (76 | ) | 637 | 900 | ||||||||
Russell U.S. Small Cap Equity Fund | — | 1,084 | 11,576 | 69 | 122 | 631 | |||||||||
Select U.S. Equity Fund | 8,731 | 10,449 | 1,575 | (27 | ) | 76 | — | ||||||||
Russell Global Opportunistic Credit Fund | 8,687 | 1,505 | 13,188 | (463 | ) | 866 | 120 | ||||||||
Russell Investment Grade Bond Fund | 43,326 | 3,186 | 27,193 | 791 | 1,606 | 471 | |||||||||
Russell Short Duration Bond Fund | 99,896 | 5,148 | 41,429 | (279 | ) | 2,265 | 374 | ||||||||
Russell Strategic Bond Fund | 99,679 | 8,117 | 57,760 | 1,398 | 4,396 | 1,106 | |||||||||
Russell Emerging Markets Fund | 8,596 | 2,142 | 2,630 | (350 | ) | 197 | 123 | ||||||||
Russell Global Equity Fund | — | 1,585 | 13,975 | 9,365 | 592 | 745 | |||||||||
Russell International Developed Markets Fund | — | 928 | 12,566 | 7,616 | 356 | — | |||||||||
Select International Equity Fund | 8,664 | 10,614 | 1,217 | (56 | ) | — | — | ||||||||
Russell Multi-Strategy Income Fund | 100,016 | 118,908 | 14,240 | (491 | ) | 1,620 | — | ||||||||
Russell U.S. Cash Management Fund | 8,872 | 15,068 | 6,196 | — | 5 | — | |||||||||
$ | 434,013 | $ | 205,243 | $ | 254,596 | $ | 27,614 | $ | 14,904 | $ | 7,079 | ||||
Moderate Strategy Fund | |||||||||||||||
Russell Commodity Strategies Fund | $ | 9,919 | $ | 2,789 | $ | 8,750 | $ | (2,414 | ) | $ | — | $ | — | ||
Russell Global Infrastructure Fund | 20,886 | 3,705 | 17,703 | 1,696 | 1,678 | 1,578 | |||||||||
Russell Global Real Estate Securities Fund | 7,000 | 1,452 | 5,344 | 5,826 | 420 | 815 | |||||||||
Russell U.S. Core Equity Fund | — | 6,075 | 25,471 | 20,215 | 908 | 4,917 | |||||||||
Russell U.S. Defensive Equity Fund | 28,304 | 984 | 7,014 | 5,772 | 494 | — | |||||||||
Russell U.S. Dynamic Equity Fund | 21,241 | 7,342 | 5,540 | (61 | ) | 1,307 | 1,812 | ||||||||
Russell U.S. Small Cap Equity Fund | 27,652 | 3,052 | 7,640 | 21 | 392 | 2,029 | |||||||||
Select U.S. Equity Fund | 31,839 | 53,420 | 21,222 | (83 | ) | 338 | — | ||||||||
Russell Global Opportunistic Credit Fund | 90,947 | 73,833 | 12,559 | (775 | ) | 2,976 | 194 | ||||||||
Russell Investment Grade Bond Fund | 111,597 | 5,163 | 42,398 | 1,191 | 3,670 | 1,050 | |||||||||
Russell Strategic Bond Fund | 222,767 | 29,490 | 78,269 | 925 | 8,729 | 2,029 | |||||||||
Russell Emerging Markets Fund | 27,217 | 3,884 | 4,187 | (346 | ) | 633 | 396 | ||||||||
Russell Global Equity Fund | 42,233 | 4,050 | 9,189 | 3,149 | 1,435 | 1,807 | |||||||||
Russell International Developed Markets Fund | — | 2,453 | 42,550 | 19,171 | 1,150 | — | |||||||||
Russell Multi-Strategy Alternative Fund | — | 846 | 26,126 | (546 | ) | 741 | — | ||||||||
Select International Equity Fund | 41,652 | 49,836 | 5,727 | 119 | — | — | |||||||||
Russell U.S. Cash Management Fund | 13,188 | 30,605 | 17,417 | — | 7 | — | |||||||||
$ | 696,442 | $ | 278,979 | $ | 337,106 | $ | 53,860 | $ | 24,878 | $ | 16,627 | ||||
Balanced Strategy Fund | |||||||||||||||
Russell Commodity Strategies Fund | $ | 63,902 | $ | 48,856 | $ | 31,567 | $ | (4,980 | ) | $ | — | $ | — | ||
Russell Global Infrastructure Fund | 118,176 | 13,620 | 38,840 | 310 | 7,309 | 6,311 | |||||||||
Russell Global Real Estate Securities Fund | 29,788 | 4,337 | 14,207 | 12,849 | 1,484 | 2,587 | |||||||||
Russell Multi-Strategy Alternative Fund | — | 3,121 | 108,830 | (2,343 | ) | 3,121 | — | ||||||||
Russell U.S. Core Equity Fund | — | 39,556 | 218,993 | 88,016 | 6,167 | 33,389 | |||||||||
Russell U.S. Defensive Equity Fund | 211,423 | 9,633 | 46,146 | 6,472 | 3,510 | — | |||||||||
Russell U.S. Dynamic Equity Fund | 212,054 | 37,198 | 55,584 | (1,562 | ) | 15,406 | 21,551 | ||||||||
Russell U.S. Small Cap Equity Fund | 177,488 | 19,783 | 82,694 | 98 | 2,918 | 15,104 | |||||||||
Select U.S. Equity Fund | 234,357 | 337,088 | 99,560 | (789 | ) | 2,434 | — | ||||||||
Russell Global Opportunistic Credit Fund | 266,655 | 186,892 | 45,117 | (3,001 | ) | 11,771 | 815 | ||||||||
Russell Strategic Bond Fund | 820,265 | 53,992 | 202,131 | 2,898 | 30,706 | 7,261 | |||||||||
Russell International Developed Markets Fund | — | 8,018 | 401,571 | 5,338 | 7,790 | — | |||||||||
Russell Emerging Markets Fund | 168,590 | 8,579 | 44,480 | (4,194 | ) | 4,482 | 2,802 | ||||||||
Russell Global Equity Fund | 301,305 | 23,303 | 67,242 | 8,740 | 10,153 | 12,788 | |||||||||
Select International Equity Fund | 296,878 | 348,455 | 33,695 | 116 | — | — | |||||||||
Russell U.S. Cash Management Fund | 50,457 | 166,157 | 115,702 | — | 31 | — | |||||||||
$ | 2,951,338 | $ | 1,308,588 | $ | 1,606,359 | $ | 107,968 | $ | 107,282 | $ | 102,608 | ||||
Growth Strategy Fund | |||||||||||||||
Russell Commodity Strategies Fund | $ | 54,010 | $ | 19,752 | $ | 27,050 | $ | (4,573 | ) | $ | — | $ | — | ||
Russell Global Infrastructure Fund | 93,545 | 10,783 | 29,418 | 356 | 5,736 | 4,932 | |||||||||
Russell Global Real Estate Securities Fund | 56,730 | 21,531 | 12,220 | 1,497 | 1,986 | 2,475 |
242 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
Realized Gain | Income | Capital Gains | ||||||||||||
Fair Value | Purchases Cost | Sales Cost | (Loss) | Distributions | Distributions | |||||||||
Russell Multi-Strategy Alternative Fund | — | 2,657 | 92,523 | (2,058 | ) | 2,651 | — | |||||||
Russell U.S. Core Equity Fund | — | 28,421 | 158,757 | 62,551 | 4,431 | 23,990 | ||||||||
Russell U.S. Defensive Equity Fund | 153,146 | 17,564 | 35,633 | 3,539 | 2,501 | — | ||||||||
Russell U.S. Dynamic Equity Fund | 153,412 | 27,073 | 39,891 | 1,431 | 11,239 | 15,731 | ||||||||
Russell U.S. Small Cap Equity Fund | 168,431 | 14,878 | 42,166 | 1,485 | 2,397 | 12,405 | ||||||||
Select U.S. Equity Fund | 210,585 | 284,862 | 71,331 | (706 | ) | 2,165 | — | |||||||
Russell Global Opportunistic Credit Fund | 94,007 | 7,100 | 39,869 | (1,987 | ) | 6,273 | 778 | |||||||
Russell Strategic Bond Fund | 223,346 | 57,525 | 53,030 | 1,005 | 7,474 | 1,646 | ||||||||
Russell Emerging Markets Fund | 161,755 | 12,336 | 13,136 | 618 | 3,726 | 2,329 | ||||||||
Russell Global Equity Fund | 228,866 | 19,109 | 65,679 | 19,968 | 8,429 | 10,616 | ||||||||
Russell International Developed Markets Fund | — | 5,938 | 302,328 | 4,801 | 5,878 | — | ||||||||
Select International Equity Fund | 244,750 | 286,826 | 27,331 | 76 | — | — | ||||||||
Russell U.S. Cash Management Fund | 33,266 | 112,216 | 78,950 | — | 20 | — | ||||||||
$ | 1,875,849 | $ | 928,571 | $ | 1,089,312 | $ | 88,003 | $ | 64,906 | $ | 74,902 | |||
Equity Growth Strategy Fund | ||||||||||||||
Russell Commodity Strategies Fund | $ | 22,224 | $ | 18,567 | $ | 11,799 | $ | (1,309 | ) | $ | — | $ | — | |
Russell Global Infrastructure Fund | 38,384 | 5,430 | 12,407 | 760 | 2,357 | 2,023 | ||||||||
Russell Global Real Estate Securities Fund | 23,316 | 12,045 | 5,018 | 1,348 | 780 | 899 | ||||||||
Russell U.S. Core Equity Fund | — | 12,942 | 72,207 | 28,419 | 2,011 | 10,888 | ||||||||
Russell Multi-Strategy Alternative Fund | — | 1,443 | 47,333 | (1,112 | ) | 1,354 | — | |||||||
Russell U.S. Defensive Equity Fund | 70,935 | 24,920 | 15,893 | 4,360 | 1,101 | — | ||||||||
Russell U.S. Dynamic Equity Fund | 71,117 | 17,900 | 30,862 | 2,166 | 5,717 | 8,034 | ||||||||
Russell U.S. Small Cap Equity Fund | 84,328 | 19,001 | 22,793 | 1,097 | 1,089 | 5,636 | ||||||||
Select U.S. Equity Fund | 78,843 | 111,722 | 31,654 | (53 | ) | 811 | — | |||||||
Russell Global Opportunistic Credit Fund | 69,276 | 17,093 | 15,481 | (1,010 | ) | 3,987 | 423 | |||||||
Russell Emerging Markets Fund | 83,306 | 18,537 | 9,229 | 349 | 1,730 | 1,082 | ||||||||
Russell Global Equity Fund | 117,891 | 20,335 | 26,310 | 6,024 | 3,710 | 4,673 | ||||||||
Russell International Developed Markets Fund | — | 2,978 | 171,034 | (15,749 | ) | 2,968 | — | |||||||
Select International Equity Fund | 100,646 | 118,820 | 12,110 | (30 | ) | — | — | |||||||
Russell U.S. Cash Management Fund | 13,143 | 47,460 | 34,317 | — | 8 | — | ||||||||
$ | 773,409 | $ | 449,193 | $ | 518,447 | $ | 25,260 | $ | 27,623 | $ | 33,658 | |||
2020 Strategy Fund | ||||||||||||||
Russell Commodity Strategies Fund | $ | 1,677 | $ | 1,401 | $ | 1,259 | $ | (156 | ) | $ | — | $ | — | |
Russell Global Infrastructure Fund | 1,442 | 634 | 1,392 | (88 | ) | 97 | 84 | |||||||
Russell Global Real Estate Securities Fund | 1,442 | 605 | 972 | 422 | 67 | 102 | ||||||||
Russell U.S. Defensive Equity Fund | 1,871 | 532 | 951 | 790 | 36 | — | ||||||||
Russell U.S. Dynamic Equity Fund | 1,288 | 679 | 1,234 | 154 | 120 | 169 | ||||||||
Russell U.S. Small Cap Equity Fund | 2,072 | 863 | 1,441 | 700 | 37 | 193 | ||||||||
Select U.S. Equity Fund | 9,107 | 2,997 | 8,909 | 475 | 158 | 4 | ||||||||
Russell Global Opportunistic Credit Fund | 3,044 | 2,016 | 2,409 | (170 | ) | 210 | 25 | |||||||
Russell Investment Grade Bond Fund | 10,104 | 2,690 | 7,851 | 165 | 351 | 97 | ||||||||
Russell Short Duration Bond Fund | 4,720 | 1,994 | 3,529 | (38 | ) | 107 | 16 | |||||||
Russell Strategic Bond Fund | 23,584 | 6,510 | 16,940 | 1,734 | 996 | 239 | ||||||||
Russell Emerging Markets Fund | 1,766 | 1,010 | 2,334 | 66 | 66 | 41 | ||||||||
Russell Global Equity Fund | 3,630 | 1,383 | 3,797 | 1,501 | 158 | 199 | ||||||||
Select International Equity Fund | 6,747 | 2,480 | 7,099 | (380 | ) | 67 | — | |||||||
$ | 72,494 | $ | 25,794 | $ | 60,117 | $ | 5,175 | $ | 2,470 | $ | 1,169 | |||
2025 Strategy Fund | ||||||||||||||
Russell Commodity Strategies Fund | $ | 780 | $ | 712 | $ | 398 | $ | (64 | ) | $ | — | $ | — | |
Russell Global Infrastructure Fund | 685 | 402 | 422 | (33 | ) | 37 | 31 | |||||||
Russell Global Real Estate Securities Fund | 683 | 747 | 770 | 13 | 27 | 37 | ||||||||
Russell U.S. Defensive Equity Fund | 854 | 383 | 427 | 71 | 14 | — | ||||||||
Russell U.S. Dynamic Equity Fund | 781 | 488 | 506 | 14 | 57 | 79 | ||||||||
Russell U.S. Small Cap Equity Fund | 1,302 | 759 | 856 | 15 | 18 | 94 | ||||||||
Select U.S. Equity Fund | 4,922 | 2,346 | 3,056 | 86 | 75 | 1 | ||||||||
Russell Global Opportunistic Credit Fund | 1,284 | 1,032 | 701 | (54 | ) | 74 | 8 | |||||||
Russell Investment Grade Bond Fund | 3,932 | 2,129 | 2,220 | (10 | ) | 112 | 29 |
Notes to Financial Statements 243
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
Realized Gain | Income | Capital Gains | |||||||||||
Fair Value | Purchases Cost | Sales Cost | (Loss) | Distributions | Distributions | ||||||||
Russell Short Duration Bond Fund | 398 | 580 | 180 | (1 | ) | 5 | — | ||||||
Russell Strategic Bond Fund | 9,170 | 5,033 | 5,164 | (19 | ) | 316 | 71 | ||||||
Russell Emerging Markets Fund | 1,113 | 786 | 1,011 | (89 | ) | 31 | 19 | ||||||
Russell Global Equity Fund | 2,106 | 1,073 | 1,519 | 284 | 70 | 89 | |||||||
Select International Equity Fund | 3,763 | 1,923 | 2,478 | (149 | ) | 29 | — | ||||||
$ | 31,773 | $ | 18,393 | $ | 19,708 | $ | 64 | $ | 865 | $ | 458 | ||
2030 Strategy Fund | |||||||||||||
Russell Commodity Strategies Fund | $ | 2,387 | $ | 2,238 | $ | 1,505 | $ | (238 | ) | $ | — | $ | — |
Russell Global Infrastructure Fund | 1,943 | 735 | 1,452 | (102 | ) | 124 | 105 | ||||||
Russell Global Real Estate Securities Fund | 1,926 | 660 | 1,025 | 425 | 86 | 127 | |||||||
Russell U.S. Defensive Equity Fund | 2,463 | 556 | 1,029 | 754 | 46 | — | |||||||
Russell U.S. Dynamic Equity Fund | 2,872 | 1,300 | 2,130 | 228 | 245 | 343 | |||||||
Russell U.S. Small Cap Equity Fund | 4,983 | 1,844 | 3,060 | 798 | 80 | 416 | |||||||
Select U.S. Equity Fund | 16,392 | 4,420 | 12,422 | 561 | 276 | 6 | |||||||
Russell Global Opportunistic Credit Fund | 3,020 | 2,444 | 2,171 | (164 | ) | 196 | 22 | ||||||
Russell Investment Grade Bond Fund | 5,164 | 3,355 | 3,654 | (3 | ) | 146 | 35 | ||||||
Russell Strategic Bond Fund | 20,659 | 8,389 | 15,218 | 206 | 810 | 187 | |||||||
Russell Emerging Markets Fund | 4,305 | 1,893 | 4,458 | (464 | ) | 139 | 87 | ||||||
Russell Global Equity Fund | 7,535 | 2,384 | 5,988 | 1,748 | 295 | 372 | |||||||
Select International Equity Fund | 12,691 | 3,841 | 10,012 | (580 | ) | 115 | — | ||||||
$ | 86,340 | $ | 34,059 | $ | 64,124 | $ | 3,169 | $ | 2,558 | $ | 1,700 | ||
2035 Strategy Fund | |||||||||||||
Russell Commodity Strategies Fund | $ | 793 | $ | 762 | $ | 414 | $ | (75 | ) | $ | — | $ | — |
Russell Global Infrastructure Fund | 665 | 313 | 337 | (25 | ) | 36 | 30 | ||||||
Russell Global Real Estate Securities Fund | 662 | 314 | 349 | 9 | 26 | 37 | |||||||
Russell U.S. Defensive Equity Fund | 750 | 265 | 302 | 51 | 12 | — | |||||||
Russell U.S. Dynamic Equity Fund | 1,081 | 549 | 571 | 14 | 77 | 107 | |||||||
Russell U.S. Small Cap Equity Fund | 1,868 | 839 | 932 | 5 | 25 | 128 | |||||||
Select U.S. Equity Fund | 5,808 | 2,176 | 3,004 | 81 | 87 | 2 | |||||||
Russell Global Opportunistic Credit Fund | 596 | 679 | 283 | (21 | ) | 31 | 3 | ||||||
Russell Strategic Bond Fund | 4,008 | 2,804 | 2,054 | (14 | ) | 121 | 24 | ||||||
Russell Emerging Markets Fund | 1,690 | 1,027 | 1,306 | (156 | ) | 44 | 28 | ||||||
Russell Global Equity Fund | 2,657 | 1,048 | 1,569 | 179 | 87 | 109 | |||||||
Select International Equity Fund | 4,455 | 1,685 | 2,183 | (133 | ) | 33 | — | ||||||
$ | 25,033 | $ | 12,461 | $ | 13,304 | $ | (85 | ) | $ | 579 | $ | 468 | |
2040 Strategy Fund | |||||||||||||
Russell Commodity Strategies Fund | $ | 2,268 | $ | 2,249 | $ | 1,990 | $ | (303 | ) | $ | — | $ | — |
Russell Global Infrastructure Fund | 1,943 | 757 | 1,681 | (123 | ) | 132 | 115 | ||||||
Russell Global Real Estate Securities Fund | 1,933 | 752 | 1,248 | 487 | 91 | 138 | |||||||
Russell U.S. Defensive Equity Fund | 1,942 | 424 | 888 | 754 | 38 | — | |||||||
Russell U.S. Dynamic Equity Fund | 3,241 | 1,372 | 2,495 | 291 | 295 | 415 | |||||||
Russell U.S. Small Cap Equity Fund | 5,518 | 1,960 | 4,006 | 591 | 95 | 491 | |||||||
Select U.S. Equity Fund | 16,999 | 4,144 | 13,837 | 703 | 295 | 7 | |||||||
Russell Strategic Bond Fund | 4,532 | 1,989 | 4,210 | 195 | 196 | 48 | |||||||
Russell Emerging Markets Fund | 5,143 | 2,190 | 5,445 | (632 | ) | 171 | 107 | ||||||
Russell Global Equity Fund | 8,418 | 2,114 | 5,697 | 1,596 | 358 | 450 | |||||||
Select International Equity Fund | 12,767 | 2,796 | 10,177 | (522 | ) | 125 | — | ||||||
$ | 64,704 | $ | 20,747 | $ | 51,674 | $ | 3,037 | $ | 1,796 | $ | 1,771 | ||
2045 Strategy Fund | |||||||||||||
Russell Commodity Strategies Fund | $ | 452 | $ | 446 | $ | 246 | $ | (56 | ) | $ | — | $ | — |
Russell Global Infrastructure Fund | 384 | 189 | 178 | (16 | ) | 21 | 17 | ||||||
Russell Global Real Estate Securities Fund | 384 | 187 | 191 | (1 | ) | 15 | 20 | ||||||
Russell U.S. Defensive Equity Fund | 386 | 127 | 147 | 21 | 6 | — | |||||||
Russell U.S. Dynamic Equity Fund | 648 | 309 | 278 | 4 | 43 | 60 | |||||||
Russell U.S. Small Cap Equity Fund | 1,101 | 535 | 519 | (6 | ) | 14 | 71 | ||||||
Select U.S. Equity Fund | 3,386 | 1,201 | 1,466 | 35 | 53 | 1 |
244 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
Realized Gain | Income | Capital Gains | |||||||||||
Fair Value | Purchases Cost | Sales Cost | (Loss) | Distributions | Distributions | ||||||||
Russell Strategic Bond Fund | 898 | 470 | 491 | (2 | ) | 32 | 7 | ||||||
Russell Emerging Markets Fund | 1,020 | 633 | 707 | (102 | ) | 25 | 16 | ||||||
Russell Global Equity Fund | 1,672 | 603 | 739 | 11 | 52 | 65 | |||||||
Select International Equity Fund | 2,526 | 952 | 1,093 | (68 | ) | 18 | — | ||||||
$ | 12,857 | $ | 5,652 | $ | 6,055 | $ | (180 | ) | $ | 279 | $ | 257 | |
2050 Strategy Fund | |||||||||||||
Russell Commodity Strategies Fund | $ | 435 | $ | 482 | $ | 353 | $ | (64 | ) | $ | — | $ | — |
Russell Global Infrastructure Fund | 370 | 211 | 267 | (20 | ) | 20 | 17 | ||||||
Russell Global Real Estate Securities Fund | 369 | 212 | 244 | 29 | 15 | 21 | |||||||
Russell U.S. Defensive Equity Fund | 371 | 146 | 189 | 59 | 6 | — | |||||||
Russell U.S. Dynamic Equity Fund | 623 | 327 | 376 | 21 | 44 | 61 | |||||||
Russell U.S. Small Cap Equity Fund | 1,060 | 557 | 694 | 2 | 14 | 73 | |||||||
Select U.S. Equity Fund | 3,256 | 1,309 | 2,084 | 48 | 50 | 1 | |||||||
Russell Strategic Bond Fund | 864 | 598 | 746 | 28 | 32 | 7 | |||||||
Russell Emerging Markets Fund | 981 | 671 | 921 | (104 | ) | 25 | 16 | ||||||
Russell Global Equity Fund | 1,608 | 639 | 937 | 114 | 53 | 66 | |||||||
Select International Equity Fund | 2,431 | 969 | 1,532 | (92 | ) | 19 | — | ||||||
$ | 12,368 | $ | 6,121 | $ | 8,343 | $ | 21 | $ | 278 | $ | 262 | ||
2055 Strategy Fund | |||||||||||||
Russell Commodity Strategies Fund | $ | 145 | $ | 135 | $ | 30 | $ | (3 | ) | $ | — | $ | — |
Russell Global Infrastructure Fund | 124 | 75 | 27 | (2 | ) | 5 | 4 | ||||||
Russell Global Real Estate Securities Fund | 124 | 75 | 33 | (1 | ) | 3 | 4 | ||||||
Russell U.S. Defensive Equity Fund | 125 | 63 | 28 | — | 1 | — | |||||||
Russell U.S. Dynamic Equity Fund | 209 | 128 | 51 | — | 9 | 12 | |||||||
Russell U.S. Small Cap Equity Fund | 354 | 214 | 86 | (2 | ) | 3 | 15 | ||||||
Select U.S. Equity Fund | 1,092 | 576 | 258 | (1 | ) | 13 | — | ||||||
Russell Strategic Bond Fund | 289 | 168 | 71 | ��� | 7 | 1 | |||||||
Russell Emerging Markets Fund | 329 | 243 | 122 | (8 | ) | 5 | 3 | ||||||
Russell Global Equity Fund | 539 | 282 | 125 | (3 | ) | 11 | 14 | ||||||
Select International Equity Fund | 815 | 432 | 160 | (8 | ) | 4 | — | ||||||
$ | 4,145 | $ | 2,391 | $ | 991 | $ | (28 | ) | $ | 61 | $ | 53 | |
In Retirement Fund | |||||||||||||
Russell Commodity Strategies Fund | $ | 843 | $ | 976 | $ | 401 | $ | (62 | ) | $ | — | $ | — |
Russell Global Infrastructure Fund | 766 | 650 | 444 | (28 | ) | 31 | 21 | ||||||
Russell Global Real Estate Securities Fund | 765 | 444 | 360 | 88 | 25 | 26 | |||||||
Russell U.S. Defensive Equity Fund | 956 | 458 | 395 | 186 | 15 | — | |||||||
Russell U.S. Dynamic Equity Fund | 458 | 365 | 261 | 26 | 20 | 27 | |||||||
Russell U.S. Small Cap Equity Fund | 691 | 392 | 317 | 96 | 5 | 29 | |||||||
Select U.S. Equity Fund | 3,667 | 2,746 | 2,169 | 82 | 51 | 1 | |||||||
Russell Global Opportunistic Credit Fund | 1,682 | 1,671 | 925 | (66 | ) | 85 | 7 | ||||||
Russell Investment Grade Bond Fund | 6,410 | 4,717 | 3,398 | 51 | 149 | 30 | |||||||
Russell Short Duration Bond Fund | 4,469 | 3,345 | 2,404 | (10 | ) | 76 | 8 | ||||||
Russell Strategic Bond Fund | 13,597 | 9,356 | 6,821 | 474 | 379 | 68 | |||||||
Russell Emerging Markets Fund | 602 | 567 | 570 | (26 | ) | 11 | 7 | ||||||
Russell Global Equity Fund | 1,263 | 742 | 865 | 301 | 25 | 31 | |||||||
Select International Equity Fund | 2,680 | 2,145 | 1,563 | (73 | ) | 12 | — | ||||||
$ | 38,849 | $ | 28,574 | $ | 20,893 | $ | 1,039 | $ | 884 | $ | 255 |
Notes to Financial Statements 245
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
5. Federal Income Taxes
At October 31, 2015, the following Funds had net tax basis capital loss carryforwards which may be applied against any net realized
taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first. Available capital loss
carryforwards and expiration dates are as follows:
No Expiration | ||||||||||
10/31/2018 | 10/31/2019 | Short Term | Long-Term | Totals | ||||||
Growth Strategy Fund | $ | — | $ | 9,811,508 | $ | — | $ | — | $ | 9,811,508 |
Equity Growth Strategy Fund | 101,878,588 | 19,352,964 | — | — | 121,231,552 |
Under the Regulated Investment Company Modernization Act of 2010, the Funds will be permitted to carry forward capital losses
incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those
future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of
this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment
capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being
considered all short-term as under previous law.
At October 31, 2015, the cost of investments and net unrealized appreciation (depreciation), undistributed ordinary income and | |||||||||||||
undistributed long-term capital gains for income tax purposes were as follows: | |||||||||||||
Conservative Strategy | Moderate Strategy | Balanced Strategy | |||||||||||
Fund | Fund | Fund | |||||||||||
Cost of Investments | $ | 421,489,588 | $ | 662,783,827 | $ | 2,783,997,262 | |||||||
Unrealized Appreciation | $ | 18,696,059 | $ | 48,150,965 | $ | 237,096,801 | |||||||
Unrealized Depreciation | (6,172,552 | ) | (14,493,149 | ) | (69,756,035 | ) | |||||||
Net Unrealized Appreciation (Depreciation) | $ | 12,523,507 | $ | 33,657,816 | $ | 167,340,766 | |||||||
Undistributed Ordinary Income | $ | 239,627 | $ | — | $ | 956,401 | |||||||
Undistributed Long-Term Capital Gains | |||||||||||||
(Capital Loss Carryforward) | $ | 33,708,096 | $ | 68,690,162 | $ | 209,400,797 | |||||||
Tax Composition of Distributions | |||||||||||||
Ordinary Income | $ | 12,295,356 | $ | 19,050,465 | $ | 83,801,839 | |||||||
Long-Term Capital Gains | $ | 10,521,858 | $ | 8,835,226 | $ | — | |||||||
Equity Growth | |||||||||||||
Growth Strategy Fund | Strategy Fund | 2020 Strategy Fund | |||||||||||
Cost of Investments | $ | 1,795,354,085 | $ | 741,155,407 | $ | 63,861,226 | |||||||
Unrealized Appreciation | $ | 146,940,862 | $ | 57,966,799 | $ | 10,321,656 | |||||||
Unrealized Depreciation | (66,446,031 | ) | (25,712,784 | ) | (1,688,784 | ) | |||||||
Net Unrealized Appreciation (Depreciation) | $ | 80,494,831 | $ | 32,254,015 | $ | 8,632,872 | |||||||
Undistributed Ordinary Income | $ | — | $ | — | $ | 117,483 | |||||||
Undistributed Long-Term Capital Gains | |||||||||||||
(Capital Loss Carryforward) | $ | (9,811,508 | ) $ | (121,231,552 | ) $ | 6,097,225 | |||||||
Tax Composition of Distributions | |||||||||||||
Ordinary Income | $ | 46,059,396 | $ | 19,811,503 | $ | 2,416,562 | |||||||
Long-Term Capital Gains | $ | — | $ | — | $ | 28,352,913 | |||||||
Distributions in Excess | $ | 4,008,949 | $ | 1,268,903 | $ | — |
246 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
2025 Strategy Fund | 2030 Strategy Fund | 2035 Strategy Fund | ||||||||||
Cost of Investments | $ | 29,317,020 | $ | 77,108,568 | $ | 23,126,694 | ||||||
Unrealized Appreciation | $ | 2,943,972 | $ | 11,300,325 | $ | 2,458,163 | ||||||
Unrealized Depreciation | (488,011 | ) | (2,068,725 | ) | (551,521 | ) | ||||||
Net Unrealized Appreciation (Depreciation) | $ | 2,455,961 | $ | 9,231,600 | $ | 1,906,642 | ||||||
Undistributed Ordinary Income | $ | 67,380 | $ | 69,221 | $ | 70,267 | ||||||
Undistributed Long-Term Capital Gains | ||||||||||||
(Capital Loss Carryforward) | $ | 757,383 | $ | 5,198,422 | $ | 628,717 | ||||||
Tax Composition of Distributions | ||||||||||||
Ordinary Income | $ | 889,789 | $ | 2,386,385 | $ | 579,160 | ||||||
Long-Term Capital Gains | $ | 6,713,955 | $ | 33,537,800 | $ | 5,650,438 | ||||||
2040 Strategy Fund | 2045 Strategy Fund | 2050 Strategy Fund | ||||||||||
Cost of Investments | $ | 56,459,334 | $ | 11,774,477 | $ | 10,796,224 | ||||||
Unrealized Appreciation | $ | 10,139,423 | $ | 1,380,051 | $ | 1,826,688 | ||||||
Unrealized Depreciation | (1,894,476 | ) | (297,244 | ) | (254,486 | ) | ||||||
Net Unrealized Appreciation (Depreciation) | $ | 8,244,947 | $ | 1,082,807 | $ | 1,572,202 | ||||||
Undistributed Ordinary Income | $ | 223,194 | $ | 11,218 | $ | 46,311 | ||||||
Undistributed Long-Term Capital Gains | ||||||||||||
(Capital Loss Carryforward) | $ | 5,188,526 | $ | 228,070 | $ | 427,557 | ||||||
Tax Composition of Distributions | ||||||||||||
Ordinary Income | $ | 1,681,217 | $ | 305,937 | $ | 319,070 | ||||||
Long-Term Capital Gains | $ | 31,760,351 | $ | 2,946,051 | $ | 4,400,203 | ||||||
2055 Strategy Fund | In Retirement Fund | |||||||||||
Cost of Investments | $ | 4,090,719 | $ | 34,911,716 | ||||||||
Unrealized Appreciation | $ | 125,689 | $ | 4,596,951 | ||||||||
Unrealized Depreciation | (71,543 | ) | (659,797 | ) | ||||||||
Net Unrealized Appreciation (Depreciation) | $ | 54,146 | $ | 3,937,154 | ||||||||
Undistributed Ordinary Income | $ | 4,385 | $ | 39,771 | ||||||||
Undistributed Long-Term Capital Gains | ||||||||||||
(Capital Loss Carryforward) | $ | 51,833 | $ | 1,348,076 | ||||||||
Tax Composition of Distributions | ||||||||||||
Ordinary Income | $ | 53,340 | $ | 826,882 | ||||||||
Long-Term Capital Gains | $ | 284,873 | $ | 7,281,031 |
As permitted by tax regulations, the Funds intend to defer a late year ordinary loss incurred from January 1, 2015 to October 31, | ||
2015 and treat it as arising in the fiscal year 2016. As of October 31, 2015, the Funds had deferred ordinary losses as follows: | ||
Equity Growth Strategy Fund | $ 9,307 |
Notes to Financial Statements 247
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
6. Record Ownership
As of October 31, 2015, the following table includes shareholders of record with greater than 10% of the total outstanding shares
of each respective Fund:
# of Shareholders | % | |||
Conservative Strategy Fund | 3 | 57.4 | ||
Moderate Strategy Fund | 2 | 51.8 | ||
Balanced Strategy Fund | 3 | 59.9 | ||
Growth Strategy Fund | 3 | 62.3 | ||
Equity Growth Strategy Fund | 3 | 53.9 | ||
2020 Strategy Fund | 4 | 55.4 | ||
2025 Strategy Fund | 3 | 52.9 | ||
2030 Strategy Fund | 4 | 55.4 | ||
2035 Strategy Fund | 3 | 51.9 | ||
2040 Strategy Fund | 4 | 55.1 | ||
2045 Strategy Fund | 3 | 46.3 | ||
2050 Strategy Fund | 4 | 50.5 | ||
2055 Strategy Fund | 3 | 56.7 | ||
In Retirement Fund | 3 | 50.6 |
7. Pending Legal Proceedings
On October 17, 2013, Fred McClure filed a derivative lawsuit against RIMCo on behalf of ten RIC funds: the Russell Commodity
Strategies Fund, Russell Emerging Markets Fund, Russell Global Equity Fund, Russell Global Infrastructure Fund, Russell Global
Opportunistic Credit Fund, Russell International Developed Markets Fund, Russell Multi-Strategy Alternative Fund, Russell
Strategic Bond Fund, Russell U.S. Small Cap Equity Fund and Russell Global Real Estate Securities Fund. The lawsuit, which
was filed in the United States District Court for the District of Massachusetts, seeks recovery under Section 36(b) of the Investment
Company Act, as amended, for the funds’ alleged payment of excessive investment management fees to RIMCo. On December 8,
2014, Fred McClure filed a second derivative lawsuit in the United States District Court for the District of Massachusetts. This
second suit involves the same ten funds, and the allegations are similar, although the second suit adds a claim alleging that RFSC
charged the funds excessive administrative fees under Section 36(b). The plaintiff seeks recovery of the amount of the allegedly
excessive compensation or payments received from these ten funds and earnings that would have accrued to plaintiff had that
compensation not been paid or, alternatively, rescission of the contracts and restitution of all excessive fees paid, for a period
commencing one year prior to the filing of the lawsuit through the date of the trial. RIMCo is defending the actions.
8. Reorganization
As of the close of business on February 20, 2015, the In Retirement Fund acquired all the net assets of the 2015 Strategy Fund,
an open-end investment company, pursuant to a plan of reorganization approved by the Board. The purpose of the transaction was
to combine two funds managed by RIMCo with identical investment objectives and similar investment strategies. The acquisition
was accomplished by a tax-free exchange of 2,359,139 shares of the In Retirement Fund, valued at $18,239,524, for 2,127,903
shares of the 2015 Strategy Fund outstanding as of the close of business on February 20, 2015. The investment portfolio of the
2015 Strategy Fund, with a fair value of $18,242,224 and identified cost of $16,155,694 as at the close of business on February
20, 2015, was the principal asset acquired by the In Retirement Fund. For financial reporting purposes, assets received and shares
issued by the In Retirement Fund were recorded at fair value; however, the cost basis of the investments received from the 2015
Strategy Fund was carried forward to align ongoing reporting of the In Retirement Fund’s realized and unrealized gains and losses
with amounts distributable to shareholders for tax purposes. Immediately prior to the merger, the net assets of the In Retirement
Fund were $32,823,587.
Assuming the acquisition had been completed on November 1, 2014, the beginning of the annual reporting period of the In
Retirement Fund, the In Retirement Fund’s pro forma results of operations for the year ended October 31, 2105, would have been
as follows:
248 Notes to Financial Statements
Russell Investment Company
LifePoints® Funds
Notes to Financial Statements, continued — October 31, 2015
2015 Strategy | In | |||||||
Fund as of close | Retirement | |||||||
of business | Fund as of | Pro Forma | ||||||
(Amounts in thousands) | 2/20/15 | 10/31/2015 | 10/31/2015 | |||||
Net investment income | $ | 595 | $ | 816 | $ | 1,411 | ||
Net gain (loss) on investments | 559 | 1,294 | 1,853 | |||||
Net change in unrealized appreciation/(depreciation) | (788 | ) | (2,064 | ) | (2,852 | ) | ||
Net increase (decrease) in net assets resulting in operations | $ | 366 | $ | 46 | $ | 412 |
There were no material amounts of undistributed net investment income or undistributed realized gains transferred to the In
Retirement Fund that will be required to be distributed. Because the combined investment portfolios have been managed as a single
integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of the
2015 Strategy Fund that have been included in the In Retirement Fund’s statement of operations since February 23, 2015.
9. Subsequent Events
Management has evaluated the events and/or transactions that have occurred through the date the financial statements were issued
and noted no items requiring adjustments to the financial statements or additional disclosure.
Notes to Financial Statements 249
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders
of Russell Investment Company
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related
statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial
position of Conservative Strategy Fund, Moderate Strategy Fund, Balanced Strategy Fund, Growth Strategy Fund, Equity Growth
Strategy Fund, 2020 Strategy Fund, 2025 Strategy Fund, 2030 Strategy Fund, 2035 Strategy Fund, 2040 Strategy Fund, 2045
Strategy Fund, 2050 Strategy Fund, 2055 Strategy Fund and In Retirement Fund (fourteen of the portfolios constituting Russell
Investment Company LifePoints Funds, hereafter collectively referred to as the “Funds”) at October 31, 2015, the results of each
of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended
and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are
the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation
of securities at October 31, 2015 by correspondence with brokers and the transfer agent, provide a reasonable basis for our opinion.
Seattle, Washington
December 22, 2015
250 Report of Independent Registered Public Accounting Firm
Russell Investment Company
LifePoints® Funds
Tax Information— October 31, 2015 (Unaudited)
For the tax year ended October 31, 2015, the Funds hereby designate 100%, or the maximum amount allowable, of its net taxable income as
qualified dividends taxed at individual net capital gain rates.
For the tax year ended October 31, 2015, the Funds hereby designate under Section 871(k)(2)(c) of the Code, the maximum amount allowable
as a short term capital gain dividend for purposes of the tax imposed under Section 871(a)(1)(A) of the Code. This applies to nonresident alien
shareholders only.
The Form 1099 you receive in January 2016 will show the tax status of all distributions paid to your account in calendar year 2015.
The Funds designate dividends distributed during the fiscal year as qualifying for the dividends received deduction for corporate shareholders as | |||
follows: | |||
Conservative Strategy Fund | 14.9 | % | |
Moderate Strategy Fund | 28.9 | % | |
Balanced Strategy Fund | 18.7 | % | |
Growth Strategy Fund | 42.2 | % | |
Equity Growth Strategy Fund | 43.5 | % | |
2020 Strategy Fund | 13.2 | % | |
2025 Strategy Fund | 16.6 | % | |
2030 Strategy Fund | 22.9 | % | |
2035 Strategy Fund | 28.9 | % | |
2040 Strategy Fund | 33.0 | % | |
2045 Strategy Fund | 37.7 | % | |
2050 Strategy Fund | 32.9 | % | |
2055 Strategy Fund | 38.2 | % | |
In Retirement Fund | 9.6 | % | |
Pursuant to Section 852 of the Internal Revenue Code, the Funds designate the following amounts as long-term capital gain dividends for their | |||
taxable year ended October 31, 2015: | |||
Conservative Strategy Fund | $ | 10,521,858 | |
Moderate Strategy Fund | 8,835,226 | ||
2020 Strategy Fund | 28,352,913 | ||
2025 Strategy Fund | 6,713,955 | ||
2030 Strategy Fund | 33,537,800 | ||
2035 Strategy Fund | 5,650,438 | ||
2040 Strategy Fund | 31,760,351 | ||
2045 Strategy Fund | 2,946,051 | ||
2050 Strategy Fund | 4,400,203 | ||
2055 Strategy Fund | 284,873 | ||
In Retirement Fund | 7,281,031 | ||
Please consult a tax adviser for any questions about federal or state income tax laws. |
Tax Information 251
Russell Investment Company
LifePoints® Funds
Tax Information, continued — October 31, 2015 (Unaudited)
The Funds listed below paid foreign taxes and recognized foreign source income during the taxable year ended October 31, 2015. Pursuant to | ||||||||
Section 853 of the Internal Revenue Code, the Funds designate the following per share amounts of foreign taxes paid and income earned from | ||||||||
foreign sources: | ||||||||
Foreign Taxes | Foreign Source Income | Foreign Source | ||||||
Fund Name | Foreign Taxes Paid | Paid Per Share | Income Per Share | |||||
Conservative Strategy Fund | $ | 68,622 | $ | 0.0017 | $ | 880,320 | $ | 0.0215 |
Moderate Strategy Fund | 157,548 | 0.0026 | 3,045,107 | 0.0503 | ||||
Balanced Strategy Fund | 1,705,417 | 0.0069 | 20,068,910 | 0.0813 | ||||
Growth Strategy Fund | 1,477,678 | 0.0091 | 17,196,929 | 0.1056 | ||||
Equity Growth Strategy Fund | 677,954 | 0.0094 | 7,811,920 | 0.1086 | ||||
2020 Strategy Fund | 28,658 | 0.0034 | 342,669 | 0.0402 | ||||
2025 Strategy Fund | 14,037 | 0.0037 | 159,470 | 0.0421 | ||||
2030 Strategy Fund | 24,489 | 0.0024 | 647,253 | 0.0640 | ||||
2035 Strategy Fund | 19,899 | 0.0069 | 230,920 | 0.0806 | ||||
2040 Strategy Fund | 58,757 | 0.0076 | 682,087 | 0.0884 | ||||
2045 Strategy Fund | 18,920 | 0.0125 | 188,757 | 0.1250 | ||||
2050 Strategy Fund | 11,201 | 0.0057 | 130,030 | 0.0665 | ||||
2055 Strategy Fund | 3,754 | 0.0100 | 43,579 | 0.1161 | ||||
In Retirement Fund | 11,427 | 0.0022 | 138,753 | 0.0271 |
252 Tax Information
Russell Investment Company
LifePoints® Funds
Shareholder Requests for Additional Information — October 31, 2015 (Unaudited)
A complete unaudited schedule of investments is made available generally no later than 60 days after the end of the first and third
quarters of each fiscal year. These reports are available (i) free of charge, upon request, by calling the Funds at (800) 787-7354; (ii) at
www.russell.com; (iii) on the Securities and Exchange Commission’s website at www.sec.gov; and (iv) at the Securities and Exchange
Commission’s public reference room.
The Board has delegated to RIMCo, as RIC’s investment adviser, the primary responsibility for monitoring, evaluating and voting
proxies solicited by or with respect to issuers of securities in which assets of the Underlying Funds may be invested. RIMCo has
established a proxy voting 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 and information regarding how the Underlying Funds voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30, 2015 are available (i) free of charge, upon request, by
calling the Funds at (800) 787-7354; (ii) at www.russell.com; and (iii) on the Securities and Exchange Commission’s website at www.
sec.gov.
To reduce expenses, we may mail only one copy of the Funds’ prospectuses and each annual and semi-annual report to those addresses
shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your Financial Intermediary.
Some Financial Intermediaries may offer electronic delivery of the Funds prospectuses and annual and semi-annual reports. Please
contact your Financial Intermediary for further details.
Financial statements of the Underlying Funds can be obtained at no charge by calling the Funds at (800) 787-7354.
Shareholder Requests for Additional Information 253
Russell Investment Company
LifePoints® Funds
Disclosure of Information about Fund Trustees and Officers — October 31, 2015
(Unaudited)
The following tables provide information for each officer and trustee of the Russell Fund Complex. The Russell Fund Complex consists
of Russell Investment Company (“RIC”), which has 41 funds, Russell Investment Funds (“RIF”), which has 9 funds. Each of the trustees
is a trustee of RIC and RIF. The first table provides information for the interested trustees. The second table provides information for the
independent trustees. The third table provides information for the Trustee Emeritus. The fourth table provides information for the officers.
Furthermore, each Trustee possesses the following specific attributes: Mr. Alston has business, financial and investment experience
as a senior executive of an international real estate firm and is trained as a lawyer; Ms. Blake has had experience as a certified public
accountant and has had experience as a member of boards of directors/trustees of other investment companies; Ms. Burgermeister has had
experience as a certified public accountant and as a member of boards of directors/trustees of other investment companies; Mr. Connealy
has had experience with other investment companies and their investment advisers first as a partner in the investment management
practice of PricewaterhouseCoopers LLP and, subsequently, as the senior financial executive of two other investment organizations
sponsoring and managing investment companies, and has been determined by the Board to be an audit committee financial expert; Ms.
Krysty has had business, financial and investment experience as the founder and senior executive of a registered investment adviser
focusing on high net worth individuals as well as a certified public accountant and a member of the boards of other corporations and
non-profit organizations; Mr. Tennison has had business, financial and investment experience as a senior executive of a corporation with
international activities and was trained as an accountant; and Mr. Thompson has had experience in business, governance, investment
and financial reporting matters as a senior executive of an organization sponsoring and managing other investment companies, and,
subsequently, has served as a board member of other investment companies. Ms. Cavanaugh has had experience with other financial
services companies, including companies engaged in the sponsorship, management and distribution of investment companies. As a senior
officer and/or director of the Funds, the Adviser and various affiliates of the Adviser providing services to the Funds, Ms. Cavanaugh
is in a position to provide the Board with such parties’ perspectives on the management, operations and distribution of the Funds.
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other | |
Age, | With Fund and | of | During the | Portfolios | Directorships | |
Address | Length of | Office* | Past 5 Years | in Russell | Held by Trustee | |
Time Served | Fund | During the | ||||
Complex | Past 5 Years | |||||
Overseen | ||||||
by Trustee | ||||||
INTERESTED TRUSTEE | ||||||
# Sandra Cavanaugh, | President and Chief | Until successor | • President and CEO RIC and RIF | 50 | • Trustee, | |
Born May 10, 1954 | Executive Officer | is chosen and | • Chairman of the Board, Co-President | Russell | ||
1301 Second Avenue, | since 2010 | qualified by | and CEO, Russell Financial Services, | Exchange | ||
18th Floor, Seattle, WA | Trustee since 2010 | Trustees | Inc. (“RFS”) | Traded Funds | ||
98101 | Appointed until | • Chairman of the Board, President | Trust | |||
successor is | and CEO, Russell Fund Services | |||||
duly elected and | Company (“RFSC”) | |||||
qualified | • Director, RIMCo | |||||
• Chairman of the Board, President and | ||||||
CEO Russell Insurance Agency, Inc. | ||||||
(“RIA”) (insurance agency) | ||||||
* | Each Trustee is subject to mandatory retirement at age 72. | |||||
# | Ms. Cavanaugh is also an officer and/or director of one or more affiliates of RIC and RIF and is therefore classified as an Interested Trustee. |
254 Disclosure of Information about Fund Trustees and Officers
Russell Investment Company
LifePoints® Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
INDEPENDENT TRUSTEES | |||||
Thaddas L. Alston, | Trustee since 2006 | Appointed until | Senior Vice President, Larco | 50 | • Until October |
Born April 7, 1945 | successor is | Investments, Ltd. (real estate firm) | 2015, Trustee, | ||
1301 Second Avenue, | duly elected and | Russell | |||
18th Floor, Seattle, WA | qualified | Exchange | |||
98101 | Traded Funds | ||||
Trust |
Disclosure of Information about Fund Trustees and Officers 255
Russell Investment Company
LifePoints® Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
Kristianne Blake, | Trustee since 2000 | Appointed until | • Director and Chairman of the Audit | 50 | • Director, |
Born January 22, 1954 | Chairman since 2005 | successor is | Committee, Avista Corp (electric | Avista Corp | |
1301 Second Avenue, | duly elected and | utilities) | (electric | ||
18th Floor, Seattle, WA | qualified | • Regent, University of Washington | utilities) | ||
98101 | Approved | • President, Kristianne Gates Blake, | • Until June | ||
annually | P.S. (accounting services) | 30, 2014, | |||
• Until June 30, 2014, Director, Ecova | Director, | ||||
(total energy and sustainability | Ecova (total | ||||
management) | energy and | ||||
• Until December 31, 2013, Trustee | sustainability | ||||
and Chairman of the Operations | management) | ||||
Committee, Principal Investors Funds | • Until | ||||
and Principal Variable Contracts | December 31, | ||||
Funds (investment company) | 2013, Trustee, | ||||
• From April 2004 through December | Principal | ||||
2012, Director, Laird Norton Wealth | Investors | ||||
Management and Laird Norton Tyee | Funds | ||||
Trust (investment company) | (investment | ||||
company) | |||||
• Until | |||||
December 31, | |||||
2013, Trustee | |||||
Principal | |||||
Variable | |||||
Contracts | |||||
Funds | |||||
(investment | |||||
company) | |||||
• From April | |||||
2004 through | |||||
December | |||||
2012, | |||||
Director, Laird | |||||
Norton Wealth | |||||
Management | |||||
and Laird | |||||
Norton | |||||
Tyee Trust | |||||
(investment | |||||
company) | |||||
• Until October | |||||
2015, Trustee, | |||||
Russell | |||||
Exchange | |||||
Traded Funds | |||||
Trust |
* | Each Trustee is subject to mandatory retirement at age 72. |
256 Disclosure of Information about Fund Trustees and Officers
Russell Investment Company
LifePoints® Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other | |
Age, | With Fund and | of | During the | Portfolios | Directorships | |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee | |
Time Served | Fund | During the | ||||
Complex | Past 5 Years | |||||
Overseen | ||||||
by Trustee | ||||||
INDEPENDENT TRUSTEES (continued) | ||||||
Cheryl Burgermeister, | Trustee since 2012 | Appointed until | • Retired | 50 | • Trustee and | |
Born June 26, 1951 | successor is | • Trustee and Chairperson of Select | Chairperson of | |||
1301 Second Avenue, | duly elected and | Sector SPDR Funds (investment | Select Sector | |||
18th Floor, Seattle, WA | qualified | company) | SPDR Funds | |||
98101 | • Until December 31, 2014, | (investment | ||||
Chairperson of Audit Committee, | company) | |||||
Select Sector SPDR Funds | • Trustee, ALPS | |||||
(investment company) | Series Trust | |||||
(investment | ||||||
company) | ||||||
• Until | ||||||
December | ||||||
31, 2014, | ||||||
Chairperson | ||||||
of Audit | ||||||
Committee, | ||||||
Select Sector | ||||||
SPDR Funds | ||||||
(investment | ||||||
company) | ||||||
• Until October | ||||||
2015, Trustee, | ||||||
Russell | ||||||
Exchange | ||||||
Traded Funds | ||||||
Trust | ||||||
Daniel P. Connealy, | Trustee since 2003 | Appointed until | • Retired | 50 | • Until October | |
Born June 6, 1946 | Chairman of the | successor is | • June 2004 to June 2014, Senior Vice | 2015, Trustee, | ||
1301 Second Avenue, | Audit Committee | duly elected and | President and Chief Financial Officer, | Russell | ||
18th Floor, Seattle, WA | since 2015 | qualified | Waddell & Reed Financial, Inc. | Exchange | ||
98101 | Appointed until | (investment company) | Traded Funds | |||
successor is | Trust | |||||
duly elected and | ||||||
qualified | ||||||
Katherine W. Krysty, | Trustee since 2014 | Appointed until | • Retired | 50 | • Until October | |
Born December 3, 1951 | successor is | • January 2011 through March 2013, | 2015, Trustee, | |||
1301 Second Avenue | duly elected and | President Emerita, Laird Norton | Russell | |||
18th Floor, Seattle, WA | qualified | Wealth Management (investment | Exchange | |||
98101 | company) | Traded Funds | ||||
Trust | ||||||
* | Each Trustee is subject to mandatory retirement at age 72. |
Disclosure of Information about Fund Trustees and Officers 257
Russell Investment Company
LifePoints® Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other | |
Age, | With Fund and | of | During the | Portfolios | Directorships | |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee | |
Time Served | Fund | During the | ||||
Complex | Past 5 Years | |||||
Overseen | ||||||
by Trustee | ||||||
INDEPENDENT TRUSTEES (continued) | ||||||
Raymond P. Tennison, Jr., | Trustee since 2000 | Appointed until | • Retired | 50 | • Until October | |
Born December 21, 1955 | Chairman of | successor is | • From January 2008 to December | 2015, Trustee, | ||
1301 Second Avenue | the Nominating | duly elected and | 2011, Vice Chairman of the Board, | Russell | ||
18th Floor, Seattle, WA | and Governance | qualified | Simpson Investment Company (paper | Exchange | ||
98101 | Committee since | Appointed until | and forest products) | Traded Funds | ||
2007 | successor is | Trust | ||||
duly elected and | ||||||
qualified | ||||||
Jack R. Thompson, | Trustee since 2005 | Appointed until | • Retired | 50 | • Until October | |
Born March 21, 1949 | Chairman of | successor is | 2015, Trustee, | |||
1301 Second Avenue, | the Investment | duly elected and | Russell | |||
18th Floor, Seattle, WA | Committee since | qualified | Exchange | |||
98101 | 2015 | Appointed until | Traded Funds | |||
successor is | Trust | |||||
duly elected and | ||||||
qualified | ||||||
* | Each Trustee is subject to mandatory retirement at age 72. |
258 Disclosure of Information about Fund Trustees and Officers
Russell Investment Company
LifePoints® Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
TRUSTEE EMERITUS | |||||
George F. Russell, Jr., | Trustee Emeritus and | Until resignation | • Director Emeritus, Frank Russell | 50 | None |
Born July 3, 1932 | Chairman Emeritus | or removal | Company (investment consultant to | ||
1301 Second Avenue, | since 1999 | institutional investors (“FRC”)) and | |||
18th Floor, Seattle, WA | RIMCo | ||||
98101 | • Chairman Emeritus, RIC and RIF; | ||||
Russell Implementation Services Inc. | |||||
(broker-dealer and investment adviser | |||||
(“RIS”)); Russell 20-20 Association | |||||
(non-profit corporation); and Russell | |||||
Trust Company (non-depository trust | |||||
company (“RTC”)) | |||||
• Chairman, Sunshine Management | |||||
Services, LLC (investment adviser) | |||||
Name, | Positions(s) Held | Term | Principal Occupation(s) | ||
Age, | With Fund and | of | During the | ||
Address | Length of | Office | Past 5 Years | ||
Time Served | |||||
OFFICERS | |||||
Cheryl Wichers, | Chief Compliance | Until removed | • Chief Compliance Officer, RIC and RIF | ||
Born December 16, 1966 | Officer since 2005 | by Independent | • Chief Compliance Officer, RFSC and U.S. One Inc. | ||
1301 Second Avenue | Trustees | • 2005 to 2011 Chief Compliance Officer, RIMCo | |||
18th Floor, Seattle, WA | |||||
98101 | |||||
Sandra Cavanaugh, | President and Chief | Until successor | • CEO, U.S. Private Client Services, Russell Investments | ||
Born May 10, 1954 | Executive Officer | is chosen and | • President and CEO, RIC and RIF | ||
1301 Second Avenue, | since 2010 | qualified by | • Chairman of the Board, Co-President and CEO, RFS | ||
18th Floor, Seattle, WA | Trustees | • Chairman of the Board, President and CEO, RFSC | |||
98101 | • Director, RIMCo | ||||
• Chairman of the Board, President and CEO, RIA | |||||
Mark E. Swanson, | Treasurer and Chief | Until successor | • Treasurer, Chief Accounting Officer and CFO, RIC and RIF | ||
Born November 26, 1963 | Accounting Officer | is chosen and | • Director, RIMCo, RFSC, Russell Trust Company (“RTC”) and RFS | ||
1301 Second Avenue | since 1998 | qualified by | • Global Head of Fund Services, Russell Investments | ||
18th Floor, Seattle, WA | Trustees | • October 2011 to December 2013, Head of North America Operations | |||
98101 | Russell Investments | ||||
• May 2009 to October 2011, Global Head of Fund Operations, Russell | |||||
Investments |
Disclosure of Information about Fund Trustees and Officers 259
Russell Investment Company
LifePoints® Funds
Disclosure of Information about Fund Trustees and Officers, continued —
October 31, 2015 (Unaudited)
Name, | Positions(s) Held | Term | Principal Occupation(s) |
Age, | With Fund and | of | During the |
Address | Length of | Office | Past 5 Years |
Time Served | |||
OFFICERS (continued) | |||
Jeffrey T. Hussey, | Chief Investment | Until removed by | • Global Chief Investment Officer, Russell Investments |
Born May 2, 1969 | Officer since 2013 | Trustees | • Chief Investment Officer, RIC and RIF |
1301 Second Avenue, | • Chairman of the Board, President and CEO, RIMCo | ||
18th Floor, Seattle WA | • Director, RTC, RIS and Russell Investments Delaware, Inc. | ||
98101 | • Board of Managers, Russell Institutional Funds Management, Inc. | ||
• 2003 to 2013 Chief Investment Officer, Fixed Income, Russell | |||
Investments | |||
Mary Beth R. Albaneze, | Secretary since 2010 | Until successor | • Associate General Counsel, Russell Investments |
Born April 25, 1969 | is chosen and | • Secretary, RIMCo, RFSC and RFS | |
1301 Second Avenue, | qualified by | • Secretary and Chief Legal Officer, RIC and RIF | |
18th Floor, Seattle, WA | Trustees | • Assistant Secretary, RFS, RIA and U.S. One Inc. | |
98101 |
260 Disclosure of Information about Fund Trustees and Officers
Russell Investment Company
LifePoints® Funds
Adviser and Service Providers — October 31, 2015 | |
Interested Trustees | Administrator and Transfer and Dividend Disbursing |
Sandra Cavanaugh | Agent |
Independent Trustees | Russell Fund Services Company |
Thaddas L. Alston | 1301 Second Avenue |
Kristianne Blake | Seattle, WA 98101 |
Cheryl Burgermeister | Custodian |
Daniel P. Connealy | State Street Bank and Trust Company |
Katherine W. Krysty | 1 Heritage Drive |
Raymond P. Tennison, Jr. | North Quincy, MA 02171 |
Jack R. Thompson | Office of Shareholder Inquiries |
Trustee Emeritus | 1301 Second Avenue |
George F. Russell, Jr. | Seattle, WA 98101 |
Officers | (800) 787-7354 |
Sandra Cavanaugh, President and Chief Executive Officer | Legal Counsel |
Cheryl Wichers, Chief Compliance Officer | Dechert LLP |
Jeffrey T. Hussey, Chief Investment Officer | One International Place, 40th Floor |
Mark E. Swanson, Treasurer and Chief Accounting Officer | 100 Oliver Street |
Mary Beth R. Albaneze, Secretary | Boston, MA 02110 |
Adviser | Distributor |
Russell Investment Management Company | Russell Financial Services, Inc. |
1301 Second Avenue | 1301 Second Avenue |
Seattle, WA 98101 | Seattle, WA 98101 |
Independent Registered Public Accounting Firm | |
PricewaterhouseCoopers LLP | |
1420 5th Avenue, Suite 2800 | |
Seattle, WA 98101 |
This report is prepared from the books and records of the Funds and is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless accompanied or preceded by an effective Prospectus. Nothing herein contained
is to be considered an offer of sale or a solicitation of an offer to buy shares of Russell Investment Company. Such offering is made only
by Prospectus, which includes details as to offering price and other material information.
Adviser and Service Providers 261
Item 2. Code of Ethics. [Annual Report Only]
(a) As of the end of the period covered by the report, the registrant has adopted a code of ethics
that applies to the registrant's principal executive officer and principal financial officer
(“Code”).
(b) That Code comprises written standards that are reasonably designed to deter wrongdoing and
to promote:
1) honest and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships;
2) full, fair, accurate, timely and understandable disclosure in reports and documents
that a registrant files with, or submits to, the Securities and Exchange Commission
(“SEC”) and in other public communications made by each Mutual Fund;
3) compliance with applicable laws and governmental rules and regulations;
4) the prompt internal reporting to an appropriate person or persons identified in the
Code of violations of the Code; and
5) accountability for adherence to the Code.
(c) The Code was restated as of August 2015; the restatement did not involve any material
change.
(d) As of the end of the period covered by the report, there have been no waivers granted from a
provision of the Code that applies to the registrant’s principal executive officer and principal
financial officer.
(e) Not applicable.
(f) The registrant has filed with the SEC, pursuant to Item 12(a)(1), a copy of the Code that
applies to the registrant’s principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions, as an exhibit to its
annual report on this Form N-CSR.
Item 3. Audit Committee Financial Expert. [Annual Report Only]
Registrant's board of trustees has determined that the Registrant has at least one audit committee
financial expert serving on its audit committee. Daniel P. Connealy has been determined to be
the Audit Committee Financial Expert and is also determined to be “independent” for purposes
of Item 3, paragraph (a)(2)(i) and (ii) of Form N-CSR.
Item 4. Principal Accountant Fees and Services. [Annual Report Only]
Audit Fees
(a) The aggregate fees billed for each of the last two fiscal years for professional services
rendered by the principal accountant for the audit of the registrant’s annual financial statements
or services that are normally provided by the accountant in connection with statutory and
regulatory filings or engagements for those fiscal years were as follows:
2014 | $ | 1,214,967 |
2015 | $ | 1,447,780 |
Audit-Related Fees
(b) The aggregate fees billed in each of the last two fiscal years for assurance and related
services by the principal accountant that are reasonably related to the performance of the audit of
the registrant’s financial statements and are not reported under paragraph (a) of this Item and the
nature of the services comprising those fees were as follows:
Fees | Nature of Services | ||||||
2014 | $ | 444,900 | Performance of agreed-upon procedures with respect to | ||||
04/30/14 semi-annual reports | |||||||
to | |||||||
2015 | $ | 539,150 | Performance of agreed-upon procedures with respect to | ||||
04/30/15 semi-annual reports |
Tax Fees
(c) The aggregate fees billed in each of the last two fiscal years for professional services
rendered by the principal accountant for tax compliance, tax advice, and tax planning and the
nature of the services comprising the fees were as follows:
Fees | Nature of Services | ||
2014 | $ | 358,100 | Tax services |
2015 | $ | 450,116 | Tax services |
All Other Fees
(d) The aggregate fees billed in each of the last two fiscal years for products and services
provided by the principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item and the nature of the services comprising those fees were as follows:
Fees | Nature of Services | |||||||
2014 | $ | 0 | Review excise reconciliations, transfer agent internal | |||||
controls analysis, overhead/travel | ||||||||
2015 | $ | 0 | Review excise reconciliations, transfer agent internal | |||||
controls analysis, overhead/travel |
(e) (1) Registrant’s audit committee has adopted the following pre-approval policies and
procedures for certain services provided by Registrant’s accountants:
Russell Investment Company
Russell Investment Funds
Audit and Non-Audit Services Pre-Approval Policy
Effective Date: August 25, 2015
I. Statement of Purpose.
This Policy has been adopted by the joint Audit Committee (the “Audit Committee”) of Russell
Investment Company (“RIC”) and Russell Investment Funds (“RIF”) to apply to any and all
engagements of the independent auditor to RIC and RIF, respectively, for audit, non-audit, tax or
other services. The term “Fund” shall collectively refer to each series of RIC and RIF. The
term “Investment Adviser” shall refer to the Funds’ advisor, Russell Investment Management
Company (“RIMCo”). This Policy does not delegate to management the responsibilities set forth
herein for the pre-approval of services performed by the Funds’ independent auditor.
II. Statement of Principles.
Under the Sarbanes-Oxley Act of 2002 (the “Act”), the Audit Committee of the Funds’ Board of
Trustees (the “Audit Committee”) is charged with responsibility for the appointment,
compensation and oversight of the work of the independent auditor for the Funds. As part of
these responsibilities, the Audit Committee is required to pre-approve the audit services and
permissible non-audit services such as audit-related, tax and other services (“non-audit services”)
performed by the independent auditor for the Funds to assure that the independence of the
auditor is not in any way compromised or impaired. In determining whether an auditor is
independent in light of the services it provides to a Fund, there are three guiding principles under
the Act that must be considered. In general, the independence of the auditor to the Funds would
be deemed impaired if the auditor provides a service whereby it:
· Functions in the role of management of the Funds, the adviser of the Funds or any
other affiliate* of the Funds;
· Is in the position of auditing its own work; or
· Serves in an advocacy role for the Funds, the adviser of the Funds or any other
affiliate of the Funds.
Accordingly, it is the Funds’ policy that the independent auditor for the Funds must not be
engaged to perform any service that contravenes any of the three guidelines set forth above, or
which in any way could be deemed to impair or compromise the independence of the auditor for
the Funds. This Policy is designed to accomplish those requirements and will henceforth be
applied to all engagements by the Funds of their independent auditor, whether for audit, audit-
related, tax, or other non-audit services.
* For purposes of this Policy, an affiliate of the Funds is defined as the Funds’ investment adviser (but not a sub-
adviser whose role is primarily portfolio management and whose activities are overseen by the principal investment
adviser), and any entity controlling, controlled by, or under common control with the investment adviser that
provides ongoing services to the Fund.
Rules adopted by the United States Securities and Exchange Commission (the “SEC”) establish
two distinct approaches to the pre-approval of services by the Audit Committee. The proposed
services either may receive general pre-approval through adoption by the Audit Committee of a
list of authorized services for the fund, together with a budget of expected costs for those
services (“general pre-approval”), or specific pre-approval by the Audit Committee of all
services provided to the fund on a case-by-case basis (“specific pre-approval”).
The Funds’ Audit Committee believes that the combination of these two approaches reflected in
this Policy will result in an effective and efficient procedure for the pre-approval of permissible
services performed by the Funds’ independent auditor. The Funds’ Audit and Non-Audit Pre-
Approved Services Schedule lists the audit, audit-related, tax and other services that have the
general pre-approval of the Audit Committee. As set forth in this Policy, unless a particular
service has received general pre-approval, those services will require specific pre-approval by
the Audit Committee before any such services can be provided by the independent auditor. Any
proposed service to the Funds that exceeds the pre-approved budget for those services will also
require specific pre-approval by the appropriate Audit Committee.
In assessing whether a particular audit or non-audit service should be approved, the Audit
Committee will take into account the ratio between the total amounts paid for audit, audit-
related, tax and other services, based on historical patterns, with a view toward assuring that the
level of fees paid for non-audit services as they relate to the fees paid for audit services does not
compromise or impair the independence of the auditor. The Audit Committee will review the list
of general pre-approved services, including the pre-approved budget for those services, at least
annually and more frequently if deemed appropriate by the Audit Committee, and may
implement changes thereto from time to time.
III. Delegation.
As provided in the Act and in the SEC’s rules, the Audit Committee from time to time may
delegate either general or specific pre-approval authority to one or more of its members. Any
member to whom such authority is delegated must report any pre-approval decisions to the Audit
Committee at its next scheduled meeting.
IV. Audit Services.
The annual audit services engagement terms and fees for the independent auditor for the Funds
require specific pre-approval of the Audit Committee. Audit services include the annual
financial statement audit and other procedures required to be performed by the independent
auditor in order to be able to form an opinion on the financial statements for the Funds for that
year. These other procedures include reviews of information systems, procedural reviews and
testing performed in order to understand and rely on the Funds’ systems of internal control, and
consultations relating to the audit. Audit services also include the attestation engagement for the
independent auditor’s report on the report from management on financial reporting internal
controls. The Audit Committee will review the audit services engagement as necessary or
appropriate in the sole judgment of the Audit Committee.
In addition to the pre-approval by the Audit Committee of the annual engagement of the
independent auditor to perform audit services, the Audit Committee may grant general pre-
approval to other audit services, which are those services that only the independent auditor
reasonably can provide. These services are generally related to the issuance of an audit opinion,
and may include statutory audits and services associated with the Funds’ SEC registration
statement on Form N-1A, periodic reports and documents filed with or information requested by
the SEC or other regulatory or self-regulatory organizations, or other documents issued in
connection with the Funds’ securities offerings.
The Audit Committee has pre-approved the audit services set forth in Schedule A of the Audit
and Non-Audit Pre-Approved Services Schedule. All other audit services not listed in Schedule
A of the Audit and Non-Audit Pre-Approved Services Schedule must be specifically pre-
approved by the Audit Committee or its delegate.
V. Audit-Related Services.
Audit-related services are assurance and related services that are reasonably related to the
performance of the audit or review of the financial statements for the Funds, or the separate
financial statements for a series of the Funds that are traditionally performed by the independent
auditor. Because the Audit Committee believes that the provision of audit-related services does
not compromise or impair the independence of the auditor and is consistent with the SEC’s rules
on auditor independence, the Audit Committee may grant pre-approval to audit related services.
“Audit related services” include, among others, accounting consultations related to accounting,
financial reporting or disclosure matters not classified as “audit services;” assistance with
understanding and implementing new accounting and financial reporting or disclosure matters
not classified as “audit services;” assistance with understanding and implementing new
accounting and financial reporting guidance from rulemaking authorities; agreed upon or
expanded audit procedures related to accounting and/or billing records required to respond to or
comply with financial, accounting or regulatory reporting matters; and assistance with internal
reporting requirements, including those under Form N-SAR and Form N-CSR.
The Audit Committee has pre-approved the audit-related services set forth in Schedule B of the
Audit and Non-Audit Pre-Approved Services Schedule. All other audit-related services not
listed in Schedule B of the Audit and Non-Audit Pre-Approved Services Schedule must be
specifically pre-approved by the Audit Committee or its delegate.
VI. Tax Services.
The Audit Committee believes that the independent auditor can provide tax services to the
Funds, such as tax compliance, tax planning and tax advice, without impairing the auditor’s
independence and the SEC has stated that the independent auditor may provide such services.
Consequently, the Audit Committee believes that it may grant general pre-approval to those tax
services that have historically been provided by the auditor, that the Audit Committee has
reviewed and believes would not impair the independence of the auditor, and that are consistent
with the SEC’s rules on auditor independence. However, the Audit Committee will not permit
the retention of the independent auditor to provide tax advice in connection with any transaction
recommended by the independent auditor, the sole business purpose of which may be tax
avoidance and the tax treatment of which may not be supported by the United States Internal
Revenue Code and related regulations or the applicable tax statutes and regulations that apply to
the Funds’ investments outside the United States. The Audit Committee will consult with the
Treasurer of the Funds or outside counsel to determine that the Funds’ tax planning and reporting
positions are consistent with this policy.
The Audit Committee has pre-approved the tax services set forth in Schedule C of the Audit and
Non-Audit Pre-Approved Services Schedule. All other tax services not listed in Schedule C of
the Audit and Non-Audit Pre-Approved Services Schedule must be specifically pre-approved by
the Audit Committee or its delegate.
VII. All Other Services.
The Audit Committee believes, based on the SEC’s rules prohibiting the independent auditor
from providing specific non-audit services, that other types of non-audit services are permitted.
Accordingly, the Audit Committee believes that it may grant general pre-approval to those
permissible non-audit services classified as “all other” services that the Audit Committee
believes are routine and recurring services, would not impair or compromise the independence of
the auditor and are consistent with the SEC’s rules on auditor independence.
The Audit Committee has pre-approved the permissible “all other services” set forth in Schedule
D of the Audit and Non-Audit Pre-Approved Services Schedule. Permissible “all other services”
not listed in Schedule D of the Audit and Non-Audit Pre-Approved Services Schedule must be
specifically pre-approved by the Audit Committee or its delegate.
A list of the SEC’s prohibited non-audit services are as follows:
· Bookkeeping or other services relating to the accounting records or financial statements
of the Funds
· Financial information system design and implementation
· Appraisal or valuation services, fairness opinions or contribution-in-kind reports
· Actuarial services
· Internal audit outsourcing services
· Management functions
· Human resources services
· Broker-dealer, investment adviser or investment banking services
· Legal services unrelated to the audit
· Expert services unrelated to the audit
The SEC’s rules and relevant official interpretations and guidance should be consulted to
determine the scope of these prohibited services and the applicability of any exceptions to certain
of the prohibitions. Under no circumstance may an executive, manager or associate of the
Funds, or the Investment Adviser, authorize the independent auditor for the Funds to provide
prohibited non-audit services.
VIII. De Minimis Waiver.
In accordance with the Act and SEC regulations, notwithstanding anything in this Policy to the
contrary, the pre-approval requirements of this Policy are waived with respect to the provision of
non-audit services that are permissible for an independent auditor to perform, provided:
(a) The aggregate amount of all such services provided constitutes no more than five
percent of the total amount of fees paid by RIC or RIF, as applicable, to the
independent auditor during the fiscal year in which the services were provided;
(b) Such services were not recognized by the Funds at the time of the engagement to
be non-audit services requiring pre-approval by the Audit Committee or its
delegate; and
(c) Such services are promptly brought to the attention of the Audit Committee and
approved by the Audit Committee or its delegate prior to the completion of the
audit, pursuant to the pre-approval provisions of this Policy.
In connection with the approval of any non-audit service pursuant to this de minimis exception, a
record shall be made indicating that each of the conditions for this exception has been satisfied.
IX. Pre-Approval Fee Levels or Budgeted Amounts.
Pre-approved fee levels or budgeted amounts for all services to be provided by the independent
auditor will be established annually by the Audit Committee and shall be subject to periodic
subsequent review during the year if deemed appropriate by the Audit Committee (separate
amounts may be specified for the Funds and for other affiliates in the investment company
complex subject to pre-approval). Any proposed services exceeding these levels or amounts will
require specific pre-approval by the Audit Committee. The Audit Committee will be mindful of
the overall relationship of fees for audit and non-audit services in determining whether to pre-
approve any such services. For each fiscal year, the Audit Committee may determine the
appropriateness of the ratio between the total amount of fees for audit, audit-related, and tax
services for the Funds (including any audit-related or tax services fees for affiliates subject to
pre-approval), and the total amount of fees for certain permissible non-audit services classified as
“all other services” for the Funds (including any such services for affiliates subject to pre-
approval by the Audit Committee or its delegate).
X. Procedures.
All requests or applications for services to be provided by the independent auditor that do not
require specific pre-approval by the Audit Committee will be submitted to the “RIC/RIF
Clearance Committee” (the “Clearance Committee”) (which shall be comprised of not less than
three members, including the Treasurer of the Funds who shall serve as its Chairperson) and
must include a detailed description of the services to be rendered and the estimated costs of those
services. The Clearance Committee will determine whether such services are included within the
list of services that have received general pre-approval by the Audit Committee. The Audit
Committee will be informed not less frequently than quarterly by the Chairperson of the
Clearance Committee of any such services rendered by the independent auditor for the Funds and
the fees paid to the independent auditors for such services.
Requests or applications to provide services that require specific pre-approval by the Audit
Committee will be submitted to the Audit Committee by both the independent auditor and the
Clearance Committee and must include a joint certification by the engagement partner of the
independent auditor and the Chairperson of the Clearing Committee that, in their view, the
request or application does not involve a prohibited non-audit service and is consistent with the
SEC’s rules governing auditor independence.
The Internal Audit Department of Frank Russell Company, the parent company of RIMCo, and
the officers of RIC and RIF will report to the Chairman of the Audit Committee any breach of
this Policy that comes to the attention of the Internal Audit Department of Frank Russell
Company or an officer of RIC or RIF.
XI. Additional Requirements.
The Audit Committee has determined to take additional measures on an annual basis to meet its
responsibility to oversee the work performed by the independent auditor and to assure the
independent auditor’s continuing independence from the Funds and their affiliates, including
Frank Russell Company. Such efforts will include, but not be limited to, reviewing a written
annual statement from the independent auditor delineating all relationships between the
independent auditor and RIC, RIF and Frank Russell Company and their subsidiaries and
affiliates, consistent with the Public Company Accounting Oversight Board’s Independence
Standards Board Standard No. 1, and discussing with the independent auditor its methods and
procedures for ensuring its independence.
(e) (2) The percentage of services described in each of paragraphs (b) through (d) of this Item
that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X is as follows:
Audit Fees | 0 | % |
Audit-Related Fees | 0 | % |
Tax Fees | 0 | % |
All Other Fees | 0 | % |
(f) For services, 50 percent or more of which were pre-approved, the percentage of hours
expended on the principal accountant’s engagement to audit the registrant’s financial statements
for the most recent fiscal year that were attributed to work performed by persons other than the
principal accountant’s full-time, permanent employees was 0%.
(g) The aggregate non-audit fees billed by registrant’s accountant for services rendered to the
registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant for each of the last two fiscal years of the
registrant were as follows:
2014 | $ | 0 |
2015 | $ | 0 |
(h) The registrant’s audit committee of the board of trustees has considered whether the
provision of nonaudit services that were rendered to the registrant’s investment adviser (not
including any subadviser whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity controlling, controlled by, or
under common control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation
S-X is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants. [Not Applicable]
Item 6. [Schedules of Investments are included as part of the Report to Shareholders filed
under Item 1 of this form]
Items 7-9. [Not Applicable]
Item 10. Submission of Matters to a Vote of Security Holders
There have been no changes to the procedures by which shareholders may recommend
nominees to the Registrant’s Board of Trustees that would require disclosure herein.
Item 11. Controls and Procedures
(a) Registrant's principal executive officer and principal financial officer have concluded
that Registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under
the Investment Company Act of 1940 (the “Act”)) are effective, based on their evaluation
of these controls and procedures as of a date within 90 days of the date this report is filed
with the Securities and Exchange Commission.
(b) There were no significant changes in Registrant's internal control over financial
reporting that occurred during the period covered by this report that has materially
affected or is likely to materially affect Registrant's internal control over financial
reporting.
Item 12. Exhibit List
(a) Registrant’s code of ethics described in Item 2
(b) Certification for principal executive officer of Registrant as required by Rule 30a-2(a)
under the Act and certification for principal financial officer of Registrant as required by
Rule 30a-2(a) under the Act.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Russell Investment Company |
By: /s/ Sandra Cavanaugh |
Sandra Cavanaugh |
President and Chief Executive Officer, Russell Investment Company; Chairman of the |
Board, President and Chief Executive Officer, Russell Fund Services Company |
Date: January 4, 2016 |
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 |
President and Chief Executive Officer, Russell Investment Company; Chairman of the |
Board, President and Chief Executive Officer, Russell Fund Services Company |
Date: January 4, 2016 |
By: /s/ Mark E. Swanson |
Mark E. Swanson |
Treasurer, Chief Accounting Officer and Chief Financial Officer, Russell Investment |
Company; |
Director, Russell Investment Management Company and |
Russell Fund Services Company |
Date: January 4, 2016 |