Russell Investment NCSRS Certified semi-annual shareholder report (management investment company)


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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 18^th Floor, Seattle Washington 98101

(Address of principal executive offices) (Zip code)

Mary Beth Rhoden, Secretary and Chief Legal Office

Russell Investment Company

18^th Floor

Seattle, Washington 98101

206-505-4846

(Name and address of agent for service)

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


Date of fiscal year end:		December 31

Date of reporting period:		January 1, 2011 – June 30, 2011

Item 1.

Reports to Stockholders

LOGO

2011 SEMI-ANNUAL REPORT

LifePoints^® Funds

Target Distribution Strategies

JUNE 30, 2011

FUND

2017 Retirement Distribution Fund — A Shares

2017 Accelerated Distribution Fund — A Shares

2027 Extended Distribution Fund — A Shares

2017 Retirement Distribution Fund — S Shares

2017 Accelerated Distribution Fund — S Shares

2027 Extended Distribution Fund — S Shares

LOGO

Russell Investment Company

Russell Investment Company is a series investment company with 40 different investment portfolios referred to as Funds. These financial statements report on six of these Funds.

Russell Investment Company

LifePoints^® Funds

Target Distribution Strategies

Semi-annual Report

June 30, 2011 (Unaudited)

Table of Contents


	Page
2017 Retirement Distribution Fund - A Shares		3
2017 Accelerated Distribution Fund - A Shares		5
2027 Extended Distribution Fund - A Shares		7
2017 Retirement Distribution Fund - S Shares		9
2017 Accelerated Distribution Fund - S Shares		11
2027 Extended Distribution Fund - S Shares		13
Statements of Assets and Liabilities		16
Statements of Operations		18
Statements of Changes in Net Assets		20
Financial Highlights		22
Notes to Financial Highlights		26
Notes to Financial Statements		27
Basis for Approval of Investment Advisory Contracts		36
Shareholder Requests for Additional Information		41
Disclosure of Information about Fund Trustees and Officers		42
Adviser, Money Managers and Service Providers		47

Russell Investment Company - LifePoints^® Funds Target Distribution Strategies.

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

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

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

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

Russell Investment Company

2017 Retirement Distribution Fund — A Shares

Shareholder Expense Example — June 30, 2011 (Unaudited)

Fund Expenses

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

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including advisory and administrative fees; distribution (12b-1) and/or service fees; and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from January 1, 2011 to June 30, 2011.

Actual Expenses

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

Hypothetical Example for Comparison Purposes

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

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


Class A	Actual Performance		Hypothetical Performance (5% return before expenses)

Beginning Account Value
January 1, 2011	$	1,000.00	$	1,000.00
Ending Account Value
June 30, 2011	$	1,024.00	$	1,022.22
Expenses Paid During Period*	$	2.61	$	2.61

Expenses are equal to the Fund's annualized expense ratio of 0.52% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). May reflect amounts waived, reimbursed and/or other credits. Without any waivers, reimbursements and/or other credits, expenses would have been higher.


2017 Retirement Distribution Fund — A Shares		3

Russell Investment Company

2017 Retirement Distribution Fund — A Shares

Schedule of Investments — June 30, 2011 (Unaudited)

Amounts in thousands (except share amounts)


	Shares		Market Value $

Investments - 101.5%
Other Russell Investment Company Series Mutual Funds

Domestic Equities - 19.3%
Russell U.S. Core Equity Fund		4,709		137
Russell U.S. Quantitative Equity Fund		4,085		128
Russell U.S. Small & Mid Cap Fund		2,667		65

				330


Fixed Income - 50.8%
Russell Global Opportunistic Credit Fund		4,271		44
Russell Investment Grade Bond Fund		9,751		215
Russell Short Duration Bond Fund		10,286		199
Russell Strategic Bond Fund		38,128		413

				871


International Equities - 23.5%
Russell Emerging Markets Fund		3,028		63
Russell Global Equity Fund		13,704		128
Russell International Developed Markets Fund		6,389		211

				402


Real Assets - 7.9%
Russell Commodity Strategies Fund		4,768		53
Russell Global Infrastructure Fund		3,260		37
Russell Global Real Estate Securities Fund		1,197		45

				135


Total Investments - 101.5% (identified cost $1,572)				1,738

Other Assets and Liabilities, Net - (1.5%)				(25	)


Net Assets - 100.0%				1,713

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


	4			2017 Retirement Distribution Fund — A Shares

Russell Investment Company

2017 Accelerated Distribution Fund — A Shares

Shareholder Expense Example — June 30, 2011 (Unaudited)

Fund Expenses

Example

Actual Expenses

Hypothetical Example for Comparison Purposes


Class A	Actual Performance		Hypothetical Performance (5% return before expenses)

Beginning Account Value
January 1, 2011	$	1,000.00	$	1,000.00
Ending Account Value
June 30, 2011	$	1,025.10	$	1,022.22
Expenses Paid During Period*	$	2.61	$	2.61


2017 Accelerated Distribution Fund — A Shares		5

Russell Investment Company

2017 Accelerated Distribution Fund — A Shares

Schedule of Investments — June 30, 2011 (Unaudited)

Amounts in thousands (except share amounts)


	Shares		Market Value $

Investments - 101.9%
Other Russell Investment Company Series Mutual Funds

Domestic Equities - 15.5%
Russell U.S. Core Equity Fund		2,585		75
Russell U.S. Quantitative Equity Fund		2,238		70
Russell U.S. Small & Mid Cap Fund		1,454		35

				180


Fixed Income - 61.2%
Russell Global Opportunistic Credit Fund		2,333		24
Russell Investment Grade Bond Fund		8,095		178
Russell Short Duration Bond Fund		8,532		165
Russell Strategic Bond Fund		31,648		343

				710


International Equities - 18.9%
Russell Emerging Markets Fund		1,652		35
Russell Global Equity Fund		7,507		70
Russell International Developed Markets Fund		3,480		115

				220


Real Assets - 6.3%
Russell Commodity Strategies Fund		2,489		28
Russell Global Infrastructure Fund		1,783		20
Russell Global Real Estate Securities Fund		658		25

				73


Total Investments - 101.9% (identified cost $1,101)				1,183

Other Assets and Liabilities, Net - (1.9%)				(22	)


Net Assets - 100.0%				1,161

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


	6			2017 Accelerated Distribution Fund — A Shares

Russell Investment Company

2027 Extended Distribution Fund — A Shares

Shareholder Expense Example — June 30, 2011 (Unaudited)

Fund Expenses

Example

Actual Expenses

Hypothetical Example for Comparison Purposes


Class A	Actual Performance		Hypothetical Performance (5% return before expenses)

Beginning Account Value
January 1, 2011	$	1,000.00	$	1,000.00
Ending Account Value
June 30, 2011	$	1,021.40	$	1,022.22
Expenses Paid During Period*	$	2.61	$	2.61


2027 Extended Distribution Fund — A Shares		7

Russell Investment Company

2027 Extended Distribution Fund — A Shares

Schedule of Investments — June 30, 2011 (Unaudited)

Amounts in thousands (except share amounts)


	Shares		Market Value $

Investments - 101.9%
Other Russell Investment Company Series Mutual Funds

Domestic Equities - 4.7%
Russell U.S. Core Equity Fund		1,328		39
Russell U.S. Quantitative Equity Fund		1,151		36
Russell U.S. Small & Mid Cap Fund		752		18

				93


Fixed Income - 58.9%
Russell Global Opportunistic Credit Fund		1,196		12
Russell Investment Grade Bond Fund		13,686		302
Russell Short Duration Bond Fund		14,432		279
Russell Strategic Bond Fund		53,481		579

				1,172


International Equities - 5.7%
Russell Emerging Markets Fund		846		18
Russell Global Equity Fund		3,850		36
Russell International Developed Markets Fund		1,782		59

				113


Real Assets - 1.9%
Russell Commodity Strategies Fund		1,269		14
Russell Global Infrastructure Fund		914		10
Russell Global Real Estate Securities Fund		338		13

				37


Short-Term Investments - 30.7%
Russell Money Market Fund		610,432		610


Total Investments - 101.9% (identified cost $1,948)				2,025

Other Assets and Liabilities, Net - (1.9%)				(37	)


Net Assets - 100.0%				1,988

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


	8			2027 Extended Distribution Fund — A Shares

Russell Investment Company

2017 Retirement Distribution Fund — S Shares

Shareholder Expense Example — June 30, 2011 (Unaudited)

Fund Expenses

Example

Actual Expenses

Hypothetical Example for Comparison Purposes


Class S	Actual Performance		Hypothetical Performance (5% return before expenses)

Beginning Account Value
January 1, 2011	$	1,000.00	$	1,000.00
Ending Account Value
June 30, 2011	$	1,024.90	$	1,023.46
Expenses Paid During Period*	$	1.36	$	1.35

Expenses are equal to the Fund's annualized expense ratio of 0.27% (representing the six month period annualized), multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). May reflect amounts waived, reimbursed and/or other credits. Without any waivers, reimbursements and/or other credits, expenses would have been higher.


2017 Retirement Distribution Fund — S Shares		9

Russell Investment Company

2017 Retirement Distribution Fund — S Shares

Schedule of Investments — June 30, 2011 (Unaudited)

Amounts in thousands (except share amounts)


	Shares		Market Value $

Investments - 101.0%
Other Russell Investment Company Series Mutual Funds

Domestic Equities - 18.4%
Russell U.S. Core Equity Fund		7,948		231
Russell U.S. Quantitative Equity Fund		6,888		216
Russell U.S. Small & Mid Cap Fund		4,477		109

				556


Fixed Income - 52.7%
Russell Global Opportunistic Credit Fund		7,317		76
Russell Investment Grade Bond Fund		17,959		395
Russell Short Duration Bond Fund		18,894		366
Russell Strategic Bond Fund		70,271		760

				1,597


International Equities - 22.4%
Russell Emerging Markets Fund		5,114		107
Russell Global Equity Fund		23,054		215
Russell International Developed Markets Fund		10,728		355

				677


Real Assets - 7.5%
Russell Commodity Strategies Fund		8,024		90
Russell Global Infrastructure Fund		5,486		61
Russell Global Real Estate Securities Fund		2,022		77

				228


Total Investments - 101.0% (identified cost $2,775)				3,058

Other Assets and Liabilities, Net - (1.0%)				(29	)


Net Assets - 100.0%				3,029

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


	10			2017 Retirement Distribution Fund — S Shares

Russell Investment Company

2017 Accelerated Distribution Fund — S Shares

Shareholder Expense Example — June 30, 2011 (Unaudited)

Fund Expenses

Example

Actual Expenses

Hypothetical Example for Comparison Purposes


Class S	Actual Performance		Hypothetical Performance (5% return before expenses)

Beginning Account Value
January 1, 2011	$	1,000.00	$	1,000.00
Ending Account Value
June 30, 2011	$	1,027.50	$	1,023.46
Expenses Paid During Period*	$	1.36	$	1.35


2017 Accelerated Distribution Fund — S Shares		11

Russell Investment Company

2017 Accelerated Distribution Fund — S Shares

Schedule of Investments — June 30, 2011 (Unaudited)

Amounts in thousands (except share amounts)


	Shares		Market Value $

Investments - 101.1%
Other Russell Investment Company Series Mutual Funds

Domestic Equities - 14.5%
Russell U.S. Core Equity Fund		3,058		89
Russell U.S. Quantitative Equity Fund		2,646		83
Russell U.S. Small & Mid Cap Fund		1,715		42

				214


Fixed Income - 63.4%
Russell Global Opportunistic Credit Fund		2,754		29
Russell Investment Grade Bond Fund		10,731		236
Russell Short Duration Bond Fund		11,307		219
Russell Strategic Bond Fund		41,967		454

				938


International Equities - 17.5%
Russell Emerging Markets Fund		1,948		41
Russell Global Equity Fund		8,873		83
Russell International Developed Markets Fund		4,108		135

				259


Real Assets - 5.7%
Russell Commodity Strategies Fund		2,916		33
Russell Global Infrastructure Fund		2,107		23
Russell Global Real Estate Securities Fund		778		29

				85


Total Investments - 101.1% (identified cost $1,383)				1,496

Other Assets and Liabilities, Net - (1.1%)				(16	)


Net Assets - 100.0%				1,480

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


	12			2017 Accelerated Distribution Fund — S Shares

Russell Investment Company

2027 Extended Distribution Fund — S Shares

Shareholder Expense Example — June 30, 2011 (Unaudited)

Fund Expenses

Example

Actual Expenses

Hypothetical Example for Comparison Purposes


Class S	Actual Performance		Hypothetical Performance (5% return before expenses)

Beginning Account Value
January 1, 2011	$	1,000.00	$	1,000.00
Ending Account Value
June 30, 2011	$	1,013.30	$	1,023.46
Expenses Paid During Period*	$	1.35	$	1.35


2027 Extended Distribution Fund — S Shares		13

Russell Investment Company

2027 Extended Distribution Fund — S Shares

Schedule of Investments — June 30, 2011 (Unaudited)

Amounts in thousands (except share amounts)


	Shares		Market Value $

Investments - 101.2%
Other Russell Investment Company Series Mutual Funds

Domestic Equities - 2.7%
Russell U.S. Core Equity Fund		648		19
Russell U.S. Quantitative Equity Fund		562		18
Russell U.S. Small & Mid Cap Fund		363		9

				46


Fixed Income - 33.6%
Russell Global Opportunistic Credit Fund		584		6
Russell Investment Grade Bond Fund		6,695		147
Russell Short Duration Bond Fund		7,060		137
Russell Strategic Bond Fund		26,161		283

				573


International Equities - 3.2%
Russell Emerging Markets Fund		413		9
Russell Global Equity Fund		1,880		17
Russell International Developed Markets Fund		870		29

				55


Real Assets - 1.1%
Russell Commodity Strategies Fund		620		7
Russell Global Infrastructure Fund		446		5
Russell Global Real Estate Securities Fund		164		6

				18


Short-Term Investments - 60.6%
Russell Money Market Fund		1,034,211		1,034


Total Investments - 101.2% (identified cost $1,664)				1,726

Other Assets and Liabilities, Net - (1.2%)				(20	)


Net Assets - 100.0%				1,706

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


	14			2027 Extended Distribution Fund — S Shares

(This page intentionally left blank)

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Statements of Assets and Liabilities — June 30, 2011 (Unaudited)


Amounts in thousands	2017 Retirement Distribution Fund - A Shares			2017 Accelerated Distribution Fund - A Shares			2027 Extended Distribution Fund - A Shares			2017 Retirement Distribution Fund - S Shares

Assets
Investments, at identified cost	$	1,572		$	1,101		$	1,948		$	2,775
Investments, at market		1,738			1,183			2,025			3,058
Receivables:
From affiliates		6			7			6			9

Total assets		1,744			1,190			2,031			3,067


Liabilities
Payables:
Accrued fees to affiliates		1			—			1			—
Other accrued expenses		30			29			42			38
	��
Total liabilities		31			29			43			38


Net Assets	$	1,713		$	1,161		$	1,988		$	3,029

Net Assets Consist of:
Undistributed (overdistributed) net investment income	$	6		$	7		$	12		$	15
Accumulated net realized gain (loss)		(123	)		(2	)		(114	)		7
Unrealized appreciation (depreciation) on investments		166			82			77			283
Shares of beneficial interest		2			1			2			4
Additional paid-in capital		1,662			1,073			2,011			2,720

Net Assets	$	1,713		$	1,161		$	1,988		$	3,029

Net Asset Value, offering and redemption price per share:
Net asset value per share*	$	7.25		$	8.16		$	8.60		$	7.41

Maximum offering price per share (Net asset value plus sales charge of 5.75%)	$	7.69		$	8.66		$	9.12		$	—
Net assets	$	1,713,024		$	1,161,253		$	1,987,734		$	3,028,642
Shares outstanding ($.01 par value)		236,256			142,245			231,189			408,565

*	Net asset value per share equals net assets divided by shares of beneficial interest outstanding.

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


	16			Statements of Assets and Liabilities


2017 Accelerated Distribution Fund - S Shares			2027 Extended Distribution Fund - S Shares


$	1,383		$	1,664
	1,496			1,726

	8			7

	1,504			1,733




	—			—
	24			27

	24			27


$	1,480		$	1,706


$	11		$	6
	(12	)		(41	)
	113			62
	2			2
	1,366			1,677

$	1,480		$	1,706


$	8.59		$	9.14

$	—		$	—
$	1,479,506		$	1,706,428
	172,294			186,764

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


Statements of Assets and Liabilities		17

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Statements of Operations — For the Period Ended June 30, 2011 (Unaudited)


Amounts in thousands	2017 Retirement Distribution Fund - A Shares			2017 Accelerated Distribution Fund - A Shares

Investment Income
Income distribution from Underlying Funds	$	11		$	10


Expenses
Advisory fees		2			1
Administrative fees		—			—
Custodian fees		5			6
Distribution fees		2			2
Transfer agent fees		2			1
Professional fees		16			14
Registration fees		12			10
Printing fees		4			1
Miscellaneous		2			2

Expenses before reductions		45			37
Expense reductions		(40	)		(34	)

Net expenses		5			3

Net investment income (loss)		6			7


Net Realized and Unrealized Gain (Loss)
Net realized gain (loss) on Investments		32			5
Net change in unrealized appreciation (depreciation) on investments		5			18

Net realized and unrealized gain (loss)		37			23

Net Increase (Decrease) in Net Assets from Operations	$	43		$	30

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


	18			Statements of Operations


2027 Extended Distribution Fund - A Shares			2017 Retirement Distribution Fund - S Shares			2017 Accelerated Distribution Fund - S Shares			2027 Extended Distribution Fund - S Shares


$	17		$	19		$	13		$	9



	2			3			1			2
	—			1			—			—
	4			6			6			5
	3			—			—			—
	2			3			1			2
	19			22			14			14
	13			11			12			12
	11			9			—			2
	2			2			3			2

	56			57			37			39
	(51	)		(53	)		(35	)		(36	)

	5			4			2			3

	12			15			11			6



	4			51			5			1
	26			9			22			15

	30			60			27			16

$	42		$	75		$	38		$	22

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


Statements of Operations		19

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Statements of Changes in Net Assets


	2017 Retirement Distribution Fund - A Shares						2017 Accelerated Distribution Fund - A Shares
Amounts in thousands	Period Ended June 30, 2011 (Unaudited)			Fiscal Year Ended December 31, 2010			Period Ended June 30, 2011 (Unaudited)			Fiscal Year Ended December 31, 2010

Increase (Decrease) in Net Assets

Operations
Net investment income (loss)	$	6		$	42		$	7		$	36
Net realized gain (loss)		32			71			5			106
Net change in unrealized appreciation (depreciation)		5			68			18			27

Net increase (decrease) in net assets from operations		43			181			30			169


Distributions
From net investment income		—			(42	)		—			(36	)
From net realized gain		—			—			—			—
From return of capital		—			(90	)		—			(32	)
In excess (Note 5)		—			(42	)		—			(92	)

Net decrease in net assets from distributions		—			(174	)		—			(160	)


Share Transactions
Net increase (decrease) in net assets from share transactions		(131	)		578			(64	)		35

Total Net Increase (Decrease) in Net Assets		(88	)		585			(34	)		44

Net Assets
Beginning of period		1,801			1,216			1,195			1,151

End of period	$	1,713		$	1,801		$	1,161		$	1,195

Undistributed (overdistributed) net investment income included in net assets	$	6		$	—		$	7		$	—

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


	20			Statements of Changes in Net Assets


2027 Extended Distribution Fund - A Shares						2017 Retirement Distribution Fund - S Shares						2017 Accelerated Distribution Fund - S Shares						2027 Extended Distribution Fund - S Shares
Period Ended June 30, 2011 (Unaudited)			Fiscal Year Ended December 31, 2010			Period Ended June 30, 2011 (Unaudited)			Fiscal Year Ended December 31, 2010			Period Ended June 30, 2011 (Unaudited)			Fiscal Year Ended December 31, 2010			Period Ended June 30, 2011 (Unaudited)			Fiscal Year Ended December 31, 2010




$	12		$	36		$	15		$	83		$	11		$	41		$	6		$	21
	4			13			51			114			5			80			1			36
	26			18			9			108			22			41			15			(13	)

	42			67			75			305			38			162			22			44



	—			(36	)		—			(83	)		—			(41	)		—			(21	)
	—			—			—			(36	)		—			—			—			—
	—			(104	)		—			(129	)		—			(84	)		—			(62	)
	—			(2	)		—			(54	)		—			(73	)		—			(33	)

	—			(142	)		—			(302	)		—			(198	)		—			(116	)



	(47	)		611			(111	)		705			(184	)		535			(37	)		294

	(5	)		536			(36	)		708			(146	)		499			(15	)		222


	1,993			1,457			3,065			2,357			1,626			1,127			1,721			1,499

$	1,988		$	1,993		$	3,029		$	3,065		$	1,480		$	1,626		$	1,706		$	1,721

$	12		$	—		$	15		$	—		$	11		$	—		$	6		$	—

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


Statements of Changes in Net Assets		21

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Financial Highlights — For the Periods Ended

For a Share Outstanding Throughout the Period.


	$ Net Asset Value, Beginning of Period			$ Net Investment Income (Loss)(a)(b)		$ Net Realized and Unrealized Gain (Loss)			$ Total from Investment Operations			$ Distributions from Net Investment Income			$ Distributions from Net Realized Gain		$ Return of Capital
2017 Retirement Distribution Fund - A Shares
June 30, 2011(3)		7.08			.03		.14			.17			—			—		—
December 31, 2010		7.04			.17		.57			.74			(.17	)		—		(.36	)
December 31, 2009		6.34			.31		1.09			1.40			(.27	)		—		(.43	)
December 31, 2008(2)		7.08			.08		(.12	)		(.04	)		(.12	)		—		(.58	)
October 31, 2008(1)		10.90	*		.17		(3.99	)*		(3.82	)*		—			—		—
2017 Accelerated Distribution Fund - A Shares
June 30, 2011(3)		7.96			.05		.15			.20			—			—		—
December 31, 2010		7.96			.21		.79			1.00			(.22	)		—		(.20	)
December 31, 2009		7.92			.28		.76			1.04			(.25	)		—		(.75	)
December 31, 2008(2)		8.82			.11		(.01	)		.10			(.28	)		—		(.72	)
October 31, 2008(1)		10.72	*		.57		(2.47	)*		(1.90	)*		—			—		—
2027 Extended Distribution Fund - A Shares
June 30, 2011(3)		8.42			.05		.13			.18			—			—		—
December 31, 2010		8.74			.15		.13			.28			(.15	)		—		(.44	)
December 31, 2009		7.76			.39		1.19			1.58			(.40	)		—		(.20	)
December 31, 2008(2)		8.34			.10		(.08	)		.02			(.29	)		—		(.31	)
October 31, 2008(1)		10.85	*		.49		(3.00	)*		(2.51	)*		—			—		—

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


	22			Financial Highlights


$ Distributions In Excess(h)			$ Total Distributions			$ Net Asset Value, End of Period		% Total Return(c)(e)			$ Net Assets, End of Period (000)		% Ratio of Expenses to Average Net Assets, Net(d)(f)(g)		% Ratio of Expenses to Average Net Assets, Gross(d)(f)		% Ratio of Net Investment Income to Average Net Assets(c)(g)		% Portfolio Turnover Rate(c)

	—			—			7.25		2.40			1,713		.52		5.06		.34		69
	(.17	)		(.70	)		7.08		10.55			1,801		.52		5.80		2.57		261
	—			(.70	)		7.04		22.10			1,216		.54		8.01		4.41		86
	—			(.70	)		6.34		(.42	)		683		.47		26.38		1.09		6
	—			—			7.08		(35.05	)		735		.29		15.46		1.85		188

	—			—			8.16		2.51			1,161		.52		6.29		.62		64
	(.58	)		(1.00	)		7.96		12.61			1,195		.52		6.69		2.54		316
	—			(1.00	)		7.96		13.13			1,151		.54		7.98		3.31		258
	—			(1.00	)		7.92		1.22			1,016		.50		17.06		1.23		41
	—			—			8.82		(17.76	)		1,145		.30		13.26		5.99		192

	—			—			8.60		2.14			1,988		.52		5.65		.58		77
	(.01	)		(.60	)		8.42		3.21			1,993		.52		5.01		1.69		96
	—			(.60	)		8.74		20.36			1,457		.54		8.42		4.70		102
	—			(.60	)		7.76		.19			861		.49		26.65		1.16		2
	—			—			8.34		(23.05	)		924		.29		9.72		5.14		114

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


Financial Highlights		23

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Financial Highlights — For the Periods Ended

For a Share Outstanding Throughout the Period.


	$ Net Asset Value, Beginning of Period			$ Net Investment Income (Loss)(a)(b)		$ Net Realized and Unrealized Gain (Loss)			$ Total from Investment Operations			$ Distributions from Net Investment Income			$ Distributions from Net Realized Gain			$ Return of Capital
2017 Retirement Distribution Fund - S Shares
June 30, 2011(3)		7.23			.04		.14			.18			—			—			—
December 31, 2010		7.15			.22		.57			.79			(.20	)		(.09	)		(.30	)
December 31, 2009		6.51			.34		1.01			1.35			(.26	)		—			(.45	)
December 31, 2008(2)		7.24			.08		(.11	)		(.03	)		(.09	)		—			(.61	)
October 31, 2008(1)		11.19	*		.12		(4.07	)*		(3.95	)*		—			—			—
2017 Accelerated Distribution Fund - S Shares
June 30, 2011(3)		8.36			.07		.16			.23			—			—			—
December 31, 2010		8.35			.28		.75			1.03			(.21	)		—			(.43	)
December 31, 2009		7.88			.42		1.06			1.48			(.40	)		—			(.61	)
December 31, 2008(2)		8.80			.11		(.03	)		.08			(.35	)		—			(.65	)
October 31, 2008(1)		10.60	*		.58		(2.38	)*		(1.80	)*		—			—			—
2027 Extended Distribution Fund - S Shares
June 30, 2011(3)		9.02			.03		.09			.12			—			—			—
December 31, 2010		9.37			.12		.14			.26			(.11	)		—			(.32	)
December 31, 2009		8.27			.45		1.26			1.71			(.45	)		—			(.16	)
December 31, 2008(2)		8.81			.10		(.04	)		.06			(.29	)		—			(.31	)
October 31, 2008(1)		10.84	*		.56		(2.59	)*		(2.03	)*		—			—			—

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


	24			Financial Highlights


$ Distributions In Excess(h)			$ Total Distributions			$ Net Asset Value, End of Period		% Total Return(c)(e)			$ Net Assets, End of Period (000)		% Ratio of Expenses to Average Net Assets, Net(d)(f)(g)		% Ratio of Expenses to Average Net Assets, Gross(d)(f)		% Ratio of Net Investment Income to Average Net Assets(c)(g)		% Portfolio Turnover Rate(c)

	—			—			7.41		2.49			3,029		.27		3.92		.52		66
	(.12	)		(.71	)		7.23		11.18			3,065		.27		4.21		3.02		254
	—			(.71	)		7.15		20.71			2,357		.30		5.31		4.77		101
	—			(.70	)		6.51		(.42	)		1,043		.19		25.68		1.18		12
	—			—			7.24		(35.23	)		927		.05		14.96		1.34		217

	—			—			8.59		2.75			1,480		.27		5.10		.77		65
	(.38	)		(1.02	)		8.36		12.40			1,626		.27		6.69		3.17		333
	—			(1.01	)		8.35		18.78			1,127		.28		7.36		4.92		128
	—			(1.00	)		7.88		.90			964		.26		26.80		1.28		4
	—			—			8.80		(16.91	)		1,056		.04		7.93		5.98		67

	—			—			9.14		1.33			1,706		.27		4.55		.38		45
	(.18	)		(.61	)		9.02		2.81			1,721		.27		5.59		1.23		60
	—			(.61	)		9.37		20.64			1,499		.29		6.19		4.96		112
	—			(.60	)		8.27		.75			1,329		.25		21.22		1.21		9
	—			—			8.81		(18.69	)		1,315		.04		7.05		5.78		328

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


Financial Highlights		25

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Notes to Financial Highlights — June 30, 2011 (Unaudited)

(1)	For the period January 2, 2008 (commencement of operations) to October 31, 2008.

(2)	For the period November 1, 2008 to December 31, 2008.

(3)	For the period ended June 30, 2011 (Unaudited).

(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)	Periods less than one year are not annualized.

(d)	The ratios for periods less than one year are annualized.

(e)	Total return for Class A does not reflect a front end sales charge. If sales charges were included, the total return would be lower.

(f)	The calculation includes only those expenses charged directly to the Funds and does not include expenses charged to the Underlying Funds in which the Fund invests.

(g)	May reflect amounts waived and/or reimbursed by RIMCo.

(h)	Distributions in excess of accumulated earnings and profits but not in excess of current earnings and profits computed on a tax basis.

The Funds effected a reverse share split on March 27, 2008. This reverse share split was not reflected retroactively to the beginning of the period ended October 31, 2008 in the Funds’ financial statements for the periods ended October 31, 2008 and December 31, 2008. Net Asset Value, Beginning of Period, Net Realized and Unrealized Gain (Loss) and Total Income (Loss) from Operations for the period ended October 31, 2008 have been restated to retroactively reflect the reverse share split.

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


	26			Notes to Financial Highlights

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Notes to Financial Statements — June 30, 2011 (Unaudited)

Organization

Russell Investment Company (the “Investment Company” or “RIC”) is a series investment company with 40 different investment portfolios referred to as Funds. These financial statements report on six of these Funds (each a “Fund” and collectively the “Funds”). The Investment Company is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. It is organized and operated as a Massachusetts business trust under a Second Amended and Restated Master Trust Agreement dated October 1, 2008 (“Master Trust Agreement”), as amended. The Investment Company’s Master Trust Agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest.

The Funds seek to achieve their objective by investing in several other RIC Funds (the “Underlying Funds”) using a dynamic asset allocation investment strategy. The Underlying Funds currently include the Russell U.S. Core Equity, Russell U.S. Quantitative Equity, Russell U.S. Small & Mid Cap, Russell Global Opportunistic Credit, Russell Investment Grade Bond, Russell Short Duration Bond, Russell Strategic Bond, Russell Emerging Markets, Russell Global Equity, Russell International Developed Markets, Russell Commodity Strategies, Russell Global Infrastructure, Russell Global Real Estate Securities and Russell Money Market Funds. The Underlying Funds are designed to provide the foundation for a diversified portfolio. Each major asset class (domestic equities, fixed income, international equities, real assets and short-term investments) is represented by one or more Underlying Funds. The Underlying Funds to which the Funds allocate their assets and the percentage allocations will change over time and a Fund may not always invest in all the Underlying Funds. In addition, the Funds may in the future invest in other funds which are not currently Underlying Funds.

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 following is a summary of the significant accounting policies consistently followed by each Fund in the preparation of its financial statements.

Security Valuation

The Funds value their portfolio securities, the shares of the Underlying Funds, at the current net asset value per share of each Underlying Fund. Generally, Underlying Fund portfolio securities are valued at the market price at the close of the principal exchange on which they are traded.

Fair value of securities is defined as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. To increase consistency and comparability in fair value measurement, the fair value hierarchy was established to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset, including assumptions about risk, (e.g., the risk inherent in a particular valuation technique, such as a pricing model, or the risks inherent in the inputs to a particular valuation technique). Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The fair value hierarchy of inputs is summarized in the three broad levels listed below.

Level 1 — quoted prices (unadjusted) in active markets for identical investments.

Level 2 — other significant observable inputs including quoted market prices in non-active markets or prices derived from market data.

Level 3 — significant unobservable inputs including the Fund’s own assumptions in determining the fair value of investments.

The levels associated with valuing the Funds’ investments for the period ended June 30, 2011 were level 1 for all Funds.

Investment Transactions

Investment transactions are reflected as of the trade date for financial reporting purposes. This may cause the net asset value stated in the financial statements to be different from the net asset value at which shareholders may transact. Realized gains and losses from securities transactions, if any, are recorded on the basis of specific identified cost.


Notes to Financial Statements		27

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Notes to Financial Statements, continued — June 30, 2011 (Unaudited)

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.

Each Fund qualifies as a regulated investment company and distributes all of its taxable income and capital gains. Therefore, no federal income tax provision was required for the Funds. Financial reporting records are adjusted for permanent book tax differences to reflect tax character but are not adjusted for temporary differences. The amount and character of tax-basis distributions and composition of net assets are finalized at fiscal year end; accordingly tax-basis balances have not been determined as of June 30, 2011.

Each Fund files a U.S. tax return. At June 30, 2011, the Funds have recorded no liabilities for net unrecognized tax benefits relating to uncertain income tax positions they have taken or expect to take in future tax returns. While the statute of limitations remains open to examine the Funds’ U.S. tax returns filed for fiscal years ending December 31, 2008 through December 31, 2009, 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

Income dividends, capital gain distributions and return of capital, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are generally declared and paid annually. An additional distribution may be paid by the 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 relate primarily to investments in the Underlying Funds sold at a loss, wash sale deferrals, and capital loss carryforwards. Accordingly, the Funds may periodically make reclassifications among certain of their capital accounts without impacting their net asset values.

Expenses

Expenses included in the accompanying financial statements reflect the expenses of each Fund and do not include those expenses incurred by the Underlying Funds. Because the Underlying Funds have varied expense and fee levels and the Funds may own different proportions of the Underlying Funds at different times, the amount of the fees and expenses incurred indirectly by the Funds will vary.

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, Counterparty and Credit Risk

In the normal course of business, the 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 Underlying Funds may also be exposed to counterparty risk or risk that an institution or other entity with which the Underlying Funds have unsettled or open transactions will default. The potential loss could exceed the value of the relevant assets recorded in the Underlying Funds financial statements (the “Assets”). The Assets, which potentially expose the Underlying Funds to credit risk, consist principally of cash due from counterparties and investments. The extent of the Underlying Funds’ exposure to credit and counterparty risks with respect to the Assets approximates their carrying value as recorded in the Underlying Funds’ Statements of Assets and Liabilities.


	28			Notes to Financial Statements

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Notes to Financial Statements, continued — June 30, 2011 (Unaudited)

Investment Transactions

Securities

During the period ended June 30, 2011, purchases and sales of the Underlying Funds (excluding investments held for short-term purposes) were as follows:


	Purchases		Sales

2017 Retirement Distribution Fund - A Shares	$	1,247,381	$	1,368,339
2017 Accelerated Distribution Fund - A Shares		778,007		838,448
2027 Extended Distribution Fund - A Shares		1,564,872		1,580,404
2017 Retirement Distribution Fund - S Shares		1,974,136		2,057,849
2017 Accelerated Distribution Fund - S Shares		975,142		1,156,534
2027 Extended Distribution Fund - S Shares		771,791		807,766

Related Party Transactions, Fees and Expenses

Adviser and Administrator

Russell Investment Management Company (“RIMCo”) advises the Funds and Russell Fund Services Company (“RFSC”) is the Funds’ administrator. RFSC is a wholly-owned subsidiary of RIMCo. RIMCo is a wholly-owned subsidiary of Frank Russell Company (a subsidiary of The Northwestern Mutual Life Insurance Company). Frank Russell Company provides ongoing money manager research and trade placement services to RIC and RIMCo.

The advisory fee of 0.20% and administrative fee of 0.05% are based upon the average daily net assets of the Funds and are payable monthly. The following shows the total amount of each of these fees paid by the Funds for the period ended June 30, 2011.


	Advisory		Administrative

2017 Retirement Distribution Fund - A Shares	$	1,763	$	441
2017 Accelerated Distribution Fund - A Shares		1,178		294
2027 Extended Distribution Fund - A Shares		1,992		498
2017 Retirement Distribution Fund - S Shares		2,901		725
2017 Accelerated Distribution Fund - S Shares		1,456		364
2027 Extended Distribution Fund - S Shares		1,699		425

Waivers and Reimbursements

For the 2017 Retirement Distribution Fund-A Shares, 2017 Accelerated Distribution Fund-A Shares and 2027 Extended Distribution Fund-A Shares, RIMCo has contractually agreed, until April 30, 2012, to waive up to the full amount of each Funds 0.20% advisory fee and then to reimburse each Fund for other direct expenses to the extent that direct expenses exceed 0.52% of the average daily net assets of the Fund on an annual basis.

For the 2017 Retirement Distribution Fund-S Shares, 2017 Accelerated Distribution Fund-S Shares and 2027 Extended Distribution Fund-S Shares, RIMCo has contractually agreed, until April 30, 2012, to waive up to the full amount of each Funds 0.20% advisory fee and then to reimburse each Fund for other direct expenses to the extent that direct expenses exceed 0.27% of the average daily net assets of the Fund on an annual basis.

These waivers and reimbursements may not be terminated during the relevant period except with Board approval.

Direct operating expenses do not include extraordinary expenses or the expenses of other investment companies in which the Funds invest, including the Underlying Funds, which are borne indirectly by the Funds.

For the period ended June 30, 2011, the fees waived and reimbursed by RIMCo were as follows:


	Waiver		Reimbursement		Total

2017 Retirement Distribution Fund - A Shares	$	1,763	$	38,238	$	40,001
2017 Accelerated Distribution Fund - A Shares		1,178		32,844		34,022
2027 Extended Distribution Fund - A Shares		1,992		49,048		51,040
2017 Retirement Distribution Fund - S Shares		2,901		50,020		52,921
2017 Accelerated Distribution Fund - S Shares		1,456		33,721		35,177
2027 Extended Distribution Fund - S Shares		1,699		34,668		36,367

RIMCo does not have the ability to recover amounts waived or reimbursed from previous periods.


Notes to Financial Statements		29

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Notes to Financial Statements, continued — June 30, 2011 (Unaudited)

Transfer and Dividend Disbursing Agent

RFSC is the Transfer and Dividend Disbursing Agent for the Investment Company. 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. RFSC retains a portion of this fee for its services provided to the Funds and pays the balance to unaffiliated agents who assist in providing these services. Total fees paid for the Funds presented herein for the period ended June 30, 2011 were as follows:


	Amount

2017 Retirement Distribution Fund - A Shares	$	1,586
2017 Accelerated Distribution Fund - A Shares		1,061
2027 Extended Distribution Fund - A Shares		1,793
2017 Retirement Distribution Fund - S Shares		2,610
2017 Accelerated Distribution Fund - S Shares		1,311
2027 Extended Distribution Fund - S Shares		1,529

Distributor

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 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 that are primarily intended to result in the sale of the Class A Shares subject to the Plan. The 12b-1 distribution payments shall not exceed 0.25% of the average daily net assets of a Fund’s Class A 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 Shares of the Funds may not exceed 7.25% of total gross sales, subject to certain exclusions. No reimbursements were required during the period as the charges did not exceed 7.25% of total gross sales.

For the period ended June 30, 2011, the sales commissions paid to selling agents for the sale of Class A Shares were as follows:


	Aggregate Font-End Sales Charges		Front-End Sales Charges Retained by Distributor

2017 Retirement Distribution Fund – A Shares	$	3,962	$	490
2017 Accelerated Distribution Fund – A Shares		2,055		263

Accrued Fees Payable to Affiliates

Accrued fees payable to affiliates for the period ended June 30, 2011 were as follows:


	2017 Retirement Distribution Fund - A Shares		2017 Accelerated Distribution Fund - A Shares		2027 Extended Distribution Fund - A Shares		2017 Retirement Distribution Fund - S Shares		2017 Accelerated Distribution Fund - S Shares		2027 Extended Distribution Fund - S Shares

Administration fees	$	69	$	47	$	82	$	120	$	61	$	70
Distribution fees		194		236		233		—		—		—
Transfer agent fees		261		183		305		215		220		257
Trustee fees		18		20		14		7		12		18

	$	542	$	486	$	634	$	342	$	293	$	345


	30			Notes to Financial Statements

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Notes to Financial Statements, continued — June 30, 2011 (Unaudited)

Board of Trustees

The Russell Fund Complex consists of RIC, which has 40 funds, and Russell Investment Funds (“RIF”), which has 10 funds. Each of the Trustees is a Trustee of both RIC and RIF. During the period, the Russell Fund Complex paid each of its independent Trustees a retainer of $75,000 per year, $6,500 for each regular quarterly meeting attended in person, $2,500 for each special meeting attended in person, and $2,500 for each Audit Committee meeting, Nominating and Governance Committee meeting, Investment Committee meeting or any other committee meeting established and approved by the Board that is attended in person. Each Trustee receives a $1,000 fee for attending the quarterly and special meetings and a $500 fee for attending the committee meeting by phone instead of receiving the full fee had the member attended in person. Trustees’ out-of-pocket expenses are also paid by the Russell Fund Complex. The Audit Committee Chair and Investment Committee Chair are each paid a fee of $15,000 per year and the Nominating and Governance Committee Chair is paid a fee of $6,000 per year. The chairman of the Board receives additional annual compensation of $75,000.

Transactions with Affiliated Companies

An affiliated company is a company in which a Fund has ownership of at least 5% of the voting securities or which the Fund controls, is controlled by or is under common control. Transactions during the period ended June 30, 2011, with Underlying Funds which are, or were, an affiliated company, are as follows:


	Market Value		Purchases Cost		Sales Cost		Realized Gain (Loss)			Income Distributions

2017 Retirement Distribution Fund - A Shares
Russell U.S. Core Equity Fund	$	137	$	72	$	130	$	9		$	—
Russell U.S. Quantitative Equity Fund		128		63		128		13			—
Russell U.S. Small & Mid Cap Fund		65		39		37		(2	)		—
Russell International Developed Markets Fund		211		120		118		(4	)		—
Russell Global Equity Fund		128		85		76		(3	)		—
Russell Emerging Markets Fund		63		59		39		(2	)		—
Russell Global Opportunistic Credit Fund		44		73		29		—			—
Russell Strategic Bond Fund		413		236		533		19			7
Russell Short Duration Bond Fund		199		112		151		2			2
Russell Investment Grade Bond Fund		215		219		4		—			1
Russell Global Real Estate Securities Fund		45		21		36		3			1
Russell Global Infrastructure Fund		37		58		21		(1	)		—
Russell Commodity Strategies Fund		53		90		34		(2	)		—

	$	1,738	$	1,247	$	1,336	$	32		$	11

2017 Accelerated Distribution Fund - A Shares
Russell U.S. Core Equity Fund	$	75	$	50	$	56	$	1		$	—
Russell U.S. Quantitative Equity Fund		70		45		56		2			—
Russell U.S. Small & Mid Cap Fund		35		21		11		(1	)		—
Russell International Developed Markets Fund		115		67		35		(2	)		—
Russell Global Equity Fund		70		44		21		(1	)		—
Russell Emerging Markets Fund		35		28		11		(1	)		—
Russell Global Opportunistic Credit Fund		24		31		7		—			—
Russell Strategic Bond Fund		343		169		380		7			7
Russell Short Duration Bond Fund		165		64		82		—			2
Russell Investment Grade Bond Fund		178		181		3		—			1
Russell Global Real Estate Securities Fund		25		15		16		—			—
Russell Money Market Fund		—		—		144		—			—
Russell Commodity Strategies Fund		28		38		7		—			—
Russell Global Infrastructure Fund		20		25		4		—			—

	$	1,183	$	778	$	833	$	5		$	10

2027 Extended Distribution Fund - A Shares
Russell U.S. Core Equity Fund	$	39	$	1	$	35	$	2		$	—
Russell U.S. Quantitative Equity Fund		36		1		35		4			—
Russell U.S. Small & Mid Cap Fund		18		5		8		—			—
Russell International Developed Markets Fund		59		13		28		2			—
Russell Global Equity Fund		36		10		16		1			—
Russell Emerging Markets Fund		18		9		7		—			—
Russell Global Opportunistic Credit Fund		12		13		1		—			—


Notes to Financial Statements		31

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Notes to Financial Statements, continued — June 30, 2011 (Unaudited)


	Market Value		Purchases Cost		Sales Cost		Realized Gain (Loss)			Income Distributions

Russell Strategic Bond Fund	$	579	$	473	$	671	$	(5	)	$	12
Russell Short Duration Bond Fund		279		159		131		—			3
Russell Investment Grade Bond Fund		302		353		52		—			2
Russell Global Real Estate Securities Fund		13		—		11		—			—
Russell Commodity Strategies Fund		14		16		1		—			—
Russell Global Infrastructure Fund		10		11		—		—			—
Russell Money Market Fund		610		501		580		—			—

	$	2,025	$	1,565	$	1,576	$	4		$	17

2017 Retirement Distribution Fund - S Shares
Russell U.S. Core Equity Fund	$	231	$	95	$	171	$	14		$	—
Russell U.S. Quantitative Equity Fund		216		81		170		17			1
Russell U.S. Small & Mid Cap Fund		109		58		47		(3	)		—
Russell International Developed Markets Fund		355		192		166		(8	)		—
Russell Global Equity Fund		215		130		100		(4	)		—
Russell Emerging Markets Fund		107		89		51		(3	)		—
Russell Global Opportunistic Credit Fund		76		113		38		—			—
Russell Strategic Bond Fund		760		382		900		36			12
Russell Short Duration Bond Fund		366		179		245		2			4
Russell Investment Grade Bond Fund		395		398		2		—			1
Russell Global Real Estate Securities Fund		77		29		50		3			1
Russell Commodity Strategies Fund		90		139		41		(2	)		—
Russell Global Infrastructure Fund		61		89		26		(1	)		—

	$	3,058	$	1,974	$	2,007	$	51		$	19

2017 Accelerated Distribution Fund - S Shares
Russell U.S. Core Equity Fund	$	89	$	48	$	62	$	1		$	—
Russell U.S. Quantitative Equity Fund		83		43		62		2			—
Russell U.S. Small & Mid Cap Fund		42		23		13		(1	)		—
Russell International Developed Markets Fund		135		73		41		(2	)		—
Russell Global Equity Fund		83		49		26		(1	)		—
Russell Emerging Markets Fund		41		32		13		(1	)		—
Russell Global Opportunistic Credit Fund		29		36		8		—			—
Russell Strategic Bond Fund		454		246		486		7			9
Russell Investment Grade Bond Fund		236		241		5		—			1
Russell Short Duration Bond Fund		219		94		105		—			3
Russell Global Real Estate Securities Fund		29		15		17		—			—
Russell Money Market Fund		—		—		300		—			—
Russell Commodity Strategies Fund		33		45		9		—			—
Russell Global Infrastructure Fund		23		30		5		—			—

	$	1,496	$	975	$	1,152	$	5		$	13

2027 Extended Distribution Fund - S Shares
Russell U.S. Core Equity Fund	$	19	$	1	$	20	$	1		$	—
Russell U.S. Quantitative Equity Fund		18		1		21		2			—
Russell U.S. Small & Mid Cap Fund		9		2		4		—			—
Russell International Developed Markets Fund		29		5		15		—			—
Russell Global Equity Fund		17		4		8		—			—
Russell Emerging Markets Fund		9		4		3		—			—
Russell Global Opportunistic Credit Fund		6		7		1		—			—
Russell Strategic Bond Fund		283		228		350		(2	)		6
Russell Short Duration Bond Fund		137		78		73		—			2
Russell Investment Grade Bond Fund		147		179		31		—			1
Russell Global Real Estate Securities Fund		6		—		6		—			—
Russell Global Infrastructure Fund		5		5		—		—			—
Russell Money Market Fund		1,034		250		274		—			—
Russell Commodity Strategies Fund		7		8		1		—			—

	$	1,726	$	772	$	807	$	1		$	9


	32			Notes to Financial Statements

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Notes to Financial Statements, continued — June 30, 2011 (Unaudited)

Federal Income Taxes

At December 31, 2010, 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:


	12/31/2015		12/31/2016		12/31/2017		Totals

2017 Retirement Distribution Fund - A Shares	$	126,925	$	—	$	—	$	126,925
2017 Accelerated Distribution Fund - A Shares		—		—		6,212		6,212
2027 Extended Distribution Fund - A Shares		60,720		—		42,978		103,698
2017 Retirement Distribution Fund - S Shares		—		—		—		—
2017 Accelerated Distribution Fund - S Shares		—		—		14,284		14,284
2027 Extended Distribution Fund - S Shares		8,749		—		31,713		40,462

Under the Regulated Investment Company Modernization Act of 2010, the Portfolio 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 June 30, 2011, the cost of investments and net unrealized appreciation (depreciation), for income tax purposes were as follows:



	2017 Retirement Distribution Fund - A Shares			2017 Accelerated Distribution Fund - A Shares			2027 Extended Distribution Fund - A Shares			2017 Retirement Distribution Fund - S Shares			2017 Accelerated Distribution Fund - S Shares			2027 Extended Distribution Fund - S Shares

Cost of Investments	$	1,585,822		$	1,102,867		$	1,960,583		$	2,791,875		$	1,385,011		$	1,665,054

Unrealized Appreciation	$	157,771		$	83,219		$	65,642		$	275,347		$	114,992		$	61,513
Unrealized Depreciation		(5,362	)		(2,980	)		(1,329	)		(9,223	)		(3,546	)		(756	)

Net Unrealized Appreciation (Depreciation)	$	152,409		$	80,239		$	64,313		$	266,124		$	111,446		$	60,757

Fund Share Transactions (amounts in thousands)

Share transactions for the periods ended June 30, 2011 and December 31, 2010 were as follows:


	2011						2010
	Shares			Dollars			Shares			Dollars


2017 Retirement Distribution Fund - A Shares
Proceeds from shares sold		9		$	68			133		$	956
Proceeds from reinvestment of distributions		—			—			1			7
Payments for shares redeemed		(27	)		(199	)		(53	)		(385	)

Total net increase (decrease)		(18	)	$	(131	)		81		$	578


	2011						2010
	Shares			Dollars			Shares			Dollars


2017 Accelerated Distribution Fund - A Shares
Proceeds from shares sold		9		$	77			48		$	387
Proceeds from reinvestment of distributions		—			—			—			—
Payments for shares redeemed		(17	)		(141	)		(42	)		(352	)

Total net increase (decrease)		(8	)	$	(64	)		6		$	35


Notes to Financial Statements		33

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Notes to Financial Statements, continued — June 30, 2011 (Unaudited)


	2011						2010
	Shares			Dollars			Shares			Dollars


2027 Extended Distribution Fund - A Shares
Proceeds from shares sold		—		$	—			86		$	754
Proceeds from reinvestment of distributions		—			—			—			—
Payments for shares redeemed		(5	)		(47	)		(16	)		(143	)

Total net increase (decrease)		(5	)	$	(47	)		70		$	611


	2011						2010
	Shares			Dollars			Shares			Dollars


2017 Retirement Distribution Fund - S Shares
Proceeds from shares sold		18		$	133			104		$	773
Proceeds from reinvestment of distributions		—			—			—			—
Payments for shares redeemed		(34	)		(244	)		(10	)		(68	)

Total net increase (decrease)		(16	)	$	(111	)		94		$	705


	2011						2010
	Shares			Dollars			Shares			Dollars


2017 Accelerated Distribution Fund - S Shares
Proceeds from shares sold		2		$	22			85		$	755
Proceeds from reinvestment of distributions		—			—			—			—
Payments for shares redeemed		(24	)		(206	)		(25	)		(220	)

Total net increase (decrease)		(22	)	$	(184	)		60		$	535


	2011						2010
	Shares			Dollars			Shares			Dollars


2027 Extended Distribution Fund - S Shares
Proceeds from shares sold		1		$	12			40		$	378
Proceeds from reinvestment of distributions		—			—			—			—
Payments for shares redeemed		(5	)		(49	)		(9	)		(84	)

Total net increase (decrease)		(4	)	$	(37	)		31		$	294

Interfund Lending Program

The Funds have been granted permission from the Securities and Exchange Commission to participate in a joint lending and borrowing facility (the “Credit Facility”). Funds may borrow money from each other for temporary purposes. All such borrowing and lending will be subject to a participating Fund’s fundamental investment limitations. A Fund will lend through the program only when the returns are higher than those available from an investment in repurchase agreements or short-term reserves and the portfolio manager determines it is in the best interest of the Fund. The Funds will borrow through the program only when the costs are equal to or lower than the cost of bank loans. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one business day’s notice. A participating Fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to the Fund could result in a lost investment opportunity or additional borrowing costs. For the period ended June 30, 2011, the Funds presented herein did not borrow or loan through the interfund lending program.


	34			Notes to Financial Statements

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Notes to Financial Statements, continued — June 30, 2011 (Unaudited)

Record Ownership

As of June 30, 2011, the following table includes shareholders of record with greater than 10% of the total outstanding shares of each respective Fund.


	# of Shareholders		%

2017 Retirement Distribution Fund - A Shares		1		35.1
2017 Accelerated Distribution Fund - A Shares		3		69.5
2027 Extended Distribution Fund - A Shares		6		99.0
2017 Retirement Distribution Fund - S Shares		1		24.6
2017 Accelerated Distribution Fund - S Shares		3		74.5
2027 Extended Distribution Fund - S Shares		1		95.0

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.


Notes to Financial Statements		35

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Basis for Approval of Investment Advisory Contracts — (Unaudited)

Approval of Investment Advisory Agreement

The Board of Trustees, including all of the Independent Trustees, last considered and approved the continuation of the advisory agreement with RIMCo (the “RIMCo Agreement”) and the portfolio management contract with each Money Manager of the Funds (collectively, the “portfolio management contracts”) in which the Funds invest (the “Underlying Funds”) at a meeting held in person on April 19, 2011 (the “Agreement Evaluation Meeting”). During the course of a year, the Trustees receive a wide variety of materials regarding the investment performance of the Funds, sales and redemptions of the Funds’ and Underlying Funds’ shares, management of the Funds and the Underlying Funds by RIMCo and compliance with applicable regulatory requirements. In preparation for the annual review, the Independent Trustees, with the advice and assistance of their independent counsel, also requested and the Board considered (1) information and reports prepared by RIMCo relating to the services provided by RIMCo (and its affiliates) to the Funds and the Underlying Funds; and (2) information (the “Third-Party Information”) received from an independent, nationally recognized provider of investment company information comparing the performance of each of the Funds and the Underlying Funds and their respective operating expenses over various periods of time with other peer funds not managed by RIMCo believed by the provider to be generally comparable in investment objectives to the Funds and the Underlying Funds. In the case of each Fund, its other peer funds are collectively hereinafter referred to as the Fund’s “Comparable Funds,” and, with the Fund, such Comparable Funds are collectively hereinafter referred to as the Fund’s “Performance Universe” in the case of performance comparisons and the Fund’s “Expense Universe” in the case of operating expense comparisons. In the case of certain Funds, the Third-Party Information reflected changes in the Comparable Funds requested by RIMCo, which changes were noted in the Third-Party Information. The foregoing information requested by the Trustees or provided by RIMCo is collectively called the “Agreement Evaluation Information.” The Trustees’ evaluations also reflected the knowledge and familiarity gained as Board members of the Funds and other funds in the same complex with respect to services provided by RIMCo, RIMCo’s affiliates and each Money Manager. The Trustees received a memorandum from counsel to the Funds and Underlying Funds discussing the legal standards for their consideration of the continuations of the RIMCo Agreement and the portfolio management contracts, and the Independent Trustees separately received a memorandum regarding their responsibilities from their independent counsel.

On April 11, 2011, the Independent Trustees in preparation for the Agreement Evaluation Meeting met by conference telephone call to review Agreement Evaluation Information received to that date in a private session with their independent counsel at which no representatives of RIMCo or the Funds’ management were present and, on the basis of that review, requested additional Agreement Evaluation Information. At the Agreement Evaluation Meeting, the Board, including the Independent Trustees, reviewed the proposed continuance of the RIMCo Agreement and the portfolio management contracts with management, counsel to the Funds and Underlying Funds and independent counsel to the Independent Trustees. Presentations made by RIMCo to the Board as part of this review encompassed the Funds and all other RIMCo-managed funds for which the Board has supervisory responsibility. Following this review, but prior to voting, the Independent Trustees again met in executive session with their independent counsel to consider additional Agreement Evaluation Information received from RIMCo and management at the Agreement Evaluation Meeting. The discussion below reflects all of these reviews.

In evaluating the portfolio management contracts, the Board considered RIMCo’s advice that the Underlying Funds, in employing a manager-of-managers method of investment, operate in a manner that is distinctly different from most other investment companies. In the case of most other investment companies, an advisory fee is paid by the investment company to its adviser which, in turn, employs and compensates individual portfolio managers to make specific securities selections consistent with the adviser’s style and investment philosophy. RIMCo has engaged multiple unaffiliated Money Managers for all Underlying Funds.

The Board considered that RIMCo (rather than any Money Manager) is responsible under the RIMCo Agreement for allocating assets of each Fund among its Underlying Funds and for determining, implementing and maintaining the investment program for each Underlying Fund. The assets of each Fund are invested in different combinations of the Underlying Funds pursuant to target asset allocations set by RIMCo. RIMCo may modify the target asset allocation for any Fund and/or the Underlying Funds in which the Funds invest. Assets of each Underlying Fund generally have been allocated among the multiple Money Managers selected by RIMCo, subject to Board approval, for that Underlying Fund. RIMCo manages directly a portion of one Underlying Fund’s assets employing a “select holdings strategy,” as described below. RIMCo also may manage directly any portion of each Underlying Fund’s assets that RIMCo determines not to allocate to the Money Managers and portions of an Underlying Fund during transitions between Money Managers. In all cases, assets are managed directly by RIMCo pursuant to authority provided by the RIMCo Agreement.

RIMCo is responsible for selecting, subject to Board approval, Money Managers for each Underlying Fund and for actively managing allocations and reallocations of its assets among the Money Managers. The Board has been advised that RIMCo’s goal is to construct and manage diversified portfolios in a risk-aware manner. Each Money Manager for an Underlying Fund in effect performs the function of an individual portfolio manager who is responsible for selecting portfolio securities for the portion of the Underlying Fund assigned to it by RIMCo (each, a “segment”) in accordance with the Underlying Fund’s applicable investment objective, policies and restrictions, any constraints placed by RIMCo upon their selection of portfolio securities and the Money Manager’s specified role in


	36			Basis for Approval of Investment Advisory Contracts

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

an Underlying Fund. RIMCo is responsible for communicating performance expectations to each Money Manager; supervising compliance by each Money Manager with each Underlying Fund’s investment objective and policies; authorizing Money Managers to engage in certain investment strategies for an Underlying Fund; and recommending annually to the Board whether portfolio management contracts should be renewed, modified or terminated. In addition to its annual recommendation as to the renewal, modification or termination of portfolio management contracts, RIMCo is responsible for recommending to the Board additions of new Money Managers or replacements of existing Money Managers at any time when, based on RIMCo’s research and ongoing review and analysis, such actions are appropriate. RIMCo may impose specific investment constraints from time to time for each Money Manager intended to capitalize on the strengths of that Money Manager or to coordinate the investment activities of Money Managers for an Underlying Fund in a complementary manner. Therefore, the performance of individual Money Managers for an Underlying Fund may reflect the roles assigned to them by RIMCo in the Underlying Fund’s investment activities and any constraints placed by RIMCo upon their selection of portfolio securities. In light of the foregoing, the overall performance of each Underlying Fund over appropriate periods reflects, in great part, the performance of RIMCo in designing the Underlying Fund’s investment program, structuring an Underlying Fund, selecting an effective Money Manager with a particular investment style or sub-style for a segment that is complementary to the styles of the Money Managers of other Underlying Fund segments, and allocating assets among the Money Managers in a manner designed to achieve the objectives of the Underlying Fund.

The Board considered that the prospectuses for the Funds and the Underlying Funds and other public disclosures emphasize to investors RIMCo’s role as the principal investment manager for each Underlying Fund, rather than the investment selection role of the Underlying Funds’ Money Managers, and describe the manner in which the Funds or Underlying Funds operate so that investors may take that information into account when deciding to purchase shares of any such Fund. The Board further considered that Fund investors in pursuing their investment goals and objectives likely purchased their shares on the basis of this information and RIMCo’s reputation for and performance record in managing the Underlying Funds’ manager-of-managers structure.

The Board also considered the demands and complexity of managing the Underlying Funds pursuant to the manager-of-managers structure, the special expertise of RIMCo with respect to the manager-of-managers structure of the Underlying Funds and the likelihood that, at the current expense ratio of each Underlying Fund, there would be no acceptable alternative investment managers to replace RIMCo on comparable terms given the need to continue the manager-of-managers strategy of such Underlying Fund selected by shareholders in purchasing their shares of a Fund or Underlying Fund.

In addition to these general factors relating to the manager-of-managers structure of the Underlying Funds, the Trustees considered, with respect to each Fund and Underlying Fund, various specific factors in evaluating renewal of the RIMCo Agreement, including the following:

1.	The nature, scope and overall quality of the investment management and other services provided, and expected to be provided, to the Fund or the Underlying Fund by RIMCo;

2.	The advisory fee paid by the Fund or the Underlying Fund to RIMCo (the “Advisory Fee”) and the fact that it encompasses all investment advisory fees paid by the Fund or Underlying Fund, including the fees for any Money Managers of such Underlying Fund;

Information provided by RIMCo as to other fees and benefits received by RIMCo or its affiliates from the Fund or Underlying Fund, including any administrative, transfer agent or cash management fees and fees received for management of securities lending cash collateral, soft dollar arrangements and commissions in connection with portfolio securities transactions;

4.	Information provided by RIMCo as to expenses incurred by the Fund or the Underlying Fund; and

5.	Information provided by RIMCo as to the profits that RIMCo derives from its mutual fund operations generally and from the Fund or Underlying Fund.

In evaluating the nature, scope and overall quality of the investment management and other services provided and which are expected to be provided to the Funds, including Fund portfolio management services, the Board inquired as to the continuing impact on the Funds’ operations of significant changes in RIMCo’s senior management and other personnel providing services to the Funds during 2009 and 2010 and to the date of the Agreement Evaluation Meeting and the relocation of the Russell organization’s headquarters. At the Agreement Evaluation Meeting, senior representatives of RIMCo discussed these changes with the Board and assured the Board that such changes have not resulted in any diminution in the nature, scope or quality of the services provided to the Funds or the Underlying Funds. The Board also discussed the impact of such changes on the compliance programs of the Funds, the Underlying Funds and RIMCo with the Funds’ Chief Compliance Officer (“CCO”) and received assurances from the CCO that such changes have not resulted in any diminution in the scope and quality of the compliance programs of the Funds or the Underlying Funds.


Basis for Approval of Investment Advisory Contracts		37

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

As noted above, RIMCo, pursuant to the terms of the RIMCo Agreement, directly manages a portion—up to 10%—of the assets of the RIC Russell U.S. Core Equity Fund (the “Participating Underlying Fund”) utilizing a select holdings strategy, the actual allocation being determined by the Participating Underlying Fund’s RIMCo portfolio manager. The select holdings strategy utilized by RIMCo in managing such assets for the Participating Underlying Fund is designed to increase the Participating Underlying Fund’s exposure to stocks that are viewed as attractive by multiple Money Managers of the Participating Underlying Fund. The Board considered that the select holdings strategy initially was utilized for two other mutual funds under the management of RIMCo but did not achieve the objectives anticipated by RIMCo in respect of such funds and therefore was discontinued. Against this background, the Board reviewed the results of the select holdings strategy in respect of the Participating Underlying Fund during the past year. The Trustees considered that RIMCo is not required to pay investment advisory fees to a Money Manager with respect to assets for which the select holdings strategy is utilized and that the profits derived by RIMCo generally and from the Participating Underlying Fund consequently may increase incrementally. The Board, however, also considered RIMCo’s advice that it pays certain Money Managers additional fees for providing information and other services in connection with the select holdings strategy and incurs additional costs in carrying out the select holdings strategy, the limited amount of assets that are managed directly by RIMCo pursuant to the select holdings strategy, and the fact that the aggregate investment advisory fees paid by the Participating Underlying Fund are not increased as a result of the select holdings strategy.

In evaluating the reasonableness of the Funds’ and Underlying Funds’ Advisory Fees in light of Fund and Underlying Fund performance, the Board considered that, in the Agreement Evaluation Information and at past meetings, RIMCo noted differences between the investment strategies of certain Underlying Funds and their respective Comparable Funds in pursuing their investment objectives, including fund strategies which seek to achieve a lower tracking error (i.e., the difference, whether positive or negative, between the return of a fund and its benchmark) and resulting lower return volatility than their Comparable Funds. According to RIMCo, these strategies may be expected to result, and for certain Underlying Funds during the periods covered by the Third-Party Information did result, in lower performance of the Underlying Funds than that of some of their Comparable Funds. According to RIMCo, the strategies pursued by the Underlying Funds, among other things, are intended to result in less volatile, more moderate returns relative to each Underlying Fund’s performance benchmark rather than more volatile, more extreme returns that its Comparable Funds may experience over time, although Fund results in 2008 and early 2009 generally did not reflect uniform success in achieving lesser volatility.

With respect to the Fund’s Advisory Fees, the Third-Party Information showed that the Advisory Fee for each Fund on a contractual basis was ranked in the second quintile of its Expense Universe and was ranked in the first quintile of its Expense Universe on an actual basis (i.e., giving effect to any voluntary fee waivers implemented by RIMCo and the advisors to such Fund’s Comparable Funds). The comparisons were based upon the latest fiscal years for the Expense Universe Funds. In assessing the Funds’ Advisory Fees, the Board focused on actual Advisory Fees.

In discussing the Advisory Fees for the Underlying Funds generally, RIMCo noted, among other things, that its Advisory Fees for Underlying Funds encompass services that may not be provided by investment advisers to the Underlying Funds’ Comparable Funds, such as cash equitization and management of portfolio transition costs when Money Managers are added, terminated or replaced. RIMCo also observed that its “margins” in providing investment advisory services to the Underlying Funds tend to be lower than competitors’ margins because of the demands and complexities of managing the Underlying Funds’ manager-of-managers structure, including RIMCo’s payment of a significant portion of the Underlying Funds’ Advisory Fees to their Money Managers.

The Board noted RIMCo’s advice that the services provided to the Funds and the Underlying Funds pursuant to the RIMCo Agreement do not encompass cash management services and considered RIMCo’s belief that its Advisory Fees nevertheless are reasonable. The Board also noted that the uninvested cash of the Underlying Funds is “swept” into a pooled investment vehicle maintained by RIMCo and that RIMCo receives a separate investment advisory fee from that investment vehicle to manage its investment portfolio. The Board considered and relied upon views expressed by RIMCo and counsel to the Funds and the Underlying Funds at the Agreement Evaluation Meeting and prior meetings regarding the appropriateness and permissibility of the separate advisory fees received by RIMCo from the investment vehicle and further considered that such fees, while being accrued on the books of the investment vehicle, are not being distributed to RIMCo pending resolution of certain issues raised by regulators.

The Board considered for each Fund and Underlying Fund whether economies of scale have been realized and whether the Advisory Fees for such Fund or Underlying Fund appropriately reflect or should be revised to reflect any such economies. The Board noted that these Funds have very low assets under management and have substantial caps, waivers and reimbursements in place. The Board, therefore, determined that, after giving effect to any applicable fee or expense caps, waivers or reimbursements, the Advisory Fee for each Fund or Underlying Fund appropriately reflected any economies of scale realized by that Fund, based upon net asset flows since inception and such factors as the variability of Money Manager investment advisory fees and other factors associated with the manager-of-managers structure employed by the Underlying Funds.


	38			Basis for Approval of Investment Advisory Contracts

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

The Board considered, as a general matter, that fees payable to RIMCo by institutional clients with investment objectives similar to those of the Funds and other RIC funds under the Board’s supervision, including the Underlying Funds, are lower, and, in some cases, may be substantially lower, than the rates paid by RIC funds supervised by the Board, including the Funds. The Trustees considered the differences in the nature and scope of services RIMCo provides to institutional clients and the funds under its supervision, including the Underlying Funds. RIMCo explained, among other things, that institutional clients have fewer administrative needs than the Funds. RIMCo also noted that since the Funds must constantly issue and redeem their shares, they are more difficult to manage than institutional accounts, where assets are relatively stable. In addition, RIMCo noted that the Funds are subject to heightened regulatory requirements relative to institutional clients. The Board noted that RIMCo provides office space and facilities to the Funds and Underlying Funds and all of the Funds’ and Underlying Funds’ officers. Accordingly, the Trustees concluded that the services provided to the Funds and Underlying Funds are sufficiently different from the services provided to the other clients that comparisons are not probative and should not be given significant weight.

With respect to the Funds’ total expenses, the Third-Party Information showed that none of the Funds had total expenses which were ranked better than the fourth quintile of its Expense Universe. In these rankings, the first quintile represents funds with the lowest total expenses among funds in the Expense Universe and the fifth quintile represents funds with the highest total expenses among funds in the Expense Universe. The Board considered RIMCo’ advice that the differential to the third quintile for each Fund is the result of the indirect expenses borne by the Funds as a result of their investment in the Underlying Funds. The Board also considered RIMCo’ advice that Funds with a higher allocation to equity Underlying Funds and therefore higher indirect expenses have the largest differential to the third quintile.

On the basis of the 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 Agreement Evaluation Meeting by RIMCo, the Board, in respect of each Fund and Underlying Fund, found, after giving effect to any applicable waivers and/or reimbursements and considering differences in the composition and investment strategies of their respective Comparable Funds (1) the Advisory Fee charged by RIMCo was reasonable in light of the nature, scope and overall quality of the investment management and other services provided, and expected to be provided, to the Funds or Underlying Funds; (2) the relative expense ratio of each Fund and Underlying Fund was comparable to those of its Comparable Funds; (3) RIMCo’s methodology of allocating expenses of operating funds in the complex was reasonable; (4) other benefits and fees received by RIMCo or its affiliates from the Funds or Underlying Funds were not excessive; and (5) RIMCo’s profitability with respect to the Funds and each Underlying Fund was not excessive in light of the nature, scope and overall quality of the investment management and other services provided by RIMCo.

In evaluating the performance of the Funds and Underlying Funds generally relative to their Comparable Funds, the Board, in addition to factors discussed above, also considered RIMCo’s advice that many of the Underlying Funds’ Comparable Funds do not “equitize” their cash (i.e., cash awaiting investment or disbursement to satisfy redemptions or other fund obligations) and may hold large cash positions uninvested in their investment portfolios. By contrast, the Underlying Funds generally follow a strategy of equitizing their cash and fully investing their assets in pursuit of their investment objectives (the Underlying Funds’ strategy of equitizing cash and fully investing their assets is hereinafter referred to as their “full investment strategy”). RIMCo noted that the Underlying Funds’ full investment strategy generally will detract from their relative performance, and therefore the relative performance of the Funds, in a declining market, such as 2008, but may enhance relative performance in a rising market, such as 2009 and 2010.

With respect to the 2017 Retirement Distribution Fund — A Shares, the Third-Party Information showed that the Fund’s performance was ranked in the fourth quintile of its Performance Universe for the 1-year period ended December 31, 2010 and its performance was ranked in the fifth quintile of its Performance Universe for the 3-year period ended December 31, 2010. With respect to the 2017 Retirement Distribution Fund — S Shares, the Third-Party Information showed that the Fund’s performance was ranked in the third quintile of its Performance Universe for the 1-year period ended December 31, 2010 but its performance was ranked in the fifth quintile of its Performance Universe for the 3-year period ended December 31, 2010. With respect to the 2027 Extended Distribution Fund A — Shares, the Third-Party Information showed that the Fund’s performance was ranked in the fifth quintile of its Performance Universe both the 1-year and 3-year periods ended December 31, 2010. With respect to the 2027 Extended Distribution Fund S — Shares, the Third-Party Information showed that the Fund’s performance was ranked in the fifth quintile of its Performance Universe for the 1-year period ended December 31, 2010 and its performance was ranked in the fourth quintile of its Performance Universe for the 3-year period ended December 31, 2010.

[In explaining the Funds’ relative performance, RIMCo noted that the Funds are intended to provide for distributions of assets during retirement, not wealth accumulation, and that their investment strategies are fundamentally different from the strategies of standard asset accumulation-oriented mutual funds. RIMCo expressed its belief that the differences in the Funds investment strategies made meaningful comparisons of the Funds’ performance and their Comparable Funds difficult.


Basis for Approval of Investment Advisory Contracts		39

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Basis for Approval of Investment Advisory Contracts, continued — (Unaudited)

In discussing the Funds’ fourth and fifth quintile 3-year performance relative to their respective Performance Universe, RIMCo noted that the Funds’ results relate to the high allocation to equity securities that the Funds maintained in early 2008. As a result of market conditions in late 2008, the Funds shifted into more conservative asset classes. Since Comparable Funds for the Funds do not employ dynamic strategies, they may have had lower equity allocations throughout 2008. This allocation difference, according to RIMCo, could lead to a significant performance differential and is the likely reason for the underperformance of the Funds relative to their respective Performance Universe.

The Board concluded that, under the circumstances, the performance of each of the Funds was consistent with continuation of the RIMCo Agreement. In evaluating performance, the Board considered each Fund’s and Underlying Fund’s absolute performance and performance relative to appropriate benchmarks and indices in addition to such Fund’s performance relative to its Comparable Funds. In assessing the Funds’ performance relative to their Comparable Funds or benchmarks or in absolute terms, the Board also considered RIMCo’s stated investment strategy of managing the Underlying Funds in a risk-aware manner and the extraordinary capital market conditions during 2008 and early 2009.

After considering the foregoing and other relevant factors, the Board concluded that continuation of the RIMCo Agreement on its current terms and conditions would be in the best interests of each Fund and its respective shareholders and voted to approve the continuation of the RIMCo Agreement.

At the Agreement Evaluation Meeting, with respect to the evaluation of the terms of portfolio management contracts with Money Managers for the Underlying Funds, the Board received and considered information from RIMCo reporting, among other things, for each Money Manager, the Money Manager’s performance over various periods; RIMCo’s assessment of the performance of each Money Manager; any significant business relationships between the Money Manager and RIMCo or Russell Financial Services, Inc., the Funds’ and Underlying Funds’ underwriter; and RIMCo’s recommendation to retain the Money Manager at the current fee rate, to retain the Money Manager at a reduced fee rate or to terminate the Money Manager. The Board received reports during the course of the year from the Funds’ CCO regarding each Money Manager’s compliance program. RIMCo recommended that each Money Manager be retained at its current fee rate. RIMCo has advised the Board that it does not regard Money Manager profitability as relevant to its evaluation of the portfolio management contracts with Money Managers because the willingness of Money Managers to serve in such capacity depends upon arm’s-length negotiations with RIMCo; RIMCo is aware of the fees charged by Money Managers to other clients; and RIMCo believes that the fees agreed upon with Money Managers are reasonable in light of the anticipated quality of investment advisory services to be rendered. The Board accepted RIMCo’s explanation in light of the Board’s findings as to the reasonableness of the Advisory Fee paid by each Fund and Underlying Fund and the fact that each Money Manager’s fee is paid by RIMCo.

Based substantially upon RIMCo’s recommendations, together with the Agreement Evaluation Information and other information received from RIMCo in support of its recommendations at the Agreement Evaluation Meeting, the Board concluded that the fees paid to the Money Managers of each Underlying Fund are reasonable in light of the quality of the investment advisory services provided and that continuation of the portfolio management contract with each Money Manager of each Underlying Fund would be in the best interests of such Underlying Fund and its shareholders.

In their deliberations, the Trustees did not identify any particular information as to the RIMCo Agreement or, other than RIMCo’s recommendation, the portfolio management contract with any Money Manager for an Underlying Fund that was all-important or controlling and each Trustee attributed different weights to the various factors considered. The Trustees evaluated all information available to them on a Fund-by-Fund basis and their determinations were made in respect of each Fund and Underlying Fund.

Subsequently, the Board of Trustees received a proposal from RIMCo at a meeting held on May 24, 2011, to effect a money manager change for the Russell Investment Company Russell Commodity Strategies Fund. In the case of the proposed change, the Trustees approved the terms of the proposed portfolio management contract based substantially upon RIMCo’s recommendation to hire the Money Manager at the proposed fee rate; any significant business relationships between the Money Manager and RIMCo or Russell Financial Services, Inc., the Fund’s underwriter; RIMCo’s explanation as to the lack of relevance of 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 fees charged by the Money Manager to other clients; and 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 Trustees also considered their findings at their April 19, 2011 meeting as to the reasonableness of the aggregate investment advisory fees paid by the Fund, and the fact that the aggregate investment advisory fees paid by the Fund would not increase as a result of the implementation of the proposed money manager change because the money managers’ investment advisory fee is paid by RIMCo.


	40			Basis for Approval of Investment Advisory Contracts

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Shareholder Requests for Additional Information — June 30, 2011 (Unaudited)

A complete unaudited schedule of investments is made available generally no later than 60 days after the end of the first and third quarters of each fiscal year. These reports are available (i) free of charge, upon request, by calling the Fund at (800) 787-7354, (ii) at www.russell.com, (iii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iv) at the Securities and Exchange Commission’s public reference room.

The Board has delegated to RIMCo, as RIC’s investment adviser, the primary responsibility for monitoring, evaluating and voting proxies solicited by or with respect to issuers of securities in which assets of the 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 is available (i) free of charge, upon request, by calling the Funds at (800) 787-7354, (ii) at www.russell.com, and (iii) on the Securities and Exchange Commission’s website at www.sec.gov.

To reduce expenses, we may mail only one copy of the Funds’ prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please contact your Financial Intermediary.

Some Financial Intermediaries may offer electronic delivery of the Funds’ prospectus 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		41

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Disclosure of Information about Fund Trustees and Officers — June 30, 2011

(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 40 funds, and Russell Investment Funds (“RIF”), which has 10 funds. Each of the trustees is a trustee of both RIC and RIF. The first table provides information for the interested trustee. The second table provides information for the independent trustees. The third table provides information for the trustees emeritus. The fourth table provides information for the officers. 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; 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,” as explained below; Mr. Fine has had financial, business and investment experience as a senior executive of a non-profit organization and previously, as a senior executive of a large regional financial services organization with management responsibility for such activities as investments, asset management and securities brokerage; 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; 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; and Ms. Weston has had experience as a tax and corporate lawyer, has served as general counsel of several corporations and has served as a director of another investment company. Ms. Cavanaugh, the only interested trustee, has had experience with other financial services companies, including companies engaged in the sponsorship, management and distribution of investment companies. As a senior officer 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,
Age,
Address

Position(s) Held
With Fund and
Length of
Time Served

Term
of
Office*

Principal Occupation(s)
During the
Past 5 Years

No. of
Portfolios in
Russell
Fund
Complex
Overseen
by Trustee

Other
Directorships Held
by Trustee
During the
Past 5 Years

INTERESTED TRUSTEE

# Sandra Cavanaugh
Born May 10, 1954

1301 Second Avenue,

18th Floor

Seattle, WA 98101

• President and Chief Executive Officer since 2010

• Trustee since 2010

• Appointed until successor is duly elected and qualified

• Until successor is chosen and qualified by Trustees

• President and CEO RIC and RIF

• Chairman of the Board, President and CEO, Russell Fund Services Company (“RFSC”)

• Chairman of the Board, President and CEO, Russell Financial Services, Inc.

• Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”))

• May 2009 to December 2009, Executive Vice President, Retail Channel, SunTrust Bank

• 2007 to January 2009, Senior Vice President, National Sales - Retail Distribution, JPMorgan Chase/Washington Mutual, Inc.

• 1997 to 2007, President - WM Funds Distributor & Shareholder Services/WM Financial Services

None

#	Ms. Cavanaugh is also an officer and/or director of one or more affiliates of RIC and RIF and is therefore an Interested Trustee.


	42			Disclosure of Information about Fund Trustees and Officers

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Disclosure of Information about Fund Trustees and Officers, continued — June 30, 2011

(Unaudited)

Name,
Age,
Address

Position(s) Held
With Fund and
Length of
Time Served

Term
of
Office*

Principal Occupation(s)
During the
Past 5 Years

No. of
Portfolios in
Russell
Fund
Complex
Overseen
by Trustee

Other
Directorships Held
by Trustee
During the
Past 5 Years

INDEPENDENT TRUSTEES

Thaddas L. Alston

Born April 7, 1945

1301 Second Avenue,

18th Floor

Seattle, WA 98101

• Trustee since 2006

• Chairman of the Investment Committee since 2010

• Appointed until successor is duly elected and qualified

• Senior Vice President, Larco Investments, Ltd. (real estate firm)

None

Kristianne Blake,

Born January 22, 1954

1301 Second Avenue,

18th Floor

Seattle, WA 98101

• Trustee since 2000

• Chairman since 2005

• Appointed until successor is duly elected and qualified

• Annual

• Director and Chairman of the Audit Committee, Avista Corp.

• Trustee and Chairman of the Operations Committee, Principal Investor Funds and Principal Variable Contracts Funds

• Regent, University of Washington

• President, Kristianne Gates Blake, P.S. (accounting services)

• February 2002 to June 2005, Chairman of the Audit Committee, RIC and RIF

• Trustee and Chairman of the Operations and Distribution Committee, WM Group of Funds, 1999–2006

• Director, Avista Corp (electric utilities);

• Trustee, Principal Investor Funds (investment company);

• Trustee, Principal Variable Contracts Funds (investment company)

• Trustee, WM Group of Funds until 2006 (investment company)

Daniel P. Connealy

Born June 6, 1946

1301 Second Avenue,

18th Floor

Seattle, WA 98101

• Trustee since 2003

• Chairman of the Audit Committee since 2005

• Appointed until successor is duly elected and qualified

• June 2004 to present, Senior Vice President and Chief Financial Officer, Waddell & Reed Financial, Inc.

• Director, Gold Banc Corporation until 2006

Jonathan Fine,

Born July 8, 1954

1301 Second Avenue,

18th Floor

Seattle, WA 98101

• Trustee since 2004

• Appointed until successor is duly elected and qualified

• President and Chief Executive Officer, United Way of King County, WA

None


Disclosure of Information about Fund Trustees and Officers		43

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Disclosure of Information about Fund Trustees and Officers, continued — June 30, 2011

(Unaudited)

Name,
Age,
Address

Position(s) Held
With Fund and
Length of
Time Served

Term
of
Office*

Principal Occupation(s)
During the
Past 5 Years

No. of
Portfolios
in Russell
Fund
Complex
Overseen by
Trustee

Other Directorships
Held by Trustee
During the Past 5
Years

INDEPENDENT TRUSTEES (continued)

Raymond P. Tennison, Jr.

Born December 21, 1955

1301 Second Avenue,

18th Floor

Seattle, WA 98101

• Trustee since 2000

• Chairman of the Nominating and Governance Committee since 2007

• Appointed until successor is duly elected and qualified

• Vice Chairman of the Board, Simpson Investment Company

• Until November 2010, President, Simpson Investment Company and several additional subsidiary companies, including Simpson Timber Company, Simpson Paper Company and Simpson Tacoma Kraft Company

None

Jack R. Thompson,

Born March 21, 1949

1301 Second Avenue,

18th Floor

Seattle, WA 98101

• Trustee since 2005

• Appointed until successor is duly elected and qualified

• September 2003 to September 2009, Independent Board Chair and Chairman of the Audit Committee, Sparx Asia Funds

• September 2007 to September 2010, Director, Board Chairman and Chairman of the Audit Committee, LifeVantage Corporation (health products company)

• Director, Board Chairman and Chairman of the Audit Committee, LifeVantage Corporation until September 2010 (health products company)

• Director, Sparx Asia Funds until 2009 (investment company)

Julie W. Weston,

Born October 2, 1943

1301 Second Avenue,

18th Floor

Seattle, WA 98101

• Trustee since 2002

• Appointed until successor is duly elected and qualified

• Retired

• Chairperson of the Investment Committee until December 2009

None

*	Each Trustee is subject to mandatory retirement at age 72.


	44			Disclosure of Information about Fund Trustees and Officers

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Disclosure of Information about Fund Trustees and Officers, continued — June 30, 2011

(Unaudited)

Name,
Age,
Address

Position(s) Held
With Fund and
Length of
Time Served

Term
of
Office

Principal Occupation(s)
During the
Past 5 Years

No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee

Other
Directorships Held
by Trustee
During the
Past 5 Years

TRUSTEES EMERITUS

* George F. Russell, Jr., Born July 3, 1932

1301 Second Avenue,

18th Floor

Seattle, WA 98101

Trustee Emeritus and Chairman Emeritus since 1999

Until resignation or removal

• Director Emeritus, Frank Russell Company (investment consultant to institutional investors (“FRC”)) and RIMCo

• Chairman Emeritus, RIC and RIF; Russell Implementation Services Inc. (broker-dealer and investment adviser (“RIS”)); Russell 20-20 Association (non-profit corporation); and Russell Trust Company (non-depository trust company (“RTC”))

• Chairman, Sunshine Management Services, LLC (investment adviser)

None

Paul E. Anderson,

Born October 15, 1931

1301 Second Avenue,

18th Floor

Seattle, WA 98101

Trustee Emeritus since 2007

Five year term

• President, Anderson Management Group LLC (private investments consulting)

• Trustee, RIC and RIF until 2006

• February 2002 to June 2005, Lead Trustee, RIC and RIF

• Chairman of the Nominating and Governance Committee, 2006

None

*	Mr. Russell is also a director emeritus of one or more affiliates of RIC and RIF.


Disclosure of Information about Fund Trustees and Officers		45

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

Disclosure of Information about Fund Trustees and Officers, continued — June 30, 2011

(Unaudited)


Name, Age, Address	Position(s) Held With Fund and Length of Time Served	Term of Office	Principal Occupation(s) During the Past 5 Years
OFFICERS
Cheryl Wichers Born December 16, 1966 1301 Second Avenue, 18th Floor Seattle, WA 98101	Chief Compliance Officer since 2005	Until removed by Independent Trustees	• Chief Compliance Officer, RIC • Chief Compliance Officer, RIF • Chief Compliance Officer, RIMCo • Chief Compliance Officer, RFSC • April 2002-May 2005, Manager, Global Regulatory Policy

Sandra Cavanaugh, Born May 10, 1954 1301 Second Avenue, 18th Floor Seattle, WA 98101	President and Chief Executive Officer since 2010	Until successor is chosen and qualified by Trustees	• President and CEO, RIC and RIF • Chairman of the Board, President and CEO, Russell Financial Services, Inc. • Chairman of the Board, President and CEO, RFSC • Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”)) • ��May 2009 to December 2009, Executive Vice President, Retail Channel, SunTrust Bank • 2007 to January 2009, Senior Vice President, National Sales - Retail Distribution, JPMorgan Chase/Washington Mutual, Inc. • 1997 to 2007, President - WM Funds Distributor & Shareholder Services/WM Financial Services

Mark E. Swanson, Born November 26, 1963 1301 Second Avenue, 18th Floor Seattle, WA 98101	Treasurer and Chief Accounting Officer since 1998	Until successor is chosen and qualified by Trustees	• Treasurer, Chief Accounting Officer and CFO, RIC and RIF • Director, Funds Administration, RIMCo, RFSC, RTC and Russell Financial Services, Inc. • Treasurer and Principal Accounting Officer, SSgA Funds

Peter Gunning, Born February 22, 1967 1301 Second Avenue, 18th Floor Seattle, WA 98101	Chief Investment Officer since 2008	Until removed by Trustees	• Chief Investment Officer, RIC and RIF • Director, FRC • Chairman of the Board, President and CEO, RIMCo • 1996 to 2008 Chief Investment Officer, Russell, Asia Pacific

Mary Beth Rhoden, Born April 25, 1969 1301 Second Avenue, 18th Floor Seattle, WA 98101	Secretary since 2010	Until successor is chosen and qualified by Trustees	• 1999 to 2010 Assistant Secretary, RIC and RIF • Associate General Counsel, FRC • Secretary, RIMCo, RFSC and Russell Financial Services, Inc. • Secretary and Chief Legal Officer, RIC and RIF


	46			Disclosure of Information about Fund Trustees and Officers

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

1301 Second Avenue, Seattle, Washington 98101

(800) 787-7354

Interested Trustee

Sandra Cavanaugh

Independent Trustees

Thaddas L. Alston

Kristianne Blake

Daniel P. Connealy

Jonathan Fine

Raymond P. Tennison, Jr.

Jack R. Thompson

Julie W. Weston

Trustees Emeritus

George F. Russell, Jr.

Paul E. Anderson

Officers

Sandra Cavanaugh, President and Chief Executive Officer

Cheryl Wichers, Chief Compliance Officer

Peter Gunning, Chief Investment Officer

Mark E. Swanson, Treasurer and Chief Accounting Officer

Mary Beth Rhoden, Secretary

Adviser

Russell Investment Management Company

1301 Second Avenue

Seattle, Washington 98101

Administrator and Transfer and Dividend Disbursing Agent

Russell Fund Services Company

1301 Second Avenue

Seattle, Washington 98101

Custodian

State Street Bank and Trust Company

Josiah Quincy Building

200 Newport Avenue

North Quincy, MA 02171

Office of Shareholder Inquiries

1301 Second Avenue

Seattle, Washington 98101

(800) 787-7354

Legal Counsel

Dechert LLP

200 Clarendon Street, 27th Floor

Boston, MA 02116-5021

Distributor

Russell Financial Services, Inc.

1301 Second Avenue

Seattle, Washington 98101

Money Managers as of June 30, 2011

Russell U.S. Core Equity Fund

BlackRock Capital Management, Inc., Wilmington, DE

Columbus Circle Investors, Stamford, CT

First Eagle Investment Management, LLC, New York, NY

Institutional Capital LLC, Chicago, IL

Lazard Asset Management, LLC, New York, NY

MFS Institutional Advisors, Inc., Boston, MA

Montag & Caldwell, LLC, Atlanta, GA

Schneider Capital Management Corporation, Wayne, PA

Snow Capital Management L.P., Sewickley, PA

Suffolk Capital Management, LLC, New York, NY

Russell U.S. Quantitative Equity Fund

Aronson+Johnson+Ortiz, LP, Philadelphia, PA

INTECH Investment Management LLC, West Palm Beach, FL

Jacobs Levy Equity Management, Inc., Florham Park, NJ

Numeric Investors LLC, Boston, MA

PanAgora Asset Management Inc, Boston MA

Russell U.S. Small & Mid Cap Fund

Chartwell Investment Partners, Berwyn, PA

ClariVest Asset Management LLC, San Diego, CA

DePrince, Race & Zollo, Inc., Winter Park, FL

Jacobs Levy Equity Management, Inc., Florham Park, NJ

Next Century Growth Investors, LLC, Minneapolis, MN

Ranger Investment Management, L.P., Dallas, TX

Signia Capital Management, LLC, Spokane, WA

Tygh Capital Management, Inc., Portland, OR

Russell International Developed Markets Fund

AQR Capital Management, LLC, Greenwich, CT

Axiom International Investors LLC, Greenwich, CT

del Rey Global Investors, LLC, Los Angeles, CA

Marsico Capital Management, LLC, Denver, CO

MFS Institutional Advisors, Inc., Boston, MA

Mondrian Investment Partners Limited, London,

United Kingdom

Pzena Investment Management, LLC, New York, NY

UBS Global Asset Management (Americas) Inc., Chicago, IL

William Blair & Company, LLC, Chicago, IL

Russell Global Equity Fund

GLG Inc., New York, NY

Harris Associates, L.P., Chicago, IL

MFS Institutional Advisors, Inc., Boston, MA

Sanders Capital, LLC, New York, NY

Tradewinds Global Investors, LLC, Los Angeles, CA

T. Rowe Price Associates, Inc., Baltimore, MD

Russell Emerging Markets Fund

AllianceBernstein L.P., New York, NY

Arrowstreet Capital, Limited Partnership, Boston, MA

Delaware Management Company, Philadelphia, PA

Genesis Asset Managers, LLP, Guernsey, Channel Islands

Harding Loevner LP, Somerville, NJ

UBS Global Asset Management (Americas) Inc., Chicago, IL

Victoria 1522 Investments, LP, San Francisco, CA

Russell Global Opportunistic Credit Fund

DDJ Capital Management, LLC, Waltham, MA

Oaktree Capital Management, L.P., Los Angeles, CA

Stone Harbor Investment Partners LP, New York, NY


Adviser, Money Managers and Service Providers		47

Russell Investment Company

LifePoints^® Funds Target Distribution Strategies

1301 Second Avenue, Seattle, Washington 98101

(800) 787-7354

Russell Strategic Bond Fund

Brookfield Investment Management Inc., New York, NY

Goldman Sachs Asset Management, L.P., New York, NY

Logan Circle Partners, L.P., Philadelphia, PA

Metropolitan West Asset Management, LLC, Los Angeles, CA

Pacific Investment Management Company LLC, Newport Beach, CA

Russell Investment Grade Bond Fund

Metropolitan West Asset Management, LLC, Los Angeles, CA

Neuberger Berman Fixed Income LLC, Chicago, IL

Pacific Investment Management Company LLC, Newport Beach, CA

Western Asset Management Company, Pasadena, CA

Western Asset Management Company Limited, London, England

Russell Short Duration Bond Fund

Logan Circle Partners, L.P., Philadelphia, PA

Pacific Investment Management Company LLC,

Newport Beach, CA

Russell Commodity Strategies Fund

Credit Suisse Asset Management, LLC, New York, NY

Goldman Sachs Asset Management, L.P., New York, NY

Jefferies Asset Management, LLC, Stamford, CT

Russell Global Infrastructure Fund

Cohen & Steers Capital Management, Inc., New York, NY

Macquarie Capital Investment Management LLC, New York, NY

Nuveen Asset Management, LLC, Chicago, IL

Russell Global Real Estate Securities Fund

AEW Capital Management, L.P., Boston, MA

Cohen & Steers Capital Management, Inc., New York, NY

INVESCO Advisers, Inc. which acts as a money manager to the Fund through its INVESCO Real Estate Division, Dallas, TX

Russell Money Market Fund

Russell Investment Management Company, Seattle, WA

This report is prepared from the books and records of the Funds and is submitted for the general information of shareholders and is not authorized for distribution to prospective investors unless accompanied or preceded by an effective Prospectus. Nothing herein contained is to be considered an offer of sale or a solicitation of an offer to buy shares of Russell Investment Company. Such offering is made only by Prospectus, which includes details as to offering price and other material information.


	48			Adviser, Money Managers and Service Providers


Russell Investment Company	1301 Second Avenue	800-787-7354
	Seattle, Washington 98101	Fax: 206-505-3495
		www.russell.com

LOGO

36-08-243

Item 2.

Code of Ethics. [Annual Report Only]

Item 3.

Audit Committee Financial Expert. [Annual Report Only]

Item 4.

Principal Accountant Fees and Services. [Annual Report Only]

Item 5.

Audit Committee of Listed Registrants. [Not Applicable]

Item 6.

[Schedules of Investments are included as part of the Report to Stockholders filed under Item 1 of this form]

Items 7-9.

[Not Applicable]

Item 10.

Submission of Matters to a Vote of Security Holders

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.

Item 11.

Controls and Procedures

(a) Registrant’s principal executive officer and principal financial officer have concluded that Registrant’s disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940 (the “Act”)) are effective, based on their evaluation of these controls and procedures as of a date within 90 days of the date this report is filed with the Securities and Exchange Commission.

(b) There were no significant changes in Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected or is likely to materially affect Registrant’s internal control over financial reporting.

Item 12.

Exhibit List

(a) Certification for principal executive officer of Registrant as required by Rule 30a-2(a) under the Act and certification for principal financial officer of Registrant as required by Rule 30a-2(a) under the Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Russell Investment Company


By:		/s/ Sandra Cavanaugh
		Sandra Cavanaugh
		President, Principal Executive Officer and Chief Executive Officer

Date: September 7, 2011

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, Principal Executive Officer and Chief Executive Officer

Date: September 7, 2011


By:		/s/ Mark E. Swanson
		Mark E. Swanson
		Principal Financial Officer, Principal Accounting Officer and Treasurer

Date: September 7, 2011

Russell Investment N-CSRSCertified semi-annual shareholder report (management investment company)