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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.A 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number:811-05371
Russell Investment Funds
(Exact name of registrant as specified in charter)
1301 2nd Avenue 18th Floor, Seattle Washington 98101
(Address of principal executive offices) (Zip code)
Mary Beth R. Albaneze, Secretary and Chief Legal Officer
Russell Investment Funds
1301 2nd Avenue
18th Floor
Seattle, Washington 98101
206-505-4846
______________________________________________
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-787-7354
Date of fiscal year end: December 31
Date of reporting period: January 1, 2018 to June 30, 2018
Item 1. Reports to Stockholders
Russell Investment Funds
Russell Investment Funds is
a series investment company
with nine different investment
portfolios referred to as Funds.
These financial statements report
on five of these Funds.
Russell Investment Funds
Semi-annual Report
June 30, 2018 (Unaudited)
Table of Contents
Page | |
U. S. Strategic Equity Fund | 3 |
U. S. Small Cap Equity Fund | 19 |
International Developed Markets Fund | 39 |
Strategic Bond Fund | 63 |
Global Real Estate Securities Fund | 113 |
Notes to Schedule of Investments | 131 |
Notes to Financial Highlights | 134 |
Notes to Financial Statements | 135 |
Affiliated Brokerage Transactions | 154 |
Basis for Approval of Investment Advisory Agreement | 155 |
Shareholder Requests for Additional Information | 163 |
Disclosure of Information about Fund Trustees and Officers | 164 |
Adviser, Money Managers and Service Providers | 169 |
Russell Investment Funds
Copyright © Russell Investments 2018. All rights reserved.
Russell Investments’ ownership is composed of a majority stake held by funds managed by TA Associates with
minority stakes held by funds managed by Reverence Capital Partners and Russell Investments’ management.
Fund objectives, risks, charges and expenses should be carefully considered before in-
vesting. A prospectus containing this and other important information must precede or
accompany this material. Please read the prospectus carefully before investing.
Securities distributed through Russell Investments Financial Services, LLC, 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.
Russell Investment Funds
U.S. Strategic Equity Fund
Shareholder Expense Example — June 30, 2018 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”) . | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. The fees and expenses shown in this | ||||||
administrative fees and other Fund expenses. The Example is | section do not reflect any Insurance Company Separate Account | ||||||
intended to help you understand your ongoing costs (in dollars) | Policy Charges. | ||||||
of investing in the Fund and to compare these costs with the | Hypothetical | ||||||
ongoing costs of investing in other mutual funds. The Example | Performance (5% | ||||||
is based on an investment of $1,000 invested at the beginning of | Actual | return before | |||||
the period and held for the entire period indicated, which for this | Performance | expenses) | |||||
Beginning Account Value | |||||||
Fund is from January 1, 2018 to June 30, 2018. | January 1, 2018 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | ||||||
June 30, 2018 | $ | 1,020.90 | $ | 1,020.63 | |||
The information in the table under the heading “Actual | Expenses Paid During Period* | $ | 4.21 | $ | 4.21 | ||
Performance” provides information about actual account values | |||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.84% | ||||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 181/365 (to reflect the one-half | |||||||
that you paid over the period. Simply divide your account value by | year period) . | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | |||||||
= 8.6), then multiply the result by the number in the first column | |||||||
in the row entitled “Expenses Paid During Period” to estimate | |||||||
the expenses you paid on your account during this period. | |||||||
Hypothetical Example for Comparison Purposes | |||||||
The information in the table under the heading “Hypothetical | |||||||
Performance (5% return before expenses)” provides information | |||||||
about hypothetical account values and hypothetical expenses | |||||||
based on the Fund’s actual expense ratio and an assumed rate of | |||||||
return of 5% per year before expenses, which is not the Fund’s | |||||||
actual return. The hypothetical account values and expenses | |||||||
may not be used to estimate the actual ending account balance or | |||||||
expenses you paid for the period. You may use this information | |||||||
to compare the ongoing costs of investing in the Fund and other | |||||||
funds. To do so, compare this 5% hypothetical example with the | |||||||
5% hypothetical examples that appear in the shareholder reports | |||||||
of other funds. |
U.S. Strategic Equity Fund 3
Russell Investment Funds
U.S. Strategic Equity Fund
Schedule of Investments — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) or | Value | Amount ($) or | Value | ||||||
Shares | $ | Shares | $ | ||||||
Common Stocks - 96.6% | Tupperware Brands Corp. | 17,300 | 713 | ||||||
Consumer Discretionary - 19.8% | Ulta Salon Cosmetics & Fragrance, Inc. (Æ) | 9,700 | 2,265 | ||||||
Advance Auto Parts, Inc. | 6,300 | 855 | VF Corp. | 5,200 | 424 | ||||
Amazon. com, Inc. (Æ) | 5,696 | 9,681 | Visteon Corp. (Æ) | 4,360 | 564 | ||||
Aramark | 5,800 | 215 | Wal-Mart Stores, Inc. | 84,326 | 7,222 | ||||
AutoZone, Inc. (Æ) | 470 | 315 | Walt Disney Co. (The) | 74,489 | 7,807 | ||||
Best Buy Co. , Inc. | 3,600 | 268 | Williams-Sonoma, Inc. | 2,200 | 135 | ||||
Brunswick Corp. | 2,400 | 155 | Yum China Holdings, Inc. | 10,100 | 388 | ||||
Burlington Stores, Inc. (Æ) | 1,020 | 154 | Yum! Brands, Inc. | 2,800 | 219 | ||||
Carnival Corp. | 53,600 | 3,072 | |||||||
Carter's, Inc. | 600 | 65 | 88,500 | ||||||
CBS Corp. Class B | 50,871 | 2,860 | |||||||
Chipotle Mexican Grill, Inc. Class A(Æ) | 310 | 134 | Consumer Staples - 9.0% | ||||||
Altria Group, Inc. | 9,300 | 528 | |||||||
Cinemark Holdings, Inc. | 9,000 | 316 | Anheuser-Busch InBev SA - ADR | 27,300 | 2,751 | ||||
Columbia Sportswear Co. | 1,300 | 119 | Archer-Daniels-Midland Co. | 24,500 | 1,122 | ||||
Comcast Corp. Class A | 177,200 | 5,813 | Bunge, Ltd. | 9,400 | 655 | ||||
Cooper-Standard Holdings, Inc. (Æ) | 990 | 129 | Coca-Cola Co. (The) | 154,561 | 6,778 | ||||
Costco Wholesale Corp. | 3,920 | 819 | Colgate-Palmolive Co. | 11,300 | 732 | ||||
Darden Restaurants, Inc. | 28,400 | 3,041 | ConAgra Foods, Inc. | 6,600 | 236 | ||||
Diageo PLC - ADR | 15,900 | 2,290 | Constellation Brands, Inc. Class A | 2,200 | 482 | ||||
Dick's Sporting Goods, Inc. | 2,900 | 102 | CVS Health Corp. | 15,800 | 1,017 | ||||
Domino's Pizza, Inc. | 2,640 | 745 | Heineken NV - ADR | 26,100 | 1,310 | ||||
DR Horton, Inc. | 30,400 | 1,246 | Hershey Co. (The) | 500 | 47 | ||||
Dunkin' Brands Group, Inc. | 20,800 | 1,437 | Ingredion, Inc. | 2,700 | 299 | ||||
eBay, Inc. (Æ) | 99,800 | 3,619 | JM Smucker Co. (The) | 1,500 | 161 | ||||
Foot Locker, Inc. | 2,200 | 116 | Kellogg Co. | 65,800 | 4,597 | ||||
Ford Motor Co. | 65,000 | 720 | Kraft Heinz Co. (The) | 40,552 | 2,548 | ||||
Fortune Brands Home & Security, Inc. | 800 | 43 | Molson Coors Brewing Co. Class B | 20,700 | 1,408 | ||||
GameStop Corp. Class A | 4,700 | 68 | Mondelez International, Inc. Class A | 51,203 | 2,099 | ||||
Garmin, Ltd. | 2,000 | 122 | Monster Beverage Corp. (Æ) | 4,200 | 241 | ||||
General Motors Co. | 116,122 | 4,576 | Nestle SA - ADR | 60,800 | 4,708 | ||||
Goodyear Tire & Rubber Co. (The) | 47,300 | 1,102 | PepsiCo, Inc. | 17,842 | 1,943 | ||||
Graham Holdings Co. Class B | 1,000 | 586 | Philip Morris International, Inc. | 15,600 | 1,260 | ||||
Hilton Worldwide Holdings, Inc. | 6,100 | 483 | Pinnacle Foods, Inc. | 32,789 | 2,133 | ||||
Home Depot, Inc. (The) | 12,200 | 2,380 | Procter & Gamble Co. (The) | 35,300 | 2,756 | ||||
Hyatt Hotels Corp. Class A | 2,500 | 193 | Tyson Foods, Inc. Class A | 3,600 | 248 | ||||
John Wiley & Sons, Inc. Class A | 5,860 | 366 | |||||||
Lear Corp. | 1,700 | 316 | 40,059 | ||||||
LKQ Corp. (Æ) | 3,900 | 124 | |||||||
LVMH Moet Hennessy Louis Vuitton SE | Energy - 7.0% | ||||||||
- ADR | 14,300 | 948 | Anadarko Petroleum Corp. | 28,700 | 2,102 | ||||
Madison Square Garden Co. (The) Class A(Æ) | 2,020 | 627 | Andeavor(Æ) | 3,700 | 485 | ||||
Magna International, Inc. Class A | 21,500 | 1,250 | BP PLC - ADR | 56,000 | 2,557 | ||||
Marriott International, Inc. Class A | 4,200 | 532 | Canadian Natural Resources, Ltd. | 81,900 | 2,955 | ||||
McDonald's Corp. | 40,070 | 6,278 | Chevron Corp. | 17,290 | 2,186 | ||||
News Corp. Class A | 10,269 | 159 | ConocoPhillips | 39,800 | 2,771 | ||||
Nike, Inc. Class B | 29,028 | 2,313 | Devon Energy Corp. | 48,800 | 2,145 | ||||
Norwegian Cruise Line Holdings, Ltd. (Æ) | 50,893 | 2,405 | EOG Resources, Inc. | 13,904 | 1,730 | ||||
NVR, Inc. (Æ) | 20 | 59 | Exxon Mobil Corp. | 23,000 | 1,903 | ||||
PulteGroup, Inc. | 9,300 | 267 | Halliburton Co. | 26,800 | 1,208 | ||||
PVH Corp. | 4,236 | 634 | Kinder Morgan, Inc. | 70,200 | 1,240 | ||||
Ross Stores, Inc. | 5,100 | 432 | Marathon Petroleum Corp. | 15,300 | 1,073 | ||||
Service Corp. International | 7,700 | 276 | National Oilwell Varco, Inc. | 11,400 | 495 | ||||
Starbucks Corp. | 18,500 | 904 | Noble Energy, Inc. | 7,300 | 258 | ||||
Tapestry, Inc. | 56,648 | 2,646 | Occidental Petroleum Corp. | 10,400 | 870 | ||||
Target Corp. | 3,300 | 251 | Oceaneering International, Inc. | 21,800 | 555 | ||||
Tenneco, Inc. | 3,100 | 137 | PBF Energy, Inc. Class A | 3,900 | 164 |
See accompanying notes which are an integral part of the financial statements.
4 U.S. Strategic Equity Fund
Russell Investment Funds
U.S. Strategic Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Peabody Energy Corp. | 6,500 | 296 | Nasdaq, Inc. | 2,400 | 219 | ||
Phillips 66 | 10,800 | 1,213 | New York Community Bancorp, Inc. | 56,000 | 618 | ||
Pioneer Natural Resources Co. | 9,292 | 1,758 | Northern Trust Corp. | 6,200 | 638 | ||
Schlumberger, Ltd. | 25,500 | 1,709 | OneMain Holdings, Inc. (Æ) | 26,900 | 896 | ||
Transocean, Ltd. (Æ) | 29,300 | 394 | PayPal Holdings, Inc. (Æ) | 6,400 | 533 | ||
Valero Energy Corp. | 12,320 | 1,365 | PNC Financial Services Group, Inc. (The) | 8,310 | 1,122 | ||
World Fuel Services Corp. | 2,700 | 55 | Popular, Inc. | 3,600 | 163 | ||
31,487 | ProAssurance Corp. | 1,200 | 43 | ||||
Progressive Corp. (The) | 11,200 | 663 | |||||
Financial Services - 15.6% | Prudential Financial, Inc. | 6,800 | 636 | ||||
Aflac, Inc. | 6,400 | 275 | Radian Group, Inc. | 32,100 | 521 | ||
Allstate Corp. (The) | 10,100 | 922 | Raymond James Financial, Inc. | 2,600 | 232 | ||
Ally Financial, Inc. | 12,900 | 339 | Rayonier, Inc. (ö) | 6,700 | 259 | ||
American Express Co. | 4,000 | 392 | Reinsurance Group of America, Inc. Class A | 1,580 | 211 | ||
American Homes 4 Rent Class A(ö) | 11,700 | 260 | Santander Consumer USA Holdings, Inc. | 75,300 | 1,437 | ||
American International Group, Inc. | 12,600 | 668 | SLM Corp. (Æ) | 52,300 | 599 | ||
American National Insurance Co. | 1,900 | 227 | State Street Corp. | 9,330 | 869 | ||
Assured Guaranty, Ltd. | 6,600 | 236 | SunTrust Banks, Inc. | 11,000 | 726 | ||
Athene Holding, Ltd. Class A(Æ) | 4,700 | 206 | Synchrony Financial | 31,500 | 1,051 | ||
Bank of America Corp. | 144,541 | 4,075 | Total System Services, Inc. | 3,600 | 304 | ||
Bank of New York Mellon Corp. (The) | 18,400 | 993 | Travelers Cos. , Inc. (The) | 6,370 | 779 | ||
BB&T Corp. | 1,500 | 76 | US Bancorp | 2,700 | 135 | ||
Berkshire Hathaway, Inc. Class B(Æ) | 20,200 | 3,769 | Visa, Inc. Class A | 6,500 | 861 | ||
Blackstone Group, LP (The) | 73,700 | 2,371 | Voya Financial, Inc. | 7,500 | 352 | ||
BNP Paribas - ADR | 35,600 | 1,095 | Wells Fargo & Co. | 9,300 | 516 | ||
Broadridge Financial Solutions, Inc. | 6,000 | 691 | Willis Towers Watson PLC(Æ) | 1,600 | 243 | ||
Capital One Financial Corp. | 33,581 | 3,086 | 69,653 | ||||
Cboe Global Markets, Inc. | 5,500 | 572 | |||||
CBRE Group, Inc. Class A(Æ) | 8,200 | 391 | Health Care - 10.7% | ||||
Citigroup, Inc. | 97,695 | 6,537 | AbbVie, Inc. | 6,800 | 630 | ||
Citizens Financial Group, Inc. | 18,330 | 713 | Aerie Pharmaceuticals, Inc. (Æ) | 28,754 | 1,943 | ||
Comerica, Inc. | 4,700 | 427 | Aetna, Inc. | 13,235 | 2,429 | ||
Commerce Bancshares, Inc. | 4,400 | 285 | Agilent Technologies, Inc. | 6,200 | 383 | ||
Discover Financial Services | 6,800 | 479 | Akorn, Inc. (Æ) | 23,600 | 392 | ||
E*Trade Financial Corp. (Æ) | 8,300 | 508 | Align Technology, Inc. (Æ) | 2,220 | 760 | ||
Equinix, Inc. (Æ)(ö) | 1,340 | 576 | Allergan PLC | 6,040 | 1,007 | ||
Equity Commonwealth(Æ)(ö) | 4,700 | 148 | Allscripts Healthcare Solutions, Inc. (Æ) | 14,528 | 174 | ||
Equity Residential(ö) | 8,300 | 529 | AmerisourceBergen Corp. Class A | 2,000 | 171 | ||
Everest Re Group, Ltd. | 1,260 | 290 | Amgen, Inc. | 2,500 | 461 | ||
Fidelity National Information Services, Inc. | 5,700 | 604 | Anthem, Inc. (Æ) | 7,150 | 1,701 | ||
First Data Corp. Class A(Æ) | 58,400 | 1,222 | Baxter International, Inc. | 12,500 | 923 | ||
Fiserv, Inc. (Æ) | 4,200 | 311 | Becton Dickinson and Co. | 1,400 | 335 | ||
Global Payments, Inc. | 500 | 56 | Bio-Rad Laboratories, Inc. Class A(Æ) | 2,000 | 577 | ||
Goldman Sachs Group, Inc. (The) | 10,587 | 2,335 | Bio-Techne Corp. (Æ) | 4,000 | 592 | ||
HCP, Inc. (ö) | 10,500 | 271 | Bristol-Myers Squibb Co. | 17,300 | 957 | ||
Intercontinental Exchange, Inc. | 9,800 | 721 | Bruker Corp. | 14,200 | 412 | ||
Jack Henry & Associates, Inc. | 3,700 | 482 | Cardinal Health, Inc. | 9,000 | 440 | ||
Jefferies Financial Group, Inc. (Æ) | 5,000 | 114 | Celgene Corp. (Æ) | 41,769 | 3,316 | ||
JPMorgan Chase & Co. | 67,686 | 7,053 | Centene Corp. (Æ) | 7,600 | 936 | ||
KKR & Co. , LP | 115,000 | 2,858 | Cerner Corp. (Æ) | 800 | 48 | ||
Lazard, Ltd. Class A | 1,900 | 93 | Charles River Laboratories International, | ||||
Lincoln National Corp. | 16,361 | 1,018 | Inc. (Æ) | 800 | 90 | ||
M&T Bank Corp. | 4,350 | 740 | Cigna Corp. | 7,520 | 1,278 | ||
MasterCard, Inc. Class A | 11,030 | 2,168 | Eli Lilly & Co. | 16,400 | 1,399 | ||
MetLife, Inc. | 38,491 | 1,679 | Envision Healthcare Corp. (Æ) | 3,600 | 158 | ||
Morgan Stanley | 41,097 | 1,948 | Express Scripts Holding Co. (Æ) | 5,200 | 401 | ||
Morningstar, Inc. | 1,700 | 218 | Gilead Sciences, Inc. | 13,200 | 935 |
See accompanying notes which are an integral part of the financial statements.
U.S. Strategic Equity Fund 5
Russell Investment Funds
U.S. Strategic Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) or | Value | Amount ($) or | Value | |||||
Shares | $ | Shares | $ | |||||
Henry Schein, Inc. (Æ) | 1,600 | 116 | Sonoco Products Co. | 2,300 | 121 | |||
Horizon Pharma PLC(Æ) | 39,000 | 646 | Tahoe Resources, Inc. | 110,500 | 544 | |||
Humana, Inc. | 4,240 | 1,262 | 10,853 | |||||
IDEXX Laboratories, Inc. (Æ) | 1,100 | 240 | ||||||
Illumina, Inc. (Æ) | 700 | 196 | Producer Durables - 11.1% | |||||
Intuitive Surgical, Inc. (Æ) | 2,470 | 1,182 | 3M Co. | 2,800 | 551 | |||
Jazz Pharmaceuticals PLC(Æ) | 3,100 | 534 | Accenture PLC Class A | 3,200 | 523 | |||
Johnson & Johnson | 18,620 | 2,260 | AECOM(Æ) | 18,200 | 601 | |||
Laboratory Corp. of America Holdings(Æ) | 3,000 | 539 | AerCap Holdings NV(Æ) | 28,400 | 1,538 | |||
LifePoint Health, Inc. (Æ) | 4,500 | 220 | AGCO Corp. | 6,700 | 407 | |||
Loxo Oncology, Inc. (Æ) | 6,645 | 1,153 | American Airlines Group, Inc. | 21,600 | 820 | |||
Mallinckrodt PLC(Æ) | 15,500 | 289 | Ametek, Inc. | 5,800 | 419 | |||
McKesson Corp. | 5,540 | 739 | Apergy Corp. (Æ) | 300 | 13 | |||
Medtronic PLC | 4,400 | 377 | Automatic Data Processing, Inc. | 2,100 | 282 | |||
Merck & Co. , Inc. | 22,200 | 1,348 | Avery Dennison Corp. | 4,700 | 480 | |||
Molina Healthcare, Inc. (Æ) | 1,100 | 108 | Babcock & Wilcox Co. (The) Class W(Æ) | 6,800 | 424 | |||
Mylan NV(Æ) | 21,900 | 791 | Boeing Co. (The) | 11,421 | 3,832 | |||
PerkinElmer, Inc. | 7,000 | 513 | Booz Allen Hamilton Holding Corp. Class A | 3,400 | 149 | |||
Pfizer, Inc. | 46,100 | 1,673 | Carlisle Cos. , Inc. | 500 | 54 | |||
Portola Pharmaceuticals, Inc. (Æ) | 9,900 | 374 | Caterpillar, Inc. | 1,300 | 176 | |||
Qiagen NV(Æ) | 10,700 | 387 | Copa Holdings SA Class A | 2,600 | 246 | |||
Quest Diagnostics, Inc. | 4,600 | 506 | Copart, Inc. (Æ) | 1,600 | 90 | |||
Sage Therapeutics, Inc. (Æ) | 10,409 | 1,629 | CoStar Group, Inc. (Æ) | 1,400 | 578 | |||
Shire PLC - ADR | 3,700 | 625 | CSX Corp. | 1,600 | 102 | |||
Steris PLC | 1,800 | 189 | Cummins, Inc. | 2,100 | 279 | |||
Stryker Corp. | 500 | 84 | Danaher Corp. | 1,300 | 128 | |||
Teleflex, Inc. | 400 | 107 | Deere & Co. | 14,329 | 2,003 | |||
Thermo Fisher Scientific, Inc. | 2,600 | 539 | Delta Air Lines, Inc. | 24,100 | 1,194 | |||
United Therapeutics Corp. (Æ) | 600 | 68 | Dover Corp. | 600 | 44 | |||
UnitedHealth Group, Inc. | 10,894 | 2,671 | Eaton Corp. PLC | 5,900 | 441 | |||
Universal Health Services, Inc. Class B | 3,300 | 368 | EMCOR Group, Inc. | 2,800 | 213 | |||
Varian Medical Systems, Inc. (Æ) | 500 | 57 | Esterline Technologies Corp. (Æ) | 1,800 | 133 | |||
Vertex Pharmaceuticals, Inc. (Æ) | 3,610 | 614 | Evoqua Water Technologies Corp. (Æ) | 71,821 | 1,472 | |||
WellCare Health Plans, Inc. (Æ) | 3,040 | 748 | Expeditors International of Washington, Inc. | 7,300 | 533 | |||
West Pharmaceutical Services, Inc. | 600 | 60 | FedEx Corp. | 8,381 | 1,903 | |||
Zimmer Biomet Holdings, Inc. | 4,700 | 524 | Fluor Corp. | 5,900 | 288 | |||
Zoetis, Inc. Class A | 12,800 | 1,090 | General Dynamics Corp. | 3,800 | 708 | |||
47,674 | Genpact, Ltd. | 32,900 | 952 | |||||
Graco, Inc. | 2,700 | 122 | ||||||
Materials and Processing - 2.4% | HD Supply Holdings, Inc. (Æ) | 4,200 | 180 | |||||
Air Products & Chemicals, Inc. | 1,600 | 249 | Heico Corp. Class A | 6,250 | 381 | |||
Ashland Global Holdings, Inc. | 7,800 | 609 | HEICO Corp. | 6,625 | 483 | |||
Ball Corp. | 2,700 | 96 | Honeywell International, Inc. | 4,400 | 634 | |||
Berry Plastics Group, Inc. (Æ) | 4,500 | 207 | Hubbell, Inc. Class B | 900 | 95 | |||
Cabot Corp. | 4,000 | 247 | Huntington Ingalls Industries, Inc. | 500 | 108 | |||
Crown Holdings, Inc. (Æ) | 20,000 | 895 | IDEX Corp. | 1,200 | 164 | |||
Domtar Corp. | 9,400 | 449 | IHS Markit, Ltd. (Æ) | 9,100 | 469 | |||
DowDuPont, Inc. | 46,790 | 3,084 | Illinois Tool Works, Inc. | 9,200 | 1,275 | |||
Eastman Chemical Co. | 8,100 | 810 | Insperity, Inc. | 1,700 | 162 | |||
Huntsman Corp. | 3,100 | 91 | Itron, Inc. (Æ) | 1,600 | 96 | |||
International Flavors & Fragrances, Inc. | 4,720 | 585 | Jacobs Engineering Group, Inc. | 2,400 | 152 | |||
LyondellBasell Industries NV Class A | 1,200 | 132 | JB Hunt Transport Services, Inc. | 500 | 61 | |||
NewMarket Corp. | 100 | 40 | Kansas City Southern | 25,217 | 2,672 | |||
Owens Corning | 2,000 | 127 | Kirby Corp. (Æ) | 1,800 | 150 | |||
Packaging Corp. of America | 500 | 56 | L3 Technologies, Inc. | 3,300 | 635 | |||
Reliance Steel & Aluminum Co. | 8,200 | 718 | Landstar System, Inc. | 5,570 | 608 | |||
Sherwin-Williams Co. (The) | 4,400 | 1,793 | Lockheed Martin Corp. | 2,380 | 703 |
See accompanying notes which are an integral part of the financial statements.
6 U.S. Strategic Equity Fund
Russell Investment Funds
U.S. Strategic Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) or | Value | Amount ($) or | Value | |||||
Shares | $ | Shares | $ | |||||
Macquarie Infrastructure Corp. | 16,100 | 679 | Cornerstone OnDemand, Inc. (Æ) | 3,000 | 142 | |||
ManpowerGroup, Inc. | 3,927 | 338 | Corning, Inc. | 20,900 | 575 | |||
Mettler-Toledo International, Inc. (Æ) | 300 | 174 | Dell Technologies, Inc. Class V(Æ) | 5,500 | 465 | |||
Navistar International Corp. (Æ) | 1,300 | 53 | EchoStar Corp. Class A(Æ) | 7,300 | 324 | |||
Northrop Grumman Corp. | 3,200 | 985 | Electronic Arts, Inc. (Æ) | 7,390 | 1,042 | |||
Old Dominion Freight Line, Inc. | 1,500 | 223 | F5 Networks, Inc. (Æ) | 3,370 | 581 | |||
Paychex, Inc. | 4,100 | 280 | Facebook, Inc. Class A(Æ) | 29,161 | 5,666 | |||
Pentair PLC | 1,200 | 50 | FireEye, Inc. (Æ) | 6,100 | 94 | |||
Quanta Services, Inc. (Æ) | 63,133 | 2,108 | Fortinet, Inc. (Æ) | 5,100 | 318 | |||
Raytheon Co. | 5,900 | 1,140 | Gartner, Inc. (Æ) | 2,300 | 306 | |||
Republic Services, Inc. Class A | 3,300 | 226 | Hewlett Packard Enterprise Co. | 92,100 | 1,345 | |||
Rockwell Automation, Inc. | 13,661 | 2,271 | HP, Inc. (Æ) | 54,600 | 1,239 | |||
Rockwell Collins, Inc. | 7,600 | 1,024 | Imperva, Inc. (Æ) | 1,000 | 48 | |||
Roper Technologies, Inc. | 1,500 | 414 | Intel Corp. | 27,500 | 1,367 | |||
Ryder System, Inc. | 2,800 | 201 | International Business Machines Corp. | 2,500 | 349 | |||
Southwest Airlines Co. | 4,000 | 204 | IPG Photonics Corp. (Æ) | 1,900 | 419 | |||
Spirit AeroSystems Holdings, Inc. Class A | 5,200 | 447 | Jabil Circuit, Inc. | 8,700 | 240 | |||
Square, Inc. Class A(Æ) | 4,000 | 247 | Juniper Networks, Inc. | 34,100 | 935 | |||
Stanley Black & Decker, Inc. | 600 | 80 | Lam Research Corp. | 1,500 | 259 | |||
Teledyne Technologies, Inc. (Æ) | 500 | 100 | Leidos Holdings, Inc. | 9,500 | 561 | |||
Terex Corp. | 2,100 | 89 | Liberty Expedia Holdings, Inc. Class A(Æ) | 9,800 | 431 | |||
Textron, Inc. | 6,900 | 455 | LogMeIn, Inc. | 1,500 | 155 | |||
Union Pacific Corp. | 17,014 | 2,410 | Marvell Technology Group, Ltd. | 159,198 | 3,413 | |||
United Continental Holdings, Inc. (Æ) | 16,500 | 1,151 | Maxim Integrated Products, Inc. | 6,300 | 370 | |||
United Technologies Corp. | 7,800 | 975 | Micron Technology, Inc. (Æ) | 47,500 | 2,491 | |||
Waters Corp. (Æ) | 1,700 | 329 | Microsoft Corp. | 100,649 | 9,925 | |||
WESCO International, Inc. (Æ) | 3,000 | 171 | NetApp, Inc. | 11,900 | 935 | |||
Worldpay, Inc. Class A(Æ) | 1,500 | 123 | NVIDIA Corp. | 8,736 | 2,069 | |||
XPO Logistics, Inc. (Æ) | 19,280 | 1,931 | Oracle Corp. | 1,200 | 53 | |||
49,604 | Palo Alto Networks, Inc. (Æ) | 1,720 | 353 | |||||
Pure Storage, Inc. Class A(Æ) | 2,400 | 57 | ||||||
Technology - 18.3% | Qorvo, Inc. (Æ) | 2,300 | 184 | |||||
Adobe Systems, Inc. (Æ) | 800 | 195 | QUALCOMM, Inc. | 4,000 | 224 | |||
Alibaba Group Holding, Ltd. - ADR(Æ) | 10,514 | 1,951 | Salesforce. com, Inc. (Æ) | 5,500 | 750 | |||
Alphabet, Inc. Class A(Æ) | 1,700 | 1,920 | ServiceNow, Inc. (Æ) | 2,050 | 354 | |||
Alphabet, Inc. Class C(Æ) | 8,831 | 9,852 | Skyworks Solutions, Inc. | 2,600 | 251 | |||
Amdocs, Ltd. | 16,800 | 1,112 | Splunk, Inc. (Æ) | 1,860 | 184 | |||
Amphenol Corp. Class A | 5,400 | 471 | SYNNEX Corp. | 610 | 59 | |||
Analog Devices, Inc. | 600 | 58 | Synopsys, Inc. (Æ) | 3,200 | 274 | |||
Apple, Inc. | 62,396 | 11,549 | Tableau Software, Inc. Class A(Æ) | 1,500 | 147 | |||
Applied Materials, Inc. | 5,300 | 245 | Take-Two Interactive Software, Inc. (Æ) | 2,200 | 260 | |||
Arista Networks, Inc. (Æ) | 2,100 | 541 | Tech Data Corp. (Æ) | 4,660 | 383 | |||
ARRIS International PLC(Æ) | 14,200 | 347 | Teradata Corp. (Æ) | 4,700 | 189 | |||
Arrow Electronics, Inc. (Æ) | 10,100 | 761 | Texas Instruments, Inc. | 2,500 | 276 | |||
Aspen Technology, Inc. (Æ) | 5,400 | 501 | Twitter, Inc. (Æ) | 12,000 | 524 | |||
Avnet, Inc. | 6,000 | 257 | Tyler Technologies, Inc. (Æ) | 800 | 178 | |||
Box, Inc. Class A(Æ) | 4,100 | 102 | Verint Systems, Inc. (Æ) | 2,700 | 120 | |||
Broadcom, Inc. | 8,162 | 1,980 | Viavi Solutions, Inc. Class W(Æ) | 10,500 | 108 | |||
CA, Inc. | 9,600 | 342 | VMware, Inc. Class A(Æ) | 2,100 | 309 | |||
Cars. com, Inc. (Æ) | 15,200 | 432 | Western Digital Corp. | 5,800 | 449 | |||
Ciena Corp. (Æ) | 2,400 | 64 | Xilinx, Inc. | 37,111 | 2,422 | |||
Cirrus Logic, Inc. (Æ) | 1,300 | 50 | Zynga, Inc. Class A(Æ) | 102,400 | 417 | |||
Cisco Systems, Inc. | 78,600 | 3,382 | 81,802 | |||||
Citrix Systems, Inc. (Æ) | 2,930 | 307 | ||||||
Cognizant Technology Solutions Corp. Class | Utilities - 2.7% | |||||||
A | 8,800 | 695 | American Electric Power Co. , Inc. | 3,800 | 263 | |||
CommVault Systems, Inc. (Æ) | 1,500 | 99 | AT&T, Inc. | 201,045 | 6,454 |
See accompanying notes which are an integral part of the financial statements.
U.S. Strategic Equity Fund 7
Russell Investment Funds
U.S. Strategic Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | |||||||
Principal | Fair | ||||||
Amount ($) or | Value | ||||||
Shares | $ | ||||||
Avangrid, Inc. | 3,600 | 191 | |||||
Centennial Resource Development, Inc. Class | |||||||
A(Æ) | 32,000 | 578 | |||||
CenterPoint Energy, Inc. | 4,300 | 119 | |||||
Consolidated Edison, Inc. | 6,400 | 499 | |||||
Edison International | 8,800 | 557 | |||||
Evergy, Inc. | 9,100 | 511 | |||||
Eversource Energy(Æ) | 4,500 | 264 | |||||
Exelon Corp. | 15,800 | 673 | |||||
Hawaiian Electric Industries, Inc. | 19,100 | 655 | |||||
NiSource, Inc. | 10,900 | 286 | |||||
PG&E Corp. | 6,300 | 269 | |||||
Pinnacle West Capital Corp. | 3,000 | 242 | |||||
Southern Co. (The) | 8,500 | 394 | |||||
T-Mobile US, Inc. (Æ) | 4,000 | 239 | |||||
US Cellular Corp. (Æ) | 700 | 26 | |||||
12,220 | |||||||
Total Common Stocks | |||||||
(cost $384,974) | 431,852 | ||||||
Short-Term Investments - 3.6% | |||||||
U. S. Cash Management Fund(@) | 16,164,236 | (8) | 16,166 | ||||
Total Short-Term Investments | |||||||
(cost $16,166) | 16,166 | ||||||
Total Investments 100.2% | |||||||
(identified cost $401,140) | 448,018 | ||||||
Other Assets and Liabilities, Net | |||||||
-(0.2%) | (869 | ) | |||||
Net Assets - 100.0% | 447,149 |
See accompanying notes which are an integral part of the financial statements.
8 U.S. Strategic Equity Fund
Russell Investment Funds
U.S. Strategic Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Futures Contracts | |||||||||||||||
Amounts in thousands (except contract amounts) | |||||||||||||||
Value and | |||||||||||||||
Unrealized | |||||||||||||||
Appreciation | |||||||||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||||||||
Contracts | Amount | Date | $ | ||||||||||||
Long Positions | |||||||||||||||
S&P 500 E-Mini Index Futures | 102 | USD | 13,880 | 09/18 | (238 | ) | |||||||||
Total Value and Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | (238 | ) | |||||||||||||
Presentation of Portfolio Holdings | |||||||||||||||
Amounts in thousands | |||||||||||||||
Fair Value | |||||||||||||||
Practical | |||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | |||||||||
Common Stocks | |||||||||||||||
Consumer Discretionary | $ | 88,500 | $ | — | $ | — | $ | — | $ | 88,500 | 19.8 | ||||
Consumer Staples | 40,059 | — | — | — | 40,059 | 9.0 | |||||||||
Energy | 31,487 | — | — | — | 31,487 | 7.0 | |||||||||
Financial Services | 69,653 | — | — | — | 69,653 | 15.6 | |||||||||
Health Care | 47,674 | — | — | — | 47,674 | 10.7 | |||||||||
Materials and Processing | 10,853 | — | — | — | 10,853 | 2.4 | |||||||||
Producer Durables | 49,604 | — | — | — | 49,604 | 11.1 | |||||||||
Technology | 81,802 | — | — | — | 81,802 | 18.3 | |||||||||
Utilities | 12,220 | — | — | — | 12,220 | 2.7 | |||||||||
Short-Term Investments | — | — | — | 16,166 | 16,166 | 3.6 | |||||||||
Total Investments | 431,852 | — | — | 16,166 | 448,018 | 100.2 | |||||||||
Other Assets and Liabilities, Net | (0.2 | ) | |||||||||||||
100.0 | |||||||||||||||
Other Financial Instruments | |||||||||||||||
Liabilities | |||||||||||||||
Futures Contracts | (238 | ) | — | — | — | (238 | ) | (0.1 | ) | ||||||
Total Other Financial Instruments* | $ | (238 | ) | $ | — | $ | — | $ | — | $ | (238 | ) |
* Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the investments.
(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified
in the fair value levels. The fair value amounts presented in the table are intended to permit reconciliation to the amounts presented in the Schedule of
Investments.
For a description of the Levels, see note 2 in the Notes to Financial Statements.
For a disclosure on transfers between Levels 1, 2 and 3 during the period ended June 30, 2018, see note 2 in the Notes to
Financial Statements.
See accompanying notes which are an integral part of the financial statements.
U.S. Strategic Equity Fund 9
Russell Investment Funds
U.S. Strategic Equity Fund
Fair Value of Derivative Instruments — June 30, 2018 (Unaudited)
Amounts in thousands
Equity | ||||
Derivatives not accounted for as hedging instruments | Contracts | |||
Location: Statement of Assets and Liabilities - Liabilities | ||||
Variation margin on futures contracts* | $ | 238 | ||
Equity | ||||
Derivatives not accounted for as hedging instruments | Contracts | |||
Location: Statement of Operations - Net realized gain (loss) | ||||
Futures contracts | $ | 925 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||
Futures contracts | $ | (181 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
10 U.S. Strategic Equity Fund
Russell Investment Funds
U.S. Strategic Equity Fund
Balance Sheet Offsetting of Financial and Derivative Instruments —
June 30, 2018 (Unaudited)
Amounts in thousands | ||||||||||
Offsetting of Financial Assets and Derivative Assets | ||||||||||
Gross | Net Amounts | |||||||||
Amounts | of Assets | |||||||||
Gross | Offset in the | Presented in | ||||||||
Amounts of | Statement of | the Statement | ||||||||
Recognized | Assets and | of Assets and | ||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||||
Futures Contracts | Variation margin on futures contracts | $ | 750 | $ | — | $ | 750 | |||
Total Financial and Derivative Assets | 750 | — | 750 | |||||||
Financial and Derivative Assets not subject to a netting agreement | (750 | ) | — | (750 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | — $ | $ | — | $ | — |
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
U.S. Strategic Equity Fund 11
Russell Investment Funds
U.S. Strategic Equity Fund
Statement of Assets and Liabilities — June 30, 2018 (Unaudited)
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 401,140 |
Investments, at fair value(>) | 448,018 | |
Receivables: | ||
Dividends and interest | 436 | |
Dividends from affiliated funds | 29 | |
Investments sold | 33,011 | |
Variation margin on futures contracts | 750 | |
Prepaid expenses | 3 | |
Total assets | 482,247 | |
Liabilities | ||
Payables: | ||
Due to custodian | 1,179 | |
Due to broker (a) | 247 | |
Investments purchased | 33,202 | |
Fund shares redeemed | 93 | |
Accrued fees to affiliates | 295 | |
Other accrued expenses | 82 | |
Total liabilities | 35,098 | |
Net Assets | $ | 447,149 |
See accompanying notes which are an integral part of the financial statements.
12 U.S. Strategic Equity Fund
Russell Investment Funds
U.S. Strategic Equity Fund
Statement of Assets and Liabilities, continued — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 1,238 | |
Accumulated net realized gain (loss) | 56,892 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | 46,878 | ||
Futures contracts | (238 | ) | |
Shares of beneficial interest | 245 | ||
Additional paid-in capital | 342,134 | ||
Net Assets | $ | 447,149 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: (#) | $ | 18.26 | |
Net assets | $ | 447,148,933 | |
Shares outstanding ($. 01 par value) | 24,494,259 | ||
Amounts in thousands | |||
(>) Investments in affiliates, U. S. Cash Management Fund | $ | 16,166 | |
(a) Due to Broker for Futures | $ | 247 | |
(#) 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.
U.S. Strategic Equity Fund 13
Russell Investment Funds
U.S. Strategic Equity Fund
Statement of Operations — For the Period Ended June 30, 2018 (Unaudited)
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 3,914 | |
Dividends from affiliated funds | 31 | ||
Interest | 2 | ||
Total investment income | 3,947 | ||
Expenses | |||
Advisory fees | 1,660 | ||
Administrative fees | 114 | ||
Custodian fees | 32 | ||
Transfer agent fees . | 10 | ||
Professional fees | 40 | ||
Trustees’ fees | 8 | ||
Printing fees | 31 | ||
Miscellaneous | 9 | ||
Total expenses | 1,904 | ||
Net investment income (loss) | 2,043 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 57,742 | ||
Futures contracts | 925 | ||
Net realized gain (loss) | 58,667 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (50,606 | ) | |
Futures contracts | (181 | ) | |
Net change in unrealized appreciation (depreciation) | (50,787 | ) | |
Net realized and unrealized gain (loss) | 7,880 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 9,923 |
See accompanying notes which are an integral part of the financial statements.
14 U.S. Strategic Equity Fund
Russell Investment Funds
U.S. Strategic Equity Fund
Statements of Changes in Net Assets
Period | ||||||
Ended June 30, 2018 | Fiscal Year Ended | |||||
Amounts in thousands | (Unaudited) | December 31, 2017 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 2,043 | $ | 4,332 | ||
Net realized gain (loss) | 58,667 | 45,648 | ||||
Net change in unrealized appreciation (depreciation) | (50,787 | ) | 36,963 | |||
Net increase (decrease) in net assets from operations | 9,923 | 86,943 | ||||
Distributions | ||||||
From net investment income | (1,804 | ) | (4,792 | ) | ||
From net realized gain . | (14,614 | ) | (44,141 | ) | ||
Net decrease in net assets from distributions | (16,418 | ) | (48,933 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (8,083 | ) | (19,336 | ) | ||
Total Net Increase (Decrease) in Net Assets | (14,578 | ) | 18,674 | |||
Net Assets | ||||||
Beginning of period | 461,727 | 443,053 | ||||
End of period | $ | 447,149 | $ | 461,727 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 1,238 | $ | 999 |
* Share transaction amounts (in thousands) for the periods ended June 30, 2018 and December 31, 2017 were as follows: | ||||||||||||
2018 (Unaudited) | 2017 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Proceeds from shares sold | 128 | $ | 2,373 | 1,301 | $ | 22,933 | ||||||
Proceeds from reinvestment of distributions | 892 | 16,419 | 2,691 | 48,933 | ||||||||
Payments for shares redeemed | (1,443 | ) | (26,875 | ) | (5,019 | ) | (91,202 | ) | ||||
Total increase (decrease) | (423 | ) | $ | (8,083 | ) | (1,027 | ) | $ | (19,336 | ) |
See accompanying notes which are an integral part of the financial statements.
U.S. Strategic Equity Fund 15
Russell Investment Funds
U.S. Strategic Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||
Period | Income (Loss)(a) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||
June 30, 2018 (1) | 18.53 | . 08 | . 32 | . 40 | (. 07 | ) | (. 60 | ) | ||||||
December 31, 2017 | 17.08 | . 17 | 3.29 | 3.46 | (. 19 | ) | (1.82 | ) | ||||||
December 31, 2016 | 16.64 | . 19 | 1.53 | 1.72 | (. 17 | ) | (1.11 | ) | ||||||
December 31, 2015 | 18.11 | . 15 | . 05 | . 20 | (. 15 | ) | (1.52 | ) | ||||||
December 31, 2014 | 18.85 | . 22 | 1.94 | 2.16 | (. 22 | ) | (2.68 | ) | ||||||
December 31, 2013 | 15.15 | . 19 | 4.75 | 4.94 | (. 22 | ) | (1.02 | ) | ||||||
See accompanying notes which are an integral part of the financial statements.
U.S. Strategic Equity Fund 16
% | % | % | ||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||
Total Distributions | Period | Return(d)(f) | (000 | ) | Gross(e)(g) | Net(e)(g) | Net Assets(e) | Turnover Rate(d) | ||||||||
(. 67 | ) | 18.26 | 2.09 | 447,149 | . 84 | . 84 | . 90 | 128 | ||||||||
(2.01 | ) | 18.53 | 20.80 | 461,727 | . 83 | . 83 | . 94 | 80 | ||||||||
(1.28 | ) | 17.08 | 10.64 | 443,053 | . 83 | . 83 | 1.15 | 101 | ||||||||
(1.67 | ) | 16.64 | 1.11 | 454,341 | . 84 | . 84 | . 84 | 99 | ||||||||
(2.90 | ) | 18.11 | 11.70 | 488,531 | . 86 | . 86 | 1.13 | 101 | ||||||||
(1.24 | ) | 18.85 | 32.92 | 475,100 | . 84 | . 84 | 1.07 | 86 |
See accompanying notes which are an integral part of the financial statements.
U.S. Strategic Equity Fund 17
Russell Investment Funds
U.S. Strategic Equity Fund
Related Party Transactions, Fees and Expenses (Unaudited)
Accrued fees payable to affiliates for the period ended June 30, 2018 were as follows: | ||
Advisory fees | $ | 273,549 |
Administration fees | 18,736 | |
Transfer agent fees | 1,649 | |
Trustee fees | 985 | |
$ | 294,919 |
Transactions (amounts in thousands) during the period ended June 30, 2018 with funds which are, or were, an affiliated company
are as follows:
Fair Value, | Change in | ||||||||||||||||||
Beginning of | Realized Gain | Unrealized | Fair Value, End | Income | Capital Gains | ||||||||||||||
Period | Purchases | Sales | (Loss) | Gain (Loss) | of Period | Distributions | Distributions | ||||||||||||
U. S. Cash Management Fund | $ | 27,698 | $ | 42,809 | $ | 54,342 | $ | — | $ | 1 | $ | 16,166 | $ | 31 | $ | — | |||
$ | 27,698 | $ | 42,809 | $ | 54,342 | $ | — | $ | 1 | $ | 16,166 | $ | 31 | $ | — |
Federal Income Taxes (Unaudited)
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation), undistributed ordinary income and
undistributed long-term capital gains for income tax purposes were as follows:
Cost of Investments | $ | 403,638,033 | |||
Unrealized Appreciation | $ | 50,878,155 | |||
Unrealized Depreciation | (6,735,778 | ) | |||
Net Unrealized Appreciation (Depreciation) | $ | 44,142,377 |
Net investment income and net realized gains (losses) in the financial statements may differ from taxable net investment income and
net realized gains (losses). Capital accounts within the financial statements are adjusted for permanent differences between book and
tax accounting. Book-tax differences may be due to foreign currency gains and losses, reclassifications of dividends and differences in
treatment of income from swaps. These adjustments have no impact on the net assets. At June 30, 2018, there were no adjustments to
the Statement of Assets and Liabilities.
See accompanying notes which are an integral part of the financial statements.
18 U.S. Strategic Equity Fund
Russell Investment Funds
U.S. Small Cap Equity Fund
Shareholder Expense Example — June 30, 2018 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”) . | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. The fees and expenses shown in this | ||||||
administrative fees and other Fund expenses. The Example is | section do not reflect any Insurance Company Separate Account | ||||||
intended to help you understand your ongoing costs (in dollars) | Policy Charges. | ||||||
of investing in the Fund and to compare these costs with the | Hypothetical | ||||||
ongoing costs of investing in other mutual funds. The Example | Performance (5% | ||||||
is based on an investment of $1,000 invested at the beginning of | Actual | return before | |||||
the period and held for the entire period indicated, which for this | Performance | expenses) | |||||
Beginning Account Value | |||||||
Fund is from January 1, 2018 to June 30, 2018. | January 1, 2018 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | ||||||
June 30, 2018 | $ | 1,066.40 | $ | 1,019.69 | |||
The information in the table under the heading “Actual | Expenses Paid During Period* | $ | 5.28 | $ | 5.16 | ||
Performance” provides information about actual account values | |||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 1.03% | ||||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 181/365 (to reflect the one-half | |||||||
that you paid over the period. Simply divide your account value by | year period) . | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | |||||||
= 8.6), then multiply the result by the number in the first column | |||||||
in the row entitled “Expenses Paid During Period” to estimate | |||||||
the expenses you paid on your account during this period. | |||||||
Hypothetical Example for Comparison Purposes | |||||||
The information in the table under the heading “Hypothetical | |||||||
Performance (5% return before expenses)” provides information | |||||||
about hypothetical account values and hypothetical expenses | |||||||
based on the Fund’s actual expense ratio and an assumed rate of | |||||||
return of 5% per year before expenses, which is not the Fund’s | |||||||
actual return. The hypothetical account values and expenses | |||||||
may not be used to estimate the actual ending account balance or | |||||||
expenses you paid for the period. You may use this information | |||||||
to compare the ongoing costs of investing in the Fund and other | |||||||
funds. To do so, compare this 5% hypothetical example with the | |||||||
5% hypothetical examples that appear in the shareholder reports | |||||||
of other funds. |
U.S. Small Cap Equity Fund 19
Russell Investment Funds
U.S. Small Cap Equity Fund
Schedule of Investments — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Common Stocks - 97.2% | Lithia Motors, Inc. Class A | 4,711 | 446 | ||||
Consumer Discretionary - 14.8% | Malibu Boats, Inc. Class A(Æ) | 2,874 | 121 | ||||
2U, Inc. (Æ) | 7,150 | 597 | MarineMax, Inc. (Æ) | 1,507 | 29 | ||
Acushnet Holdings Corp. | 6,080 | 149 | Matthews International Corp. Class A | 12,706 | 747 | ||
Adtalem Global Education, Inc. (Æ) | 2,832 | 136 | Meredith Corp. (Ñ) | 15,935 | 813 | ||
AH Belo Corp. Class A | 7,237 | 34 | Meritor, Inc. (Æ) | 7,783 | 160 | ||
AMC Entertainment Holdings, Inc. Class A | 7,255 | 115 | Nexstar Media Group, Inc. Class A | 13,706 | 1,006 | ||
Aspen Group, Inc. (Æ) | 23,688 | 177 | Noodles & Co. Class A(Æ)(Ñ) | 23,303 | 287 | ||
At Home Group, Inc. (Æ) | 11,479 | 449 | Ollie's Bargain Outlet Holdings, Inc. (Æ) | 7,796 | 565 | ||
B. Riley Financial, Inc. | 22,144 | 499 | Papa John's International, Inc. | 5,583 | 283 | ||
Barnes & Noble Education, Inc. (Æ) | 72,622 | 410 | Peak Resorts, Inc. | 13,639 | 68 | ||
Big Lots, Inc. (Ñ) | 32,899 | 1,375 | Penn National Gaming, Inc. (Æ) | 2,586 | 87 | ||
BJ's Restaurants, Inc. | 4,921 | 295 | PetIQ, Inc. (Æ)(Ñ) | 8,016 | 215 | ||
Bloomin' Brands, Inc. | 30,841 | 620 | Planet Fitness, Inc. Class A(Æ) | 16,141 | 709 | ||
BMC Stock Holdings, Inc. (Æ) | 10,440 | 218 | Pool Corp. | 5,401 | 818 | ||
Bojangles', Inc. (Æ) | 30,988 | 446 | Red Robin Gourmet Burgers, Inc. (Æ)(Ñ) | 5,573 | 260 | ||
Boot Barn Holdings, Inc. (Æ) | 18,697 | 388 | Red Rock Resorts, Inc. Class A | 3,249 | 109 | ||
Cable One, Inc. | 746 | 547 | Ruth's Hospitality Group, Inc. | 7,664 | 215 | ||
Canada Goose Holdings, Inc. (Æ) | 8,481 | 499 | Sally Beauty Holdings, Inc. (Æ) | 36,488 | 585 | ||
Cardlytics, Inc. (Æ) | 4,542 | 99 | Scientific Games Corp. Class A(Æ) | 2,165 | 106 | ||
Carriage Services, Inc. Class A | 12,393 | 304 | SeaWorld Entertainment, Inc. (Æ)(Ñ) | 5,779 | 126 | ||
Carrols Restaurant Group, Inc. (Æ) | 2,441 | 36 | Shutterfly, Inc. (Æ) | 744 | 67 | ||
Central Garden & Pet Co. (Æ) | 8,859 | 385 | Skechers U. S. A. , Inc. Class A(Æ) | 19,770 | 593 | ||
Central Garden & Pet Co. Class A(Æ) | 14,667 | 594 | Stamps. com, Inc. (Æ) | 311 | 79 | ||
Century Casinos, Inc. (Æ) | 4,644 | 41 | Standard Motor Products, Inc. | 9,534 | 461 | ||
Century Communities, Inc. (Æ) | 11,769 | 371 | Steven Madden, Ltd. | 2,699 | 143 | ||
Cheesecake Factory, Inc. (The)(Ñ) | 28,803 | 1,585 | Sturm Ruger & Co. , Inc. (Ñ) | 12,789 | 716 | ||
Chegg, Inc. (Æ) | 43,492 | 1,209 | Superior Uniform Group, Inc. (Å) | 32,674 | 677 | ||
Children's Place, Inc. (The) | 4,208 | 508 | Texas Roadhouse, Inc. Class A | 5,095 | 334 | ||
Chuy's Holdings, Inc. (Æ) | 16,321 | 501 | Thor Industries, Inc. | 5,115 | 498 | ||
Conn's, Inc. (Æ) | 29,511 | 974 | TravelCenters of America LLC(Æ) | 63,131 | 221 | ||
Cooper Tire & Rubber Co. | 47,107 | 1,239 | Tribune Media Co. Class A | 1,888 | 72 | ||
Deckers Outdoor Corp. (Æ) | 3,628 | 410 | Tropicana Entertainment, Inc. (Æ) | 6,016 | 439 | ||
Delta Apparel, Inc. (Æ) | 10,978 | 212 | Urban One, Inc. (Æ) | 39,731 | 83 | ||
Eldorado Resorts, Inc. (Æ) | 23,673 | 926 | Urban Outfitters, Inc. (Æ) | 4,035 | 180 | ||
Entravision Communications Corp. Class A | 18,093 | 90 | William Lyon Homes Class A(Æ) | 23,479 | 545 | ||
Eros International PLC(Æ) | 4,167 | 54 | Wingstop, Inc. | 2,363 | 123 | ||
EW Scripps Co. (The) Class A | 10,652 | 143 | |||||
First Cash Financial Services, Inc. | 1,562 | 140 | 37,650 | ||||
Five Below, Inc. (Æ) | 399 | 39 | |||||
Floor & Decor Holdings, Inc. Class A(Æ) | 11,628 | 574 | Consumer Staples - 3.7% | ||||
Andersons, Inc. (The) | 18,684 | 639 | |||||
Fortress Transportation & Infrastructure | B&G Foods, Inc. Class A(Ñ) | 13,180 | 394 | ||||
Investors LLC | 53,892 | 974 | |||||
Fossil Group, Inc. (Æ) | 32,833 | 882 | Calavo Growers, Inc. (Ñ) | 8,169 | 785 | ||
Full House Resorts, Inc. (Æ) | 98,232 | 327 | Casey's General Stores, Inc. | 4,210 | 442 | ||
Genesco, Inc. (Æ) | 16,221 | 644 | Core-Mark Holding Co. , Inc. | 14,528 | 330 | ||
Gentherm, Inc. (Æ) | 24,710 | 971 | Energizer Holdings, Inc. | 34,294 | 2,160 | ||
G-III Apparel Group, Ltd. (Æ) | 1,937 | 86 | Farmer Brothers Co. (Æ) | 3,631 | 111 | ||
Golden Entertainment, Inc. (Æ) | 3,780 | 102 | Flowers Foods, Inc. | 35,807 | 746 | ||
Grand Canyon Education, Inc. (Æ) | 6,763 | 755 | Hain Celestial Group, Inc. (The)(Æ) | 28,728 | 856 | ||
Gray Television, Inc. (Æ) | 23,435 | 370 | J&J Snack Foods Corp. | 3,626 | 553 | ||
Horizon Global Corp. (Æ)(Ñ) | 13,979 | 83 | Lancaster Colony Corp. | 650 | 90 | ||
Inspired Entertainment, Inc. (Æ)(Ñ) | 8,262 | 52 | Medifast, Inc. | 1,183 | 189 | ||
Instructure, Inc. (Æ) | 12,025 | 512 | Nomad Foods, Ltd. (Æ) | 30,211 | 580 | ||
J Alexander's Holdings, Inc. (Æ) | 46,088 | 514 | PetMed Express, Inc. (Ñ) | 10,572 | 466 | ||
Jack in the Box, Inc. | 7,421 | 632 | Primo Water Corp. (Æ) | 6,123 | 107 | ||
Lee Enterprises, Inc. (Æ)(Ñ) | 130,580 | 372 | Sanderson Farms, Inc. | 841 | 88 |
See accompanying notes which are an integral part of the financial statements.
20 U.S. Small Cap Equity Fund
Russell Investment Funds
U.S. Small Cap Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Universal Corp. | 13,477 | 890 | Amerisafe, Inc. | 7,717 | 446 | ||
9,426 | AmTrust Financial Services, Inc. | 7,905 | 115 | ||||
Argo Group International Holdings, Ltd. | 2,305 | 134 | |||||
Energy - 3.9% | Aspen Insurance Holdings, Ltd. | 16,298 | 663 | ||||
Arch Coal, Inc. Class A | 1,031 | 81 | Banc of California, Inc. | 2,162 | 42 | ||
Basic Energy Services, Inc. (Æ) | 8,933 | 99 | BancFirst Corp. | 1,676 | 99 | ||
C&J Energy Services, Inc. (Æ) | 11,547 | 273 | Bancorp, Inc. (The)(Æ) | 30,468 | 319 | ||
Callon Petroleum Co. (Æ) | 14,981 | 161 | BancorpSouth Bank | 3,321 | 109 | ||
Carrizo Oil & Gas, Inc. (Æ) | 12,305 | 343 | Bank of Marin Bancorp | 1,736 | 140 | ||
Civeo Corp. (Æ) | 31,797 | 139 | Bank of the Ozarks, Inc. | 13,877 | 625 | ||
CONSOL Energy, Inc. (Æ) | 4,805 | 184 | BankUnited, Inc. | 35,118 | 1,435 | ||
Delek US Holdings, Inc. | 2,802 | 141 | Banner Corp. | 1,817 | 109 | ||
Dril-Quip, Inc. (Æ) | 925 | 48 | BBCN Bancorp, Inc. | 5,123 | 91 | ||
Golar LNG, Ltd. | 3,256 | 96 | Berkshire Hills Bancorp, Inc. | 2,450 | 99 | ||
Gores Holdings, Inc. Class A(Æ) | 37,652 | 511 | BofI Holding, Inc. (Æ) | 3,901 | 160 | ||
Green Plains, Inc. | 5,214 | 95 | Brightsphere Investment Group(Æ) | 18,016 | 257 | ||
Gulfport Energy Corp. (Æ) | 89,973 | 1,130 | Cadence Bancorp | 9,875 | 285 | ||
Independence Contract Drilling, Inc. (Æ) | 26,939 | 111 | Cannae Holdings, Inc. (Æ) | 35,226 | 653 | ||
Keane Group, Inc. (Æ) | 9,405 | 129 | Capitol Federal Financial, Inc. | 7,958 | 105 | ||
Mammoth Energy Services, Inc. (Ñ) | 10,216 | 347 | Capstar Financial Holdings, Inc. | 6,985 | 129 | ||
Matador Resources Co. (Æ) | 5,576 | 168 | Capstead Mortgage Corp. (ö) | 15,593 | 140 | ||
Matrix Service Co. (Æ) | 4,382 | 80 | Carolina Financial Corp. | 1,773 | 76 | ||
McDermott International, Inc. (Æ) | 4,605 | 90 | Cass Information Systems, Inc. | 788 | 54 | ||
Nabors Industries, Ltd. | 76,769 | 492 | CatchMark Timber Trust, Inc. Class A(ö) | 33,906 | 432 | ||
Newpark Resources, Inc. (Æ) | 32,080 | 348 | Cathay General Bancorp | 2,829 | 115 | ||
Nine Energy Service, Inc. (Æ) | 2,255 | 75 | Central Valley Community Bancorp | 3,937 | 83 | ||
Noble Corp. PLC(Æ) | 20,220 | 128 | Chemical Financial Corp. | 5,057 | 282 | ||
Northern Oil and Gas, Inc. (Æ) | 36,880 | 116 | Chemung Financial Corp. | 1,765 | 88 | ||
Oasis Petroleum, Inc. (Æ) | 10,313 | 134 | Chesapeake Lodging Trust(ö) | 4,052 | 128 | ||
Pacific Ethanol, Inc. (Æ) | 9,883 | 26 | Civista Bancshares, Inc. | 1,600 | 39 | ||
Par Pacific Holdings, Inc. (Æ) | 4,350 | 76 | CNO Financial Group, Inc. | 54,023 | 1,029 | ||
Patterson-UTI Energy, Inc. | 3,767 | 68 | CoBiz Financial, Inc. | 16,449 | 353 | ||
PBF Energy, Inc. Class A | 17,899 | 750 | Cohen & Steers, Inc. | 8,889 | 371 | ||
PDC Energy, Inc. (Æ) | 2,054 | 124 | Columbia Banking System, Inc. | 4,923 | 201 | ||
Phillips 66 Partners, LP(Ñ) | 10,569 | 539 | Community Bank System, Inc. | 4,731 | 279 | ||
Profire Energy, Inc. (Æ) | 13,397 | 45 | Cousins Properties, Inc. (ö) | 20,648 | 200 | ||
Range Resources Corp. | 18,523 | 310 | Cowen Group, Inc. Class A(Æ) | 32,716 | 453 | ||
REX American Resources Corp. (Æ) | 1,654 | 134 | CyrusOne, Inc. (ö) | 6,304 | 368 | ||
Ring Energy, Inc. (Æ) | 10,921 | 138 | Diamond Hill Investment Group, Inc. | 1,452 | 282 | ||
RPC, Inc. (Ñ) | 28,012 | 408 | DiamondRock Hospitality Co. (ö) | 9,660 | 119 | ||
Sanchez Energy Corp. (Æ)(Ñ) | 25,362 | 115 | Eagle Bancorp, Inc. (Æ) | 1,464 | 90 | ||
Select Energy Services, Inc. Class A(Æ) | 10,501 | 153 | EastGroup Properties, Inc. (ö) | 1,434 | 137 | ||
SemGroup Corp. Class A | 10,274 | 261 | Education Realty Trust, Inc. (ö) | 17,210 | 714 | ||
Solaris Oilfield Infrastructure, Inc. Class | Employers Holdings, Inc. | 3,405 | 137 | ||||
A(Æ) | 9,201 | 131 | Enova International, Inc. (Æ) | 5,729 | 209 | ||
SRC Energy, Inc. (Æ) | 9,875 | 109 | Enstar Group, Ltd. (Æ) | 443 | 92 | ||
SunCoke Energy, Inc. (Æ) | 22,195 | 297 | Essent Group, Ltd. (Æ) | 2,531 | 91 | ||
TPI Composites, Inc. (Æ) | 14,450 | 423 | Evercore, Inc. Class A | 7,049 | 743 | ||
Unit Corp. (Æ) | 15,597 | 399 | Everi Holdings, Inc. (Æ) | 27,466 | 198 | ||
Ezcorp, Inc. Class A(Æ) | 6,882 | 83 | |||||
10,025 | Fair Isaac Corp. (Æ) | 570 | 110 | ||||
FB Financial Corp. | 3,388 | 138 | |||||
Financial Services - 23.0% | FBL Financial Group, Inc. Class A | 2,066 | 163 | ||||
Acadia Realty Trust(ö) | 3,004 | 82 | |||||
Agree Realty Corp. (ö) | 1,954 | 103 | Federal Agricultural Mortgage Corp. Class C | 4,495 | 402 | ||
American Equity Investment Life Holding | FedNat Holding Co. | 5,800 | 134 | ||||
Co. | 52,526 | 1,892 | Financial Engines, Inc. | 3,492 | 157 | ||
Financial Institutions, Inc. | 2,390 | 79 |
See accompanying notes which are an integral part of the financial statements.
U.S. Small Cap Equity Fund 21
Russell Investment Funds
U.S. Small Cap Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
First BanCorp | 7,095 | 290 | Meridian Bancorp, Inc. | 4,897 | 94 | ||
First Busey Corp. | 2,561 | 81 | MGIC Investment Corp. (Æ) | 11,749 | 126 | ||
First Citizens BancShares, Inc. Class A | 352 | 142 | Moelis & Co. Class A | 1,986 | 116 | ||
First Commonwealth Financial Corp. | 80,485 | 1,248 | Morningstar, Inc. | 5,518 | 708 | ||
First Defiance Financial Corp. | 1,427 | 96 | National Bankshares, Inc. | 2,227 | 103 | ||
First Financial Bancorp | 3,462 | 106 | National Commerce Corp. (Æ) | 1,400 | 65 | ||
First Financial Bankshares, Inc. (Ñ) | 2,312 | 118 | National General Holdings Corp. | 52,627 | 1,386 | ||
First Financial Corp. | 2,207 | 100 | National Western Life Group, Inc. Class A | 375 | 115 | ||
First Hawaiian, Inc. | 21,697 | 630 | Navigators Group, Inc. (The) | 1,591 | 91 | ||
First Horizon National Corp. | 44,111 | 787 | NMI Holdings, Inc. Class A(Æ) | 16,676 | 272 | ||
First Industrial Realty Trust, Inc. (ö) | 4,185 | 140 | Northrim BanCorp, Inc. | 4,824 | 191 | ||
First Internet Bancorp | 5,257 | 179 | Northwest Bancshares, Inc. | 7,167 | 125 | ||
First Merchants Corp. | 1,930 | 90 | OFG Bancorp(Ñ) | 110,777 | 1,556 | ||
First Midwest Bancorp, Inc. | 6,025 | 153 | Old National Bancorp | 30,070 | 559 | ||
FNB Corp. | 184,207 | 2,473 | Opus Bank | 2,713 | 78 | ||
Four Corners Property Trust, Inc. (ö) | 3,841 | 95 | Outfront Media, Inc. (ö) | 41,065 | 799 | ||
Fulton Financial Corp. | 5,790 | 96 | Owens Realty Mortgage, Inc. (ö) | 4,603 | 77 | ||
Genworth Financial, Inc. Class A(Æ) | 22,972 | 103 | Pacific Premier Bancorp, Inc. (Æ) | 5,539 | 211 | ||
German American Bancorp, Inc. | 6,206 | 222 | PCSB Financial Corp. | 19,743 | 392 | ||
Glacier Bancorp, Inc. | 2,702 | 105 | Pebblebrook Hotel Trust(ö) | 3,665 | 142 | ||
Gladstone Land Corp. (ö) | 12,238 | 155 | People's Utah Bancorp | 2,792 | 100 | ||
Great Western Bancorp, Inc. | 29,339 | 1,232 | Piper Jaffray Cos. | 929 | 71 | ||
Green Dot Corp. Class A(Æ) | 12,570 | 923 | Potlatch Corp. (ö) | 7,840 | 399 | ||
Greenhill & Co. , Inc. (Ñ) | 27,723 | 787 | Preferred Bank | 3,958 | 243 | ||
Hamilton Lane, Inc. Class A | 3,013 | 145 | Primerica, Inc. | 1,690 | 168 | ||
Hancock Holding Co. | 2,823 | 132 | Prosperity Bancshares, Inc. | 14,373 | 983 | ||
Health Insurance Innovations, Inc. Class | Provident Financial Services, Inc. | 3,328 | 92 | ||||
A(Æ) | 5,272 | 171 | PS Business Parks, Inc. (ö) | 1,196 | 154 | ||
Heritage Commerce Corp. | 5,232 | 89 | Pzena Investment Management, Inc. Class A | 22,086 | 203 | ||
Heritage Financial Corp. | 11,963 | 417 | QTS Realty Trust, Inc. Class A(ö) | 11,525 | 455 | ||
Heritage Insurance Holdings, Inc. | 4,151 | 69 | R1 RCM, Inc. (Æ) | 28,810 | 250 | ||
Hersha Hospitality Trust Class A(ö) | 5,114 | 110 | Radian Group, Inc. | 7,338 | 119 | ||
Hilltop Holdings, Inc. | 3,867 | 85 | Redwood Trust, Inc. (ö) | 5,433 | 89 | ||
Home BancShares, Inc. | 36,464 | 823 | Renasant Corp. | 2,342 | 107 | ||
Horace Mann Educators Corp. | 5,150 | 230 | Retail Opportunity Investments Corp. (ö) | 53,154 | 1,018 | ||
Houlihan Lokey, Inc. Class A | 2,079 | 106 | Rexford Industrial Realty, Inc. (ö) | 4,133 | 130 | ||
Howard Bancorp, Inc. (Æ) | 1,629 | 29 | RLI Corp. | 3,250 | 215 | ||
Iberiabank Corp. | 12,866 | 975 | RLJ Lodging Trust(ö) | 30,664 | 676 | ||
Independence Realty Trust, Inc. (ö) | 38,848 | 401 | RMR Group, Inc. (The) Class A | 1,162 | 91 | ||
Independent Bank Corp. | 18,313 | 467 | Ryman Hospitality Properties, Inc. (ö) | 8,602 | 715 | ||
Infinity Property & Casualty Corp. | 916 | 130 | Safety Insurance Group, Inc. | 1,267 | 108 | ||
InfraREIT, Inc. (ö) | 1,946 | 43 | Selective Insurance Group, Inc. | 2,548 | 140 | ||
Investors Title Co. | 337 | 62 | Seritage Growth Properties(Ñ)(ö) | 1,986 | 84 | ||
Jack Henry & Associates, Inc. | 6,016 | 784 | Shore Bancshares, Inc. | 4,749 | 90 | ||
James River Group Holdings, Ltd. | 20,803 | 817 | STAG Industrial, Inc. (ö) | 3,648 | 99 | ||
JER Investment Trust, Inc. (Æ)(Š)(Å) | 1,771 | — | State Auto Financial Corp. | 7,815 | 234 | ||
Kearny Financial Corp. | 96,349 | 1,296 | State Bank Financial Corp. | 7,699 | 257 | ||
Kemper Corp. | 2,000 | 151 | Sterling Bancorp | 4,233 | 99 | ||
Kennedy-Wilson Holdings, Inc. | 27,444 | 580 | Stewart Information Services Corp. | 2,354 | 101 | ||
Kingstone Cos. , Inc. | 4,421 | 75 | Stifel Financial Corp. | 2,087 | 109 | ||
LaSalle Hotel Properties(ö) | 7,603 | 260 | Sunstone Hotel Investors, Inc. (ö) | 11,743 | 195 | ||
LendingTree, Inc. (Æ)(Ñ) | 1,441 | 308 | Taubman Centers, Inc. (ö) | 6,472 | 380 | ||
Live Oak Bancshares, Inc. | 3,394 | 104 | TCF Financial Corp. | 13,925 | 343 | ||
LPL Financial Holdings, Inc. | 3,461 | 227 | Terreno Realty Corp. (ö) | 3,173 | 120 | ||
MB Financial, Inc. | 2,736 | 128 | Texas Capital Bancshares, Inc. (Æ) | 1,023 | 94 | ||
Medical Properties Trust, Inc. (ö) | 26,822 | 377 | Third Point Reinsurance, Ltd. (Æ) | 3,826 | 48 | ||
Mercantile Bank Corp. | 6,415 | 237 | Timberland Bancorp, Inc. | 1,541 | 58 |
See accompanying notes which are an integral part of the financial statements.
22 U.S. Small Cap Equity Fund
Russell Investment Funds
U.S. Small Cap Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
TriState Capital Holdings, Inc. (Æ) | 4,423 | 115 | Emergent BioSolutions, Inc. (Æ) | 1,880 | 95 | ||
Triumph Bancorp, Inc. (Æ) | 3,099 | 126 | Enanta Pharmaceuticals, Inc. (Æ) | 1,030 | 119 | ||
TrustCo Bank Corp. | 12,289 | 109 | Encompass Health Corp. (Æ) | 12,532 | 849 | ||
UMB Financial Corp. | 6,458 | 492 | Ensign Group, Inc. (The) | 26,567 | 952 | ||
Umpqua Holdings Corp. | 96,590 | 2,183 | Esperion Therapeutics, Inc. (Æ) | 876 | 34 | ||
Union Bankshares Corp. | 2,655 | 103 | Exact Sciences Corp. (Æ) | 3,767 | 225 | ||
United Bankshares, Inc. | 3,296 | 120 | FibroGen, Inc. (Æ) | 3,152 | 197 | ||
United Community Banks, Inc. | 3,137 | 96 | GenMark Diagnostics, Inc. (Æ) | 16,707 | 107 | ||
Universal Insurance Holdings, Inc. | 2,883 | 101 | Genomic Health, Inc. (Æ) | 2,046 | 103 | ||
Urban Edge Properties(ö) | 3,864 | 88 | Global Blood Therapeutics, Inc. (Æ) | 1,878 | 85 | ||
Valley National Bancorp | 9,512 | 116 | Globus Medical, Inc. Class A(Æ) | 5,223 | 264 | ||
Veritex Holdings, Inc. (Æ) | 3,548 | 110 | HealthEquity, Inc. (Æ) | 1,799 | 135 | ||
Waddell & Reed Financial, Inc. Class A(Ñ) | 3,979 | 72 | Heron Therapeutics, Inc. (Æ) | 2,088 | 81 | ||
Washington Federal, Inc. | 3,963 | 130 | ICU Medical, Inc. (Æ) | 413 | 121 | ||
Washington Real Estate Investment Trust(ö) | 3,281 | 100 | ImmunoGen, Inc. (Æ) | 6,459 | 63 | ||
WesBanco, Inc. | 8,525 | 384 | Inogen, Inc. (Æ) | 4,390 | 818 | ||
Westamerica Bancorporation | 10,090 | 570 | Insmed, Inc. (Æ) | 3,080 | 73 | ||
Wintrust Financial Corp. | 4,579 | 399 | Insulet Corp. (Æ) | 2,134 | 183 | ||
WisdomTree Investments, Inc. | 9,197 | 84 | Integra LifeSciences Holdings Corp. (Æ) | 7,937 | 511 | ||
Xenia Hotels & Resorts, Inc. (ö) | 5,994 | 146 | Intersect ENT, Inc. (Æ) | 2,248 | 84 | ||
58,727 | iRhythm Technologies, Inc. (Æ) | 576 | 47 | ||||
Ironwood Pharmaceuticals, Inc. Class A(Æ) | 13,224 | 253 | |||||
Health Care - 12.8% | Jazz Pharmaceuticals PLC(Æ) | 1,599 | 276 | ||||
Acadia Healthcare Co. , Inc. (Æ)(Ñ) | 8,715 | 357 | K2M Group Holdings, Inc. (Æ) | 6,769 | 152 | ||
Acceleron Pharma, Inc. (Æ) | 1,874 | 91 | Lannett Co. , Inc. (Æ)(Ñ) | 57,609 | 783 | ||
Aclaris Therapeutics, Inc. (Æ) | 2,811 | 56 | LeMaitre Vascular, Inc. | 2,193 | 73 | ||
Addus HomeCare Corp. (Æ) | 6,881 | 394 | LHC Group, Inc. (Æ) | 11,868 | 1,016 | ||
Aimmune Therapeutics, Inc. (Æ) | 3,781 | 102 | Ligand Pharmaceuticals, Inc. Class B(Æ) | 5,336 | 1,105 | ||
Aldeyra Therapeutics, Inc. (Æ) | 8,368 | 67 | LivaNova PLC(Æ) | 1,029 | 103 | ||
Allscripts Healthcare Solutions, Inc. (Æ) | 28,378 | 341 | Loxo Oncology, Inc. (Æ) | 638 | 111 | ||
AMAG Pharmaceuticals, Inc. (Æ) | 55,427 | 1,081 | Luminex Corp. | 2,791 | 82 | ||
Amicus Therapeutics, Inc. (Æ) | 6,885 | 108 | Magellan Health, Inc. (Æ) | 1,390 | 133 | ||
AMN Healthcare Services, Inc. (Æ) | 7,028 | 412 | Masimo Corp. (Æ) | 2,531 | 247 | ||
AnaptysBio, Inc. (Æ) | 1,026 | 73 | Medidata Solutions, Inc. (Æ) | 1,213 | 98 | ||
Anika Therapeutics, Inc. (Æ) | 1,260 | 40 | Meridian Bioscience, Inc. | 13,033 | 207 | ||
Antares Pharma, Inc. (Æ) | 75,039 | 194 | Merit Medical Systems, Inc. (Æ) | 13,486 | 690 | ||
Apollo Endosurgery, Inc. (Æ) | 26,073 | 182 | MiMedx Group, Inc. (Æ)(Ñ) | 6,931 | 44 | ||
Atrion Corp. | 201 | 120 | Minerva Neurosciences, Inc. (Æ) | 7,681 | 63 | ||
Avanos Medical, Inc. (Æ) | 2,525 | 145 | Molina Healthcare, Inc. (Æ) | 3,503 | 343 | ||
AxoGen, Inc. (Æ) | 8,378 | 421 | Myriad Genetics, Inc. (Æ) | 4,260 | 159 | ||
BioSpecifics Technologies Corp. (Æ) | 1,155 | 52 | National Research Corp. Class A | 2,114 | 79 | ||
BioTelemetry, Inc. (Æ) | 19,306 | 869 | Nektar Therapeutics(Æ) | 967 | 47 | ||
Bluebird Bio, Inc. (Æ) | 1,692 | 266 | Neogen Corp. (Æ) | 2,169 | 174 | ||
Blueprint Medicines Corp. (Æ) | 1,835 | 116 | NeoGenomics, Inc. (Æ) | 126,938 | 1,663 | ||
Cardiovascular Systems, Inc. (Æ) | 4,151 | 134 | Neos Therapeutics, Inc. (Æ) | 43,131 | 270 | ||
CareDx, Inc. (Æ) | 8,747 | 107 | Neurocrine Biosciences, Inc. (Æ) | 3,199 | 314 | ||
Catalent, Inc. (Æ) | 3,903 | 163 | Nevro Corp. (Æ) | 2,547 | 203 | ||
Chemed Corp. | 3,796 | 1,221 | Nuvectra Corp. (Æ) | 19,817 | 407 | ||
Clearside Biomedical, Inc. (Æ) | 6,335 | 68 | NxStage Medical, Inc. (Æ) | 3,121 | 87 | ||
Clovis Oncology, Inc. (Æ) | 2,402 | 109 | Omnicell, Inc. (Æ) | 12,709 | 667 | ||
Collegium Pharmaceutical, Inc. (Æ) | 12,268 | 293 | OraSure Technologies, Inc. (Æ) | 3,748 | 62 | ||
Concert Pharmaceuticals, Inc. (Æ) | 3,987 | 67 | Orthofix International NV(Æ) | 3,320 | 189 | ||
Corcept Therapeutics, Inc. (Æ) | 10,531 | 166 | Oxford Immunotec Global PLC(Æ) | 7,351 | 95 | ||
CorVel Corp. (Æ) | 7,418 | 401 | Pacira Pharmaceuticals, Inc. (Æ) | 2,549 | 82 | ||
CryoLife, Inc. (Æ) | 2,316 | 65 | PDL BioPharma, Inc. (Æ) | 36,743 | 86 | ||
Cutera, Inc. (Æ) | 2,163 | 87 | Penumbra, Inc. (Æ) | 2,919 | 403 | ||
Eagle Pharmaceuticals, Inc. (Æ) | 672 | 51 | Pfenex, Inc. (Æ) | 27,489 | 149 |
See accompanying notes which are an integral part of the financial statements.
U.S. Small Cap Equity Fund 23
Russell Investment Funds
U.S. Small Cap Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Prestige Brands Holdings, Inc. (Æ) | 11,351 | 436 | Omega Flex, Inc. | 736 | 58 | ||
Prothena Corp. PLC(Æ) | 2,745 | 40 | Owens-Illinois, Inc. (Æ) | 19,449 | 327 | ||
Quality Systems, Inc. (Æ) | 3,762 | 73 | Patrick Industries, Inc. (Æ) | 2,969 | 169 | ||
Radius Health, Inc. (Æ)(Ñ) | 1,573 | 46 | PGT Innovations, Inc. (Æ) | 19,152 | 399 | ||
Repligen Corp. (Æ) | 3,781 | 178 | PH Glatfelter Co. | 2,242 | 44 | ||
Retrophin, Inc. (Æ) | 9,420 | 257 | Platform Specialty Products Corp. (Æ) | 63,537 | 737 | ||
Sage Therapeutics, Inc. (Æ) | 1,693 | 265 | Quaker Chemical Corp. | 4,882 | 756 | ||
Sangamo BioSciences, Inc. (Æ) | 5,935 | 84 | Quanex Building Products Corp. | 10,678 | 192 | ||
Sarepta Therapeutics, Inc. (Æ) | 2,712 | 358 | Rayonier Advanced Materials, Inc. | 38,082 | 651 | ||
SeaSpine Holdings Corp. (Æ) | 26,458 | 334 | Ryerson Holding Corp. (Æ) | 9,987 | 111 | ||
Select Medical Holdings Corp. (Æ) | 9,486 | 172 | Silgan Holdings, Inc. | 40,163 | 1,078 | ||
Spark Therapeutics, Inc. (Æ) | 1,663 | 138 | Simpson Manufacturing Co. , Inc. | 2,204 | 137 | ||
Steris PLC | 5,974 | 627 | SiteOne Landscape Supply, Inc. (Æ) | 5,246 | 441 | ||
Supernus Pharmaceuticals, Inc. (Æ) | 11,262 | 674 | Trex Co. , Inc. (Æ) | 1,588 | 99 | ||
Surmodics, Inc. (Æ) | 3,820 | 211 | Triton International, Ltd. | 1,501 | 46 | ||
Tabula Rasa HealthCare, Inc. (Æ) | 7,157 | 457 | Tronox, Ltd. Class A | 7,547 | 149 | ||
Tactile Systems Technology, Inc. (Æ) | 15,993 | 832 | US Concrete, Inc. (Æ)(Ñ) | 12,492 | 656 | ||
Teladoc, Inc. (Æ)(Ñ) | 6,844 | 397 | US Silica Holdings, Inc. | 2,866 | 74 | ||
Triple-S Management Corp. Class B(Æ) | 3,878 | 151 | Valvoline, Inc. | 18,644 | 402 | ||
Ultragenyx Pharmaceutical, Inc. (Æ) | 2,268 | 174 | Venator Materials PLC(Æ) | 5,983 | 98 | ||
US Physical Therapy, Inc. | 5,877 | 564 | Versum Materials, Inc. | 17,585 | 653 | ||
Utah Medical Products, Inc. | 5,118 | 564 | 20,933 | ||||
Varex Imaging Corp. (Æ) | 14,974 | 555 | |||||
Vericel Corp. (Æ) | 33,016 | 320 | Producer Durables - 12.9% | ||||
ViewRay, Inc. (Æ)(Ñ) | 26,327 | 182 | ABM Industries, Inc. | 24,209 | 706 | ||
Voyager Therapeutics, Inc. (Æ) | 2,537 | 50 | ACCO Brands Corp. | 100,570 | 1,392 | ||
Wright Medical Group NV(Æ) | 4,074 | 106 | Advanced Energy Industries, Inc. (Æ) | 1,216 | 71 | ||
32,725 | AECOM(Æ) | 16,278 | 538 | ||||
Aegion Corp. Class A(Æ) | 15,572 | 401 | |||||
Materials and Processing - 8.2% | Allied Motion Technologies, Inc. | 10,342 | 495 | ||||
AAON, Inc. | 2,238 | 74 | AquaVenture Holdings, Ltd. (Æ) | 4,825 | 75 | ||
Advanced Drainage Systems, Inc. | 17,041 | 487 | ASGN, Inc. (Æ) | 10,412 | 814 | ||
Apogee Enterprises, Inc. | 46,162 | 2,224 | Astec Industries, Inc. | 1,514 | 91 | ||
Armstrong Flooring, Inc. (Æ) | 25,011 | 351 | Atlas Air Worldwide Holdings, Inc. (Æ) | 21,685 | 1,554 | ||
Armstrong World Industries, Inc. (Æ) | 6,690 | 423 | AZZ, Inc. | 13,459 | 585 | ||
Beacon Roofing Supply, Inc. (Æ) | 629 | 27 | Babcock & Wilcox Co. (The) Class W(Æ) | 13,856 | 864 | ||
Belden, Inc. | 751 | 46 | Badger Meter, Inc. | 10,909 | 488 | ||
Bemis Co. , Inc. | 27,273 | 1,151 | Barrett Business Services, Inc. | 1,426 | 138 | ||
BlueLinx Holdings, Inc. (Æ) | 12,315 | 462 | BG Staffing, Inc. | 7,889 | 183 | ||
Cabot Microelectronics Corp. | 5,515 | 593 | Brink's Co. (The) | 6,039 | 482 | ||
Chase Corp. | 411 | 48 | Casella Waste Systems, Inc. Class A(Æ) | 4,376 | 112 | ||
Comfort Systems USA, Inc. | 15,383 | 705 | Colfax Corp. (Æ) | 3,579 | 110 | ||
Commercial Metals Co. | 49,351 | 1,042 | Columbus McKinnon Corp. | 3,519 | 153 | ||
Compass Minerals International, Inc. (Ñ) | 17,918 | 1,178 | Construction Partners, Inc. Class A(Æ) | 4,490 | 59 | ||
Ferroglobe PLC | 49,565 | 425 | Convergys Corp. | 2,871 | 70 | ||
FutureFuel Corp. | 7,489 | 105 | Covanta Holding Corp. | 64,000 | 1,056 | ||
Ingevity Corp. (Æ) | 8,697 | 703 | Covenant Transportation Group, Inc. Class | ||||
Innospec, Inc. | 2,253 | 172 | A(Æ) | 4,072 | 128 | ||
Insteel Industries, Inc. | 26,627 | 889 | CPI Aerostructures, Inc. (Æ) | 7,055 | 74 | ||
Interface, Inc. Class A | 14,992 | 344 | CRA International, Inc. | 7,508 | 382 | ||
KMG Chemicals, Inc. | 4,853 | 358 | Deluxe Corp. | 1,584 | 105 | ||
LB Foster Co. Class A(Æ) | 8,563 | 197 | DHT Holdings, Inc. | 24,243 | 114 | ||
Materion Corp. | 1,591 | 86 | DMC Global, Inc. (Æ) | 4,750 | 213 | ||
Mueller Water Products, Inc. Class A | 50,617 | 593 | DXP Enterprises, Inc. (Æ) | 2,405 | 92 | ||
Neenah Paper, Inc. | 6,224 | 528 | Dycom Industries, Inc. (Æ) | 2,590 | 245 | ||
NewMarket Corp. | 972 | 393 | Exponent, Inc. | 18,462 | 892 | ||
NN, Inc. | 2,758 | 52 | Flir Systems, Inc. | 4,017 | 209 |
See accompanying notes which are an integral part of the financial statements.
24 U.S. Small Cap Equity Fund
Russell Investment Funds
U.S. Small Cap Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) or | Value | Amount ($) or | Value | ||||
Shares | $ | Shares | $ | ||||
Forrester Research, Inc. | 1,691 | 71 | Welbilt, Inc. (Æ) | 24,072 | 537 | ||
Forward Air Corp. | 8,245 | 487 | WNS Holdings, Ltd. - ADR(Æ) | 8,245 | 430 | ||
Gorman-Rupp Co. (The) | 1,619 | 57 | YRC Worldwide, Inc. (Æ) | 56,744 | 570 | ||
GP Strategies Corp. (Æ) | 7,872 | 139 | 32,912 | ||||
Granite Construction, Inc. | 5,313 | 296 | |||||
Great Lakes Dredge & Dock Corp. (Æ) | 34,613 | 182 | Technology - 13.2% | ||||
Greenbrier Cos. , Inc. | 4,543 | 240 | ACM Research, Inc. Class A(Æ)(Ñ) | 5,591 | 60 | ||
H&E Equipment Services, Inc. | 1,297 | 49 | Acxiom Corp. (Æ) | 15,513 | 465 | ||
Healthcare Services Group, Inc. | 11,882 | 513 | Adesto Technologies Corp. (Æ) | 23,543 | 198 | ||
HEICO Corp. | 17,695 | 1,289 | ADTRAN, Inc. | 35,640 | 529 | ||
Heidrick & Struggles International, Inc. | 2,347 | 82 | Altair Engineering, Inc. Class A(Æ) | 2,979 | 102 | ||
HNI Corp. | 17,669 | 657 | American Software, Inc. Class A | 4,266 | 62 | ||
Hurco Cos. , Inc. | 1,809 | 81 | Anixter International, Inc. (Æ) | 2,044 | 129 | ||
I3 Verticals, Inc. Class A(Æ) | 5,527 | 84 | Apptio, Inc. Class A(Æ) | 18,867 | 683 | ||
Information Services Group, Inc. (Æ) | 32,867 | 135 | Aquantia Corp. (Æ)(Ñ) | 17,112 | 198 | ||
JetBlue Airways Corp. (Æ) | 33,848 | 642 | Aspen Technology, Inc. (Æ) | 1,647 | 153 | ||
KBR, Inc. | 73,922 | 1,324 | Asure Software, Inc. (Æ)(Ñ) | 16,162 | 258 | ||
Kelly Services, Inc. Class A | 3,783 | 85 | Avaya Holdings Corp. (Æ) | 34,391 | 691 | ||
Kennametal, Inc. | 2,766 | 99 | AVX Corp. | 5,301 | 83 | ||
Kimball International, Inc. Class B | 11,881 | 192 | Bandwidth, Inc. Class A(Æ) | 3,673 | 140 | ||
KLX, Inc. (Æ) | 8,395 | 604 | Benchmark Electronics, Inc. | 5,130 | 150 | ||
Knight-Swift Transportation Holdings, Inc. | Blackline, Inc. (Æ) | 7,111 | 309 | ||||
(Æ) | 4,071 | 156 | Blucora, Inc. (Æ) | 8,553 | 316 | ||
Kornit Digital, Ltd. (Æ)(Ñ) | 20,052 | 357 | Bottomline Technologies, Inc. (Æ) | 11,815 | 589 | ||
Littelfuse, Inc. | 2,818 | 643 | Box, Inc. Class A(Æ) | 13,169 | 329 | ||
Lydall, Inc. (Æ) | 11,015 | 481 | CACI International, Inc. Class A(Æ) | 852 | 144 | ||
Manitowoc Co. , Inc. (The)(Æ) | 21,702 | 561 | CalAmp Corp. (Æ) | 31,731 | 743 | ||
Marlin Business Services Corp. | 2,454 | 73 | Carbonite, Inc. (Æ) | 24,827 | 866 | ||
Marten Transport, Ltd. | 14,216 | 333 | Cars. com, Inc. (Æ) | 17,575 | 499 | ||
MasTec, Inc. (Æ) | 14,222 | 722 | Castlight Health, Inc. Class B(Æ) | 25,336 | 108 | ||
MAXIMUS, Inc. | 6,297 | 391 | Cirrus Logic, Inc. (Æ) | 2,017 | 77 | ||
Milacron Holdings Corp. (Æ) | 2,223 | 42 | Cohu, Inc. | 4,366 | 107 | ||
Mitek Systems, Inc. (Æ) | 13,537 | 120 | CommVault Systems, Inc. (Æ) | 2,541 | 167 | ||
Modine Manufacturing Co. (Æ) | 8,288 | 151 | Conduent, Inc. (Æ) | 44,896 | 816 | ||
NV5 Global, Inc. (Æ) | 3,782 | 262 | Cornerstone OnDemand, Inc. (Æ) | 9,302 | 441 | ||
Old Dominion Freight Line, Inc. | 4,807 | 716 | Coupa Software, Inc. (Æ) | 3,689 | 230 | ||
Orion Group Holdings, Inc. (Æ) | 17,683 | 146 | Cree, Inc. (Æ) | 1,324 | 55 | ||
PFSweb, Inc. (Æ) | 25,017 | 243 | Cypress Semiconductor Corp. | 17,159 | 267 | ||
Radiant Logistics, Inc. (Æ) | 13,199 | 52 | Diodes, Inc. (Æ) | 4,582 | 158 | ||
Raven Industries, Inc. | 2,624 | 101 | Ellie Mae, Inc. (Æ) | 853 | 89 | ||
Ryder System, Inc. | 7,816 | 562 | Entegris, Inc. | 2,158 | 73 | ||
Saia, Inc. (Æ) | 5,637 | 456 | EPAM Systems, Inc. (Æ) | 877 | 109 | ||
Ship Finance International, Ltd. | 7,330 | 110 | Everbridge, Inc. (Æ) | 8,581 | 407 | ||
SkyWest, Inc. | 3,511 | 182 | Fabrinet(Æ) | 3,556 | 131 | ||
Spartan Motors, Inc. | 16,953 | 256 | Finisar Corp. (Æ)(Ñ) | 35,790 | 644 | ||
Square, Inc. Class A(Æ) | 3,337 | 206 | FireEye, Inc. (Æ) | 51,171 | 788 | ||
Standex International Corp. | 5,319 | 544 | Five9, Inc. (Æ) | 51,800 | 1,792 | ||
Steelcase, Inc. Class A | 88,180 | 1,190 | Fusion Connect, Inc. (Æ)(Ñ) | 51,908 | 205 | ||
Sun Hydraulics Corp. | 2,589 | 125 | Global Eagle Entertainment, Inc. (Æ) | 23,659 | 60 | ||
Sykes Enterprises, Inc. (Æ) | 3,386 | 97 | Graham Corp. | 2,718 | 70 | ||
TopBuild Corp. (Æ) | 1,022 | 80 | GrubHub, Inc. (Æ)(Ñ) | 3,333 | 350 | ||
Triumph Group, Inc. | 8,945 | 175 | GSI Group, Inc. (Æ) | 2,633 | 164 | ||
Tutor Perini Corp. (Æ) | 8,434 | 156 | GTT Communications, Inc. (Æ) | 6,450 | 290 | ||
UniFirst Corp. | 431 | 76 | Hortonworks, Inc. (Æ) | 9,846 | 179 | ||
Vishay Precision Group, Inc. (Æ) | 13,515 | 516 | II-VI, Inc. (Æ) | 1,165 | 51 | ||
WageWorks, Inc. (Æ) | 11,549 | 577 | Insight Enterprises, Inc. (Æ) | 4,702 | 230 | ||
Watts Water Technologies, Inc. Class A | 4,052 | 318 | Integrated Device Technology, Inc. (Æ) | 41,334 | 1,319 |
See accompanying notes which are an integral part of the financial statements.
U.S. Small Cap Equity Fund 25
Russell Investment Funds
U.S. Small Cap Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) or | Value | Amount ($) or | Value | |||||
Shares | $ | Shares | $ | |||||
InterDigital, Inc. | 781 | 63 | Allete, Inc. | 2,235 | 173 | |||
InterXion Holding NV(Æ) | 4,687 | 293 | American States Water Co. | 9,040 | 517 | |||
Kimball Electronics, Inc. (Æ) | 24,889 | 455 | Antero Midstream GP LP | 31,310 | 591 | |||
Leaf Group, Ltd. (Æ) | 23,939 | 260 | Avista Corp. | 2,825 | 149 | |||
ManTech International Corp. Class A | 2,329 | 125 | Boingo Wireless, Inc. (Æ) | 49,507 | 1,117 | |||
Meet Group, Inc. (Æ) | 25,706 | 115 | Bonanza Creek Energy, Inc. (Æ) | 3,131 | 119 | |||
Methode Electronics, Inc. | 4,184 | 169 | California Water Service Group | 4,276 | 167 | |||
Mimecast, Ltd. (Æ) | 17,496 | 721 | Chesapeake Utilities Corp. | 1,052 | 84 | |||
Mindbody Inc. Class A(Æ) | 1,991 | 77 | Cogent Communications Holdings, Inc. | 8,963 | 479 | |||
MKS Instruments, Inc. | 1,421 | 136 | Consolidated Water Co. , Ltd. | 2,918 | 38 | |||
MongoDB, Inc. (Æ) | 908 | 45 | El Paso Electric Co. | 2,684 | 159 | |||
Monolithic Power Systems, Inc. | 2,081 | 278 | Enerplus Corp. | 10,403 | 131 | |||
Monotype Imaging Holdings, Inc. | 8,838 | 179 | Evolution Petroleum Corp. | 19,361 | 191 | |||
NCR Corp. (Æ) | 21,936 | 658 | Extraction Oil & Gas, Inc. (Æ) | 3,976 | 58 | |||
NETGEAR, Inc. (Æ) | 3,608 | 226 | GCI Liberty, Inc. Class A(Æ) | 18,054 | 813 | |||
NetScout Systems, Inc. (Æ) | 3,368 | 100 | Gogo, Inc. (Æ)(Ñ) | 20,501 | 100 | |||
Nice, Ltd. - ADR(Æ) | 4,047 | 420 | Idacorp, Inc. | 2,252 | 208 | |||
Nova Measuring Instruments, Ltd. (Æ) | 6,147 | 168 | j2 Global, Inc. | 8,459 | 732 | |||
Nutanix, Inc. Class A(Æ) | 5,569 | 287 | Midstates Petroleum Co. , Inc. (Æ) | 25,823 | 351 | |||
Paycom Software, Inc. (Æ)(Ñ) | 1,907 | 188 | New Jersey Resources Corp. | 4,001 | 179 | |||
PC Connection, Inc. | 4,918 | 163 | Northwest Natural Gas Co. | 1,663 | 106 | |||
PC-Telephone, Inc. | 19,866 | 124 | NorthWestern Corp. | 2,016 | 115 | |||
Perficient, Inc. (Æ) | 28,005 | 738 | NRG Yield, Inc. Class A | 28,535 | 487 | |||
Perspecta, Inc. | 26,929 | 553 | NRG Yield, Inc. Class C | 8,853 | 152 | |||
PlayAGS, Inc. (Æ) | 33,929 | 918 | ONE Gas, Inc. | 2,727 | 204 | |||
Plexus Corp. (Æ) | 1,080 | 64 | Ormat Technologies, Inc. | 1,412 | 75 | |||
Power Integrations, Inc. | 8,042 | 587 | PNM Resources, Inc. | 2,407 | 94 | |||
Proofpoint, Inc. (Æ) | 4,895 | 564 | Portland General Electric Co. | 2,494 | 107 | |||
Q2 Holdings, Inc. (Æ) | 2,060 | 118 | Resolute Energy Corp. (Æ)(Ñ) | 6,987 | 218 | |||
Quantenna Communications, Inc. (Æ) | 24,553 | 382 | RingCentral, Inc. Class A(Æ) | 9,589 | 675 | |||
Rapid7, Inc. (Æ) | 3,100 | 87 | Sanchez Midstream Partners LP | 6,285 | 74 | |||
RealPage, Inc. (Æ) | 15,118 | 833 | SJW Group | 726 | 48 | |||
Sanmina Corp. (Æ) | 5,308 | 156 | South Jersey Industries, Inc. (Ñ) | 12,206 | 409 | |||
ScanSource, Inc. (Æ) | 4,699 | 189 | Southwest Gas Holdings, Inc. | 1,881 | 143 | |||
Semtech Corp. (Æ) | 2,586 | 122 | Spire, Inc. | 12,044 | 850 | |||
ShotSpotter, Inc. (Æ) | 14,865 | 564 | Spok Holdings, Inc. | 12,240 | 184 | |||
Silicon Laboratories, Inc. (Æ) | 726 | 72 | Ultra Petroleum Corp. (Æ) | 7,248 | 17 | |||
Simulations Plus, Inc. | 3,348 | 74 | Vistra Energy Corp. (Æ) | 11,027 | 261 | |||
Super Micro Computer, Inc. (Æ) | 31,306 | 740 | WGL Holdings, Inc. | 1,757 | 156 | |||
Switch, Inc. Class A(Ñ) | 24,909 | 303 | Whiting Petroleum Corp. (Æ) | 10,333 | 545 | |||
Synaptics, Inc. (Æ) | 8,571 | 432 | WildHorse Resource Development Corp. (Æ) | |||||
SYNNEX Corp. | 792 | 76 | (Ñ) | 3,923 | 99 | |||
Tech Data Corp. (Æ) | 790 | 65 | 11,869 | |||||
TechTarget, Inc. (Æ) | 6,206 | 176 | ||||||
Twilio, Inc. Class A(Æ) | 5,219 | 292 | Total Common Stocks | |||||
USA Technologies, Inc. (Æ) | 51,924 | 727 | ||||||
Varonis Systems, Inc. (Æ) | 14,374 | 1,071 | (cost $210,347) | 247,889 | ||||
Verint Systems, Inc. (Æ) | 1,202 | 53 | ||||||
ViaSat, Inc. (Æ) | 930 | 61 | Short-Term Investments - 2.8% | |||||
Vishay Intertechnology, Inc. | 9,054 | 210 | U. S. Cash Management Fund(@) | 7,203,192 | (8) | 7,204 | ||
Xperi Corp. | 57,297 | 922 | Total Short-Term Investments | |||||
Yelp, Inc. Class A(Æ) | 1,390 | 54 | (cost $7,203) | 7,204 | ||||
Zynga, Inc. Class A(Æ) | 23,506 | 96 | ||||||
33,622 | Other Securities - 6.2% | |||||||
U. S. Cash Collateral Fund(×)(@) | 15,877,485 | (8) | 15,877 | |||||
Utilities - 4.7% | Total Other Securities | |||||||
Algonquin Power & Utilities Corp. | 51,046 | 494 | (cost $15,877) | 15,877 |
See accompanying notes which are an integral part of the financial statements.
26 U.S. Small Cap Equity Fund
Russell Investment Funds
U.S. Small Cap Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | ||||
Principal | Fair | |||
Amount ($) or | Value | |||
Shares | $ | |||
Total Investments 106.2% | ||||
(identified cost $233,427) | 270,970 | |||
Other Assets and Liabilities, Net | ||||
- | (6.2%) | (15,939 | ) | |
Net Assets - 100.0% | 255,031 |
See accompanying notes which are an integral part of the financial statements.
U.S. Small Cap Equity Fund 27
Russell Investment Funds
U.S. Small Cap Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
0.3% | ||||||||||||
JER Investment Trust, Inc. | 05/27/04 | 1,771 | 82.03 | 145 | — | |||||||
Superior Uniform Group, Inc. | 07/23/15 | 32,674 | 22.92 | 749 | 677 | |||||||
677 | ||||||||||||
For a description of restricted securities see note 7 in the Notes to Financial Statements. |
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Value and | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
Russell 2000 E-Mini Index Futures | 13 | USD | 1,071 | 09/18 | (19 | ) | |
Total Value and Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | (19 | ) |
Presentation of Portfolio Holdings | ||||||||||||||||
Amounts in thousands | ||||||||||||||||
Fair Value | ||||||||||||||||
Practical | ||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | ||||||||||
Common Stocks | ||||||||||||||||
Consumer Discretionary | $ | 37,650 | $ | — | $ | — | $ | — | $ | 37,650 | 14.8 | |||||
Consumer Staples | 9,426 | — | — | — | 9,426 | 3.7 | ||||||||||
Energy | 10,025 | — | — | — | 10,025 | 3.9 | ||||||||||
Financial Services | 58,727 | — | — | — | 58,727 | 23.0 | ||||||||||
Health Care | 32,725 | — | — | — | 32,725 | 12.8 | ||||||||||
Materials and Processing | 20,933 | — | — | — | 20,933 | 8.2 | ||||||||||
Producer Durables | 32,912 | — | — | — | 32,912 | 12.9 | ||||||||||
Technology | 33,622 | — | — | — | 33,622 | 13.2 | ||||||||||
Utilities | 11,869 | — | — | — | 11,869 | 4.7 | ||||||||||
Short-Term Investments | — | — | — | 7,204 | 7,204 | 2.8 | ||||||||||
Other Securities | — | — | — | 15,877 | 15,877 | 6.2 | ||||||||||
Total Investments | 247,889 | — | — | 23,081 | 270,970 | 106.2 | ||||||||||
Other Assets and Liabilities, Net | (6.2 | ) | ||||||||||||||
100.0 | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Liabilities | ||||||||||||||||
Futures Contracts | (19 | ) | — | — | — | (19 | ) | (—)* | ||||||||
Total Other Financial Instruments** | $ | (19 | ) | $ | — | $ | — | $ | — | $ | (19 | ) |
See accompanying notes which are an integral part of the financial statements.
28 U.S. Small Cap Equity Fund
Russell Investment Funds
U.S. Small Cap Equity Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
* Less than 0.05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the investments.
(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified
in the fair value levels. The fair value amounts presented in the table are intended to permit reconciliation to the amounts presented in the Schedule of
Investments.
For a description of the Levels, see note 2 in the Notes to Financial Statements.
For a disclosure on transfers between Levels 1, 2 and 3 during the period ended June 30, 2018, see note 2 in the Notes to
Financial Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended June 30,
2018, were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
U.S. Small Cap Equity Fund 29
Russell Investment Funds
U.S. Small Cap Equity Fund
Fair Value of Derivative Instruments — June 30, 2018 (Unaudited)
Amounts in thousands
Equity | ||||
Derivatives not accounted for as hedging instruments | Contracts | |||
Location: Statement of Assets and Liabilities - Liabilities | ||||
Variation margin on futures contracts* | $ | 19 | ||
Equity | ||||
Derivatives not accounted for as hedging instruments | Contracts | |||
Location: Statement of Operations - Net realized gain (loss) | ||||
Futures contracts | $ | 831 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | ||||
Futures contracts | $ | (68 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
30 U.S. Small Cap Equity Fund
Russell Investment Funds
U.S. Small Cap Equity Fund
Balance Sheet Offsetting of Financial and Derivative Instruments —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Securities on Loan* | Investments, at fair value | $ | 15,441 | $ | — | $ | 15,441 | ||
Futures Contracts | Variation margin on futures contracts | 58 | — | 58 | |||||
Total Financial and Derivative Assets | 15,499 | — | 15,499 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (58) | — | (58 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 15,441 | $ | — | $ | 15,441 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||||
Gross Amounts Not Offset in | ||||||||||
the Statement of Assets and | ||||||||||
Liabilities | ||||||||||
Net Amounts | ||||||||||
of Assets | ||||||||||
Presented in | ||||||||||
the Statement | Financial and | |||||||||
of Assets and | Derivative | Collateral | ||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | ||||||
Barclays | $ | 1,153 | $ | — | $ | 1,153 | $ | — | ||
Citigroup | 386 | — | 386 | — | ||||||
Credit Suisse | 4,612 | — | 4,612 | — | ||||||
Goldman Sachs | 4,218 | — | 4,218 | — | ||||||
HSBC | 1,168 | — | 1,168 | — | ||||||
Merrill Lynch | 3,859 | — | 3,859 | — | ||||||
Newedge | 45 | — | 45 | — | ||||||
Total | $ | 15,441 | $ | — | $ | 15,441 | $ | — |
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 2 | $ | — | $ | 2 | ||
Total Financial and Derivative Liabilities | 2 | — | 2 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (2 | ) | — | (2 | ) | ||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | — | $ | — | $ | — |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
U.S. Small Cap Equity Fund 31
Russell Investment Funds
U.S. Small Cap Equity Fund
Statement of Assets and Liabilities — June 30, 2018 (Unaudited)
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 233,427 |
Investments, at fair value(*)(>) | 270,970 | |
Cash | 14 | |
Receivables: | ||
Dividends and interest | 200 | |
Dividends from affiliated funds | 14 | |
Variation margin on futures contracts | 58 | |
Prepaid expenses | 1 | |
Total assets | 271,257 | |
Liabilities | ||
Payables: | ||
Due to broker (a) | 17 | |
Fund shares redeemed | 65 | |
Accrued fees to affiliates | 205 | |
Other accrued expenses | 60 | |
Variation margin on futures contracts | 2 | |
Payable upon return of securities loaned | 15,877 | |
Total liabilities | 16,226 | |
Net Assets | $ | 255,031 |
See accompanying notes which are an integral part of the financial statements.
32 U.S. Small Cap Equity Fund
Russell Investment Funds
U.S. Small Cap Equity Fund
Statement of Assets and Liabilities, continued — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 449 | |
Accumulated net realized gain (loss) | 10,272 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | 37,543 | ||
Futures contracts | (19 | ) | |
Shares of beneficial interest | 157 | ||
Additional paid-in capital | 206,629 | ||
Net Assets | $ | 255,031 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: (#) | $ | 16.23 | |
Net assets | $ | 255,031,477 | |
Shares outstanding ($. 01 par value) | 15,716,582 | ||
Amounts in thousands | |||
(*) Securities on loan included in investments | $ | 15,441 | |
(>) Investments in affiliates, U. S. Cash Management Fund and U. S. Cash Collateral Fund | $ | 23,081 | |
(a) Due to Broker for Futures | $ | 17 | |
(#) 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.
U.S. Small Cap Equity Fund 33
Russell Investment Funds
U.S. Small Cap Equity Fund
Statement of Operations — For the Period Ended June 30, 2018 (Unaudited)
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 1,457 | |
Dividends from affiliated funds | 105 | ||
Interest | 1 | ||
Securities lending income (net) | 94 | ||
Total investment income | 1,657 | ||
Expenses | |||
Advisory fees | 1,132 | ||
Administrative fees | 63 | ||
Custodian fees | 32 | ||
Transfer agent fees | 6 | ||
Professional fees | 34 | ||
Trustees’ fees | 5 | ||
Printing fees | 18 | ||
Miscellaneous | 7 | ||
Total expenses | 1,297 | ||
Net investment income (loss) | 360 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 10,810 | ||
Futures contracts | 831 | ||
Net realized gain (loss) | 11,641 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | 4,392 | ||
Investments in affiliated funds | 1 | ||
Futures contracts | (68 | ) | |
Net change in unrealized appreciation (depreciation) | 4,325 | ||
Net realized and unrealized gain (loss) | 15,966 | ||
Net Increase (Decrease) in Net Assets from Operations | $ | 16,326 | |
See accompanying notes which are an integral part of the financial statements.
34 U.S. Small Cap Equity Fund
Russell Investment Funds
U.S. Small Cap Equity Fund
Statements of Changes in Net Assets
Period | ||||||
Ended June 30, 2018 | Fiscal Year Ended | |||||
Amounts in thousands | (Unaudited) | December 31, 2017 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 360 | $ | 424 | ||
Net realized gain (loss) | 11,641 | 37,490 | ||||
Net change in unrealized appreciation (depreciation) | 4,325 | (2,016 | ) | |||
Net increase (decrease) in net assets from operations | 16,326 | 35,898 | ||||
Distributions | ||||||
From net investment income | (168 | ) | (428 | ) | ||
From net realized gain | (18,051 | ) | (16,588 | ) | ||
Net decrease in net assets from distributions | (18,219 | ) | (17,016 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 2,070 | 7,257 | ||||
Total Net Increase (Decrease) in Net Assets | 177 | 26,139 | ||||
Net Assets | ||||||
Beginning of period | 254,854 | 228,715 | ||||
End of period | $ | 255,031 | $ | 254,854 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 449 | $ | 257 |
* Share transaction amounts (in thousands) for the periods ended June 30, 2018 and December 31, 2017 were as follows: | ||||||||||||
2018 (Unaudited) | 2017 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Proceeds from shares sold | 156 | $ | 2,476 | 1,771 | $ | 27,847 | ||||||
Proceeds from reinvestment of distributions | 1,190 | 18,219 | 1,034 | 17,015 | ||||||||
Payments for shares redeemed | (1,168 | ) | (18,625 | ) | (2,300 | ) | (37,605 | ) | ||||
Total increase (decrease) | 178 | $ | 2,070 | 505 | $ | 7,257 |
See accompanying notes which are an integral part of the financial statements.
U.S. Small Cap Equity Fund 35
Russell Investment Funds
U.S. Small Cap Equity Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||||||||
$ | |||||||||||||||||||
$ | Net | $ | $ | $ | $ | ||||||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | $ | |||||||||||||
Beginning of | Income | and Unrealized | Investment | from Net | from Net | Return of | |||||||||||||
Period | (Loss) (a) | Gain (Loss) | Operations | Investment Income | Realized Gain | Capital | |||||||||||||
June 30, 2018(1) | 16.40 | . 02 | 1.00 | 1.02 | (. 01 | ) | (1.18 | ) | — | ||||||||||
December 31, 2017 | 15.21 | . 03 | 2.33 | 2.36 | (. 03 | ) | (1.14 | ) | — | ||||||||||
December 31, 2016 | 12.93 | . 10 | 2.30 | 2.40 | (. 10 | ) | (. 01 | ) | (. 01 | ) | |||||||||
December 31, 2015 | 15.51 | . 09 | (1.19 | ) | (1.10 | ) | (. 10 | ) | (1.38 | ) | — | ||||||||
December 31, 2014 | 16.88 | . 06 | . 18 | . 24 | (. 04 | ) | (1.57 | ) | — | ||||||||||
December 31, 2013 | 13.02 | . 08 | 5.11 | 5.19 | (. 07 | ) | (1.26 | ) | — | ||||||||||
See accompanying notes which are an integral part of the financial statements.
U.S. Small Cap Equity Fund 36
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(d)(f) | (000 | ) | Gross(e)(g) | Net(e)(g) | Net Assets(e) | Turnover Rate(d) | |||||||||
(1.19 | ) | 16.23 | 6.64 | 255,031 | 1.03 | 1.03 | . 29 | 34 | |||||||||
(1.17 | ) | 16.40 | 15.48 | 254,854 | 1.03 | 1.03 | . 17 | 135 | |||||||||
(. 12 | ) | 15.21 | 18.66 | 228,715 | 1.03 | 1.03 | . 76 | 106 | |||||||||
(1.48 | ) | 12.93 | (7.19 | ) | 218,063 | 1.06 | 1.04 | . 61 | 138 | ||||||||
(1.61 | ) | 15.51 | 1.56 | 253,803 | 1.06 | 1.01 | . 35 | 80 | |||||||||
(1.33 | ) | 16.88 | 40.00 | 237,828 | 1.05 | 1.00 | . 50 | 77 |
See accompanying notes which are an integral part of the financial statements.
U.S. Small Cap Equity Fund 37
Russell Investment Funds
U.S. Small Cap Equity Fund
Related Party Transactions, Fees and Expenses (Unaudited)
Accrued fees payable to affiliates for the period ended June 30, 2018 were as follows: | ||
Advisory fees | $ | 192,842 |
Administration fees | 10,713 | |
Transfer agent fees | 943 | |
Trustee fees | 516 | |
$ | 205,014 |
Transactions (amounts in thousands) during the period ended June 30, 2018 with funds which are, or were, an affiliated company
are as follows:
Fair Value, | Change in | ||||||||||||||||||
Beginning of | Realized Gain | Unrealized | Fair Value, End | Income | Capital Gains | ||||||||||||||
Period | Purchases | Sales | (Loss) | Gain (Loss) | of Period | Distributions | Distributions | ||||||||||||
U. S. Cash Collateral Fund | $ | 10,927 | $ | 38,710 | $ | 33,760 | $ | — | $ | — | $ | 15,877 | $ | 95 | $ | — | |||
U. S. Cash Management Fund | 15,786 | 21,262 | 29,845 | — | 1 | 7,204 | 105 | — | |||||||||||
$ | 26,713 | $ | 59,972 | $ | 63,605 | $ | — | $ | 1 | $ | 23,081 | $ | 200 | $ | — |
Federal Income Taxes (Unaudited)
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation), undistributed ordinary income and
undistributed long-term capital gains for income tax purposes were as follows:
Cost of Investments | $ | 234,719,459 | |||
Unrealized Appreciation | $ | 45,158,562 | |||
Unrealized Depreciation | (8,926,985 | ) | |||
Net Unrealized Appreciation (Depreciation) | $ | 36,231,577 |
Net investment income and net realized gains (losses) in the financial statements may differ from taxable net investment income and
net realized gains (losses). Capital accounts within the financial statements are adjusted for permanent differences between book and
tax accounting. Book-tax differences may be due to foreign currency gains and losses, reclassifications of dividends and differences in
treatment of income from swaps. These adjustments have no impact on the net assets. At June 30, 2018, there were no adjustments to
the Statement of Assets and Liabilities.
See accompanying notes which are an integral part of the financial statements.
38 U.S. Small Cap Equity Fund
Russell Investment Funds
International Developed Markets Fund
Shareholder Expense Example — June 30, 2018 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”) . | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. The fees and expenses shown in this | ||||||
administrative fees and other Fund expenses. The Example is | section do not reflect any Insurance Company Separate Account | ||||||
intended to help you understand your ongoing costs (in dollars) | Policy Charges. | ||||||
of investing in the Fund and to compare these costs with the | Hypothetical | ||||||
ongoing costs of investing in other mutual funds. The Example | Performance (5% | ||||||
is based on an investment of $1,000 invested at the beginning of | Actual | return before | |||||
the period and held for the entire period indicated, which for this | Performance | expenses) | |||||
Beginning Account Value | |||||||
Fund is from January 1, 2018 to June 30, 2018. | January 1, 2018 | $ | 1,000.00 | $ | 1,000.00 | ||
Ending Account Value | |||||||
Actual Expenses | June 30, 2018 | $ | 968.50 | $ | 1,019.44 | ||
The information in the table under the heading “Actual | Expenses Paid During Period* | $ | 5.27 | $ | 5.41 | ||
Performance” provides information about actual account values | |||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 1.08% | ||||||
(representing the six month period annualized), multiplied by the average | |||||||
together with the amount you invested, to estimate the expenses | account value over the period, multiplied by 181/365 (to reflect the one-half | ||||||
that you paid over the period. Simply divide your account value by | year period) . | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | |||||||
= 8.6), then multiply the result by the number in the first column | |||||||
in the row entitled “Expenses Paid During Period” to estimate | |||||||
the expenses you paid on your account during this period. | |||||||
Hypothetical Example for Comparison Purposes | |||||||
The information in the table under the heading “Hypothetical | |||||||
Performance (5% return before expenses)” provides information | |||||||
about hypothetical account values and hypothetical expenses | |||||||
based on the Fund’s actual expense ratio and an assumed rate of | |||||||
return of 5% per year before expenses, which is not the Fund’s | |||||||
actual return. The hypothetical account values and expenses | |||||||
may not be used to estimate the actual ending account balance or | |||||||
expenses you paid for the period. You may use this information | |||||||
to compare the ongoing costs of investing in the Fund and other | |||||||
funds. To do so, compare this 5% hypothetical example with the | |||||||
5% hypothetical examples that appear in the shareholder reports | |||||||
of other funds. |
International Developed Markets Fund 39
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Common Stocks - 95.5% | Bank of Nova Scotia (The) | 3,699 | 209 | |||||||
Australia - 3.0% | BCE, Inc. | 5,200 | 211 | |||||||
AGL Energy, Ltd. | 36,746 | 612 | BRP, Inc. | 4,200 | 202 | |||||
Ansell, Ltd. - GDR | 500 | 10 | CAE, Inc. | 28,300 | 588 | |||||
Aristocrat Leisure, Ltd. | 77,204 | 1,763 | Canadian Imperial Bank of Commerce | 5,421 | 472 | |||||
Australia & New Zealand Banking | Canadian National Railway Co. | 6,938 | 567 | |||||||
Group, Ltd. - ADR | 8,664 | 182 | Canadian Natural Resources, Ltd. | 16,191 | 584 | |||||
BlueScope Steel, Ltd. | 18,000 | 229 | Canadian Tire Corp. , Ltd. Class A | 3,700 | 483 | |||||
Brambles, Ltd. | 13,498 | 89 | Canfor Corp. (Æ) | 3,300 | 79 | |||||
Coca-Cola Amatil, Ltd. | 46,200 | 314 | Celestica, Inc. (Æ) | 56,029 | 665 | |||||
Commonwealth Bank of Australia - ADR | 10,890 | 590 | Cenovus Energy, Inc. | 28,214 | 293 | |||||
Computershare, Ltd. | 17,800 | 244 | CGI Group, Inc. Class A(Æ) | 16,700 | 1,059 | |||||
Crown Resorts, Ltd. | 2,500 | 25 | Constellation Software, Inc. | 1,300 | 1,008 | |||||
CSL, Ltd. | 10,921 | 1,561 | Empire Co. , Ltd. Class A | 33,500 | 672 | |||||
Macquarie Group, Ltd. | 19,625 | 1,803 | Encana Corp. | 53,287 | 696 | |||||
Mirvac Group(ö) | 161,300 | 260 | First Quantum Minerals, Ltd. | 36,174 | 533 | |||||
National Australia Bank, Ltd. - ADR | 6,643 | 135 | George Weston, Ltd. | 1,700 | 139 | |||||
Newcrest Mining, Ltd. | 48,800 | 791 | Granite Real Estate Investment Trust(ö) | 2,600 | 106 | |||||
Qantas Airways, Ltd. (Æ) | 47,858 | 219 | Great-West Lifeco, Inc. | 3,963 | 97 | |||||
REA Group, Ltd. | 1,600 | 108 | H&R Real Estate Investment Trust(ö) | 8,200 | 125 | |||||
Sandfire Resources NL | 20,962 | 143 | Intact Financial Corp. | 1,318 | 93 | |||||
Sims Metal Management, Ltd. | 1,600 | 19 | Loblaw Cos. , Ltd. | 9,800 | 504 | |||||
Sirtex Medical, Ltd. | 1,000 | 23 | Manulife Financial Corp. | 12,488 | 224 | |||||
South32, Ltd. | 11,800 | 32 | National Bank of Canada | 4,700 | 226 | |||||
Stockland(ö) | 47,000 | 139 | Northland Power, Inc. | 3,600 | 67 | |||||
Telstra Corp. , Ltd. | 50,191 | 98 | Nutrien, Ltd. | 21,547 | 1,173 | |||||
Treasury Wine Estates, Ltd. | 38,300 | 495 | Parex Resources, Inc. (Æ) | 7,200 | 136 | |||||
Vicinity Centres(Æ)(ö) | 127,000 | 244 | Quebecor, Inc. Class B | 8,400 | 172 | |||||
Wesfarmers, Ltd. (Æ) | 36,883 | 1,352 | RioCan Real Estate Investment Trust(ö) | 9,100 | 167 | |||||
Westpac Banking Corp. | 9,071 | 198 | Rogers Communications, Inc. Class B | 24,881 | 1,182 | |||||
Whitehaven Coal, Ltd. | 32,600 | 140 | Royal Bank of Canada - GDR | 14,387 | 1,084 | |||||
Woolworths Group, Ltd. | 21,911 | 496 | Stars Group, Inc. (The)(Æ) | 2,200 | 80 | |||||
12,314 | Sun Life Financial, Inc. | 11,324 | 455 | |||||||
Teck Resources, Ltd. Class B | 200 | 5 | ||||||||
Austria - 0.5% | TELUS Corp. | 9,500 | 337 | |||||||
ams AG(Æ) | 5,946 | 440 | TFI International, Inc. (Æ) | 4,400 | 136 | |||||
Andritz AG | 21,154 | 1,124 | Toronto Dominion Bank | 32,839 | 1,901 | |||||
Erste Group Bank AG(Æ) | 5,324 | 222 | Transcontinental, Inc. Class A - ADR | 3,600 | 84 | |||||
Immofinanz AG(Æ) | 3,824 | 91 | West Fraser Timber Co. , Ltd. | 400 | 28 | |||||
OMV AB | 2,338 | 132 | 17,129 | |||||||
Voestalpine AG | 4,135 | 190 | ||||||||
2,199 | China - 2.6% | |||||||||
Alibaba Group Holding, Ltd. - ADR(Æ) | 10,417 | 1,933 | ||||||||
Belgium - 1.4% | Industrial & Commercial Bank of China, | |||||||||
Ageas | 31,265 | 1,577 | Ltd. Class H | 708,000 | 526 | |||||
Anheuser-Busch InBev SA | 10,283 | 1,037 | Lenovo Group, Ltd. | 4,330,000 | 2,332 | |||||
Cie d'Entreprises CFE | 818 | 101 | New Oriental Education & Technology | |||||||
Colruyt SA | 2,318 | 132 | Group - ADR | 4,690 | 444 | |||||
Groupe Bruxelles Lambert SA | 1,585 | 167 | Ping An Insurance Group Co. of China, | |||||||
KBC Groep NV | 20,881 | 1,610 | Ltd. Class H | 182,543 | 1,668 | |||||
Proximus | 6,902 | 156 | Sunny Optical Technology Group Co. , | |||||||
Solvay SA | 1,464 | 184 | Ltd. | 32,499 | 598 | |||||
UCB SA | 11,147 | 874 | Tencent Holdings, Ltd. | 58,331 | 2,904 | |||||
5,838 | Weibo Corp. - ADR(Æ)(Ñ) | 4,182 | 371 | |||||||
10,776 | ||||||||||
Canada - 4.2% | ||||||||||
Bank of Montreal | 3,717 | 287 |
See accompanying notes which are an integral part of the financial statements.
40 International Developed Markets Fund
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Curacao - 0.0% | Publicis Groupe SA - ADR | 35,541 | 2,442 | ||||||
HAL Trust | 837 | 142 | Renault SA | 2,664 | 226 | ||||
Rexel SA Class H | 147,245 | 2,116 | |||||||
Denmark - 1.7% | Safran SA | 14,304 | 1,735 | ||||||
AP Moller - Maersk A/S Class B | 1,421 | 1,768 | Sanofi - ADR | 50,955 | 4,081 | ||||
Danske Bank A/S | 43,686 | 1,366 | Schneider Electric SE | 31,588 | 2,628 | ||||
Dfds A/S | 1,762 | 112 | SCOR SE - ADR | 1,918 | 71 | ||||
DSV A/S | 8,553 | 690 | Societe Generale SA | 6,061 | 255 | ||||
Genmab A/S(Æ) | 1,462 | 225 | Television Francaise 1 | 5,013 | 53 | ||||
GN Store Nord A/S | 990 | 45 | Thales SA | 7,112 | 915 | ||||
H Lundbeck A/S | 12,418 | 872 | Total SA | 50,376 | 3,064 | ||||
Orsted A/S(Þ) | 3,350 | 203 | Trigano SA | 253 | 45 | ||||
Pandora A/S | 2,336 | 163 | Unibail-Rodamco-Westfield | 820 | 181 | ||||
Royal Unibrew A/S | 550 | 44 | Vallourec SA(Æ)(Ñ) | 148,982 | 881 | ||||
Scandinavian Tobacco Group A/S(Þ) | 70,784 | 1,068 | Vicat SA | 16,412 | 1,076 | ||||
Sydbank A/S | 1,126 | 39 | Vinci SA | 11,700 | 1,124 | ||||
TDC A/S(Æ)(Š) | 29,907 | 241 | 39,240 | ||||||
6,836 | |||||||||
Germany - 5.6% | |||||||||
Finland - 0.7% | Adidas AG | 5,544 | 1,211 | ||||||
Fortum OYJ | 17,086 | 408 | Allianz SE | 3,021 | 624 | ||||
Kesko OYJ Class B | 1,502 | 92 | AURELIUS Equity Opportunities SE & | ||||||
Outokumpu OYJ | 19,216 | 119 | Co. KGaA | 951 | 57 | ||||
Sampo OYJ Class A | 3,443 | 168 | BASF SE | 4,603 | 440 | ||||
Stora Enso OYJ Class R | 25,492 | 498 | Bayer AG | 4,183 | 461 | ||||
Tikkurila OYJ | 24,844 | 426 | Bayerische Motoren Werke AG | 12,612 | 1,144 | ||||
UPM-Kymmene OYJ | 37,035 | 1,322 | Beiersdorf AG | 9,303 | 1,056 | ||||
3,033 | Commerzbank AG(Æ) | 15,020 | 144 | ||||||
Continental AG | 923 | 211 | |||||||
France - 9.6% | Covestro AG(Þ) | 12,133 | 1,082 | ||||||
Air Liquide SA Class A | 19,107 | 2,400 | Daimler AG | 6,385 | 411 | ||||
Arkema SA | 908 | 107 | Deutsche Bank AG | 11,357 | 123 | ||||
Atos SE | 2,622 | 357 | Deutsche Boerse AG | 20,788 | 2,770 | ||||
AXA SA | 13,124 | 322 | Deutsche Lufthansa AG | 22,320 | 537 | ||||
BNP Paribas SA | 17,142 | 1,062 | Deutsche Pfandbriefbank AG(Þ) | 2,030 | 28 | ||||
Bouygues SA - ADR | 18,731 | 806 | Deutsche Telekom AG | 19,785 | 307 | ||||
Bureau Veritas SA | 27,692 | 738 | Deutsche Wohnen SE | 4,039 | 195 | ||||
Carrefour SA(Ñ) | 7,053 | 114 | Deutz AG | 1,900 | 15 | ||||
Christian Dior SE | 425 | 177 | Fresenius Medical Care AG & Co. | 60 | 6 | ||||
Cie de Saint-Gobain | 12,132 | 541 | GEA Group AG | 35,365 | 1,192 | ||||
CNP Assurances | 4,867 | 111 | Hannover Rueck SE | 1,868 | 233 | ||||
Credit Agricole SA | 85,255 | 1,137 | Hapag-Lloyd AG(Æ)(Þ) | 2,140 | 76 | ||||
Danone SA | 26,749 | 1,961 | HeidelbergCement AG | 12,452 | 1,048 | ||||
Dassault Aviation SA | 491 | 934 | Hochtief AG | 1,280 | 231 | ||||
Eiffage SA | 70 | 8 | Infineon Technologies AG - ADR | 26,821 | 683 | ||||
Engie SA | 79,584 | 1,217 | Muenchener Rueckversicherungs- | ||||||
Essilor International SA | 1,844 | 260 | Gesellschaft AG in Muenchen | 8,807 | 1,866 | ||||
Hermes International | 1,236 | 756 | SAP SE - ADR | 18,505 | 2,140 | ||||
Kering | 1,408 | 794 | Scout24 AG(Þ) | 2,280 | 121 | ||||
L'Oreal SA | 10,561 | 2,607 | Siemens AG | 15,370 | 2,031 | ||||
LVMH Moet Hennessy Louis Vuitton | Siemens Healthineers AG(Æ)(Þ) | 6,810 | 281 | ||||||
SE - ADR | 1,430 | 475 | Siltronic AG | 979 | 140 | ||||
Mercialys SA(ö) | 5,811 | 101 | Transportation Components, Inc. | 39,250 | 861 | ||||
Natixis SA | 39,293 | 278 | Vonovia SE | 3,866 | 184 | ||||
Orange SA - ADR | 18,449 | 308 | Wacker Chemie AG | 685 | 90 | ||||
Pernod Ricard SA | 1,492 | 244 | Zalando SE(Æ)(Þ) | 14,182 | 792 | ||||
Peugeot SA | 23,342 | 532 |
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 41
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Zooplus AG(Æ) | 1,193 | 223 | Teva Pharmaceutical Industries, Ltd. | 14,548 | 352 | ||||||
23,014 | 4,250 | ||||||||||
Hong Kong - 3.1% | Italy - 2.7% | ||||||||||
AIA Group, Ltd. | 160,292 | 1,388 | ACEA SpA | 6,641 | 99 | ||||||
China Mobile, Ltd. | 150,500 | 1,335 | Assicurazioni Generali SpA | 15,928 | 267 | ||||||
China Resources Power Holdings Co. , | ASTM SpA | 1,008 | 23 | ||||||||
Ltd. | 688,000 | 1,206 | Atlantia SpA | 3,171 | 94 | ||||||
CK Asset Holdings, Ltd. | 153,851 | 1,215 | Davide Campari-Milano SpA | 82,958 | 682 | ||||||
CK Hutchison Holdings Ltd | 143,500 | 1,515 | Enel SpA | 593,266 | 3,286 | ||||||
CLP Holdings, Ltd. | 21,500 | 231 | ENI SpA - ADR | 164,298 | 3,051 | ||||||
Hang Seng Bank, Ltd. | 51,612 | 1,284 | FinecoBank Banca Fineco SpA | 41,698 | 469 | ||||||
Henderson Land Development Co. , Ltd. | 16,090 | 85 | Intesa Sanpaolo SpA | 125,767 | 364 | ||||||
HKT Trust & HKT, Ltd. | 172,000 | 219 | Moncler SpA | 9,127 | 415 | ||||||
Hongkong Land Holdings, Ltd. | 36,400 | 260 | Parmalat SpA | 24,114 | 81 | ||||||
Hysan Development Co. , Ltd. | 27,000 | 150 | Snam Rete Gas SpA | 36,633 | 153 | ||||||
Kerry Properties, Ltd. | 23,000 | 110 | Telecom Italia SpA(Æ) | 830,901 | 617 | ||||||
Link(ö) | 85,000 | 773 | UniCredit SpA | 92,186 | 1,533 | ||||||
Melco Crown Entertainment, Ltd. - ADR | 25,444 | 712 | 11,134 | ||||||||
Swire Pacific, Ltd. Class A | 86,500 | 914 | |||||||||
Swire Properties, Ltd. | 24,000 | 89 | Japan - 17.5% | ||||||||
Techtronic Industries Co. , Ltd. | 80,771 | 448 | 77 Bank, Ltd. (The) | 1,500 | 33 | ||||||
WH Group, Ltd. (Þ) | 365,000 | 295 | Advantest Corp. | 23,367 | 486 | ||||||
Wharf Holdings, Ltd. (The) | 42,000 | 135 | Aisin Seiki Co. , Ltd. | 3,000 | 137 | ||||||
Wheelock & Co. , Ltd. | 24,000 | 167 | Alfresa Holdings Corp. | 16,800 | 394 | ||||||
12,531 | Aozora Bank, Ltd. | 6,000 | 228 | ||||||||
Asahi Glass Co. , Ltd. | 11,300 | 439 | |||||||||
India - 1.1% | Asahi Group Holdings, Ltd. | 6,700 | 343 | ||||||||
HDFC Bank, Ltd. - ADR | 25,621 | 2,691 | Asahi Kasei Corp. | 18,000 | 228 | ||||||
Infosys, Ltd. - ADR | 89,145 | 1,732 | Astellas Pharma, Inc. | 86,900 | 1,324 | ||||||
4,423 | Benesse Holdings, Inc. | 1,100 | 39 | ||||||||
BML, Inc. | 41,700 | 1,074 | |||||||||
Indonesia - 0.2% | Bridgestone Corp. | 20,000 | 781 | ||||||||
Bank Central Asia Tbk PT | 551,295 | 825 | Canon, Inc. | 4,200 | 138 | ||||||
Central Japan Railway Co. | 1,400 | 290 | |||||||||
Ireland - 0.7% | Century Tokyo Leasing Corp. | 4,200 | 238 | ||||||||
Bank of Ireland Group PLC | 80,368 | 626 | Chiba Bank, Ltd. (The) | 33,000 | 233 | ||||||
CRH PLC | 7,610 | 269 | Chubu Electric Power Co. , Inc. | 28,700 | 430 | ||||||
Medtronic PLC | 6,743 | 577 | Coca-Cola Bottlers Japan Holdings, Inc. | 4,300 | 172 | ||||||
Ryanair Holdings PLC - ADR(Æ) | 4,014 | 459 | Concordia Financial Group, Ltd. | 56,200 | 286 | ||||||
Willis Towers Watson PLC(Æ) | 5,106 | 774 | Cosel Co. , Ltd. | 30,700 | 388 | ||||||
2,705 | Credit Saison Co. , Ltd. | 17,900 | 281 | ||||||||
Dai Nippon Printing Co. , Ltd. | 22,100 | 494 | |||||||||
Israel - 1.0% | Dai-ichi Life Holdings, Inc. | 64,250 | 1,143 | ||||||||
Azrieli Group, Ltd. | 3,281 | 163 | Daiichi Sankyo Co. , Ltd. | 9,900 | 379 | ||||||
Bank Hapoalim BM | 121,347 | 823 | Daikin Industries, Ltd. | 3,400 | 407 | ||||||
Bank Leumi Le-Israel BM | 199,302 | 1,181 | Daiseki Co. , Ltd. | 16,900 | 496 | ||||||
Bezeq The Israeli Telecommunication | Daito Trust Construction Co. , Ltd. | 2,400 | 390 | ||||||||
Corp. , Ltd. | 124,676 | 140 | Daiwa House Industry Co. , Ltd. | 8,700 | 296 | ||||||
Check Point Software Technologies, Ltd. | Daiwa Securities Group, Inc. | 31,000 | 180 | ||||||||
(Æ) | 2,700 | 264 | Denso Corp. | 4,000 | 195 | ||||||
Israel Discount Bank, Ltd. Class A | 16,000 | 47 | DMG Mori Seiki Co. , Ltd. | 1,900 | 26 | ||||||
Mizrahi Tefahot Bank, Ltd. | 12,470 | 229 | East Japan Railway Co. | 1,300 | 125 | ||||||
Nice, Ltd. (Æ) | 7,253 | 753 | Ebara Corp. | 33,300 | 1,033 | ||||||
Plus500, Ltd. | 7,421 | 158 | Eisai Co. , Ltd. | 13,540 | 952 | ||||||
Taro Pharmaceutical Industries, Ltd. | FamilyMart UNY Holdings Co. , Ltd. | 3,800 | 400 | ||||||||
(Æ)(Ñ) | 1,211 | 140 | FANUC Corp. | 2,805 | 556 |
See accompanying notes which are an integral part of the financial statements.
42 International Developed Markets Fund
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Fuji Media Holdings, Inc. | 3,600 | 61 | Nippon Yusen KK | 15,200 | 301 | |||||
Fujitsu, Ltd. | 473,000 | 2,865 | Nissan Motor Co. , Ltd. | 27,100 | 263 | |||||
Hazama Ando Corp. | 12,800 | 116 | Nisshinbo Holdings, Inc. | 4,400 | 47 | |||||
Heiwa Corp. | 1,400 | 34 | Nitto FC Co. , Ltd. | 10,600 | 73 | |||||
Hitachi Capital Corp. | 7,200 | 186 | Nomura Holdings, Inc. | 56,300 | 272 | |||||
Hitachi, Ltd. | 154,000 | 1,085 | NTT Data Corp. | 4,200 | 48 | |||||
Honda Motor Co. , Ltd. | 137,700 | 4,038 | NTT DOCOMO, Inc. | 51,200 | 1,304 | |||||
Hoya Corp. | 9,300 | 528 | Obayashi Corp. | 13,500 | 140 | |||||
Icom, Inc. | 10,900 | 266 | Oji Holdings Corp. | 39,000 | 242 | |||||
Iida Group Holdings Co. , Ltd. | 35,100 | 676 | OKUMA Corp. | 500 | 26 | |||||
Inpex Corp. | 228,600 | 2,363 | Ono Pharmaceutical Co. , Ltd. | 22,500 | 527 | |||||
Isetan Mitsukoshi Holdings, Ltd. | 2,900 | 36 | Oriental Land Co. , Ltd. | 3,200 | 335 | |||||
Isuzu Motors, Ltd. | 164,400 | 2,181 | ORIX Corp. | 35,100 | 554 | |||||
ITOCHU Corp. | 46,700 | 845 | Osaka Gas Co. , Ltd. | 8,400 | 174 | |||||
Japan Post Bank Co. , Ltd. | 27,800 | 323 | Qol Co. , Ltd. | 27,200 | 508 | |||||
Japan Post Holdings Co. , Ltd. | 105,400 | 1,154 | Resona Holdings, Inc. | 19,800 | 106 | |||||
Japan Post Insurance Co. , Ltd. | 11,000 | 226 | Round One Corp. | 500 | 8 | |||||
Japan Tobacco, Inc. | 23,200 | 648 | SBI Holdings, Inc. | 2,300 | 59 | |||||
JFE Holdings, Inc. | 11,600 | 219 | Secom Co. , Ltd. | 10,400 | 798 | |||||
JSR Corp. | 14,900 | 253 | Secom Joshinetsu Co. , Ltd. (Å) | 7,000 | 223 | |||||
JX Holdings, Inc. | 164,400 | 1,141 | Sekisui House, Ltd. | 12,900 | 228 | |||||
Kajima Corp. | 22,000 | 170 | Seven & i Holdings Co. , Ltd. | 16,200 | 706 | |||||
Kansai Electric Power Co. , Inc. (The) | 17,000 | 248 | Shin-Etsu Chemical Co. , Ltd. | 5,235 | 464 | |||||
Kao Corp. | 11,100 | 846 | Shingakukai Co. , Ltd. | 300 | 2 | |||||
Kawasaki Heavy Industries, Ltd. | 6,000 | 176 | Shiseido Co. , Ltd. | 4,200 | 333 | |||||
KDDI Corp. | 30,500 | 834 | Showa Corp. | 2,400 | 39 | |||||
Kirin Holdings Co. , Ltd. | 11,000 | 294 | Showa Denko KK | 2,200 | 98 | |||||
Kitagawa Industries Co. , Ltd. (Å) | 10,600 | 135 | SMC Corp. | 1,270 | 465 | |||||
Kobe Steel, Ltd. | 15,900 | 145 | SoftBank Group Corp. | 2,700 | 194 | |||||
Komatsu, Ltd. | 18,760 | 534 | Sojitz Corp. | 94,600 | 343 | |||||
Kyushu Railway Co. | 6,800 | 208 | Sompo Japan Nipponkoa Holdings, Inc. | 33,800 | 1,366 | |||||
Makino Milling Machine Co. , Ltd. | 3,000 | 23 | Sony Corp. | 40,110 | 2,058 | |||||
Marubeni Corp. | 54,300 | 414 | Sumitomo Chemical Co. , Ltd. | 25,000 | 141 | |||||
Maruha Nichiro Corp. | 400 | 16 | Sumitomo Corp. | 21,300 | 350 | |||||
Mazda Motor Corp. | 16,900 | 207 | Sumitomo Electric Industries, Ltd. | 6,600 | 98 | |||||
McDonald's Holdings Co. Japan, Ltd. | 4,100 | 209 | Sumitomo Heavy Industries, Ltd. | 5,000 | 168 | |||||
Medipal Holdings Corp. | 5,000 | 100 | Sumitomo Metal Mining Co. , Ltd. | 5,000 | 191 | |||||
Mitsubishi Chemical Holdings Corp. | 24,700 | 206 | Sumitomo Mitsui Financial Group, Inc. | 47,400 | 1,837 | |||||
Mitsubishi Corp. | 12,900 | 358 | Sumitomo Mitsui Trust Holdings, Inc. | 5,900 | 234 | |||||
Mitsubishi Electric Corp. | 10,600 | 141 | T&D Holdings, Inc. | 16,800 | 252 | |||||
Mitsubishi Heavy Industries, Ltd. | 9,400 | 342 | Taiheiyo Cement Corp. | 5,000 | 164 | |||||
Mitsubishi Materials Corp. | 5,700 | 156 | Taisho Pharmaceutical Holdings Co. , | |||||||
Mitsubishi UFJ Financial Group, Inc. | 289,000 | 1,639 | Ltd. | 4,500 | 526 | |||||
Mitsubishi UFJ Lease & Finance Co. , | Takeda Pharmaceutical Co. , Ltd. | 5,000 | 211 | |||||||
Ltd. | 31,900 | 196 | Toho Holdings Co. , Ltd. | 16,200 | 395 | |||||
Mitsui & Co. , Ltd. | 19,600 | 327 | Toho Zinc Co. , Ltd. | 1,500 | 55 | |||||
Mizuho Financial Group, Inc. | 162,800 | 274 | Tohoku Electric Power Co. , Inc. | 26,800 | 327 | |||||
Morinaga Milk Industry Co. , Ltd. | 2,700 | 101 | Tokio Marine Holdings, Inc. | 17,100 | 801 | |||||
MS&AD Insurance Group Holdings, Inc. | 29,900 | 929 | Tokuyama Corp. | 3,400 | 109 | |||||
NH Foods, Ltd. | 6,200 | 250 | Tokyo Electric Power Co. Holdings, Inc. | |||||||
Nidec Corp. | 4,450 | 667 | (Æ) | 33,900 | 158 | |||||
Nintendo Co. , Ltd. | 2,010 | 656 | Tokyo Gas Co. , Ltd. | 15,000 | 398 | |||||
Nippon Carbon Co. , Ltd. | 800 | 45 | Tokyu Construction Co. , Ltd. | 1,600 | 16 | |||||
Nippon Express Co. , Ltd. | 2,600 | 188 | Toppan Printing Co. , Ltd. | 39,000 | 305 | |||||
Nippon Sheet Glass Co. , Ltd. | 11,000 | 106 | Toray Industries, Inc. | 17,000 | 134 | |||||
Nippon Steel & Sumitomo Metal Corp. | 4,300 | 84 | Toyo Seikan Group Holdings, Ltd. | 2,600 | 46 | |||||
Nippon Telegraph & Telephone Corp. | 26,703 | 1,214 | Toyota Industries Corp. | 4,100 | 230 |
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 43
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Toyota Motor Corp. | 25,600 | 1,655 | Norsk Hydro ASA | 30,072 | 180 | |||||
Toyota Tsusho Corp. | 6,200 | 207 | Orkla ASA | 155,725 | 1,364 | |||||
Transcosmos, Inc. | 19,300 | 462 | Statoil ASA Class N | 10,753 | 285 | |||||
Tsugami Corp. | 1,000 | 9 | Telenor ASA | 47,565 | 975 | |||||
V Technology Co. , Ltd. | 100 | 18 | TGS Nopec Geophysical Co. ASA - ADR | 970 | 36 | |||||
West Japan Railway Co. | 15,200 | 1,120 | Yara International ASA | 5,054 | 209 | |||||
Yahoo! Japan Corp. (Ñ) | 377,100 | 1,249 | 4,793 | |||||||
Yamada Denki Co. , Ltd. | 55,100 | 273 | ||||||||
Yamaguchi Financial Group, Inc. | 22,000 | 247 | Portugal - 0.3% | |||||||
71,406 | Energias de Portugal SA | 41,349 | 164 | |||||||
Galp Energia SGPS SA Class B | 32,451 | 616 | ||||||||
Jersey - 0.1% | Navigator Co. SA (The) - ADR | 18,622 | 111 | |||||||
Centamin PLC | 29,223 | 46 | Sonae SGPS SA | 103,713 | 125 | |||||
Ferguson PLC | 1,191 | 96 | 1,016 | |||||||
Randgold Resources, Ltd. | 1,130 | 87 | ||||||||
Shire PLC - ADR | 1,080 | 61 | Russia - 0.0% | |||||||
290 | Evraz PLC | 6,648 | 45 | |||||||
Luxembourg - 0.4% | Singapore - 1.3% | |||||||||
Aperam SA | 2,499 | 107 | DBS Group Holdings, Ltd. | 67,700 | 1,315 | |||||
ArcelorMittal SA(Æ) | 7,875 | 230 | Genting Singapore, Ltd. | 264,000 | 237 | |||||
RTL Group SA | 1,148 | 78 | Oversea-Chinese Banking Corp. , Ltd. | 14,800 | 126 | |||||
Spotify Technology SA(Æ) | 6,124 | 1,030 | Singapore Telecommunications, Ltd. | 1,026,200 | 2,316 | |||||
1,445 | Wilmar International, Ltd. | 614,400 | 1,378 | |||||||
5,372 | ||||||||||
Macao - 0.2% | ||||||||||
Sands China, Ltd. | 122,425 | 652 | South Africa - 0.0% | |||||||
Old Mutual, Ltd. (Æ) | 64,896 | 129 | ||||||||
Mexico - 0.2% | ||||||||||
Grupo Televisa SAB - ADR | 48,555 | 920 | South Korea - 1.9% | |||||||
CLIO Cosmetics Co. , Ltd. | 12,320 | 314 | ||||||||
Netherlands - 4.2% | Grand Korea Leisure Co. , Ltd. | 27,744 | 648 | |||||||
Aalberts Industries NV | 2,635 | 126 | Hana Financial Group, Inc. | 24,945 | 958 | |||||
ABN AMRO Group NV(Þ) | 17,940 | 464 | Hyundai Motor Co. | 14,100 | 1,586 | |||||
Aegon NV | 26,355 | 157 | Kangwon Land, Inc. | 18,760 | 440 | |||||
AerCap Holdings NV(Æ) | 7,391 | 400 | POSCO | 4,880 | 1,442 | |||||
ASML Holding NV | 11,326 | 2,234 | Samsung Electronics Co. , Ltd. | 53,552 | 2,236 | |||||
Exor NV | 2,526 | 170 | 7,624 | |||||||
Ferrari NV | 1,796 | 244 | ||||||||
Heineken NV | 18,332 | 1,838 | Spain - 1.5% | |||||||
ING Groep NV | 146,942 | 2,109 | Aena SA(Þ) | 3,268 | 593 | |||||
Koninklijke Ahold Delhaize NV | 59,971 | 1,434 | Banco Bilbao Vizcaya Argentaria SA | |||||||
Koninklijke KPN NV | 322,088 | 876 | - ADR | 89,421 | 631 | |||||
NN Group NV | 19,910 | 808 | Banco de Sabadell SA - ADR | 102,799 | 172 | |||||
Royal Dutch Shell PLC Class A | 145,785 | 5,058 | Banco Santander SA - ADR | 147,747 | 789 | |||||
Wolters Kluwer NV | 14,970 | 843 | Bankia SA | 186,756 | 696 | |||||
Yandex NV Class A(Æ) | 13,973 | 502 | CaixaBank SA | 26,400 | 114 | |||||
17,263 | Cellnex Telecom SA(Þ) | 23,149 | 583 | |||||||
Enagas SA(Ñ) | 5,810 | 170 | ||||||||
Norway - 1.2% | Endesa SA - ADR(Ñ) | 11,664 | 257 | |||||||
Austevoll Seafood ASA | 9,561 | 115 | Gas Natural SDG SA(Ñ) | 10,383 | 275 | |||||
Det Norske Oljeselskap ASA | 2,400 | 88 | Gestamp Automocion SA(Æ)(Þ) | 14,172 | 106 | |||||
DNB ASA | 16,315 | 318 | Grupo Catalana Occidente SA | 1,840 | 82 | |||||
Gjensidige Forsikring ASA | 5,573 | 91 | Iberdrola SA | 50,407 | 389 | |||||
Kongsberg Gruppen ASA | 3,550 | 75 | Industria de Diseno Textil SA | 16,835 | 574 | |||||
Leroy Seafood Group ASA | 11,635 | 78 | Mediaset Espana Comunicacion SA | 5,900 | 50 | |||||
Marine Harvest ASA | 49,158 | 979 | NH Hoteles SA | 10,846 | 80 |
See accompanying notes which are an integral part of the financial statements.
44 International Developed Markets Fund
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Repsol SA - ADR | 24,422 | 477 | Compal Electronics, Inc. | 542,000 | 341 | |||||
Telefonica SA - ADR | 19,908 | 170 | Hon Hai Precision Industry Co. , Ltd. | 107,153 | 293 | |||||
6,208 | 1,184 | |||||||||
Sweden - 2.0% | United Kingdom - 15.0% | |||||||||
Assa Abloy AB Class B | 28,394 | 604 | 3i Group PLC | 102,865 | 1,222 | |||||
Atlas Copco AB(Æ) | 16,527 | 479 | Admiral Group PLC | 5,767 | 145 | |||||
Boliden AB(Æ) | 11,305 | 366 | Anglo American PLC | 9,002 | 200 | |||||
Loomis AB Class B | 473 | 16 | Ashtead Group PLC | 2,410 | 72 | |||||
Lundin Petroleum AB | 410 | 13 | AstraZeneca PLC | 12,611 | 873 | |||||
Nordea Bank AB | 25,620 | 246 | Auto Trader Group PLC(Þ) | 7,100 | 40 | |||||
Skandinaviska Enskilda Banken AB | Aviva PLC | 222,295 | 1,478 | |||||||
Class A | 36,105 | 343 | Babcock International Group PLC | 10,320 | 111 | |||||
SSAB AB Class B | 18,860 | 71 | BAE Systems PLC | 326,352 | 2,785 | |||||
Svenska Handelsbanken AB Class A | 19,032 | 211 | Barclays PLC | 498,815 | 1,244 | |||||
Swedbank AB Class A | 26,986 | 577 | Barratt Developments PLC | 22,700 | 154 | |||||
Swedish Match AB | 40,334 | 1,998 | Bellway PLC | 520 | 21 | |||||
Telefonaktiebolaget LM Ericsson Class B | 346,562 | 2,668 | Berkeley Group Holdings PLC | 3,717 | 186 | |||||
Telia Co. AB | 43,440 | 198 | BHP Billiton PLC | 44,593 | 998 | |||||
Trelleborg AB Class B | 21,147 | 450 | BP PLC | 83,438 | 635 | |||||
8,240 | BP PLC - ADR | 40,928 | 1,869 | |||||||
British American Tobacco PLC | 16,223 | 819 | ||||||||
Switzerland - 7.6% | British Land Co. PLC (The)(ö) | 5,300 | 47 | |||||||
ABB, Ltd. | 88,367 | 1,928 | BT Group PLC | 59,592 | 171 | |||||
Adecco SA | 2,904 | 172 | CNH Industrial NV | 9,340 | 99 | |||||
Baloise Holding AG | 1,143 | 166 | ConvaTec Group PLC(Þ) | 44,500 | 125 | |||||
Banque Cantonale Vaudoise | 94 | 72 | Derwent London PLC(ö) | 2,630 | 108 | |||||
Barry Callebaut AG | 5 | 9 | Diageo PLC | 119,959 | 4,307 | |||||
Chocoladefabriken Lindt & Spruengli | Direct Line Insurance Group PLC | 125,035 | 566 | |||||||
AG | 20 | 130 | Drax Group PLC | 20,500 | 89 | |||||
Cie Financiere Richemont SA | 35,143 | 2,977 | Fiat Chrysler Automobiles NV(Æ) | 27,120 | 516 | |||||
Coca-Cola HBC AG - ADR(Æ) | 32,380 | 1,081 | Foxtons Group PLC | 438,867 | 328 | |||||
Credit Suisse Group AG(Æ) | 101,270 | 1,520 | GlaxoSmithKline PLC - ADR | 148,863 | 3,003 | |||||
Glencore PLC(Æ) | 57,045 | 270 | HSBC Holdings PLC | 353,841 | 3,318 | |||||
Julius Baer Group, Ltd. (Æ) | 11,350 | 667 | Imperial Tobacco Group PLC | 44,766 | 1,667 | |||||
LafargeHolcim, Ltd. (Æ) | 4,129 | 201 | J Sainsbury PLC | 528,335 | 2,239 | |||||
Luzerner Kantonalbank AG | 158 | 82 | JD Sports Fashion PLC | 10,900 | 63 | |||||
Nestle SA | 35,926 | 2,781 | John Wood Group PLC | 267,083 | 2,204 | |||||
Novartis AG | 55,566 | 4,209 | Just Eat PLC(Æ) | 56,967 | 585 | |||||
OC Oerlikon Corp. AG(Æ) | 970 | 15 | Kingfisher PLC | 129,281 | 507 | |||||
Pargesa Holding SA | 1,227 | 104 | Land Securities Group PLC(ö) | 9,107 | 115 | |||||
Partners Group Holding AG | 140 | 103 | Legal & General Group PLC | 69,558 | 244 | |||||
Roche Holding AG | 28,222 | 6,281 | Lloyds Banking Group PLC | 2,037,524 | 1,695 | |||||
SGS SA | 465 | 1,239 | London Stock Exchange Group PLC | 24,059 | 1,417 | |||||
Sika AG | 17,467 | 2,407 | Lookers PLC | 247,916 | 355 | |||||
STMicroelectronics NV | 19,860 | 441 | LSL Property Services PLC(Å) | 196,248 | 690 | |||||
Straumann Holding AG | 587 | 447 | Meggitt PLC | 146,239 | 952 | |||||
Swatch Group AG (The) Class B | 158 | 75 | National Grid PLC | 26,899 | 298 | |||||
Swiss Life Holding AG(Æ) | 440 | 153 | Persimmon PLC Class A | 33,257 | 1,111 | |||||
Swiss Re AG | 10,475 | 905 | Prudential PLC | 27,747 | 634 | |||||
Swisscom AG | 790 | 353 | Quilter PLC(Æ)(Þ) | 21,632 | 41 | |||||
UBS Group AG(Æ) | 107,541 | 1,655 | Reckitt Benckiser Group PLC | 1,619 | 133 | |||||
Zurich Insurance Group AG | 1,376 | 408 | Redrow PLC | 13,056 | 92 | |||||
30,851 | Rio Tinto PLC | 14,983 | 827 | |||||||
Royal Bank of Scotland Group PLC(Æ) | 765,914 | 2,588 | ||||||||
Taiwan - 0.3% | Royal Dutch Shell PLC Class A | 8,190 | 284 | |||||||
Catcher Technology Co. , Ltd. | 49,290 | 550 | Royal Mail PLC | 144,176 | 961 |
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 45
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||||
Principal | Fair | Principal | Fair | |||||||||
Amount ($) | Value | Amount ($) | Value | |||||||||
or Shares | $ | or Shares | $ | |||||||||
Scottish & Southern Energy PLC | 5,144 | 92 | Total Preferred Stocks | |||||||||
Smith & Nephew PLC | 12,410 | 228 | (cost $3,222) | 3,598 | ||||||||
St. James's Place PLC | 11,799 | 179 | ||||||||||
Standard Chartered PLC | 175,907 | 1,607 | ||||||||||
Standard Life Aberdeen PLC | 22,412 | 96 | Warrants & Rights - 0.0% | |||||||||
Stock Spirits Group PLC | 133,127 | 400 | Italy | - 0.0% | ||||||||
Intesa Sanpaolo SpA(Æ) | ||||||||||||
Subsea 7 SA | 12,081 | 192 | 2018 Rights | 142,172 | — | |||||||
Taylor Wimpey PLC | 245,799 | 580 | ||||||||||
Tesco PLC | 743,224 | 2,517 | Spain- 0.0% | |||||||||
Thomas Cook Group PLC | 44,200 | 63 | Repsol SA(Æ) | |||||||||
Travis Perkins PLC | 176,544 | 3,313 | 2018 Rights | 18,413 | 10 | |||||||
Unilever NV | 43,312 | 2,414 | ||||||||||
Unilever PLC | 2,420 | 134 | ||||||||||
Vertu Motors PLC | 254,375 | 166 | Total Warrants & Rights | |||||||||
Vodafone Group PLC | 1,579,327 | 3,828 | (cost $10) | 10 | ||||||||
61,040 | ||||||||||||
Short-Term Investments - 3.0% | ||||||||||||
United States - 3.7% | United States - 3.0% | |||||||||||
Abbott Laboratories | 8,606 | 525 | U. S. Cash Management Fund(@) | 11,976,648 | (8) | 11,978 | ||||||
Alphabet, Inc. Class C(Æ) | 1,643 | 1,833 | Total Short-Term Investments | |||||||||
Brookfield Real Estate Services, Inc. (Å) | 29,742 | 441 | (cost $11,977) | 11,978 | ||||||||
Carnival PLC | 16,830 | 963 | ||||||||||
Facebook, Inc. Class A(Æ) | 9,663 | 1,878 | ||||||||||
Interfor Corp. (Æ) | 5,800 | 111 | Other Securities - 0.7% | |||||||||
U. S. Cash Collateral Fund(×)(@) | 2,949,270 | (8) | 2,949 | |||||||||
MasterCard, Inc. Class A | 12,190 | 2,396 | Total Other Securities | |||||||||
Mylan NV(Æ) | 68,953 | 2,491 | ||||||||||
News Corp. Class A | 74,951 | 1,162 | (cost $2,949) | 2,949 | ||||||||
NVIDIA Corp. | 4,296 | 1,018 | ||||||||||
Thomson Reuters Corp. | 4,396 | 177 | Total Investments 100.1% | |||||||||
Valeant Pharmaceuticals International, | (identified cost $399,201) | 408,687 | ||||||||||
Inc. (Æ) | 3,600 | 84 | ||||||||||
Visa, Inc. Class A | 9,573 | 1,268 | ||||||||||
Wausau Paper Corp. | 59,638 | 938 | Other Assets and Liabilities, Net | |||||||||
15,285 | - | (0.1%) | (268 | ) | ||||||||
Net Assets - 100.0% | 408,419 | |||||||||||
Total Common Stocks | ||||||||||||
(cost $381,043) | 390,152 | |||||||||||
Preferred Stocks - 0.9% | ||||||||||||
Germany - 0.9% | ||||||||||||
Bayerische Motoren Werke AG | ||||||||||||
5.706% (Ÿ) | 1,673 | 133 | ||||||||||
Porsche Automobil Holding SE | ||||||||||||
3.125% (Ÿ) | 3,041 | 194 | ||||||||||
Volkswagen AG | ||||||||||||
2.690% (Ÿ) | 18,864 | 3,132 | ||||||||||
3,459 | ||||||||||||
Italy - 0.0% | ||||||||||||
Intesa Sanpaolo SpA | ||||||||||||
8.409% (Ÿ) | 19,505 | 59 | ||||||||||
Japan - 0.0% | ||||||||||||
Ito En, Ltd. | ||||||||||||
1.969% (Ÿ) | 3,400 | 80 |
See accompanying notes which are an integral part of the financial statements.
46 International Developed Markets Fund
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Restricted Securities | |||||||||||
Amounts in thousands (except share and cost per unit amounts) | |||||||||||
Principal | Cost per | Cost | Fair Value | ||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | ||||
Securities | Date | or shares | $ | $ | $ | ||||||
0.4% | |||||||||||
Brookfield Real Estate Services, Inc. | 12/06/17 | 29,742 | 13.03 | 387 | 441 | ||||||
Kitagawa Industries Co. , Ltd. | 12/06/17 | JPY | 10,600 | 13.78 | 146 | 135 | |||||
LSL Property Services PLC | 12/06/17 | GBP | 196,248 | 3.80 | 745 | 690 | |||||
Secom Joshinetsu Co. , Ltd. | 12/13/17 | JPY | 7,000 | 39.27 | 275 | 223 | |||||
1,489 | |||||||||||
For a description of restricted securities see note 7 in the Notes to Financial Statements. |
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Value and | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
CAC40 Euro Index Futures | 29 | EUR | 1,543 | 07/18 | (45 | ) | |
DAX Index Futures | 4 | EUR | 1,231 | 09/18 | (61 | ) | |
EURO STOXX 50 Index Futures | 253 | EUR | 8,579 | 09/18 | (148 | ) | |
FTSE 100 Index Futures | 22 | GBP | 1,672 | 09/18 | (14 | ) | |
Hang Seng Index Futures | 3 | HKD | 4,309 | 07/18 | — | ||
S&P Energy Select Sector Index Futures | 67 | USD | 5,136 | 09/18 | (48 | ) | |
S&P/TSX 60 Index Futures | 26 | CAD | 5,009 | 09/18 | 37 | ||
SPI 200 Index Futures | 8 | AUD | 1,230 | 09/18 | 9 | ||
TOPIX Index Futures | 192 | JPY | 3,322,560 | 09/18 | (704 | ) | |
Short Positions | |||||||
FTSE 100 Index Futures | 58 | GBP | 4,409 | 09/18 | 32 | ||
Hang Seng Index Futures | 25 | HKD | 35,908 | 07/18 | (4 | ) | |
MSCI Emerging Markets Mini Index Futures | 252 | USD | 13,398 | 09/18 | 882 | ||
NASDAQ 100 E-Mini Index Futures | 37 | USD | 5,229 | 09/18 | 87 | ||
S&P 500 E-Mini Index Futures | 90 | USD | 12,247 | 09/18 | 254 | ||
Total Value and Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 277 |
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Bank of America | USD | 75 | HKD | 591 | 07/03/18 | — | ||
Bank of America | USD | 75 | JPY | 8,297 | 07/03/18 | — | ||
Bank of Montreal | USD | 295 | AUD | 387 | 09/19/18 | (8 | ) | |
Bank of Montreal | USD | 1,269 | AUD | 1,666 | 09/19/18 | (36 | ) | |
Bank of Montreal | USD | 417 | CAD | 540 | 09/19/18 | (5 | ) | |
Bank of Montreal | USD | 509 | CAD | 660 | 09/19/18 | (6 | ) | |
Bank of Montreal | USD | 2,256 | CAD | 2,924 | 09/19/18 | (29 | ) | |
Bank of Montreal | USD | 1,321 | EUR | 1,111 | 09/19/18 | (16 | ) | |
Bank of Montreal | USD | 2,197 | EUR | 1,848 | 09/19/18 | (26 | ) | |
Bank of Montreal | USD | 680 | GBP | 506 | 09/19/18 | (10 | ) | |
Bank of Montreal | USD | 1,414 | GBP | 1,052 | 09/19/18 | (21 | ) | |
Bank of Montreal | USD | 197 | HKD | 1,546 | 09/19/18 | — | ||
Bank of Montreal | USD | 796 | HKD | 6,240 | 09/19/18 | — | ||
Bank of Montreal | USD | 1,062 | JPY | 115,983 | 09/19/18 | (9 | ) |
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 47
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Bank of Montreal | USD | 4,835 | JPY | 528,093 | 09/19/18 | (40 | ) | |
Bank of Montreal | CHF | 1,850 | USD | 1,894 | 09/19/18 | 13 | ||
Bank of Montreal | GBP | 842 | USD | 1,132 | 09/19/18 | 17 | ||
Bank of Montreal | HKD | 6,020 | USD | 768 | 09/19/18 | — | ||
Bank of Montreal | NOK | 4,640 | USD | 580 | 09/19/18 | 8 | ||
Brown Brothers Harriman | USD | 3 | CAD | 4 | 07/03/18 | — | ||
Brown Brothers Harriman | USD | 102 | CHF | 100 | 09/19/18 | — | ||
Brown Brothers Harriman | USD | 35 | SEK | 300 | 09/19/18 | (2 | ) | |
Commonwealth Bank of Australia | USD | 295 | AUD | 387 | 09/19/18 | (8 | ) | |
Commonwealth Bank of Australia | USD | 1,269 | AUD | 1,666 | 09/19/18 | (37 | ) | |
Commonwealth Bank of Australia | USD | 417 | CAD | 540 | 09/19/18 | (5 | ) | |
Commonwealth Bank of Australia | USD | 509 | CAD | 660 | 09/19/18 | (6 | ) | |
Commonwealth Bank of Australia | USD | 2,256 | CAD | 2,924 | 09/19/18 | (30 | ) | |
Commonwealth Bank of Australia | USD | 1,320 | EUR | 1,111 | 09/19/18 | (14 | ) | |
Commonwealth Bank of Australia | USD | 2,195 | EUR | 1,848 | 09/19/18 | (24 | ) | |
Commonwealth Bank of Australia | USD | 680 | GBP | 506 | 09/19/18 | (10 | ) | |
Commonwealth Bank of Australia | USD | 1,414 | GBP | 1,052 | 09/19/18 | (21 | ) | |
Commonwealth Bank of Australia | USD | 197 | HKD | 1,546 | 09/19/18 | — | ||
Commonwealth Bank of Australia | USD | 796 | HKD | 6,240 | 09/19/18 | — | ||
Commonwealth Bank of Australia | USD | 1,063 | JPY | 115,983 | 09/19/18 | (9 | ) | |
Commonwealth Bank of Australia | USD | 4,838 | JPY | 528,093 | 09/19/18 | (43 | ) | |
Commonwealth Bank of Australia | CHF | 1,850 | USD | 1,895 | 09/19/18 | 14 | ||
Commonwealth Bank of Australia | GBP | 842 | USD | 1,132 | 09/19/18 | 17 | ||
Commonwealth Bank of Australia | HKD | 6,020 | USD | 768 | 09/19/18 | — | ||
Commonwealth Bank of Australia | NOK | 4,640 | USD | 580 | 09/19/18 | 9 | ||
Royal Bank of Canada | USD | 294 | AUD | 387 | 09/19/18 | (8 | ) | |
Royal Bank of Canada | USD | 1,268 | AUD | 1,666 | 09/19/18 | (34 | ) | |
Royal Bank of Canada | USD | 417 | CAD | 540 | 09/19/18 | (6 | ) | |
Royal Bank of Canada | USD | 509 | CAD | 660 | 09/19/18 | (7 | ) | |
Royal Bank of Canada | USD | 2,257 | CAD | 2,924 | 09/19/18 | (30 | ) | |
Royal Bank of Canada | USD | 1,319 | EUR | 1,111 | 09/19/18 | (14 | ) | |
Royal Bank of Canada | USD | 2,194 | EUR | 1,848 | 09/19/18 | (23 | ) | |
Royal Bank of Canada | USD | 679 | GBP | 506 | 09/19/18 | (9 | ) | |
Royal Bank of Canada | USD | 1,413 | GBP | 1,052 | 09/19/18 | (20 | ) | |
Royal Bank of Canada | USD | 197 | HKD | 1,546 | 09/19/18 | — | ||
Royal Bank of Canada | USD | 797 | HKD | 6,240 | 09/19/18 | — | ||
Royal Bank of Canada | USD | 1,061 | JPY | 115,983 | 09/19/18 | (7 | ) | |
Royal Bank of Canada | USD | 4,830 | JPY | 528,093 | 09/19/18 | (34 | ) | |
Royal Bank of Canada | CHF | 1,850 | USD | 1,893 | 09/19/18 | 12 | ||
Royal Bank of Canada | GBP | 842 | USD | 1,131 | 09/19/18 | 16 | ||
Royal Bank of Canada | HKD | 6,020 | USD | 768 | 09/19/18 | — | ||
Royal Bank of Canada | NOK | 4,640 | USD | 579 | 09/19/18 | 7 | ||
State Street | USD | 4 | CAD | 6 | 07/03/18 | — | ||
State Street | USD | 67 | CAD | 88 | 07/03/18 | — | ||
State Street | USD | 203 | CHF | 200 | 09/19/18 | — | ||
State Street | USD | 23 | EUR | 20 | 07/02/18 | — | ||
State Street | USD | 46 | ILS | 167 | 07/02/18 | — | ||
State Street | USD | 141 | ILS | 516 | 07/02/18 | — | ||
State Street | USD | 198 | JPY | 21,765 | 07/02/18 | (1 | ) | |
State Street | USD | 306 | JPY | 33,684 | 07/02/18 | (2 | ) | |
State Street | USD | 1,443 | JPY | 159,286 | 07/02/18 | (4 | ) | |
State Street | USD | 49 | JPY | 5,431 | 07/03/18 | — |
See accompanying notes which are an integral part of the financial statements.
48 International Developed Markets Fund
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
State Street | USD | 335 | SGD | 456 | 07/02/18 | — | |
State Street | CAD | 13 | USD | 10 | 07/03/18 | — | |
State Street | DKK | 103 | USD | 16 | 07/02/18 | — | |
State Street | DKK | 11,220 | USD | 1,789 | 09/19/18 | 20 | |
State Street | GBP | 22 | USD | 29 | 07/02/18 | — | |
State Street | JPY | 6,561 | USD | 59 | 07/03/18 | — | |
State Street | JPY | 61 | USD | 1 | 07/05/18 | — | |
State Street | SEK | 11,000 | USD | 1,279 | 09/19/18 | 44 | |
UBS AG | USD | 1,268 | AUD | 1,666 | 09/19/18 | (35 | ) |
UBS AG | USD | 509 | CAD | 660 | 09/19/18 | (7 | ) |
UBS AG | USD | 2,257 | CAD | 2,924 | 09/19/18 | (30 | ) |
UBS AG | USD | 1,319 | EUR | 1,111 | 09/19/18 | (14 | ) |
UBS AG | USD | 1,413 | GBP | 1,052 | 09/19/18 | (20 | ) |
UBS AG | USD | 797 | HKD | 6,240 | 09/19/18 | — | |
UBS AG | USD | 4,830 | JPY | 528,093 | 09/19/18 | (34 | ) |
UBS AG | CHF | 1,850 | USD | 1,893 | 09/19/18 | 12 | |
UBS AG | GBP | 842 | USD | 1,131 | 09/19/18 | 16 | |
UBS AG | HKD | 6,020 | USD | 768 | 09/19/18 | — | |
UBS AG | NOK | 4,640 | USD | 579 | 09/19/18 | 8 | |
Westpac | USD | 1,268 | AUD | 1,666 | 09/19/18 | (35 | ) |
Westpac | USD | 510 | CAD | 660 | 09/19/18 | (7 | ) |
Westpac | USD | 2,257 | CAD | 2,924 | 09/19/18 | (30 | ) |
Westpac | USD | 1,320 | EUR | 1,111 | 09/19/18 | (15 | ) |
Westpac | USD | 1,413 | GBP | 1,052 | 09/19/18 | (20 | ) |
Westpac | USD | 797 | HKD | 6,240 | 09/19/18 | — | |
Westpac | USD | 4,831 | JPY | 528,093 | 09/19/18 | (36 | ) |
Westpac | CHF | 1,850 | USD | 1,893 | 09/19/18 | 13 | |
Westpac | GBP | 842 | USD | 1,132 | 09/19/18 | 16 | |
Westpac | HKD | 6,020 | USD | 768 | 09/19/18 | — | |
Westpac | NOK | 4,640 | USD | 579 | 09/19/18 | 8 | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | (647 | ) |
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 49
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Presentation of Portfolio Holdings | |||||||||||||
Amounts in thousands | |||||||||||||
Fair Value | |||||||||||||
Practical | |||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | |||||||
Common Stocks | |||||||||||||
Australia | $ | — | $ | 12,314 | $ | — | $ | — | $ | 12,314 | 3.0 | ||
Austria | — | 2,199 | — | — | 2,199 | 0.5 | |||||||
Belgium | — | 5,838 | — | — | 5,838 | 1.4 | |||||||
Canada | 17,129 | — | — | — | 17,129 | 4.2 | |||||||
China | 2,748 | 8,028 | — | — | 10,776 | 2.6 | |||||||
Curacao | — | 142 | — | — | 142 | —* | |||||||
Denmark | — | 6,595 | 241 | — | 6,836 | 1.7 | |||||||
Finland | — | 3,033 | — | — | 3,033 | 0.7 | |||||||
France | 181 | 39,059 | — | — | 39,240 | 9.6 | |||||||
Germany | 2,122 | 20,892 | — | — | 23,014 | 5.6 | |||||||
Hong Kong | 712 | 11,819 | — | — | 12,531 | 3.1 | |||||||
India | 4,423 | — | — | — | 4,423 | 1.1 | |||||||
Indonesia | — | 825 | — | — | 825 | 0.2 | |||||||
Ireland | 1,810 | 895 | — | — | 2,705 | 0.7 | |||||||
Israel | 404 | 3,846 | — | — | 4,250 | 1.0 | |||||||
Italy | — | 11,134 | — | — | 11,134 | 2.7 | |||||||
Japan | — | 71,406 | — | — | 71,406 | 17.5 | |||||||
Jersey | — | 290 | — | — | 290 | 0.1 | |||||||
Luxembourg | 1,030 | 415 | — | — | 1,445 | 0.4 | |||||||
Macao | — | 652 | — | — | 652 | 0.2 | |||||||
Mexico | 920 | — | — | — | 920 | 0.2 | |||||||
Netherlands | 902 | 16,361 | — | — | 17,263 | 4.2 | |||||||
Norway | — | 4,793 | — | — | 4,793 | 1.2 | |||||||
Portugal | — | 1,016 | — | — | 1,016 | 0.3 | |||||||
Russia | — | 45 | — | — | 45 | —* | |||||||
Singapore | — | 5,372 | — | — | 5,372 | 1.3 | |||||||
South Africa | 129 | — | — | — | 129 | —* | |||||||
South Korea | — | 7,624 | — | — | 7,624 | 1.9 | |||||||
Spain | — | 6,208 | — | — | 6,208 | 1.5 | |||||||
Sweden | 13 | 8,227 | — | — | 8,240 | 2.0 | |||||||
Switzerland | — | 30,851 | — | — | 30,851 | 7.6 | |||||||
Taiwan | — | 1,184 | — | — | 1,184 | 0.3 | |||||||
United Kingdom | 1,910 | 59,130 | — | — | 61,040 | 15.0 | |||||||
United States | 13,384 | 1,901 | — | — | 15,285 | 3.7 | |||||||
Preferred Stocks | — | 3,598 | — | — | 3,598 | 0.9 | |||||||
Warrants & Rights | 10 | — | — | — | 10 | —* | |||||||
Short-Term Investments | — | — | — | 11,978 | 11,978 | 3.0 | |||||||
Other Securities | — | — | — | 2,949 | 2,949 | 0.7 | |||||||
Total Investments | 47,827 | 345,692 | 241 | 14,927 | 408,687 | 100.1 |
See accompanying notes which are an integral part of the financial statements.
50 International Developed Markets Fund
Russell Investment Funds
International Developed Markets Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Presentation of Portfolio Holdings | |||||||||||||||||
Amounts in thousands | |||||||||||||||||
Fair Value | |||||||||||||||||
Practical | |||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | |||||||||||
Other Assets and Liabilities, Net | (0.1 | ) | |||||||||||||||
100.0 | |||||||||||||||||
Other Financial Instruments | |||||||||||||||||
Assets | |||||||||||||||||
Futures Contracts | 1,301 | — | — | — | 1,301 | 0.3 | |||||||||||
Foreign Currency Exchange Contracts | 1 | 249 | — | — | 250 | 0.1 | |||||||||||
Liabilities | |||||||||||||||||
Futures Contracts | (1,024 | ) | — | — | — | (1,024 | ) | (0.3 | ) | ||||||||
Foreign Currency Exchange Contracts | (8 | ) | (889 | ) | — | — | (897 | ) | (0.2 | ) | |||||||
Total Other Financial Instruments** | $ | 270 | $ | (640 | ) | $ | — | $ | — | $ | (370 | ) |
* Less than 0.05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the investments.
(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified
in the fair value levels. The fair value amounts presented in the table are intended to permit reconciliation to the amounts presented in the Schedule of
Investments.
For a description of the Levels, see note 2 in the Notes to Financial Statements.
For a disclosure on transfers between Levels 1, 2 and 3 during the period ended June 30, 2018, see note 2 in the Notes to
Financial Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended June 30,
2018, were less than 1% of net assets.
Amounts in thousands | |||
Fair Value | |||
Sector Exposure | $ | ||
Consumer Discretionary | 57,579 | ||
Consumer Staples | 31,648 | ||
Energy | 22,106 | ||
Financial Services | 95,960 | ||
Health Care | 33,932 | ||
Materials and Processing | 34,513 | ||
Producer Durables | 44,288 | ||
Technology | 50,458 | ||
Utilities | 23,266 | ||
Warrants and Rights | 10 | ||
Short-Term Investments | 11,978 | ||
Other Securities | 2,949 | ||
Total Investments | 408,687 |
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 51
Russell Investment Funds
International Developed Markets Fund
Fair Value of Derivative Instruments — June 30, 2018 (Unaudited)
Amounts in thousands
Foreign | |||||||
Equity | Currency | ||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | |||||
Location: Statement of Assets and Liabilities - Assets | |||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 250 | |||
Variation margin on futures contracts* | 1,301 | — | |||||
Total | $ | 1,301 | $ | 250 | |||
Location: Statement of Assets and Liabilities - Liabilities | |||||||
Variation margin on futures contracts* | $ | 1,024 | $ | — | |||
Unrealized depreciation on foreign currency exchange contracts | — | 897 | |||||
Total | $ | 1,024 | $ | 897 | |||
Foreign | |||||||
Equity | Currency | ||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | |||||
Location: Statement of Operations - Net realized gain (loss) | |||||||
Futures contracts | $ | (553 | ) | $ | — | ||
Foreign currency exchange contracts | — | 16 | |||||
Total | $ | (553 | ) | $ | 16 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||||||
Futures contracts | $ | 838 | $ | — | |||
Foreign currency exchange contracts | — | (1,461 | ) | ||||
Total | $ | 838 | $ | (1,461 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
52 International Developed Markets Fund
Russell Investment Funds
International Developed Markets Fund
Balance Sheet Offsetting of Financial and Derivative Instruments —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Securities on Loan* | Investments, at fair value | $ | 2,836 | $ | — | $ | 2,836 | ||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 250 | — | 250 | |||||
Futures Contracts | Variation margin on futures contracts | 3,987 | — | 3,987 | |||||
Total Financial and Derivative Assets | 7,073 | — | 7,073 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (3,987) | — | (3,987 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 3,086 | $ | — | $ | 3,086 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Assets | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | ||||||||
Bank of Montreal | $ | 38 | $ | 38 | $ | — | $ | — | ||||
Citigroup | 1,618 | — | 1,618 | — | ||||||||
Commonwealth Bank of Australia | 40 | 40 | — | — | ||||||||
Goldman Sachs | 816 | — | 816 | — | ||||||||
ING | 156 | — | 156 | — | ||||||||
Merrill Lynch | 137 | — | 137 | — | ||||||||
Royal Bank of Canada | 36 | 36 | — | — | ||||||||
State Street | 64 | — | — | 64 | ||||||||
UBS | 144 | 35 | 108 | 1 | ||||||||
Westpac | 37 | 37 | — | — | ||||||||
Total | $ | 3,086 | $ | 186 | $ | 2,835 | $ | 65 |
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 53
Russell Investment Funds
International Developed Markets Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 364 | $ | — | $ | 364 | ||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 897 | — | 897 | |||||
Total Financial and Derivative Liabilities | 1,261 | — | 1,261 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (370) | — | (370 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 891 | $ | — | $ | 891 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Liabilities | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||
Bank of Montreal | $ | 206 | $ | 38 | $ | — | $ | 168 | |||
Brown Brothers Harriman | 2 | — | — | 2 | |||||||
Commonwealth Bank of Australia | 207 | 40 | — | 167 | |||||||
Royal Bank of Canada | 193 | 36 | — | 157 | |||||||
UBS | 140 | 35 | — | 105 | |||||||
Westpac | 143 | 37 | — | 106 | |||||||
Total | $ | 891 | $ | 186 | $ | — | $ | 705 |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
54 International Developed Markets Fund
Russell Investment Funds
International Developed Markets Fund
Statement of Assets and Liabilities — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Assets | |||
Investments, at identified cost | $ | 399,201 | |
Investments, at fair value(*)(>) | 408,687 | ||
Cash | 75 | ||
Foreign currency holdings(^) | 779 | ||
Unrealized appreciation on foreign currency exchange contracts | 250 | ||
Receivables: | |||
Dividends and interest | 1,122 | ||
Dividends from affiliated funds | 32 | ||
Investments sold | 575 | ||
Fund shares sold | 85 | ||
Foreign capital gains taxes recoverable | 561 | ||
From broker(a) | 287 | ||
Variation margin on futures contracts | 3,987 | ||
Prepaid expenses | 2 | ||
Total assets | 416,442 | ||
Liabilities | |||
Payables: | |||
Investments purchased | 3,333 | ||
Fund shares redeemed | 25 | ||
Accrued fees to affiliates | 327 | ||
Other accrued expenses | 128 | ||
Variation margin on futures contracts | 364 | ||
Unrealized depreciation on foreign currency exchange contracts | 897 | ||
Payable upon return of securities loaned | 2,949 | ||
Total liabilities | 8,023 | ||
Net Assets | $ | 408,419 |
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 55
Russell Investment Funds
International Developed Markets Fund
Statement of Assets and Liabilities, continued — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 2,970 | |
Accumulated net realized gain (loss) | 12,845 | ||
Unrealized appreciation (depreciation) on: | |||
Investments | 9,485 | ||
Investments in affiliated funds | 1 | ||
Futures contracts | 277 | ||
Foreign currency exchange contracts | (647 | ) | |
Foreign currency-related transactions | (74 | ) | |
Shares of beneficial interest | 332 | ||
Additional paid-in capital | 383,230 | ||
Net Assets | $ | 408,419 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: (#) | $ | 12.30 | |
Net assets | $ | 408,419,434 | |
Shares outstanding ($. 01 par value) | 33,209,766 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 791 | |
(*) Securities on loan included in investments | $ | 2,836 | |
(>) Investments in affiliates, U. S. Cash Management Fund and U. S. Cash Collateral Fund | $ | 14,927 | |
(a) Receivable from Broker for Futures | $ | 287 | |
(#) 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.
56 International Developed Markets Fund
Russell Investment Funds
International Developed Markets Fund
Statement of Operations — For the Period Ended June 30, 2018 (Unaudited)
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 8,186 | |
Dividends from affiliated funds | 156 | ||
Securities lending income (net) | 81 | ||
Less foreign taxes withheld | (817 | ) | |
Total investment income | 7,606 | ||
Expenses | |||
Advisory fees | 1,917 | ||
Administrative fees | 107 | ||
Custodian fees | 177 | ||
Transfer agent fees | 9 | ||
Professional fees | 45 | ||
Trustees’ fees | 8 | ||
Printing fees | 26 | ||
Miscellaneous | 8 | ||
Total expenses | 2,297 | ||
Net investment income (loss) | 5,309 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 16,322 | ||
Investments in affiliated funds | 1 | ||
Futures contracts | (553 | ) | |
Foreign currency exchange contracts | 16 | ||
Foreign currency-related transactions | (156 | ) | |
Net realized gain (loss) | 15,630 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (33,415 | ) | |
Investments in affiliated funds | 3 | ||
Futures contracts | 838 | ||
Foreign currency exchange contracts | (1,461 | ) | |
Foreign currency-related transactions | (102 | ) | |
Net change in unrealized appreciation (depreciation) | (34,137 | ) | |
Net realized and unrealized gain (loss) | (18,507 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (13,198 | ) |
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 57
Russell Investment Funds
International Developed Markets Fund
Statements of Changes in Net Assets
Period | ||||||
Ended June 30, 2018 | Fiscal Year Ended | |||||
Amounts in thousands | (Unaudited) | December 31, 2017 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 5,309 | $ | 6,296 | ||
Net realized gain (loss) | 15,630 | 57,814 | ||||
Net change in unrealized appreciation (depreciation) | (34,137 | ) | 22,734 | |||
Net increase (decrease) in net assets from operations | (13,198 | ) | 86,844 | |||
Distributions | ||||||
From net investment income | (2,330 | ) | (10,619 | ) | ||
From net realized gain | (11,618 | ) | (14,486 | ) | ||
Net decrease in net assets from distributions | (13,948 | ) | (25,105 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (745 | ) | 19,197 | |||
Total Net Increase (Decrease) in Net Assets | (27,891 | ) | 80,936 | |||
Net Assets | ||||||
Beginning of period | 436,310 | 355,374 | ||||
End of period | $ | 408,419 | $ | 436,310 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 2,970 | $ | (9 | ) |
* Share transaction amounts (in thousands) for the periods ended June 30, 2018 and December 31, 2017 were as follows: | ||||||||||||
2018 (Unaudited) | 2017 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Proceeds from shares sold | 580 | $ | 7,444 | 2,608 | $ | 33,743 | ||||||
Proceeds from reinvestment of distributions | 1,081 | 13,948 | 1,946 | 25,104 | ||||||||
Payments for shares redeemed | (1,694 | ) | (22,137 | ) | (3,173 | ) | (39,650 | ) | ||||
Total increase (decrease) | (33 | ) | $ | (745 | ) | 1,381 | $ | 19,197 |
See accompanying notes which are an integral part of the financial statements.
58 International Developed Markets Fund
(This page intentionally left blank)
Russell Investment Funds
International Developed Markets Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | ||||||||||||
Period | Income (Loss)(a) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||||
June 30, 2018(1) | 13.12 | . 16 | (. 55 | ) | (. 39 | ) | (. 07 | ) | (. 36 | ) | |||||||
December 31, 2017 | 11.15 | . 19 | 2.58 | 2.77 | (. 34 | ) | (. 46 | ) | |||||||||
December 31, 2016 | 11.26 | . 19 | . 06 | . 25 | (. 36 | ) | — | ||||||||||
December 31, 2015 | 11.54 | . 19 | (. 33 | ) | (. 14 | ) | (. 14 | ) | — | ||||||||
December 31, 2014 | 12.32 | . 26 | (. 80 | ) | (. 54 | ) | (. 24 | ) | — | ||||||||
December 31, 2013 | 10.31 | . 18 | 2.05 | 2.23 | (. 22 | ) | — | ||||||||||
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 60
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(d)(f) | (000 | ) | Gross(e)(g) | Net(e)(g) | Net Assets(e) | Turnover Rate(d) | |||||||||
(. 43 | ) | 12.30 | (3.15 | ) | 408,419 | 1.08 | 1.08 | 2.49 | 37 | ||||||||
(. 80 | ) | 13.12 | 24.98 | 436,310 | 1.08 | 1.08 | 1.56 | 117 | |||||||||
(. 36 | ) | 11.15 | 2.36 | 355,374 | 1.02 | 1.02 | 1.78 | 36 | |||||||||
(. 14 | ) | 11.26 | (1.31 | ) | 358,125 | 1.06 | 1.04 | 1.60 | 35 | ||||||||
(. 24 | ) | 11.54 | (4.45 | ) | 379,675 | 1.08 | 1.03 | 2.13 | 32 | ||||||||
(. 22 | ) | 12.32 | 21.91 | 428,517 | 1.04 | . 99 | 1.76 | 36 |
See accompanying notes which are an integral part of the financial statements.
International Developed Markets Fund 61
Russell Investment Funds
International Developed Markets Fund
Related Party Transactions, Fees and Expenses (Unaudited)
Accrued fees payable to affiliates for the period ended June 30, 2018 were as follows: | ||
Advisory fees | $ | 307,975 |
Administration fees | 17,110 | |
Transfer agent fees | 1,505 | |
Trustee fees | 521 | |
$ | 327,111 |
Transactions (amounts in thousands) during the period ended June 30, 2018 with funds which are, or were, an affiliated company | |||||||||||||||||||
are as follows: | |||||||||||||||||||
Fair Value, | Change in | ||||||||||||||||||
Beginning of | Realized Gain | Unrealized | Fair Value, End | Income | Capital Gains | ||||||||||||||
Period | Purchases | Sales | (Loss) | Gain (Loss) | of Period | Distributions | Distributions | ||||||||||||
U. S. Cash Collateral Fund | $ | 402 | $ | 71,425 | $ | 68,878 | $ | — | $ | — | $ | 2,949 | $ | 62 | $ | — | |||
U. S. Cash Management Fund | 21,071 | 107,679 | 116,776 | 1 | 3 | 11,978 | 156 | — | |||||||||||
$ | 21,473 | $ | 179,104 | $ | 185,654 | $ | 1 | $ | 3 | $ | 14,927 | $ | 218 | $ | — |
Federal Income Taxes (Unaudited)
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation), undistributed ordinary income and
undistributed long-term capital gains for income tax purposes were as follows:
Cost of Investments | $ | 403,124,701 | |||
Unrealized Appreciation | $ | 19,003,606 | |||
Unrealized Depreciation | (13,811,793 | ) | |||
Net Unrealized Appreciation (Depreciation) | $ | 5,191,813 |
Net investment income and net realized gains (losses) in the financial statements may differ from taxable net investment income and
net realized gains (losses). Capital accounts within the financial statements are adjusted for permanent differences between book and
tax accounting. Book-tax differences may be due to foreign currency gains and losses, reclassifications of dividends and differences in
treatment of income from swaps. These adjustments have no impact on the net assets. At June 30, 2018, there were no adjustments to
the Statement of Assets and Liabilities.
See accompanying notes which are an integral part of the financial statements.
62 International Developed Markets Fund
Russell Investment Funds
Strategic Bond Fund
Shareholder Expense Example — June 30, 2018 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”) . | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. The fees and expenses shown in this | ||||||
administrative fees and other Fund expenses. The Example is | section do not reflect any Insurance Company Separate Account | ||||||
intended to help you understand your ongoing costs (in dollars) | Policy Charges. | ||||||
of investing in the Fund and to compare these costs with the | Hypothetical | ||||||
ongoing costs of investing in other mutual funds. The Example | Performance (5% | ||||||
is based on an investment of $1,000 invested at the beginning of | Actual | return before | |||||
the period and held for the entire period indicated, which for this | Performance | expenses) | |||||
Beginning Account Value | |||||||
Fund is from January 1, 2018 to June 30, 2018. | January 1, 2018 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | ||||||
June 30, 2018 | $ | 980.60 | $ | 1,021.47 | |||
The information in the table under the heading “Actual | Expenses Paid During Period* | $ | 3.29 | $ | 3.36 | ||
Performance” provides information about actual account values | |||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.67% | ||||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 181/365 (to reflect the one-half | |||||||
that you paid over the period. Simply divide your account value by | year period) . | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | |||||||
= 8.6), then multiply the result by the number in the first column | |||||||
in the row entitled “Expenses Paid During Period” to estimate | |||||||
the expenses you paid on your account during this period. | |||||||
Hypothetical Example for Comparison Purposes | |||||||
The information in the table under the heading “Hypothetical | |||||||
Performance (5% return before expenses)” provides information | |||||||
about hypothetical account values and hypothetical expenses | |||||||
based on the Fund’s actual expense ratio and an assumed rate of | |||||||
return of 5% per year before expenses, which is not the Fund’s | |||||||
actual return. The hypothetical account values and expenses | |||||||
may not be used to estimate the actual ending account balance or | |||||||
expenses you paid for the period. You may use this information | |||||||
to compare the ongoing costs of investing in the Fund and other | |||||||
funds. To do so, compare this 5% hypothetical example with the | |||||||
5% hypothetical examples that appear in the shareholder reports | |||||||
of other funds. |
Strategic Bond Fund 63
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments — June 30, 2018 (Unaudited)
. | |||||||
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | ||||||
Principal | Fair | Amount ($) | Value | ||||
Amount ($) | Value | or Shares | $ | ||||
or Shares | $ | ||||||
1.800% due 09/20/21 | 700 | 691 | |||||
Long-Term Investments - 90.5% | Citigroup Mortgage Loan Trust, Inc. | ||||||
Asset-Backed Securities - 6.4% | Series 2007-WFH2 Class M2 | ||||||
Access Group, Inc. | 1.221% due 03/25/37 (Ê) | 1,490 | 1,421 | ||||
Series 2007-1 Class A4 | Conseco Financial Corp. | ||||||
1.427% due 01/25/23 (Ê) | 597 | 586 | Series 1998-2 Class M1 | ||||
ACE Securities Corp. Home Equity Loan | 6.940% due 12/01/28 (~)(Ê) | 1,411 | 1,339 | ||||
Trust | |||||||
Series 2005-HE3 Class M2 | Countrywide Asset-Backed Certificates | ||||||
1.453% due 05/25/35 (Ê) | 484 | 486 | Series 2005-5 Class M4 | ||||
ACE Securities Corp. Mortgage Loan | 1.556% due 10/25/35 (Ê) | 425 | 427 | ||||
Trust | Series 2005-9 Class M1 | ||||||
Series 2007-D1 Class A2 | 1.511% due 01/25/36 (Ê) | 930 | 929 | ||||
6.336% due 02/25/38 (~)(Ê)(Þ) | 622 | 577 | Fieldstone Mortgage Investment Trust | ||||
AmeriCredit Automobile Receivables | Series 2004-4 Class M3 | ||||||
Trust | 2.438% due 10/25/35 (Ê) | 524 | 530 | ||||
Series 2015-3 Class B | Ford Credit Auto Owner Trust | ||||||
2.080% due 09/08/20 | 351 | 350 | Series 2015-B Class A3 | ||||
Ameriquest Mortgage Securities, | 1.160% due 11/15/19 | 57 | 57 | ||||
Inc. Asset-Backed Pass-Through | |||||||
Certificates | Series 2017-B Class A2B | ||||||
Series 2005-R1 Class M4 | 1.130% due 05/15/20 (Ê) | 294 | 294 | ||||
1.307% due 03/25/35 (Ê) | 830 | 820 | Series 2017-C Class A2A | ||||
BCAP LLC Trust | 1.800% due 09/15/20 | 454 | 452 | ||||
Series 2014-RR3 Class 3A2 | GMACM Home Equity Loan Trust | ||||||
1.390% due 07/26/36 (~)(Ê)(Þ) | 1,330 | 1,262 | Series 2007-HE1 Class A4 | ||||
Series 2014-RR3 Class 5A2 | 5.952% due 08/25/37 (~)(Ê) | 580 | 586 | ||||
1.400% due 10/26/36 (~)(Ê)(Þ) | 780 | 738 | Series 2007-HE1 Class A5 | ||||
Blackbird Capital Aircraft Lease | 5.705% due 08/25/37 (~)(Ê) | 313 | 316 | ||||
Securitization, Ltd. | Greenpoint Manufactured Housing | ||||||
Series 2016-1A Class AA | Contract Trust | ||||||
2.487% due 12/16/41 (~)(Ê)(Þ) | 1,052 | 1,024 | Series 2000-4 Class A3 | ||||
BNC Mortgage Loan Trust | 3.010% due 08/21/31 (Ê) | 1,025 | 1,017 | ||||
Series 2007-1 Class A4 | Hertz Vehicle Financing II LP | ||||||
2.251% due 03/25/37 (Ê) | 1,156 | 1,099 | Series 2018-1A Class A | ||||
CAL Funding III, Ltd. | 3.290% due 02/25/24 (Þ) | 150 | 147 | ||||
Series 2017-1A Class A | Hertz Vehicle Financing LLC | ||||||
3.620% due 06/25/42 (Þ) | 712 | 700 | Series 2015-2A Class A | ||||
Capital One Multi-Asset Execution Trust | 2.020% due 09/25/19 (Þ) | 920 | 918 | ||||
Series 2014-A3 Class A3 | Home Equity Asset Trust | ||||||
1.374% due 01/18/22 (Ê) | 250 | 250 | Series 2005-9 Class M1 | ||||
Series 2016-A3 Class A3 | 0.580% due 04/25/36 (Ê) | 380 | 376 | ||||
1.340% due 04/15/22 | 710 | 701 | Series 2006-4 Class 2A4 | ||||
CIT Mortgage Loan Trust | 1.518% due 08/25/36 (Ê) | 735 | 731 | ||||
Series 2007-1 Class 1M1 | Series 2006-6 Class 2A3 | ||||||
2.256% due 10/25/37 (Ê)(Þ) | 260 | 267 | 0.596% due 11/25/36 (Ê) | 673 | 617 | ||
Citibank Credit Card Issuance Trust | Honda Auto Receivables Owner Trust | ||||||
Series 2014-A1 Class A1 | Series 2015-4 Class A3 | ||||||
2.880% due 01/23/23 | 1,040 | 1,037 | 1.230% due 09/23/19 | 244 | 243 | ||
Series 2014-A5 Class A5 | Series 2017-2 Class A2 | ||||||
2.680% due 06/07/23 | 550 | 545 | 1.460% due 10/15/19 | 185 | 185 | ||
Series 2014-A6 Class A6 | Series 2018-1 Class A2 | ||||||
2.150% due 07/15/21 | 415 | 413 | 2.360% due 06/15/20 | 400 | 399 | ||
Series 2016-A2 Class A2 | Series 2018-A Class A2A | ||||||
2.190% due 11/20/23 | 620 | 603 | 2.390% due 12/15/20 | 75 | 75 | ||
Series 2017-A8 Class A8 | Series 2018-A Class A2B | ||||||
1.860% due 08/08/22 | 625 | 610 | 1.783% due 12/15/20 (Ê) | 75 | 75 | ||
Series 2017-A9 Class A9 | HSI Asset Securitization Corp. Trust |
See accompanying notes which are an integral part of the financial statements.
64 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2006-OPT3 Class 2A | 1.494% due 11/25/46 (Ê) | 1,500 | 1,464 | ||||
9.611% due 02/25/36 (Ê) | 253 | 253 | RAMP Trust | ||||
Series 2007-OPT1 Class 1A | Series 2006-RZ1 Class M4 | ||||||
0.628% due 12/25/36 (Ê) | 285 | 242 | 1.058% due 03/25/36 (Ê) | 960 | 920 | ||
Hyundai Auto Receivables Trust | Renaissance Home Equity Loan Trust | ||||||
Series 2015-C Class A3 | Series 2006-1 Class AF6 | ||||||
1.460% due 02/18/20 | 107 | 107 | 5.746% due 05/25/36 (~)(Ê) | 100 | 72 | ||
LCM XXII, Ltd. | Residential Asset Mortgage Products, | ||||||
Series 2016-22A Class A1 | Inc. Trust | ||||||
2.636% due 10/20/28 (Ê)(Þ) | 1,133 | 1,140 | Series 2005-EFC1 Class M3 | ||||
LCM XXV, Ltd. | 1.258% due 05/25/35 (Ê) | 109 | 109 | ||||
Series 2017-25A Class A | SBA Small Business Investment Cos. | ||||||
3.569% due 07/20/30 (Ê)(Þ) | 1,124 | 1,125 | Series 2017-10A Class 1 | ||||
Long Beach Mortgage Loan Trust | 2.845% due 03/10/27 | 576 | 566 | ||||
Series 2004-1 Class M1 | Series 2017-10B Class 1 | ||||||
1.741% due 02/25/34 (Ê) | 471 | 471 | 2.518% due 09/10/27 | 178 | 172 | ||
Series 2004-4 Class M1 | Shackleton CLO, Ltd. | ||||||
2.134% due 10/25/34 (Ê) | 866 | 867 | Series 2018-4RA Class A1A | ||||
Madison Park Funding XVIII, Ltd. | 3.342% due 04/13/31 (Ê)(Þ) | 930 | 928 | ||||
Series 2017-18A Class A1R | SLM Private Credit Student Loan Trust | ||||||
3.552% due 10/21/30 (Ê)(Þ) | 872 | 874 | Series 2005-B Class A4 | ||||
Madison Park Funding XXVI, Ltd. | 1.180% due 06/15/39 (Ê) | 650 | 637 | ||||
Series 2017-26A Class AR | Series 2006-A Class A5 | ||||||
3.559% due 07/29/30 (Ê)(Þ) | 780 | 782 | 0.943% due 06/15/39 (Ê) | 261 | 256 | ||
Magnetite XVIII, Ltd. | SLM Student Loan Trust | ||||||
Series 2016-18A Class A | Series 2006-10 Class A6 | ||||||
2.715% due 11/15/28 (Ê)(Þ) | 1,488 | 1,488 | 1.895% due 03/25/44 (Ê) | 1,130 | 1,092 | ||
Master Asset-Backed Securities Trust | Series 2008-6 Class A4 | ||||||
2.467% due 07/25/23 (Ê) | 160 | 161 | |||||
Series 2005-WMC1 Class M4 | |||||||
2.179% due 03/25/35 (Ê) | 551 | 553 | Series 2010-1 Class A | ||||
0.934% due 03/25/25 (Ê) | 251 | 247 | |||||
Merrill Lynch Mortgage Investors Trust | |||||||
Series 2006-FF1 Class M4 | SoFi Professional Loan Program LLC | ||||||
0.895% due 08/25/36 (Ê) | 790 | 783 | Series 2017-E Class A2A | ||||
1.860% due 11/26/40 (Þ) | 420 | 415 | |||||
Nelnet Student Loan Trust | |||||||
Series 2008-3 Class A4 | Series 2018-A Class A2A | ||||||
2.967% due 11/25/24 (Ê) | 350 | 355 | 2.390% due 02/25/42 (Þ) | 360 | 358 | ||
New Century Home Equity Loan Trust | Series 2018-B Class A1FX | ||||||
2.640% due 08/26/47 (Þ) | 934 | 930 | |||||
Series 2005-B Class M1 | |||||||
2.032% due 10/25/35 (Ê) | 690 | 668 | Soundview Home Loan Trust | ||||
Nissan Auto Receivables Owner Trust | Series 2007-1 Class A3 | ||||||
7.000% due 02/25/38 (~)(Ê)(Þ) | 1,208 | 1,143 | |||||
Series 2017-C Class A2A | |||||||
1.890% due 10/15/20 | 820 | 816 | Structured Asset Investment Loan Trust | ||||
Option One Mortgage Loan Trust | Series 2005-HE3 Class M1 | ||||||
1.254% due 09/25/35 (Ê) | 804 | 802 | |||||
Series 2004-3 Class M1 | |||||||
1.314% due 11/25/34 (Ê) | 738 | 737 | Textainer Marine Containers, Ltd. | ||||
Series 2007-FXD1 Class 3A4 | Series 2017-1A Class A | ||||||
5.860% due 01/25/37 (Ê) | 1,448 | 1,436 | 3.720% due 05/20/42 (Þ) | 895 | 889 | ||
Park Place Securities, Inc. Asset-Backed | THL Credit Wind River CLO, Ltd. | ||||||
Pass-Through Certificates | Series 2017-2A Class AR | ||||||
Series 2005-WHQ1 Class M5 | 3.585% due 10/18/30 (Ê)(Þ) | 1,016 | 1,019 | ||||
1.896% due 03/25/35 (Ê) | 1,290 | 1,294 | Towd Point Mortgage Trust | ||||
Popular ABS Mortgage Pass-Through | Series 2016-3 Class A1 | ||||||
Trust | 2.250% due 04/25/56 (~)(Ê)(Þ) | 328 | 321 | ||||
Series 2006-C Class A4 | Series 2017-1 Class A1 | ||||||
1.484% due 07/25/36 (Ê) | 824 | 816 | 2.750% due 10/25/56 (~)(Ê)(Þ) | 1,325 | 1,297 | ||
Series 2006-D Class A3 | Series 2017-2 Class A1 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 65
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Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
2.750% due 04/25/57 (~)(Ê)(Þ) | 605 | 595 | Amazon. com, Inc. | ||||
Series 2017-3 Class A1 | 1.900% due 08/21/20 | 247 | 242 | ||||
2.750% due 06/25/57 (~)(Ê)(Þ) | 643 | 629 | 5.200% due 12/03/25 | 515 | 560 | ||
Series 2017-4 Class A1 | 3.150% due 08/22/27 | 160 | 154 | ||||
2.750% due 06/25/57 (~)(Ê)(Þ) | 316 | 309 | 3.875% due 08/22/37 | 50 | 49 | ||
Toyota Auto Receivables Owner Trust | 4.950% due 12/05/44 | 60 | 67 | ||||
Series 2018-A Class A2A | 4.050% due 08/22/47 | 70 | 68 | ||||
2.100% due 10/15/20 | 1,095 | 1,091 | Ambac Assurance Corp. | ||||
Triton Container Finance IV LLC | 5.100% due 06/07/20 (Þ) | 1 | 1 | ||||
Series 2017-2A Class A | American Airlines, Inc. Pass-Through | ||||||
3.620% due 08/20/42 (Þ) | 606 | 595 | Certificates Trust | ||||
Series 2011-1 Class A | |||||||
Triton Container Finance LLC | 5.250% due 01/31/21 | 169 | 175 | ||||
Series 2017-1A Class A | |||||||
3.520% due 06/20/42 (Þ) | 275 | 270 | Series 2013-2 Class A | ||||
4.950% due 01/15/23 | 433 | 446 | |||||
Series 2018-1A Class A | |||||||
3.950% due 03/20/43 (Þ) | 242 | 241 | American Axle & Manufacturing, Inc. | ||||
Wells Fargo Home Equity Asset-Backed | 6.625% due 10/15/22 | 41 | 42 | ||||
Securities Trust | American Express Co. | ||||||
Series 2005-3 Class M4 | 2.200% due 10/30/20 | 1,085 | 1,060 | ||||
1.581% due 11/25/35 (Ê) | 500 | 502 | 3.000% due 10/30/24 | 685 | 653 | ||
56,730 | American Express Credit Corp. | ||||||
Corporate Bonds and Notes - 19.8% | 2.375% due 05/26/20 | 80 | 79 | ||||
21st Century Fox America, Inc. | Series F | ||||||
8.450% due 08/01/34 | 160 | 222 | 2.600% due 09/14/20 | 870 | 860 | ||
6.400% due 12/15/35 | 125 | 150 | American Honda Finance Corp. | ||||
6.650% due 11/15/37 | 40 | 50 | 2.713% due 11/05/21 (Ê) | 300 | 300 | ||
6.900% due 08/15/39 | 730 | 929 | Series MTN | ||||
3M Co. | 2.695% due 02/14/20 (Ê) | 1,000 | 1,002 | ||||
1.625% due 09/19/21 | 250 | 239 | American International Group, Inc. | ||||
ABB Treasury Center, Inc. | 6.400% due 12/15/20 | 825 | 885 | ||||
4.000% due 06/15/21 (Þ) | 231 | 236 | 3.750% due 07/10/25 | 110 | 106 | ||
Abbott Laboratories | American Tower Trust | ||||||
3.250% due 04/15/23 | 241 | 238 | 3.070% due 03/15/23 (Þ) | 270 | 265 | ||
3.750% due 11/30/26 | 90 | 88 | Amgen, Inc. | ||||
4.750% due 11/30/36 | 60 | 63 | 2.125% due 05/01/20 | 20 | 20 | ||
4.900% due 11/30/46 | 80 | 86 | 3.625% due 05/22/24 | 10 | 10 | ||
Series 4658 | 6.400% due 02/01/39 | 295 | 353 | ||||
2.350% due 11/22/19 | 103 | 102 | 5.375% due 05/15/43 | 215 | 231 | ||
AbbVie, Inc. | 4.400% due 05/01/45 | 100 | 96 | ||||
2.500% due 05/14/20 | 691 | 682 | Anadarko Petroleum Corp. | ||||
2.300% due 05/14/21 | 240 | 233 | 4.850% due 03/15/21 | 100 | 103 | ||
3.600% due 05/14/25 | 60 | 58 | 5.550% due 03/15/26 | 240 | 257 | ||
Aetna, Inc. | 6.450% due 09/15/36 | 997 | 1,151 | ||||
2.800% due 06/15/23 | 30 | 29 | 4.500% due 07/15/44 | 125 | 116 | ||
Allison Transmission, Inc. | 6.600% due 03/15/46 | 90 | 108 | ||||
5.000% due 10/01/24 (Þ) | 90 | 89 | Anheuser-Busch InBev Finance, Inc. | ||||
2.650% due 02/01/21 | 160 | 158 | |||||
Ally Financial, Inc. | 2.625% due 01/17/23 | 284 | 274 | ||||
8.000% due 11/01/31 | 100 | 119 | |||||
3.300% due 02/01/23 | 200 | 198 | |||||
Alphabet, Inc. | |||||||
3.625% due 05/19/21 | 235 | 240 | 3.650% due 02/01/26 | 470 | 460 | ||
4.900% due 02/01/46 | 120 | 123 | |||||
Altria Group, Inc. | |||||||
9.250% due 08/06/19 | 434 | 464 | Anheuser-Busch InBev Worldwide, Inc. | ||||
2.625% due 01/14/20 | 240 | 239 | 3.750% due 01/15/22 | 234 | 237 | ||
2.850% due 08/09/22 | 170 | 166 | 4.000% due 04/13/28 | 100 | 100 | ||
4.000% due 01/31/24 | 565 | 572 | 4.375% due 04/15/38 | 410 | 398 | ||
10.200% due 02/06/39 | 482 | 784 | 4.750% due 04/15/58 | 660 | 644 | ||
Anthem, Inc. |
See accompanying notes which are an integral part of the financial statements.
66 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
2.500% due 11/21/20 | 350 | 344 | 6.110% due 01/29/37 | 330 | 379 | ||||
3.700% due 08/15/21 | 40 | 40 | Series AA | ||||||
3.125% due 05/15/22 | 30 | 30 | 6.100% due 12/31/49 (Ê)(ƒ) | 50 | 52 | ||||
2.950% due 12/01/22 | 80 | 78 | Series FF | ||||||
3.350% due 12/01/24 | 30 | 29 | 5.875% due 12/31/99 (Ê)(ƒ) | 275 | 269 | ||||
3.650% due 12/01/27 | 60 | 57 | Series GMTN | ||||||
5.950% due 12/15/34 | 190 | 214 | 3.300% due 01/11/23 | 460 | 453 | ||||
Aon Corp. | 4.450% due 03/03/26 | 30 | 30 | ||||||
8.205% due 01/01/27 | 172 | 206 | 3.500% due 04/19/26 | 1,295 | 1,252 | ||||
Apache Corp. | 3.593% due 07/21/28 (Ê) | 260 | 248 | ||||||
3.250% due 04/15/22 | 20 | 19 | Bank of New York Mellon Corp. (The) | ||||||
5.100% due 09/01/40 | 140 | 139 | 2.600% due 08/17/20 | 225 | 223 | ||||
4.750% due 04/15/43 | 130 | 123 | 2.450% due 11/27/20 | 249 | 245 | ||||
4.250% due 01/15/44 | 20 | 18 | 2.200% due 08/16/23 | 355 | 333 | ||||
Apollo Management Holdings, LP | Bank One Capital III | ||||||||
4.000% due 05/30/24 (Þ) | 295 | 293 | 8.750% due 09/01/30 | 280 | 385 | ||||
4.400% due 05/27/26 (Þ) | 275 | 275 | BankUnited, Inc. | ||||||
5.000% due 03/15/48 (Þ) | 580 | 581 | 4.875% due 11/17/25 | 213 | 216 | ||||
Apple, Inc. | Barrick NA Finance LLC | ||||||||
2.000% due 11/13/20 | 80 | 79 | 4.400% due 05/30/21 | 265 | 274 | ||||
2.400% due 05/03/23 | 247 | 238 | 5.700% due 05/30/41 | 130 | 144 | ||||
2.450% due 08/04/26 | 110 | 101 | BAT Capital Corp. | ||||||
4.650% due 02/23/46 | 100 | 108 | 2.297% due 08/14/20 (Þ) | 245 | 240 | ||||
Associated Banc-Corp. | 3.557% due 08/15/27 (Þ) | 230 | 214 | ||||||
2.750% due 11/15/19 | 221 | 219 | 4.540% due 08/15/47 (Þ) | 160 | 149 | ||||
AT&T, Inc. | Bayer US Finance II LLC | ||||||||
3.000% due 02/15/22 | 40 | 39 | 3.500% due 06/25/21 (Þ) | 239 | 239 | ||||
3.800% due 03/01/24 | 295 | 289 | 4.250% due 12/15/25 (Þ) | 280 | 282 | ||||
4.250% due 03/01/27 | 440 | 431 | 4.375% due 12/15/28 (Þ) | 410 | 411 | ||||
4.300% due 02/15/30 (Þ) | 1,054 | 996 | 4.875% due 06/25/48 (Þ) | 330 | 333 | ||||
8.250% due 11/15/31 (Þ) | 350 | 449 | Bayer US Finance LLC | ||||||
5.250% due 03/01/37 | 190 | 187 | 3.375% due 10/08/24 (Þ) | 250 | 241 | ||||
4.350% due 06/15/45 | 90 | 76 | BB&T Corp. | ||||||
Athene Global Funding | 5.250% due 11/01/19 | 232 | 238 | ||||||
2.750% due 04/20/20 (Þ) | 920 | 909 | Beacon Escrow Corp. | ||||||
Athene Holding, Ltd. | 4.875% due 11/01/25 (Þ) | 20 | 19 | ||||||
4.125% due 01/12/28 | 705 | 650 | Becton Dickinson and Co. | ||||||
AutoNation, Inc. | 2.894% due 06/06/22 | 560 | 541 | ||||||
3.800% due 11/15/27 | 590 | 548 | 3.363% due 06/06/24 | 180 | 173 | ||||
Avnet, Inc. | 3.734% due 12/15/24 | 242 | 237 | ||||||
4.625% due 04/15/26 | 214 | 211 | 4.685% due 12/15/44 | 10 | 10 | ||||
AXA Equitable Holdings, Inc. | Berkshire Hathaway Energy Co. | ||||||||
5.000% due 04/20/48 (Þ) | 400 | 368 | 2.800% due 01/15/23 | 245 | 239 | ||||
BAC Capital Trust XIV | 6.500% due 09/15/37 | 174 | 229 | ||||||
Series G | Berkshire Hathaway Finance Corp. | ||||||||
4.000% due 09/29/49 (Ê)(ƒ) | 70 | 62 | 4.300% due 05/15/43 | 221 | 222 | ||||
Ball Corp. | Berkshire Hathaway, Inc. | ||||||||
5.250% due 07/01/25 | 110 | 112 | 3.125% due 03/15/26 | 242 | 233 | ||||
Bank of America Corp. | BGC Partners, Inc. | ||||||||
2.625% due 10/19/20 | 267 | 264 | 5.375% due 12/09/19 | 232 | 236 | ||||
2.328% due 10/01/21 (Ê) | 340 | 332 | Blue Cube Spinco, Inc. | ||||||
3.004% due 12/20/23 (Ê) | 42 | 41 | 10.000% due 10/15/25 | 235 | 273 | ||||
3.550% due 03/05/24 (Ê) | 130 | 129 | BMW US Capital LLC | ||||||
3.366% due 01/23/26 (Ê) | 845 | 813 | 2.705% due 04/06/20 (Ê)(Þ) | 300 | 301 | ||||
4.250% due 10/22/26 | 170 | 168 | 1.850% due 09/15/21 (Þ) | 20 | 19 | ||||
3.419% due 12/20/28 (Ê) | 482 | 454 | 3.450% due 04/12/23 (Þ) | 400 | 396 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 67
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Boeing Co. (The) | 6.834% due 10/23/55 | 226 | 242 | ||||||
4.875% due 02/15/20 | 100 | 103 | Cheniere Corpus Christi Holdings LLC | ||||||
Braskem America Finance Co. | 5.125% due 06/30/27 | 60 | 59 | ||||||
7.125% due 07/22/41 (Þ) | 25 | 28 | Cheniere Energy Partners, LP | ||||||
Brighthouse Financial, Inc. | 5.250% due 10/01/25 (Þ) | 585 | 571 | ||||||
3.700% due 06/22/27 | 575 | 512 | Chesapeake Energy Corp. | ||||||
4.700% due 06/22/47 | 50 | 41 | 6.125% due 02/15/21 | 50 | 51 | ||||
Broadcom Corp. / Broadcom Cayman | 8.000% due 12/15/22 (Þ) | 8 | 8 | ||||||
Finance, Ltd. | Chevron Corp. | ||||||||
3.125% due 01/15/25 | 70 | 65 | 2.419% due 11/17/20 | 245 | 242 | ||||
3.875% due 01/15/27 | 1,010 | 955 | 2.801% due 03/03/22 (Ê) | 720 | 727 | ||||
Burlington Northern Santa Fe LLC | 2.954% due 05/16/26 | 70 | 67 | ||||||
3.250% due 06/15/27 | 239 | 231 | Chubb INA Holdings, Inc. | ||||||
4.150% due 04/01/45 | 100 | 97 | 2.300% due 11/03/20 | 20 | 20 | ||||
Campbell Soup Co. | 3.350% due 05/03/26 | 30 | 29 | ||||||
2.971% due 03/15/21 (Ê) | 125 | 125 | Cigna Corp. | ||||||
Cardinal Health, Inc. | 3.050% due 10/15/27 | 440 | 397 | ||||||
2.616% due 06/15/22 | 50 | 48 | Cimarex Energy Co. | ||||||
3.079% due 06/15/24 | 60 | 57 | 3.900% due 05/15/27 | 70 | 67 | ||||
Carlyle Holdings II Finance LLC | Cintas Corp. No. 2 | ||||||||
5.625% due 03/30/43 (Þ) | 195 | 201 | 2.900% due 04/01/22 | 60 | 59 | ||||
Caterpillar Financial Services Corp. | 3.700% due 04/01/27 | 70 | 69 | ||||||
2.571% due 03/15/21 (Ê) | 750 | 751 | Cisco Systems, Inc. | ||||||
1.931% due 10/01/21 | 450 | 432 | 2.450% due 06/15/20 | 240 | 238 | ||||
Series GMTN | CIT Group, Inc. | ||||||||
1.850% due 09/04/20 | 271 | 264 | 5.250% due 03/07/25 | 30 | 30 | ||||
CBS Corp. | Citigroup Capital III | ||||||||
7.875% due 07/30/30 | 430 | 531 | 7.625% due 12/01/36 | 350 | 467 | ||||
CC Holdings GS V LLC / Crown Castle | |||||||||
GS III Corp. | Citigroup, Inc. | ||||||||
3.849% due 04/15/23 | 242 | 240 | 4.450% due 09/29/27 | 770 | 758 | ||||
CCO Holdings LLC / CCO Holdings | 8.125% due 07/15/39 | 420 | 591 | ||||||
Capital Corp. | 5.300% due 05/06/44 | 101 | 104 | ||||||
5.125% due 05/01/23 (Þ) | 50 | 49 | 4.650% due 07/30/45 | 147 | 146 | ||||
5.375% due 05/01/25 (Þ) | 110 | 106 | 4.750% due 05/18/46 | 220 | 209 | ||||
Series DMTN | Series P | ||||||||
5.000% due 02/01/28 (Þ) | 30 | 27 | 5.950% due 12/31/49 (Ê)(ƒ) | 280 | 282 | ||||
Celgene Corp. | Citizens Financial Group, Inc. | ||||||||
2.250% due 08/15/21 | 70 | 67 | 2.375% due 07/28/21 | 520 | 503 | ||||
3.550% due 08/15/22 | 30 | 30 | CME Group, Inc. | ||||||
3.900% due 02/20/28 | 540 | 512 | 5.300% due 09/15/43 | 30 | 35 | ||||
5.000% due 08/15/45 | 80 | 78 | CNH Industrial Capital LLC | ||||||
Centene Corp. | 3.875% due 10/15/21 | 250 | 249 | ||||||
5.625% due 02/15/21 | 30 | 31 | CNOOC Finance USA LLC | ||||||
4.750% due 05/15/22 | 50 | 50 | 3.500% due 05/05/25 | 300 | 289 | ||||
6.125% due 02/15/24 | 50 | 53 | Coca-Cola Co. (The) | ||||||
CF Industries, Inc. | 3.300% due 09/01/21 | 236 | 238 | ||||||
5.375% due 03/15/44 | 555 | 490 | Comcast Cable Communications | ||||||
Charter Communications Operating LLC | Holdings, Inc. | ||||||||
/ Charter Communications Operating | 9.455% due 11/15/22 | 163 | 200 | ||||||
Capital | Comcast Corp. | ||||||||
3.579% due 07/23/20 | 80 | 80 | 3.600% due 03/01/24 | 240 | 236 | ||||
4.908% due 07/23/25 | 680 | 687 | 6.500% due 11/15/35 | 90 | 107 | ||||
4.200% due 03/15/28 | 40 | 37 | 6.550% due 07/01/39 | 480 | 578 | ||||
6.384% due 10/23/35 | 40 | 42 | CommScope Technologies LLC | ||||||
5.375% due 04/01/38 | 80 | 76 | 5.000% due 03/15/27 (Þ) | 30 | 28 | ||||
6.484% due 10/23/45 | 775 | 816 | Concho Resources, Inc. | ||||||
5.750% due 04/01/48 | 670 | 648 | |||||||
See accompanying notes which are an integral part of the financial statements. |
68 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
4.300% due 08/15/28 | 60 | 60 | 5.000% due 06/15/45 | 180 | 183 | |||
Constellation Brands, Inc. | Devon Financing Co. LLC | |||||||
4.750% due 11/15/24 | 262 | 272 | 7.875% due 09/30/31 | 210 | 266 | |||
Continental Airlines Pass-Through Trust | Diageo Investment Corp. | |||||||
Series 071A Class A | 2.875% due 05/11/22 | 90 | 89 | |||||
5.983% due 04/19/22 | 77 | 82 | Diamond 1 Finance Corp. / Diamond 2 | |||||
Continental Resources, Inc. | Finance Corp | |||||||
4.500% due 04/15/23 | 90 | 91 | 8.100% due 07/15/36 (Þ) | 270 | 315 | |||
4.375% due 01/15/28 | 10 | 10 | Digital Realty Trust LP | |||||
Costco Wholesale Corp. | 3.400% due 10/01/20 | 247 | 247 | |||||
2.150% due 05/18/21 | 244 | 239 | Discovery Communications LLC | |||||
5.625% due 08/15/19 | 258 | 265 | ||||||
Cott Holdings, Inc. | 6.350% due 06/01/40 | 545 | 597 | |||||
5.500% due 04/01/25 (Þ) | 60 | 58 | ||||||
Cox Communications, Inc. | DISH DBS Corp. | |||||||
3.250% due 12/15/22 (Þ) | 225 | 218 | 5.875% due 07/15/22 | 30 | 28 | |||
6.450% due 12/01/36 (Þ) | 605 | 662 | 5.875% due 11/15/24 | 120 | 102 | |||
Crown Castle International Corp. | Dominion Energy, Inc. | |||||||
5.250% due 01/15/23 | 203 | 213 | 2.579% due 07/01/20 | 243 | 239 | |||
CVS Health Corp. | Dominion Resources, Inc. | |||||||
2.750% due 12/01/22 | 90 | 86 | 7.000% due 06/15/38 | 20 | 26 | |||
3.700% due 03/09/23 | 870 | 861 | Domtar Corp. | |||||
4.100% due 03/25/25 | 80 | 80 | 6.750% due 02/15/44 | 216 | 229 | |||
3.875% due 07/20/25 | 170 | 166 | Dow Chemical Co. (The) | |||||
2.875% due 06/01/26 | 190 | 173 | 3.500% due 10/01/24 | 238 | 232 | |||
4.300% due 03/25/28 | 1,400 | 1,380 | Duke Energy Carolinas LLC | |||||
4.780% due 03/25/38 | 560 | 554 | 5.300% due 02/15/40 | 30 | 35 | |||
5.125% due 07/20/45 | 140 | 142 | 4.000% due 09/30/42 | 100 | 98 | |||
5.050% due 03/25/48 | 565 | 571 | Duke Energy Corp. | |||||
DAE Funding LLC | 3.750% due 04/15/24 | 260 | 259 | |||||
4.500% due 08/01/22 (Þ) | 22 | 21 | Eaton Corp. | |||||
5.000% due 08/01/24 (Þ) | 30 | 29 | 2.750% due 11/02/22 | 150 | 146 | |||
Daimler Finance NA LLC | 4.150% due 11/02/42 | 40 | 39 | |||||
1.750% due 10/30/19 (Þ) | 720 | 707 | Ecolab, Inc. | |||||
2.300% due 01/06/20 (Þ) | 945 | 933 | 4.350% due 12/08/21 | 8 | 8 | |||
3.350% due 05/04/21 (Þ) | 1,460 | 1,453 | EI du Pont de Nemours & Co. | |||||
Danaher Corp. | 4.900% due 01/15/41 | 197 | 205 | |||||
2.400% due 09/15/20 | 249 | 246 | Eli Lilly & Co. | |||||
Delhaize America, Inc. | 3.100% due 05/15/27 | 50 | 48 | |||||
9.000% due 04/15/31 | 154 | 209 | Energy Transfer Partners, LP | |||||
Dell International LLC / EMC Corp. | 4.050% due 03/15/25 | 405 | 391 | |||||
4.420% due 06/15/21 (Þ) | 280 | 284 | 6.050% due 06/01/41 | 325 | 324 | |||
7.125% due 06/15/24 (Þ) | 100 | 106 | EnLink Midstream Partners, LP | |||||
8.350% due 07/15/46 (Þ) | 1,025 | 1,233 | 4.150% due 06/01/25 | 210 | 194 | |||
Delta Air Lines Pass-Through Trust | 5.050% due 04/01/45 | 260 | 211 | |||||
Series 071A Class A | Enterprise Products Operating LLC | |||||||
6.821% due 08/10/22 | 386 | 421 | 5.950% due 02/01/41 | 305 | 344 | |||
Series 2002-1 Class G-1 | Series A | |||||||
6.718% due 01/02/23 | 82 | 88 | 6.066% due 08/01/66 (Ê) | 360 | 361 | |||
Delta Air Lines, Inc. | EOG Resources, Inc. | |||||||
2.875% due 03/13/20 | 250 | 248 | 2.450% due 04/01/20 | 135 | 133 | |||
Deutsche Bank AG | 4.150% due 01/15/26 | 30 | 31 | |||||
2.700% due 07/13/20 | 260 | 253 | EP Energy / Everest Acquisition | |||||
2.950% due 08/20/20 | 242 | 236 | Finance, Inc. | |||||
9.375% due 05/01/24 (Þ) | 60 | 49 | ||||||
Devon Energy Corp. | ||||||||
3.250% due 05/15/22 | 110 | 108 | Series NCD | |||||
8.000% due 02/15/25 (Þ) | 30 | 23 | ||||||
5.850% due 12/15/25 | 370 | 407 | ||||||
Equifax, Inc. |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 69
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Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Series 5Y | 6.250% due 10/02/43 | 110 | 114 | |||||||
3.950% due 06/15/23 | 580 | 577 | 5.200% due 04/01/45 | 255 | 234 | |||||
Equities Midstream Partners, LP | General Motors Financial Co. , Inc. | |||||||||
Series 10Y | 2.450% due 11/06/20 | 30 | 29 | |||||||
5.500% due 07/15/28 | 540 | 540 | 4.375% due 09/25/21 | 20 | 20 | |||||
Exelon Corp. | 4.250% due 05/15/23 | 10 | 10 | |||||||
2.850% due 06/15/20 | 555 | 550 | Gilead Sciences, Inc. | |||||||
3.497% due 06/01/22 | 245 | 242 | 2.550% due 09/01/20 | 590 | 583 | |||||
Exelon Generation Co. LLC | 3.650% due 03/01/26 | 90 | 89 | |||||||
2.950% due 01/15/20 | 257 | 256 | 4.750% due 03/01/46 | 100 | 103 | |||||
Exxon Mobil Corp. | GlaxoSmithKline Capital, Inc. | |||||||||
3.176% due 03/15/24 | 243 | 241 | 2.800% due 03/18/23 | 248 | 242 | |||||
3.043% due 03/01/26 | 60 | 58 | 3.375% due 05/15/23 | 455 | 455 | |||||
4.114% due 03/01/46 | 40 | 41 | Glencore Funding LLC | |||||||
Farmers Exchange Capital III | 2.875% due 04/16/20 (Þ) | 20 | 20 | |||||||
5.454% due 10/15/54 (Ê)(Þ) | 420 | 423 | 4.625% due 04/29/24 (Þ) | 40 | 40 | |||||
FedEx Corp. | 4.000% due 03/27/27 (Þ) | 200 | 189 | |||||||
4.500% due 02/01/65 | 226 | 201 | GLP Capital, LP / GLP Financing II, Inc. | |||||||
Fifth Third Bank | 5.375% due 11/01/23 | 80 | 82 | |||||||
Series BKNT | Goldman Sachs Capital I | |||||||||
2.875% due 10/01/21 | 450 | 445 | 6.345% due 02/15/34 | 75 | 86 | |||||
First Data Corp. | Goldman Sachs Capital II | |||||||||
5.375% due 08/15/23 (Þ) | 140 | 141 | 4.000% due 06/01/43 (Ê)(ƒ) | 3 | 3 | |||||
First Niagara Financial Group, Inc. | Goldman Sachs Group, Inc. (The) | |||||||||
6.750% due 03/19/20 | 237 | 250 | 5.250% due 07/27/21 | 380 | 399 | |||||
FirstEnergy Corp. | 3.850% due 07/08/24 | 150 | 149 | |||||||
Series B | 4.250% due 10/21/25 | 310 | 305 | |||||||
4.250% due 03/15/23 | 100 | 102 | 3.491% due 05/15/26 (Ê) | 185 | 183 | |||||
3.900% due 07/15/27 | 370 | 359 | 3.500% due 11/16/26 | 90 | 85 | |||||
Series C | 3.691% due 06/05/28 (Ê) | 200 | 190 | |||||||
7.375% due 11/15/31 | 280 | 363 | 4.223% due 05/01/29 (Ê) | 790 | 778 | |||||
Ford Motor Co. | 6.750% due 10/01/37 | 410 | 487 | |||||||
4.750% due 01/15/43 | 50 | 43 | 6.250% due 02/01/41 | 160 | 187 | |||||
Ford Motor Credit Co. LLC | 5.150% due 05/22/45 | 30 | 30 | |||||||
3.200% due 01/15/21 | 200 | 198 | 4.750% due 10/21/45 | 250 | 247 | |||||
5.875% due 08/02/21 | 200 | 212 | Series 60MO | |||||||
Freeport-McMoRan, Inc. | 3.272% due 09/29/25 (Ê) | 775 | 736 | |||||||
3.550% due 03/01/22 | 90 | 86 | Series D | |||||||
6.875% due 02/15/23 | 10 | 11 | 6.000% due 06/15/20 | 150 | 158 | |||||
5.450% due 03/15/43 | 1,045 | 917 | Series GMTN | |||||||
Fresenius Medical Care US Finance II, | 4.109% due 10/28/27 (Ê) | 270 | 275 | |||||||
Inc. | Great Plains Energy, Inc. | |||||||||
5.875% due 01/31/22 (Þ) | 236 | 250 | 5.292% due 06/15/22 (~)(Ê) | 670 | 702 | |||||
4.750% due 10/15/24 (Þ) | 110 | 113 | Halliburton Co. | |||||||
GE Capital International Funding Co. | 3.800% due 11/15/25 | 70 | 69 | |||||||
Unlimited Co. | 4.850% due 11/15/35 | 130 | 134 | |||||||
4.418% due 11/15/35 | 200 | 194 | ||||||||
Harris Corp. | ||||||||||
General Electric Co. | 4.400% due 06/15/28 | 580 | 585 | |||||||
5.300% due 02/11/21 | 361 | 378 | 4.854% due 04/27/35 | 40 | 41 | |||||
4.500% due 03/11/44 | 190 | 186 | 5.054% due 04/27/45 | 40 | 41 | |||||
Series GMTN | HCA, Inc. | |||||||||
5.500% due 01/08/20 | 10 | 10 | 5.000% due 03/15/24 | 50 | 50 | |||||
6.875% due 01/10/39 | 411 | 520 | 5.375% due 02/01/25 | 100 | 98 | |||||
General Mills, Inc. | 4.500% due 02/15/27 | 40 | 38 | |||||||
3.150% due 12/15/21 | 233 | 230 | 5.500% due 06/15/47 | 455 | 417 | |||||
General Motors Co. | Hewlett Packard Enterprise Co. | |||||||||
4.875% due 10/02/23 | 450 | 462 |
See accompanying notes which are an integral part of the financial statements.
70 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
2.100% due 10/04/19 (Þ) | 435 | 430 | 4.350% due 08/15/21 | 130 | 134 | ||
6.000% due 09/15/41 | 235 | 239 | 3.875% due 09/10/24 | 795 | 787 | ||
6.350% due 10/15/45 | 239 | 236 | 4.125% due 12/15/26 | 230 | 227 | ||
Home Depot, Inc. (The) | 4.250% due 10/01/27 | 30 | 30 | ||||
2.625% due 06/01/22 | 243 | 238 | 6.400% due 05/15/38 | 100 | 123 | ||
Honeywell International, Inc. | 4.950% due 06/01/45 | 100 | 102 | ||||
1.850% due 11/01/21 | 255 | 245 | JPMorgan Chase Bank NA | ||||
HSBC Bank NA | Series BKNT | ||||||
Series BKNT | 1.650% due 09/23/19 | 195 | 192 | ||||
5.875% due 11/01/34 | 475 | 540 | Kellogg Co. | ||||
HSBC USA, Inc. | Series B | ||||||
7.200% due 07/15/97 | 157 | 209 | 7.450% due 04/01/31 | 187 | 238 | ||
Humana, Inc. | Kerr-McGee Corp. | ||||||
3.150% due 12/01/22 | 10 | 10 | 6.950% due 07/01/24 | 10 | 11 | ||
3.950% due 03/15/27 | 100 | 98 | 7.875% due 09/15/31 | 30 | 38 | ||
4.625% due 12/01/42 | 20 | 20 | Kinder Morgan Energy Partners, LP | ||||
4.950% due 10/01/44 | 20 | 21 | 3.500% due 03/01/21 | 30 | 30 | ||
4.800% due 03/15/47 | 10 | 10 | 7.500% due 11/15/40 | 189 | 224 | ||
IBM Credit LLC | Kinder Morgan, Inc. | ||||||
1.800% due 01/20/21 | 255 | 247 | 4.300% due 03/01/28 | 180 | 174 | ||
2.619% due 01/20/21 (Ê) | 800 | 804 | 5.550% due 06/01/45 | 275 | 278 | ||
Industrial & Commercial Bank of China, | Series GMTN | ||||||
Ltd. | 7.800% due 08/01/31 | 176 | 212 | ||||
3.231% due 11/13/19 | 250 | 249 | Kindred Healthcare, Inc. | ||||
Intel Corp. | 8.750% due 01/15/23 | 60 | 64 | ||||
3.300% due 10/01/21 | 240 | 242 | |||||
2.875% due 05/11/24 | 460 | 445 | KKR Group Finance Co. II LLC | ||||
5.500% due 02/01/43 (Þ) | 10 | 10 | |||||
3.700% due 07/29/25 | 20 | 20 | |||||
KKR Group Finance Co. III LLC | |||||||
3.734% due 12/08/47 | 10 | 9 | 5.125% due 06/01/44 (Þ) | 475 | 469 | ||
International Business Machines Corp. | Kohl's Corp. | ||||||
2.250% due 02/19/21 | 244 | 239 | 5.550% due 07/17/45 | 740 | 718 | ||
International Lease Finance Corp. | Kraft Heinz Foods Co. | ||||||
8.625% due 01/15/22 | 50 | 57 | 3.500% due 07/15/22 | 30 | 30 | ||
5.875% due 08/15/22 | 410 | 435 | 4.000% due 06/15/23 | 10 | 10 | ||
International Paper Co. | 4.875% due 02/15/25 (Þ) | 1,240 | 1,263 | ||||
8.700% due 06/15/38 | 305 | 425 | 3.000% due 06/01/26 | 60 | 54 | ||
5.150% due 05/15/46 | 188 | 191 | 4.625% due 01/30/29 | 400 | 396 | ||
Jackson National Life Global Funding | 5.000% due 07/15/35 | 240 | 237 | ||||
2.666% due 04/27/20 (Ê)(Þ) | 2,805 | 2,804 | 6.875% due 01/26/39 | 270 | 317 | ||
Jefferies Group LLC | 5.000% due 06/04/42 | 20 | 19 | ||||
6.500% due 01/20/43 | 190 | 197 | 5.200% due 07/15/45 | 20 | 19 | ||
John Deere Capital Corp. | 4.375% due 06/01/46 | 20 | 17 | ||||
2.800% due 03/04/21 | 242 | 240 | Kroger Co. (The) | ||||
Series DMTN | 5.150% due 08/01/43 | 20 | 20 | ||||
2.350% due 01/08/21 | 180 | 177 | L3 Technologies, Inc. | ||||
Series MTN | 3.850% due 06/15/23 | 238 | 237 | ||||
2.801% due 09/08/22 (Ê) | 785 | 784 | Lamb Weston Holdings, Inc. | ||||
Johnson & Johnson | 4.875% due 11/01/26 (Þ) | 60 | 58 | ||||
1.650% due 03/01/21 | 253 | 246 | Land O' Lakes, Inc. | ||||
2.250% due 03/03/22 | 450 | 440 | 6.000% due 11/15/22 (Þ) | 630 | 668 | ||
3.625% due 03/03/37 | 70 | 68 | Land O'Lakes Capital Trust I | ||||
JPMorgan Chase & Co. | 7.450% due 03/15/28 (Þ) | 180 | 202 | ||||
2.750% due 06/23/20 | 440 | 436 | Lennar Corp. | ||||
4.400% due 07/22/20 | 231 | 236 | 4.500% due 04/30/24 | 40 | 39 | ||
4.250% due 10/15/20 | 300 | 306 | 4.750% due 11/29/27 | 100 | 93 | ||
2.550% due 03/01/21 | 610 | 597 | |||||
2.877% due 03/09/21 (Ê) | 1,720 | 1,724 | Leucadia National Corp. |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 71
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
5.500% due 10/18/23 | 209 | 216 | 4.875% due 06/01/25 | 100 | 103 | |||
Life Technologies Corp. | 4.000% due 03/15/28 | 20 | 19 | |||||
6.000% due 03/01/20 | 224 | 233 | 4.500% due 04/15/38 | 805 | 743 | |||
Lockheed Martin Corp. | 4.700% due 04/15/48 | 140 | 130 | |||||
4.250% due 11/15/19 | 250 | 255 | Mutual of Omaha Insurance Co. | |||||
3.350% due 09/15/21 | 220 | 221 | 4.297% due 07/15/54 (Ê)(Þ) | 215 | 216 | |||
4.500% due 05/15/36 | 10 | 10 | Navient Corp. | |||||
Series 10YR | Series MTN | |||||||
3.550% due 01/15/26 | 90 | 89 | 8.000% due 03/25/20 | 70 | 74 | |||
Lowe's Cos. , Inc. | NBCUniversal Media LLC | |||||||
3.800% due 11/15/21 | 240 | 245 | 4.375% due 04/01/21 | 368 | 378 | |||
Lubrizol Corp. | NCL Corp. , Ltd. | |||||||
6.500% due 10/01/34 | 183 | 242 | 4.750% due 12/15/21 (Þ) | 24 | 24 | |||
LyondellBasell Industries NV | Nevada Power Co. | |||||||
5.750% due 04/15/24 | 198 | 215 | 5.375% due 09/15/40 | 209 | 244 | |||
Maple Escrow Subsidiary, Inc. | New Cingular Wireless Services, Inc. | |||||||
4.417% due 05/25/25 (Þ) | 360 | 362 | 8.750% due 03/01/31 | 170 | 228 | |||
4.597% due 05/25/28 (Þ) | 730 | 732 | Newell Brands, Inc. | |||||
Marathon Petroleum Corp. | 3.150% due 04/01/21 | 50 | 50 | |||||
5.000% due 09/15/54 | 234 | 215 | 3.850% due 04/01/23 | 60 | 59 | |||
Masco Corp. | 5.000% due 11/15/23 | 790 | 807 | |||||
4.450% due 04/01/25 | 238 | 239 | 4.200% due 04/01/26 | 40 | 39 | |||
MassMutual Global Funding II | 5.500% due 04/01/46 | 830 | 808 | |||||
1.950% due 09/22/20 (Þ) | 1,315 | 1,278 | NGPL PipeCo. LLC | |||||
McDonald's Corp. | 4.375% due 08/15/22 (Þ) | 660 | 653 | |||||
3.700% due 01/30/26 | 60 | 60 | Noble Energy, Inc. | |||||
3.500% due 03/01/27 | 70 | 68 | 3.900% due 11/15/24 | 150 | 148 | |||
Medtronic, Inc. | 3.850% due 01/15/28 | 80 | 76 | |||||
3.500% due 03/15/25 | 150 | 148 | 5.250% due 11/15/43 | 10 | 10 | |||
Merck & Co. , Inc. | 4.950% due 08/15/47 | 40 | 40 | |||||
2.750% due 02/10/25 | 40 | 38 | Northrop Grumman Corp. | |||||
Mercury General Corp. | 2.930% due 01/15/25 | 80 | 76 | |||||
4.400% due 03/15/27 | 440 | 428 | Series F0TZ | |||||
MetLife, Inc. | 3.250% due 01/15/28 | 210 | 198 | |||||
6.400% due 12/15/36 | 100 | 106 | Northwest Airlines Pass-Through Trust | |||||
Metropolitan Life Global Funding I | Series 07-1 | |||||||
2.561% due 01/08/21 (Ê)(Þ) | 1,715 | 1,712 | 7.027% due 11/01/19 | 352 | 368 | |||
Microsoft Corp. | Novartis Capital Corp. | |||||||
2.875% due 02/06/24 | 427 | 418 | Series 0006 | |||||
2.700% due 02/12/25 | 40 | 38 | 1.800% due 02/14/20 | 525 | 517 | |||
2.400% due 08/08/26 | 200 | 185 | NVR, Inc. | |||||
3.300% due 02/06/27 | 320 | 316 | 3.950% due 09/15/22 | 445 | 448 | |||
3.750% due 02/12/45 | 100 | 98 | Occidental Petroleum Corp. | |||||
MidAmerican Energy Co. | 3.125% due 02/15/22 | 30 | 30 | |||||
3.700% due 09/15/23 | 237 | 240 | 3.400% due 04/15/26 | 50 | 49 | |||
Mondelez International, Inc. | 3.000% due 02/15/27 | 360 | 340 | |||||
4.125% due 05/07/28 | 243 | 241 | 4.625% due 06/15/45 | 30 | 31 | |||
Morgan Stanley | 4.400% due 04/15/46 | 20 | 20 | |||||
5.625% due 09/23/19 | 200 | 206 | 4.100% due 02/15/47 | 170 | 166 | |||
3.759% due 10/24/23 (Ê) | 805 | 823 | ONEOK, Inc. | |||||
3.737% due 04/24/24 (Ê) | 170 | 169 | 7.500% due 09/01/23 | 204 | 234 | |||
Series GMTN | Oracle Corp. | |||||||
3.750% due 02/25/23 | 670 | 671 | 2.625% due 02/15/23 | 245 | 237 | |||
3.772% due 01/24/29 (Ê) | 700 | 675 | PACCAR Financial Corp. | |||||
MPLX LP | 1.200% due 08/12/19 | 210 | 207 | |||||
3.375% due 03/15/23 | 140 | 137 | 2.800% due 03/01/21 | 500 | 496 |
See accompanying notes which are an integral part of the financial statements.
72 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
Pacific Gas & Electric Co. | Regency Energy Partners, LP / Regency | |||||||
6.050% due 03/01/34 | 200 | 216 | Energy Finance Corp. | |||||
5.800% due 03/01/37 | 60 | 63 | 5.875% due 03/01/22 | 60 | 63 | |||
Pacific Life Insurance Co. | Reliance Holding USA, Inc. | |||||||
4.300% due 10/24/67 (Ê)(Þ) | 280 | 254 | 4.500% due 10/19/20 (Þ) | 231 | 235 | |||
Reliance Standard Life Global Funding | ||||||||
PacifiCorp | II | |||||||
5.750% due 04/01/37 | 197 | 237 | 2.500% due 01/15/20 (Þ) | 455 | 451 | |||
PepsiCo, Inc. | Reynolds American, Inc. | |||||||
2.750% due 03/01/23 | 242 | 236 | 6.875% due 05/01/20 | 190 | 202 | |||
Pepsi-Cola Metropolitan Bottling Co. , | 3.250% due 06/12/20 | 40 | 40 | |||||
Inc. | 4.450% due 06/12/25 | 420 | 422 | |||||
Series B | ||||||||
7.000% due 03/01/29 | 165 | 210 | 8.125% due 05/01/40 | 450 | 610 | |||
5.850% due 08/15/45 | 70 | 77 | ||||||
Pfizer, Inc. | Reynolds Group Issuer, Inc. / Reynolds | |||||||
1.700% due 12/15/19 | 252 | 248 | Group Issuer LLC | |||||
Philip Morris International, Inc. | 5.750% due 10/15/20 | 81 | 82 | |||||
1.875% due 11/01/19 | 170 | 168 | Roche Holdings, Inc. | |||||
2.000% due 02/21/20 | 1,255 | 1,234 | 2.875% due 09/29/21 (Þ) | 241 | 239 | |||
2.500% due 08/22/22 | 90 | 87 | Roper Technologies, Inc. | |||||
4.500% due 03/20/42 | 40 | 39 | 2.800% due 12/15/21 | 240 | 234 | |||
Series 5YR | Sabine Pass Liquefaction LLC | |||||||
2.500% due 11/02/22 | 60 | 58 | 6.250% due 03/15/22 | 590 | 635 | |||
Series NCD | 5.000% due 03/15/27 | 290 | 295 | |||||
2.375% due 08/17/22 | 633 | 605 | Salesforce. com, Inc. | |||||
Plains All American Pipeline, LP/PAA | 3.250% due 04/11/23 | 70 | 70 | |||||
Finance Corp. | ||||||||
2.600% due 12/15/19 | 261 | 258 | 3.700% due 04/11/28 | 30 | 30 | |||
PNC Bank NA | Santander Holdings USA, Inc. | |||||||
4.500% due 07/17/25 | 20 | 20 | ||||||
Series BKNT | ||||||||
2.450% due 11/05/20 | 269 | 264 | Schlumberger Holdings Corp. | |||||
4.000% due 12/21/25 (Þ) | 40 | 40 | ||||||
Precision Castparts Corp. | ||||||||
2.500% due 01/15/23 | 240 | 231 | Select Income REIT | |||||
Prime Security Services Borrower LLC / | 4.250% due 05/15/24 | 290 | 277 | |||||
Prime Finance, Inc. | Sherwin-Williams Co. | |||||||
9.250% due 05/15/23 (Þ) | 97 | 104 | 2.250% due 05/15/20 | 375 | 369 | |||
Procter & Gamble Co. (The) | Sierra Pacific Power Co. | |||||||
2.628% due 11/01/19 (Ê) | 230 | 231 | 2.600% due 05/01/26 | 236 | 218 | |||
1.850% due 02/02/21 | 228 | 222 | Smithfield Foods, Inc. | |||||
Progress Energy, Inc. | 2.700% due 01/31/20 (Þ) | 244 | 240 | |||||
4.400% due 01/15/21 | 30 | 31 | Southern Natural Gas Co. LLC / | |||||
PSEG Power LLC | Southern Natural Issuing Corp. | |||||||
8.625% due 04/15/31 | 170 | 223 | 4.400% due 06/15/21 | 400 | 409 | |||
Public Service Electric & Gas Co. | Southwest Airlines Co. | |||||||
3.700% due 05/01/28 | 180 | 180 | 2.750% due 11/06/19 | 241 | 240 | |||
2.650% due 11/05/20 | 340 | 336 | ||||||
QUALCOMM, Inc. | ||||||||
2.100% due 05/20/20 | 300 | 300 | Spectrum Brands, Inc. | |||||
5.750% due 07/15/25 | 50 | 49 | ||||||
Series 0002 | ||||||||
4.300% due 05/20/47 | 610 | 567 | Sprint Capital Corp. | |||||
8.750% due 03/15/32 | 180 | 193 | ||||||
Series 000A | Sprint Spectrum Co. LLC / Sprint | |||||||
2.600% due 01/30/23 | 455 | 435 | Spectrum Co. II LLC / Sprint | |||||
Quicken Loans, Inc. | Spectrum Co. III LLC | |||||||
5.750% due 05/01/25 (Þ) | 10 | 10 | 4.738% due 03/20/25 (Þ) | 685 | 680 | |||
QVC, Inc. | Series A-1 | |||||||
4.375% due 03/15/23 | 535 | 528 | 3.360% due 09/20/21 (Þ) | 163 | 161 | |||
Range Resources Corp. | Starbucks Corp. | |||||||
5.875% due 07/01/22 | 30 | 30 | 2.200% due 11/22/20 | 250 | 244 | |||
4.875% due 05/15/25 | 70 | 66 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 73
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Sunoco Logistics Partners Operations, | 2.800% due 11/15/24 | 252 | 242 | ||||
LP | 3.050% due 11/15/27 | 20 | 19 | ||||
5.400% due 10/01/47 | 260 | 238 | United Rentals NA, Inc. | ||||
Sysco Corp. | 5.750% due 11/15/24 | 60 | 61 | ||||
2.500% due 07/15/21 | 225 | 220 | |||||
Teachers Insurance & Annuity | United Technologies Corp. | ||||||
1.950% due 11/01/21 | 232 | 222 | |||||
Association of America | 3.100% due 06/01/22 | 100 | 99 | ||||
4.900% due 09/15/44 (Þ) | 240 | 252 | |||||
Tennessee Gas Pipeline Co. LLC | 4.500% due 06/01/42 | 30 | 30 | ||||
8.375% due 06/15/32 | 380 | 472 | UnitedHealth Group, Inc. | ||||
2.700% due 07/15/20 | 311 | 309 | |||||
Thermo Fisher Scientific, Inc. | 3.875% due 10/15/20 | 10 | 10 | ||||
2.950% due 09/19/26 | 228 | 211 | |||||
TIAA Asset Management Finance Co. | 2.875% due 12/15/21 | 40 | 40 | ||||
LLC | 4.625% due 07/15/35 | 100 | 105 | ||||
2.950% due 11/01/19 (Þ) | 40 | 40 | 5.700% due 10/15/40 | 60 | 71 | ||
Time Warner Cable LLC | Universal Health Services, Inc. | ||||||
4.125% due 02/15/21 | 150 | 151 | 4.750% due 08/01/22 (Þ) | 253 | 255 | ||
6.550% due 05/01/37 | 150 | 159 | Univision Communications, Inc. | ||||
7.300% due 07/01/38 | 210 | 238 | 5.125% due 05/15/23 (Þ) | 50 | 48 | ||
5.875% due 11/15/40 | 120 | 117 | 5.125% due 02/15/25 (Þ) | 60 | 55 | ||
Time Warner Entertainment Co. , LP | US Airways Pass-Through Trust | ||||||
8.375% due 03/15/23 | 182 | 212 | Series 2012-1 Class A | ||||
Time Warner, Inc. | 5.900% due 10/01/24 | 477 | 511 | ||||
4.875% due 03/15/20 | 250 | 256 | Series A Class A | ||||
4.750% due 03/29/21 | 620 | 639 | 7.125% due 10/22/23 | 279 | 311 | ||
3.800% due 02/15/27 | 80 | 76 | US Bank NA | ||||
TJX Cos. , Inc. (The) | Series BKNT | ||||||
2.750% due 06/15/21 | 246 | 244 | 2.125% due 10/28/19 | 250 | 248 | ||
2.250% due 09/15/26 | 10 | 9 | 2.502% due 10/23/20 (Ê) | 600 | 599 | ||
Toll Brothers Finance Corp. | 3.150% due 04/26/21 | 1,775 | 1,777 | ||||
4.375% due 04/15/23 | 30 | 29 | Valeant Pharmaceuticals International, | ||||
Toyota Motor Credit Corp. | Inc. | ||||||
2.495% due 11/14/19 (Ê) | 1,250 | 1,248 | 5.625% due 12/01/21 (Þ) | 30 | 30 | ||
5.500% due 03/01/23 (Þ) | 140 | 130 | |||||
Series GMTN | 9.000% due 12/15/25 (Þ) | 30 | 31 | ||||
2.800% due 07/13/22 | 245 | 240 | |||||
9.250% due 04/01/26 (Þ) | 20 | 21 | |||||
Transcontinental Gas Pipe Line Co. LLC | |||||||
7.850% due 02/01/26 | 220 | 268 | Valero Energy Corp. | ||||
4.000% due 03/15/28 (Þ) | 240 | 233 | 4.350% due 06/01/28 | 358 | 359 | ||
10.500% due 03/15/39 | 151 | 245 | |||||
Tyson Foods, Inc. | |||||||
3.950% due 08/15/24 | 237 | 236 | Verizon Communications, Inc. | ||||
3.500% due 11/01/24 | 20 | 19 | |||||
Unilever Capital Corp. | 3.376% due 02/15/25 | 178 | 171 | ||||
1.375% due 07/28/21 | 254 | 241 | |||||
2.625% due 08/15/26 | 40 | 35 | |||||
Union Pacific Corp. | 4.125% due 03/16/27 | 100 | 99 | ||||
3.750% due 07/15/25 | 60 | 60 | |||||
3.950% due 09/10/28 | 570 | 573 | 4.329% due 09/21/28 (Þ) | 324 | 321 | ||
4.375% due 09/10/38 | 220 | 221 | 4.500% due 08/10/33 | 180 | 174 | ||
4.500% due 09/10/48 | 540 | 545 | 5.250% due 03/16/37 | 515 | 528 | ||
Union Pacific Railroad Co. Pass-Through | 5.500% due 03/16/47 | 10 | 10 | ||||
Trust | 4.672% due 03/15/55 | 535 | 475 | ||||
Series 06-1 | Viacom, Inc. | ||||||
5.866% due 07/02/30 | 110 | 119 | 3.875% due 04/01/24 | 20 | 19 | ||
United Airlines Pass-Through Trust | 6.250% due 02/28/57 (Ê) | 1,125 | 1,079 | ||||
3.650% due 01/07/26 | 360 | 350 | Virginia Electric & Power Co. | ||||
Series B | Series B | ||||||
4.600% due 03/01/26 | 195 | 196 | 2.950% due 11/15/26 | 660 | 618 | ||
United Parcel Service, Inc. | Series C | ||||||
2.500% due 04/01/23 | 40 | 39 | 4.000% due 11/15/46 | 225 | 216 | ||
Visa, Inc. |
See accompanying notes which are an integral part of the financial statements.
74 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
2.200% due 12/14/20 | 250 | 246 | International Debt - 8.0% | ||||
3.150% due 12/14/25 | 150 | 145 | 1011778 B. C. Unlimited Liability Co. / | ||||
4.300% due 12/14/45 | 390 | 406 | New Red Finance, Inc. | ||||
Volkswagen Group of America Finance | 5.000% due 10/15/25 (Þ) | 50 | 47 | ||||
LLC | 1011778 B. C. Unlimited Liability Co. | ||||||
2.450% due 11/20/19 (Þ) | 425 | 420 | 1st Lien Term Loan B4 | ||||
4.344% due 02/17/24 (Ê) | 144 | 143 | |||||
Wachovia Capital Trust II | |||||||
2.848% due 01/15/27 (Ê) | 485 | 456 | ABN AMRO Bank NV | ||||
1.800% due 09/20/19 (Þ) | 244 | 240 | |||||
Walgreens Boots Alliance, Inc. | Abu Dhabi Government International | ||||||
2.700% due 11/18/19 | 256 | 255 | Bond | ||||
4.800% due 11/18/44 | 100 | 94 | Series C | ||||
Walmart, Inc. | 2.500% due 10/11/22 (Þ) | 200 | 192 | ||||
1.900% due 12/15/20 | 250 | 245 | Actavis Funding SCS | ||||
2.567% due 06/23/21 (Ê) | 200 | 200 | 3.000% due 03/12/20 (Þ) | 258 | 257 | ||
3.550% due 06/26/25 | 590 | 594 | ACWA Power Management and | ||||
3.700% due 06/26/28 | 150 | 151 | Investments One, Ltd. | ||||
Walt Disney Co. (The) | 5.950% due 12/15/39 (Þ) | 300 | 293 | ||||
2.508% due 06/05/20 (Ê) | 800 | 801 | AerCap Ireland Capital DAC / AerCap | ||||
2.750% due 08/16/21 | 264 | 260 | Global Aviation Trust | ||||
3.300% due 01/23/23 | 330 | 317 | |||||
Washington Prime Group, LP | AerCap Ireland Capital, Ltd. / AerCap | ||||||
5.950% due 08/15/24 | 221 | 213 | Global Aviation Trust | ||||
Waste Management, Inc. | 5.000% due 10/01/21 | 150 | 155 | ||||
3.500% due 05/15/24 | 190 | 188 | |||||
WEA Finance LLC / Westfield UK & | Alcoa Nederland Holding BV | ||||||
Europe Finance PLC | 6.750% due 09/30/24 (Þ) | 200 | 211 | ||||
2.700% due 09/17/19 (Þ) | 212 | 211 | Alibaba Group Holding, Ltd. | ||||
Wells Fargo & Co. | 3.125% due 11/28/21 | 239 | 237 | ||||
2.500% due 03/04/21 | 400 | 391 | Alimentation Couche-Tard, Inc. | ||||
3.661% due 03/04/21 (Ê) | 1,100 | 1,125 | 3.550% due 07/26/27 (Þ) | 220 | 208 | ||
4.600% due 04/01/21 | 431 | 445 | Allergan Funding SCS | ||||
3.069% due 01/24/23 | 470 | 457 | 3.450% due 03/15/22 | 40 | 39 | ||
3.589% due 10/31/23 (Ê) | 1,455 | 1,483 | 3.800% due 03/15/25 | 60 | 58 | ||
3.000% due 04/22/26 | 400 | 372 | 4.550% due 03/15/35 | 80 | 76 | ||
3.000% due 10/23/26 | 260 | 240 | 4.750% due 03/15/45 | 41 | 39 | ||
5.375% due 11/02/43 | 200 | 209 | Ambac LSNI LLC | ||||
4.650% due 11/04/44 | 10 | 10 | 7.337% due 02/12/23 (Ê)(Þ) | 2,379 | 2,414 | ||
4.400% due 06/14/46 | 230 | 210 | America Movil SAB de CV | ||||
4.750% due 12/07/46 | 150 | 145 | 5.000% due 10/16/19 | 230 | 235 | ||
Series GMTN | 5.000% due 03/30/20 | 535 | 550 | ||||
2.600% due 07/22/20 | 645 | 637 | Anglo American Capital PLC | ||||
4.300% due 07/22/27 | 520 | 512 | 3.625% due 09/11/24 (Þ) | 200 | 189 | ||
4.900% due 11/17/45 | 250 | 248 | ArcelorMittal | ||||
Western Gas Partners, LP | 6.250% due 02/25/22 | 110 | 117 | ||||
4.650% due 07/01/26 | 40 | 39 | Aristocrat International, Pty, Ltd. Term | ||||
Loan B3 | |||||||
WestRock MWV LLC | 4.105% due 10/19/24 (Ê) | 121 | 120 | ||||
7.375% due 09/01/19 | 310 | 325 | |||||
AstraZeneca PLC | |||||||
Williams Cos. , Inc. (The) | 2.375% due 11/16/20 | 580 | 569 | ||||
7.750% due 06/15/31 | 130 | 156 | 2.375% due 06/12/22 | 350 | 337 | ||
Series A | Australia & New Zealand Banking | ||||||
7.500% due 01/15/31 | 20 | 24 | Group, Ltd. | ||||
Williams Partners, LP | 2.831% due 08/19/20 (Ê)(Þ) | 1,000 | 1,006 | ||||
5.250% due 03/15/20 | 40 | 41 | Bacardi, Ltd. | ||||
4.300% due 03/04/24 | 160 | 161 | 5.300% due 05/15/48 (Þ) | 420 | 399 | ||
5.800% due 11/15/43 | 200 | 213 | Banco de Bogota SA | ||||
Wyndham Worldwide Corp. | Series EMTQ | ||||||
4.150% due 04/01/24 | 220 | 216 | 4.375% due 08/03/27 (Þ) | 223 | 208 | ||
177,194 | Banco Santander SA |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 75
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
3.848% due 04/12/23 | 600 | 587 | Canadian Oil Sands, Ltd. | ||||
4.379% due 04/12/28 | 755 | 722 | 4.500% due 04/01/22 (Þ) | 680 | 692 | ||
Bancolombia SA | CBQ Finance, Ltd. | ||||||
5.950% due 06/03/21 | 705 | 743 | 7.500% due 11/18/19 (Þ) | 205 | 214 | ||
Banistmo SA | CDP Financial, Inc. | ||||||
Series MTQ0 | 5.600% due 11/25/39 (Þ) | 215 | 275 | ||||
3.650% due 09/19/22 (Þ) | 250 | 236 | Cenovus Energy, Inc. | ||||
Bank of China Hong Kong, Ltd. | 4.250% due 04/15/27 | 710 | 684 | ||||
5.550% due 02/11/20 (Þ) | 231 | 238 | 6.750% due 11/15/39 | 120 | 132 | ||
Bank of Montreal | Coca-Cola FEMSA SAB de CV | ||||||
2.100% due 12/12/19 | 230 | 227 | 4.625% due 02/15/20 | 234 | 239 | ||
1.900% due 08/27/21 | 420 | 402 | Colombia Government International | ||||
Bank of Nova Scotia (The) | Bond | ||||||
Series BKNT | 5.625% due 02/26/44 | 270 | 287 | ||||
2.500% due 01/08/21 | 220 | 216 | Commonwealth Bank of Australia | ||||
2.450% due 09/19/22 | 380 | 366 | 5.000% due 10/15/19 (Þ) | 30 | 31 | ||
Barclays PLC | 3.900% due 07/12/47 (Þ) | 150 | 140 | ||||
4.338% due 05/16/24 (Ê) | 610 | 602 | Cooperatieve Rabobank UA | ||||
4.972% due 05/16/29 (Ê) | 1,130 | 1,119 | 4.625% due 12/01/23 | 250 | 252 | ||
8.250% due 12/31/49 (Ê)(ƒ) | 165 | 168 | 4.375% due 08/04/25 | 650 | 637 | ||
BAT International Finance PLC | Credit Agricole SA | ||||||
2.750% due 06/15/20 (Þ) | 257 | 254 | 3.250% due 10/04/24 (Þ) | 730 | 687 | ||
BBVA Bancomer SA | Credit Suisse Group AG | ||||||
6.750% due 09/30/22 (Þ) | 485 | 517 | 6.250% due 12/31/49 (Ê)(ƒ)(Þ) | 505 | 494 | ||
Credit Suisse Group Funding Guernsey, | |||||||
Bharti Airtel, Ltd. | Ltd. | ||||||
4.375% due 06/10/25 (Þ) | 500 | 460 | 4.875% due 05/15/45 | 300 | 296 | ||
BHP Billiton Finance USA, Ltd. | Danone SA | ||||||
2.875% due 02/24/22 | 5 | 5 | 1.691% due 10/30/19 (Þ) | 227 | 223 | ||
5.000% due 09/30/43 | 320 | 359 | 2.077% due 11/02/21 (Þ) | 690 | 660 | ||
BNP Paribas SA | Deutsche Telekom International Finance | ||||||
3.500% due 03/01/23 (Þ) | 415 | 404 | BV | ||||
3.375% due 01/09/25 (Þ) | 390 | 368 | 1.950% due 09/19/21 (Þ) | 251 | 239 | ||
4.375% due 03/01/33 (Ê)(Þ) | 775 | 727 | 4.375% due 06/21/28 (Þ) | 890 | 883 | ||
BOC Aviation, Ltd. | DNB Nor Bank ASA | ||||||
3.000% due 03/30/20 (Þ) | 241 | 239 | 2.573% due 02/10/20 (Ê)(~) | 1,000 | 1,000 | ||
BP Capital Markets PLC | Dryden 37 Senior Loan Fund | ||||||
3.245% due 05/06/22 | 10 | 10 | Series 2017-37A Class AR | ||||
3.216% due 11/28/23 | 700 | 686 | 2.820% due 01/15/31 (Ê)(Þ) | 1,300 | 1,299 | ||
3.119% due 05/04/26 | 120 | 115 | Dryden 50 Senior Loan Fund | ||||
Series EN1I | Series 2017-50A Class A1 | ||||||
1.768% due 09/19/19 | 220 | 217 | 3.568% due 07/15/30 (Ê)(Þ) | 1,230 | 1,231 | ||
Braskem Netherlands Finance BV | Ecopetrol SA | ||||||
3.500% due 01/10/23 (Þ) | 485 | 456 | 5.375% due 06/26/26 | 60 | 62 | ||
4.500% due 01/10/28 (Þ) | 305 | 281 | 5.875% due 05/28/45 | 250 | 237 | ||
Brazilian Government International Bond | Empresa Electrica Angamos SA | ||||||
2.625% due 01/05/23 | 220 | 200 | 4.875% due 05/25/29 (Þ) | 209 | 204 | ||
5.625% due 01/07/41 | 170 | 148 | Enbridge, Inc. | ||||
British Telecommunications PLC | 3.700% due 07/15/27 | 222 | 210 | ||||
9.625% due 12/15/30 | 165 | 236 | Enel Finance International NV | ||||
Brookfield Finance LLC | Series 658A | ||||||
4.000% due 04/01/24 | 218 | 216 | 3.500% due 04/06/28 (Þ) | 250 | 225 | ||
Brookfield Finance, Inc. | Ensco PLC | ||||||
4.250% due 06/02/26 | 211 | 208 | 8.000% due 01/31/24 | 29 | 29 | ||
Canadian Imperial Bank of Commerce | Equate Petrochemical BV | ||||||
Series BKNT | 4.250% due 11/03/26 (Þ) | 200 | 194 | ||||
2.100% due 10/05/20 | 246 | 240 | ESAL GmbH |
See accompanying notes which are an integral part of the financial statements.
76 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
6.250% due 02/05/23 (Þ) | 445 | 414 | Lukoil International Finance BV | |||||
Fairfax Financial Holdings, Ltd. | 6.125% due 11/09/20 (Þ) | 450 | 471 | |||||
4.850% due 04/17/28 (Þ) | 285 | 282 | 4.563% due 04/24/23 (Þ) | 212 | 214 | |||
Gazprom Capital SA | LYB International Finance BV | |||||||
3.850% due 02/06/20 (Þ) | 240 | 240 | 4.000% due 07/15/23 | 260 | 260 | |||
GE Capital International Funding Co. | Marks And Spencer PLC | |||||||
Unlimited Co | 7.125% due 12/01/37 (Þ) | 207 | 230 | |||||
2.342% due 11/15/20 | 245 | 239 | Medtronic Global Holdings SCA | |||||
GlaxoSmithKline Capital PLC | 3.350% due 04/01/27 | 160 | 156 | |||||
2.850% due 05/08/22 | 306 | 301 | Mexico Generadora de Energia S de rl | |||||
Grupo Bimbo SAB de CV | 5.500% due 12/06/32 (Þ) | 186 | 180 | |||||
5.950% due 12/31/99 (Ê)(ƒ)(Þ) | 480 | 474 | Mexico Government International Bond | |||||
HSBC Bank PLC | 6.050% due 01/11/40 | 30 | 33 | |||||
7.650% due 05/01/25 | 375 | 437 | 4.750% due 03/08/44 | 20 | 19 | |||
HSBC Holdings PLC | 4.600% due 02/10/48 | 500 | 460 | |||||
2.926% due 05/18/21 (Ê) | 825 | 826 | Mitsubishi UFJ Financial Group, Inc. | |||||
3.950% due 05/18/24 (Ê) | 380 | 379 | 2.998% due 02/22/22 | 60 | 59 | |||
3.900% due 05/25/26 | 220 | 215 | ||||||
4.041% due 03/13/28 (Ê) | 410 | 398 | Mizuho Bank, Ltd. | |||||
2.737% due 10/01/19 (Ê)(~) | 500 | 501 | ||||||
4.583% due 06/19/29 (Ê) | 570 | 576 | Mondelez International Holdings | |||||
6.250% due 12/31/99 (Ê)(ƒ) | 200 | 196 | Netherlands BV | |||||
6.500% due 12/31/99 (Ê)(ƒ) | 200 | 192 | 1.625% due 10/28/19 (Þ) | 228 | 224 | |||
Indonesia Government International | Myriad International Holdings BV | |||||||
Bond | 6.000% due 07/18/20 (Þ) | 206 | 215 | |||||
4.350% due 01/11/48 | 240 | 215 | 4.850% due 07/06/27 (Þ) | 250 | 245 | |||
Series REGS | National Australia Bank, Ltd. | |||||||
3.750% due 04/25/22 | 430 | 426 | 2.839% due 05/22/20 (Ê)(Þ) | 450 | 451 | |||
ING Bank NV | National Bank of Canada | |||||||
5.800% due 09/25/23 (Þ) | 870 | 922 | ||||||
Series 575 | ||||||||
Intesa Sanpaolo SpA | 2.150% due 06/12/20 | 265 | 260 | |||||
3.125% due 07/14/22 (Þ) | 200 | 185 | ||||||
3.375% due 01/12/23 (Þ) | 450 | 414 | Nokia OYJ | |||||
3.875% due 07/14/27 (Þ) | 520 | 449 | 6.625% due 05/15/39 | 740 | 771 | |||
3.875% due 01/12/28 (Þ) | 245 | 210 | Nordea Bank AB | |||||
2.789% due 05/29/20 (Ê)(Þ) | 450 | 451 | ||||||
Inversiones CMPC SA | ||||||||
4.500% due 04/25/22 (Þ) | 214 | 216 | NOVA Chemicals Corp. | |||||
5.250% due 06/01/27 (Þ) | 420 | 391 | ||||||
Itau CorpBanca SA | ||||||||
3.875% due 09/22/19 (Þ) | 218 | 219 | Numericable Group SA Term Loan B12 | |||||
5.348% due 01/05/26 (Ê) | 117 | 115 | ||||||
KazMunayGas National Co. JSC | ||||||||
5.375% due 04/24/30 (Þ) | 200 | 200 | Nutrien, Ltd. | |||||
7.125% due 05/23/36 | 183 | 235 | ||||||
Korea Gas Corp. | ||||||||
2.750% due 07/20/22 (Þ) | 510 | 491 | NXP BV / NXP Funding LLC | |||||
4.625% due 06/15/22 (Þ) | 450 | 457 | ||||||
Korea Hydro & Nuclear Power Co. , Ltd. | ||||||||
4.750% due 07/13/21 (Þ) | 229 | 236 | Pernod Ricard SA | |||||
4.450% due 01/15/22 (Þ) | 150 | 154 | ||||||
Korea Southern Power Co. , Ltd. | ||||||||
3.000% due 01/29/21 (Þ) | 241 | 237 | Peru Government International Bond | |||||
6.550% due 03/14/37 | 30 | 37 | ||||||
Kuwait International Government Bond | 5.625% due 11/18/50 | 110 | 128 | |||||
Series 000Q | ||||||||
3.500% due 03/20/27 (Þ) | 210 | 204 | Petrobras Global Finance BV | |||||
Lions Gate Entertainment Corp. Term | 6.250% due 03/17/24 | 100 | 99 | |||||
Loan B | 5.299% due 01/27/25 (Þ) | 1,105 | 1,021 | |||||
4.341% due 03/19/25 (~)(Ê) | 34 | 33 | Petroleos Mexicanos | |||||
Lloyds Banking Group PLC | 4.625% due 09/21/23 | 585 | 577 | |||||
2.907% due 11/07/23 (Ê) | 650 | 619 | 6.875% due 08/04/26 | 220 | 231 | |||
4.375% due 03/22/28 | 200 | 197 | 6.625% due 06/15/35 | 10 | 10 | |||
Lloyds TSB Bank PLC | 5.625% due 01/23/46 | 225 | 190 | |||||
6.500% due 09/14/20 (Þ) | 228 | 241 | Province of Quebec Canada |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 77
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||
Principal | Fair | Principal | Fair | |||||
Amount ($) | Value | Amount ($) | Value | |||||
or Shares | $ | or Shares | $ | |||||
2.642% due 07/21/19 (Ê) | 480 | 481 | Standard Chartered PLC | |||||
Provincia de Buenos Aires | 5.700% due 03/26/44 (Þ) | 250 | 261 | |||||
6.500% due 02/15/23 (Þ) | 140 | 128 | Sumitomo Mitsui Banking Corp. | |||||
PT Pertamina (Persero) | 2.092% due 10/18/19 | 253 | 250 | |||||
4.300% due 05/20/23 (Þ) | 520 | 514 | Sumitomo Mitsui Financial Group, Inc. | |||||
Qatar Government International Bond | Series 5FXD | |||||||
5.103% due 04/23/48 (Þ) | 205 | 204 | 2.058% due 07/14/21 | 90 | 86 | |||
Reckitt Benckiser Treasury Services PLC | Suncor Energy, Inc. | |||||||
2.895% due 06/24/22 (Ê)(Þ) | 685 | 684 | 3.600% due 12/01/24 | 264 | 261 | |||
Republic of Argentina Government | Svenska Handelsbanken AB | |||||||
International Bond | Series BKNT | |||||||
5.625% due 01/26/22 | 340 | 318 | 2.800% due 05/24/21 (Ê) | 410 | 410 | |||
7.500% due 04/22/26 | 170 | 157 | 3.350% due 05/24/21 | 250 | 250 | |||
6.875% due 01/11/48 | 350 | 264 | ||||||
Republic of Ecuador Government | Telefonica Emisiones SAU | |||||||
International Bond | 5.134% due 04/27/20 | 40 | 41 | |||||
7.875% due 01/23/28 (Þ) | 200 | 168 | 5.213% due 03/08/47 | 150 | 144 | |||
Republic of Poland Government | Tencent Holdings, Ltd. | |||||||
International Bond | 2.875% due 02/11/20 (Þ) | 241 | 240 | |||||
5.125% due 04/21/21 | 400 | 420 | Teva Pharmaceutical Finance Co. BV | |||||
Royal Bank of Canada | 3.650% due 11/10/21 | 20 | 19 | |||||
2.150% due 10/26/20 | 70 | 68 | 2.950% due 12/18/22 | 40 | 36 | |||
Series GMTN | Teva Pharmaceutical Finance | |||||||
2.125% due 03/02/20 | 580 | 571 | Netherlands III BV | |||||
2.150% due 03/06/20 | 246 | 242 | 1.700% due 07/19/19 | 30 | 29 | |||
3.200% due 04/30/21 | 70 | 70 | 2.200% due 07/21/21 | 200 | 185 | |||
Royal Bank of Scotland Group PLC | Toronto-Dominion Bank (The) | |||||||
6.400% due 10/21/19 | 180 | 187 | 2.250% due 11/05/19 | 246 | 244 | |||
6.125% due 12/15/22 | 70 | 74 | 2.700% due 05/01/20 (Ê) | 1,105 | 1,100 | |||
3.875% due 09/12/23 | 665 | 646 | 2.125% due 04/07/21 | 405 | 393 | |||
5.125% due 05/28/24 | 220 | 222 | 3.250% due 06/11/21 | 90 | 90 | |||
4.519% due 06/25/24 (Ê) | 200 | 200 | Total Capital International SA | |||||
Sanofi | 2.750% due 06/19/21 | 242 | 240 | |||||
4.000% due 03/29/21 | 232 | 238 | Total Capital SA | |||||
Santander UK PLC | 4.250% due 12/15/21 | 230 | 238 | |||||
2.375% due 03/16/20 | 40 | 39 | Trust F/1401 | |||||
Schlumberger Norge AS | 5.250% due 01/30/26 (Þ) | 212 | 206 | |||||
4.200% due 01/15/21 (Þ) | 70 | 72 | UBS AG | |||||
Shell International Finance BV | 2.450% due 12/01/20 (Þ) | 845 | 826 | |||||
4.375% due 03/25/20 | 10 | 10 | UBS Group Funding Switzerland AG | |||||
2.250% due 11/10/20 | 246 | 242 | 3.491% due 05/23/23 (Þ) | 270 | 264 | |||
2.875% due 05/10/26 | 40 | 38 | 4.253% due 03/23/28 (Þ) | 200 | 199 | |||
4.375% due 05/11/45 | 220 | 225 | Unitymedia Finance LLC 1st Lien Term | |||||
4.000% due 05/10/46 | 80 | 77 | Loan D | |||||
4.323% due 01/15/26 (Ê) | 170 | 169 | ||||||
Shinhan Bank Co. , Ltd. | ||||||||
2.250% due 04/15/20 (Þ) | 229 | 224 | Vale Overseas, Ltd. | |||||
6.875% due 11/21/36 | 270 | 303 | ||||||
Shire Acquisitions Investments | 6.875% due 11/10/39 | 190 | 215 | |||||
1.900% due 09/23/19 | 815 | 803 | Valeant Pharmaceuticals International, | |||||
Siemens Financieringsmaatschappij NV | Inc. | |||||||
2.150% due 05/27/20 (Þ) | 246 | 242 | 7.000% due 03/15/24 (Þ) | 90 | 94 | |||
Skandinaviska Enskilda Banken AB | Valeant Pharmaceuticals International, | |||||||
2.751% due 05/17/21 (Ê)(Þ) | 635 | 634 | Inc. Term Loan | |||||
Smurfit Kappa Treasury Funding, Ltd. | 4.982% due 05/17/25 (Ê) | 100 | 99 | |||||
7.500% due 11/20/25 | 125 | 148 | Validus Holdings, Ltd. | |||||
Southern Copper Corp. | 8.875% due 01/26/40 | 350 | 499 | |||||
6.750% due 04/16/40 | 10 | 11 | Virgin Media Bristol LLC 1st Lien Term | |||||
5.250% due 11/08/42 | 440 | 435 | Loan K | |||||
4.573% due 01/15/26 (Ê) | 107 | 106 |
See accompanying notes which are an integral part of the financial statements.
78 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Vodafone Group PLC | 4.100% due 04/30/25 (Ê) | 179 | 178 | ||||||
4.125% due 05/30/25 | 236 | 235 | CityCenter Holdings, LLC Term Loan B | ||||||
4.375% due 05/30/28 | 260 | 257 | 4.344% due 04/18/24 (Ê) | 22 | 22 | ||||
7.875% due 02/15/30 | 215 | 269 | CSC Holdings, LLC 1st Lien Term Loan | ||||||
5.250% due 05/30/48 | 140 | 140 | 4.323% due 07/17/25 (Ê) | 164 | 163 | ||||
Voya CLO, Ltd. | CWGS Group LLC Term Loan | ||||||||
Series 2017-2A Class A1R | 4.775% due 11/08/23 (Ê) | 69 | 68 | ||||||
3.603% due 04/17/30 (Ê)(Þ) | 1,428 | 1,428 | Dell International LLC 1st Lien Term | ||||||
Westpac Banking Corp. | Loan B | ||||||||
2.300% due 05/26/20 | 10 | 10 | 4.100% due 09/07/23 (Ê) | 109 | 109 | ||||
2.600% due 11/23/20 | 80 | 79 | First Data Corp. 1st Lien Term Loan | ||||||
Woori Bank | 4.091% due 04/26/24 (Ê) | 248 | 246 | ||||||
5.875% due 04/13/21 (Þ) | 232 | 243 | Golden Nugget, Inc. 1st Lien Term Loan | ||||||
Ziggo Secured Finance Partnership 1st | 4.796% due 10/04/23 (Ê) | 77 | 76 | ||||||
Lien Term Loan E | 4.844% due 10/04/23 (Ê) | 100 | 100 | ||||||
4.573% due 04/27/25 (Ê) | 56 | 56 | HCA, Inc. Term Loan B10 | ||||||
71,382 | 4.094% due 03/07/25 (Ê) | 179 | 179 | ||||||
Loan Agreements - 0.8% | Hilton Worldwide Finance LLC Term | ||||||||
Air Medical Group Holdings, Inc. 1st | Loan B2 | ||||||||
Lien Term Loan B | 3.841% due 10/25/23 (Ê) | 180 | 180 | ||||||
5.280% due 04/28/22 (Ê) | 117 | 114 | Jaguar Holding Co. II Term Loan | ||||||
Albertson's LLC Term Loan B4 | 4.594% due 08/18/22 (Ê) | 144 | 144 | ||||||
4.844% due 08/25/21 (Ê) | 68 | 68 | Level 3 Financing, Inc. Term Loan B | ||||||
Albertson's LLC Term Loan B6 | 4.334% due 02/22/24 (Ê) | 180 | 179 | ||||||
5.319% due 06/22/23 (Ê) | 113 | 112 | M A Finance Co. LLC 1st Lien Term | ||||||
American Axle & Manufacturing, Inc. | Loan B | ||||||||
1st Lien Term Loan B | 4.844% due 06/21/24 (Ê) | 4 | 4 | ||||||
4.350% due 04/06/24 (Ê) | 44 | 44 | MacDermid, Inc. Term Loan B6 | ||||||
American Builders Contractors Co. , Inc. | 5.094% due 06/07/23 (Ê) | 414 | 414 | ||||||
1st Lien Term Loan B2 | MGM Growth Properties Operating | ||||||||
4.094% due 10/31/23 (Ê) | 168 | 166 | Partnership, LP Term Loan B | ||||||
Aramark Services, Inc. Term Loan B1 | 4.094% due 04/25/23 (Ê) | 244 | 243 | ||||||
4.084% due 03/11/25 (Ê) | 80 | 80 | Michaels Stores, Inc. Term Loan B | ||||||
Avolon LLC 1st Lien Term Loan B3 | 4.557% due 01/28/23 (Ê) | 47 | 46 | ||||||
4.088% due 01/15/25 (Ê) | 178 | 176 | 4.588% due 01/28/23 (Ê) | 8 | 8 | ||||
Beacon Roofing Supply, Inc. Term Loan | 4.594% due 01/28/23 (Ê) | 125 | 124 | ||||||
B | MultiPlan, Inc. Term Loan B | ||||||||
4.285% due 01/02/25 (Ê) | 161 | 159 | 5.084% due 05/25/23 (Ê) | 179 | 178 | ||||
Berry Plastics Group, Inc. 1st Lien Term | ON Semiconductor Corp. 1st Lien Term | ||||||||
Loan Q | Loan B | ||||||||
4.046% due 10/01/22 (Ê) | 56 | 56 | 3.844% due 03/31/23 (Ê) | 72 | 72 | ||||
4.094% due 10/01/22 (Ê) | 86 | 86 | PAREXEL International Corp. 1st Lien | ||||||
Berry Plastics Group, Inc. 1st Lien Term | Term Loan B | ||||||||
Loan R | 4.844% due 09/29/24 (Ê) | 30 | 30 | ||||||
4.046% due 01/19/24 (Ê) | 35 | 35 | Party City Holdings, Inc. 1st Lien Term | ||||||
Boyd Gaming Corp. Term Loan B | Loan | ||||||||
4.488% due 09/15/23 (Ê) | 52 | 52 | 4.850% due 08/19/22 (Ê) | 101 | 101 | ||||
Caesars Resort Collection LLC 1st Lien | 5.280% due 08/19/22 (Ê) | 50 | 50 | ||||||
Term Loan B | PetSmart, Inc. Term Loan B2 | ||||||||
4.844% due 12/22/24 (Ê) | 177 | 176 | 5.010% due 03/10/22 (Ê) | 192 | 158 | ||||
Catalent Pharma Solutions, Inc. Term | Post Holdings, Inc. Incremental Term | ||||||||
Loan B | Loan | ||||||||
4.344% due 05/20/21 (Ê) | 117 | 116 | 4.100% due 05/24/24 (Ê) | 180 | 179 | ||||
CenturyLink, Inc. Term Loan B | Prime Security Services Borrower LLC | ||||||||
4.844% due 01/31/25 (Ê) | 54 | 53 | Term Loan B1 | ||||||
Change Healthcare Holdings LLC 1st | 4.844% due 05/02/22 (Ê) | 157 | 156 | ||||||
Lien Term Loan B | Quikrete Holdings, Inc. 1st Lien Term | ||||||||
4.844% due 03/01/24 (Ê) | 195 | 194 | Loan B | ||||||
Charter Communications Operating LLC | 4.844% due 11/15/23 (Ê) | 174 | 173 | ||||||
1st Lien Term Loan B |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 79
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Reynolds Group Holdings, Inc. 1st Lien | BCAP LLC Trust | ||||||
Term Loan B | Series 2010-RR7 Class 3A12 | ||||||
4.844% due 02/05/23 (Ê) | 178 | 177 | 2.798% due 08/26/35 (~)(Ê)(Þ) | 955 | 813 | ||
RPI Finance Trust Term Loan B | Series 2011-R11 Class 15A1 | ||||||
4.334% due 03/27/23 (Ê) | 182 | 181 | 3.400% due 10/26/33 (~)(Å)(Ê) | 126 | 128 | ||
Scientific Games International, Inc. 1st | |||||||
Lien Term Loan B5 | Series 2011-R11 Class 20A5 | ||||||
4.906% due 08/14/24 (Ê) | 183 | 182 | 3.411% due 03/26/35 (~)(Ê)(Þ) | 47 | 47 | ||
Seattle SpinCo, Inc. 1st Lien Term Loan | Bear Stearns Alternative-A Trust | ||||||
B3 | Series 2005-2 Class 1M1 | ||||||
4.844% due 06/21/24 (Ê) | 27 | 27 | 1.342% due 03/25/35 (Ê) | 900 | 855 | ||
Sinclair Television Group, Inc. 1st Lien | Series 2005-4 Class 24A1 | ||||||
Term Loan B | 3.031% due 05/25/35 (~)(Ê) | 354 | 366 | ||||
3.913% due 12/12/24 (~)(Ê) | 140 | 139 | |||||
Sprint Communications, Inc. 1st Lien | Bear Stearns ARM Trust | ||||||
Term Loan B | Series 2004-3 Class 2A | ||||||
4.625% due 02/02/24 (Ê) | 17 | 17 | 3.063% due 07/25/34 (~)(Ê) | 168 | 169 | ||
Sungard Availability Services Capital, | Bear Stearns Commercial Mortgage | ||||||
Inc. 1st Lien Term Loan B | Securities Trust | ||||||
11.977% due 10/01/22 (Ê) | 318 | 312 | Series 2007-T26 Class AM | ||||
Trans Union LLC 1st Lien Term Loan B3 | 5.513% due 01/12/45 (~)(Ê) | 139 | 140 | ||||
4.094% due 04/09/23 (Ê) | 181 | 181 | Blackstone Commercial Mortgage Trust | ||||
Univision Communications, Inc. Term | Series 2018-BIOA Class E | ||||||
Loan C5 | 3.601% due 03/15/37 (Å)(Ê) | 1,575 | 1,567 | ||||
4.844% due 03/15/24 (Ê) | 210 | 203 | BX Trust | ||||
UPC Financing Partnership 1st Lien | |||||||
Term Loan AR | Series 2018-BILT Class C | ||||||
4.573% due 01/15/26 (Ê) | 175 | 173 | 3.120% due 05/15/35 (Ê)(Þ) | 1,650 | 1,646 | ||
Series 2018-MCSF Class A | |||||||
VICI Properties, Inc. Term Loan | 2.477% due 04/15/35 (Ê)(Þ) | 1,036 | 1,026 | ||||
4.084% due 12/15/24 (Ê) | 86 | 86 | |||||
Western Digital Corp. 1st Lien Term | BXP Trust | ||||||
Loan B4 | Series 2017-GM Class A | ||||||
3.844% due 04/29/23 (Ê) | 52 | 52 | 3.379% due 06/13/39 (Þ) | 416 | 404 | ||
XPO Logistics, Inc. Term Loan | CFCRE Commercial Mortgage Trust | ||||||
4.091% due 02/23/25 (Ê) | 175 | 174 | Series 2016-C3 Class A3 | ||||
7,171 | 3.865% due 01/10/48 | 1,150 | 1,162 | ||||
Mortgage-Backed Securities - 20.4% | CHL Mortgage Pass-Through Trust | ||||||
A10 Securitization LLC | Series 2005-3 Class 1A2 | ||||||
Series 2017-AA Class B1 | 1.814% due 04/25/35 (Ê) | 9 | 8 | ||||
0.071% due 05/15/36 (Å) | 961 | 937 | Citigroup Commercial Mortgage Trust | ||||
American Home Mortgage Investment | Series 2013-375P Class A | ||||||
Trust | 3.251% due 05/10/35 (Þ) | 380 | 377 | ||||
Series 2004-4 Class 4A | Series 2015-GC29 Class C | ||||||
3.844% due 02/25/45 (Ê) | 19 | 20 | 4.293% due 04/10/48 (~)(Ê) | 100 | 98 | ||
Banc of America Commercial Mortgage | Citigroup Mortgage Loan Trust, Inc. | ||||||
Trust | Series 2005-2 Class 1A2A | ||||||
Series 2007-2 Class AJ | 3.131% due 05/25/35 (~)(Ê) | 416 | 426 | ||||
5.634% due 04/10/49 (~)(Ê) | 48 | 29 | |||||
Series 2005-11 Class A2A | |||||||
Banc of America Funding Trust | 3.630% due 10/25/35 (Ê) | 8 | 8 | ||||
Series 2005-D Class A1 | |||||||
3.509% due 05/25/35 (~)(Ê) | 442 | 462 | Series 2006-AR9 Class 1M1 | ||||
0.865% due 11/25/36 (Ê) | 1,060 | 909 | |||||
Series 2006-6 Class 2A1 | |||||||
6.000% due 08/25/36 | 983 | 959 | Series 2015-2 Class 5A1 | ||||
Barclays Commercial Mortgage | 0.444% due 03/25/47 (Å)(Ê) | 309 | 302 | ||||
Securities LLC | Cold Storage Trust | ||||||
Series 2017-GLKS Class E | Series 2017-ICE3 Class D | ||||||
4.101% due 11/15/34 (Å)(Ê) | 1,372 | 1,373 | 3.094% due 04/15/24 (Ê)(Þ) | 510 | 512 | ||
Bayview Commercial Asset Trust | Commercial Mortgage Trust | ||||||
Series 2007-2A Class A1 | Series 2013-300P Class A1 | ||||||
1.507% due 07/25/37 (Å)(Ê) | 1,217 | 1,197 | 4.353% due 08/10/30 (Þ) | 390 | 404 |
See accompanying notes which are an integral part of the financial statements.
80 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2013-CR6 Class B | 5.000% due 2031 | 139 | 148 | ||||
3.397% due 03/10/46 (Þ) | 211 | 207 | 6.000% due 2032 | 30 | 34 | ||
Series 2013-CR9 Class ASB | 3.000% due 2033 | 1,132 | 1,122 | ||||
3.834% due 07/10/45 | 840 | 854 | 3.500% due 2033 | 862 | 874 | ||
Series 2014-277P Class A | 5.000% due 2033 | 6 | 7 | ||||
3.732% due 08/10/49 (Ê)(Þ) | 410 | 412 | 3.500% due 2034 | 181 | 184 | ||
Series 2014-UBS4 Class A1 | 5.500% due 2034 | 22 | 23 | ||||
1.309% due 08/10/47 | 48 | 48 | 4.500% due 2035 | 512 | 540 | ||
Series 2015-LC19 Class A4 | 5.500% due 2037 | 140 | 151 | ||||
3.183% due 02/10/48 | 191 | 186 | 5.500% due 2038 | 575 | 625 | ||
Series 2015-LC19 Class B | 6.000% due 2039 | 54 | 59 | ||||
3.829% due 02/10/48 (~)(Ê) | 100 | 99 | 4.000% due 2040 | 335 | 346 | ||
Series 2016-GCT Class A | 5.500% due 2040 | 696 | 759 | ||||
2.681% due 08/10/29 (Þ) | 140 | 137 | 6.000% due 2040 | 162 | 178 | ||
Countrywide Alternative Loan Trust | 4.000% due 2041 | 581 | 598 | ||||
Series 2007-16CB Class 1A5 | 6.000% due 2041 | 171 | 188 | ||||
1.156% due 08/25/37 (Ê) | 516 | 441 | 3.500% due 2043 | 1,302 | 1,301 | ||
Credit Suisse Mortgage Capital | 4.000% due 2044 | 1,141 | 1,178 | ||||
Certificates | 3.500% due 2045 | 1,847 | 1,844 | ||||
Series 2017-CHOP Class G | 3.000% due 2046 | 613 | 595 | ||||
6.446% due 07/15/32 (Ê)(Þ) | 600 | 599 | 4.000% due 2046 | 1,911 | 1,958 | ||
Credit Suisse Mortgage Trust | 4.500% due 2046 | 609 | 643 | ||||
Series 2018-J1 Class A2 | 3.000% due 2047 | 730 | 709 | ||||
3.500% due 02/25/48 (~)(Ê) | 1,275 | 1,244 | 3.500% due 2047 | 676 | 673 | ||
CSAIL Commercial Mortgage Trust | 4.000% due 2047 | 4,299 | 4,388 | ||||
Series 2015-C4 Class E | 4.500% due 2047 | 2,649 | 2,762 | ||||
3.585% due 11/15/48 (~)(Ê) | 500 | 380 | 4.000% due 2056 | 1,377 | 1,412 | ||
CSMC Mortgage-Backed Trust | 4.500% due 2056 | 343 | 361 | ||||
Series 2011-4R Class 5A1 | 5.500% due 2056 | 328 | 357 | ||||
3.588% due 05/27/36 (~)(Å)(Ê) | 24 | 24 | 3.500% due 2057 | 996 | 989 | ||
4.000% due 2057 | 186 | 191 | |||||
DBJPM Mortgage Trust | 4.500% due 2057 | 297 | 311 | ||||
Series 2016-C3 Class A5 | |||||||
2.890% due 09/10/49 | 240 | 226 | 15 Year TBA(Ï) | ||||
Deutsche Mortgage Securities, Inc. Re- | 3.000% | 200 | 199 | ||||
REMIC Trust | 3.500% | 3,200 | 3,238 | ||||
Series 2007-WM1 Class A1 | 30 Year TBA(Ï) | ||||||
4.078% due 06/27/37 (~)(Ê)(Þ) | 541 | 547 | 3.000% | 7,665 | 7,415 | ||
Fannie Mae | 3.500% | 7,790 | 7,740 | ||||
3.950% due 2020 | 405 | 412 | 4.000% | 800 | 816 | ||
4.000% due 2020 | 69 | 70 | 4.500% | 6,078 | 6,327 | ||
5.500% due 2020 | 5 | 5 | 5.000% | 1,700 | 1,801 | ||
4.250% due 2021 | 395 | 407 | Series 2016-C04 Class 1M2 | ||||
4.283% due 2021 | 549 | 564 | 4.726% due 01/25/29 (Ê) | 50 | 57 | ||
2.500% due 2022 | 267 | 264 | Fannie Mae Connecticut Avenue | ||||
5.500% due 2022 | 37 | 38 | Securities | ||||
2.000% due 2023 | 964 | 944 | Series 2014-C02 Class 1M2 | ||||
2.500% due 2024 | 440 | 439 | 3.134% due 05/25/24 (Ê) | 882 | 936 | ||
4.500% due 2024 | 4 | 5 | Series 2014-C04 Class 1M2 | ||||
2.500% due 2025 | 330 | 329 | 6.138% due 11/25/24 (Ê) | 973 | 1,113 | ||
4.000% due 2025 | 13 | 13 | Series 2016-C06 Class 1M1 | ||||
4.500% due 2025 | 197 | 205 | 2.538% due 04/25/29 (Ê) | 1,031 | 1,040 | ||
4.000% due 2026 | 148 | 152 | Fannie Mae REMIC Trust | ||||
2.940% due 2027 | 100 | 96 | Series 2004-W5 Class A1 | ||||
4.500% due 2027 | 13 | 13 | 6.000% due 02/25/47 | 185 | 204 | ||
2.560% due 2028 | 370 | 341 | Fannie Mae REMICS | ||||
3.500% due 2030 | 143 | 145 | Series 1999-56 Class Z | ||||
2.600% due 2031 | 375 | 337 | 7.000% due 12/18/29 | 13 | 14 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 81
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2005-24 Class ZE | Freddie Mac | ||||||
5.000% due 04/25/35 | 257 | 275 | 4.500% due 2020 | 149 | 150 | ||
Series 2009-96 Class DB | 2.000% due 2028 | 1,424 | 1,364 | ||||
4.000% due 11/25/29 | 193 | 201 | 3.500% due 2030 | 136 | 137 | ||
Series 2012-35 Class SC | 4.500% due 2034 | 182 | 191 | ||||
Interest Only STRIP | 5.500% due 2038 | 421 | 465 | ||||
5.266% due 04/25/42 (Ê) | 29 | 5 | 6.000% due 2038 | 86 | 96 | ||
Series 2012-55 Class PC | 5.000% due 2040 | 274 | 293 | ||||
3.500% due 05/25/42 | 700 | 699 | 4.000% due 2041 | 1,415 | 1,461 | ||
Series 2013-54 Class BS | 4.500% due 2041 | 266 | 279 | ||||
Interest Only STRIP | 5.500% due 2041 | 277 | 300 | ||||
4.918% due 06/25/43 (Ê) | 123 | 21 | 3.500% due 2043 | 1,094 | 1,100 | ||
Series 2013-124 Class SB | 4.000% due 2044 | 664 | 683 | ||||
Interest Only STRIP | 3.500% due 2045 | 1,903 | 1,905 | ||||
4.718% due 12/25/43 (Ê) | 134 | 22 | 4.000% due 2045 | 1,596 | 1,634 | ||
Series 2016-23 Class ST | 3.500% due 2046 | 2,098 | 2,092 | ||||
4.000% due 2046 | 2,159 | 2,210 | |||||
Interest Only STRIP | 4.500% due 2046 | 396 | 413 | ||||
5.547% due 11/25/45 (Ê) | 449 | 75 | |||||
3.000% due 2047 | 728 | 707 | |||||
Series 2016-61 Class BS | 4.000% due 2047 | 4,315 | 4,404 | ||||
Interest Only STRIP | 4.000% due 2048 | 597 | 609 | ||||
5.613% due 09/25/46 (Ê) | 404 | 49 | |||||
30 Year TBA(Ï) | |||||||
Series 2017-6 Class PA | 4.000% | 2,200 | 2,242 | ||||
3.500% due 06/25/46 | 1,839 | 1,840 | 4.500% | 1,400 | 1,457 | ||
Series 2017-76 Class SB | Freddie Mac Multifamily Structured | ||||||
Interest Only STRIP | Pass-Through Certificates | ||||||
4.866% due 10/25/57 (Ê) | 432 | 73 | Series 2013-K024 Class A2 | ||||
Series 2017-85 Class SC | 2.573% due 09/25/22 | 1,530 | 1,500 | ||||
Interest Only STRIP | Series 2013-K029 Class A2 | ||||||
4.963% due 11/25/47 (Ê) | 87 | 13 | 3.320% due 02/25/23 (~)(Ê) | 1,450 | 1,464 | ||
Fannie Mae-Aces | Series 2015-K045 Class A2 | ||||||
Series 2014-M13 Class AB2 | 3.023% due 01/25/25 | 1,020 | 1,010 | ||||
2.951% due 08/25/24 (~)(Ê) | 287 | 282 | Series 2015-K046 Class A2 | ||||
Series 2015-M11 Class A1 | 3.205% due 03/25/25 | 400 | 400 | ||||
2.097% due 04/25/25 | 187 | 186 | Series 2016-K052 Class A2 | ||||
Series 2016-M2 Class ABV2 | 3.151% due 11/25/25 | 1,110 | 1,104 | ||||
2.131% due 01/25/23 | 577 | 556 | Series 2016-K053 Class A2 | ||||
Series 2016-M3 Class ASQ2 | 2.995% due 12/25/25 | 390 | 384 | ||||
2.263% due 02/25/23 | 895 | 867 | Series 2016-K058 Class X1 | ||||
Series 2016-M6 Class AB2 | Interest Only STRIP | ||||||
2.395% due 05/25/26 | 1,015 | 954 | 0.930% due 08/25/26 (~)(Ê) | 4,136 | 261 | ||
Series 2016-M7 Class A2 | Freddie Mac Reference REMIC | ||||||
2.499% due 09/25/26 | 210 | 196 | Series 2006-R006 Class ZA | ||||
Series 2016-M7 Class AV2 | 6.000% due 04/15/36 | 337 | 373 | ||||
2.157% due 10/25/23 | 2,035 | 1,955 | Freddie Mac REMICS | ||||
Series 2017-M15 Class ATS2 | Series 2003-2624 Class QH | ||||||
3.136% due 11/25/27 (~)(Ê) | 10 | 10 | 5.000% due 06/15/33 | 88 | 95 | ||
FDIC Trust | Series 2006-R007 Class ZA | ||||||
Series 2010-R1 Class A | 6.000% due 05/15/36 | 281 | 310 | ||||
2.184% due 05/25/50 (Å) | 203 | 203 | Series 2009-3569 Class NY | ||||
Federal Home Loan Bank | 5.000% due 08/15/39 | 1,400 | 1,456 | ||||
2.125% due 02/11/20 | 70 | 70 | Series 2010-3632 Class PK | ||||
Flagstar Mortgage Trust | 5.000% due 02/15/40 | 192 | 204 | ||||
Series 2017-2 Class A5 | Series 2010-3653 Class B | ||||||
3.500% due 10/25/47 (~)(Ê)(Þ) | 1,068 | 1,058 | 4.500% due 04/15/30 | 274 | 287 | ||
Series 2018-2 Class A4 | Series 2011-3973 Class SA | ||||||
3.500% due 04/25/48 (~)(Ê) | 589 | 579 |
See accompanying notes which are an integral part of the financial statements.
82 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Interest Only STRIP | 3.369% due 06/10/28 (Þ) | 393 | 395 | ||||
5.331% due 12/15/41 (Ê) | 414 | 74 | GS Mortgage Securities Corp. II | ||||
Series 2012-4010 Class KM | Series 2018-SRP5 Class A | ||||||
3.000% due 01/15/42 | 144 | 141 | 3.281% due 09/15/31 (Ê)(Þ) | 490 | 490 | ||
Series 2013-4233 Class MD | GS Mortgage Securities Corp. Trust | ||||||
1.750% due 03/15/25 | 49 | 49 | Series 2018-CHLL Class D | ||||
Freddie Mac Structured Agency Credit | 3.238% due 02/15/37 (Ê)(Þ) | 332 | 332 | ||||
Risk Debt Notes | GS Mortgage Securities Trust | ||||||
Series 2015-DN1 Class M3 | Series 2012-GCJ7 Class A4 | ||||||
4.331% due 01/25/25 (Ê) | 936 | 1,005 | 3.377% due 05/10/45 | 1,176 | 1,180 | ||
Series 2015-DNA2 Class M2 | Series 2013-GC14 Class AAB | ||||||
3.838% due 12/25/27 (Ê) | 403 | 412 | 3.817% due 08/10/46 | 470 | 477 | ||
Series 2015-DNA3 Class M3 | Series 2013-GC14 Class AS | ||||||
5.133% due 04/25/28 (Ê) | 500 | 593 | 4.507% due 08/10/46 (Þ) | 235 | 245 | ||
Series 2015-DNA3 Class M3F | Series 2015-GS1 Class C | ||||||
5.321% due 04/25/28 (Ê) | 760 | 869 | 4.570% due 11/10/48 (~)(Ê) | 180 | 179 | ||
Series 2015-HQA2 Class M2 | Series 2016-GS2 Class A4 | ||||||
4.038% due 05/25/28 (Ê) | 656 | 674 | 3.050% due 05/10/49 (Æ) | 1,342 | 1,286 | ||
Series 2017-DNA1 Class M2 | Hilton USA Trust | ||||||
4.028% due 07/25/29 (Ê) | 740 | 797 | |||||
Series 2016-HHV Class D | |||||||
Series 2017-DNA2 Class B1 | 4.194% due 11/05/38 (~)(Ê)(Þ) | 1,240 | 1,203 | ||||
6.144% due 10/25/29 (Ê) | 510 | 583 | |||||
Series 2016-HHV Class E | |||||||
Series 2017-DNA2 Class M1 | 4.194% due 11/05/38 (~)(Å)(Ê) | 600 | 560 | ||||
2.186% due 10/25/29 (Ê) | 372 | 376 | |||||
Freddie Mac Whole Loan Securities | Series 2016-SFP Class A | ||||||
Trust | 2.828% due 11/05/35 (Þ) | 226 | 220 | ||||
Series 2016-SC01 Class M1 | HMH Trust | ||||||
3.883% due 07/25/46 (~)(Ê) | 135 | 131 | Series 2017-NSS Class E | ||||
Ginnie Mae | 6.292% due 07/05/31 (Å) | 1,170 | 1,128 | ||||
Series 2012-135 Class IO | Hyatt Hotel Portfolio Trust | ||||||
Interest Only STRIP | Series 2017-HYT2 Class C | ||||||
0.615% due 01/16/53 (~)(Ê) | 1,884 | 75 | 2.289% due 08/09/20 (Ê)(Þ) | 789 | 788 | ||
Series 2016-21 Class ST | IndyMac Mortgage Loan Trust | ||||||
Interest Only STRIP | Series 2007-FLX3 Class A1 | ||||||
5.638% due 02/20/46 (Ê) | 287 | 48 | 1.474% due 06/25/37 (Ê) | 260 | 255 | ||
JPMBB Commercial Mortgage Securities | |||||||
Series 2016-51 Class NS | Trust | ||||||
Interest Only STRIP | Series 2013-C14 Class D | ||||||
5.518% due 04/20/46 (Ê) | 142 | 21 | 4.563% due 08/15/46 (~)(Ê)(Þ) | 560 | 502 | ||
Ginnie Mae I | JPMDB Commercial Mortgage Securities | ||||||
2.140% due 2023 | 426 | 406 | Trust | ||||
Ginnie Mae II | Series 2017-C5 Class B | ||||||
3.000% due 2047 | 1,851 | 1,811 | 4.009% due 03/15/50 (~)(Ê) | 150 | 149 | ||
3.500% due 2047 | 388 | 390 | Series 2017-C5 Class C | ||||
5.000% due 2048 | 400 | 420 | 4.512% due 03/15/50 (~)(Ê) | 120 | 119 | ||
30 Year TBA(Ï) | JPMorgan Chase Commercial Mortgage | ||||||
3.000% | 3,700 | 3,619 | Securities Trust | ||||
3.500% | 500 | 502 | Series 2004-LN2 Class B | ||||
4.000% | 1,900 | 1,947 | 5.462% due 07/15/41 (~)(Ê) | 150 | 129 | ||
4.500% | 4,560 | 4,739 | Series 2015-MAR7 Class E | ||||
5.000% | 700 | 735 | 5.962% due 06/05/32 (Þ) | 500 | 492 | ||
Ginnie Mae REMICS | Series 2016-NINE Class A | ||||||
Series 2013-53 Class OI | 2.854% due 10/06/38 (~)(Ê)(Þ) | 394 | 371 | ||||
Interest Only STRIP | JPMorgan Mortgage Trust | ||||||
3.500% due 04/20/43 | 971 | 144 | Series 2015-3 Class A5 | ||||
Grace Mortgage Trust | 3.500% due 05/25/45 (~)(Ê)(Þ) | 385 | 383 | ||||
Series 2014-GRCE Class A | Series 2016-4 Class A5 | ||||||
3.500% due 10/25/46 (~)(Ê)(Þ) | 444 | 439 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 83
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Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
Series 2017-1 Class A4 | Series 2017-1MKT Class A | ||||||
3.500% due 01/25/47 (~)(Ê)(Þ) | 1,187 | 1,179 | 3.614% due 02/10/32 (Þ) | 370 | 369 | ||
Series 2017-2 Class A5 | Series 2017-1MKT Class C | ||||||
3.500% due 05/25/47 (~)(Ê)(Þ) | 526 | 520 | 4.016% due 02/10/32 (Þ) | 217 | 216 | ||
Series 2017-3 Class 1A5 | Series 2017-1MKT Class D | ||||||
3.500% due 08/25/47 (~)(Ê)(Þ) | 964 | 952 | 4.146% due 02/10/32 (Þ) | 400 | 395 | ||
Series 2017-4 Class A5 | Series 2017-1MKT Class E | ||||||
3.500% due 11/25/47 (~)(Ê)(Þ) | 1,085 | 1,072 | 4.142% due 02/10/32 (Å) | 595 | 568 | ||
Series 2018-3 Class A1 | RBS Commercial Funding, Inc. Trust | ||||||
3.500% due 04/25/48 (~)(Ê)(Þ) | 734 | 721 | Series 2013-GSP Class A | ||||
Series 2018-4 Class A1 | 3.961% due 01/13/32 (~)(Ê)(Þ) | 200 | 203 | ||||
3.500% due 10/25/48 (~)(Ê)(Þ) | 286 | 281 | Residential Accredit Loans, Inc. | ||||
Series 2018-5 Class A1 | Series 2006-QO7 Class 2A1 | ||||||
3.500% due 10/25/48 (~)(Ê)(Þ) | 955 | 939 | 1.464% due 09/25/46 (Ê) | 1,176 | 1,022 | ||
LB-UBS Commercial Mortgage Trust | Residential Asset Securitization Trust | ||||||
Series 2005-C7 Class F | Series 2003-A15 Class 1A2 | ||||||
5.350% due 11/15/40 (~)(Ê) | 405 | 408 | 1.684% due 02/25/34 (Ê) | 23 | 21 | ||
Series 2007-C6 Class AM | Sequoia Mortgage Trust | ||||||
6.114% due 07/15/40 (~)(Ê) | 40 | 40 | Series 2015-1 Class A1 | ||||
ML-CFC Commercial Mortgage Trust | 3.500% due 01/25/45 (~)(Ê)(Þ) | 669 | 660 | ||||
Series 2007-5 Class AJ | SG Commercial Mortgage Securities | ||||||
5.450% due 08/12/48 (~)(Ê) | 247 | 186 | Trust | ||||
Series 2007-5 Class AJFL | Series 2016-C5 Class A4 | ||||||
5.450% due 08/12/48 (~)(Ê)(Þ) | 247 | 186 | 3.055% due 10/10/48 | 475 | 451 | ||
Morgan Stanley Bank of America Merrill | Structured Adjustable Rate Mortgage | ||||||
Lynch Trust | Loan Trust | ||||||
Series 2015-C24 Class A4 | Series 2006-5 Class 3A | ||||||
3.732% due 05/15/48 | 835 | 839 | 3.101% due 06/25/36 (~)(Ê) | 1,401 | 1,227 | ||
Series 2015-C26 Class A3 | Tharaldson Hotel Portfolio Trust | ||||||
3.211% due 10/15/48 | 875 | 857 | Series 2018-THL Class A | ||||
2.796% due 11/11/34 (Ê)(Þ) | 464 | 464 | |||||
Series 2016-C31 Class A1 | Washington Mutual Mortgage Pass- | ||||||
1.511% due 11/15/21 | 317 | 309 | Through Certificates | ||||
Morgan Stanley Capital I Trust | Series 2006-AR1 Class 2A1A | ||||||
Series 2011-C3 Class A4 | 1.594% due 01/25/46 (Ê) | 474 | 474 | ||||
4.118% due 07/15/49 | 115 | 118 | Washington Mutual Mortgage Pass- | ||||
Series 2015-MS1 Class A4 | Through Certificates Trust | ||||||
3.779% due 05/15/48 (~)(Ê) | 200 | 202 | Series 2003-AR7 Class A7 | ||||
Series 2016-UBS9 Class A4 | 3.130% due 08/25/33 (~)(Ê) | 76 | 77 | ||||
3.594% due 03/15/49 | 205 | 204 | Series 2005-10 Class 3CB1 | ||||
Morgan Stanley Mortgage Capital | 6.000% due 11/25/35 | 1,088 | 1,028 | ||||
Holdings LLC Trust | Series 2005-AR9 Class A1A | ||||||
Series 2017-237P Class D | 2.261% due 07/25/45 (Ê) | 385 | 384 | ||||
3.865% due 09/13/39 (Þ) | 1,500 | 1,437 | Series 2005-AR11 Class A1A | ||||
Series 2017-237P Class XA | 0.844% due 08/25/45 (Ê) | 350 | 350 | ||||
Interest Only STRIP | Wells Fargo Commercial Mortgage Trust | ||||||
0.467% due 09/13/39 (~)(Å)(Ê) | 8,761 | 255 | Series 2016-BNK1 Class A3 | ||||
Series 2017-237P Class XB | 2.652% due 08/15/49 | 460 | 427 | ||||
Interest Only STRIP | Series 2016-C37 Class C | ||||||
0.051% due 09/13/39 (~)(Å)(Ê) | 5,418 | 42 | 4.495% due 12/15/49 (~)(Ê) | 150 | 147 | ||
MSCG Trust | Series 2017-RB1 Class XA | ||||||
Series 2015-ALDR Class A2 | Interest Only STRIP | ||||||
3.577% due 06/07/35 (~)(Ê)(Þ) | 255 | 249 | 1.288% due 03/15/50 (~)(Ê) | 1,972 | 171 | ||
Nomura Resecuritization Trust | Wells Fargo Mortgage Backed Securities | ||||||
Series 2015-4R Class 1A14 | Trust | ||||||
0.590% due 03/26/47 (Ê)(Þ) | 1,290 | 872 | Series 2004-P Class 2A1 | ||||
One Market Plaza Trust | 3.538% due 09/25/34 (~)(Ê) | 136 | 140 |
See accompanying notes which are an integral part of the financial statements.
84 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Series 2006-AR2 Class 2A1 | Malaysia Government International Bond | |||||||||
3.257% due 03/25/36 (~)(Ê) | 59 | 60 | Series 0111 | |||||||
Wells Fargo Mortgage-Backed Securities | 4.160% due 07/15/21 | MYR | 150 | 38 | ||||||
Trust | Series 0114 | |||||||||
Series 2006-AR5 Class 1A1 | 4.181% due 07/15/24 | MYR | 540 | 134 | ||||||
3.337% due 04/25/36 (~)(Ê) | 1,772 | 1,788 | Series 0116 | |||||||
WFRBS Commercial Mortgage Trust | 3.800% due 08/17/23 | MYR | 3,100 | 760 | ||||||
Series 2014-C19 Class A3 | Series 0117 | |||||||||
3.660% due 03/15/47 | 500 | 505 | 3.882% due 03/10/22 | MYR | 428 | 106 | ||||
Series 2014-C24 Class D | Series 0215 | |||||||||
3.692% due 11/15/47 (Þ) | 280 | 196 | 3.795% due 09/30/22 | MYR | 1,220 | 302 | ||||
WinWater Mortgage Loan Trust | Series 0314 | |||||||||
Series 2014-1 Class A1 | 4.048% due 09/30/21 | MYR | 610 | 152 | ||||||
3.926% due 06/20/44 (~)(Ê)(Þ) | 720 | 719 | Series 0315 | |||||||
Worldwide Plaza Trust | 3.659% due 10/15/20 | MYR | 1,274 | 316 | ||||||
Series 2017-WWP Class A | Series 0414 | |||||||||
3.526% due 11/10/36 (Þ) | 452 | 442 | 3.654% due 10/31/19 | MYR | 1,060 | 263 | ||||
182,419 | Series 0517 | |||||||||
Municipal Bonds - 0.4% | 3.441% due 02/15/21 | MYR | 432 | 106 | ||||||
Municipal Electric Authority of Georgia | Series 0613 | |||||||||
Revenue Bonds | 3.889% due 07/31/20 | MYR | 230 | 57 | ||||||
6.637% due 04/01/57 | 750 | 948 | ||||||||
7.055% due 04/01/57 | 325 | 392 | Series 0902 | |||||||
Tender Option Bond Trust Receipts | 4.378% due 11/29/19 | MYR | 220 | 55 | ||||||
/ Certificates General Obligation | Mexican Bonos | |||||||||
Unlimited | Series M 20 | |||||||||
2.040% due 08/01/49 (~)(Ê)(Þ) | 500 | 500 | 10.000% due 12/05/24 | MXN | 630 | 36 | ||||
Tender Option Bond Trust Receipts / | 7.500% due 06/03/27 | MXN | 6,762 | 338 | ||||||
Certificates Revenue Bonds | Series M 30 | |||||||||
2.590% due 10/29/27 (~)(Ê)(Þ) | 1,400 | 1,400 | 10.000% due 11/20/36 | MXN | 16,152 | 1,003 | ||||
3,240 | 8.500% due 11/18/38 | MXN | 9,100 | 498 | ||||||
Non-US Bonds - 3.4% | Series M | |||||||||
Australia Government International | 8.000% due 06/11/20 | MXN | 15,200 | 769 | ||||||
Bond | 6.500% due 06/10/21 | MXN | 740 | 36 | ||||||
Series 126 | 7.750% due 05/29/31 | MXN | 2,940 | 149 | ||||||
4.500% due 04/15/20 | AUD | 2,330 | 1,800 | 7.750% due 11/13/42 | MXN | 46,399 | 2,354 | |||
Series 133 | 8.000% due 11/07/47 | MXN | 4,880 | 254 | ||||||
5.500% due 04/21/23 | AUD | 990 | 840 | New Zealand Government International | ||||||
Series 140 | Bond | |||||||||
4.500% due 04/21/33 | AUD | 1,040 | 926 | Series 0423 | ||||||
Brazil Notas do Tesouro Nacional | 5.500% due 04/15/23 | NZD | 1,549 | 1,207 | ||||||
Series NTNB | Series 0521 | |||||||||
6.000% due 05/15/45 | BRL | 334 | 272 | 6.000% due 05/15/21 | NZD | 3,120 | 2,352 | |||
Series NTNF | Series 0925 | |||||||||
10.000% due 01/01/21 | BRL | 3,205 | 840 | 2.000% due 09/20/25 | NZD | 410 | 310 | |||
10.000% due 01/01/23 | BRL | 3,513 | 885 | Peru Government International Bond | ||||||
10.000% due 01/01/25 | BRL | 3,370 | 818 | 5.700% due 08/12/24 | PEN | 3,740 | 1,182 | |||
10.000% due 01/01/27 | BRL | 165 | 39 | 6.900% due 08/12/37 | PEN | 2,670 | 875 | |||
Colombian TES | Republic of Argentina Government | |||||||||
Series B | International Bond | |||||||||
10.000% due 07/24/24 | COP | 6,809,400 | 2,766 | 18.200% due 10/03/21 | ARS | 5,600 | 178 | |||
6.000% due 04/28/28 | COP | 703,400 | 230 | Series POM | ||||||
40.000% due 06/21/20 (Ê) | ARS | 450 | 16 | |||||||
Ireland Government International Bond | Republic of Poland Government | |||||||||
5.400% due 03/13/25 | EUR | 1,220 | 1,904 | |||||||
Japan Government 10 Year International | International Bond | |||||||||
Bond | Series 1020 | |||||||||
Series 348 | 5.250% due 10/25/20 | PLN | 920 | 265 | ||||||
10.000% due 09/20/27 | JPY | 73,350 | 668 | Series 1021 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 85
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Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
5.750% due 10/25/21 | PLN | 1,998 | 597 | 2.750% due 02/15/28 | 1,855 | 1,838 | |||
Series 1023 | 1.625% due 05/15/28 | 2,303 | 2,112 | ||||||
4.000% due 10/25/23 | PLN | 840 | 240 | 2.875% due 05/15/28 | 2,751 | 2,755 | |||
Russian Federal Bond - OFZ | 4.375% due 02/15/38 | 1,940 | 2,362 | ||||||
Series 6207 | 4.500% due 05/15/38 | 1,945 | 2,409 | ||||||
8.150% due 02/03/27 | RUB | 48,740 | 806 | 3.750% due 11/15/43 | 1,945 | 2,208 | |||
Series 6212 | 3.125% due 08/15/44 | 690 | 707 | ||||||
7.050% due 01/19/28 | RUB | 2,430 | 37 | 2.875% due 08/15/45 | 450 | 441 | |||
Series 6219 | 3.000% due 11/15/45 | 1,702 | 1,706 | ||||||
7.750% due 09/16/26 | RUB | 31,660 | 510 | 3.000% due 02/15/47 | 5,000 | 5,013 | |||
Singapore Government International | 3.000% due 05/15/47 | 3,470 | 3,476 | ||||||
Bond | 2.750% due 08/15/47 | 14,800 | 14,108 | ||||||
2.000% due 07/01/20 | SGD | 350 | 257 | 2.750% due 11/15/47 | 4,915 | 4,685 | |||
2.250% due 06/01/21 | SGD | 540 | 398 | 3.000% due 02/15/48 | 3,584 | 3,593 | |||
1.250% due 10/01/21 | SGD | 250 | 179 | 279,601 | |||||
3.125% due 09/01/22 | SGD | 290 | 221 | Total Long-Term Investments | |||||
2.750% due 07/01/23 | SGD | 470 | 352 | ||||||
3.000% due 09/01/24 | SGD | 380 | 289 | (cost $817,655) | 808,436 | ||||
2.375% due 06/01/25 | SGD | 400 | 293 | ||||||
2.125% due 06/01/26 | SGD | 120 | 86 | Common Stocks - 0.0% | |||||
3.500% due 03/01/27 | SGD | 423 | 335 | Financial Services - 0.0% | |||||
30,699 | Escrow GM Corp. (Å)(Š) | 80,000 | — | ||||||
United States Government Treasuries - 31.3% | Total Common Stocks | ||||||||
United States Treasury Inflation Indexed | |||||||||
Bonds | (cost $—) | — | |||||||
1.375% due 01/15/20 | 9,725 | 9,835 | |||||||
0.125% due 04/15/21 | 10,538 | 10,375 | |||||||
0.375% due 07/15/23 | 6,676 | 6,616 | Options Purchased - 0.0% | ||||||
0.375% due 07/15/25 | 6,759 | 6,639 | (Number of Contracts) | ||||||
3.375% due 04/15/32 | 6,245 | 8,335 | Cross Currency Options | ||||||
2.125% due 02/15/40 | 3,821 | 4,802 | (USD/JPY) | ||||||
0.750% due 02/15/45 | 4,404 | 4,270 | HSBC Jul 2018 109.00 Put (1) | USD | 1,100 | (ÿ) | 2 | ||
1.000% due 02/15/46 | 603 | 620 | Swaption | ||||||
0.875% due 02/15/47 | 4,431 | 4,430 | (Counterparty, Fund Receives/Fund | ||||||
United States Treasury Notes | Pays, Notional, Termination Date) | ||||||||
0.875% due 07/31/19 | 11,840 | 11,649 | BNP Paribas, USD 0.626%/CDX NA | ||||||
1.375% due 05/31/20 | 17,365 | 16,990 | Investment Grade Index, USD 600,000, | ||||||
1.375% due 09/30/20 | 8,915 | 8,683 | 06/20/23 | ||||||
Merrill Lynch Aug 2018 62.50 | |||||||||
1.375% due 05/31/21 | 11,195 | 10,803 | Call (1) | USD | 2,920 | (ÿ) | 1 | ||
1.125% due 06/30/21 | 14,130 | 13,519 | |||||||
1.250% due 10/31/21 | 26,640 | 25,451 | Total Options Purchased | ||||||
1.750% due 05/15/23 | 14,260 | 13,619 | (cost $10) | 3 | |||||
2.750% due 05/31/23 | 90 | 90 | |||||||
2.625% due 06/30/23 | 1,280 | 1,273 | Short-Term Investments - 12.4% | ||||||
1.625% due 10/31/23 | 15,830 | 14,940 | |||||||
2.250% due 10/31/24 | 1,175 | 1,137 | Ally Financial, Inc. | ||||||
2.500% due 01/31/25 | 9,490 | 9,315 | 3.250% due 11/05/18 | 475 | 475 | ||||
2.875% due 04/30/25 | 12,300 | 12,346 | American Express Credit Corp. | ||||||
2.125% due 05/15/25 | 2,850 | 2,727 | 1.875% due 05/03/19 | 210 | 208 | ||||
2.750% due 06/30/25 | 1,735 | 1,741 | Apache Corp. | ||||||
2.000% due 08/15/25 | 4,498 | 4,260 | 6.900% due 09/15/18 | 200 | 201 | ||||
2.250% due 11/15/25 | 2,680 | 2,577 | |||||||
1.625% due 05/15/26 | 2,005 | 1,834 | Apple, Inc. | ||||||
1.500% due 08/15/26 | 2,055 | 1,855 | 3.150% due 02/22/19 (Ê) | 591 | 594 | ||||
2.375% due 05/15/27 | 2,495 | 2,402 | 2.663% due 05/06/19 (Ê) | 480 | 481 | ||||
2.250% due 08/15/27 | 850 | 809 | AT&T, Inc. | ||||||
2.250% due 11/15/27 | 19,200 | 18,246 | 3.229% due 11/27/18 (Ê) | 300 | 301 |
See accompanying notes which are an integral part of the financial statements.
86 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||
Principal | Fair | Principal | Fair | ||||
Amount ($) | Value | Amount ($) | Value | ||||
or Shares | $ | or Shares | $ | ||||
2.997% due 03/11/19 (Ê) | 900 | 903 | 1.374% due 07/09/18 (ç)(Ê)(Þ)(~) | 350 | 350 | ||
Autobahn Funding Co. LLC | Continental Airlines Pass-Through Trust | ||||||
1.586% due 07/05/18 (ç)(Þ)(~) | 750 | 750 | Series 991A Class A | ||||
Bank of America Corp. | 6.545% due 02/02/19 | 44 | 44 | ||||
Series L | Credit Agricole SA | ||||||
2.600% due 01/15/19 | 8 | 8 | 0.953% due 07/02/18 (ç)(~) | 250 | 250 | ||
Bank of America NA | Crown Point Capital Co. LLC | ||||||
Series BKNT | 2.360% due 08/03/18 (ç)(Þ)(~) | 1,000 | 1,000 | ||||
2.050% due 12/07/18 | 315 | 314 | Daimler Finance NA LLC | ||||
Bank of Montreal | 2.000% due 08/03/18 (Þ) | 980 | 980 | ||||
2.186% due 08/09/18 (ç)(~) | 750 | 748 | Dell International LLC / EMC Corp. | ||||
Bank of Nova Scotia (The) | 3.480% due 06/01/19 (Þ) | 150 | 150 | ||||
2.996% due 06/14/19 (Ê) | 1,300 | 1,306 | DZ Bank AG | ||||
Bank of Tokyo-Mitsubishi UFJ, Ltd. | 2.701% due 08/16/18 (ç)(Ê)(~) | 765 | 765 | ||||
(The) | |||||||
2.326% due 07/24/18 (ç)(~) | 790 | 789 | ENI Finance USA, Inc. | ||||
Barclays Bank PLC | 2.198% due 07/09/18 (ç)(Þ)(~) | 650 | 650 | ||||
2.388% due 08/21/18 (ç)(~) | 700 | 698 | EnLink Midstream Partners, LP | ||||
BMW US Capital LLC | 2.700% due 04/01/19 | 405 | 401 | ||||
1.500% due 04/11/19 (Þ) | 840 | 833 | Exxon Mobil Corp. | ||||
BNP Paribas Fortis Funding SA | 2.491% due 03/15/19 (Ê) | 800 | 801 | ||||
2.074% due 08/03/18 (ç)(~) | 610 | 609 | Fannie Mae | ||||
3.170% due 08/01/18 | 1,116 | 1,114 | |||||
BPCE | Federal Home Loan Bank Discount | ||||||
2.616% due 01/18/19 (Þ)(~) | 500 | 493 | Notes | ||||
CAFCO LLC | 1.917% due 08/17/18 (ç)(~) | 180 | 180 | ||||
2.382% due 10/01/18 (Þ)(~) | 750 | 746 | 1.923% due 08/27/18 (ç)(~) | 420 | 419 | ||
Canadian Imperial Bank of Commerce | 1.902% due 08/29/18 (~) | 280 | 279 | ||||
2.593% due 02/04/19 (Ê)(~) | 500 | 500 | Ford Motor Credit Co. | ||||
2.649% due 05/29/19 (Ê)(~) | 500 | 501 | 3.060% due 04/15/19 (~) | 1,595 | 1,560 | ||
Canadian Oil Sands, Ltd. | Ford Motor Credit Co. LLC | ||||||
7.750% due 05/15/19 (Þ) | 450 | 463 | 2.551% due 10/05/18 | 860 | 860 | ||
Capital One Bank USA NA | Freddie Mac | ||||||
Series BKNT | 4.500% due 08/01/18 | 18 | 19 | ||||
2.250% due 02/13/19 | 510 | 508 | General Motors Co. | ||||
Caterpillar Financial Services Corp. | 3.500% due 10/02/18 | 425 | 426 | ||||
1.350% due 05/18/19 | 230 | 227 | Goldman Sachs Group, Inc. (The) | ||||
Chesham Finance, Ltd. / Chesham | |||||||
Finance LLC | Series GMTN | ||||||
0.978% due 07/02/18 (ç)(~) | 1,000 | 1,000 | 7.500% due 02/15/19 | 300 | 308 | ||
Chevron Corp. | Hewlett Packard Enterprise Co. | ||||||
1.790% due 11/16/18 | 100 | 100 | 2.850% due 10/05/18 | 141 | 141 | ||
Citigroup, Inc. | Huntington National Bank (The) | ||||||
2.150% due 07/30/18 | 1,300 | 1,300 | Series BKNT | ||||
Collateralized Commercial Paper Co. | 2.200% due 11/06/18 | 465 | 464 | ||||
LLC | International Business Machines Corp. | ||||||
1.939% due 08/08/18 (ç)(~) | 300 | 299 | 2.725% due 02/12/19 (Ê) | 220 | 221 | ||
Commercial Mortgage Trust | JPMorgan Securities LLC | ||||||
Series 2013-CR13 Class A1 | 2.414% due 09/27/18 (~) | 1,220 | 1,213 | ||||
1.259% due 11/10/18 | 8 | 8 | LyondellBasell Industries NV | ||||
Commonwealth Bank of Australia | 5.000% due 04/15/19 | 395 | 399 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 87
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Malaysia Government International Bond | 3.202% due 01/22/19 (Ê) | 250 | 252 | |||||||
Series 0515 | U. S. Cash Management Fund(@) | 48,935,722 | (8) | 48,941 | ||||||
3.759% due 03/15/19 | MYR | 110 | 27 | United States Treasury Bills | ||||||
National Australia Bank, Ltd. | 1.917% due 08/16/18 (ç)(~) | 2,656 | 2,650 | |||||||
2.609% due 05/14/19 (Ê)(Þ) | 650 | 651 | 1.872% due 08/23/18 (ç)(~) | 1,920 | 1,915 | |||||
National Bank of Canada | 1.781% due 10/04/18 | 2,663 | 2,650 | |||||||
2.563% due 05/08/19 (Ê)(~) | 650 | 650 | 2.061% due 12/06/18 | 2,672 | 2,648 | |||||
Natixis SA | ||||||||||
2.097% due 08/02/18 (ç)(~) | 950 | 948 | 2.026% due 01/03/19 (~) | 1,950 | 1,935 | |||||
2.323% due 08/31/18 (~) | 250 | 249 | 2.125% due 01/03/19 | 2,673 | 2,644 | |||||
New York Life Global Funding | United States Treasury Notes | |||||||||
2.459% due 04/12/19 (Ê)(Þ) | 1,685 | 1,686 | 3.750% due 11/15/18 (~) | 2,024 | 2,036 | |||||
Nordea Bank AB | US Bancorp | |||||||||
Series MTN | ||||||||||
2.711% due 02/21/19 (Ê)(~) | 800 | 802 | 2.760% due 04/25/19 (Ê) | 1,000 | 1,003 | |||||
Novartis Securities Investment, Ltd. | Victory Receivables Corp. | |||||||||
5.125% due 02/10/19 | 510 | 517 | 2.245% due 08/13/18 (ç)(~) | 550 | 549 | |||||
PACCAR Financial Corp. | Vodafone Group PLC | |||||||||
1.650% due 02/25/19 | 245 | 243 | 2.126% due 09/04/18 (Æ)(Þ)(~) | 610 | 607 | |||||
Pharmacia LLC | ||||||||||
6.500% due 12/01/18 | 240 | 244 | 2.165% due 10/04/18 (Þ)(~) | 640 | 636 | |||||
Province of Quebec Canada | Westpac Banking Corp. | |||||||||
Series MTN | 1.769% due 11/29/18 (Ê)(Þ)(~) | 1,100 | 1,100 | |||||||
2.551% due 09/04/18 (Ê) | 335 | 335 | Total Short-Term Investments | |||||||
PSP Capital, Inc | (cost $110,839) | 110,846 | ||||||||
1.462% due 11/07/18 (Ê)(Þ)(~) | 400 | 400 | ||||||||
Reckitt Benckiser Treasury Services PLC | Total Investments 102.9% | |||||||||
1.132% due 07/02/18 (ç)(Þ)(~) | 400 | 400 | (identified cost $928,504) | 919,285 | ||||||
Republic of Argentina Government | ||||||||||
International Bond | Other Assets and Liabilities, | |||||||||
21.200% due 09/19/18 | ARS | 90 | 3 | Net - (2.9%) | (26,104 | ) | ||||
Rockies Express Pipeline LLC | ||||||||||
6.850% due 07/15/18 (Þ) | 260 | 260 | Net Assets - 100.0% | 893,181 | ||||||
Sheffield Receivables Co. LLC | ||||||||||
2.618% due 11/05/18 (Þ)(~) | 700 | 694 | ||||||||
Shell International Finance BV | ||||||||||
2.933% due 11/10/18 (Ê) | 1,000 | 1,002 | ||||||||
1.375% due 05/10/19 | 445 | 440 | ||||||||
Sprint Communications, Inc. | ||||||||||
9.000% due 11/15/18 (Þ) | 19 | 19 | ||||||||
Standard Chartered Bank | ||||||||||
2.266% due 07/09/18 (ç)(Ê)(~) | 1,100 | 1,100 | ||||||||
Sumitomo Mitsui Banking Corp. | ||||||||||
2.803% due 05/15/19 (Ê)(~) | 850 | 852 | ||||||||
Series GMTN | ||||||||||
1.950% due 07/23/18 | 400 | 400 | ||||||||
Svenska Handelsbanken AB | ||||||||||
2.599% due 06/07/19 (Ê)(~) | 1,000 | 1,001 | ||||||||
Toronto-Dominion Bank (The) | ||||||||||
Series MTN |
See accompanying notes which are an integral part of the financial statements.
88 Strategic Bond Fund
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Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Restricted Securities | |||||||||||
Amounts in thousands (except share and cost per unit amounts) | |||||||||||
Principal | Cost per | Cost | Fair Value | ||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | ||||
Securities | Date | or shares | $ | $ | $ | ||||||
0.9% | |||||||||||
A10 Securitization LLC | 06/23/17 | 961,000 | 100.00 | 961 | 937 | ||||||
Barclays Commercial Mortgage Securities LLC | 11/17/17 | 1,372,000 | 100.00 | 1,372 | 1,373 | ||||||
Bayview Commercial Asset Trust | 10/26/17 | 1,217,421 | 95.70 | 1,165 | 1,197 | ||||||
BCAP LLC Trust | 11/26/13 | 125,926 | 103.78 | 131 | 128 | ||||||
Blackstone Commercial Mortgage Trust | 03/02/18 | 1,575,000 | 99.41 | 1,566 | 1,567 | ||||||
Citigroup Mortgage Loan Trust, Inc. | 02/01/17 | 308,516 | 97.67 | 301 | 302 | ||||||
CSMC Mortgage-Backed Trust | 07/26/13 | 23,823 | 97.62 | 23 | 24 | ||||||
Escrow GM Corp. | 04/21/11 | 80,000 | — | — | — | ||||||
FDIC Trust | 06/08/12 | 202,808 | 103.77 | 210 | 203 | ||||||
Hilton USA Trust | 11/22/16 | 600,000 | 81.75 | 490 | 560 | ||||||
HMH Trust | 06/09/17 | 1,170,000 | 100.00 | 1,170 | 1,128 | ||||||
Morgan Stanley Mortgage Capital Holdings LLC Trust | 08/11/17 | 5,418,000 | 0.78 | 42 | 42 | ||||||
Morgan Stanley Mortgage Capital Holdings LLC Trust | 08/11/17 | 8,761,000 | 2.91 | 255 | 255 | ||||||
One Market Plaza Trust | 02/15/17 | 595,000 | 97.69 | 581 | 568 | ||||||
8,284 | |||||||||||
For a description of restricted securities see note 7 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 89
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Variable Rate Securities | ||
Securities | Referenced Rate | Spread % |
1011778 B. C. Unlimited Liability Co. 1st Lien Term Loan B4 | USD 1 Month LIBOR | 2.250 |
Access Group, Inc. | USD 3 Month LIBOR | 0.060 |
ACE Securities Corp. Home Equity Loan Trust | USD 1 Month LIBOR | 0.675 |
Air Medical Group Holdings, Inc. 1st Lien Term Loan B | USD 1 Month LIBOR | 3.250 |
Albertson's LLC Term Loan B4 | USD 1 Month LIBOR | 2.750 |
Albertson's LLC Term Loan B6 | USD 3 Month LIBOR | 3.000 |
Ambac LSNI LLC | USD 3 Month LIBOR | 10.000 |
American Axle & Manufacturing, Inc. 1st Lien Term Loan B | USD 1 Month LIBOR | 2.250 |
American Builders Contractors Co. , Inc. 1st Lien Term Loan B2 | USD 1 Month LIBOR | 2.000 |
American Home Mortgage Investment Trust | USD 6 Month LIBOR | 2.000 |
American Honda Finance Corp. | USD 3 Month LIBOR | 0.350 |
American Honda Finance Corp. | USD 3 Month LIBOR | 0.340 |
Ameriquest Mortgage Securities, Inc. Asset-Backed Pass-Through Certificates | USD 1 Month LIBOR | 1.110 |
Apple, Inc. | USD 3 Month LIBOR | 0.300 |
Apple, Inc. | USD 3 Month LIBOR | 0.820 |
Aramark Services, Inc. Term Loan B1 | USD 3 Month LIBOR | 1.750 |
Aristocrat International, Pty, Ltd. Term Loan B3 | USD 3 Month LIBOR | 1.750 |
AT&T, Inc. | USD 3 Month LIBOR | 0.910 |
AT&T, Inc. | USD 3 Month LIBOR | 0.670 |
Australia & New Zealand Banking Group, Ltd. | USD 3 Month LIBOR | 0.500 |
Avolon LLC 1st Lien Term Loan B3 | USD 1 Month LIBOR | 2.000 |
BAC Capital Trust XIV | USD 3 Month LIBOR | 0.400 |
Bank of America Corp. | USD 3 Month LIBOR | 3.898 |
Bank of America Corp. | USD 3 Month LIBOR | 1.370 |
Bank of America Corp. | USD 3 Month LIBOR | 1.040 |
Bank of America Corp. | USD 3 Month LIBOR | 0.810 |
Bank of America Corp. | USD 3 Month LIBOR | 0.790 |
Bank of America Corp. | USD 3 Month LIBOR | 0.630 |
Bank of America Corp. | USD 3 Month LIBOR | 2.931 |
Bank of America Corp. | USD 3 Month LIBOR | 0.780 |
Bank of Nova Scotia (The) | USD 3 Month LIBOR | 0.660 |
Barclays Commercial Mortgage Securities LLC | USD 1 Month LIBOR | 2.850 |
Barclays PLC | USD 3 Month LIBOR | 3.804 |
USD Swap Semiannual 30/360 (versus 3 Month | ||
Barclays PLC | LIBOR) 5 Year Rate | 6.705 |
Barclays PLC | USD 3 Month LIBOR | 1.356 |
Bayview Commercial Asset Trust | USD 1 Month LIBOR | 0.270 |
Beacon Roofing Supply, Inc. Term Loan B | USD 1 Month LIBOR | 2.250 |
Bear Stearns Alternative-A Trust | USD 1 Month LIBOR | 0.750 |
Berry Plastics Group, Inc. 1st Lien Term Loan Q | USD 1 Month LIBOR | 2.000 |
Berry Plastics Group, Inc. 1st Lien Term Loan R | USD 1 Month LIBOR | 2.000 |
Blackstone Commercial Mortgage Trust | USD 1 Month LIBOR | 1.951 |
BMW US Capital LLC | USD 3 Month LIBOR | 0.380 |
See accompanying notes which are an integral part of the financial statements.
90 Strategic Bond Fund
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Variable Rate Securities | ||
Securities | Referenced Rate | Spread % |
BNC Mortgage Loan Trust | USD 1 Month LIBOR | 0.160 |
USD Swap Semiannual 30/360 (versus 3 Month | ||
BNP Paribas SA | LIBOR) 5 Year Rate | 2.966 |
Boyd Gaming Corp. Term Loan B | USD 1 Week LIBOR | 2.500 |
BX Trust | USD 1 Month LIBOR | 0.577 |
BX Trust | USD 1 Month LIBOR | 1.220 |
Caesars Resort Collection LLC 1st Lien Term Loan B | USD 1 Month LIBOR | 2.750 |
Campbell Soup Co. | USD 3 Month LIBOR | 0.630 |
Canadian Imperial Bank of Commerce | USD 3 Month LIBOR | 0.330 |
Canadian Imperial Bank of Commerce | USD 3 Month LIBOR | 0.230 |
Capital One Multi-Asset Execution Trust | USD 1 Month LIBOR | 0.380 |
Catalent Pharma Solutions, Inc. Term Loan B | USD 1 Month LIBOR | 2.250 |
Caterpillar Financial Services Corp. | USD 3 Month LIBOR | 0.230 |
CenturyLink, Inc. Term Loan B | USD 1 Month LIBOR | 2.750 |
Change Healthcare Holdings LLC 1st Lien Term Loan B | USD 1 Month LIBOR | 2.750 |
Charter Communications Operating LLC 1st Lien Term Loan B | USD 1 Month LIBOR | 2.000 |
Chevron Corp. | USD 3 Month LIBOR | 0.480 |
CHL Mortgage Pass-Through Trust | USD 1 Month LIBOR | 0.580 |
CIT Mortgage Loan Trust | USD 1 Month LIBOR | 1.500 |
Citigroup Mortgage Loan Trust, Inc. | USD 1 Month LIBOR | 0.450 |
Citigroup Mortgage Loan Trust, Inc. | USD 1 Month LIBOR | 0.340 |
U. S. Treasury Yield Curve Rate T Note Constant | ||
Citigroup Mortgage Loan Trust, Inc. | Maturity 1 Year | 2.400 |
Citigroup Mortgage Loan Trust, Inc. | USD 1 Month LIBOR | 0.250 |
Citigroup, Inc. | USD 3 Month LIBOR | 3.905 |
CityCenter Holdings, LLC Term Loan B | USD 1 Month LIBOR | 2.250 |
Cold Storage Trust | USD 1 Month LIBOR | 2.100 |
Commonwealth Bank of Australia | USD 1 Month LIBOR | 0.150 |
Countrywide Alternative Loan Trust | USD 1 Month LIBOR | 0.400 |
Countrywide Asset-Backed Certificates | USD 1 Month LIBOR | 0.800 |
Countrywide Asset-Backed Certificates | USD 1 Month LIBOR | 0.520 |
USD Swap Semiannual 30/360 (versus 3 Month | ||
Credit Suisse Group AG | LIBOR) 5 Year Rate | 3.455 |
Credit Suisse Mortgage Capital Certificates | USD 1 Month LIBOR | 5.620 |
CSC Holdings, LLC 1st Lien Term Loan | USD 1 Month LIBOR | 2.250 |
CWGS Group LLC Term Loan | USD 1 Month LIBOR | 2.750 |
Dell International LLC 1st Lien Term Loan B | USD 1 Month LIBOR | 2.000 |
DNB Nor Bank ASA | USD 3 Month LIBOR | 0.220 |
Dryden 37 Senior Loan Fund | USD 3 Month LIBOR | 1.100 |
Dryden 50 Senior Loan Fund | USD 3 Month LIBOR | 1.220 |
DZ Bank AG | USD 3 Month LIBOR | 0.370 |
Enterprise Products Operating LLC | USD 3 Month LIBOR | 3.708 |
Exxon Mobil Corp. | USD 3 Month LIBOR | 0.150 |
Fannie Mae | USD 1 Month LIBOR | 4.250 |
Fannie Mae Connecticut Avenue Securities | USD 1 Month LIBOR | 1.300 |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Variable Rate Securities | ||
Securities | Referenced Rate | Spread % |
Fannie Mae Connecticut Avenue Securities | USD 1 Month LIBOR | 2.600 |
Fannie Mae Connecticut Avenue Securities | USD 1 Month LIBOR | 4.900 |
Fannie Mae REMICS | USD 1 Month LIBOR | 6.100 |
Fannie Mae REMICS | USD 1 Month LIBOR | 6.000 |
Fannie Mae REMICS | USD 1 Month LIBOR | 6.150 |
Fannie Mae REMICS | USD 1 Month LIBOR | 6.100 |
Fannie Mae REMICS | USD 1 Month LIBOR | 5.950 |
Fannie Mae REMICS | USD 1 Month LIBOR | 6.500 |
Fannie Mae REMICS | USD 1 Month LIBOR | 6.200 |
Farmers Exchange Capital III | USD 3 Month LIBOR | 3.454 |
Fieldstone Mortgage Investment Trust | USD 1 Month LIBOR | 1.950 |
First Data Corp. 1st Lien Term Loan | USD 1 Month LIBOR | 2.000 |
Ford Credit Auto Owner Trust | USD 1 Month LIBOR | 0.070 |
Freddie Mac REMICS | USD 1 Month LIBOR | 6.490 |
Freddie Mac Structured Agency Credit Risk Debt Notes | USD 1 Month LIBOR | 2.600 |
Freddie Mac Structured Agency Credit Risk Debt Notes | USD 1 Month LIBOR | 4.700 |
Freddie Mac Structured Agency Credit Risk Debt Notes | USD 1 Month LIBOR | 3.700 |
Freddie Mac Structured Agency Credit Risk Debt Notes | USD 1 Month LIBOR | 2.800 |
Freddie Mac Structured Agency Credit Risk Debt Notes | USD 1 Month LIBOR | 5.150 |
Freddie Mac Structured Agency Credit Risk Debt Notes | USD 1 Month LIBOR | 4.150 |
Freddie Mac Structured Agency Credit Risk Debt Notes | USD 1 Month LIBOR | 1.200 |
Freddie Mac Structured Agency Credit Risk Debt Notes | USD 1 Month LIBOR | 3.250 |
Ginnie Mae | USD 1 Month LIBOR | 6.150 |
Ginnie Mae | USD 1 Month LIBOR | 6.050 |
Golden Nugget, Inc. 1st Lien Term Loan | USD 1 Month LIBOR | 2.750 |
Goldman Sachs Capital II | USD 3 Month LIBOR | 0.768 |
Goldman Sachs Group, Inc. (The) | USD 3 Month LIBOR | 1.170 |
Goldman Sachs Group, Inc. (The) | USD 3 Month LIBOR | 1.201 |
Goldman Sachs Group, Inc. (The) | USD 3 Month LIBOR | 1.750 |
Goldman Sachs Group, Inc. (The) | USD 3 Month LIBOR | 1.510 |
Goldman Sachs Group, Inc. (The) | USD 3 Month LIBOR | 1.301 |
Greenpoint Manufactured Housing Contract Trust | USD 1 Month LIBOR | 2.000 |
U. S. Treasury Yield Curve Rate T Note Constant | ||
Grupo Bimbo SAB de CV | Maturity 5 Year | 3.280 |
GS Mortgage Securities Corp. II | USD 1 Month LIBOR | 1.300 |
GS Mortgage Securities Corp. Trust | USD 1 Month LIBOR | 1.650 |
HCA, Inc. Term Loan B10 | USD 1 Month LIBOR | 2.000 |
Hilton Worldwide Finance LLC Term Loan B2 | USD 1 Month LIBOR | 1.750 |
Home Equity Asset Trust | USD 1 Month LIBOR | 0.280 |
Home Equity Asset Trust | USD 1 Month LIBOR | 0.150 |
Home Equity Asset Trust | USD 1 Month LIBOR | 0.410 |
Honda Auto Receivables Owner Trust | USD 1 Month LIBOR | 0.090 |
HSBC Holdings PLC | USD 3 Month LIBOR | 3.068 |
See accompanying notes which are an integral part of the financial statements.
92 Strategic Bond Fund
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Variable Rate Securities | ||
Securities | Referenced Rate | Spread % |
HSBC Holdings PLC | USD ICE Swap Rate NY 5 Year Rate | 3.453 |
HSBC Holdings PLC | USD ICE Swap Rate NY 5 Year Rate | 3.606 |
HSBC Holdings PLC | USD 3 Month LIBOR | 1.546 |
HSBC Holdings PLC | USD 3 Month LIBOR | 0.987 |
HSBC Holdings PLC | USD 3 Month LIBOR | 0.600 |
HSI Asset Securitization Corp. Trust | USD 1 Month LIBOR | 0.190 |
HSI Asset Securitization Corp. Trust | USD 1 Month LIBOR | 0.140 |
Hyatt Hotel Portfolio Trust | USD 1 Month LIBOR | 1.056 |
IBM Credit LLC | USD 3 Month LIBOR | 0.260 |
IndyMac Mortgage Loan Trust | USD 1 Month LIBOR | 0.240 |
International Business Machines Corp. | USD 3 Month LIBOR | 0.370 |
Jackson National Life Global Funding | USD 3 Month LIBOR | 0.300 |
Jaguar Holding Co. II Term Loan | USD 1 Month LIBOR | 2.500 |
John Deere Capital Corp. | USD 3 Month LIBOR | 0.480 |
JPMorgan Chase & Co. | USD 3 Month LIBOR | 0.550 |
LCM XXII, Ltd. | USD 3 Month LIBOR | 1.480 |
LCM XXV, Ltd. | USD 3 Month LIBOR | 1.210 |
Level 3 Financing, Inc. Term Loan B | USD 1 Month LIBOR | 2.250 |
Lions Gate Entertainment Corp. Term Loan B | USD 1 Month LIBOR | 2.250 |
Lloyds Banking Group PLC | USD 3 Month LIBOR | 0.810 |
Long Beach Mortgage Loan Trust | USD 1 Month LIBOR | 0.750 |
Long Beach Mortgage Loan Trust | USD 1 Month LIBOR | 0.900 |
M A Finance Co. LLC 1st Lien Term Loan B | USD 1 Month LIBOR | 2.500 |
MacDermid, Inc. Term Loan B6 | USD 1 Month LIBOR | 3.000 |
Madison Park Funding XVIII, Ltd. | USD 3 Month LIBOR | 1.190 |
Madison Park Funding XXVI, Ltd. | USD 3 Month LIBOR | 1.200 |
Magnetite XVIII, Ltd. | USD 3 Month LIBOR | 1.400 |
Master Asset-Backed Securities Trust | USD 1 Month LIBOR | 0.945 |
Merrill Lynch Mortgage Investors Trust | USD 1 Month LIBOR | 0.370 |
Metropolitan Life Global Funding I | USD 3 Month LIBOR | 0.230 |
MGM Growth Properties Operating Partnership, LP Term Loan B | USD 1 Month LIBOR | 2.000 |
Michaels Stores, Inc. Term Loan B | USD 1 Month LIBOR | 2.500 |
Mizuho Bank, Ltd. | USD 3 Month LIBOR | 0.400 |
Morgan Stanley | USD 3 Month LIBOR | 1.140 |
Morgan Stanley | USD 3 Month LIBOR | 1.400 |
Morgan Stanley | USD 3 Month LIBOR | 0.847 |
MultiPlan, Inc. Term Loan B | USD 3 Month LIBOR | 3.000 |
Mutual of Omaha Insurance Co. | USD 3 Month LIBOR | 2.640 |
National Australia Bank, Ltd. | USD 3 Month LIBOR | 0.280 |
National Australia Bank, Ltd. | USD 3 Month LIBOR | 0.510 |
National Bank of Canada | USD 3 Month LIBOR | 0.200 |
Nelnet Student Loan Trust | USD 3 Month LIBOR | 1.650 |
New Century Home Equity Loan Trust | USD 1 Month LIBOR | 0.480 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 93
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Variable Rate Securities | ||
Securities | Referenced Rate | Spread % |
New York Life Global Funding | USD 3 Month LIBOR | 0.120 |
Nomura Resecuritization Trust | USD 1 Month LIBOR | 0.190 |
Nordea Bank AB | USD 3 Month LIBOR | 0.380 |
Nordea Bank AB | USD 3 Month LIBOR | 0.470 |
Numericable Group SA Term Loan B12 | USD 3 Month LIBOR | 3.000 |
ON Semiconductor Corp. 1st Lien Term Loan B | USD 1 Month LIBOR | 1.750 |
Option One Mortgage Loan Trust | USD 1 Month LIBOR | 0.780 |
Pacific Life Insurance Co. | USD 3 Month LIBOR | 2.796 |
PAREXEL International Corp. 1st Lien Term Loan B | USD 1 Month LIBOR | 2.750 |
Park Place Securities, Inc. Asset-Backed Pass-Through Certificates | USD 1 Month LIBOR | 1.125 |
Party City Holdings, Inc. 1st Lien Term Loan | USD 1 Month LIBOR | 2.750 |
PetSmart, Inc. Term Loan B2 | USD 1 Month LIBOR | 3.000 |
Popular ABS Mortgage Pass-Through Trust | USD 1 Month LIBOR | 0.250 |
Popular ABS Mortgage Pass-Through Trust | USD 1 Month LIBOR | 0.260 |
Post Holdings, Inc. Incremental Term Loan | USD 1 Month LIBOR | 2.000 |
Prime Security Services Borrower LLC Term Loan B1 | USD 1 Month LIBOR | 2.750 |
Procter & Gamble Co. (The) | USD 3 Month LIBOR | 0.270 |
Province of Quebec Canada | USD 3 Month LIBOR | 0.230 |
Province of Quebec Canada | USD 3 Month LIBOR | 0.280 |
PSP Capital, Inc | USD 3 Month LIBOR | 0.070 |
Quikrete Holdings, Inc. 1st Lien Term Loan B | USD 1 Month LIBOR | 2.750 |
RAMP Trust | USD 1 Month LIBOR | 0.570 |
Reckitt Benckiser Treasury Services PLC | USD 3 Month LIBOR | 0.560 |
Republic of Argentina Government International Bond | Argentina Central Bank 7-Day Repo Reference Rate | 0.000 |
Federal Reserve U. S. 12 Month Cumulative Avg 1 | ||
Residential Accredit Loans, Inc. | Year CMT | 0.850 |
Residential Asset Mortgage Products, Inc. Trust | USD 1 Month LIBOR | 0.480 |
Residential Asset Securitization Trust | USD 1 Month LIBOR | 0.450 |
Reynolds Group Holdings, Inc. 1st Lien Term Loan B | USD 1 Month LIBOR | 2.750 |
Royal Bank of Scotland Group PLC | USD 3 Month LIBOR | 1.550 |
RPI Finance Trust Term Loan B | USD 3 Month LIBOR | 2.000 |
Scientific Games International, Inc. 1st Lien Term Loan B5 | USD 1 Month LIBOR | 2.750 |
Seattle SpinCo, Inc. 1st Lien Term Loan B3 | USD 1 Month LIBOR | 2.500 |
Shackleton CLO, Ltd. | USD 3 Month LIBOR | 1.000 |
Shell International Finance BV | USD 3 Month LIBOR | 0.580 |
Skandinaviska Enskilda Banken AB | USD 3 Month LIBOR | 0.430 |
SLM Private Credit Student Loan Trust | USD 3 Month LIBOR | 0.290 |
SLM Private Credit Student Loan Trust | USD 3 Month LIBOR | 0.330 |
SLM Student Loan Trust | USD 3 Month LIBOR | 1.100 |
SLM Student Loan Trust | USD 1 Month LIBOR | 0.400 |
SLM Student Loan Trust | USD 3 Month LIBOR | 0.150 |
Sprint Communications, Inc. 1st Lien Term Loan B | USD 1 Month LIBOR | 2.500 |
Standard Chartered Bank | USD 1 Month LIBOR | 0.220 |
See accompanying notes which are an integral part of the financial statements.
94 Strategic Bond Fund
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Variable Rate Securities | ||
Securities | Referenced Rate | Spread % |
Structured Asset Investment Loan Trust | USD 1 Month LIBOR | 0.720 |
Sumitomo Mitsui Banking Corp. | USD 3 Month LIBOR | 0.460 |
Sungard Availability Services Capital, Inc. 1st Lien Term Loan B | USD 1 Month LIBOR | 10.000 |
Svenska Handelsbanken AB | USD 3 Month LIBOR | 0.280 |
Svenska Handelsbanken AB | USD 3 Month LIBOR | 0.470 |
Tharaldson Hotel Portfolio Trust | USD 1 Month LIBOR | 0.750 |
THL Credit Wind River CLO, Ltd. | USD 3 Month LIBOR | 1.230 |
Toronto-Dominion Bank (The) | USD 3 Month LIBOR | 0.840 |
Toronto-Dominion Bank (The) | USD 3 Month LIBOR | 0.300 |
Toyota Motor Credit Corp. | USD 3 Month LIBOR | 0.140 |
Trans Union LLC 1st Lien Term Loan B3 | USD 1 Month LIBOR | 2.000 |
Unitymedia Finance LLC 1st Lien Term Loan D | USD 1 Month LIBOR | 2.250 |
Univision Communications, Inc. Term Loan C5 | USD 1 Month LIBOR | 2.750 |
UPC Financing Partnership 1st Lien Term Loan AR | USD 1 Month LIBOR | 2.500 |
US Bancorp | USD 3 Month LIBOR | 0.400 |
US Bank NA | USD 3 Month LIBOR | 0.140 |
Valeant Pharmaceuticals International, Inc. Term Loan | USD 1 Month LIBOR | 3.000 |
Viacom, Inc. | USD 3 Month LIBOR | 3.899 |
VICI Properties, Inc. Term Loan | USD 1 Month LIBOR | 2.000 |
Virgin Media Bristol LLC 1st Lien Term Loan K | USD 1 Month LIBOR | 2.500 |
Voya CLO, Ltd. | USD 3 Month LIBOR | 1.250 |
Wachovia Capital Trust II | USD 3 Month LIBOR | 0.500 |
Walmart, Inc. | USD 3 Month LIBOR | 0.230 |
Walt Disney Co. (The) | USD 3 Month LIBOR | 0.190 |
Federal Reserve U. S. 12 Month Cumulative Avg 1 | ||
Washington Mutual Mortgage Pass-Through Certificates | Year CMT | 1.070 |
Washington Mutual Mortgage Pass-Through Certificates Trust | USD 1 Month LIBOR | 0.640 |
Washington Mutual Mortgage Pass-Through Certificates Trust | USD 1 Month LIBOR | 0.320 |
Wells Fargo & Co. | USD 3 Month LIBOR | 1.340 |
Wells Fargo & Co. | USD 3 Month LIBOR | 1.230 |
Wells Fargo Home Equity Asset-Backed Securities Trust | USD 1 Month LIBOR | 0.885 |
Western Digital Corp. 1st Lien Term Loan B4 | USD 1 Month LIBOR | 1.750 |
Westpac Banking Corp. | USD 1 Month LIBOR | 0.200 |
XPO Logistics, Inc. Term Loan | USD 1 Month LIBOR | 2.000 |
Ziggo Secured Finance Partnership 1st Lien Term Loan E | USD 1 Month LIBOR | 2.500 |
For a description of variable, adjustable or floating rate securities see note 2 in the Notes to Financial Statements. |
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Value and | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
Australia 10 Year Government Bond Futures | 450 | AUD | 58,214 | 09/18 | 585 | ||
Canadian Dollar Currency Futures | 7 | USD | 533 | 09/18 | (7 | ) | |
Euro-Btp Futures | 10 | EUR | 1,272 | 09/18 | (7 | ) | |
Euro-Bund Futures | 78 | EUR | 12,679 | 09/18 | 87 | ||
Eurodollar Futures | 269 | USD | 65,256 | 12/19 | (33 | ) | |
Eurodollar Futures | 89 | USD | 21,587 | 06/20 | (79 | ) | |
Eurodollar Futures | 11 | USD | 2,668 | 03/21 | (11 | ) | |
Japanese Yen Currency Futures | 18 | USD | 2,040 | 09/18 | (18 | ) | |
United States 2 Year Treasury Note Futures | 132 | USD | 27,961 | 09/18 | 15 | ||
United States 5 Year Treasury Note Futures | 639 | USD | 72,601 | 09/18 | 222 | ||
United States 10 Year Treasury Note Futures | 1,536 | USD | 184,608 | 09/18 | 1,665 | ||
United States 10 Year Ultra Treasury Note Futures | 20 | USD | 2,565 | 09/18 | 37 | ||
United States Long Bond Futures | 213 | USD | 30,885 | 09/18 | 637 | ||
United States Ultra Bond Futures | 116 | USD | 18,509 | 09/18 | 544 | ||
Short Positions | |||||||
British Pound Currency Futures | 7 | USD | 579 | 09/18 | (4 | ) | |
Euro-Bobl Futures | 35 | EUR | 4,626 | 09/18 | (23 | ) | |
Euro-Bund Futures | 461 | EUR | 74,936 | 09/18 | (878 | ) | |
Eurodollar Futures | 31 | USD | 5,713 | 09/18 | 46 | ||
Eurodollar Futures | 39 | USD | 9,493 | 12/18 | 59 | ||
Eurodollar Futures | 38 | USD | 9,238 | 03/19 | 48 | ||
Euro-OAT Futures | 17 | EUR | 2,627 | 09/18 | (33 | ) | |
Euro-Schatz Futures | 498 | EUR | 55,818 | 09/18 | (30 | ) | |
Japan Government 10 Year Bond Futures | 4 | JPY | 603,359 | 09/18 | (3 | ) | |
Long Gilt Futures | 289 | GBP | 35,565 | 09/18 | (382 | ) | |
United States 2 Year Treasury Note Futures | 100 | USD | 21,183 | 09/18 | 6 | ||
United States 5 Year Treasury Note Futures | 55 | USD | 6,249 | 09/18 | (15 | ) | |
United States 10 Year Treasury Note Futures | 28 | USD | 3,366 | 09/18 | (5 | ) | |
United States 10 Year Ultra Treasury Note Futures | 44 | USD | 5,642 | 09/18 | (59 | ) | |
United States Long Bond Futures | 127 | USD | 18,415 | 09/18 | (221 | ) | |
United States Ultra Bond Futures | 75 | USD | 11,967 | 09/18 | (168 | ) | |
Total Value and Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 1,975 |
Options Written | |||||||||
Amounts in thousands (except contract amounts) | |||||||||
Number of | Strike | Notional | Expiration | Fair Value | |||||
Description | Counterparty | Call/Put | Contracts | Price | Amount | Date | $ | ||
Cross Currency Options (USD/JPY) | HSBC | Put | 1 | 106.50 | USD | 1,100 | 07/19/18 | — | |
United States 10 Year Treasury Note | |||||||||
Futures | Merrill Lynch | Call | 13 | 120.00 | USD | 1,560 | 07/06/18 | (4 | ) |
United States 10 Year Treasury Note | |||||||||
Futures | Merrill Lynch | Call | 29 | 120.00 | USD | 3,480 | 07/27/18 | (16 | ) |
United States 10 Year Treasury Note | |||||||||
Futures | Merrill Lynch | Call | 30 | 120.50 | USD | 3,615 | 07/27/18 | (10 | ) |
United States Treasury Bond Futures | Merrill Lynch | Call | 18 | 145.00 | USD | 2,610 | 07/27/18 | (17 | ) |
Swaption | |||||||||
(Counterparty, Fund Receives/Fund | |||||||||
Pays, Notional, Termination Date) |
See accompanying notes which are an integral part of the financial statements.
96 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Options Written | |||||||||||
Amounts in thousands (except contract amounts) | |||||||||||
Number of | Strike | Notional | Expiration | Fair Value | |||||||
Description | Counterparty | Call/Put | Contracts | Price | Amount | Date | $ | ||||
BNP Paribas, USD 0.800%/CDX NA | |||||||||||
Investment Grade Index, USD | |||||||||||
600,000, 06/20/23 | Merrill Lynch | Put | 1 | 0.00 | 2,920 | 08/15/18 | (3 | ) | |||
Total Liability for Options Written (premiums received $44) | (50 | ) | |||||||||
Foreign Currency Exchange Contracts | |||||||||||
Amounts in thousands | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Amount | Amount | (Depreciation) | |||||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||||
Bank of America | USD | 743 | CZK | 16,333 | 08/28/18 | (6 | ) | ||||
Bank of America | USD | 3,393 | CZK | 72,985 | 08/28/18 | (102 | ) | ||||
Bank of America | USD | — | HKD | 4 | 08/28/18 | — | |||||
Bank of America | USD | 627 | HKD | 4,905 | 08/28/18 | (1 | ) | ||||
Bank of America | USD | 3,426 | HKD | 26,841 | 08/28/18 | (2 | ) | ||||
Bank of America | USD | 740 | HUF | 201,781 | 08/28/18 | (22 | ) | ||||
Bank of America | USD | 3,399 | HUF | 901,874 | 08/28/18 | (189 | ) | ||||
Bank of America | USD | 63 | MXN | 1,329 | 08/28/18 | 3 | |||||
Bank of America | USD | 135 | MXN | 2,684 | 08/28/18 | (1 | ) | ||||
Bank of America | USD | 1,466 | MXN | 29,348 | 08/28/18 | (1 | ) | ||||
Bank of America | USD | 732 | PLN | 2,700 | 08/28/18 | (10 | ) | ||||
Bank of America | USD | 3,377 | PLN | 12,204 | 08/28/18 | (116 | ) | ||||
Bank of America | USD | 274 | TRY | 1,340 | 08/28/18 | 11 | |||||
Bank of America | USD | 1,020 | TRY | 4,986 | 08/28/18 | 40 | |||||
Bank of America | USD | 1,421 | TRY | 6,542 | 08/28/18 | (31 | ) | ||||
Bank of America | USD | 3,198 | TRY | 14,719 | 08/28/18 | (69 | ) | ||||
Bank of America | USD | 80 | ZAR | 1,084 | 08/28/18 | (1 | ) | ||||
Bank of America | USD | 136 | ZAR | 1,716 | 08/28/18 | (11 | ) | ||||
Bank of America | USD | 1,480 | ZAR | 18,620 | 08/28/18 | (132 | ) | ||||
Bank of America | CZK | 558 | USD | 25 | 08/28/18 | — | |||||
Bank of America | CZK | 3,289 | USD | 150 | 08/28/18 | 1 | |||||
Bank of America | CZK | 32,438 | USD | 1,508 | 08/28/18 | 45 | |||||
Bank of America | HUF | 788 | USD | 3 | 08/28/18 | — | |||||
Bank of America | HUF | 40,629 | USD | 149 | 08/28/18 | 4 | |||||
Bank of America | HUF | 400,833 | USD | 1,510 | 08/28/18 | 84 | |||||
Bank of America | PLN | 210 | USD | 57 | 08/28/18 | 1 | |||||
Bank of America | THB | 46 | USD | 1 | 08/28/18 | — | |||||
Bank of America | THB | 3,517 | USD | 110 | 08/28/18 | 4 | |||||
Bank of America | THB | 20,916 | USD | 657 | 08/28/18 | 24 | |||||
Bank of America | THB | 48,490 | USD | 1,518 | 08/28/18 | 52 | |||||
Bank of America | THB | 109,103 | USD | 3,416 | 08/28/18 | 118 | |||||
Bank of America | TRY | 1,349 | USD | 276 | 08/28/18 | (11 | ) | ||||
Bank of Montreal | AUD | 1,356 | MXN | 21,575 | 09/19/18 | 139 | |||||
Barclays | USD | 1,154 | CAD | 1,450 | 07/19/18 | (50 | ) | ||||
Barclays | USD | 724 | CNY | 4,619 | 07/19/18 | (28 | ) | ||||
Barclays | USD | 73 | MXN | 1,500 | 07/19/18 | 2 | |||||
Barclays | USD | 1,241 | MXN | 22,780 | 07/19/18 | (97 | ) | ||||
Barclays | USD | 5 | RUB | 340 | 07/19/18 | — | |||||
Barclays | USD | 59 | RUB | 3,723 | 07/19/18 | — | |||||
Barclays | CNY | 15,140 | USD | 2,387 | 07/19/18 | 103 | |||||
Barclays | EUR | 917 | USD | 1,139 | 07/19/18 | 67 | |||||
Barclays | MXN | 800 | USD | 41 | 07/19/18 | 1 | |||||
Brown Brothers Harriman | USD | 3,960 | AUD | 5,326 | 07/24/18 | (19 | ) |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 97
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Brown Brothers Harriman | ILS | 9,098 | USD | 2,527 | 07/24/18 | 36 | |
Brown Brothers Harriman | ILS | 18,196 | USD | 5,020 | 07/24/18 | 39 | |
Citibank | USD | 304 | BRL | 1,040 | 07/19/18 | (37 | ) |
Citibank | USD | 1,150 | JPY | 124,950 | 07/19/18 | (20 | ) |
Citibank | USD | 20,263 | JPY | 2,233,500 | 07/24/18 | (61 | ) |
Citibank | USD | 363 | MXN | 6,910 | 07/19/18 | (16 | ) |
Citibank | USD | 9 | RUB | 570 | 07/19/18 | — | |
Citibank | USD | 40 | RUB | 2,502 | 07/19/18 | (1 | ) |
Citibank | USD | 322 | RUB | 19,970 | 07/19/18 | (5 | ) |
Citibank | EUR | 150 | USD | 176 | 07/19/18 | — | |
Citibank | EUR | 170 | USD | 199 | 07/19/18 | — | |
Citibank | ILS | 36,134 | USD | 9,970 | 07/24/18 | 79 | |
Citibank | JPY | 164,844 | USD | 1,547 | 07/19/18 | 56 | |
Citibank | MXN | 400 | USD | 20 | 07/19/18 | — | |
Citibank | MXN | 650 | USD | 32 | 07/19/18 | (1 | ) |
Citibank | MXN | 860 | USD | 45 | 07/19/18 | 2 | |
Citibank | MXN | 1,000 | USD | 51 | 07/19/18 | — | |
Citibank | MXN | 1,500 | USD | 81 | 07/19/18 | 6 | |
Citibank | TWD | 1,370 | USD | 45 | 08/03/18 | — | |
Citibank | TWD | 5,150 | USD | 169 | 08/03/18 | — | |
Commonwealth Bank of Australia | USD | 20,063 | GBP | 15,132 | 07/24/18 | (74 | ) |
Commonwealth Bank of Australia | CHF | 13,951 | USD | 14,065 | 07/24/18 | (47 | ) |
Goldman Sachs | USD | 41 | MXN | 821 | 07/23/18 | — | |
Goldman Sachs | USD | 1,100 | MXN | 21,925 | 07/23/18 | 1 | |
HSBC | USD | 537 | CLP | 342,000 | 07/23/18 | (14 | ) |
HSBC | USD | 27 | JPY | 2,958 | 07/23/18 | — | |
HSBC | USD | 531 | NOK | 4,342 | 07/23/18 | 3 | |
JPMorgan Chase | USD | 50 | ARS | 1,310 | 08/21/18 | (7 | ) |
JPMorgan Chase | USD | 530 | BRL | 2,000 | 07/23/18 | (15 | ) |
JPMorgan Chase | USD | 1,528 | CAD | 1,957 | 08/03/18 | (39 | ) |
JPMorgan Chase | USD | 1,213 | CLP | 769,726 | 07/13/18 | (35 | ) |
JPMorgan Chase | USD | 1,659 | GBP | 1,235 | 08/13/18 | (27 | ) |
JPMorgan Chase | USD | 1,091 | INR | 71,640 | 07/19/18 | (47 | ) |
JPMorgan Chase | USD | 115 | JPY | 12,567 | 08/13/18 | (1 | ) |
JPMorgan Chase | USD | 377 | JPY | 41,247 | 08/13/18 | (3 | ) |
JPMorgan Chase | USD | 2,349 | NOK | 18,734 | 08/03/18 | (46 | ) |
JPMorgan Chase | USD | 17 | PHP | 911 | 07/13/18 | — | |
JPMorgan Chase | USD | 626 | PLN | 2,185 | 08/03/18 | (42 | ) |
JPMorgan Chase | USD | 376 | SEK | 3,252 | 08/03/18 | (12 | ) |
JPMorgan Chase | USD | 2,261 | SEK | 19,569 | 08/03/18 | (71 | ) |
JPMorgan Chase | AUD | 7,285 | USD | 5,572 | 08/13/18 | 180 | |
JPMorgan Chase | BRL | 7,177 | USD | 1,882 | 07/13/18 | 32 | |
JPMorgan Chase | BRL | 4,000 | USD | 1,073 | 07/23/18 | 43 | |
JPMorgan Chase | CHF | 2,069 | USD | 2,105 | 08/03/18 | 11 | |
JPMorgan Chase | CLP | 342,000 | USD | 531 | 07/23/18 | 7 | |
JPMorgan Chase | COP | 2,620,180 | USD | 909 | 07/13/18 | 15 | |
JPMorgan Chase | CZK | 1,754 | USD | 83 | 08/03/18 | 4 | |
JPMorgan Chase | DKK | 91 | USD | 15 | 08/03/18 | — | |
JPMorgan Chase | EUR | 3,347 | USD | 3,976 | 08/13/18 | 56 | |
JPMorgan Chase | HKD | 524 | USD | 67 | 08/03/18 | — | |
JPMorgan Chase | HUF | 572,591 | USD | 2,219 | 08/03/18 | 186 | |
JPMorgan Chase | IDR | 25,423,879 | USD | 1,823 | 07/13/18 | 44 |
See accompanying notes which are an integral part of the financial statements.
98 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
JPMorgan Chase | MXN | 22,746 | USD | 1,109 | 07/23/18 | (33 | ) |
JPMorgan Chase | MXN | 1,735 | USD | 88 | 08/03/18 | 1 | |
JPMorgan Chase | MXN | 6,680 | USD | 351 | 08/03/18 | 16 | |
JPMorgan Chase | MXN | 15,332 | USD | 746 | 08/03/18 | (22 | ) |
JPMorgan Chase | NZD | 9,164 | USD | 6,461 | 08/13/18 | 255 | |
JPMorgan Chase | PEN | 10,383 | USD | 3,165 | 07/13/18 | 4 | |
JPMorgan Chase | SGD | 3,325 | USD | 2,514 | 08/03/18 | 73 | |
JPMorgan Chase | THB | 67,306 | USD | 2,112 | 07/13/18 | 80 | |
JPMorgan Chase | TWD | 41,954 | USD | 1,413 | 07/13/18 | 35 | |
JPMorgan Chase | TWD | 924 | USD | 30 | 08/02/18 | — | |
JPMorgan Chase | TWD | 3,120 | USD | 102 | 08/02/18 | — | |
Royal Bank of Canada | AUD | 1,358 | MXN | 21,575 | 09/19/18 | 136 | |
Royal Bank of Canada | CAD | 13,120 | USD | 9,951 | 07/24/18 | (33 | ) |
Royal Bank of Canada | MXN | 43,150 | AUD | 2,892 | 09/19/18 | (11 | ) |
State Street | USD | 125 | IDR | 1,782,386 | 08/28/18 | (1 | ) |
State Street | USD | 1,478 | IDR | 21,199,642 | 08/28/18 | (8 | ) |
State Street | USD | 16 | KRW | 17,523 | 08/28/18 | — | |
State Street | USD | 9 | PEN | 29 | 08/28/18 | — | |
State Street | USD | 20 | RUB | 1,282 | 08/28/18 | — | |
State Street | USD | 94 | RUB | 5,896 | 08/28/18 | (1 | ) |
State Street | USD | 1,490 | RUB | 93,744 | 08/28/18 | (6 | ) |
State Street | USD | 3 | TWD | 89 | 08/28/18 | — | |
State Street | BRL | 228 | USD | 60 | 08/28/18 | 1 | |
State Street | BRL | 2,510 | USD | 680 | 08/28/18 | 37 | |
State Street | BRL | 12,252 | USD | 3,307 | 08/28/18 | 165 | |
State Street | CHF | 3,450 | NZD | 5,144 | 07/06/18 | 1 | |
State Street | CHF | 3,450 | NZD | 5,139 | 08/07/18 | (27 | ) |
State Street | IDR | 438,471 | USD | 31 | 08/28/18 | — | |
State Street | ILS | 9,098 | USD | 2,518 | 07/24/18 | 27 | |
State Street | KRW | 122,879 | USD | 114 | 08/28/18 | 4 | |
State Street | KRW | 713,468 | USD | 663 | 08/28/18 | 22 | |
State Street | KRW | 1,625,078 | USD | 1,512 | 08/28/18 | 50 | |
State Street | KRW | 3,656,425 | USD | 3,401 | 08/28/18 | 113 | |
State Street | MYR | 51 | USD | 13 | 08/28/18 | — | |
State Street | MYR | 2,598 | USD | 650 | 08/28/18 | 7 | |
State Street | MYR | 13,508 | USD | 3,394 | 08/28/18 | 53 | |
State Street | NZD | 4,990 | CHF | 3,450 | 07/06/18 | 211 | |
State Street | NZD | 5,158 | CHF | 3,450 | 08/07/18 | 1 | |
State Street | PEN | 2,110 | USD | 643 | 08/28/18 | 2 | |
State Street | PEN | 11,135 | USD | 3,393 | 08/28/18 | 9 | |
State Street | TWD | 3,220 | USD | 108 | 08/28/18 | 2 | |
State Street | TWD | 45,224 | USD | 1,523 | 08/28/18 | 33 | |
Toronto Dominion Bank | USD | 612 | JPY | 67,322 | 07/31/18 | (3 | ) |
Westpac | USD | 5,997 | EUR | 5,154 | 07/24/18 | 31 | |
Westpac | USD | 3,993 | NZD | 5,746 | 07/24/18 | (101 | ) |
Westpac | SEK | 122,174 | USD | 13,865 | 07/24/18 | 203 | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 1,305 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 99
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Interest Rate Swap Contracts | ||||||||||||||
Amounts in thousands | ||||||||||||||
Premiums | Unrealized | |||||||||||||
Paid | Appreciation | |||||||||||||
Termination | (Received) | (Depreciation) | Fair Value | |||||||||||
Counterparty | Notional Amount | Fund Receives | Fund Pays | Date | $ | $ | $ | |||||||
JPMorgan Chase | DKK | 4,200 | Six Month CIBOR(3) | 0.510%(4) | 05/05/25 | — | 5 | 5 | ||||||
JPMorgan Chase | DKK | 10,470 | Six Month CIBOR(3) | 0.943%(4) | 05/05/25 | — | (34 | ) | (34 | ) | ||||
JPMorgan Chase | CZK | 15,850 | Six Month PRIBOR(3) | 0.495%(4) | 06/19/25 | — | 70 | 70 | ||||||
JPMorgan Chase | CZK | 36,930 | Six Month PRIBOR(3) | 1.280%(4) | 06/19/25 | — | 74 | 74 | ||||||
Mexico Interbank 28 | ||||||||||||||
Merrill Lynch | MXN | 188,910 | 7.351%(1) | Day Deposit Rate(1) | 04/05/21 | (7 | ) | (152 | ) | (159 | ) | |||
Merrill Lynch | USD | 3,744 | 2.250%(3) | Three Month LIBOR(2) | 05/31/22 | 7 | (96 | ) | (89 | ) | ||||
Merrill Lynch | USD | 9,660 | 2.850%(3) | Three Month LIBOR(2) | 08/31/22 | (3 | ) | (11 | ) | (14 | ) | |||
Federal Fund | ||||||||||||||
Merrill Lynch | USD | 16,720 | Effective Rate(2) | Three Month LIBOR(2) | 09/19/23 | — | 18 | 18 | ||||||
Merrill Lynch | USD | 1,583 | Three Month LIBOR(2) | 2.950%(3) | 11/15/43 | (10 | ) | 22 | 12 | |||||
Total Open Interest Rate Swap Contracts (å) | (13 | ) | (104 | ) | (117 | ) |
Credit Default Swap Contracts | ||||||||||||||
Amounts in thousands | ||||||||||||||
Credit Indices | ||||||||||||||
Premiums | Unrealized | |||||||||||||
Fund (Pays)/ | Paid/ | Appreciation | ||||||||||||
Purchase/Sell | Receives | Termination | (Received) | (Depreciation) | Fair Value | |||||||||
Reference Entity | Counterparty | Protection | NotionalAmount | Fixed Rate | Date | $ | $ | $ | ||||||
CDX Investment Grade | ||||||||||||||
Index | Merrill Lynch | Sell | USD | 6,850 | 1.000%(2) | 06/20/23 | 117 | (14 | ) | 103 | ||||
CDX NA High Yield Index | Goldman Sachs | Sell | USD | 2,260 | 5.000%(2) | 06/20/23 | 140 | (7 | ) | 133 | ||||
CDX NA High Yield Index | Merrill Lynch | Purchase | USD | 1,150 | (5.000%)(2) | 12/20/22 | (79 | ) | 7 | (72 | ) | |||
CDX NA High Yield Index | Merrill Lynch | Purchase | USD | 2,440 | (5.000%)(2) | 06/20/23 | (171 | ) | 27 | (144 | ) | |||
Total Open Credit Indices Contracts (å) | 7 | 13 | 20 |
See accompanying notes which are an integral part of the financial statements.
100 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Presentation of Portfolio Holdings | ||||||||||||||||
Amounts in thousands | ||||||||||||||||
Fair Value | ||||||||||||||||
Practical | ||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | ||||||||||
Long-Term Investments | ||||||||||||||||
Asset-Backed Securities | $ | — | $ | 56,730 | $ | — | $ | — | $ | 56,730 | 6.4 | |||||
Corporate Bonds and Notes | — | 177,194 | — | — | 177,194 | 19.8 | ||||||||||
International Debt | — | 71,382 | — | — | 71,382 | 8.0 | ||||||||||
Loan Agreements | — | 7,171 | — | — | 7,171 | 0.8 | ||||||||||
Mortgage-Backed Securities | — | 182,419 | — | — | 182,419 | 20.4 | ||||||||||
Municipal Bonds | — | 3,240 | — | — | 3,240 | 0.4 | ||||||||||
Non-US Bonds | — | 30,699 | — | — | 30,699 | 3.4 | ||||||||||
United States Government Treasuries | — | 279,601 | — | — | 279,601 | 31.3 | ||||||||||
Common Stocks | — | — | — | — | — | — | ||||||||||
Options Purchased | 1 | 2 | — | — | 3 | —* | ||||||||||
Short-Term Investments | — | 61,861 | 44 | 48,941 | 110,846 | 12.4 | ||||||||||
Total Investments | 1 | 870,299 | 44 | 48,941 | 919,285 | 102.9 | ||||||||||
Other Assets and Liabilities, Net | (2.9 | ) | ||||||||||||||
100.0 | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Assets | ||||||||||||||||
Futures Contracts | 3,951 | — | — | — | 3,951 | 0.4 | ||||||||||
Foreign Currency Exchange Contracts | — | 3,071 | — | — | 3,071 | 0.3 | ||||||||||
Interest Rate Swap Contracts | — | 179 | — | — | 179 | —* | ||||||||||
Credit Default Swap Contracts | — | 236 | — | — | 236 | —* | ||||||||||
Liabilities | ||||||||||||||||
Futures Contracts | (1,976 | ) | — | — | — | (1,976 | ) | (0.2 | ) | |||||||
Options Written | (50 | ) | — | — | — | (50 | ) | (—)* | ||||||||
Foreign Currency Exchange Contracts | — | (1,766 | ) | — | — | (1,766 | ) | (0.2 | ) | |||||||
Interest Rate Swap Contracts | — | (296 | ) | — | — | (296 | ) | (—)* | ||||||||
Credit Default Swap Contracts | — | (216 | ) | — | — | (216 | ) | (—)* | ||||||||
Total Other Financial Instruments** | $ | 1,925 | $ | 1,208 | $ | — | $ | — | $ | 3,133 |
* Less than 0.05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the investments.
(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified
in the fair value levels. The fair value amounts presented in the table are intended to permit reconciliation to the amounts presented in the Schedule of
Investments.
For a description of the Levels, see note 2 in the Notes to Financial Statements.
For a disclosure on transfers between Levels 1, 2 and 3 during the period ended June 30, 2018, see note 2 in the Notes to
Financial Statements.
Investments in which significant unobservable inputs (Level 3) were used in determining a fair value for the period ended June 30,
2018, were less than 1% of net assets.
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 101
Russell Investment Funds
Strategic Bond Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Fair Value | |||
Country Exposure | $ | ||
Argentina | 1,064 | ||
Australia | 7,866 | ||
Austria | 414 | ||
Bermuda | 916 | ||
Brazil | 3,720 | ||
Canada | 13,619 | ||
Cayman Islands | 6,612 | ||
Chile | 639 | ||
China | 489 | ||
Colombia | 4,531 | ||
Curacao | 55 | ||
Ecuador | 168 | ||
Finland | 771 | ||
France | 4,547 | ||
Germany | 1,423 | ||
Guernsey | 296 | ||
Hong Kong | 238 | ||
India | 460 | ||
Indonesia | 1,155 | ||
Ireland | 3,566 | ||
Italy | 1,258 | ||
Japan | 3,605 | ||
Kazakhstan | 200 | ||
Kuwait | 204 | ||
Luxembourg | 982 | ||
Malaysia | 2,316 | ||
Mexico | 9,358 | ||
Netherlands | 10,292 | ||
New Zealand | 3,869 | ||
Norway | 1,072 | ||
Panama | 236 | ||
Peru | 2,668 | ||
Poland | 1,522 | ||
Qatar | 418 | ||
Russia | 1,353 | ||
Singapore | 2,649 | ||
South Korea | 1,433 | ||
Spain | 1,494 | ||
Sweden | 3,548 | ||
Switzerland | 1,783 | ||
United Arab Emirates | 485 | ||
United Kingdom | 13,756 | ||
United States | 802,235 | ||
Total Investments | 919,285 |
See accompanying notes which are an integral part of the financial statements.
102 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Fair Value of Derivative Instruments — June 30, 2018 (Unaudited)
Amounts in thousands
Foreign | |||||||||
Credit | Currency | Interest Rate | |||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | ||||||
Location: Statement of Assets and Liabilities - Assets | |||||||||
Investments, at fair value* | $ | — | $ | 2 | $ | 1 | |||
Unrealized appreciation on foreign currency exchange contracts | — | 3,071 | — | ||||||
Variation margin on futures contracts** | — | 21 | 3,930 | ||||||
Interest rate swap contracts, at fair value | — | — | 179 | ||||||
Credit default swap contracts, at fair value | 236 | — | — | ||||||
Total | $ | 236 | $ | 3,094 | $ | 4,110 | |||
Location: Statement of Assets and Liabilities - Liabilities | |||||||||
Variation margin on futures contracts** | $ | — | $ | 28 | $ | 1,948 | |||
Unrealized depreciation on foreign currency exchange contracts | — | 1,766 | — | ||||||
Options written, at fair value | — | — | 50 | ||||||
Interest rate swap contracts, at fair value | — | — | 296 | ||||||
Credit default swap contracts, at fair value | 216 | — | — | ||||||
Total | $ | 216 | $ | 1,794 | $ | 2,294 | |||
Foreign | |||||||||
Credit | Currency | Interest Rate | |||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | ||||||
Location: Statement of Operations - Net realized gain (loss) | |||||||||
Investments*** | $ | — | $ | (47 | ) | $ | (156 | ) | |
Futures contracts | — | (10,378 | ) | (91 | ) | ||||
Options written | — | 38 | 267 | ||||||
Interest rate swap contracts | — | — | 428 | ||||||
Credit default swap contracts | 12 | — | — | ||||||
Foreign currency exchange contracts | — | (1,253 | ) | — | |||||
Total | $ | 12 | $ | (11,640 | ) | $ | 448 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||||||||
Investments**** | $ | — | $ | (5 | ) | $ | 2 | ||
Futures contracts | — | 3 | 3,110 | ||||||
Options written | — | 2 | (17 | ) | |||||
Interest rate swap contracts | — | — | (161 | ) | |||||
Credit default swap contracts | 26 | — | — | ||||||
Foreign currency exchange contracts | — | 1,032 | — | ||||||
Total | $ | 26 | $ | 1,032 | $ | 2,934 |
* Fair value of purchased options.
** Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
*** Includes net realized gain (loss) on purchased options as reported in the Statement of Operations.
**** Includes net change in unrealized appreciation/depreciation on purchased options as reported in the Schedule of Investments.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 103
Russell Investment Funds
Strategic Bond Fund
Balance Sheet Offsetting of Financial and Derivative Instruments —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Options Purchased Contracts | Investments, at fair value | $ | 3 | $ | — | $ | 3 | ||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 3,071 | — | 3,071 | |||||
Futures Contracts | Variation margin on futures contracts | 6,309 | — | 6,309 | |||||
Interest Rate Swap Contracts | Interest rate swap contracts, at fair value | 179 | — | 179 | |||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 236 | — | 236 | |||||
Total Financial and Derivative Assets | 9,798 | — | 9,798 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (6,574) | — | (6,574 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 3,224 | $ | — | $ | 3,224 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Assets | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||
Bank of America | $ | 389 | $ | 389 | $ | — | $ | — | |||
Bank of Montreal | 139 | — | — | 139 | |||||||
Barclays | 174 | 174 | — | — | |||||||
Brown Brothers Harriman | 75 | 19 | — | 56 | |||||||
Citigroup | 143 | 141 | — | 2 | |||||||
Goldman Sachs | 1 | — | — | 1 | |||||||
HSBC | 5 | 5 | — | — | |||||||
JPMorgan Chase | 1,189 | 432 | 757 | — | |||||||
Merrill Lynch | 1 | — | — | 1 | |||||||
Royal Bank of Canada | 136 | 44 | — | 92 | |||||||
State Street | 738 | 44 | — | 694 | |||||||
Westpac | 234 | 101 | — | 133 | |||||||
Total | $ | 3,224 | $ | 1,349 | $ | 757 | $ | 1,118 |
See accompanying notes which are an integral part of the financial statements.
104 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 1,430 | $ | — | $ | 1,430 | ||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 1,766 | — | 1,766 | |||||
Options Written Contracts | Options written, at fair value | 50 | — | 50 | |||||
Interest Rate Swap Contracts | Interest rate swap contracts, at fair value | 296 | — | 296 | |||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 216 | — | 216 | |||||
Total Financial and Derivative Liabilities | 3,758 | — | 3,758 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (1,953) | — | (1,953 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 1,805 | $ | — | $ | 1,805 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | ||||||||||
Gross Amounts Not Offset in | ||||||||||
the Statement of Assets and | ||||||||||
Liabilities | ||||||||||
Net Amounts | ||||||||||
of Liabilities | ||||||||||
Presented in | ||||||||||
the Statement | Financial and | |||||||||
of Assets and | Derivative | Collateral | ||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | ||||||
Bank of America | $ | 707 | $ | 389 | $ | 318 | $ | — | ||
Barclays | 176 | 174 | — | 2 | ||||||
Brown Brothers Harriman | 19 | 19 | — | — | ||||||
Citigroup | 141 | 141 | — | — | ||||||
Commonwealth Bank of Australia | 121 | — | — | 121 | ||||||
HSBC | 14 | 5 | — | 9 | ||||||
JPMorgan Chase | 432 | 432 | — | — | ||||||
Merrill Lynch | 3 | — | 1 | 2 | ||||||
Royal Bank of Canada | 44 | 44 | — | — | ||||||
State Street | 44 | 44 | — | — | ||||||
Toronto Dominion Bank | 3 | — | — | 3 | ||||||
Westpac | 101 | 101 | — | — | ||||||
Total | $ | 1,805 | $ | 1,349 | $ | 319 | $ | 137 |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 105
Russell Investment Funds
Strategic Bond Fund
Statement of Assets and Liabilities — June 30, 2018 (Unaudited)
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 928,504 |
Investments, at fair value(>) | 919,285 | |
Cash | 5,947 | |
Foreign currency holdings(^) | 586 | |
Unrealized appreciation on foreign currency exchange contracts | 3,071 | |
Receivables: | ||
Dividends and interest | 5,066 | |
Dividends from affiliated funds | 74 | |
Investments sold | 21,144 | |
Fund shares sold | 502 | |
From broker(a)(b)(c) | 5,989 | |
Variation margin on futures contracts | 6,309 | |
Prepaid expenses | 5 | |
Interest rate swap contracts, at fair value(•) | 179 | |
Credit default swap contracts, at fair value(+) | 236 | |
Total assets | 968,393 | |
Liabilities | ||
Payables: | ||
Due to broker (d)(e)(f) | 2,883 | |
Investments purchased | 67,738 | |
Fund shares redeemed | 233 | |
Accrued fees to affiliates | 444 | |
Other accrued expenses | 156 | |
Variation margin on futures contracts | 1,430 | |
Unrealized depreciation on foreign currency exchange contracts | 1,766 | |
Options written, at fair value(x) | 50 | |
Interest rate swap contracts, at fair value(•) | 296 | |
Credit default swap contracts, at fair value(+) | 216 | |
Total liabilities | 75,212 | |
Net Assets | $ | 893,181 |
See accompanying notes which are an integral part of the financial statements.
106 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Statement of Assets and Liabilities, continued — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 3,922 | |
Accumulated net realized gain (loss) | (28,054 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | (9,221 | ) | |
Investments in affiliated funds | 2 | ||
Futures contracts | 1,975 | ||
Options written | (6 | ) | |
Foreign currency exchange contracts | 1,305 | ||
Interest rate swap contracts | (104 | ) | |
Credit default swap contracts | 13 | ||
Foreign currency-related transactions | (27 | ) | |
Shares of beneficial interest | 884 | ||
Additional paid-in capital | 922,492 | ||
Net Assets | $ | 893,181 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: (#) | $ | 10.11 | |
Net assets | $ | 893,180,656 | |
Shares outstanding ($. 01 par value) | 88,389,177 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 602 | |
(x) Premiums received on options written | $ | 44 | |
(+) Credit default swap contracts - premiums paid (received) | $ | 7 | |
(•) Interest rate swap contracts - premiums paid (received) | $ | (13 | ) |
(>) Investments in affiliates, U. S. Cash Management Fund | $ | 48,941 | |
(a) Receivable from Broker for Futures | $ | 2,987 | |
(b) Receivable from Broker for Swaps | $ | 2,255 | |
(c) Receivable from Broker for TBAs | $ | 747 | |
(d) Due to Broker for Futures | $ | 394 | |
(e) Due to Broker for Swaps | $ | 939 | |
(f) Due to Broker for Forwards | $ | 1,550 | |
(#) 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.
Strategic Bond Fund 107
Russell Investment Funds
Strategic Bond Fund
Statement of Operations — For the Period Ended June 30, 2018 (Unaudited)
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 10 | |
Dividends from affiliated funds | 399 | ||
Interest | 12,684 | ||
Total investment income | 13,093 | ||
Expenses | |||
Advisory fees | 2,439 | ||
Administrative fees | 222 | ||
Custodian fees | 136 | ||
Transfer agent fees . | 20 | ||
Professional fees | 60 | ||
Trustees’ fees | 16 | ||
Printing fees | 56 | ||
Miscellaneous | 9 | ||
Total expenses | 2,958 | ||
Net investment income (loss) | 10,135 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | (8,610 | ) | |
Futures contracts | (10,469 | ) | |
Options written | 305 | ||
Foreign currency exchange contracts | (1,253 | ) | |
Interest rate swap contracts | 428 | ||
Credit default swap contracts | 12 | ||
Foreign currency-related transactions | (6 | ) | |
Net realized gain (loss) | (19,593 | ) | |
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (12,578 | ) | |
Investments in affiliated funds | 5 | ||
Futures contracts | 3,113 | ||
Options written | (15 | ) | |
Foreign currency exchange contracts | 1,032 | ||
Interest rate swap contracts | (161 | ) | |
Credit default swap contracts | 26 | ||
Foreign currency-related transactions | (47 | ) | |
Net change in unrealized appreciation (depreciation) | (8,625 | ) | |
Net realized and unrealized gain (loss) | (28,218 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (18,083 | ) |
See accompanying notes which are an integral part of the financial statements.
108 Strategic Bond Fund
Russell Investment Funds
Strategic Bond Fund
Statements of Changes in Net Assets
Period | ||||||
Ended June 30, 2018 | Fiscal Year Ended | |||||
Amounts in thousands | (Unaudited) | December 31, 2017 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 10,135 | $ | 16,488 | ||
Net realized gain (loss) | (19,593 | ) | (2,495 | ) | ||
Net change in unrealized appreciation (depreciation) | (8,625 | ) | 18,578 | |||
Net increase (decrease) in net assets from operations | (18,083 | ) | 32,571 | |||
Distributions | ||||||
From net investment income | (5,187 | ) | (11,721 | ) | ||
Net decrease in net assets from distributions | (5,187 | ) | (11,721 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 9,084 | 35,795 | ||||
Total Net Increase (Decrease) in Net Assets | (14,186 | ) | 56,645 | |||
Net Assets | ||||||
Beginning of period | 907,367 | 850,722 | ||||
End of period | $ | 893,181 | $ | 907,367 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 3,922 | $ | (1,026 | ) |
* Share transaction amounts (in thousands) for the periods ended June 30, 2018 and December 31, 2017 were as follows: | ||||||||||||
2018 (Unaudited) | 2017 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Proceeds from shares sold | 2,494 | $ | 25,375 | 6,949 | $ | 71,566 | ||||||
Proceeds from reinvestment of distributions | 511 | 5,187 | 1,139 | 11,721 | ||||||||
Payments for shares redeemed | (2,114 | ) | (21,478 | ) | (4,638 | ) | (47,492 | ) | ||||
Total increase (decrease) | 891 | $ | 9,084 | 3,450 | $ | 35,795 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 109
Russell Investment Funds
Strategic Bond Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period.
$ | $ | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | Income (Loss)(a) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
June 30, 2018(1) | 10.37 | . 12 | (. 32 | ) | (. 20 | ) | (. 06 | ) | — | |||||||
December 31, 2017 | 10.12 | . 20 | . 19 | . 39 | (. 14 | ) | — | |||||||||
December 31, 2016 | 10.27 | . 18 | . 14 | . 32 | (. 17 | ) | (. 30 | ) | ||||||||
December 31, 2015 | 10.66 | . 16 | (. 17 | ) | (. 01 | ) | (. 26 | ) | (. 12 | ) | ||||||
December 31, 2014 | 10.46 | . 15 | . 43 | . 58 | (. 17 | ) | (. 21 | ) | ||||||||
December 31, 2013 | 10.81 | . 18 | (. 35 | ) | (. 17 | ) | (. 15 | ) | (. 03 | ) | ||||||
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 110
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(d)(f) | (000 | ) | Gross(e) | Net(e) | Net Assets(e) | Turnover Rate(d) | |||||||||
(. 06 | ) | 10.11 | (1.94 | ) | 893,181 | . 67 | . 67 | 2.29 | 142 | ||||||||
(. 14 | ) | 10.37 | 3.86 | 907,367 | . 67 | . 66 | 1.89 | 143 | |||||||||
(. 47 | ) | 10.12 | 3.10 | 850,722 | . 67 | . 65 | 1.72 | 262 | |||||||||
(. 38 | ) | 10.27 | (. 14 | ) | 855,909 | . 67 | . 64 | 1.49 | 225 | ||||||||
(. 38 | ) | 10.66 | 5.55 | 839,458 | . 69 | . 64 | 1.44 | 173 | |||||||||
(. 18 | ) | 10.46 | (1.55 | ) | 763,901 | . 67 | . 62 | 1.73 | 133 |
See accompanying notes which are an integral part of the financial statements.
Strategic Bond Fund 111
Russell Investment Funds
Strategic Bond Fund
Related Party Transactions, Fees and Expenses (Unaudited)
Accrued fees payable to affiliates for the period ended June 30, 2018 were as follows: | ||
Advisory fees | $ | 402,396 |
Administration fees | 36,581 | |
Transfer agent fees | 3,219 | |
Trustee fees | 2,136 | |
$ | 444,332 |
Transactions (amounts in thousands) during the period ended June 30, 2018 with funds which are, or were, an affiliated company
are as follows:
Fair Value, | Change in | ||||||||||||||||||
Beginning of | Realized Gain | Unrealized | Fair Value, End | Income | Capital Gains | ||||||||||||||
Period | Purchases | Sales | (Loss) | Gain (Loss) | of Period | Distributions | Distributions | ||||||||||||
U. S. Cash Management Fund | $ | 57,316 | $ | 202,408 | $ | 210,789 | $ | 2 | $ | 4 | $ | 48,941 | $ | 399 | $ | — | |||
$ | 57,316 | $ | 202,408 | $ | 210,789 | $ | 2 | $ | 4 | $ | 48,941 | $ | 399 | $ | — |
Federal Income Taxes (Unaudited)
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation), undistributed ordinary income and
undistributed long-term capital gains for income tax purposes were as follows:
Cost of Investments | $ | 931,692,491 | |||
Unrealized Appreciation | $ | 19,489,757 | |||
Unrealized Depreciation | (28,712,994 | ) | |||
Net Unrealized Appreciation (Depreciation) | $ | (9,223,237 | ) |
Net investment income and net realized gains (losses) in the financial statements may differ from taxable net investment income and
net realized gains (losses). Capital accounts within the financial statements are adjusted for permanent differences between book and
tax accounting. Book-tax differences may be due to foreign currency gains and losses, reclassifications of dividends and differences in
treatment of income from swaps. These adjustments have no impact on the net assets. At June 30, 2018, there were no adjustments to
the Statement of Assets and Liabilities.
See accompanying notes which are an integral part of the financial statements.
112 Strategic Bond Fund
Russell Investment Funds
Global Real Estate Securities Fund
Shareholder Expense Example — June 30, 2018 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”) . | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. The fees and expenses shown in this | ||||||
administrative fees and other Fund expenses. The Example is | section do not reflect any Insurance Company Separate Account | ||||||
intended to help you understand your ongoing costs (in dollars) | Policy Charges. | ||||||
of investing in the Fund and to compare these costs with the | Hypothetical | ||||||
ongoing costs of investing in other mutual funds. The Example | Performance (5% | ||||||
is based on an investment of $1,000 invested at the beginning of | Actual | return before | |||||
the period and held for the entire period indicated, which for this | Performance | expenses) | |||||
Beginning Account Value | |||||||
Fund is from January 1, 2018 to June 30, 2018. | January 1, 2018 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | ||||||
June 30, 2018 | $ | 1,004.60 | $ | 1,020.23 | |||
The information in the table under the heading “Actual | Expenses Paid During Period* | $ | 4.57 | $ | 4.61 | ||
Performance” provides information about actual account values | |||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.92% | ||||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 181/365 (to reflect the one-half | |||||||
that you paid over the period. Simply divide your account value by | year period) . | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | |||||||
= 8.6), then multiply the result by the number in the first column | |||||||
in the row entitled “Expenses Paid During Period” to estimate | |||||||
the expenses you paid on your account during this period. | |||||||
Hypothetical Example for Comparison Purposes | |||||||
The information in the table under the heading “Hypothetical | |||||||
Performance (5% return before expenses)” provides information | |||||||
about hypothetical account values and hypothetical expenses | |||||||
based on the Fund’s actual expense ratio and an assumed rate of | |||||||
return of 5% per year before expenses, which is not the Fund’s | |||||||
actual return. The hypothetical account values and expenses | |||||||
may not be used to estimate the actual ending account balance or | |||||||
expenses you paid for the period. You may use this information | |||||||
to compare the ongoing costs of investing in the Fund and other | |||||||
funds. To do so, compare this 5% hypothetical example with the | |||||||
5% hypothetical examples that appear in the shareholder reports | |||||||
of other funds. |
Global Real Estate Securities Fund 113
Russell Investment Funds
Global Real Estate Securities Fund
Schedule of Investments — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||||
Principal | Fair | Principal | Fair | ||||||||
Amount ($) | Value | Amount ($) | Value | ||||||||
or Shares | $ | or Shares | $ | ||||||||
Common Stocks - 97.9% | Unibail-Rodamco-Westfield(Ñ) | 23,817 | 5,244 | ||||||||
Australia - 4.0% | 36,517 | ||||||||||
Arena REIT(Æ)(ö) | 1 | — | |||||||||
Charter Hall Group - ADR(ö) | 673,358 | 3,260 | Germany - 3.6% | ||||||||
Dexus Property Group(Æ)(ö) | 708,612 | 5,109 | ADO Properties SA(Þ) | 67,345 | 3,665 | ||||||
Goodman Group(ö) | 1,009,496 | 7,205 | Alstria Office REIT-AG(ö) | 207,187 | 3,112 | ||||||
GPT Group (The)(ö) | 2,217,407 | 8,332 | Deutsche Wohnen SE | 305,918 | 14,776 | ||||||
Investa Office Fund(ö) | 287,603 | 1,114 | TLG Immobilien AG | 75,479 | 2,013 | ||||||
Mirvac Group(ö) | 1,673,433 | 2,695 | Vonovia SE | 190,516 | 9,065 | ||||||
OneMarket, Ltd. (Æ) | 7,346 | 7 | 32,631 | ||||||||
Scentre Group(ö) | 2,553,946 | 8,321 | |||||||||
Viva Energy(ö) | 39,933 | 67 | Hong Kong - 10.9% | ||||||||
36,110 | Champion REIT(Æ)(ö) | 760,433 | 505 | ||||||||
CK Asset Holdings, Ltd. | 1,740,259 | 13,751 | |||||||||
Austria - 0.2% | Hang Lung Properties, Ltd. - ADR | 946,818 | 1,945 | ||||||||
CA Immobilien Anlagen AG | 42,442 | 1,415 | Henderson Land Development Co. , Ltd. | 57,761 | 304 | ||||||
Hongkong Land Holdings, Ltd. | 2,235,200 | 15,992 | |||||||||
Belgium - 0.2% | Hopewell Holdings, Ltd. | 1 | — | ||||||||
Aedifica(ö) | 11,206 | 1,022 | Hysan Development Co. , Ltd. | 631,596 | 3,515 | ||||||
VGP NV(Å) | 7,201 | 523 | Link Real Estate Investment Trust(ö) | 1,746,692 | 15,880 | ||||||
1,545 | New World Development Co. , Ltd. | 5,243,435 | 7,327 | ||||||||
Sino Land Co. , Ltd. | 1,582,664 | 2,567 | |||||||||
Brazil - 0.3% | Sun Hung Kai Properties, Ltd. | 1,349,576 | 20,248 | ||||||||
BR Malls Participacoes SA(Æ) | 512,391 | 1,282 | Swire Properties, Ltd. | 2,586,626 | 9,560 | ||||||
Iguatemi Empresa de Shopping Centers | Wharf Holdings, Ltd. (The) | 119,434 | 383 | ||||||||
SA | 154,537 | 1,230 | Wharf Real Estate Investment Co. , Ltd. | 725,342 | 5,150 | ||||||
2,512 | 97,127 | ||||||||||
Canada - 2.2% | Ireland - 0.3% | ||||||||||
Allied Properties Real Estate Investment | Green REIT PLC(ö) | 533,543 | 922 | ||||||||
Trust(ö) | 132,693 | 4,224 | Hibernia REIT PLC(ö) | 1,006,175 | 1,763 | ||||||
Boardwalk Real Estate Investment | 2,685 | ||||||||||
Trust(Ñ)(ö) | 146,346 | 5,084 | |||||||||
Canadian Apartment Properties(ö) | 161,526 | 5,238 | Japan - 9.2% | ||||||||
Crombie Real Estate Investment Trust(ö) | 172 | 2 | Activia Properties, Inc. (ö) | 800 | 3,668 | ||||||
Dream Office Real Estate Investment | Daiwa House REIT Investment Corp. (ö) | 1,338 | 3,175 | ||||||||
Trust(ö) | 10,211 | 182 | Frontier Real Estate Investment Corp. (ö) | 463 | 1,861 | ||||||
First Capital Realty, Inc. Class A(Ñ) | 65,104 | 1,023 | Global One Real Estate Investment | ||||||||
Granite Real Estate Investment Trust(ö) | 66,024 | 2,692 | Corp. (Å)(ö) | 4,225 | 4,256 | ||||||
H&R Real Estate Investment Trust(ö) | 37 | 1 | GLP J-Reit(ö) | 1,003 | 1,065 | ||||||
RioCan Real Estate Investment Trust(ö) | 93,969 | 1,726 | Hulic Co. , Ltd. | 132,000 | 1,405 | ||||||
20,172 | Ichigo Hotel REIT Investment Corp. (ö) | 524 | 659 | ||||||||
Invincible Investment Corp. (ö) | 5,058 | 2,278 | |||||||||
China - 0.3% | Japan Logistics Fund, Inc. (ö) | 1,065 | 2,171 | ||||||||
China Overseas Land & Investment, Ltd. | 222,000 | 726 | Japan Real Estate Investment Corp. (ö) | 479 | 2,535 | ||||||
Longfor Properties Co. , Ltd. | 675,000 | 1,817 | Japan Retail Fund Investment Corp. (ö) | 314 | 566 | ||||||
2,543 | Mitsubishi Estate Co. , Ltd. | 999,500 | 17,459 | ||||||||
Mitsui Fudosan Co. , Ltd. | 677,620 | 16,332 | |||||||||
Finland - 0.0% | Mori Hills REIT Investment Corp. Class | ||||||||||
Citycon OYJ(Ñ) | 215,947 | 467 | A(ö) | 1,149 | 1,475 | ||||||
Mori Trust Sogo REIT, Inc. (ö) | 632 | 906 | |||||||||
France - 4.1% | Nippon Building Fund, Inc. (ö) | 321 | 1,852 | ||||||||
Fonciere Des Regions(ö) | 33,747 | 3,509 | Nippon Healthcare Investment Corp. | ||||||||
Gecina SA(ö) | 52,360 | 8,755 | (Æ)(ö) | 78 | 121 | ||||||
Klepierre SA - GDR(ö) | 218,428 | 8,216 | Nomura Real Estate Holdings, Inc. | 174,200 | 3,862 | ||||||
Unibail-Rodamco-Westfield(Æ) | 49,015 | 10,793 | NTT Urban Development Corp. | 256,500 | 2,754 | ||||||
Orix JREIT, Inc. (ö) | 2,347 | 3,747 |
See accompanying notes which are an integral part of the financial statements.
114 Global Real Estate Securities Fund
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | ||||||||
Principal | Fair | Principal | Fair | ||||||
Amount ($) | Value | Amount ($) | Value | ||||||
or Shares | $ | or Shares | $ | ||||||
Premier Investment Corp. (ö) | 3,730 | 3,787 | Warehouse REIT PLC(ö) | 189,837 | 252 | ||||
Tokyo Tatemono Co. , Ltd. | 368,094 | 5,048 | Workspace Group PLC(ö) | 91,182 | 1,299 | ||||
XYMAX REIT Investment Corp. (Å) | 66,107 | ||||||||
(Æ)(ö) | 904 | 939 | |||||||
81,921 | United States - 51.4% | ||||||||
Acadia Realty Trust(ö) | 69,304 | 1,896 | |||||||
Netherlands - 0.4% | Agree Realty Corp. (ö) | 77,632 | 4,097 | ||||||
Eurocommercial Properties NV | 55,496 | 2,355 | Alexandria Real Estate Equities, Inc. (ö) | 53,834 | 6,792 | ||||
InterXion Holding NV(Æ) | 15,046 | 939 | American Homes 4 Rent Class A(ö) | 60,085 | 1,333 | ||||
3,294 | American Tower Corp. (ö) | 23,378 | 3,371 | ||||||
Americold Realty Trust(ö) | 86,947 | 1,914 | |||||||
Norway - 0.3% | Apartment Investment & Management | ||||||||
Entra ASA(Þ) | 215,159 | 2,937 | Co. Class A(ö) | 121,089 | 5,123 | ||||
AvalonBay Communities, Inc. (ö) | 37,339 | 6,418 | |||||||
Singapore - 0.6% | BGP Holdings PLC(Å)(Æ)(Š) | 926,311 | — | ||||||
CapitaLand Commercial Trust, Ltd. (ö) | 1,150,200 | 1,400 | Boston Properties, Inc. (ö) | 107,262 | 13,452 | ||||
CapitaLand, Ltd. | 411,000 | 951 | Brixmor Property Group, Inc. (ö) | 522,985 | 9,116 | ||||
City Developments, Ltd. | 65,500 | 527 | Camden Property Trust(ö) | 108,935 | 9,927 | ||||
Mapletree Logistics Trust(ö) | 745,000 | 672 | CBL & Associates Properties, Inc. (Ñ)(ö) | 5,239 | 29 | ||||
Suntec Real Estate Investment Trust(Æ) | Columbia Property Trust, Inc. (ö) | 104,886 | 2,382 | ||||||
(ö) | 922,700 | 1,173 | CoreSite Realty Corp. Class A(ö) | 27,051 | 2,998 | ||||
UOL Group, Ltd. | 79,600 | 444 | Corporate Office Properties Trust(ö) | 73,078 | 2,119 | ||||
5,167 | Cousins Properties, Inc. (ö) | 523,636 | 5,073 | ||||||
Crown Castle International Corp. (ö) | 25,865 | 2,789 | |||||||
Spain - 1.6% | CubeSmart(ö) | 199,950 | 6,442 | ||||||
Aedas Homes SAU(Æ)(Þ) | 42,166 | 1,498 | CyrusOne, Inc. (ö) | 43,664 | 2,548 | ||||
Hispania Activos Inmobiliarios Socimi | DCT Industrial Trust, Inc. (ö) | 60,304 | 4,024 | ||||||
SA(ö) | 6,552 | 140 | DDR Corp. (ö) | 133,890 | 2,397 | ||||
Inmobiliaria Colonial Socimi SA(ö) | 382,911 | 4,228 | Digital Realty Trust, Inc. (ö) | 69,042 | 7,704 | ||||
Merlin Properties Socimi SA(ö) | 572,063 | 8,310 | Douglas Emmett, Inc. (ö) | 211,834 | 8,511 | ||||
14,176 | Education Realty Trust, Inc. (ö) | 41,280 | 1,713 | ||||||
Empire State Realty Trust, Inc. Class | |||||||||
Sweden - 0.6% | A(ö) | 91,162 | 1,559 | ||||||
Atrium Ljungberg AB Class B | 23,240 | 375 | Equinix, Inc. (Æ)(ö) | 7,288 | 3,133 | ||||
Castellum AB | 230,236 | 3,728 | Equity LifeStyle Properties, Inc. Class | ||||||
Hufvudstaden AB Class A | 110,944 | 1,588 | A(ö) | 104,779 | 9,629 | ||||
5,691 | Equity Residential(ö) | 233,658 | 14,882 | ||||||
Essential Properties Realty Trust, Inc. | |||||||||
Switzerland - 0.3% | (Æ)(ö) | 40,432 | 547 | ||||||
PSP Swiss Property AG | 29,161 | 2,707 | Essex Property Trust, Inc. (ö) | 40,659 | 9,721 | ||||
Extended Stay America, Inc. | 112,946 | 2,440 | |||||||
United Kingdom - 7.4% | Extra Space Storage, Inc. (ö) | 160,603 | 16,030 | ||||||
Assura PLC(ö) | 3,238,996 | 2,461 | Federal Realty Investment Trust(ö) | 24,913 | 3,153 | ||||
Big Yellow Group PLC(ö) | 165,396 | 2,081 | First Industrial Realty Trust, Inc. (ö) | 85,620 | 2,854 | ||||
British Land Co. PLC (The)(ö) | 1,092,939 | 9,694 | Forest City Realty Trust, Inc. Class A(ö) | 66,934 | 1,527 | ||||
Derwent London PLC(ö) | 186,735 | 7,653 | GEO Group, Inc. (The)(ö) | 1,963 | 54 | ||||
Grainger PLC | 298,784 | 1,214 | GGP, Inc. (Æ)(ö) | 578,758 | 11,824 | ||||
Great Portland Estates PLC(ö) | 930,861 | 8,771 | HCP, Inc. (ö) | 247,547 | 6,392 | ||||
Hammerson PLC(ö) | 473,970 | 3,260 | Healthcare Realty Trust, Inc. (ö) | 42,659 | 1,241 | ||||
Land Securities Group PLC(ö) | 870,713 | 10,962 | Hilton Worldwide Holdings, Inc. | 44,784 | 3,545 | ||||
LondonMetric Property PLC(ö) | 668,744 | 1,628 | Host Hotels & Resorts, Inc. (ö) | 537,351 | 11,322 | ||||
LXB Retail Properties PLC(Å)(Æ) | 338,848 | 99 | Hudson Pacific Properties, Inc. (ö) | 40,996 | 1,453 | ||||
PRS REIT PLC (The)(Å)(ö) | 937,480 | 1,293 | Invitation Homes, Inc. (ö) | 271,849 | 6,269 | ||||
Safestore Holdings PLC(ö) | 259,148 | 1,878 | JBG Smith Properties(ö) | 79,146 | 2,887 | ||||
Segro PLC(ö) | 864,149 | 7,633 | Kilroy Realty Corp. (ö) | 96,661 | 7,311 | ||||
St. Modwen Properties PLC | 305,246 | 1,693 | Kimco Realty Corp. (ö) | 208,458 | 3,542 | ||||
UNITE Group PLC (The)(ö) | 372,881 | 4,236 | LaSalle Hotel Properties(ö) | 29,519 | 1,010 |
See accompanying notes which are an integral part of the financial statements.
Global Real Estate Securities Fund 115
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Amounts in thousands (except share amounts) | Amounts in thousands (except share amounts) | |||||||||
Principal | Fair | Principal | Fair | |||||||
Amount ($) | Value | Amount ($) | Value | |||||||
or Shares | $ | or Shares | $ | |||||||
Life Storage, Inc. (Æ)(ö) | 35,822 | 3,486 | (cost $10,204) | 10,204 | ||||||
Macerich Co. (The)(ö) | 97,266 | 5,527 | ||||||||
Mack-Cali Realty Corp. (ö) | 200,792 | 4,072 | ||||||||
MGM Growth Properties LLC Class A(Ñ) | Total Investments 100.5% | |||||||||
(ö) | 105,079 | 3,201 | (identified cost $800,240) | 899,202 | ||||||
Mid-America Apartment Communities, | ||||||||||
Inc. (ö) | 63,782 | 6,421 | Other Assets and Liabilities, Net | |||||||
National Retail Properties, Inc. (ö) | 62,825 | 2,762 | - | (0.5%) | (4,685 | ) | ||||
Omega Healthcare Investors, Inc. (Ñ)(ö) | 87,692 | 2,718 | ||||||||
Paramount Group, Inc. (ö) | 169,886 | 2,616 | Net Assets - 100.0% | 894,517 | ||||||
Pennsylvania Real Estate Investment | ||||||||||
Trust(Ñ)(ö) | 40,567 | 446 | ||||||||
Physicians Realty Trust(ö) | 109,351 | 1,743 | ||||||||
Prologis, Inc. (ö) | 230,104 | 15,115 | ||||||||
Public Storage(ö) | 24,877 | 5,644 | ||||||||
QTS Realty Trust, Inc. Class A(ö) | 16,758 | 662 | ||||||||
Rayonier, Inc. (ö) | 47,150 | 1,824 | ||||||||
Realty Income Corp. (ö) | 163,455 | 8,793 | ||||||||
Regency Centers Corp. (ö) | 157,124 | 9,755 | ||||||||
Retail Properties of America, Inc. Class | ||||||||||
A(ö) | 220,378 | 2,817 | ||||||||
Rexford Industrial Realty, Inc. (ö) | 150,091 | 4,711 | ||||||||
RLJ Lodging Trust(ö) | 50,081 | 1,105 | ||||||||
Ryman Hospitality Properties, Inc. (ö) | 47,244 | 3,928 | ||||||||
Sabra Health Care REIT, Inc. (ö) | 178,207 | 3,872 | ||||||||
Simon Property Group, Inc. (ö) | 255,141 | 43,423 | ||||||||
SL Green Realty Corp. (ö) | 162,279 | 16,315 | ||||||||
STORE Capital Corp. (ö) | 159,405 | 4,368 | ||||||||
Sun Communities, Inc. (ö) | 55,386 | 5,421 | ||||||||
Sunstone Hotel Investors, Inc. (ö) | 354,019 | 5,883 | ||||||||
Tanger Factory Outlet Centers, Inc. (Ñ)(ö) | 3,102 | 73 | ||||||||
Taubman Centers, Inc. (ö) | 5,681 | 333 | ||||||||
UDR, Inc. (ö) | 215,534 | 8,091 | ||||||||
Urban Edge Properties(ö) | 16,673 | 381 | ||||||||
Ventas, Inc. (ö) | 78,790 | 4,487 | ||||||||
VEREIT, Inc. (ö) | 587,354 | 4,370 | ||||||||
VICI Properties, Inc. (ö) | 108,923 | 2,249 | ||||||||
Vornado Realty Trust(ö) | 204,718 | 15,134 | ||||||||
Washington Prime Group, Inc. (ö) | 22,106 | 179 | ||||||||
Weingarten Realty Investors(ö) | 166,682 | 5,135 | ||||||||
Welltower, Inc. (ö) | 284,309 | 17,822 | ||||||||
Weyerhaeuser Co. (ö) | 6,020 | 219 | ||||||||
459,594 | ||||||||||
Total Common Stocks | ||||||||||
(cost $776,356) | 875,318 | |||||||||
Short-Term Investments - 1.5% | ||||||||||
United States - 1.5% | ||||||||||
U. S. Cash Management Fund(@) | 13,678,992 | (8) | 13,680 | |||||||
Total Short-Term Investments | ||||||||||
(cost $13,680) | 13,680 | |||||||||
Other Securities - 1.1% | ||||||||||
U. S. Cash Collateral Fund(×)(@) | 10,204,064 | (8) | 10,204 | |||||||
Total Other Securities |
See accompanying notes which are an integral part of the financial statements.
116 Global Real Estate Securities Fund
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Global Real Estate Securities Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Restricted Securities | ||||||||||||
Amounts in thousands (except share and cost per unit amounts) | ||||||||||||
Principal | Cost per | Cost | Fair Value | |||||||||
% of Net Assets | Acquisition | Amount ($) | Unit | (000 | ) | (000 | ) | |||||
Securities | Date | or shares | $ | $ | $ | |||||||
0.8% | ||||||||||||
BGP Holdings PLC | 08/06/09 | EUR | 926,311 | — | — | — | ||||||
Global One Real Estate Investment Corp. | 09/23/16 | JPY | 3,468 | 896.60 | 3,109 | 3,493 | ||||||
Global One Real Estate Investment Corp. | 11/18/16 | JPY | 757 | 887.87 | 672 | 763 | ||||||
LXB Retail Properties PLC | 05/28/14 | GBP | 338,848 | 2.03 | 688 | 99 | ||||||
PRS REIT PLC (The) | 05/31/17 | GBP | 826,659 | 1.40 | 1,155 | 1,140 | ||||||
PRS REIT PLC (The) | 07/17/17 | GBP | 110,821 | 1.39 | 154 | 153 | ||||||
VGP NV | 10/25/17 | EUR | 6,386 | 66.10 | 422 | 464 | ||||||
VGP NV | 11/21/17 | EUR | 815 | 67.61 | 55 | 59 | ||||||
XYMAX REIT Investment Corp. | 02/27/18 | JPY | 733 | 1,064.57 | 780 | 761 | ||||||
XYMAX REIT Investment Corp. | 03/20/18 | JPY | 171 | 1,062.86 | 182 | 178 | ||||||
7,110 | ||||||||||||
For a description of restricted securities see note 7 in the Notes to Financial Statements. |
Futures Contracts | |||||||
Amounts in thousands (except contract amounts) | |||||||
Value and | |||||||
Unrealized | |||||||
Appreciation | |||||||
Number of | Notional | Expiration | (Depreciation) | ||||
Contracts | Amount | Date | $ | ||||
Long Positions | |||||||
Dow U. S. Real Estate Index Futures | 274 | USD | 8,763 | 09/18 | 229 | ||
FTSE/EPRA Europe Index Futures | 124 | EUR | 2,755 | 09/18 | (7 | ) | |
Hang Seng Index Futures | 8 | HKD | 11,490 | 07/18 | — | ||
MSCI Singapore IX ETS Index Futures | 16 | SGD | 586 | 07/18 | (2 | ) | |
S&P/TSX 60 Index Futures | 3 | CAD | 578 | 09/18 | 4 | ||
SPI 200 Index Futures | 9 | AUD | 1,383 | 09/18 | 11 | ||
TOPIX Index Futures | 12 | JPY | 207,660 | 09/18 | (48 | ) | |
Total Value and Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 187 |
Foreign Currency Exchange Contracts | ||||||||
Amounts in thousands | ||||||||
Unrealized | ||||||||
Appreciation | ||||||||
Amount | Amount | (Depreciation) | ||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||
Bank of America | USD | 19 | HKD | 147 | 07/03/18 | — | ||
Bank of America | USD | 63 | HKD | 494 | 07/03/18 | — | ||
Bank of America | USD | 120 | HKD | 945 | 07/03/18 | — | ||
Bank of America | USD | 121 | HKD | 947 | 07/03/18 | — | ||
Bank of America | USD | 29 | JPY | 3,191 | 07/02/18 | — | ||
Bank of America | USD | 125 | JPY | 13,821 | 07/02/18 | (1 | ) | |
Bank of America | USD | 93 | JPY | 10,277 | 07/03/18 | — | ||
Bank of America | JPY | 1,297 | USD | 12 | 07/02/18 | — | ||
Bank of America | JPY | 7,158 | USD | 65 | 07/02/18 | — | ||
Bank of America | JPY | 7,857 | USD | 71 | 07/02/18 | — | ||
Bank of America | JPY | 11,560 | USD | 105 | 07/02/18 | 1 | ||
Bank of Montreal | USD | 543 | AUD | 712 | 09/19/18 | (15 | ) | |
Bank of Montreal | USD | 203 | CAD | 263 | 09/19/18 | (3 | ) | |
Bank of Montreal | USD | 1,759 | EUR | 1,480 | 09/19/18 | (20 | ) | |
Bank of Montreal | USD | 961 | HKD | 7,527 | 09/19/18 | — | ||
Bank of Montreal | USD | 1,178 | JPY | 128,664 | 09/19/18 | (10 | ) | |
Bank of Montreal | USD | 272 | SGD | 363 | 09/19/18 | (6 | ) |
See accompanying notes which are an integral part of the financial statements.
Global Real Estate Securities Fund 117
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Exchange Contracts | |||||||
Amounts in thousands | |||||||
Unrealized | |||||||
Appreciation | |||||||
Amount | Amount | (Depreciation) | |||||
Counterparty | Sold | Bought | Settlement Date | $ | |||
Brown Brothers Harriman | USD | 179 | HKD | 1,405 | 07/03/18 | — | |
Brown Brothers Harriman | USD | 195 | HKD | 1,530 | 07/03/18 | — | |
Brown Brothers Harriman | EUR | 88 | USD | 103 | 07/03/18 | — | |
Brown Brothers Harriman | EUR | 160 | USD | 187 | 09/19/18 | — | |
Brown Brothers Harriman | EUR | 200 | USD | 234 | 09/19/18 | (2 | ) |
Brown Brothers Harriman | HKD | 3,060 | USD | 390 | 09/19/18 | — | |
Brown Brothers Harriman | JPY | 6,574 | USD | 59 | 07/05/18 | — | |
Brown Brothers Harriman | JPY | 17,140 | USD | 156 | 09/19/18 | 1 | |
Brown Brothers Harriman | JPY | 35,740 | USD | 325 | 09/19/18 | 1 | |
Brown Brothers Harriman | SGD | 120 | USD | 89 | 09/19/18 | 1 | |
Merrill Lynch | SGD | 735 | USD | 538 | 07/02/18 | (2 | ) |
Royal Bank of Canada | USD | 542 | AUD | 712 | 09/19/18 | (15 | ) |
Royal Bank of Canada | USD | 203 | CAD | 263 | 09/19/18 | (3 | ) |
Royal Bank of Canada | USD | 63 | EUR | 55 | 07/02/18 | 1 | |
Royal Bank of Canada | USD | 63 | EUR | 55 | 07/02/18 | 1 | |
Royal Bank of Canada | USD | 64 | EUR | 55 | 07/02/18 | 1 | |
Royal Bank of Canada | USD | 1,757 | EUR | 1,480 | 09/19/18 | (20 | ) |
Royal Bank of Canada | USD | 961 | HKD | 7,527 | 09/19/18 | — | |
Royal Bank of Canada | USD | 1,177 | JPY | 128,664 | 09/19/18 | (8 | ) |
Royal Bank of Canada | USD | 272 | SGD | 363 | 09/19/18 | (6 | ) |
State Street | USD | 126 | EUR | 109 | 07/02/18 | 1 | |
State Street | USD | 85 | HKD | 670 | 07/03/18 | — | |
State Street | USD | 121 | HKD | 950 | 07/03/18 | — | |
State Street | AUD | 150 | USD | 112 | 09/19/18 | 1 | |
State Street | CAD | — | USD | — | 07/03/18 | — | |
State Street | EUR | — | USD | 1 | 07/02/18 | — | |
State Street | EUR | 470 | USD | 548 | 07/03/18 | (1 | ) |
State Street | JPY | 7,448 | USD | 67 | 07/02/18 | — | |
State Street | JPY | 7,903 | USD | 71 | 07/02/18 | — | |
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | (103 | ) |
Presentation of Portfolio Holdings | ||||||||||||||||
Amounts in thousands | ||||||||||||||||
Fair Value | ||||||||||||||||
Practical | ||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | ||||||||||
Common Stocks | ||||||||||||||||
Australia | $ | 7 | $ | 36,103 | $ | — | $ | — | $ | 36,110 | 4.0 | |||||
Austria | — | 1,415 | — | — | 1,415 | 0.2 | ||||||||||
Belgium | — | 1,545 | — | — | 1,545 | 0.2 | ||||||||||
Brazil | 2,512 | — | — | — | 2,512 | 0.3 | ||||||||||
Canada | 20,172 | — | — | — | 20,172 | 2.2 | ||||||||||
China | — | 2,543 | — | — | 2,543 | 0.3 | ||||||||||
Finland | — | 467 | — | — | 467 | —* | ||||||||||
France | 16,037 | 20,480 | — | — | 36,517 | 4.1 | ||||||||||
Germany | — | 32,631 | — | — | 32,631 | 3.6 |
See accompanying notes which are an integral part of the financial statements.
118 Global Real Estate Securities Fund
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Schedule of Investments, continued — June 30, 2018 (Unaudited)
Presentation of Portfolio Holdings | ||||||||||||||||||
Amounts in thousands | ||||||||||||||||||
Fair Value | ||||||||||||||||||
Practical | ||||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | ||||||||||||
Hong Kong | — | 97,127 | — | — | 97,127 | 10.9 | ||||||||||||
Ireland | — | 2,685 | — | — | 2,685 | 0.3 | ||||||||||||
Japan | — | 81,921 | — | — | 81,921 | 9.2 | ||||||||||||
Netherlands | 939 | 2,355 | — | — | 3,294 | 0.4 | ||||||||||||
Norway | — | 2,937 | — | — | 2,937 | 0.3 | ||||||||||||
Singapore | — | 5,167 | — | — | 5,167 | 0.6 | ||||||||||||
Spain | — | 14,176 | — | — | 14,176 | 1.6 | ||||||||||||
Sweden | — | 5,691 | — | — | 5,691 | 0.6 | ||||||||||||
Switzerland | — | 2,707 | — | — | 2,707 | 0.3 | ||||||||||||
United Kingdom | 99 | 66,008 | — | — | 66,107 | 7.4 | ||||||||||||
United States | 459,594 | — | — | — | 459,594 | 51.4 | ||||||||||||
Short-Term Investments | — | — | — | 13,680 | 13,680 | 1.5 | ||||||||||||
Other Securities | — | — | — | 10,204 | 10,204 | 1 | . 1 | |||||||||||
Total Investments | 499,360 | 375,958 | — | 23,884 | 899,202 | 100.5 | ||||||||||||
Other Assets and Liabilities, Net | (0.5 | ) | ||||||||||||||||
100.0 | ||||||||||||||||||
Other Financial Instruments | ||||||||||||||||||
Assets | ||||||||||||||||||
Futures Contracts | 244 | — | — | — | 244 | —* | ||||||||||||
Foreign Currency Exchange Contracts | 4 | 5 | — | — | 9 | —* | ||||||||||||
A | ||||||||||||||||||
Liabilities | ||||||||||||||||||
Futures Contracts | (57 | ) | — | — | — | (57 | ) | (—)* | ||||||||||
Foreign Currency Exchange Contracts | (4 | ) | (108 | ) | — | — | (112 | ) | (—)* | |||||||||
Total Other Financial Instruments** | $ | 187 | $ | (103 | ) | $ | — | $ | — | $ | 84 |
* Less than 0.05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the investments.
(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified
in the fair value levels. The fair value amounts presented in the table are intended to permit reconciliation to the amounts presented in the Schedule of
Investments.
For a description of the Levels, see note 2 in the Notes to Financial Statements.
For a disclosure on transfers between Levels 1, 2 and 3 during the period ended June 30, 2018, see note 2 in the Notes to
Financial Statements.
Amounts in thousands | |||
Fair Value | |||
Property Sector Exposure | $ | ||
Diversified | 328,489 | ||
Healthcare | 40,857 | ||
Industrial | 42,521 | ||
Lodging/Resorts | 33,620 | ||
Manufactured Homes | 15,050 |
See accompanying notes which are an integral part of the financial statements.
Global Real Estate Securities Fund 119
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Global Real Estate Securities Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Office | 115,097 | ||
Regional Malls | 50,010 | ||
Residential | 110,951 | ||
Retail | 11,831 | ||
Self Storage | 35,561 | ||
Shopping Centers | 88,198 | ||
Specialized REITs | 3,133 | ||
Short-Term Investments | 13,680 | ||
Other Securities | 10,204 | ||
Total Investments | 899,202 |
See accompanying notes which are an integral part of the financial statements.
120 Global Real Estate Securities Fund
Russell Investment Funds
Global Real Estate Securities Fund
Fair Value of Derivative Instruments — June 30, 2018 (Unaudited)
Amounts in thousands
Foreign | |||||||
Equity | Currency | ||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | |||||
Location: Statement of Assets and Liabilities - Assets | |||||||
Unrealized appreciation on foreign currency exchange contracts | $ | — | $ | 9 | |||
Variation margin on futures contracts* | 244 | — | |||||
Total | $ | 244 | $ | 9 | |||
Location: Statement of Assets and Liabilities - Liabilities | |||||||
Variation margin on futures contracts * | $ | 57 | $ | — | |||
Unrealized depreciation on foreign currency exchange contracts | — | 112 | |||||
Total | $ | 57 | $ | 112 | |||
Foreign | |||||||
Equity | Currency | ||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | |||||
Location: Statement of Operations - Net realized gain (loss) | |||||||
Futures contracts | $ | (179 | ) | $ | — | ||
Foreign currency exchange contracts | — | 22 | |||||
Total | $ | (179 | ) | $ | 22 | ||
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||||||
Futures contracts | $ | 76 | $ | — | |||
Foreign currency exchange contracts | — | (178 | ) | ||||
Total | $ | 76 | $ | (178 | ) |
* Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Global Real Estate Securities Fund 121
Russell Investment Funds
Global Real Estate Securities Fund
Balance Sheet Offsetting of Financial and Derivative Instruments —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Assets | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||
Securities on Loan* | Investments, at fair value | $ | 9,827 | $ | — | $ | 9,827 | ||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 9 | — | 9 | |||||
Futures Contracts | Variation margin on futures contracts | 853 | — | 853 | |||||
Total Financial and Derivative Assets | 10,689 | — | 10,689 | ||||||
Financial and Derivative Assets not subject to a netting agreement | (859) | — | (859 | ) | |||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 9,830 | $ | — | $ | 9,830 |
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Assets | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | ||||||||
Barclays | $ | 176 | $ | — | $ | 176 | $ | — | ||||
Brown Brothers Harriman | 2 | 2 | — | — | ||||||||
Citigroup | 1,360 | — | 1,360 | — | ||||||||
Goldman Sachs | 567 | — | 567 | — | ||||||||
Merrill Lynch | 6,068 | — | 6,068 | — | ||||||||
State Street | 1 | — | — | 1 | ||||||||
UBS | 1,656 | — | 1,656 | — | ||||||||
Total | $ | 9,830 | $ | 2 | $ | 9,827 | $ | 1 |
See accompanying notes which are an integral part of the financial statements.
122 Global Real Estate Securities Fund
Russell Investment Funds
Global Real Estate Securities Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||
Gross | Net Amounts | ||||||||
Amounts | of Liabilities | ||||||||
Gross | Offset in the | Presented in | |||||||
Amounts of | Statement of | the Statement | |||||||
Recognized | Assets and | of Assets and | |||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||
Futures Contracts | Variation margin on futures contracts | $ | 4 | $ | — | $ | 4 | ||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 112 | — | 112 | |||||
Total Financial and Derivative Liabilities | 116 | — | 116 | ||||||
Financial and Derivative Liabilities not subject to a netting agreement | (8) | — | (8 | ) | |||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 108 | $ | — | $ | 108 |
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Liabilities | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||
Bank of Montreal | $ | 56 | $ | — | $ | — | $ | 56 | |||
Brown Brothers Harriman | 2 | 2 | — | — | |||||||
Royal Bank of Canada | 50 | — | — | 50 | |||||||
Total | $ | 108 | $ | 2 | $ | — | $ | 106 |
* Fair value of securities on loan as reported in the footnotes to the Statement of Assets and Liabilities.
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Global Real Estate Securities Fund 123
Russell Investment Funds
Global Real Estate Securities Fund
Statement of Assets and Liabilities — June 30, 2018 (Unaudited)
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 800,240 |
Investments, at fair value(*)(>) | 899,202 | |
Foreign currency holdings(^) | 2,849 | |
Unrealized appreciation on foreign currency exchange contracts | 9 | |
Receivables: | ||
Dividends and interest | 3,899 | |
Dividends from affiliated funds | 26 | |
Investments sold | 9,154 | |
Fund shares sold | 86 | |
Foreign capital gains taxes recoverable | 219 | |
From broker(a) | 85 | |
Variation margin on futures contracts | 853 | |
Prepaid expenses | 5 | |
Total assets | 916,387 | |
Liabilities | ||
Payables: | ||
Investments purchased | 10,628 | |
Fund shares redeemed | 127 | |
Accrued fees to affiliates | 629 | |
Other accrued expenses | 166 | |
Variation margin on futures contracts | 4 | |
Unrealized depreciation on foreign currency exchange contracts | 112 | |
Payable upon return of securities loaned | 10,204 | |
Total liabilities | 21,870 | |
Net Assets | $ | 894,517 |
See accompanying notes which are an integral part of the financial statements.
124 Global Real Estate Securities Fund
Russell Investment Funds
Global Real Estate Securities Fund
Statement of Assets and Liabilities, continued — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | (18,479 | ) |
Accumulated net realized gain (loss) | (8,136 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | 98,961 | ||
Investments in affiliated funds | 1 | ||
Futures contracts | 187 | ||
Foreign currency exchange contracts | (103 | ) | |
Foreign currency-related transactions | (46 | ) | |
Shares of beneficial interest | 611 | ||
Additional paid-in capital | 821,521 | ||
Net Assets | $ | 894,517 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: (#) | $ | 14.63 | |
Net assets | $ | 894,516,985 | |
Shares outstanding ($. 01 par value) | 61,133,013 | ||
Amounts in thousands | |||
(^) Foreign currency holdings - cost | $ | 2,881 | |
(*) Securities on loan included in investments | $ | 9,827 | |
(>) Investments in affiliates, U. S. Cash Management Fund and U. S. Cash Collateral Fund | $ | 23,884 | |
(a) Receivable from Broker for Futures | $ | 85 | |
(#) 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.
Global Real Estate Securities Fund 125
Russell Investment Funds
Global Real Estate Securities Fund
Statement of Operations — For the Period Ended June 30, 2018 (Unaudited)
Amounts in thousands | |||
Investment Income | |||
Dividends | $ | 18,045 | |
Dividends from affiliated funds | 128 | ||
Securities lending income (net) | 87 | ||
Less foreign taxes withheld | (1,204 | ) | |
Total investment income | 17,056 | ||
Expenses | |||
Advisory fees | 3,484 | ||
Administrative fees | 218 | ||
Custodian fees | 168 | ||
Transfer agent fees | 19 | ||
Professional fees | 47 | ||
Trustees’ fees | 16 | ||
Printing fees | 53 | ||
Miscellaneous | 11 | ||
Total expenses | 4,016 | ||
Net investment income (loss) | 13,040 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 5,935 | ||
Investments in affiliated funds | 3 | ||
Futures contracts | (179 | ) | |
Foreign currency exchange contracts | 22 | ||
Foreign currency-related transactions | (59 | ) | |
Net realized gain (loss) | 5,722 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (14,675 | ) | |
Investments in affiliated funds | 1 | ||
Futures contracts | 76 | ||
Foreign currency exchange contracts | (178 | ) | |
Foreign currency-related transactions | (57 | ) | |
Net change in unrealized appreciation (depreciation) | (14,833 | ) | |
Net realized and unrealized gain (loss) | (9,111 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | 3,929 |
See accompanying notes which are an integral part of the financial statements.
126 Global Real Estate Securities Fund
Russell Investment Funds
Global Real Estate Securities Fund
Statements of Changes in Net Assets
Period | ||||||
Ended June 30, 2018 | Fiscal Year Ended | |||||
Amounts in thousands | (Unaudited) | December 31, 2017 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 13,040 | $ | 17,690 | ||
Net realized gain (loss) | 5,722 | 29,177 | ||||
Net change in unrealized appreciation (depreciation) | (14,833 | ) | 47,887 | |||
Net increase (decrease) in net assets from operations | 3,929 | 94,754 | ||||
Distributions | ||||||
From net investment income | (14,032 | ) | (31,188 | ) | ||
From net realized gain | (408 | ) | (16,441 | ) | ||
Net decrease in net assets from distributions | (14,440 | ) | (47,629 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 5,574 | 51,511 | ||||
Total Net Increase (Decrease) in Net Assets | (4,937 | ) | 98,636 | |||
Net Assets | ||||||
Beginning of period | 899,454 | 800,818 | ||||
End of period | $ | 894,517 | $ | 899,454 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | (18,479 | ) | $ | (17,487 | ) |
* Share transaction amounts (in thousands) for the periods ended June 30, 2018 and December 31, 2017 were as follows: | ||||||||||||
2018 (Unaudited) | 2017 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Proceeds from shares sold | 1,068 | $ | 15,237 | 2,324 | $ | 33,928 | ||||||
Proceeds from reinvestment of distributions | 1,030 | 14,440 | 3,266 | 47,629 | ||||||||
Payments for shares redeemed | (1,680 | ) | (24,103 | ) | (2,058 | ) | (30,046 | ) | ||||
Total increase (decrease) | 418 | $ | 5,574 | 3,532 | $ | 51,510 |
See accompanying notes which are an integral part of the financial statements.
Global Real Estate Securities Fund 127
Russell Investment Funds
Global Real Estate Securities Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | $ | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | Return of | ||||||||||||
Period | Income (Loss)(a) | Gain (Loss) | Operations | Investment Income | Realized Gain | Capital | ||||||||||||
June 30, 2018(1) | 14.81 | . 21 | (. 15 | ) | . 06 | (. 23 | ) | (. 01 | ) | — | ||||||||
December 31, 2017 | 14.00 | . 29 | 1.34 | 1.63 | (. 54 | ) | (. 28 | ) | — | |||||||||
December 31, 2016 | 14.71 | . 31 | . 13 | . 44 | (. 57 | ) | (. 46 | ) | (. 12 | ) | ||||||||
December 31, 2015 | 15.63 | . 29 | (. 25 | ) | . 04 | (. 25 | ) | (. 71 | ) | — | ||||||||
December 31, 2014 | 14.68 | . 28 | 1.89 | 2.17 | (. 52 | ) | (. 70 | ) | — | |||||||||
December 31, 2013 | 15.37 | . 31 | . 24 | . 55 | (. 63 | ) | (. 61 | ) | — | |||||||||
See accompanying notes which are an integral part of the financial statements.
Global Real Estate Securities Fund 128
% | % | % | ||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | ||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | ||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | |||||||||
Total Distributions | Period | Return(d)(f) | (000 | ) | Gross(e) | Net(e) | Net Assets(e) | Turnover Rate(d) | ||||||||
(. 24 | ) | 14.63 | . 46 | 894,517 | . 92 | . 92 | 2.99 | 40 | ||||||||
(. 82 | ) | 14.81 | 11.80 | 899,454 | . 92 | . 92 | 2.09 | 84 | ||||||||
(1.15 | ) | 14.00 | 3.02 | 800,818 | . 94 | . 94 | 2.06 | 91 | ||||||||
(. 96 | ) | 14.71 | . 25 | 778,091 | . 93 | . 93 | 1.86 | 64 | ||||||||
(1.22 | ) | 15.63 | 14.75 | 777,376 | . 95 | . 95 | 1.76 | 64 | ||||||||
(1.24 | ) | 14.68 | 3.70 | 658,413 | . 93 | . 93 | 1.97 | 72 |
See accompanying notes which are an integral part of the financial statements.
Global Real Estate Securities Fund 129
Russell Investment Funds
Global Real Estate Securities Fund
Related Party Transactions, Fees and Expenses (Unaudited)
Accrued fees payable to affiliates for the period ended June 30, 2018 were as follows: | ||
Advisory fees | $ | 586,788 |
Administration fees | 36,674 | |
Transfer agent fees | 3,227 | |
Trustee fees | 1,896 | |
$ | 628,585 |
Transactions (amounts in thousands) during the period ended June 30, 2018 with funds which are, or were, an affiliated company
are as follows:
Fair Value, | Change in | ||||||||||||||||||
Beginning of | Realized Gain | Unrealized | Fair Value, End | Income | Capital Gains | ||||||||||||||
Period | Purchases | Sales | (Loss) | Gain (Loss) | of Period | Distributions | Distributions | ||||||||||||
U. S. Cash Collateral Fund | $ | 10,496 | $ | 82,134 | $ | 82,426 | $ | — | $ | — | $ | 10,204 | $ | 94 | $ | — | |||
U. S. Cash Management Fund | 15,820 | 97,203 | 99,348 | 3 | 2 | 13,680 | 128 | — | |||||||||||
$ | 26,316 | $ | 179,337 | $ | 181,774 | $ | 3 | $ | 2 | $ | 23,884 | $ | 222 | $ | — |
Federal Income Taxes (Unaudited)
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation), undistributed ordinary income and
undistributed long-term capital gains for income tax purposes were as follows:
Cost of Investments | $ | 840,505,600 | |||
Unrealized Appreciation | $ | 66,874,493 | |||
Unrealized Depreciation | (8,094,353 | ) | |||
Net Unrealized Appreciation (Depreciation) | $ | 58,780,140 |
Net investment income and net realized gains (losses) in the financial statements may differ from taxable net investment income and
net realized gains (losses). Capital accounts within the financial statements are adjusted for permanent differences between book and
tax accounting. Book-tax differences may be due to foreign currency gains and losses, reclassifications of dividends and differences in
treatment of income from swaps. These adjustments have no impact on the net assets. At June 30, 2018, there were no adjustments to
the Statement of Assets and Liabilities.
See accompanying notes which are an integral part of the financial statements.
130 Global Real Estate Securities Fund
Russell Investment Funds
Notes to Schedules of Investments — June 30, 2018 (Unaudited)
Footnotes:
(Æ) Non-income-producing security.
(ö) Real Estate Investment Trust (REIT).
(§) All or a portion of the shares of this security are pledged as collateral in connection with futures contracts purchased (sold), options
written, or swaps entered into by the Fund.
(~ ) Rate noted is yield-to-maturity from date of acquisition.
(ç) At amortized cost, which approximates market.
(Ê) Variable, adjustable or floating rate security. Rate shown reflects rate in effect at period end.
(Ï) Forward commitment.
(ƒ) Perpetual floating rate security. Rate shown reflects rate in effect at period end.
(µ) Bond is insured by a guarantor.
(æ) Pre-refunded: These bonds are collateralized by U.S. Treasury securities, which are held in escrow by a trustee and used to pay
principal and interest in the tax-exempt issue and to retire the bonds in full at the earliest refunding date.
(Ø) In default.
(ß) Illiquid security. See Note 7.
(x) The security is purchased with the cash collateral from the securities loaned.
(Ñ) All or a portion of the shares of this security are on loan.
(~) Rate fluctuates based on various factors such as changes in current rates and prepayments of the underlying assets, changes in the
CPI or other contractual arrangements.
(ì) All or a portion of the shares of this security are pledged as collateral in connection with options written contracts.
(¢) Date shown reflects next contractual call date.
(Þ) Restricted security. Security may have contractual restrictions on resale, may have been offered in a private placement transaction,
and may not be registered under the Securities Act of 1933. See Note 7.
(ÿ) Notional Amount in thousands.
(Š) Value was determined using significant unobservable inputs.
(Å) Illiquid and restricted security. See Note 7.
(@) Affiliate.
(Ÿ) Rate noted is dividend yield at period end.
(å) Currency balances were pledged in connection with futures contracts purchased (sold), options written, or swaps entered into by the
Fund. See Note 2.
(8) Unrounded units.
(v) Loan agreement still pending. Rate not available at period end.
(1) Weekly payment frequency.
(2) Quarterly payment frequency.
(3) Semi-annual payment frequency.
(4) Annual payment frequency.
(5) Payment at termination.
Abbreviations:
144A - Represents private placement security for qualified buyers according to rule 144A of the Securities Act of 1933.
ADR - American Depositary Receipt
ADS - American Depositary Share
BBSW - Bank Bill Swap Reference Rate
CIBOR - Copenhagen Interbank Offered Rate
CME - Chicago Mercantile Exchange
CMO - Collateralized Mortgage Obligation
CVO - Contingent Value Obligation
EMU - European Economic and Monetary Union
EURIBOR - Euro Interbank Offered Rate
FDIC - Federal Deposit Insurance Company
GDR - Global Depositary Receipt
GDS - Global Depositary Share
HIBOR – Hong Kong Interbank Offered Rate
LIBOR - London Interbank Offered Rate
NIBOR - Norwegian Interbank Offered Rate
PIK - Payment in Kind
Notes to Schedules of Investments 131
Russell Investment Funds
Notes to Schedules of Investments, continued — June 30, 2018 (Unaudited)
PRIBOR - Prague Interbank Offered Rate
REMIC - Real Estate Mortgage Investment Conduit
SIBOR – Singapore Interbank Offered Rate
STRIP - Separate Trading of Registered Interest and Principal of Securities
TBA - To Be Announced Security
UK - United Kingdom
132 Notes to Schedules of Investments
Russell Investment Funds
Notes to Schedules of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Abbreviations: | ||
ARS - Argentine peso | HUF - Hungarian forint | PKR - Pakistani rupee |
AUD - Australian dollar | IDR - Indonesian rupiah | PLN - Polish zloty |
BRL - Brazilian real | ILS - Israeli shekel | RUB - Russian ruble |
CAD - Canadian dollar | INR - Indian rupee | SEK - Swedish krona |
CHF - Swiss franc | ISK - Icelandic krona | SGD - Singapore dollar |
CLP - Chilean peso | ITL - Italian lira | SKK - Slovakian koruna |
CNY - Chinese renminbi yuan | JPY - Japanese yen | THB - Thai baht |
COP - Colombian peso | KES - Kenyan schilling | TRY - Turkish lira |
CRC - Costa Rican colon | KRW - South Korean won | TWD - Taiwanese dollar |
CZK - Czech koruna | MXN - Mexican peso | USD - United States dollar |
DKK - Danish krone | MYR – Malaysian ringgit | VEB - Venezuelan bolivar |
EGP - Egyptian pound | NOK - Norwegian krone | VND - Vietnamese dong |
EUR - Euro | NZD - New Zealand dollar | ZAR - South African rand |
GBP - British pound sterling | PEN - Peruvian nuevo sol | |
HKD – Hong Kong dollar | PHP – Philippine peso |
Notes to Schedules of Investments 133
Russell Investment Funds
Notes to Financial Highlights — June 30, 2018 (Unaudited)
(1) For the period ended June 30, 2018 (Unaudited).
(a) Average daily shares outstanding were used for this calculation.
(b) May reflect amounts waived and/or reimbursed by Russell Investment Management, LLC (“RIM”).
(c) Less than $.01 per share.
(d) Periods less than one year are not annualized.
(e) Periods less than one year are annualized.
(f) The total return does not reflect any Insurance Company Separate Account or Policy Charges.
(g) Gross and Net Expense Ratios for the period ended December 31, 2016 include a reimbursement from State Street for the overbilling of custody
expenses in prior years. Without the reimbursement, the expense ratios would have been higher by the amount listed below.
Impact of the fee reimbursement on | ||
Fund | gross and net expense ratios | |
U. S. Strategic Equity Fund | 0.01 | % |
U. S. Small Cap Equity Fund | 0.01 | % |
International Developed Markets Fund | 0.05 | % |
134 Notes to Financial Highlights
Russell Investment Funds
Notes to Financial Statements — June 30, 2018 (Unaudited)
1. Organization
Russell Investment Funds (the “Investment Company” or “RIF”) is a series investment company with nine different investment
portfolios referred to as funds (each a “Fund” and collectively the “Funds”). These financial statements report on five of these Funds.
The Investment Company provides the investment base for one or more variable insurance products issued by one or more insurance
companies. These Funds are offered at net asset value (“NAV”) to qualified insurance company separate accounts offering variable
insurance products. The Investment Company is registered under the Investment Company Act of 1940, as amended (“Investment
Company Act”), as an open-end management investment company. It is organized and operated as a Massachusetts business trust
under a Second Amended and Restated Master Trust Agreement dated March 1, 2018, as amended (“Master Trust Agreement”),
and the provisions of Massachusetts law governing the operation of a Massachusetts business trust. The Investment Company’s
Master Trust Agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest.
Each of the Funds is diversified. Under the Investment Company Act a diversified company is defined as a management company
which meets the following requirements: at least 75% of the value of its total assets is represented by cash and cash equivalents
(including receivables), government securities, securities of other investment companies, and other securities for the purposes of
this calculation limited in respect of any one issuer to an amount not greater in value than five percent of the value of the total assets
of such management company and to not more than 10% of the outstanding voting securities of such issuer.
2. Significant Accounting Policies
The Funds’ financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”)
which require the use of management estimates and assumptions at the date of the financial statements. Actual results could differ
from those estimates. The Funds are considered investment companies under U.S. GAAP and follow the accounting and reporting
guidance applicable to investment companies. The following is a summary of the significant accounting policies consistently
followed by each Fund in the preparation of its financial statements.
Security Valuation
The Funds value portfolio securities according to Board-approved securities valuation procedures which include market and fair
value procedures. The Board has delegated the responsibility for administration of the securities valuation procedures to Russell
Investments Fund Services, LLC ("RIFUS").
U.S. GAAP defines fair value as the price that a Fund would receive to sell an asset or pay to transfer a liability in an orderly
transaction between market participants at the measurement date. It establishes a fair value hierarchy that prioritizes inputs to
valuation methods and requires a separate disclosure of the fair value hierarchy for each major category of assets and liabilities,
that segregates fair value measurements into levels (Level 1, 2, and 3). The inputs or methodology used for valuing securities are
not necessarily an indication of the risk associated with investing in those securities. Levels 1, 2 and 3 of the fair value hierarchy
are defined as follows:
• Level 1 — Quoted prices (unadjusted) in active markets or exchanges for identical assets and liabilities.
• Level 2 — Inputs other than quoted prices included within Level 1 that are observable, which may include, but are not
limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets
or liabilities in markets that are not active, and inputs such as interest rates, yield curves, implied volatilities, credit spreads
or other market corroborated inputs.
• Level 3 — Significant unobservable inputs based on the best information available in the circumstances, to the extent
observable inputs are not available, which may include assumptions made by RIFUS, acting at the discretion of the Board,
that are used in determining the fair value of investments.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for
example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and
other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable
or unobservable in the market, the determination of fair value requires more judgement. Accordingly, the degree of judgement
exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs or methodology used for valuing
securities are not necessarily an indication of the risk associated with investing in those securities.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes,
the level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that
is significant to the fair value measurement in its entirety.
Notes to Financial Statements 135
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
The valuation techniques and significant inputs used in determining the fair market values of financial instruments categorized as
Level 1 and Level 2 of the fair value hierarchy are as follows:
Equity securities, including common and preferred stock, short securities, ETFs and restricted securities that are traded on a
national securities exchange (or reported on the NASDAQ national market), are stated at the last reported sales price on the day of
valuation or official closing price, as applicable. To the extent these securities are actively traded, and valuation adjustments are not
applied, they are categorized as Level 1 of the fair value hierarchy. Preferred stock and other equities traded on inactive markets or
valued by reference to similar instruments are categorized as Level 2 of the fair value hierarchy. Certain foreign equity securities
may be fair valued using a pricing service that considers the correlation of the trading patterns of the foreign security to the intraday
trading in the U.S. markets for investments such as American Depositary Receipts, financial futures, exchange-traded funds, and
the movement of certain indexes of securities, based on the statistical analysis of historical relationships. Foreign equity securities
prices as described above are categorized as Level 2 of the fair value hierarchy.
Fixed income securities including corporate, convertible, U.S. government agency, municipal bonds and notes, U.S. treasury
obligations, sovereign issues, bank loans, bank notes and non-U.S. bonds are normally valued by pricing service providers that use
broker dealer quotations or valuation estimates from their internal pricing models. The pricing service providers’ internal models
use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads and
default rates. Such fixed income securities that use pricing service internal models as described above are categorized as Level
2 of the fair value hierarchy. Such fixed income securities that use broker dealer quotations are categorized as Level 3 of the fair
value hierarchy.
Fixed income securities purchased on a delayed-delivery basis and marked-to-market daily until settlement at the forward settlement
date are categorized as Level 2 of the fair value hierarchy.
Mortgage and asset-backed securities are usually issued as separate tranches, or classes, of securities within each deal. These
securities are also normally valued by pricing service providers that use broker dealer quotations or valuation estimates from their
internal pricing models. The pricing models for these securities usually consider tranche-level attributes, including estimated cash
flows of each tranche, market-based yield spreads for each tranche, and current market data, as well as incorporate deal collateral
performance, as available. Mortgage and asset-backed securities that use these and similar valuation techniques and inputs as
described above are categorized as Level 2 of the fair value hierarchy.
Investments in privately held investment funds will be valued based upon the NAV of such investments. The Funds have adopted
the authoritative guidance under U.S. GAAP for estimating the fair value of investments in funds that have calculated NAV per
share in accordance with the specialized accounting guidance for investment companies. Accordingly, the Funds estimate the
fair value of an investment in a fund using the NAV per share without further adjustment as a practical expedient, if the NAV per
share of the investment is determined in accordance with the specialized accounting guidance for investment companies as of the
reporting entity’s measurement date.
Short-term investments having a maturity of 60 days or less are generally valued at amortized cost, which approximates fair market
value. These investments are categorized as Level 2 of the fair value hierarchy.
Derivative instruments are instruments such as foreign currency contracts, futures contracts, options contracts, or swap agreements
that derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors.
Derivatives may be classified into two groups depending upon the way that they are traded: privately traded over-the-counter
(“OTC”) derivatives that do not go through an exchange or intermediary and exchange-traded derivatives that are traded through
specialized derivatives exchanges or other regulated exchanges. OTC derivatives are normally valued on the basis of broker dealer
quotations or pricing service providers. Depending on the product and the terms of the transaction, the value of the derivative
instrument can be estimated by a pricing service provider using a series of techniques, including simulation pricing models.
The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest
rates, yield curves, dividends and exchange rates. OTC derivatives that use these and similar valuation techniques and inputs as
described above are categorized as Level 2 of the fair value hierarchy, with the exception of foreign currency spot contracts which
are categorized as Level 1 of the fair value hierarchy. OTC derivatives that use broker dealer quotations are categorized as level 3 of
the fair value hierarchy. Exchange-traded derivatives are valued based on the last reported sales price on the day of valuation and
are categorized as Level 1 of the fair value hierarchy.
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at
the daily settlement price determined by the respective exchange. For centrally cleared credit default swaps, the clearing facility
136 Notes to Financial Statements
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
requires its members to provide actionable levels across complete term structures. These levels along with external third-party
prices are used to produce daily settlement prices. These securities are categorized as Level 2 of the fair value hierarchy. Centrally
cleared interest rate swaps are valued using a pricing model that references the underlying rates including the Overnight Index
Swap Rate (“OIS”) and London Interbank Offered Rate (“LIBOR”) forward rate to produce the daily settlement price. These
securities are categorized as Level 2 of the fair value hierarchy.
Events or circumstances affecting the values of Fund securities that occur between the closing of the principal markets on which
they trade and the time the NAV of Fund shares is determined may be reflected in the calculation of NAV for each applicable
Fund when the Fund deems that the particular event or circumstance would materially affect such Fund’s NAV. Funds that invest
primarily in frequently traded exchange-listed securities will use fair value pricing in limited circumstances since reliable market
quotations will often be readily available. Funds that invest in foreign securities use fair value pricing daily as events may occur
between the close of foreign markets and the time of pricing. Although there are observable inputs assigned on a security level,
prices are derived from factors using proprietary models or matrix pricing. For this reason, fair value factors will cause movement
between Levels 1 and 2. Significant events that could trigger fair value pricing of one or more securities include: a company
development such as a material business development; a natural disaster or emergency situation; or an armed conflict.
The NAV of a Fund’s portfolio that includes foreign securities may change on days when shareholders will not be able to purchase
or redeem Fund shares, since foreign securities can trade on non-business days.
For movements between the levels within the fair value hierarchy, the Funds have adopted a policy of recognizing the transfers as
of period end.
The U.S. Strategic Equity, U.S. Small Cap Equity, International Developed Markets and Global Real Estate Securities Funds had
no transfers between Levels 1, 2, and 3 for the period ended June 30, 2018.
The Strategic Bond Fund had transfers out of Level 3 into Level 2 representing financial instruments for which approved pricing
became available. The amount transferred was $1,300,182.
Level 3 Fair Value Investments
The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of
the fair value hierarchy are as follows:
Securities and other assets for which market quotes are not readily available, or are not reliable, are valued at fair value as
determined in good faith by RIFUS and are categorized as Level 3 of the fair value hierarchy. Market quotes are considered not
readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or
broker quotes). When RIFUS applies fair valuation methods that use significant unobservable inputs to determine a Fund’s NAV,
securities will not be priced on the basis of quotes from the primary market in which they are traded, but instead may be priced by
another method that RIFUS believes accurately reflects fair value and will be categorized as Level 3 of the fair value hierarchy. Fair
value pricing may require subjective determinations about the value of a security. While the securities valuation procedures are
intended to result in a calculation of a Fund’s NAV that fairly reflects security values as of the time of pricing, the process cannot
guarantee that fair values determined by RIFUS would accurately reflect the price that a Fund could obtain for a security if it were
to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ
from the value that would be realized if the security was sold.
RIFUS employs third party pricing vendors to provide fair value measurements. RIFUS oversees third-party pricing service
providers in order to support the valuation process throughout the year.
The significant unobservable input used in fair value measurement of certain of the Funds’ preferred equity securities is the
redemption value calculated on a fully-diluted basis if converted to common stock. Significant increases or decreases in the
redemption value would have a direct and proportional impact to fair value.
The significant unobservable input used in the fair value measurement of certain Funds’ debt securities is the yield to worst ratio.
Significant increases (decreases) in the yield to worst ratio would result in a lower (higher) fair value measurement.
These significant unobservable inputs are further disclosed in the Presentation of Portfolio Holdings for each respective Fund as
applicable.
If third party evaluated vendor pricing is neither available nor deemed to be indicative of fair value, RIFUS may elect to obtain
indicative market quotations (“broker quotes”) directly from the broker or passed through from a third party vendor. In the event
Notes to Financial Statements 137
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
that the source of fair value is from a single source broker quote, these securities are classified as Level 3 per the fair value
hierarchy. Broker quotes are typically received from established market participants. Although independently received on a daily
basis, RIFUS does not have the transparency to view the underlying inputs which support the broker quotes. Significant changes
in the broker quote would have direct and proportional changes in the fair value of the security. There is a third-party pricing
exception to the quantitative disclosure requirement when prices are not determined by the reporting entity. RIFUS is exercising
this exception and has made a reasonable attempt to obtain quantitative information from the third party pricing vendors regarding
the unobservable inputs used.
For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances
for reported fair values that present changes attributable to total realized and unrealized gains or losses, purchases and sales, and
transfers in/out of the Level 3 category during the period. Additionally, U.S. GAAP requires quantitative information regarding the
significant unobservable inputs used in the determination of fair value of assets categorized as Level 3 in the fair value hierarchy. In
accordance with the requirements of U.S. GAAP, a fair value hierarchy, a Level 3 reconciliation and an additional disclosure about
fair value measurements, if any, has been included in the Presentation of Portfolio Holdings for each respective Fund.
Investment Transactions
Investment transactions are reflected as of the trade date for financial reporting purposes. This may cause the NAV stated in the
financial statements to be different from the NAV at which shareholders may transact. Realized gains and losses from securities
transactions, if applicable, are recorded on the basis of specific identified cost.
Investment Income
Dividend income is recorded net of applicable withholding taxes on the ex-dividend date, except that certain dividends from
foreign securities are recorded as soon as the Funds are informed of the dividend, subsequent to the ex-dividend date. To the
extent the dividend represents a return of capital or capital gain for tax purposes, reclassifications are made which may be based
on management's estimates. Interest income is recorded daily on the accrual basis. The Strategic Bond Fund classifies gains and
losses realized on prepayments received on mortgage-backed securities as an adjustment to interest income. All premiums and
discounts, including original issue discounts, are amortized/ accreted using the effective interest method. Debt obligation securities
may be placed in a non-accrual status and related interest income may be reduced by stopping current accruals and writing off
interest receivable when the collection of all or a portion of interest has become doubtful.
Federal Income Taxes
Since the Investment Company is a Massachusetts business trust, each Fund is a separate corporate taxpayer and determines its
net investment income and capital gains (or losses) and the amounts to be distributed to each Fund’s shareholders without regard
to the income and capital gains (or losses) of the other Funds.
For each year, each Fund intends to qualify or continue to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”) and intends to distribute all of its taxable income and capital gains.
Therefore, no federal income tax provision is required for the Funds.
The Funds comply with the authoritative guidance for uncertainty in income taxes which requires management to determine whether
a tax position of the Funds is more likely than not to be sustained upon examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the
tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being
realized upon ultimate settlement with the relevant taxing authority. Management determined that no accruals need to be made in
the financial statements due to uncertain tax positions. Management continually reviews and adjusts the Funds’ liability for income
taxes based on analyses of tax laws and regulations, as well as their interpretations, and other relevant factors.
Each Fund files a U.S. tax return. At June 30, 2018, the Funds had recorded no liabilities for net unrecognized tax benefits relating
to uncertain income tax positions they have taken or expect to take in future tax returns. While the statute of limitations remains
open to examine the Funds’ U.S. tax returns filed for the fiscal years ended December 31, 2015 through December 31, 2017, 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.
138 Notes to Financial Statements
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Dividends and Distributions to Shareholders
For all Funds, income, capital gain distributions and return of capital, if any, are recorded on the ex-dividend date. Income
distributions are generally declared and paid according to the following schedule:
Declared | Payable | Funds |
Quarterly | April, July, October and mid-December | U. S. Strategic Equity, U. S. Small Cap Equity, Strategic Bond and |
Global Real Estate Securities Funds | ||
Annually | Mid-December | International Developed Markets Fund |
The Funds intend to distribute substantially all of the distributions they receive from real estate investment trust ("REIT")
investments, less expenses, as well as income from other investments. Such distributions may be comprised of income, return of
capital, and capital gains. The Funds may also realize capital gains on the sale of its REIT shares and other investments.
Capital gain distributions are generally declared and paid annually. An additional distribution may be paid by the Funds to avoid
imposition of federal income and excise tax on any remaining undistributed capital gains and net investment income.
The timing and characterization of certain income and capital gain distributions are determined in accordance with federal tax
regulations which may differ from U.S. GAAP. As a result, net investment income and net realized gain (or loss) on investments
and foreign currency-related transactions for a reporting period may differ significantly from distributions during such period. The
differences between tax regulations and U.S. GAAP primarily relate to investments in options, futures, forward contracts, swap
contracts, passive foreign investment companies, foreign-denominated investments, mortgage-backed securities, certain securities
sold at a loss, wash sale deferrals and capital loss carryforwards. Accordingly, the Funds may periodically make reclassifications
among certain of their capital accounts without impacting their NAVs.
Expenses
The Funds pay their own expenses other than those expressly assumed by Russell Investment Management, LLC ("RIM"), the
Funds’ adviser, or RIFUS. Most expenses can be directly attributed to the individual Funds. Expenses which cannot be directly
attributed to a specific Fund are allocated among all Funds principally based on their relative net assets.
Foreign Currency Translations
The books and records of the Funds are maintained in U.S. dollars. Foreign currency amounts and transactions of the Funds are
translated into U.S. dollars on the following basis:
(a) Fair value of investment securities, other assets and liabilities at the closing rate of exchange on the valuation date.
(b) Purchases and sales of investment securities and income at the closing rate of exchange prevailing on the respective trade
dates of such transactions.
Net realized gains or losses from foreign currency-related transactions arise from: sales and maturities of short-term securities;
sales of foreign currencies; currency gains or losses realized between the trade and settlement dates on securities transactions; the
difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’ books and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized gains or losses from foreign currency-related transactions
arise from changes in the value of assets and liabilities, other than investments in securities, as a result of changes in the exchange
rates.
The Funds do not isolate that portion of the results of operations of the Funds that arises as a result of changes in exchange rates
from that portion that arises from changes in market prices of investments during the year. Such fluctuations are included with the
net realized and unrealized gain or loss from investments. However, for federal income tax purposes, the Funds do isolate the effects
of changes in foreign exchange rates from the fluctuations arising from changes in market prices for realized gain (or loss) on debt
obligations.
Capital Gains Taxes
The International Developed Markets and Global Real Estate Securities Funds may be subject to capital gains taxes and repatriation
taxes imposed by certain countries in which they invest. The International Developed Markets and Global Real Estate Securities
Funds may record a deferred capital gains tax liability with respect to the unrealized appreciation on foreign securities for potential
capital gains and repatriation taxes at June 30, 2018. The accrual for capital gains and repatriation taxes is included in net
unrealized appreciation (depreciation) on investments in the Statements of Assets and Liabilities. The amounts related to capital
Notes to Financial Statements 139
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
gains and repatriation taxes are included in net realized gain (loss) on investments in the Statements of Operations. For the period
ended June 30, 2018, none of the funds had capital gains and repatriation taxes included in net realized gain (loss) on investments
in the Statements of Operations.
Derivatives
The Funds may invest in derivatives. Derivatives are instruments or agreements whose value is derived from an underlying security
or index. They include options, futures, swaps and forwards. These instruments offer unique characteristics and risks that facilitate
the Funds' investment strategies.
The Funds typically use derivatives in three ways: exposing cash to markets, hedging and return enhancement. In addition, certain
Funds may enter into foreign exchange contracts for trade settlement purposes. The Funds may pursue their strategy of being fully
invested by exposing cash to the performance of appropriate markets by purchasing securities and/or derivatives. This is intended
to cause the Funds to perform as though cash were actually invested in those markets.
Hedging may be used by certain Funds to limit or control risks, such as adverse movements in exchange rates and interest rates.
Return enhancement can be accomplished through the use of derivatives in a Fund, including using derivatives as a substitute for
holding physical securities, and using them to express various macro views (e.g., interest rate movements, currency movements,
and macro credit strategies). By purchasing certain instruments, the Funds may more effectively achieve the desired portfolio
characteristics that assist them in meeting their investment objectives. Depending on how the derivatives are structured and
utilized, the risks associated with them may vary widely. These risks include, but are not limited to, market risk, liquidity risk,
leveraging risk, counterparty risk, basis risk, reinvestment risk, political risk, prepayment risk, extension risk, valuation risk and
credit risk.
Futures, certain options and cleared swaps are traded or cleared on an exchange or central exchange clearing house. Exchange-
traded or exchange-cleared transactions generally present less counterparty risk to a Fund. The exchange’s clearing house stands
between the Fund and the broker to the contract and therefore, credit risk is generally limited to the failure of the clearing house and
the clearing member. Cleared swap contracts are subject to clearing house rules, including initial and variation margin requirement,
daily settlement of obligations and the clearing house guarantee of payments to the broker. There is, however, still counterparty risk
due to the insolvency of the broker with respect to any margin held in the brokers’ customer accounts. While clearing members are
required to segregate customer assets from their own assets, in the event of insolvency, there may be a shortfall in the amount of
margin held by the broker for its clients. Collateral and margin requirements for exchange-traded or exchange-cleared derivatives
are established through regulation, as well as set by the broker or applicable clearing house. Margin for exchange-traded and
exchange-cleared transactions are detailed in the Statements of Assets and Liabilities as Receivable from broker and Payable due
to broker for futures and swap contracts. Securities and cash pledged as collateral are reflected as assets on the Statements of Assets
and Liabilities as either a component of Investments at fair value (securities) or Receivable from broker. Cash collateral received
is not typically held in a segregated account and as such is reflected as a liability on the Statement of Assets and Liabilities as Due
to broker. Typically, the Funds and counterparties are not permitted to sell, repledge, rehypothecate or otherwise use collateral
pledged by the other party unless explicitly permitted by each respective governing agreement.
In addition, proposed regulatory changes by the Securities and Exchange Commission ("SEC") relating to a mutual fund's use of
derivatives could potentially limit or impact the Funds' ability to invest in derivatives and adversely affect the value or performance
of the Funds or their derivative investments.
The effects of derivative instruments, categorized by risk exposure, on the Statements of Assets and Liabilities and the Statements
of Operations, for the period ended June 30, 2018, if applicable, are disclosed in the Fair Value of Derivative Instruments table
following each applicable Fund’s Schedule of Investments.
Foreign Currency Exchange Contracts
Certain Funds may enter into foreign currency exchange spot contracts and forward foreign currency exchange contracts (“FX
contracts”). From time to time, certain Funds may enter into FX contracts to hedge certain foreign currency-denominated assets.
FX contracts are recorded at fair value. Certain risks may arise upon entering into these FX contracts from the potential inability
of counterparties to meet the terms of their FX contracts and are generally limited to the amount of unrealized gain on the FX
contracts, if any, that are disclosed in the Statements of Assets and Liabilities.
For the period ended June 30, 2018, the following Funds entered into foreign currency exchange contracts primarily for the
strategies listed below:
140 Notes to Financial Statements
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Funds | Strategies |
International Developed Markets Fund | Return enhancement, hedging and exposing cash to markets |
Strategic Bond Fund | Return enhancement and hedging |
Global Real Estate Securities Fund | Exposing cash to markets and trade settlement |
The Funds’ foreign currency contract notional dollar values outstanding fluctuate throughout the fiscal year as required to meet
strategic requirements. The following tables illustrate the quarterly volume of foreign currency contracts. For the purpose of this
disclosure, volume is measured by the amounts bought and sold in USD.
Outstanding Contract Amounts Sold | ||||||
Quarter Ended | March 31, 2018 | June 30, 2018 | ||||
International Developed Markets Fund | $ | 129,142,830 | $ | 104,314,002 | ||
Strategic Bond Fund | 209,542,881 | 268,378,272 | ||||
Global Real Estate Securities Fund | 12,929,374 | 14,423,538 | ||||
Outstanding Contract Amounts Bought | ||||||
Quarter Ended | March 31, 2018 | June 30, 2018 | ||||
International Developed Markets Fund | $ | 128,904,989 | $ | 103,498,657 | ||
Strategic Bond Fund | 209,328,160 | 269,868,967 | ||||
Global Real Estate Securities Fund | 12,863,477 | 14,289,100 |
Options
Certain Funds may purchase and sell (write) call and put options on securities and securities indices. Such options are traded on
a national securities exchange or in an OTC market. The Funds may also purchase and sell (write) call and put options on foreign
currencies.
When a Fund writes a covered call or a put option, an amount equal to the premium received by the Fund is included in the Fund’s
Statement of Assets and Liabilities as an asset and as an equivalent liability. The amount of the liability is subsequently marked-
to-market to reflect the current fair value of the option written. The Fund receives a premium on the sale of a call option but gives
up the opportunity to profit from any increase in the value of the underlying instrument above the exercise price of the option, and
when the Fund writes a put option it is exposed to a decline in the price of the underlying instrument.
When a Fund sells an uncovered call option, it does not simultaneously have a long position in the underlying security. When a
Fund sells an uncovered put option, it does not simultaneously have a short position in the underlying security. Uncovered options
are riskier than covered options because there is no underlying security held by the Fund that can act as a partial hedge.
Whether an option which the Fund has written expires on its stipulated expiration date or the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or loss, if the cost of a closing purchase transaction exceeds the premium received when the
option was sold) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is
extinguished. If a call option which the Fund has written is exercised, the Fund realizes a capital gain or loss from the sale of the
underlying security, and the proceeds from such sale are increased by the premium originally received. When a put option which
a Fund has written is exercised, the amount of the premium originally received will reduce the cost of the security which a Fund
purchases upon exercise of the option.
The Funds’ use of written options involves, to varying degrees, elements of market risk in excess of the amount recognized in the
Statements of Assets and Liabilities. The face or contract amounts of these instruments reflect the extent of the Funds’ exposure to
market risk. The risks may be caused by an imperfect correlation between movements in the price of the instrument and the price
of the underlying securities and interest rates.
Certain Funds may enter into a swaption (an option on a swap). In a swaption, in exchange for an option, the buyer gains the right
but not the obligation to enter into a specified swap agreement with the issuer on a specified future date. The writer of the contract
receives the premium and bears the risk of unfavorable changes in the preset rate on the underlying swap.
For the period ended June 30, 2018, the Strategic Bond Fund purchased or sold options primarily for return enhancement and
hedging.
The Strategic Bond Fund’s options contracts notional amounts fluctuate throughout the fiscal year as required to meet strategic
requirements. The following table illustrates the quarterly volume of options contracts measured by notional in USD.
Notes to Financial Statements 141
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Notional of Options Contracts Outstanding | ||||||
Funds | March 31, 2018 | June 30, 2018 | ||||
Strategic Bond Fund | $ | 17,738,500 | $ | 19,305,000 |
Futures Contracts
The Funds may invest in futures contracts (i.e., interest rate, foreign currency and index futures contracts). The face or contract
value of these instruments reflect the extent of the Funds’ exposure to off balance sheet risk. The primary risks associated with the
use of futures contracts are an imperfect correlation between the change in fair value of the securities held by the Funds and the
prices of futures contracts, and the possibility of an illiquid market. Upon entering into a futures contract, the Funds are required to
deposit with a broker an amount, termed the initial margin, which typically represents 5% to 10% of the purchase price indicated
in the futures contract. Payments to and from the broker, known as variation margin, are typically required to be made on a daily
basis as the price of the futures contract fluctuates. Changes in initial settlement value are accounted for as unrealized appreciation
(depreciation) until the contracts are terminated, at which time realized gains and losses are recognized.
For the period ended June 30, 2018, the following Funds entered into futures contracts primarily for the strategies listed below:
Funds | Strategies |
U. S. Strategic Equity Fund | Exposing cash to markets |
U. S. Small Cap Equity Fund | Exposing cash to markets |
International Developed Markets Fund | Return enhancement, hedging and exposing cash to markets |
Strategic Bond Fund | Return enhancement, hedging and exposing cash to markets |
Global Real Estate Securities Fund | Exposing cash to markets |
The Funds’ futures contracts notional amounts fluctuate throughout the fiscal year as required to meet strategic requirements. The
following table illustrates the quarterly volume of futures contracts measured by notional in USD.
Notional of Futures Contracts Outstanding | ||||||
Funds | March 31, 2018 | June 30, 2018 | ||||
U. S. Strategic Equity Fund | $ | 9,118,350 | $ | 13,880,160 | ||
U. S. Small Cap Equity Fund | 2,985,840 | 1,070,875 | ||||
International Developed Markets Fund | 98,131,089 | 97,149,688 | ||||
Strategic Bond Fund | 737,707,675 | 793,981,992 | ||||
Global Real Estate Securities Fund | 17,023,222 | 17,213,484 |
Swap Agreements
Certain Funds may enter into swap agreements, on either an asset-based or liability-based basis, depending on whether they are
hedging their assets or their liabilities, and will usually enter into swaps on a net basis (i.e., the two payment streams are netted
out, with the Funds receiving or paying only the net amount of the two payments). When a Fund engages in a swap, it exchanges
its obligations to pay or rights to receive payments for the obligations to pay or rights to receive payments of another party (i.e., an
exchange of floating rate payments for fixed rate payments).
Certain Funds may enter into several different types of swap agreements including credit default, interest rate, total return (equity
and/or index) and currency swaps. Credit default swaps are a counterparty agreement which allows the transfer of third party credit
risk (the possibility that an issuer will default on its obligation by failing to pay principal or interest in a timely manner) from one
party to another. The lender faces the credit risk from a third party and the counterparty in the swap agrees to insure this risk in
exchange for regular periodic payments. Interest rate swaps are a counterparty agreement, can be customized to meet each party’s
needs, and involve the exchange of a fixed or variable payment per period for a payment that is not fixed. Total return swaps are a
counterparty agreement where two parties exchange two sets of cash flows on predetermined dates for an agreed upon amount of
time. The cash flows will typically be an equity index value swapped with a floating rate such as LIBOR plus or minus a pre-defined
spread. Total return swap agreements are a counterparty agreement intended to expose cash to markets or to effect investment
transactions consistent with those Funds’ investment objectives and strategies. Currency swaps are a counterparty agreement where
two parties exchange specified amounts of different currencies which are followed by each paying the other a series of interest
payments that are based on the principal cash flow. At maturity the principal amounts are returned.
The Funds generally expect to enter into these transactions primarily to preserve a return or spread on a particular investment or
portion of their portfolios or to protect against any increase in the price of securities they anticipate purchasing at a later date, or for
return enhancement. Under most swap agreements entered into by a Fund, the parties' obligations are determined on a "net basis".
The net amount of the excess, if any, of the Funds’ obligations over their entitlements with respect to each swap will be accrued on a
142 Notes to Financial Statements
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
daily basis and an amount of cash or liquid assets having an aggregate NAV at least equal to the accrued excess will be segregated.
To the extent that the Funds enter into swaps on other than a net basis, the amount maintained in a segregated account will be the
full amount of the Funds’ obligations, if any, with respect to such swaps, accrued on a daily basis. If there is a default by the other
party to such a transaction, the Funds will have contractual remedies pursuant to the agreement related to the transaction.
A Fund may not receive the expected amount under a swap agreement if the other party to the agreement defaults or becomes
bankrupt.
Credit Default Swaps
The Strategic Bond Fund may enter into credit default swaps. A credit default swap can refer to corporate issues, government
issues, asset-backed securities or an index of assets, each known as the reference entity or underlying asset. The Fund may act as
either the buyer or the seller of a credit default swap involving one party making a stream of payments to another party in exchange
for the right to receive a specified return in the event of a default or other credit event. Depending upon the terms of the contract,
the credit default swap may be closed via physical settlement. However, due to the possible or potential instability in the market,
there is a risk that the Fund may be unable to deliver the underlying debt security to the other party to the agreement. Additionally,
the Fund may not receive the expected amount under the swap agreement if the other party to the agreement defaults or becomes
bankrupt. In an unhedged credit default swap, the Fund enters into a credit default swap without owning the underlying asset or
debt issued by the reference entity. Credit default swaps allow the Fund to acquire or reduce credit exposure to a particular issuer,
asset or basket of instruments.
As the seller of protection in a credit default swap, the Fund would be required to pay the par or other agreed-upon value (or
otherwise perform according to the swap contract) of a reference debt obligation to the counterparty in the event of a default (or
other specified credit event) and the counterparty would be required to surrender the reference debt obligation. In return, the Fund
would receive from the counterparty a periodic stream of payments over the term of the contract provided that no credit event has
occurred. If no credit event occurs, the Fund would keep the stream of payments and would have no payment obligations. As a seller
of protection, the Fund would effectively add leverage to its portfolio because in addition to its total net assets, that Fund would be
subject to investment exposure on the notional amount of the swap.
The Fund may also purchase protection via credit default swap contracts in order to offset the risk of default of debt securities held
in their portfolios or to take a short position in a debt security, in which case the Fund would function as the counterparty referenced
in the preceding paragraph.
If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of
the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer
of protection’s right to choose the deliverable obligation with the lowest value following a credit event). The Fund may use credit
default swaps to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where the Fund owns or has
exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood (as measured by the
credit default swap’s spread) of a particular issuer’s default.
Deliverable obligations for credit default swaps on asset-backed securities in most instances are limited to the specific referenced
obligation as performance for asset-backed securities can vary across deals. Prepayments, principal paydowns, and other writedown
or loss events on the underlying mortgage loans will reduce the outstanding principal balance of the referenced obligation. These
reductions may be temporary or permanent as defined under the terms of the swap agreement and the notional amount for the swap
agreement generally will be adjusted by corresponding amounts. The Strategic Bond Fund may use credit default swaps on asset-
backed securities to provide a measure of protection against defaults (or other defined credit events) of the referenced obligation
or to take an active long or short position with respect to the likelihood of a particular referenced obligation’s default (or another
defined credit event).
Credit default swap agreements on credit indices involve one party making a stream of payments to another party in exchange for
the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of
the referenced entities comprising the credit index. A credit index is a basket of credit instruments or exposures designed to be
representative of some part of the credit market as a whole. These indices are made up of reference credits that are judged by a
poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the
indices may include, but are not limited to, investment grade securities, high yield securities, asset-backed securities, emerging
markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized
terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and
Notes to Financial Statements 143
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
if there is a default, the credit event is settled based on that name’s weight in the index. The composition of the indices changes
periodically, usually every six months, and, for most indices, each name has an equal weight in the index. Traders may use credit
default swaps on indices to speculate on changes in credit quality.
Implied credit spreads, represented in absolute terms, utilized in determining the fair value of credit default swap agreements on
corporate issues as of period-end are disclosed in the Schedules of Investments and generally serve as an indicator of the current
status of the payment/performance risk and represent the likelihood or risk of default (or other defined credit event) for the credit
derivative. The implied credit spread of a particular referenced entity reflects the cost of entering into a credit default swap and
may include upfront payments required to be made to enter into the agreement. For credit default swap agreements on asset-
backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of
the payment/performance risk. Wider credit spreads and increasing fair values, in absolute terms when compared to the notional
amount of the swap, generally represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk
of default or other credit event occurring as defined under the terms of the agreement. The maximum potential amount of future
payments (undiscounted) that the Fund as a seller of protection could be required to make under a credit default swap agreement
equals the notional amount of the agreement. Notional amounts of all credit default swap agreements outstanding as of June 30,
2018, for which a Fund is the seller of protection are disclosed in the Schedules of Investments. These potential amounts would be
partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the
agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by the Fund
for the same referenced entity or entities.
Credit default swaps could result in losses if the Fund does not correctly evaluate the creditworthiness of the company or companies
on which the credit default swap is based. Credit default swap agreements may involve greater risks than if the Fund had invested
in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject to
illiquidity and counterparty risk. The Fund will generally incur a greater degree of risk when it sells a credit default swap than when
it purchases a credit default swap. As a buyer of a credit default swap, the Fund may lose its investment and recover nothing should
a credit event fail to occur and the swap is held to its termination date. As seller of a credit default swap, if a credit event were
to occur, the value of any deliverable obligation received by the Fund, coupled with the upfront or periodic payments previously
received, may be less than what it pays to the buyer, resulting in a loss of value to the Fund.
If the creditworthiness of the Fund’s swap counterparty declines, the risk that the counterparty may not perform could increase,
potentially resulting in a loss to the Fund. To limit the counterparty risk involved in swap agreements, the Fund will only enter
into swap agreements with counterparties that meet certain standards of creditworthiness. Although there can be no assurance
that the Fund will be able to do so, the Fund may be able to reduce or eliminate its exposure under a swap agreement either by
assignment or other disposition, or by entering into an offsetting swap agreement with the same party or another creditworthy party.
The Fund may have limited ability to eliminate its exposure under a credit default swap if the credit quality of the reference entity
or underlying asset has declined.
For the period ended June 30, 2018, the Strategic Bond Fund entered into credit default swaps primarily for return enhancement,
hedging and exposing cash to markets.
The Strategic Bond Fund’s credit default swap contract notional amounts outstanding fluctuate throughout the fiscal year as required
to meet strategic requirements. The following table illustrates the quarterly volume of credit default swap contracts. For the purpose
of this disclosure, the volume is measured by notional amounts outstanding in USD at each quarter end.
Credit Default Swap Notional | ||||||
Amounts Outstanding | ||||||
Quarter Ended | March 31, 2018 | June 30, 2018 | ||||
Strategic Bond Fund | $ | 11,160,000 | $ | 12,700,000 |
Interest Rate Swaps
The use of interest rate swaps is a highly specialized activity which involves investment techniques and risks different from those
associated with ordinary portfolio securities transactions. If RIM or a money manager using this technique is incorrect in its forecast
of fair values, interest rates and other applicable factors, the investment performance of a Fund might diminish compared to what
it would have been if this investment technique were not used.
Interest rate swaps do not involve the delivery of securities or other underlying assets or principal. Accordingly, the risk of loss
with respect to interest rate swaps is limited to the net amount of interest payments that a Fund is contractually obligated to make.
Interest rate swaps are traded on exchanges and are subject to central clearing. If the clearing house or futures commission merchant
144 Notes to Financial Statements
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
defaults, a Funds' risk of loss consists of the net amount of interest payments that a Fund is contractually entitled to receive. The
counterparty risk for cleared derivatives is generally lower than for uncleared derivatives. However, clearing may subject a Fund to
increased costs or margin requirements.
For the period ended June 30, 2018, the Strategic Bond Fund entered into interest rate swaps primarily for return enhancement,
hedging and exposing cash to markets.
The Strategic Bond Fund’s interest rate swap contract notional amounts outstanding fluctuate throughout the fiscal year as required
to meet strategic requirements. The following table illustrates the quarterly volume of interest rate swap contracts. For the purpose
of this disclosure, volume is measured by the notional amounts outstanding in USD at each quarter end.
Interest Rate Swap Notional Amounts | ||||||
Outstanding | ||||||
Quarter Ended | March 31, 2018 | June 30, 2018 | ||||
Strategic Bond Fund | $ | 32,200,014 | $ | 45,892,459 |
Total Return Swaps
Certain Funds may enter into total return swap agreements to expose cash to markets or to effect investment transactions. Total
return swap agreements are two party contracts entered into primarily by institutional investors for periods ranging from a few weeks
to more than one year. In a standard total return swap transaction, the two parties agree to exchange the returns (or differentials
in rates of return) earned or realized on particular investments or instruments. The returns to be exchanged between the parties
are calculated with respect to a “notional amount” (i.e., a specified dollar amount that is hypothetically invested in a “basket” of
securities representing a particular index).
The Strategic Bond Fund’s total return swap contract notional amounts outstanding fluctuate throughout the fiscal year as required
to meet strategic requirements. The following table illustrates the quarterly volume of total return swap contracts. For the purpose
of this disclosure, volume is measured by notional amounts outstanding in USD at each quarter end.
For the period ended June 30, 2018, there were no total return swaps held in the Funds.
Currency Swaps
Funds may enter into currency swap agreements to enhance returns or for hedging purposes. Currency swap agreements are
agreements where two parties exchange specified amounts of different currencies which are followed by paying the other a series of
interest payments that are based on the principal cash flow. At maturity, the principal amounts are exchanged.
For the period ended June 30, 2018, the Funds did not enter into currency swap agreements.
Master Agreements
Certain Funds are parties to International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”)
with counterparties that govern transactions in OTC derivative and foreign exchange contracts entered into by the Funds and
those counterparties. The ISDA Master Agreements contain provisions for general obligations, representations, agreements,
collateral and events of default or termination. Events of termination and default include conditions that may entitle either party
to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement.
Any election to terminate early could be material to the financial statements. Since different types of forward and OTC financial
derivative transactions have different mechanics and are sometimes traded out of different legal entities of a particular counterparty
organization, each type of transaction may be covered by a different ISDA Master Agreement, resulting in the need for multiple
agreements with a single counterparty. As the ISDA Master Agreements are specific to unique operations of different asset types,
they allow a Fund to net its total exposure to a counterparty in the event of a default with respect to all the transactions governed
under a single agreement with a counterparty.
Master Repurchase Agreements (“Master Repo Agreements”) govern transactions between a Fund and select counterparties.
The Master Repo Agreements maintain provisions for, among other things, initiation, income payments, events of default, and
maintenance of collateral for repurchase and reverse repurchase agreements.
Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern the considerations and factors
surrounding the settlement of certain forward settling transactions, such as delayed delivery by and between a Fund and select
counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment
and transfer, events of default, termination, and maintenance of collateral.
Notes to Financial Statements 145
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Disclosure about Offsetting Assets and Liabilities
Balance sheet disclosure is based on various netting agreements between brokers and counterparties, such as ISDA Master
Agreements, Master Repo Agreements and Master Forward Agreements. Certain Funds utilize multiple counterparties. The
quantitative disclosure begins with disaggregation of counterparties by legal entity and the roll up of the data to reflect a single
counterparty in the table within the Funds’ financial statements. Net exposure represents the net receivable (payable) that would be
due from/to the counterparty in the event of default. Exposure from OTC derivatives can only be netted across transactions governed
under the same Master Agreement with the same legal entity.
Loan Agreements
The Strategic Bond Fund may invest in direct debt instruments which are interests in amounts owed by corporate, governmental,
or other borrowers to lenders or lending syndicates. The Fund’s investments in loans may be in the form of participations in loans
or assignments of all or a portion of loans from third parties. A loan is often administered by a bank or other financial institution
(the “agent”) that acts as agent for all holders. The agent administers the terms of the loan, as specified in the loan agreement.
When investing in a loan participation, the Fund has the right to receive payments of principal, interest and any fees to which it
is entitled only from the agent selling the loan agreement and only upon receipt by the agent of payments from the borrower. The
Fund generally has no right to enforce compliance with the terms of the loan agreement with the borrower. As a result, the Fund
may be subject to the credit risk of both the borrower and the agent that is selling the loan agreement. When the Fund purchases
assignments from agents it acquires direct rights against the borrower on the loan. As of June 30, 2018, the Strategic Bond Fund
had no unfunded loan commitments.
Local Access Products
Certain Funds may invest in local access products, also known as certificates of participation, participation notes or participation
interest notes. Local access products are issued by banks or broker-dealers and are designed to replicate the performance of foreign
companies or foreign securities markets and can be used by the Fund as an alternative means to access the securities market of a
frontier emerging market country. The performance results of local access products will not replicate exactly the performance of
the foreign companies or foreign securities markets that they seek to replicate due to transaction and other expenses. Investments
in local access products involve certain risks in addition to those associated with a direct investment in the underlying foreign
companies or foreign securities markets whose return they seek to replicate. There can be no assurance that there will be a trading
market or that the trading price of local access products will equal the underlying value of the foreign company or foreign securities
market that it seeks to replicate. The Funds rely on the creditworthiness of the counterparty issuing the local access products and
have no rights against the issuer of the underlying security. The Funds minimize this risk by entering into agreements only with
counterparties that RIM deems creditworthy. Due to liquidity and transfer restrictions, the secondary markets on which the local
access products are traded may be less liquid than the markets for other securities, or may be completely illiquid.
Emerging Markets Securities
Certain Funds may invest in emerging markets securities. Investing in emerging markets securities can pose some risks different
from, and greater than, risks of investing in U.S. or developed markets securities. These risks include: a risk of loss due to
exposure to economic structures that are generally less diverse and mature, and to political systems which may have less stability,
than those of more developed countries; smaller market capitalization of securities markets, which may suffer periods of relative
illiquidity; significant price volatility; restrictions on foreign investment; and possible difficulties in the repatriation of investment
income and capital. In addition, foreign investors may be required to register the proceeds of sales and future economic or political
crises could lead to price controls, forced mergers, expropriation or confiscatory taxation, seizure, nationalization, or creation of
government monopolies. The currencies of emerging market countries may experience significant declines against the U.S. dollar,
and devaluation may occur subsequent to investments in these currencies by the Funds. Emerging market securities may be
subject to currency transfer restrictions and may experience delays and disruptions in settlement procedures. Inflation and rapid
fluctuations in inflation rates have had, and may continue to have, negative effects on the economies and securities markets of
certain emerging market countries.
Emerging Markets Debt
The Strategic Bond Fund may invest in emerging markets debt. The Fund's emerging markets debt securities may include obligations
of governments and corporations. As with any fixed income securities, emerging markets debt securities are subject to the risk of
being downgraded in credit rating due to the risk of default. In the event of a default on any investments in foreign debt obligations,
146 Notes to Financial Statements
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
it may be more difficult for the Fund to obtain or to enforce a judgment against the issuers of such securities. With respect to debt
issued by emerging market governments, such issuers may be unwilling to pay interest and repay principal when due, either due
to an inability to pay or submission to political pressure not to pay, and as a result may default, declare temporary suspensions of
interest payments or require that the conditions for payment be renegotiated.
Repurchase Agreements
The Strategic Bond Fund may enter into repurchase agreements. A repurchase agreement is an agreement under which a Fund
acquires a fixed income security from a commercial bank, broker or dealer and simultaneously agrees to resell such security to the
seller at an agreed upon price and date (normally within a few days or weeks). The resale price reflects an agreed upon interest rate
effective for the period the security is held by a Fund and is unrelated to the interest rate on the security. The securities acquired
by a Fund constitute collateral for the repurchase obligation. In these transactions, the securities acquired by a Fund (including
accrued interest earned thereon) must have a total value in excess of the value of the repurchase agreement and must be held by the
custodian bank until repurchased. A Fund will not invest more than 15% of its net assets (taken at current fair value) in repurchase
agreements maturing in more than seven days.
Mortgage-Related and Other Asset-Backed Securities
The Strategic Bond Fund may invest in mortgage or other asset-backed securities (“ABS”). These securities may include mortgage
instruments issued by U.S. government agencies (“agency mortgages”) or those issued by private entities (“non-agency mortgages”).
Specific types of instruments may include reverse mortgages, mortgage pass-through securities, collateralized mortgage obligations
(“CMO”), commercial mortgage-backed securities, mortgage dollar rolls, CMO residuals, stripped mortgage-backed securities and
other securities that directly or indirectly represent a participation in, or are secured by a payable from, mortgage loans on real
property. The value of a Fund’s mortgage-backed securities (“MBS”) may be affected by, among other things, changes or perceived
changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the mortgage, or the
quality of the underlying assets. The mortgages underlying the securities may default or decline in quality or value. Through its
investments in MBS, a Fund has exposure to subprime loans, Alt-A loans and non-conforming loans as well as to the mortgage
and credit markets generally. Underlying collateral related to subprime, Alt-A and non-conforming mortgage loans has become
increasingly susceptible to defaults and declines in quality or value, especially in a declining residential real estate market. In
addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole.
Mortgage-Backed Securities
MBS often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying
the securities. In practice, however, unscheduled or early payments of principal and interest on the underlying mortgages may make
the securities’ effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of
a Fund’s portfolio at the time resulting in reinvestment risk.
Rising or high interest rates may result in slower than expected principal payments which may tend to extend the duration of MBS,
making them more volatile and more sensitive to changes in interest rates. This is known as extension risk.
MBS may have less potential for capital appreciation than comparable fixed income securities due to the likelihood of increased
prepayments of mortgages resulting from foreclosures or declining interest rates. These foreclosed or refinanced mortgages are paid
off at face value (par) or less, causing a loss, particularly for any investor who may have purchased the security at a premium or a
price above par. In such an environment, this risk limits the potential price appreciation of these securities.
Agency Mortgage-Backed Securities
Certain MBS may be issued or guaranteed by the U.S. government or a government sponsored entity, such as Fannie Mae (the Federal
National Mortgage Association) or Freddie Mac (the Federal Home Loan Mortgage Corporation). Although these instruments may
be guaranteed by the U.S. government or a government sponsored entity, many such MBS are not backed by the full faith and credit
of the United States and are still exposed to the risk of non-payment.
Privately Issued Mortgage-Backed Securities
MBS held by a Fund may be issued by private issuers including commercial banks, savings associations, mortgage companies,
investment banking firms, finance companies and special purpose finance entities (called special purpose vehicles or SPVs) and
other entities that acquire and package mortgage loans for resale as MBS. These privately issued non-agency MBS may offer higher
Notes to Financial Statements 147
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
yields than those issued by government agencies, but also may be subject to greater price changes than governmental issues.
Subprime loans refer to loans made to borrowers with weakened credit histories or with a lower capacity to make timely payments
on their loans. Alt-A loans refer to loans extended to borrowers who have incomplete documentation of income, assets, or other
variables that are important to the credit underwriting processes. Non-conforming mortgages are loans that do not meet the standards
that allow purchase by government-sponsored enterprises. MBS with exposure to subprime loans, Alt-A loans or nonconforming
loans have had in many cases higher default rates than those loans that meet government underwriting requirements. The risk of
non-payment is greater for MBS that are backed by mortgage pools that contain subprime, Alt-A and non-conforming loans, but a
level of risk exists for all loans.
Unlike agency MBS issued or guaranteed by the U.S. government or a government-sponsored entity (e.g., Fannie Mae and Freddie
Mac), MBS issued by private issuers do not have a government or government-sponsored entity guarantee, but may have credit
enhancements provided by external entities such as banks or financial institutions or achieved through the structuring of the
transaction itself. Examples of such credit support arising out of the structure of the transaction include the issue of senior and
subordinated securities (e.g., the issuance of securities by an SPV in multiple classes or tranches, with one or more classes being
senior to other subordinated classes as to the payment of principal and interest, with the result that defaults on the underlying
mortgage loans are borne first by the holders of the subordinated class); creation of reserve funds (in which case cash or investments,
sometimes funded from a portion of the payments on the underlying mortgage loans, are held in reserve against future losses); and
overcollateralization (in which case the scheduled payments on, or the principal amount of, the underlying mortgage loans exceeds
that required to make payment on the securities and pay any servicing or other fees). However, there can be no guarantee that credit
enhancements, if any, will be sufficient to prevent losses in the event of defaults on the underlying mortgage loans. In addition, MBS
that are issued by private issuers are not subject to the underwriting requirements for the underlying mortgages that are applicable
to those MBS that have a government or government-sponsored entity guarantee. As a result, the mortgage loans underlying private
MBS may, and frequently do, have less favorable collateral, credit risk or other underwriting characteristics than government or
government-sponsored MBS and have wider variances in a number of terms including interest rate, term, size, purpose and borrower
characteristics. Privately issued pools more frequently include second mortgages, high loan-to-value mortgages and manufactured
housing loans. The coupon rates and maturities of the underlying mortgage loans in a private-label MBS pool may vary to a greater
extent than those included in a government guaranteed pool, and the pool may include subprime mortgage loans.
Privately issued MBS are not traded on an exchange and there may be a limited market for the securities, especially when there is a
perceived weakness in the mortgage and real estate market sectors. Without an active trading market, MBS held in a Fund's portfolio
may be particularly difficult to value because of the complexities involved in assessing the value of the underlying mortgage loans.
Asset-Backed Securities
ABS may include MBS, loans, receivables or other assets. The value of the Funds’ ABS may be affected by, among other things,
actual or perceived changes in interest rates, factors concerning the interests in and structure of the issuer or the originator of the
receivables, the market’s assessment of the quality of underlying assets or actual or perceived changes in the credit worthiness of
the individual borrowers, the originator, the servicing agent or the financial institution providing the credit support.
Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities.
Rising or high interest rates tend to extend the duration of ABS, making them more volatile and more sensitive to changes in interest
rates. The underlying assets are sometimes subject to prepayments which can shorten the security’s weighted average life and may
lower its return. Defaults on loans underlying ABS have become an increasing risk for ABS that are secured by home equity loans
related to sub-prime, Alt-A or non-conforming mortgage loans, especially in a declining residential real estate market.
ABS (other than MBS) present certain risks that are not presented by MBS. Primarily, these securities may not have the benefit
of any security interest in the related assets. Credit card receivables are generally unsecured and the debtors are entitled to the
protection of a number of state and federal consumer credit laws, many of which give such debtors the right to set off certain amounts
owed on the credit cards, thereby reducing the balance due. There is the possibility that recoveries on repossessed collateral may
not, in some cases, be available to support payments on these securities. ABS are often backed by a pool of assets representing the
obligations of a number of different parties. To lessen the effect of failures by obligors on underlying assets to make payments, the
securities may contain elements of credit support which fall into two categories: (i) liquidity protection, and (ii) protection against
losses resulting from ultimate default by an obligor on the underlying assets. Liquidity protection refers to the provision of advances,
generally by the entity administering the pool of assets, to ensure that the receipt of payments on the underlying pool occurs in
a timely fashion. Protection against losses results from payment of the insurance obligations on at least a portion of the assets in
the pool. This protection may be provided through guarantees, policies or letters of credit obtained by the issuer or sponsor from
148 Notes to Financial Statements
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
third parties, through various means of structuring the transaction or through a combination of such approaches. The Fund will not
pay any additional or separate fees for credit support. The degree of credit support provided for each issue is generally based on
historical information respecting the level of credit risk associated with the underlying assets.
Delinquency or loss in excess of that anticipated or failure of the credit support could adversely affect the return on an investment
in such a security. The availability of ABS may be affected by legislative or regulatory developments. It is possible that such
developments may require the Funds to dispose of any then-existing holdings of such securities.
Forward Commitments
The Strategic Bond Fund may contract to purchase securities for a fixed price at a future date beyond customary settlement time.
The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the
transaction is negotiated. The Fund may dispose of a forward commitment transaction prior to settlement if it is appropriate to do
so and may realize short-term gains (or losses) upon such sale. When effecting such transactions, cash or liquid high-grade debt
obligations of the Fund in a dollar amount sufficient to make payment for the portfolio securities to be purchased will be earmarked
on the Fund’s records at the trade date and until the transaction is settled. A forward commitment transaction involves a risk of
loss if the value of the security to be purchased declines prior to the settlement date or the other party to the transaction fails to
complete the transaction.
The Strategic Bond Fund may invest in to-be-announced ("TBA") mortgage-backed securities. A TBA security is a forward
mortgage-backed securities trade in which a seller agrees to issue a TBA mortgage-backed security at a future date. The securities
are purchased and sold on a forward commitment basis with an approximate principal amount and maturity date. The actual
principal amount and maturity date will be determined upon settlement when the specific mortgage pools are assigned. These
securities are within the parameters of industry “good delivery” standards.
As of June 30, 2018, the Strategic Bond Fund had no cash collateral balances in connection with TBAs.
Inflation-Indexed Bonds
The Strategic Bond Fund may invest in inflation-indexed securities, which are typically bonds or notes designed to provide a return
higher than the rate of inflation (based on a designated index) if held to maturity. A common type of inflation-indexed security is a
U.S. Treasury Inflation-Protected Security (“TIPS”). The principal of a TIPS increases with inflation and decreases with deflation,
as measured by the Consumer Price Index. When a TIPS matures, the adjusted principal or original principal is paid, whichever is
greater. TIPS pay interest twice a year, at a fixed rate. The rate is applied to the adjusted principal; so, like the principal, interest
payments rise with inflation and fall with deflation.
Guarantees
In the normal course of business, the Funds enter into contracts that contain a variety of representations which provide general
indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that
may be made against the Funds that have not yet occurred. However, the Funds expect the risk of loss to be remote.
Market, Credit and Counterparty Risk
In the normal course of business, the Funds trade financial instruments and enter into financial transactions where risk of potential
loss exists due to changes in the market (market risk) or failure of the other party to a transaction to perform (credit risk). Similar
to credit risk, the Funds may also be exposed to counterparty risk or risk that an institution or other entity with which the Funds
have unsettled or open transactions will default. The potential loss could exceed the value of the relevant assets recorded in the
Funds' financial statements (the “Assets”). The Assets consist principally of cash due from counterparties and investments. The
extent of the Funds’ exposure to market, credit and counterparty risks with respect to the Assets approximates their carrying value
as recorded in the Funds’ Statements of Assets and Liabilities.
Global economies and financial markets are becoming increasingly interconnected and political and economic conditions (including
recent instability and volatility) and events (including natural disasters) in one country, region or financial market may adversely
impact issuers in a different country, region or financial market. As a result, issuers of securities held by a Fund may experience
significant declines in the value of their assets and even cease operations. Such conditions and/or events may not have the same
impact on all types of securities and may expose a Fund to greater market and liquidity risk and potential difficulty in valuing
portfolio instruments held. This could cause a Fund to underperform other types of investments.
Notes to Financial Statements 149
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
3. Investment Transactions
Securities
During the period ended June 30, 2018, purchases and sales of investment securities (excluding U.S. Government and Agency
obligations, short-term investments, options, futures and repurchase agreements) were as follows:
Purchases | Sales | |||||
U. S. Strategic Equity Fund | $ | 558,541,815 | $ | 566,778,361 | ||
U. S. Small Cap Equity Fund | 81,739,081 | 87,388,680 | ||||
International Developed Markets Fund | 158,707,684 | 150,339,073 | ||||
Strategic Bond Fund | 389,842,550 | 330,809,907 | ||||
Global Real Estate Securities Fund | 359,285,318 | 349,797,093 |
Purchases and sales of U.S. Government and Agency obligations (excluding short-term investments, options, futures and repurchase
agreements) were as follows:
cx
Purchases | Sales | |||||
Strategic Bond Fund | $ | 834,245,521 | $ | 860,267,135 |
Securities Lending
The Investment Company has a securities lending program whereby each Fund can loan securities with a value up to 33 1/3% of
each Fund’s total assets. The maturity associated with these securities is considered continuous. The Fund receives cash (U.S.
currency), U.S. Government or U.S. Government Agency obligations as collateral against the loaned securities. The collateral
cannot be resold, repledged or rehypothecated. As of June 30, 2018, to the extent that a loan was collateralized by cash, such
collateral was invested by the securities lending agent, Brown Brothers Harriman & Co. (“BBH”), in the U.S. Cash Collateral Fund,
an unregistered fund advised by RIM. The collateral received is recorded on a lending Fund’s Statement of Assets and Liabilities
along with the related obligation to return the collateral.
Affiliated income generated from the investment of cash collateral, less negotiated rebate fees paid to participating brokers, is
divided between the Fund and BBH and is reported as securities lending income on the Fund's Statement of Operations. To the
extent that a loan is secured by non-cash collateral, brokers pay the Fund negotiated lenders’ fees, which are divided between the
Fund and BBH and are recorded as securities lending income for the Fund. All collateral received will be in an amount at least
equal to 102% (for loans of U.S. securities) or 105% (for loans of non-U.S. securities) of the fair value of the loaned securities at the
inception of each loan. The fair value of the loaned securities is determined at the close of business of the Fund and any additional
required collateral is delivered to the Fund the next day. Should the borrower of the securities fail financially, there is a risk of delay
in recovery of the securities or loss of rights in the collateral.
4. Related Party Transactions, Fees and Expenses
Adviser, Administrator, Transfer and Dividend Disbursing Agent
RIM provides or oversees the provision of all investment advisory and portfolio management services for the Funds, including
developing the investment program for each Fund and managing each Fund's overall exposures. From its advisory fees received
from the Funds, RIM, as agent for RIC, pays all fees to the money managers for their investment advisory services. Each money
manager has agreed that it will look only to RIM for the payment of the money manager’s fee, after RIC has paid RIM. Fees paid
to the money managers are not affected by any voluntary or statutory expense limitations. RIFUS is the Funds' administrator and
transfer agent. RIFUS, in its capacity as the Funds' administrator, provides or oversees the provision of all administrative services
for the Funds. RIFUS, in its capacity as the Funds' transfer agent and dividend disbursing agent, is responsible for providing
transfer agency and dividend disbursing services to the Funds. RIFUS is a wholly-owned subsidiary of RIM. RIM is an indirect,
wholly-owned subsidiary of Russell Investments Group, Ltd., a Cayman company.
The Funds are permitted to invest their cash (i.e., cash awaiting investment or cash held to meet redemption requests or to pay
expenses) in the U.S. Cash Management Fund, an unregistered fund advised by RIM. As of June 30, 2018, the Funds had invested
$97,968,586 in the U.S. Cash Management Fund. In addition, all or a portion of the collateral received from the Investment
Company’s securities lending program in the amount of $29,030,485 is invested in the U.S. Cash Collateral Fund, an unregistered
fund advised by RIM.
150 Notes to Financial Statements
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
The advisory fee is based upon the average daily net assets of each Fund and the administration fee of up to 0.05% is based on the
combined average daily net assets of the Funds. Advisory and administration fees are paid monthly.
Annual Rate | ||||||
Funds | Adviser (%) | Administrator (%) | ||||
U. S. Strategic Equity Fund | 0.73 | Up to 0.05 | ||||
U. S. Small Cap Equity Fund | 0.90 | Up to 0.05 | ||||
International Developed Markets Fund | 0.90 | Up to 0.05 | ||||
Strategic Bond Fund | 0.55 | Up to 0.05 | ||||
Global Real Estate Securities Fund | 0.80 | Up to 0.05 |
The following table shows the total amount of each of these fees paid by the Funds for the period ended June 30, 2018: | ||||||
Advisory | Administrative | |||||
U. S. Strategic Equity Fund | $ | 1,660,015 | $ | 113,699 | ||
U. S. Small Cap Equity Fund | 1,132,495 | 62,917 | ||||
International Developed Markets Fund | 1,917,494 | 106,527 | ||||
Strategic Bond Fund | 2,438,643 | 221,695 | ||||
Global Real Estate Securities Fund | 3,484,211 | 217,763 |
There were no advisory fee waivers for the Funds during the period.
RIM does not have the ability to recover amounts waived or reimbursed from previous periods.
Transfer and Dividend Disbursing Agent
RIFUS serves as transfer agent and provides dividend disbursing services to the Funds. For this service, RIFUS is paid a fee based
upon the average daily net assets of the Funds for transfer agency and dividend disbursing services. RIFUS retains a portion of this
fee for services provided to the Funds and pays the balance to unaffiliated agents who assist in providing these services. Transfer
agency fees paid by the Funds presented herein for the period ended June 30, 2018 were as follows:
Amount | |||
U. S. Strategic Equity Fund | $ | 10,006 | |
U. S. Small Cap Equity Fund | 5,537 | ||
International Developed Markets Fund | 9,374 | ||
Strategic Bond Fund | 19,509 | ||
Global Real Estate Securities Fund | 19,163 |
Distributor
Russell Investments Financial Services, LLC (the “Distributor”), a wholly-owned subsidiary of RIM, is the distributor for the
Investment Company, pursuant to a distribution agreement with the Investment Company. The Distributor receives no compensation
from the Investment Company for its services.
Affiliated Brokerage Commissions
The Funds effect certain transactions through Russell Investments Implementation Services, LLC (“RIIS”). RIIS is a registered
broker and investment adviser and an affiliate of RIM. RIIS uses a multi-venue trade management approach whereby RIIS allocates
trades among RIIS’ network of independent brokers for execution, clearing and other services. Trades placed through RIIS and its
independent brokers are made (i) to manage trading associated with changes in money managers, rebalancing across existing money
managers, cash flows and other portfolio transitions, (ii) to execute portfolio securities transactions for the portion of each Fund’s
assets that RIM determines not to allocate to money managers, (iii) to execute portfolio securities transactions for the portion of a
Fund’s assets that RIM manages based upon model portfolios provided by the Fund’s non-discretionary managers or (iv) to execute
money manager’s portfolio securities transactions for the segment of a Fund’s portfolio assigned to the money manager. RIM has
authorized RIIS to effect certain futures, swaps, OTC derivative transactions, and cleared swaps, including foreign currency spots,
forwards and options trading on behalf of the Funds.
The Funds are permitted to purchase or sell securities from or to certain related affiliated funds under specified conditions outlined
in procedures adopted by the Board. The procedures have been designed to ensure that any purchase or sale of securities by the
Funds from or to another fund or portfolio that are, or could be, considered an affiliate by virtue of having a common investment
Notes to Financial Statements 151
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a -7 of the Investment
Company Act. Further, as defined under the procedures each transaction is effected at the current market value.
During the During the period ended June 30, 2018, the Funds did not engage in purchases and sales of securities pursuant to Rule
17a -7 of the Investment Company Act.
Board of Trustees
The Russell Investments Fund Complex consists of Russell Investment Company ("RIC"), which has 32 funds and RIF, which has
9 funds. Each of the Trustees is a Trustee of RIC and RIF. The Russell Investments Fund Complex compensates each Trustee who
is not an employee of RIM or its affiliates. Trustee compensation and expenses are allocated to each Fund based on its net assets
relative to other funds in the Russell Investments Fund Complex.
For the period ended June 30, 2018, the regular compensation paid to the Trustees by the Russell Investments Fund Complex was
$884,750.
5. Federal Income Taxes
At December 31, 2017, the following Funds had net tax basis capital loss carryforwards which may be applied against any net
realized taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first. Available capital
loss carryforwards and expiration dates are as follows:
No Expiration | ||||||||||||
Funds | 12/31/2017 | 10/31/2018 | 10/31/2019 | Short Term | Long-Term | Totals | ||||||
Strategic Bond Fund | $ | — | $ | — | $ | — | $ | 4,638,689 | $ | 2,747,409 | $ | 7,386,098 |
Under the Regulated Investment Company Modernization Act of 2010, the Funds are permitted to carry forward capital losses
incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred in post-
enactment 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.
6. Record Ownership
At June 30, 2018, the following table includes shareholders of record with greater than 10% of the total outstanding shares of each
respective Fund.
# of Shareholders | % | |||||
U. S. Strategic Equity Fund | 2 | 86.1 | ||||
U. S. Small Cap Equity Fund | 2 | 71.8 | ||||
International Developed Markets Fund | 2 | 70.9 | ||||
Strategic Bond Fund | 1 | 70.3 | ||||
Global Real Estate Securities Fund | 2 | 91.3 |
7. Illiquid and Restricted Securities
No more than 15% of a Fund's net assets will be invested in securities, including repurchase agreements of more than seven days'
duration, that are illiquid. This limitation is applied at the time of purchase. A security is illiquid if it cannot be disposed of within
seven days in the ordinary course of business at approximately the amount at which a Fund has valued such security. There may be
delays in selling illiquid securities at prices representing their fair value.
The Board of the Funds has adopted procedures to permit each Fund to deem as liquid the following types of securities that are
otherwise presumed to be illiquid securities: (i) certain restricted securities that are eligible for resale pursuant to Rule 144A
under the Securities Act; (ii) certain commercial paper issued in reliance on the exemption from registration provided by Section
4(a)(2) of the Securities Act; (iii) certain interest-only and principal-only fixed mortgage-backed securities issued by the United
States government or its agencies and instrumentalities; (iv) certain municipal lease obligations and certificates of participation
in municipal lease obligations; and (v) certain restricted debt securities that are subject to unconditional puts or demand features
exercisable within seven days.
152 Notes to Financial Statements
Russell Investment Funds
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
A restricted security may have contractual restrictions on resale, may have been offered in a private placement transaction, and may
not be registered under the Securities Act of 1933.
See each Fund's Schedule of Investments for a list of securities that have been footnoted as a restricted security or as an illiquid
and restricted security.
8. Commitments and Contingencies
The Strategic Bond Fund may enter into certain credit agreements, all or a portion of which may be unfunded. The Fund is obligated
to fund these loan commitments at the borrowers' discretion. Unfunded loan commitments and funded portions of credit agreements
are marked to market daily and any unrealized appreciation or depreciation is included in the Statements of Assets and Liabilities
and the Statements of Operations. Funded portions of credit agreements are presented in the Schedules of Investments. For the
period ended June 30, 2018, there were no unfunded loan commitments held by the Fund.
9. Subsequent Events
Management has evaluated the events and/or transactions that have occurred through the date the financial statements were issued
and noted no items requiring adjustments of the financial statements or additional disclosures except the following:
On July 2, 2018, the Board declared dividends payable from net investment income. Dividends were paid on July 5, 2018, to
shareholders of record effective with the opening of business on July 3, 2018.
Notes to Financial Statements 153
Russell Investment Funds
Affiliated Brokerage Transactions — June 30, 2018 (Unaudited)
As stated in the Note 4 in the Notes to Financial Statements contained in this semi-annual report, the Funds utilize RIIS and its
independent brokers. RIIS is a registered broker dealer and investment adviser and an affiliate of RIM. RIIS uses a multi-venue
trade management approach whereby RIIS allocates trades among RIIS’ network of independent brokers for execution, clearing,
and other services. Trades placed through RIIS and its independent brokers are made (i) to manage trading associated with changes
in money managers, rebalancing across existing money managers, cash flows and other portfolio transitions, (ii) to execute portfolio
securities transactions for each Fund’s assets that RIM determines not to allocate to money managers, (iii) to execute portfolio securities
transactions for the portion of a Fund’s assets that RIM manages based upon model portfolios provided by the Funds’ non-discretionary
managers or (iv) to execute money manager portfolio securities transactions for the segment of a Fund’s portfolio assigned to the money
manager. RIM has authorized RIIS to effect certain futures, swaps, OTC derivative transactions, and cleared swaps, including foreign
currency spots, forwards and options trading on behalf of the Funds.
Amounts retained by RIIS for the period ended June 30, 2018 were as follows:
Fund Name | Amount | |
U. S. Strategic Equity Fund | $ | 55,142 |
U. S. Small Cap Equity Fund | 13,567 | |
International Developed Markets Fund | 16,370 | |
Strategic Bond Fund | — | |
Global Real Estate Securities Fund | 39,643 |
154 Affiliated Brokerage Transactions
Russell Investment Funds
Basis for Approval of Investment Advisory Agreement — (Unaudited)
Approval of Investment Advisory Agreement
The Investment Company Act of 1940, as amended (the “1940 Act”), requires that the Board of Trustees (the “Board”), including a
majority of its members who are not considered to be “interested persons” under the 1940 Act (the “Independent Trustees”) voting
separately, approve for an initial term not to exceed two years and, thereafter, approve the continuation of the advisory agreement
with RIM (the “RIM Agreement”) and the portfolio management contract with each Money Manager of the Funds (collectively, the
“portfolio management contracts and, with the RIM Agreement, the “Agreements”) on at least an annual basis and that the terms and
conditions of the RIM Agreement and the terms and conditions of each portfolio management contract provide for its termination if
continuation is not approved annually. The RIM Agreement was approved by the Board on December 16, 2015 (the “Approval Date”)
and subsequently approved by the respective shareholders of each Fund and it became effective on June 1, 2016 for an initial period
of two years. The Board, including all of the Independent Trustees, considered and approved the continuation of the Agreements at
a meeting held in person on May 21, 2018 (the “Agreement Evaluation Meeting”). During the course of a year, the Trustees receive a
wide variety of materials regarding, among other things, the investment performance of the Funds, sales and redemptions of the Funds’
shares, management of the Funds and other services provided by RIM (and its affiliates) and the Money Managers and compliance with
applicable regulatory requirements. In preparation for the annual review, the Independent Trustees, with the advice and assistance of
their independent counsel (“Independent Counsel”), also requested and the Board considered (1) information and reports prepared
by RIM relating to the services provided by RIM (and its affiliates) and the Money Managers to the Funds; (2) information and reports
prepared by RIM relating to the profitability of each Fund to RIM (and its affiliates); and (3) information (the “Third-Party Information”)
received from an independent, nationally recognized provider of investment company information comparing the performance of the
Funds and their respective operating expenses over various periods of time with other peer funds not managed by RIM, believed
by the provider and/or by RIM in the case of the custom peer comparisons to be generally comparable to the Funds. In the case of
certain, but not all, Funds, the Third-Party Information reflected changes in the Comparable Funds requested by RIM, which changes
were noted in the Third-Party Information. 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. The foregoing and other information received by the Board, including the Independent Trustees, in connection with
its evaluations of the Agreements are collectively called the “Agreement Evaluation Information.” The Trustees’ evaluations also
reflected the knowledge and familiarity gained as Board members of the Funds and the other RIM-managed funds for which the
Board has supervisory responsibility (“Other RIM Funds”) with respect to services provided by RIM, RIM’s affiliates and each Money
Manager. The Trustees received a memorandum from counsel to the Funds (“Fund Counsel”) discussing the legal standards for their
consideration of the continuations of the Agreements, and the Independent Trustees separately received a memorandum regarding their
responsibilities from Independent Counsel.
At a meeting held in person on April 24, 2018 (the “Agreement Information Review Meeting,”), the Board, including the Independent
Trustees, in preparation for the Agreement Evaluation Meeting, met with representatives of RIM; met in an executive session with the
Chief Executive Officer of Russell Investments (as defined below); met in an executive session with a representative of TA Associates
(as defined below); and then the Independent Trustees met in a private session with Independent Counsel at which no representatives
of RIM or the Funds’ management were present to review the Agreement Evaluation Information received to that date and, on the
basis of that review, requested additional Agreement Evaluation Information. The Board met by conference telephone call in a private
session with the Chief Executive Officer of Russell Investments on May 7, 2018 to review and discuss additional Agreement Evaluation
Information regarding organizational developments and plans. The additional Agreement Evaluation Information requested in the
April 24, 2018 meeting was received on May 8, 2018 and May 15, 2018. On May 15, 2018, the Independent Trustees met by
conference telephone call in private session with Independent Counsel to review the additional Agreement Evaluation Information. On
May 15, 2018, following the aforementioned conference call, the Board Chair met telephonically with representatives of management
to request additional or revised Agreement Evaluation Information. The additional or revised Agreement Evaluation Information
requested by the Board Chair on her May 15, 2018 conference call with representatives of management was received on May 18, 2018.
At the Agreement Evaluation Meeting, the Independent Trustees again met in person in a private session with Independent Counsel
to review additional or revised Agreement Evaluation Information received to that date. At the Agreement Evaluation Meeting, the
Board, including the Independent Trustees, considered the proposed continuance of the Agreements with RIM, Fund management,
Independent Counsel and Fund Counsel. The Board considered that the Agreement Evaluation Information and presentations made
by RIM at the Agreement Evaluation Meeting as part of this review encompassed the Funds and all Other RIM Funds. Information
received by the Board, including the Independent Trustees, prior to and at the Agreement Information Review Meeting, the Agreement
Evaluation Meeting and other meetings identified above is included in the Agreement Evaluation Information. Prior to voting at the
Agreement Evaluation Meeting, the Independent Trustees met in private session with Independent Counsel to consider Agreement
Basis for Approval of Investment Advisory Agreement 155
Russell Investment Funds
Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
Evaluation Information received from RIM and management at and prior to the Agreement Evaluation Meeting. The discussion below
reflects all of these reviews.
In evaluating the Agreements, the Board considered that each of the Funds employs a manager-of-managers method of investment and
RIM’s past expressed belief that such Funds, in employing a manager-of-managers method of investment, operate in a manner that is
different from most other investment companies. In the case of most other investment companies, an investment 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. RIM, however, has engaged multiple unaffiliated
Money Managers for the Funds. A Money Manager may have (1) a discretionary asset management assignment pursuant to which it
is allocated a portion of a Fund’s assets to manage directly in its discretion; (2) a non-discretionary assignment pursuant to which it
provides a model portfolio to RIM representing its investment recommendations, based upon which RIM purchases and sells securities
for a Fund; or (3) both a discretionary and a non-discretionary assignment. Money Managers may be paid fees at a lower rate for non-
discretionary services than discretionary services.
The Board considered that RIM (rather than any Money Manager) is responsible under the RIM Agreement for determining, implementing
and maintaining the investment program for each Fund. The Board considered that, although RIM traditionally has managed Fund
exposures through the selection of and allocations to Money Managers, innovations in RIM portfolio management techniques together
with evolutions in available technology, tools and analytics have resulted in changes in RIM’s approach to its Fund investment advisory
services. In this regard, assets of each Fund generally have been allocated among RIM and the multiple Money Manager strategies
selected by RIM, subject to Board approval, for that Fund. RIM manages the investment of each Fund’s cash and also may manage
directly any portion of each Fund’s assets that RIM determines not to allocate to the Money Manager strategies and portions of a Fund
during transitions between Money Managers. The Funds usually, but not always, pursue a strategy to be fully invested by exposing
all or a portion of their cash to the performance of appropriate markets by purchasing equity securities, fixed income securities and/
or derivatives, which typically include futures contracts. This cash “equitization” strategy is managed by RIM. In the case of non-
discretionary Money Manager assignments, RIM itself manages portions of a Fund based upon model portfolios provided by the
non-discretionary Money Managers. In the case of non-discretionary Money Manager assignments for equity funds, RIM implements
model equity portfolios through an “enhanced portfolio implementation,” or “emulation,” process designed to reduce trades and lower
turnover, and provide more flexibility to manage tax impacts of trades. In all cases, Fund assets are managed directly by RIM pursuant
to authority provided by the RIM Agreement. The Board noted the variety and complexity of investment advisory services that RIM
has provided to Funds under the RIM Agreement.
RIM is responsible for selecting, subject to Board approval, Money Managers for each Fund and for actively managing allocations
and reallocations of its assets among the Money Managers or their strategies and RIM itself. Each discretionary Money Manager for
a Fund in effect performs the function of an individual portfolio manager who is responsible for selecting portfolio securities for the
portion of the Fund assigned to it by RIM (each, a “segment”) in accordance with the Fund’s applicable investment objective, policies
and restrictions, any specific parameters placed by RIM upon their selection of portfolio securities and the Money Manager’s specified
role in a Fund. For each Fund, RIM is responsible for, among other things, providing each Money Manager with a statement of the
investment parameters and policies for the assets allocated to it and any specific investment restrictions; monitoring the performance
of each Money Manager and Fund; generally supervising compliance by each Money Manager with each Fund’s investment objective
and policies; with respect to Funds with non-discretionary Money Managers, purchasing and selling securities for the Funds based on
model portfolios representing the investment recommendations of the non-discretionary Money Managers; managing Fund assets that
are not allocated to Money Manager strategies; managing the Funds’ cash balances; and recommending at least 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, RIM is responsible for recommending to the Board additions
or terminations of new Money Managers or replacements of existing Money Managers at any time when, based on RIM’s research
and ongoing review and analysis, such actions are, in RIM’s judgment, appropriate. RIM may impose specific investment or strategy
parameters from time to time for each Money Manager intended to capitalize on the strengths of that Money Manager or to coordinate
the investment activities of Money Managers for the Fund in a complementary manner. Therefore, RIM’s selection of Money Managers
is made not only on the basis of performance considerations but also on the basis of other factors, including anticipated compatibility
with other Money Managers in the same Fund. In light of the foregoing, the overall performance of each Fund has reflected, in great
part, the performance of RIM in designing the Fund’s investment program, structuring the Fund, selecting effective Money Managers
on a discretionary or non-discretionary basis, and allocating assets among the Money Managers or their strategies and RIM in a manner
designed to achieve the investment objectives of the Fund. The Agreement Evaluation Information noted the broad array of investment
156 Basis for Approval of Investment Advisory Agreement
Russell Investment Funds
Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
management services provided to the Funds by RIM compared to the relatively narrow portfolio management services provided to the
Funds by Money Managers. RIM has advised the Board that while its portfolio construction process is “investment led,” it establishes
a reasonable Money Manager fee target (“Fee Target”) for each Fund to provide a cost framework for portfolio construction. RIM in the
Agreement Evaluation Information advised the Board that Money Manager fees, in the aggregate, “must allow RIM to remain a going
concern with sufficient resources to provide required services to the Funds and to earn a reasonable profit.” RIM further advised the
Board that it uses a number of tools in the portfolio construction process to meet a Fund’s objective taking into account the Fee Target
including the selection of Money Managers, allocation of assets among Money Managers, allocation of assets to itself, Money Manager
fee negotiations and guideline customization. RIM has advised the Board that Fee Targets for particular Funds may be adjusted (higher
or lower) from time to time.
The Board considered that the prospectuses for the Funds and other public disclosures emphasize to investors RIM’s role as the principal
investment manager for each such Fund, rather than the investment selection role of these Funds’ Money Managers, and describe the
manner in which the Funds operate so that investors may take that information into account when deciding to purchase shares of any
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 RIM’s reputation for and performance record in managing the Funds’ manager-of-managers
structure.
The Board also considered the demands and complexity of managing the Funds pursuant to the manager-of-managers structure, the
special expertise of RIM with respect to the manager-of-managers structure of the Funds and the possibility that, at the current expense
ratio of each Fund, there would be no acceptable alternative investment managers to replace RIM on comparable terms given the need
to continue the manager-of-managers strategy of such Fund selected by shareholders in purchasing their shares.
In addition to these general factors relating to the manager-of-managers structure of the Funds, the Trustees considered, with respect
to each Fund, various specific factors in evaluating renewal of the RIM 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 by RIM;
2. The advisory fee paid by the Fund to RIM (the “Advisory Fee”) and the fact that it encompasses all investment advisory fees paid by
the Fund, including the fact that RIM pays the fees for Money Managers of such Fund out of its Advisory Fee;
3. Information provided by RIM as to other fees and benefits received by RIM or its affiliates in connection with the Fund, including any
administrative or transfer agent fees and any fees received for management or administration of uninvested cash and securities lending
cash collateral, soft dollar arrangements and commissions in connection with portfolio securities and foreign exchange transactions;
4. Information provided by RIM as to expenses incurred by the Fund;
5. Information provided by RIM as to the profits that RIM derives from its mutual fund operations generally and from the Fund; and
6. Information provided by RIM concerning economies of scale and whether any scale economies are adequately shared with the 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 discussed with senior representatives of RIM
the impact on the Funds of changes in RIM’s senior management and other personnel providing investment management and other
services to the Funds since the Approval Date and changes, and proposed changes, to the operational and data infrastructure supporting
the services provided by RIM to the Funds and the impact of delays and challenges that have been experienced in implementing such
changes on the Funds. The Board was not advised of any diminution in the nature, scope or quality of the investment advisory or other
services provided to the Funds resulting or expected to result from such changes. The Board also discussed with the Chief Compliance
Officer of the Funds (the “CCO”) whether personnel and other resources made available to her are adequate for the maintenance of
the Funds’ compliance program and the impact of organizational changes on the compliance programs of the Funds and RIM. The
Board received assurances from the CCO that organizational and other changes since the Approval Date have not resulted in any
diminution in the scope and quality of the Funds’ compliance programs, although the CCO had previously noted her concerns as to
the effectiveness of some aspects of the compliance program in connection with the portions of Funds that are managed directly by
RIM and other new and more complex investment products and investment strategies. She and RIM senior management have advised
the Board that measures, including the aforementioned operational and data infrastructure changes, are in process that should better
accommodate these new and more complex investment products and strategies.
Basis for Approval of Investment Advisory Agreement 157
Russell Investment Funds
Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
Since June 1, 2016, RIM has been an indirect wholly-owned subsidiary of Russell Investments Group, Ltd., a Cayman company through
which the limited partners of certain private equity funds affiliated with TA Associates Management, L.P. (“TA Associates”) indirectly
have a majority ownership interest through alternative investment vehicles and the limited partners of certain private equity funds
affiliated with Reverence Capital Partners, L.P. (“Reverence Capital”) indirectly have a significant minority controlling ownership
interest through certain Reverence Capital funds and alternative investment vehicles in RIM and its affiliates (“Russell Investments”).
In connection with the Board’s initial approval of the RIM Agreement, TA Associates advised the Board of its plans ultimately to effect
a sale or other disposition of its ownership interest in Russell Investments. Any such future transaction (“Transaction”) could cause
a change of control of RIM resulting, among other things, in an assignment and termination of the RIM Agreement, as required by
the 1940 Act, and by the terms and conditions of the RIM Agreement. In the event of a Transaction, the Board would be required to
consider the approval of the terms and conditions of a replacement agreement (“Successor Agreement”) for the RIM Agreement and
thereafter to submit the Successor Agreement to each Fund’s shareholders for approval, as required by the 1940 Act. At the Agreement
Information Review Meeting, the Board met in executive session with a representative of TA Associates to discuss the status of its
indirect investment in RIM. The Board was not advised of any change in TA Associates’ plans regarding its ownership interest in
Russell Investments.
As noted above, RIM, in addition to managing the investment of each Fund’s cash, directly manages a portion (which may represent
a significant portion) of the Funds pursuant to the RIM Agreement, the actual allocation of Fund assets among Money Managers and
RIM being determined from time to time by the RIM portfolio manager. The nature and scope of RIM’s direct management of Fund
assets has evolved over the past several years. RIM utilizes quantitative and/or rules-based processes and qualitative analysis to assess
Fund characteristics and invests in securities and instruments which provide the desired exposures (such as volatility, momentum,
value, growth, quality, capitalization size, industry, sector, region, currency, commodity, credit or mortgage exposure, country risk,
yield curve positioning or interest rates). RIM may utilize tools such as “optimization,” which involves the analysis of tradeoffs between
various risk and return factors as well as turnover and transaction costs, in order to estimate optimal portfolio positioning. RIM may
use strategies based on indexes, including optimized index sampling (strategies that seek to purchase a sampling of securities using
optimization and risk models) and/or index replication. RIM’s direct management of assets for these purposes is hereinafter referred to
as the “Direct Management Services.” RIM’s Direct Management Services generally are not intended to be a primary driver of Funds’
investment results, although the services may have a positive or negative impact on investment results, but rather are intended to
enhance incrementally the ability of Funds to carry out their investment programs. The Board has been advised that RIM intends to
continue to expand its Direct Management Services. In connection with this expansion, RIM expects that a larger portion of certain
Funds will be managed directly by RIM pursuant to the Direct Management Services. The Board considered that RIM is not required
to pay investment advisory fees to any Money Managers with respect to assets for which it provides Direct Management Services and
that the profits derived by RIM generally and from the Funds consequently may be increased, although RIM may incur additional
costs in providing Direct Management Services. Such increased profits ultimately may be partially offset by the impact of any new or
additional fee waivers or expense caps separately implemented from time to time for the affected Funds. RIM advised the Board that,
while its portfolio construction process is “investment led,” allocations, or increased allocations, of Fund assets to Direct Management
Services, together with Money Manager selection, allocations among Money Managers, renegotiation of Money Manager fees and
changes in existing Money Manager assignments from discretionary to non-discretionary assignments where there is a related Money
Manager fee reduction may reduce its costs of providing investment advisory services to the Funds, which would benefit RIM. The
Board considered that any such benefit ultimately may be partially offset by the impact of any new or additional fee waivers or expense
caps separately implemented from time to time for the affected Funds. The Board, however, also considered information provided by
RIM as to the potential benefits of the Direct Management Services to Funds; and the fact that the aggregate Advisory Fees paid by the
Funds are not increased as a result of RIM’s direct management of Fund assets as part of the Direct Management Services or otherwise.
RIM also noted in the Agreement Evaluation Information that it is implementing a more concentrated pool of Money Managers eligible
for selection for Funds with the primary objective of achieving higher conviction in the Funds’ Money Manager lineups. RIM, however,
will also benefit from this initiative in the form of potential Money Manager fee savings and increased internal efficiencies. The Board
considered that any such benefit ultimately may be partially offset by the impact of any new or additional fee waivers or expense caps
separately implemented from time to time for the affected Funds.
In evaluating the Funds’ Advisory Fees in light of Fund performance, the Board considered that, in the Agreement Evaluation
Information and at past meetings, RIM noted differences between the investment strategies of certain Funds and their respective
Comparable Funds in pursuing their investment objectives.
158 Basis for Approval of Investment Advisory Agreement
Russell Investment Funds
Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
The Third-Party Information included, among other things, comparisons of the Funds’ Advisory Fees with the investment advisory fees
of their Comparable Funds on an actual basis (i.e., giving effect to any voluntary fee waivers implemented by RIM with respect to a
Fund and by the managers of such Fund’s Comparable Funds). The Third-Party Information, among other things, showed that the RIF
U.S. Strategic Equity Fund, RIF U.S. Small Cap Equity Fund, RIF International Developed Markets Fund and RIF Strategic Bond
Fund each had an Advisory Fee which, compared with the investment advisory fees of its respective Comparable Funds on an actual
basis, was ranked in the fourth or fifth quintile of its Expense Universe for that expense component. The Advisory Fee for the RIF
Global Real Estate Securities Fund ranked in the third quintile of its Expense Universe. In these rankings, the first quintile represents
funds with the lowest investment advisory fees of its comparable Fund among funds in the Expense Universe and the fifth quintile
represents funds with the highest investment advisory fees among the Expense Universe funds. The comparisons were based upon the
latest fiscal years for the Expense Universe funds.
In discussing the Funds’ Advisory Fees generally, RIM noted, among other things, that its Advisory Fees for the Funds encompass
services that are typical to services provided by investment advisers to the Funds’ Comparable Funds, as well as unique services that
are distinctly different from those provided by investment advisers to the Funds’ Comparable Funds, such as cash equitization and
transition management efforts that enable efficient and cost-effective asset transition events.
RIM also advised the Board that although its profitability generally and from its relationships with the Funds improved in 2017, its
pre-tax “margins” in providing investment advisory services to the Funds remain near the bottom compared to the margins of public
management company peers. RIM expressed the view that Advisory Fees should be considered in the context of a Fund’s total
expense ratio to obtain a complete picture. The Board, however, considered each Fund’s Advisory Fee on both a standalone basis and
in the context of the Fund’s total expense ratio. The Board has engaged, and continues to engage in discussions with RIM to identify
opportunities and establish goals, where appropriate, for improving the total expense comparisons for certain Funds relative to their
respective Comparable Funds through Advisory Fee waivers or expense caps.
The Board considered that the actual Advisory Fee for the RIF Strategic Bond Fund was less than 5 basis points from the third quintile
of its Expense Universe. The Board further considered RIM’s explanation of the reasons for the Funds’ actual Advisory Fee rankings
and its belief that the Funds’ Advisory Fees are fair and reasonable under the circumstances, notwithstanding such comparisons.
Among other things, RIM noted that meaningful comparisons of investment advisory fees between funds affiliated with insurance
companies issuing variable annuity and life policies and non-affiliated funds, such as the Funds, are difficult as insurance companies
may allocate fees between the insurance contracts and their underlying funds. The Board considered that the total expenses for each
Fund except the RIF International Developed Markets Fund were ranked in the third quintile of its Expense Universe, and the total
expenses for the RIF International Developed Markets Fund were within 2 basis points of the third quintile of its Expense Universe.
The Board determined that it would continue to monitor the Funds’ Advisory Fees against the Funds’ Comparable Funds’ investment
advisory fees.
Based upon information provided by RIM, the Board considered for each Fund whether economies of scale have been realized and
whether the Advisory Fee for such Fund appropriately reflects or should be revised to reflect any such economies. The Funds are
distributed exclusively through variable annuity and variable life insurance contracts issued by insurance companies. Currently,
the Funds are made available to holders of such insurance policies (“Insurance Contract Holders”) by a few insurance companies.
The Funds are primarily available through, and their assets are primarily attributed to, The Northwestern Mutual Life Insurance
Company (“Northwestern Mutual”). At the Agreement Evaluation Meeting, RIM expressed its belief that Northwestern Mutual intends
to continue to make the Funds available to its Insurance Contract Holders. However, the Board received no direct assurances in this
regard from Northwestern Mutual. If Northwestern Mutual were to discontinue its participation in the Funds, the Board considered that
it is unlikely that the Funds would remain viable. RIM has advised the Board that, while it is assessing other potential opportunities, it
does not expect that additional insurance companies will make the Funds available to their variable annuity or variable life insurance
policyholders in the near term. Notwithstanding this expectation, RIM expressed its belief that the Funds will remain viable in the
near term. The Board considered, among other things, the potential negative implications for significant future Fund asset growth if
additional insurance companies do not make the Funds available to their variable annuity and variable life insurance policyholders.
The Board also considered that, since the Approval Date, RIM has renegotiated fees with certain Money Managers; changed certain
Money Manager assignments from discretionary to non-discretionary; reallocated assets among Money Managers; hired or terminated
certain Money Managers, including in connection with the implementation of an initiative to reduce the number of Money Managers
for each Fund; and increased its allocations to direct management of various Funds in recent years, each of which alone may operate
to reduce RIM’s costs of providing investment advisory and other services to the Funds contemplated by the RIM Agreement. The
Basis for Approval of Investment Advisory Agreement 159
Russell Investment Funds
Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
Board also considered that any resulting benefit of the decrease in Money Manager fees paid by RIM in respect of a Fund accrues to
RIM, rather than such Fund. The Board also considered that such benefit ultimately may be partially offset by any new or additional
fee waivers or expense caps on such Fund.
The Board also considered, as a general matter, that fees payable to RIM or its affiliates by institutional clients with investment
objectives similar to those of the Funds are lower, and, in some cases, may be substantially lower, than the rates paid by the Funds
and Other RIM Funds. The Trustees considered the differences in the nature and scope of services RIM provides to institutional
clients and the Funds. RIM explained, among other things, that institutional clients have fewer compliance, administrative and other
needs than the Funds. RIM 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, RIM noted that the Funds are subject to heightened
regulatory requirements relative to institutional clients. Accordingly, the Trustees concluded that the services provided to the 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 the total expenses for the RIF International Developed
Markets Fund ranked in the fourth quintile of its Expense Universe. The total expenses for each of the other Funds ranked in the third
quintile of its Expense Universe. With respect to the RIF International Developed Markets Fund, the Board considered that the Fund’s
total expenses were within 2 basis points of the third quintile of the Fund’s Expense Universe. In these rankings, the first quintile
represents the funds with the lowest total expenses among funds in the Expense Universe and the fifth quintile represents funds with the
highest total expenses among the Expense Universe funds. In the case of many of the aforementioned Funds, a significant factor in the
Fund’s total expense ranking was the Fund’s Advisory Fee when compared to the investment advisory fees of other Comparable Funds.
On the basis of the Agreement Evaluation Information, and other information previously received by the Board from RIM during the
course of prior years, or presented at or in connection with the Agreement Evaluation Meetings by RIM, the Board, in respect of each
Fund, found, after giving effect to any applicable waivers and/or reimbursements and considering any differences in the composition of
the Expense Universe and investment strategies of its respective Comparable Funds and in light of other factors discussed above, (1)
the Advisory Fee charged by RIM, was acceptable in light of the nature, scope and overall quality of the investment advisory and other
services provided, and expected to be provided, to the Fund and to provide continuity of investment advisory and other services by RIM
to the Funds; (2) except as noted above, the relative expense ratio of the Fund either was comparable to those of its Comparable Funds
or RIM had provided an explanation satisfactory to the Board as to why the relative expense ratio was not comparable to those of its
Comparable Funds; (3) other benefits and fees received by RIM or its affiliates from the Fund identified in the Agreement Evaluation
Information were not considered to be excessive; (4) RIM’s profitability with respect to the Fund was not considered to be excessive in
light of the nature, scope and overall quality of the investment management and other services provided by RIM and applicable judicial
and regulatory guidance; and (5) the Advisory Fee charged by RIM appropriately reflects any economies of scale realized by such Fund
in light of various factors, including potential negative implications for significant future Fund asset growth if additional insurance
companies do not make the Funds available to their Insurance Contract Holders and other factors associated with the manager-of-
managers structure employed by the Fund, including the variability of Money Manager investment advisory fees.
The Board concluded that, under the circumstances and based on RIM’s performance information and reviews for each Fund, the
performance of each of the Funds is consistent with continuation of the RIM Agreement. The Board noted RIM’s advice that a key
objective of the strategies pursued on behalf of the Fund’s is an improvement in the consistency of their returns over time relative
to Comparable Funds that are not multi-manager. In assessing the performance of Funds, the Board focused upon each Fund’s
performance for the 3-year period ended December 31, 2017 as most relevant but also considered Fund performance for the 1- and
5-year periods ended such date. In reviewing the Funds’ performance generally, the Board took into consideration various steps
taken by RIM since the Approval Date to enhance the performance of certain Funds, including changes in Money Managers or their
allocations, and RIM’s implementation or expansion of its Direct Management Services and other strategies, which may not yet be fully
reflected in Fund investment results.
With respect to the RIF U.S. Small Cap Equity Fund, the Third-Party Information showed that the Fund’s performance for the 5-year
period ended December 31, 2017 was in the fifth quintile of its Performance Universe, that its performance for the 3-year period ended
such date was in the fourth quintile of its Performance Universe, and that its performance for the 1-year period ended such date was
in the first quintile of its Performance Universe. In the 3-year period, RIM noted, among other things, that the Fund’s overweight
to cyclicals, such as energy, compared to its Comparable Funds detracted from the Fund’s relative performance as that category
underperformed. The Board also considered RIM’s explanation that the Fund was tilted towards the bottom-end of the capitalization
160 Basis for Approval of Investment Advisory Agreement
Russell Investment Funds
Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
opportunity set relative to its Performance Universe, which detracted from small cap performance as small cap stocks outperformed
micro-cap stocks.
With respect to the RIF Strategic Bond Fund, the Third-Party Information showed that the Fund’s performance was ranked in the
fourth quintile of its Performance Universe for each of the 1-, 3- and 5-year periods ended December 31, 2017. RIM noted that
the Fund’s underperformance relative to its Performance Universe was primary attributable to differences in strategies employed by
Performance Universe constituents. For example, the Performance Universe included funds that are a blend of high-yield, mortgage-
backed securities, developed emerging markets credit default swaps and currency futures and forwards. Among other things, other
Performance Universe funds held longer maturity bonds which outperformed in rallies and underperformed in sell offs. RIM noted that
the Fund outperformed its benchmark in the 3-year period.
The Third-Party Information also showed that the performance of the RIF International Developed Markets Fund and the RIF Global
Real Estate Securities Fund was ranked in the first quintile of their respective Performance Universes for the 3-year period ended
December 31, 2017, and the performance of the RIF US Strategic Equity Fund was ranked in the second quintile of its Performance
Universe for the 3-year period ended such date.
In evaluating performance, the Board considered each Fund’s absolute performance and performance relative to appropriate benchmarks
and indices in addition to such Fund’s performance relative to its Comparable Funds. In assessing the Funds’ performance relative to
their Comparable Funds or benchmarks or in absolute terms, the Board also considered RIM’s expressed belief that the use of multi-
manager strategies generally results in lower volatility and lower tracking error. The Board also considered the Money Manager changes
that have been made since the Approval Date and that the performance of Money Managers continues to impact Fund performance
for periods prior and subsequent to their termination, and that any incremental positive or negative impact of the Direct Management
Services, which continue to evolve in nature and scope, was not yet fully reflected in the Fund’s investment results. Lastly, the Board
considered the implementation of additional strategies and refinements to strategies discussed at the Agreement Evaluation Meetings
and prior Board meetings that may be employed by RIM in respect of certain Funds.
After considering the foregoing and other relevant factors, the Board concluded in respect of each Fund that continuation of the
RIM Agreement would be in the best interests of such Fund and its shareholders and voted to approve the continuation of the RIM
Agreement.
At the Agreement Evaluation Meetings, with respect to the evaluation of the terms of portfolio management contracts with Money
Managers, the Board received and considered information from RIM reporting, among other things, for each Money Manager, the Money
Manager’s performance over various periods; RIM’s assessment of the performance of each Money Manager; any significant business
relationships between the Money Manager and RIM or Russell Investments Financial Services, LLC, the Funds’ underwriter; and RIM’s
recommendation to retain each discretionary or non-discretionary Money Manager on the current terms and conditions, including at the
current fee rate. The Board received reports during the course of the year from the Funds’ CCO regarding her assessments of Money
Manager compliance programs and any compliance issues. RIM did not identify any benefits from the Funds’ portfolio transactions
received by Money Managers or their affiliates other than benefits from their soft dollar arrangements or commissions paid to any
affiliated broker-dealer through which a Money Manager may execute trades. The Agreement Evaluation Information described RIM’s
oversight of Money Manager soft dollar arrangements. The Agreement Evaluation Information expressed RIM’s belief that, based
upon certifications from Money Managers and pre-hire and ongoing reviews of Money Manager soft dollar arrangements, policies and
procedures, the Money Managers’ soft dollar arrangements, policies and procedures are consistent with applicable legal standards and
with disclosures made by Money Managers in their investment adviser registration statements filed with the Securities and Exchange
Commission and by the Funds in their registration statements. The Board was advised that, in the case of Money Managers using soft
dollar arrangements, the CCO may from time to time request that money managers provide information regarding their soft dollar
program to RIM. The CCO and RIM do not obtain, and the Agreement Evaluation Information therefore did not include, information
regarding the value of soft dollar benefits derived by Money Managers from Fund portfolio transactions.
RIM recommended that each of the Money Managers be retained for its current discretionary or non-discretionary assignment at its
current fee rate. In doing so, RIM, as it has in the past, 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 RIM; RIM is aware of the standard fee rates charged by Money Managers
to other clients; and RIM 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 RIM’s explanation of the relevance of Money Manager profitability in
Basis for Approval of Investment Advisory Agreement 161
Russell Investment Funds
Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
light of RIM’s belief that such fees are reasonable; the Board’s findings as to the acceptability of the Advisory Fee paid by each Fund;
and the fact that each Money Manager’s fee is paid by RIM. At the Agreement Evaluation Meeting, RIM reported that it planned to
recommend termination of certain Money Managers to the Board at the May 22, 2018 meeting.
Based upon RIM’s recommendations, together with relevant Agreement Evaluation Information, the Board concluded that the fees paid
to the Money Managers of each Fund are acceptable in light of RIM’s assessment of quality of the investment advisory services provided
and that continuation of the portfolio management contract with each Money Manager of each Fund would be in the best interests of
the Fund and its shareholders.
* * *
In their deliberations, the Trustees did not identify any particular information as to the RIM Agreement or, other than RIM’s
recommendation, the portfolio management contract with any Money Manager that was all-important or controlling, except, in the case
of the RIM Agreement, the need to continue the managers-of-managers structure of the Funds 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.
Approval of Money Manager Contracts
Prior and subsequent to the Agreement Evaluation Meeting, the Board received the following proposals from RIM: (i) at a meeting held
on February 27, 2018, to approve a new portfolio management contract for an existing Money Manager of the International Developed
Markets Fund; and (ii) at a meeting held on May 22, 2018, to approve a new portfolio management contract for an existing Money
Manager of the International Developed Markets Fund, to approve a new portfolio management contract for an existing Money Manager
of the U.S. Strategic Equity Fund and to effect Money Manager changes for the U.S. Strategic Equity Fund. In the case of each proposed
change, the Trustees approved the terms of the proposed portfolio management contract based upon RIM’s recommendation to hire the
Money Manager at the proposed fee rate; information as to the reason for the proposed change; information as to the Money Manager’s
role in the management of the Fund’s investment portfolio (including the amount of Fund assets to be allocated to the Money Manager or
managed pursuant to the Money Manager’s strategy) and RIM’s evaluation of the anticipated quality of the investment advisory services
to be provided by the Money Manager; information as to any significant business relationships between the Money Manager and RIM
or Russell Investments Financial Services, LLC, the Fund’s underwriter; the CCO’s evaluation of the Money Manager’s compliance
program, policies and procedures in relation to the Money Manager’s role in the management of the Fund’s investment portfolio, and
certification that they were consistent with applicable legal standards; RIM’s explanation as to the lack of relevance of Money Manager
profitability to the evaluation of portfolio management contracts with Money Managers because the willingness of Money Managers to
serve in such capacity depends upon arm’s-length negotiations with RIM; RIM’s awareness of the standard fee rates charged by the
Money Manager to other clients; RIM’s belief that the proposed Money Manager fees would be reasonable in light of the anticipated
quality of investment advisory services to be rendered; the increase or decrease in aggregate Money Manager fees to be paid by RIM
from its advisory fee as a result of the engagement of the Money Manager; and the expected costs of transitioning Fund assets to the
Money Manager or its strategy. The Trustees’ approval also reflected their findings at prior meetings, including their December 2015
meeting and the Agreement Evaluation Meeting in connection with their evaluation and approval of the Funds’ existing investment
advisory agreements with RIM and then current Money Managers for the Funds, as well as information received throughout the course
of the year regarding, among other things, the quality of services provided to the Funds in the case of existing Money Managers and the
reasonableness of the aggregate investment advisory fees paid by the Funds, as well as the fact that the aggregate investment advisory
fees paid by the Funds would not increase or decrease as a result of the implementation of the proposed Money Manager changes
because the Money Manager’s investment advisory fees are paid by RIM.
162 Basis for Approval of Investment Advisory Agreement
Russell Investment Funds
Shareholder Requests for Additional Information — June 30, 2018 (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 on Form N-Q. These reports are available (i) free of charge, upon request, by calling the Funds at (800) 787-
7354; (ii) at the Securities and Exchange Commission’s website at www.sec.gov: and (iii) also the Funds’ Form N-Q may be reviewed
and copied at the Securities and Exchange Commission's Office of Investor Education and Advocacy (formerly, the Public Reference
Room) in Washington, DC. Information on the operation of the Office of Investor Education and Advocacy may be obtained by calling
1-202-551-8090.
The Board has delegated to RIM, as RIF’s investment adviser, the primary responsibility for monitoring, evaluating and voting proxies
solicited by or with respect to issuers of securities in which assets of the Funds may be invested. RIM has established a proxy voting
committee and has adopted written proxy voting policies and procedures (“P&P”) and proxy voting guidelines (“Guidelines”). The
Funds maintain a Portfolio Holdings Disclosure Policy that governs the timing and circumstances of disclosure to shareholders and
third parties of information regarding the portfolio investments held by the Funds. A description of the P&P, Guidelines, Portfolio
Holdings Disclosure Policy and additional information about Fund Trustees are contained in the Funds’ Statement of Additional
Information (“SAI”). The SAI and information regarding how the Funds voted proxies relating to portfolio securities during the most
recent 12-month period ended June 30, 2017 are available (i) free of charge, upon request, by calling the Funds at (800) 787-7354,
and (ii) on the Securities and Exchange Commission’s website at www.sec.gov.
If possible, depending on contract owner registration and address information, and unless you have otherwise opted out, only one copy
of the RIF prospectus and each annual and semi-annual report will be sent to contract owners at the same address. If you would like
to receive a separate copy of these documents, please contact your Insurance Company. If you currently receive multiple copies of the
prospectus, annual report and semi-annual report and would like to request to receive a single copy of these documents in the future,
please call your insurance company.
Some insurance companies may offer electronic delivery of the Funds’ prospectuses and annual and semi-annual reports. Please
contact your insurance company for further details.
Shareholder Requests for Additional Information 163
Russell Investment Funds
Disclosure of Information about Fund Trustees and Officers — June 30, 2018
(Unaudited)
The following tables provide information for each officer and trustee of the Russell Investments Fund Complex. The Russell Investments
Fund Complex consists of Russell Investment Company (“RIC”), which has 33 funds and Russell Investment Funds (“RIF”), which has
9 funds. Each of the trustees is a trustee of RIC and RIF. The first table provides information for the interested trustee. The second table
provides information for the independent trustees. The third table provides information for the Trustee Emeritus. The fourth table provides
information for the officers. Furthermore, each Trustee possesses the following specific attributes: Mr. Alston has business, financial and
investment experience as a senior executive of an international real estate firm and is trained as a lawyer; Ms. Blake has had experience
as a certified public accountant and has had experience as a member of boards of directors/trustees of other investment companies; Ms.
Burgermeister has had experience as a certified public accountant and as a member of boards of directors/trustees of other investment
companies; Ms. Krysty has had business, financial and investment experience as the founder and senior executive of a registered
investment adviser focusing on high net worth individuals as well as a certified public accountant and a member of the boards of other
corporations and non-profit organizations; Mr. Tennison has had business, financial and investment experience as a senior executive
of a corporation with international activities and was trained as an accountant; and Mr. Thompson has had experience in business,
governance, investment and financial reporting matters as a senior executive of an organization sponsoring and managing other investment
companies, and, subsequently, has served as a board member of other investment companies. Mr. Spina has had experience with other
financial services companies, including companies engaged in the sponsorship, management and distribution of investment companies.
As a senior officer and/or director of the Funds, the Adviser and various affiliates of the Adviser providing services to the Funds, Mr.
Spina is in a position to provide the Board with such parties' perspectives on the management, operations and distribution of the Funds.
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
INTERESTED TRUSTEE | |||||
Mark Spina, # | Trustee since 2017 | Appointed until | • President and CEO, RIC and RIF | 42 | None |
Born June 8, 1970 | President and Chief | successor is | • Chairman of the Board, President, | ||
1301 Second Avenue, | Executive Officer | duly elected and | Russell Investments Financial | ||
18th Floor, Seattle, WA | since 2017 | qualified | Services, LLC (“RIFIS”) | ||
98101 | Appointed | • Chairman of the Board, President, | |||
until successor | Russell Investments Fund Services, | ||||
is chosen and | LLC (“RIFUS”) | ||||
qualified by | • Director, RIM. | ||||
Trustees | • From 2015-2016, Head of | ||||
Intermediary Distribution and | |||||
President of Pioneer Funds | |||||
Distributor | |||||
• From 2008-2015 Head of | |||||
Intermediary Distribution, Voya | |||||
Investment Management | |||||
INDEPENDENT TRUSTEES | |||||
Thaddas L. Alston, | Trustee since 2006 | Appointed until | Senior Vice President, Larco | 42 | Until October |
Born April 7, 1945 | successor is | Investments, Ltd. (real estate firm) | 2015, Trustee, | ||
1301 Second Avenue, | duly elected and | Russell | |||
18th Floor, Seattle, WA | qualified | Exchange | |||
98101 | Traded Funds | ||||
Trust |
164 Disclosure of Information about Fund Trustees and Officers
Russell Investment Funds
Disclosure of Information about Fund Trustees and Officers, continued — June 30,
2018 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
Kristianne Blake, | Trustee since 2000 | Appointed until | • Lean Independent Director, Avista | 42 | • Lead |
Born January 22, 1954 | Chairman since 2005 | successor is | Corp (electric utilities) | Independent | |
1301 Second Avenue, | duly elected and | • Until May 2017, Director and | Director, | ||
18th Floor, Seattle, WA | qualified | Chairman of the Audit Committee, | Avista Corp | ||
98101 | Approved | Avista Corp (electric utilities) | (electric | ||
annually | • Regent, University of Washington | utilities) | |||
• President, Kristianne Gates Blake, | • Until May | ||||
P. S. (accounting services) | 2017, Director | ||||
• Until June 2014, Director, Ecova | Avista Corp | ||||
(total energy and sustainability | (electric | ||||
management) | Utilities) | ||||
• Until December 2013, Trustee | • Until June | ||||
and Chairman of the Operations | 2014, | ||||
Committee, Principal Investors Funds | Director, | ||||
and Principal Variable Contracts | Ecova (total | ||||
Funds (investment company) | energy and | ||||
sustainability | |||||
management) | |||||
• Until | |||||
December | |||||
2013, Trustee, | |||||
Principal | |||||
Investors | |||||
Funds | |||||
(investment | |||||
company) | |||||
• Until | |||||
December | |||||
2013, Trustee | |||||
Principal | |||||
Variable | |||||
Contracts | |||||
Funds | |||||
(investment | |||||
company) | |||||
• Until October | |||||
2015, Trustee, | |||||
Russell | |||||
Exchange | |||||
Traded Funds | |||||
Trust |
* Each Trustee is subject to mandatory retirement at age 75.
# Mr. Spina is also an officer and/or director of one or more affiliates of RIC and RIF and is therefore an Interested Trustee.
Disclosure of Information about Fund Trustees and Officers 165
Russell Investment Funds
Disclosure of Information about Fund Trustees and Officers, continued — June 30,
2018 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
INDEPENDENT TRUSTEES (continued) | |||||
Cheryl Burgermeister, | Trustee since 2012 | Appointed until | • Retired | 42 | • Trustee and |
Born June 26, 1951 | Chairman of the | successor is | • Trustee and Chairperson of Select | Chairperson of | |
1301 Second Avenue, | Audit Committee | duly elected and | Sector SPDR Funds (investment | Select Sector | |
18th Floor, Seattle, WA | since 2017 | qualified | company) | SPDR Funds | |
98101 | Appointed until | • Until December 31, 2014, | (investment | ||
successor is | Chairperson of Audit Committee, | company) | |||
duly elected and | Select Sector SPDR Funds | • From August | |||
qualified | (investment company) | 2012 through | |||
May 2016, | |||||
Trustee, ALPS | |||||
Series Trust | |||||
(investment | |||||
company) | |||||
• Until October | |||||
2015, Trustee, | |||||
Russell | |||||
Exchange | |||||
Traded Funds | |||||
Trust | |||||
Katherine W. Krysty, | Trustee since 2014 | Appointed until | • Retired | 42 | Until October |
Born December 3, 1951 | successor is | • January 2011 through March 2013, | 2015, Trustee, | ||
1301 Second Avenue | duly elected and | President Emerita, Laird Norton | Russell | ||
18th Floor, Seattle, WA | qualified | Wealth Management (investment | Exchange | ||
98101 | company) | Traded Funds | |||
Trust | |||||
Raymond P. Tennison, Jr. , | Trustee since 2000 | Appointed until | • Retired | 42 | Until October |
Born December 21, 1955 | Chairman of | successor is | 2015, Trustee, | ||
1301 Second Avenue | the Nominating | duly elected and | Russell | ||
18th Floor, Seattle, WA | and Governance | qualified | Exchange | ||
98101 | Committee since | Appointed until | Traded Funds | ||
2007 | successor is | Trust | |||
duly elected and | |||||
qualified | |||||
Jack R. Thompson, | Trustee since 2005 | Appointed until | • Retired | 42 | • Until October |
Born March 21, 1949 | Chairman of | successor is | 2015, Trustee, | ||
1301 Second Avenue, | the Investment | duly elected and | Russell | ||
18th Floor, Seattle, WA | Committee since | qualified | Exchange | ||
98101 | 2015 | Appointed until | Traded Funds | ||
successor is | Trust | ||||
duly elected and | |||||
qualified |
* Each Trustee is subject to mandatory retirement at age 75.
166 Disclosure of Information about Fund Trustees and Officers
Russell Investment Funds
Disclosure of Information about Fund Trustees and Officers, continued — June 30,
2018 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
TRUSTEE EMERITUS | |||||
George F. Russell, Jr. , | Trustee Emeritus and | Until resignation | • Director Emeritus, RIM | 42 | None |
Born July 3, 1932 | Chairman Emeritus | or removal | |||
1301 Second Avenue, | since 1999 | ||||
18th Floor, Seattle, WA | |||||
98101 |
Name, | Positions(s) Held | Term | Principal Occupation(s) |
Age, | With Fund and | of | During the |
Address | Length of | Office | Past 5 Years |
Time Served | |||
OFFICERS | |||
Mark Spina, | President and Chief | Until successor | • President and Chief Executive Officer, RIC and RIF |
Born June 8, 1970 | Executive Officer | is chosen and | • Chairman of the Board, President, RIFIS |
1301 Second Avenue | since 2017 | qualified by | • Chairman of the Board, RIFUS |
18th Floor, Seattle, WA | Trustees | • Director, RIM | |
98101 | • From 2015 to 2016, Head of Intermediary Distribution and President | ||
of Pioneer Funds Distributor | |||
• From 2008 to 2015, Head of Intermediary Distribution, Voya | |||
Investment Management | |||
Cheryl Wichers, | Chief Compliance | Until removed | • Chief Compliance Officer, RIC and RIF |
Born December 16, 1966 | Officer since 2005 | by Independent | • Chief Compliance Officer, RIFUS |
1301 Second Avenue | Trustees | • 2011 to 2016 Chief Compliance Officer, U. S. One , LLC | |
18th Floor, Seattle, WA | |||
98101 | |||
Mark E. Swanson, | Treasurer, Chief | Until successor | • Global Head of Fund Services, Russell Investments |
Born November 26, 1963 | Accounting Officer | is chosen and | • Treasurer, Chief Accounting Officer and CFO, RIC and RIF |
1301 Second Avenue | and Chief Financial | qualified by | • Director and President, RIFUS |
18th Floor, Seattle, WA | Officer since 1998 | Trustees | • Director RIM, Russell Investments Trust Company (“RITC”) and |
98101 | RIFIS | ||
• President and Chief Executive Officer, RIC and RIF, June 2016 to | |||
June 2017 | |||
• October 2011 to December 2013, Head of North America Operations | |||
Russell Investments | |||
Jeffrey T. Hussey, | Chief Investment | Until removed by | • Global Chief Investment Officer, Russell Investments |
Born May 2, 1969 | Officer since 2013 | Trustees | • Chief Investment Officer, RIC and RIF |
1301 Second Avenue, | • Chairman of the Board and President, RIM | ||
18th Floor, Seattle WA | • Director, RITC, Russell Investments Implementation Services, LLC | ||
98101 | and Russell Investments Delaware, LLC | ||
• Board of Managers, Russell Investments Funds Management, LLC | |||
• 2003 to 2013 Chief Investment Officer, Fixed Income, Russell | |||
Investments |
Disclosure of Information about Fund Trustees and Officers 167
Russell Investment Funds
Disclosure of Information about Fund Trustees and Officers, continued — June 30,
2018 (Unaudited)
Name, | Positions(s) Held | Term | Principal Occupation(s) |
Age, | With Fund and | of | During the |
Address | Length of | Office | Past 5 Years |
Time Served | |||
Mary Beth R. Albaneze, | Secretary since 2010 | Until successor | • Associate General Counsel, Russell Investments |
Born April 25, 1969 | is chosen and | • Secretary, RIM, RIFUS and RIFIS | |
1301 Second Avenue, | qualified by | • Secretary and Chief Legal Officer, RIC and RIF | |
18th Floor, Seattle, WA | Trustees | • Assistant Secretary, Russell Investments Insurance Agency, LLC | |
98101 |
168 Disclosure of Information about Fund Trustees and Officers
Russell Investment Funds
Adviser, Money Managers and Service Providers — June 30, 2018 (Unaudited)
Interested Trustee | Independent Registered |
Mark Spina | PricewaterhouseCoopers LLP |
Independent Trustees | 1420 5th Avenue, Suite 2800 |
Thaddas L. Alston | Seattle, WA 98101 |
Kristianne Blake | Money Mangers |
Cheryl Burgermeister | U. S. Strategic Equity Fund |
Katherine W. Krysty | Brandywine Global Investment Management, LLC, |
Raymond P. Tennison, Jr. | Philadelphia, PA |
Jack R. Thompson | HS Management Partners, LLC, New York, NY |
Trustee Emeritus | Jacobs Levy Equity Management, Inc. , Florham Park, NJ |
George F. Russell, Jr. | Suffolk Capital Management, LLC, New York, NY |
Officers | U. S. Small Cap Equity Fund |
Mark Spina, President and Chief Executive Officer | Ancora Advisors, LLC, Cleveland, OH |
Mark E. Swanson, Treasurer, Chief Accounting Officer and | Copeland Capital Management, LLC, Conshohocken, PA |
Chief Financial Officer | DePrince, Race & Zollo, Inc. , Winter Park, FL |
Cheryl Wichers, Chief Compliance Officer | Falcon Point Capital, LLC, San Francisco, CA |
Jeffrey T. Hussey, Chief Investment Officer | Penn Capital Management Company, Inc. , Philadelphia, PA |
Mary Beth R. Albaneze, Secretary | Snow Capital Management, L. P. , Sewickley, PA |
Adviser | Timpani Capital Management LLC, Milwaukee, WI |
Russell Investment Management, LLC | International Developed Markets Fund |
1301 Second Avenue | GQG Partners LLC, Fort Lauderdale, FL |
Seattle, WA 98101 | Janus Capital Management LLC, Denver, CO and Perkins |
Administrator and Transfer and Dividend Disbursing | Investment Management LLC, Chicago, IL |
Numeric Investors LLC, Boston, MA | |
Agent | Pzena Investment Management, LLC, New York, NY |
Russell Investments Fund Services, LLC | Wellington Management Company LLP, Boston, MA |
1301 Second Avenue | |
Seattle, WA 98101 | Strategic Bond Fund |
Colchester Global Investors Limited, London, England | |
Custodian | Insight Investment International Limited, London, United |
State Street Bank and Trust Company | Kingdom |
1 Heritage Drive | Logan Circle Partners, L. P. , Philadelphia, PA |
North Quincy, MA 02171 | Schroder Investment Management North America Inc. , New |
Office of Shareholder Inquiries | York, NY |
1301 Second Avenue | Scout Investments, Inc. , Kansas City, MO |
Seattle, WA 98101 | Western Asset Management Company, Pasadena, CA and |
(800) 787-7354 | Western Asset Management Company Limited, London, |
Legal Counsel | United Kingdom |
Dechert LLP | Global Real Estate Securities Fund |
One International Place, 40th Floor | Cohen & Steers Capital Management, Inc. , New York, NY |
100 Oliver Street | Cohen & Steers UK Limited London, United Kingdom and |
Boston, MA 02110 | Cohen & Steers Asia Limited, Hong Kong, China |
Distributor | Morgan Stanley Investment Management Inc. , New York, NY |
Russell Investments Financial Services, LLC | Morgan Stanley Investment Management Limited, New |
1301 Second Avenue | York, NY and Morgan Stanley Investment Management |
Seattle, WA 98101 | Company, New York, NY |
RREEF America L. L. C. , Chicago, IL, Deutsche Investments | |
Australia Limited, Sydney NSW, Australia, | |
Deutsch Alternatives Asset Management (Global) Limited, | |
London, United Kingdom |
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 Funds. Such offering is made only by
Prospectus, which includes details as to offering price and other material information.
Adviser, Money Managers and Service Providers 169
Russell Investment Funds
Russell Investment Funds is
a series investment company
with nine different investment
portfolios referred to as Funds.
These financial statements report
on four of these Funds.
Russell Investment Funds
LifePoints® Funds
Variable Target Portfolio Series
Semi-annual Report
June 30, 2018 (Unaudited)
Table of Contents | |
Page | |
Moderate Strategy Fund | 3 |
Balanced Strategy Fund | 19 |
Growth Strategy Fund | 35 |
Equity Growth Strategy Fund | 51 |
Notes to Schedule of Investments | 67 |
Notes to Financial Highlights | 69 |
Notes to Financial Statements | 70 |
Basis for Approval of Investment Advisory Agreement | 83 |
Shareholder Requests for Additional Information | 91 |
Disclosure of Information about Fund Trustees and Officers | 92 |
Adviser and Service Providers | 97 |
Russell Investment Funds - LifePoints® Funds Variable Target Portfolio Series
Copyright © Russell Investments 2018. All rights reserved.
Russell Investments’ ownership is composed of a majority stake held by funds managed by TA Associates with
minority stakes held by funds managed by Reverence Capital Partners and Russell Investments’ management.
Fund objectives, risks, charges and expenses should be carefully considered before in-
vesting. A prospectus containing this and other important information must precede or
accompany this material. Please read the prospectus carefully before investing.
Securities distributed through Russell Investments Financial Services, LLC, 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.
Russell Investment Funds
Moderate Strategy Fund
Shareholder Expense Example — June 30, 2018 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”) . | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. The fees and expenses shown in this | ||||||
administrative fees and other Fund expenses. The Example is | section do not reflect any Insurance Company Separate Account | ||||||
intended to help you understand your ongoing costs (in dollars) | or Policy Charges. | ||||||
of investing in the Fund and to compare these costs with the | Hypothetical | ||||||
ongoing costs of investing in other mutual funds. The Example | Performance (5% | ||||||
is based on an investment of $1,000 invested at the beginning of | Actual | return before | |||||
the period and held for the entire period indicated, which for this | Performance | expenses) | |||||
Beginning Account Value | |||||||
Fund is from January 1, 2018 to June 30, 2018. | January 1, 2018 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | ||||||
June 30, 2018 | $ | 990.80 | $ | 1,024.10 | |||
The information in the table under the heading “Actual | Expenses Paid During Period* | $ | 0.69 | $ | 0.70 | ||
Performance” provides information about actual account values | |||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.14% | ||||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 181/365 (to reflect the one-half | |||||||
that you paid over the period. Simply divide your account value by | year period) . May reflect amounts waived and/or reimbursed. Without any | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | waivers and/or reimbursements, expenses would have been higher. | ||||||
= 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. |
Moderate Strategy Fund 3
Russell Investment Funds
Moderate Strategy Fund
Schedule of Investments — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | |||||
Fair | |||||
Value | |||||
Shares | $ | ||||
Investments in Affiliated Funds - 95.7% | |||||
Alternative - 5.9% | |||||
RIC Commodity Strategies Fund Class Y | 545,951 | 3,133 | |||
RIC Global Infrastructure Fund Class Y | 166,725 | 1,851 | |||
RIF Global Real Estate Securities Fund | 99,634 | 1,458 | |||
6,442 | |||||
Domestic Equities - 9.1% | |||||
RIC U. S. Defensive Equity Fund Class Y | 1,201 | 63 | |||
RIC U. S. Dynamic Equity Fund Class Y | 25,621 | 238 | |||
RIF U. S. Small Cap Equity Fund | 496,257 | 8,054 | |||
RIF U. S. Strategic Equity Fund | 92,746 | 1,693 | |||
10,048 | |||||
Fixed Income - 48.3% | |||||
RIC Global Opportunistic Credit Fund Class Y | 724,936 | 6,872 | |||
RIC Investment Grade Bond Fund Class Y | 638,981 | 13,265 | |||
RIC Unconstrained Total Return Fund Class Y | 891,569 | 8,907 | |||
RIF Strategic Bond Fund | 2,370,761 | 23,969 | |||
53,013 | |||||
International Equities - 18.2% | |||||
RIC Emerging Markets Fund Class Y | 325,528 | 6,384 | |||
RIC Global Equity Fund Class Y | 691,513 | 7,488 | |||
RIF International Developed Markets Fund | 499,333 | 6,142 | |||
20,014 | |||||
Multi-Asset - 14.2% | |||||
RIC Multi-Strategy Income Fund Class Y | 1,555,127 | 15,613 | |||
Total Investments in Affiliated Funds | |||||
(cost $99,386) | 105,130 | ||||
Options Purchased - 0.2% | |||||
(Number of Contracts) | |||||
S&P 500 Index | |||||
Goldman Sachs Sep 2018 2,725.00 Call (32) | USD | 8,720 | (ÿ) | 227 | |
Total Options Purchased | |||||
(cost $279) | 227 | ||||
Total Investments 95.9% | |||||
(identified cost $99,665) | 105,357 | ||||
Other Assets and Liabilities, Net - 4.1% | 4,490 | ||||
Net Assets - 100.0% | 109,847 |
See accompanying notes which are an integral part of the financial statements.
4 Moderate Strategy Fund
Russell Investment Funds
Moderate Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Futures Contracts | |||||||||
Amounts in thousands (except contract amounts) | |||||||||
Value and | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||
Contracts | Amount | Date | $ | ||||||
Long Positions | |||||||||
Amsterdam Index Futures | 5 | EUR | 552 | 07/18 | (14 | ) | |||
CAC40 Euro Index Futures | 33 | EUR | 1,756 | 07/18 | (52 | ) | |||
DAX Index Futures | 4 | EUR | 1,231 | 09/18 | (61 | ) | |||
Dow U. S. Real Estate Index Futures | 35 | USD | 1,119 | 09/18 | 29 | ||||
EURO STOXX 50 Index Futures | 32 | EUR | 1,085 | 09/18 | (19 | ) | |||
FTSE/MIB Index Futures | 3 | EUR | 324 | 09/18 | 5 | ||||
IBEX 35 Index Futures | 5 | EUR | 480 | 07/18 | (12 | ) | |||
MSCI EAFE Mini Index Futures | 13 | USD | 1,271 | 09/18 | (37 | ) | |||
OMXS30 Index Futures | 24 | SEK | 3,746 | 07/18 | (1 | ) | |||
Russell 1000 E-Mini Index Futures | 4 | USD | 302 | 09/18 | (6 | ) | |||
S&P 400 E-Mini Index Futures | 1 | USD | 196 | 09/18 | (4 | ) | |||
S&P 500 E-Mini Index Futures | 19 | USD | 2,586 | 09/18 | (53 | ) | |||
S&P/TSX 60 Index Futures | 4 | CAD | 771 | 09/18 | 6 | ||||
TOPIX Index Futures | 13 | JPY | 224,964 | 09/18 | (48 | ) | |||
Short Positions | |||||||||
FTSE 100 Index Futures | 6 | GBP | 456 | 09/18 | 4 | ||||
MSCI Emerging Markets Mini Index Futures | 2 | USD | 106 | 09/18 | 3 | ||||
NASDAQ 100 E-Mini Index Futures | 12 | USD | 1,696 | 09/18 | 27 | ||||
Russell 2000 E-Mini Index Futures | 54 | USD | 4,449 | 09/18 | 76 | ||||
S&P 500 E-Mini Index Futures | 27 | USD | 3,674 | 09/18 | 78 | ||||
S&P Financial Select Sector Index Futures | 25 | USD | 2,046 | 09/18 | 107 | ||||
SPI 200 Index Futures | 1 | AUD | 154 | 09/18 | (1 | ) | |||
United States 2 Year Treasury Note Futures | 8 | USD | 1,695 | 09/18 | (1 | ) | |||
United States 5 Year Treasury Note Futures | 25 | USD | 2,840 | 09/18 | (12 | ) | |||
United States 10 Year Treasury Note Futures | 8 | USD | 962 | 09/18 | (9 | ) | |||
United States Long Bond Futures | 2 | USD | 290 | 09/18 | (6 | ) | |||
Total Value and Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | (1 | ) |
Options Written | ||||||||||
Amounts in thousands (except contract amounts) | ||||||||||
Number of | Strike | Notional | Expiration | Fair Value | ||||||
Description | Counterparty | Call/Put | Contracts | Price | Amount | Date | $ | |||
iShares MSCI EAFE ETF Index | Goldman Sachs | Put | 62,579 | 40.75 | USD | 63 | 09/28/18 | — | ||
S&P 500 Index | Goldman Sachs | Put | 11 | 2,250.00 | USD | 2,475 | 09/28/18 | (11 | ) | |
Total Liability for Options Written (premiums received $89) (å) | (11 | ) |
Foreign Currency Exchange Contracts | |||||||||||
Amounts in thousands | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Amount | Amount | (Depreciation) | |||||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||||
Bank of Montreal | USD | 240 | AUD | 315 | 09/19/18 | (7 | ) | ||||
Bank of Montreal | USD | 381 | CAD | 494 | 09/19/18 | (5 | ) | ||||
Bank of Montreal | USD | 362 | JPY | 39,503 | 09/19/18 | (3 | ) | ||||
Bank of Montreal | USD | 28 | MXN | 575 | 09/19/18 | 1 | |||||
Bank of Montreal | CHF | 118 | USD | 121 | 09/19/18 | 1 | |||||
Bank of Montreal | EUR | 11 | USD | 13 | 09/19/18 | — | |||||
Bank of Montreal | GBP | 241 | USD | 323 | 09/19/18 | 5 | |||||
Bank of Montreal | HKD | 415 | USD | 53 | 09/19/18 | — | |||||
Bank of Montreal | SEK | 432 | USD | 50 | 09/19/18 | 2 | |||||
Bank of Montreal | SGD | 26 | USD | 19 | 09/19/18 | — | |||||
Bank of Montreal | ZAR | 250 | USD | 19 | 09/19/18 | 1 | |||||
Citibank | USD | 21 | RUB | 1,340 | 09/19/18 | — |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 5
Russell Investment Funds
Moderate Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Exchange Contracts | ||||||||||
Amounts in thousands | ||||||||||
Unrealized | ||||||||||
Appreciation | ||||||||||
Amount | Amount | (Depreciation) | ||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||
Royal Bank of Canada | USD | 240 | AUD | 315 | 09/19/18 | (6 | ) | |||
Royal Bank of Canada | USD | 381 | CAD | 494 | 09/19/18 | (5 | ) | |||
Royal Bank of Canada | USD | 361 | JPY | 39,503 | 09/19/18 | (3 | ) | |||
Royal Bank of Canada | USD | 28 | MXN | 575 | 09/19/18 | 1 | ||||
Royal Bank of Canada | CHF | 118 | USD | 121 | 09/19/18 | 1 | ||||
Royal Bank of Canada | EUR | 11 | USD | 13 | 09/19/18 | — | ||||
Royal Bank of Canada | GBP | 241 | USD | 323 | 09/19/18 | 4 | ||||
Royal Bank of Canada | HKD | 415 | USD | 53 | 09/19/18 | — | ||||
Royal Bank of Canada | SEK | 432 | USD | 50 | 09/19/18 | 2 | ||||
Royal Bank of Canada | SGD | 26 | USD | 19 | 09/19/18 | — | ||||
Royal Bank of Canada | ZAR | 250 | USD | 19 | 09/19/18 | 1 | ||||
State Street | USD | 1,074 | CNY | 6,920 | 09/19/18 | (35 | ) | |||
State Street | INR | 8,140 | USD | 119 | 09/19/18 | 2 | ||||
State Street | KRW | 349,910 | USD | 326 | 09/19/18 | 11 | ||||
State Street | TWD | 9,520 | USD | 322 | 09/19/18 | 8 | ||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | (24 | ) |
Total Return Swap Contracts | ||||||||
Amounts in thousands | ||||||||
Premiums | Unrealized | |||||||
Paid | Appreciation | |||||||
Notional | Termination | (Received) | (Depreciation) | Fair Value | ||||
Underlying Reference Entity | Counterparty | Amount | Terms | Date | $ | $ | $ | |
Short | ||||||||
S&P 500 Total Return Index | Barclays | USD | 11,206 | 3 Month LIBOR + 0.900%(2) | 09/19/18 | — | 244 | 244 |
Total Open Total Return Swap Contracts (å) | — | 244 | 244 |
Credit Default Swap Contracts | ||||||||||||||
Amounts in thousands | ||||||||||||||
Credit Indices | ||||||||||||||
Premiums | Unrealized | |||||||||||||
Fund (Pays)/ | Paid/ | Appreciation | ||||||||||||
Purchase/Sell | Receives | Termination | (Received) | (Depreciation) | Fair Value | |||||||||
Reference Entity | Counterparty | Protection | Notional Amount | Fixed Rate | Date | $ | $ | $ | ||||||
CDX Emerging Markets | ||||||||||||||
Index | Bank of America | Purchase | USD | 2,200 | (1.000%)(2) | 06/20/23 | 46 | 42 | 88 | |||||
CDX Investment Grade | ||||||||||||||
Index | Bank of America | Purchase | USD | 8,900 | (1.000%)(2) | 06/20/23 | (166 | ) | 32 | (134 | ) | |||
CDX NA High Yield Index | Bank of America | Sell | USD | 3,600 | 5.000%(2) | 06/20/23 | 219 | (7 | ) | 212 | ||||
Total Open Credit Indices Contracts (å) | 99 | 67 | 166 |
See accompanying notes which are an integral part of the financial statements.
6 Moderate Strategy Fund
Russell Investment Funds
Moderate Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Presentation of Portfolio Holdings | |||||||||||||||||
Amounts in thousands | |||||||||||||||||
Fair Value | |||||||||||||||||
Practical | |||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | |||||||||||
Investments in Affiliated Funds | $ | 105,130 | $ | — | $ | — | $ | — | $ | 105,130 | 95.7 | ||||||
Options Purchased | 227 | — | — | — | 227 | 0.2 | |||||||||||
Total Investments | 105,357 | — | — | — | 105,357 | 95.9 | |||||||||||
Other Assets and Liabilities, Net | 4.1 | ||||||||||||||||
100.0 | |||||||||||||||||
Other Financial Instruments | |||||||||||||||||
Assets | |||||||||||||||||
Futures Contracts | 335 | — | — | — | 335 | 0.3 | |||||||||||
Foreign Currency Exchange Contracts | — | 40 | — | — | 40 | — * | |||||||||||
Total Return Swap Contracts | — | 244 | — | — | 244 | 0.2 | |||||||||||
Credit Default Swap Contracts | — | 300 | — | — | 300 | 0.3 | |||||||||||
Liabilities | |||||||||||||||||
Futures Contracts | (336 | ) | — | — | — | (336 | ) | (0.3 | ) | ||||||||
Options Written | (11 | ) | — | — | — | (11 | ) | (—)* | |||||||||
Foreign Currency Exchange Contracts | — | (64 | ) | — | — | (64 | ) | (0.1 | ) | ||||||||
Credit Default Swap Contracts | — | (134 | ) | — | — | (134 | ) | (0.1 | ) | ||||||||
Total Other Financial Instruments** | $ | (12 | ) | $ | 386 | $ | — | $ | — | $ | 374 |
* Less than 0.05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the investments.
(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified
in the fair value levels. The fair value amounts presented in the table are intended to permit reconciliation to the amounts presented in the Schedule of
Investments.
For a description of the Levels, see note 2 in the Notes to Financial Statements.
For a disclosure on transfers between Levels 1, 2 and 3 during the period ended June 30, 2018, see note 2 in the Notes to
Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 7
Russell Investment Funds
Moderate Strategy Fund
Fair Value of Derivative Instruments — June 30, 2018 (Unaudited)
Amounts in thousands
Foreign | |||||||||||||
Equity | Credit | Currency | Interest Rate | ||||||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | Contracts | |||||||||
Location: Statement of Assets and Liabilities - Assets | |||||||||||||
Investments, at fair value* | $ | 227 | $ | — | $ | — | $ | — | |||||
Unrealized appreciation on foreign currency exchange contracts | — | — | 40 | — | |||||||||
Variation margin on futures contracts** | 335 | — | — | — | |||||||||
Total return swap contracts, at fair value | 244 | — | — | — | |||||||||
Credit default swap contracts, at fair value | — | 300 | — | — | |||||||||
Total | $ | 806 | $ | 300 | $ | 40 | $ | — | |||||
Location: Statement of Assets and Liabilities - Liabilities | |||||||||||||
Variation margin on futures contracts** | $ | 308 | $ | — | $ | — | $ | 28 | |||||
Unrealized depreciation on foreign currency exchange contracts | — | — | 64 | — | |||||||||
Options written, at fair value | 11 | — | — | — | |||||||||
Credit default swap contracts, at fair value | — | 134 | — | — | |||||||||
Total | $ | 319 | $ | 134 | $ | 64 | $ | 28 | |||||
Foreign | |||||||||||||
Equity | Credit | Currency | Interest Rate | ||||||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | Contracts | |||||||||
Location: Statement of Operations - Net realized gain (loss) | |||||||||||||
Investments*** | $ | 271 | $ | — | $ | — | $ | — | |||||
Futures contracts | (462 | ) | — | — | 185 | ||||||||
Total return swap contracts | (409 | ) | — | — | — | ||||||||
Credit default swap contracts | — | (115 | ) | — | — | ||||||||
Foreign currency exchange contracts | — | — | (150 | ) | — | ||||||||
Total | $ | (600 | ) | $ | (115 | ) | $ | (150 | ) | $ | 185 | ||
Location: Statement of Operations - Net change in unrealized appreciation | |||||||||||||
(depreciation) | |||||||||||||
Investments**** | $ | (126 | ) | $ | — | $ | — | $ | — | ||||
Futures contracts | 222 | — | — | (56 | ) | ||||||||
Options written | 78 | — | — | — | |||||||||
Total return swap contracts | 258 | — | — | — | |||||||||
Credit default swap contracts | — | 188 | — | — | |||||||||
Foreign currency exchange contracts | — | — | 37 | — | |||||||||
Total | $ | 432 | $ | 188 | $ | 37 | $ | (56 | ) |
* Fair value of purchased options.
** Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only receivable from broker or due to broker for
futures is reported within the Statement of Assets and Liabilities.
*** Includes net realized gain (loss) on purchased options as reported in the Statement of Operations.
**** Includes net change in unrealized appreciation/depreciation on purchased options as reported in the Schedule of Investments.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
8 Moderate Strategy Fund
Russell Investment Funds
Moderate Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||
Gross | Net Amounts | ||||||||||
Amounts | of Assets | ||||||||||
Gross | Offset in the | Presented in | |||||||||
Amounts of | Statement of | the Statement | |||||||||
Recognized | Assets and | of Assets and | |||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||
Options Purchased Contracts | Investments, at fair value | $ | 227 | $ | — | $ | 227 | ||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 40 | — | 40 | |||||||
Futures Contracts | Variation margin on futures contracts | 1,616 | — | 1,616 | |||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 244 | — | 244 | |||||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 300 | — | 300 | |||||||
Total Financial and Derivative Assets | 2,427 | — | 2,427 | ||||||||
Financial and Derivative Assets not subject to a netting agreement | (2,143 | ) | — | (2,143 | ) | ||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 284 | $ | — | $ | 284 | |||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Assets | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||
Bank of Montreal | $ | 10 | $ | 10 | $ | — | $ | — | |||
Barclays | 244 | — | — | 244 | |||||||
Royal Bank of Canada | 9 | 9 | — | — | |||||||
State Street | 21 | 21 | — | — | |||||||
Total | $ | 284 | $ | 40 | $ | — | $ | 244 |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 9
Russell Investment Funds
Moderate Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||
Gross | Net Amounts | ||||||||||
Amounts | of Liabilities | ||||||||||
Gross | Offset in the | Presented in | |||||||||
Amounts of | Statement of | the Statement | |||||||||
Recognized | Assets and | of Assets and | |||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||||
Futures Contracts | Variation margin on futures contracts | $ | 183 | $ | — | $ | 183 | ||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 64 | — | 64 | |||||||
Options Written Contracts | Options written, at fair value | 11 | — | 11 | |||||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 134 | — | 134 | |||||||
Total Financial and Derivative Liabilities | 392 | — | 392 | ||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (327 | ) | — | (327 | ) | ||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 65 | $ | — | $ | 65 | |||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Liabilities | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||
Bank of Montreal | $ | 15 | $ | 10 | $ | — | $ | 5 | |||
Royal Bank of Canada | 14 | 9 | — | 5 | |||||||
State Street | 36 | 21 | — | 15 | |||||||
Total | $ | 65 | $ | 40 | $ | — | $ | 25 |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
10 Moderate Strategy Fund
Russell Investment Funds
Moderate Strategy Fund
Statement of Assets and Liabilities — June 30, 2018 (Unaudited)
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 99,665 |
Investments, at fair value(>) | 105,357 | |
Cash | 162,736 | |
Unrealized appreciation on foreign currency exchange contracts | 40 | |
Receivables: | ||
Investments sold | 1 | |
From broker(a)(b) | 9,092 | |
Variation margin on futures contracts | 1,616 | |
Prepaid expenses | 1 | |
Total return swap contracts, at fair value(8) | 244 | |
Credit default swap contracts, at fair value(+) | 300 | |
Total assets | 279,387 | |
Liabilities | ||
Payables: | ||
Due to broker (c)(d)(e) | 169,100 | |
Fund shares redeemed | 1 | |
Accrued fees to affiliates | 5 | |
Other accrued expenses | 42 | |
Variation margin on futures contracts | 183 | |
Unrealized depreciation on foreign currency exchange contracts | 64 | |
Options written, at fair value(x) | 11 | |
Credit default swap contracts, at fair value(+) | 134 | |
Total liabilities | 169,540 | |
Net Assets | $ | 109,847 |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 11
Russell Investment Funds
Moderate Strategy Fund
Statement of Assets and Liabilities, continued — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 268 | |
Accumulated net realized gain (loss) | (1,151 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | (52 | ) | |
Investments in affiliated funds | 5,744 | ||
Futures contracts | (1 | ) | |
Options written | 78 | ||
Foreign currency exchange contracts | (24 | ) | |
Total return swap contracts | 244 | ||
Credit default swap contracts | 67 | ||
Foreign currency-related transactions | (14 | ) | |
Shares of beneficial interest | 110 | ||
Additional paid-in capital | 104,578 | ||
Net Assets | $ | 109,847 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: (#) | $ | 10.03 | |
Net assets | $ | 109,846,563 | |
Shares outstanding ($. 01 par value) | 10,955,135 | ||
Amounts in thousands | |||
(x) Premiums received on options written | $ | 89 | |
(8) Total return swap contracts - premiums paid (received) | $ | — | |
(+) Credit default swap contracts - premiums paid (received) | $ | 99 | |
(>) Investments in affiliated funds | $ | 105,130 | |
(a) Receivable from Broker for Swaps | $ | 8,406 | |
(b) Receivable from Broker for Options | $ | 686 | |
(c) Due to Broker for Futures | $ | 101 | |
(d) Due to Broker for Swaps | $ | 8,571 | |
(e) Due to Broker for Options | $ | 160,428 | |
(#) 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.
12 Moderate Strategy Fund
Russell Investment Funds
Moderate Strategy Fund
Statement of Operations — For the Period Ended June 30, 2018 (Unaudited)
Amounts in thousands | |||
Investment Income | |||
Dividends from affiliated funds | $ | 827 | |
Expenses | |||
Advisory fees | 112 | ||
Administrative fees | 24 | ||
Custodian fees | 17 | ||
Transfer agent fees | 2 | ||
Professional fees | 18 | ||
Trustees’ fees | 2 | ||
Printing fees | 11 | ||
Miscellaneous | 4 | ||
Expenses before reductions | 190 | ||
Expense reductions | (112 | ) | |
Net expenses | 78 | ||
Net investment income (loss) | 749 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 271 | ||
Investments in affiliated funds | 339 | ||
Futures contracts | (277 | ) | |
Foreign currency exchange contracts | (150 | ) | |
Total return swap contracts | (409 | ) | |
Credit default swap contracts | (115 | ) | |
Capital gain distributions from affiliated funds | 670 | ||
Net realized gain (loss) | 329 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (126 | ) | |
Investments in affiliated funds | (2,676 | ) | |
Futures contracts | 166 | ||
Options written | 78 | ||
Foreign currency exchange contracts | 37 | ||
Total return swap contracts | 258 | ||
Credit default swap contracts | 188 | ||
Foreign currency-related transactions | (14 | ) | |
Net change in unrealized appreciation (depreciation) | (2,089 | ) | |
Net realized and unrealized gain (loss) | (1,760 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (1,011 | ) |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 13
Russell Investment Funds
Moderate Strategy Fund
Statements of Changes in Net Assets
Period | ||||||
Ended June 30, 2018 | Fiscal Year Ended | |||||
Amounts in thousands | (Unaudited) | December 31, 2017 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 749 | $ | 2,831 | ||
Net realized gain (loss) | 329 | 1,837 | ||||
Net change in unrealized appreciation (depreciation) | (2,089 | ) | 5,609 | |||
Net increase (decrease) in net assets from operations | (1,011 | ) | 10,277 | |||
Distributions | ||||||
From net investment income | (896 | ) | (2,453 | ) | ||
From net realized gain | (948 | ) | (1,332 | ) | ||
Net decrease in net assets from distributions | (1,844 | ) | (3,785 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | (2,204 | ) | 782 | |||
Total Net Increase (Decrease) in Net Assets | (5,059 | ) | 7,274 | |||
Net Assets | ||||||
Beginning of period | 114,906 | 107,632 | ||||
End of period | $ | 109,847 | $ | 114,906 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 268 | $ | 415 |
* Share transaction amounts (in thousands) for the periods ended June 30, 2018 and December 31, 2017 were as follows: | ||||||||||||
2018 (Unaudited) | 2017 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Proceeds from shares sold | 375 | $ | 3,837 | 1,027 | $ | 10,475 | ||||||
Proceeds from reinvestment of distributions | 182 | 1,844 | 377 | 3,785 | ||||||||
Payments for shares redeemed | (772 | ) | (7,885 | ) | (1,337 | ) | (13,478 | ) | ||||
Total increase (decrease) | (215 | ) | $ | (2,204 | ) | 67 | $ | 782 |
See accompanying notes which are an integral part of the financial statements.
14 Moderate Strategy Fund
(This page intentionally left blank)
Russell Investment Funds
Moderate Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | ||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | (a)(b)(f) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
June 30, 2018(1) | 10.29 | . 07 | (. 16 | ) | (. 09 | ) | (. 08 | ) | (. 09 | ) | ||||||
December 31, 2017 | 9.69 | . 25 | . 70 | . 95 | (. 23 | ) | (. 12 | ) | ||||||||
December 31, 2016 | 9.78 | . 31 | . 43 | . 74 | (. 38 | ) | (. 45 | ) | ||||||||
December 31, 2015 | 10.45 | . 26 | (. 43 | ) | (. 17 | ) | (. 25 | ) | (. 25 | ) | ||||||
December 31, 2014 | 10.41 | . 31 | . 19 | . 50 | (. 30 | ) | (. 16 | ) | ||||||||
December 31, 2013 | 10.10 | . 18 | . 50 | . 68 | (. 18 | ) | (. 19 | ) | ||||||||
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 16
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c)(h) | (000 | ) | Gross(d)(e) | Net(d)(e)(f) | Net Assets(b)(c)(f) | Turnover Rate(c) | |||||||||
(. 17 | ) | 10.03 | (. 92 | ) | 109,847 | . 34 | . 14 | . 66 | 13 | ||||||||
(. 35 | ) | 10.29 | 9.88 | 114,906 | . 35 | . 13 | 2.57 | 20 | |||||||||
(. 83 | ) | 9.69 | 7.75 | 107,632 | . 33 | . 11 | 3.17 | 38 | |||||||||
(. 50 | ) | 9.78 | (1.71 | ) | 108,045 | . 32 | . 11 | 2.57 | 29 | ||||||||
(. 46 | ) | 10.45 | 4.85 | 114,918 | . 35 | . 10 | 2.89 | 18 | |||||||||
(. 37 | ) | 10.41 | 6.79 | 103,093 | . 35 | . 10 | 1.69 | 18 |
See accompanying notes which are an integral part of the financial statements.
Moderate Strategy Fund 17
Russell Investment Funds
Moderate Strategy Fund
Related Party Transactions, Fees and Expenses (Unaudited)
Accrued fees payable to affiliates for the period ended June 30, 2018 were as follows: | ||
Administration fees | $ | 3,865 |
Transfer agent fees | 400 | |
Trustee fees | 273 | |
$ | 4,538 |
Transactions (amounts in thousands) during the period ended June 30, 2018 with funds which are, or were, an affiliated company | ||||||||||||||||||||
are as follows: | ||||||||||||||||||||
Fair Value, | Change in | |||||||||||||||||||
Beginning of | Realized Gain | Unrealized | Fair Value, End | Income | Capital Gains | |||||||||||||||
Period | Purchases | Sales | (Loss) | Gain (Loss) | of Period | Distributions | Distributions | |||||||||||||
RIC Commodity Strategies Fund | $ | 3,517 | $ | 9 | $ | 406 | $ | (249 | ) | $ | 262 | $ | 3,133 | $ | — | $ | — | |||
RIC Global Infrastructure Fund | 3,308 | 65 | 1,485 | 105 | (142 | ) | 1,851 | 2 | — | |||||||||||
RIF Global Real Estate Securities | ||||||||||||||||||||
Fund | 157 | 1,423 | 105 | (2 | ) | (15 | ) | 1,458 | 24 | 1 | ||||||||||
RIC U. S. Defensive Equity Fund | 67 | 2 | 8 | — | 2 | 63 | — | — | ||||||||||||
RIC U. S. Dynamic Equity Fund | 256 | 10 | 33 | — | 5 | 238 | 1 | — | ||||||||||||
RIF U. S. Small Cap Equity Fund | 8,620 | 909 | 1,424 | 11 | (62 | ) | 8,054 | 154 | 457 | |||||||||||
RIF U. S. Strategic Equity Fund | 1,815 | 127 | 229 | 6 | (26 | ) | 1,693 | 23 | 40 | |||||||||||
RIC Global Opportunistic Credit | ||||||||||||||||||||
Fund | 14,102 | 696 | 7,697 | 300 | (529 | ) | 6,872 | 102 | — | |||||||||||
RIC Investment Grade Bond Fund | 13,856 | 552 | 765 | (15 | ) | (363 | ) | 13,265 | 118 | — | ||||||||||
RIC Unconstrained Total Return | ||||||||||||||||||||
Fund | 5,690 | 3,805 | 633 | (1 | ) | 46 | 8,907 | 101 | — | |||||||||||
RIF Strategic Bond Fund | 25,021 | 923 | 1,342 | (25 | ) | (608 | ) | 23,969 | 139 | — | ||||||||||
RIC Emerging Markets Fund | 7,378 | 341 | 872 | 145 | (608 | ) | 6,384 | — | — | |||||||||||
RIC Global Equity Fund | 7,721 | 519 | 792 | 18 | 22 | 7,488 | — | — | ||||||||||||
RIF International Developed Markets | ||||||||||||||||||||
Fund | 6,741 | 381 | 596 | 39 | (423 | ) | 6,142 | 35 | 172 | |||||||||||
RIC Multi-Strategy Income Fund | 13,646 | 4,315 | 2,118 | 7 | (237 | ) | 15,613 | 128 | — | |||||||||||
$ | 111,895 | $ | 14,077 | $ | 18,505 | $ | 339 | $ | (2,676 | ) | $ | 105,130 | $ | 827 | $ | 670 |
Federal Income Taxes (Unaudited) | |||||
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows: | |||||
Cost of Investments | $ | 101,193,993 | |||
Unrealized Appreciation | $ | 5,688,436 | |||
Unrealized Depreciation | (1,076,503 | ) | |||
Net Unrealized Appreciation (Depreciation) | $ | 4,611,933 |
Net investment income and net realized gains (losses) in the financial statements may differ from taxable net investment income and
net realized gains (losses). Capital accounts within the financial statements are adjusted for permanent differences between book and
tax accounting. Book-tax differences may be due to foreign currency gains and losses, reclassifications of dividends and differences in
treatment of income from swaps. These adjustments have no impact on the net assets. At June 30, 2018, there were no adjustments to
the Statement of Assets and Liabilities.
See accompanying notes which are an integral part of the financial statements.
18 Moderate Strategy Fund
Russell Investment Funds
Balanced Strategy Fund
Shareholder Expense Example — June 30, 2018 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”) . | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. The fees and expenses shown in this | ||||||
administrative fees and other Fund expenses. The Example is | section do not reflect any Insurance Company Separate Account | ||||||
intended to help you understand your ongoing costs (in dollars) | or Policy Charges. | ||||||
of investing in the Fund and to compare these costs with the | Hypothetical | ||||||
ongoing costs of investing in other mutual funds. The Example | Performance (5% | ||||||
is based on an investment of $1,000 invested at the beginning of | Actual | return before | |||||
the period and held for the entire period indicated, which for this | Performance | expenses) | |||||
Beginning Account Value | |||||||
Fund is from January 1, 2018 to June 30, 2018. | January 1, 2018 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | ||||||
June 30, 2018 | $ | 994.20 | $ | 1,024.10 | |||
The information in the table under the heading “Actual | Expenses Paid During Period* | $ | 0.69 | $ | 0.70 | ||
Performance” provides information about actual account values | |||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.14% | ||||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 181/365 (to reflect the one-half | |||||||
that you paid over the period. Simply divide your account value by | year period) . May reflect amounts waived and/or reimbursed. Without any | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | waivers and/or reimbursements, expenses would have been higher. | ||||||
= 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. |
Balanced Strategy Fund 19
Russell Investment Funds
Balanced Strategy Fund
Schedule of Investments — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | ||||
Fair | ||||
Value | ||||
Shares | $ | |||
Investments in Affiliated Funds - 94.1% | ||||
Alternative - 6.7% | ||||
RIC Commodity Strategies Fund Class Y | 1,553,143 | 8,916 | ||
RIC Global Infrastructure Fund Class Y | 485,985 | 5,394 | ||
RIF Global Real Estate Securities Fund | 316,229 | 4,626 | ||
18,936 | ||||
Domestic Equities - 9.5% | ||||
RIC U. S. Defensive Equity Fund Class Y | 101,283 | 5,291 | ||
RIC U. S. Dynamic Equity Fund Class Y | 219,221 | 2,037 | ||
RIF U. S. Small Cap Equity Fund | 963,814 | 15,642 | ||
RIF U. S. Strategic Equity Fund | 220,806 | 4,030 | ||
27,000 | ||||
Fixed Income - 33.2% | ||||
RIC Global Opportunistic Credit Fund Class Y | 1,154,745 | 10,947 | ||
RIC Unconstrained Total Return Fund Class Y | 1,955,274 | 19,533 | ||
RIF Strategic Bond Fund | 6,331,260 | 64,009 | ||
94,489 | ||||
International Equities - 36.9% | ||||
RIC Emerging Markets Fund Class Y | 1,050,760 | 20,605 | ||
RIC Global Equity Fund Class Y | 4,632,363 | 50,169 | ||
RIF International Developed Markets Fund | 2,799,840 | 34,438 | ||
105,212 | ||||
Multi-Asset - 7.8% | ||||
RIC Multi-Strategy Income Fund Class Y | 2,208,281 | 22,171 | ||
Total Investments in Affiliated Funds | ||||
(cost $240,745) | 267,808 | |||
Options Purchased - 0.8% | ||||
(Number of Contracts) | ||||
S&P 500 Index | ||||
Goldman Sachs Sep 2018 2,725.00 Call (324) | USD | 88,290 | (ÿ) | 2,297 |
Total Options Purchased | ||||
(cost $2,825) | 2,297 | |||
Short-Term Investments - 0.0% | ||||
U. S. Cash Management Fund(@) | 9,707 | (8) | 10 | |
Total Short-Term Investments | ||||
(cost $10) | 10 | |||
Total Investments 94.9% | ||||
(identified cost $243,580) | 270,115 | |||
Other Assets and Liabilities, Net - 5.1% | 14,553 | |||
Net Assets - 100.0% | 284,668 |
See accompanying notes which are an integral part of the financial statements.
20 Balanced Strategy Fund
Russell Investment Funds
Balanced Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Futures Contracts | |||||||||
Amounts in thousands (except contract amounts) | |||||||||
Value and | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||
Contracts | Amount | Date | $ | ||||||
Long Positions | |||||||||
Amsterdam Index Futures | 16 | EUR | 1,765 | 07/18 | (46 | ) | |||
CAC40 Euro Index Futures | 101 | EUR | 5,374 | 07/18 | (158 | ) | |||
DAX Index Futures | 14 | EUR | 4,308 | 09/18 | (213 | ) | |||
Dow U. S. Real Estate Index Futures | 162 | USD | 5,181 | 09/18 | 136 | ||||
EURO STOXX 50 Index Futures | 96 | EUR | 3,255 | 09/18 | (56 | ) | |||
FTSE/MIB Index Futures | 11 | EUR | 1,186 | 09/18 | 18 | ||||
IBEX 35 Index Futures | 16 | EUR | 1,536 | 07/18 | (40 | ) | |||
OMXS 30 Index Futures | 74 | SEK | 11,551 | 07/18 | (2 | ) | |||
S&P/TSX 60 Index Futures | 2 | CAD | 385 | 09/18 | 3 | ||||
TOPIX Index Futures | 47 | JPY | 813,336 | 09/18 | (171 | ) | |||
Short Positions | |||||||||
FTSE 100 Index Futures | 46 | GBP | 3,497 | 09/18 | 27 | ||||
Hang Seng Index Futures | 1 | HKD | 1,436 | 07/18 | — | ||||
MSCI Emerging Markets Mini Index Futures | 10 | USD | 532 | 09/18 | 16 | ||||
MSCI Singapore Index Futures | 1 | SGD | 37 | 07/18 | — | ||||
NASDAQ 100 E-Mini Index Futures | 43 | USD | 6,078 | 09/18 | 102 | ||||
Russell 1000 E-Mini Index Futures | 7 | USD | 529 | 09/18 | 10 | ||||
S&P 400 E-Mini Index Futures | 5 | USD | 978 | 09/18 | 24 | ||||
S&P 500 E-Mini Index Futures | 118 | USD | 16,057 | 09/18 | 327 | ||||
S&P Financial Select Sector Index Futures | 48 | USD | 3,929 | 09/18 | 206 | ||||
United States 2 Year Treasury Note Futures | 11 | USD | 2,330 | 09/18 | (1 | ) | |||
United States 5 Year Treasury Note Futures | 38 | USD | 4,317 | 09/18 | (19 | ) | |||
United States 10 Year Treasury Note Futures | 18 | USD | 2,163 | 09/18 | (20 | ) | |||
United States Long Bond Futures | 2 | USD | 290 | 09/18 | (6 | ) | |||
Total Value and Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 137 |
Options Written | ||||||||||
Amounts in thousands (except contract amounts) | ||||||||||
Number of | Strike | Notional | Expiration | Fair Value | ||||||
Description | Counterparty | Call/Put | Contracts | Price | Amount | Date | $ | |||
iShares MSCI EAFE ETF Index | Goldman Sachs | Put | 604,933 | 40.75 | USD | 605 | 09/28/18 | — | ||
S&P 500 Index | Goldman Sachs | Put | 108 | 2,250.00 | USD | 24,300 | 09/28/18 | (104 | ) | |
Total Liability for Options Written (premiums received $864) (å) | (104 | ) |
Foreign Currency Exchange Contracts | |||||||||||
Amounts in thousands | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Amount | Amount | (Depreciation) | |||||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||||
Bank of Montreal | USD | 384 | CAD | 498 | 09/19/18 | (5 | ) | ||||
Bank of Montreal | USD | 172 | CHF | 168 | 09/19/18 | (1 | ) | ||||
Bank of Montreal | USD | 396 | JPY | 43,270 | 09/19/18 | (3 | ) | ||||
Bank of Montreal | USD | 20 | MXN | 415 | 09/19/18 | 1 | |||||
Bank of Montreal | USD | 173 | NOK | 1,388 | 09/19/18 | (2 | ) | ||||
Bank of Montreal | AUD | 682 | USD | 520 | 09/19/18 | 15 | |||||
Bank of Montreal | EUR | 1,717 | USD | 2,041 | 09/19/18 | 23 | |||||
Bank of Montreal | GBP | 877 | USD | 1,179 | 09/19/18 | 17 | |||||
Bank of Montreal | HKD | 1,124 | USD | 143 | 09/19/18 | — | |||||
Bank of Montreal | SEK | 464 | USD | 54 | 09/19/18 | 2 | |||||
Bank of Montreal | SGD | 230 | USD | 172 | 09/19/18 | 4 | |||||
Bank of Montreal | TRY | 440 | USD | 93 | 09/19/18 | 1 | |||||
Bank of Montreal | ZAR | 53 | USD | 4 | 09/19/18 | — | |||||
Citibank | USD | 30 | RUB | 1,880 | 09/19/18 | — |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 21
Russell Investment Funds
Balanced Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Exchange Contracts | ||||||||||||
Amounts in thousands | ||||||||||||
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Amount | Amount | (Depreciation) | ||||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||||
Commonwealth Bank of Australia | USD | 384 | CAD | 498 | 09/19/18 | (5 | ) | |||||
Commonwealth Bank of Australia | USD | 172 | CHF | 168 | 09/19/18 | (1 | ) | |||||
Commonwealth Bank of Australia | USD | 396 | JPY | 43,270 | 09/19/18 | (3 | ) | |||||
Commonwealth Bank of Australia | USD | 20 | MXN | 415 | 09/19/18 | 1 | ||||||
Commonwealth Bank of Australia | USD | 174 | NOK | 1,388 | 09/19/18 | (3 | ) | |||||
Commonwealth Bank of Australia | AUD | 682 | USD | 520 | 09/19/18 | 15 | ||||||
Commonwealth Bank of Australia | EUR | 1,717 | USD | 2,039 | 09/19/18 | 21 | ||||||
Commonwealth Bank of Australia | GBP | 877 | USD | 1,179 | 09/19/18 | 18 | ||||||
Commonwealth Bank of Australia | HKD | 1,124 | USD | 143 | 09/19/18 | — | ||||||
Commonwealth Bank of Australia | SEK | 464 | USD | 54 | 09/19/18 | 2 | ||||||
Commonwealth Bank of Australia | SGD | 230 | USD | 172 | 09/19/18 | 4 | ||||||
Commonwealth Bank of Australia | TRY | 440 | USD | 94 | 09/19/18 | 1 | ||||||
Commonwealth Bank of Australia | ZAR | 53 | USD | 4 | 09/19/18 | — | ||||||
Royal Bank of Canada | USD | 384 | CAD | 498 | 09/19/18 | (5 | ) | |||||
Royal Bank of Canada | USD | 172 | CHF | 168 | 09/19/18 | (1 | ) | |||||
Royal Bank of Canada | USD | 396 | JPY | 43,270 | 09/19/18 | (3 | ) | |||||
Royal Bank of Canada | USD | 20 | MXN | 415 | 09/19/18 | 1 | ||||||
Royal Bank of Canada | USD | 173 | NOK | 1,388 | 09/19/18 | (2 | ) | |||||
Royal Bank of Canada | AUD | 682 | USD | 519 | 09/19/18 | 14 | ||||||
Royal Bank of Canada | EUR | 1,717 | USD | 2,038 | 09/19/18 | 21 | ||||||
Royal Bank of Canada | GBP | 877 | USD | 1,177 | 09/19/18 | 16 | ||||||
Royal Bank of Canada | HKD | 1,124 | USD | 143 | 09/19/18 | — | ||||||
Royal Bank of Canada | SEK | 464 | USD | 54 | 09/19/18 | 2 | ||||||
Royal Bank of Canada | SGD | 230 | USD | 172 | 09/19/18 | 4 | ||||||
Royal Bank of Canada | TRY | 440 | USD | 94 | 09/19/18 | 1 | ||||||
Royal Bank of Canada | ZAR | 53 | USD | 4 | 09/19/18 | — | ||||||
State Street | USD | 2,394 | CNY | 15,430 | 09/19/18 | (77 | ) | |||||
State Street | BRL | 5,310 | USD | 1,411 | 09/19/18 | 52 | ||||||
State Street | INR | 49,110 | USD | 720 | 09/19/18 | 10 | ||||||
State Street | KRW | 1,695,470 | USD | 1,581 | 09/19/18 | 55 | ||||||
State Street | TWD | 28,550 | USD | 965 | 09/19/18 | 23 | ||||||
Westpac | USD | 384 | CAD | 498 | 09/19/18 | (5 | ) | |||||
Westpac | USD | 172 | CHF | 168 | 09/19/18 | (1 | ) | |||||
Westpac | USD | 396 | JPY | 43,270 | 09/19/18 | (3 | ) | |||||
Westpac | USD | 20 | MXN | 415 | 09/19/18 | 1 | ||||||
Westpac | USD | 173 | NOK | 1,388 | 09/19/18 | (2 | ) | |||||
Westpac | AUD | 682 | USD | 519 | 09/19/18 | 14 | ||||||
Westpac | EUR | 1,717 | USD | 2,039 | 09/19/18 | 21 | ||||||
Westpac | GBP | 877 | USD | 1,178 | 09/19/18 | 17 | ||||||
Westpac | HKD | 1,124 | USD | 143 | 09/19/18 | — | ||||||
Westpac | SEK | 464 | USD | 54 | 09/19/18 | 2 | ||||||
Westpac | SGD | 230 | USD | 172 | 09/19/18 | 4 | ||||||
Westpac | TRY | 440 | USD | 93 | 09/19/18 | 1 | ||||||
Westpac | ZAR | 53 | USD | 4 | 09/19/18 | — | ||||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 262 | |||||||||||
Total Return Swap Contracts | ||||||||||||
Amounts in thousands | ||||||||||||
Premiums | Unrealized | |||||||||||
Paid | Appreciation | |||||||||||
Notional | Termination | (Received) | (Depreciation) | Fair Value | ||||||||
Underlying Reference Entity | Counterparty | Amount | Terms | Date | $ | $ | $ | |||||
Short | ||||||||||||
S&P 500 Total Return Index | Barclays | USD | 45,530 | 3 Month LIBOR + 0.900%(2) | 09/19/18 | — | 991 | 991 | ||||
Total Open Total Return Swap Contracts (å) | — | 991 | 991 |
See accompanying notes which are an integral part of the financial statements.
22 Balanced Strategy Fund
Russell Investment Funds
Balanced Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Credit Default Swap Contracts | ||||||||||||||
Amounts in thousands | ||||||||||||||
Credit Indices | ||||||||||||||
Premiums | Unrealized | |||||||||||||
Fund (Pays)/ | Paid/ | Appreciation | ||||||||||||
Purchase/Sell | Receives | Termination | (Received) | (Depreciation) | Fair Value | |||||||||
Reference Entity | Counterparty | Protection | Notional Amount | Fixed Rate | Date | $ | $ | $ | ||||||
CDX Emerging Markets | ||||||||||||||
Index | Bank of America | Purchase | USD | 4,300 | (1.000%)(2) | 06/20/23 | 89 | 82 | 171 | |||||
CDX Investment Grade | ||||||||||||||
Index | Bank of America | Purchase | USD | 16,800 | (1.000%)(2) | 06/20/23 | (315 | ) | 61 | (254 | ) | |||
CDX NA High Yield Index | Bank of America | Sell | USD | 8,000 | 5.000%(2) | 06/20/23 | 488 | (16 | ) | 472 | ||||
Total Open Credit Indices Contracts (å) | 262 | 127 | 389 |
Presentation of Portfolio Holdings | |||||||||||||||||
Amounts in thousands | |||||||||||||||||
Fair Value | |||||||||||||||||
Practical | |||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | |||||||||||
Investments in Affiliated Funds | $ | 267,808 | $ | — | $ | — | $ | — | $ | 267,808 | 94.1 | ||||||
Options Purchased | 2,297 | — | — | — | 2,297 | 0.8 | |||||||||||
Short-Term Investments | — | — | — | 10 | 10 | —* | |||||||||||
Total Investments | 270,105 | — | — | 10 | 270,115 | 94.9 | |||||||||||
Other Assets and Liabilities, Net | 5.1 | ||||||||||||||||
100.0 | |||||||||||||||||
Other Financial Instruments | |||||||||||||||||
Assets | |||||||||||||||||
Futures Contracts | 869 | — | — | — | 869 | 0.3 | |||||||||||
Foreign Currency Exchange Contracts | — | 384 | — | — | 384 | 0.1 | |||||||||||
Total Return Swap Contracts | — | 991 | — | — | 991 | 0.3 | |||||||||||
Credit Default Swap Contracts | — | 643 | — | — | 643 | 0.2 | |||||||||||
Liabilities | |||||||||||||||||
Futures Contracts | (732 | ) | — | — | — | (732 | ) | (0.3 | ) | ||||||||
Options Written | (104 | ) | — | — | — | (104 | ) | (—)* | |||||||||
Foreign Currency Exchange Contracts | — | (122 | ) | — | — | (122 | ) | (—)* | |||||||||
Credit Default Swap Contracts | — | (254 | ) | — | — | (254 | ) | (0.1 | ) | ||||||||
Total Other Financial Instruments** | $ | 33 | $ | 1,642 | $ | — | $ | — | $ | 1,675 |
* Less than 0.05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the investments.
(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified
in the fair value levels. The fair value amounts presented in the table are intended to permit reconciliation to the amounts presented in the Schedule of
Investments.
For a description of the Levels, see note 2 in the Notes to Financial Statements.
For a disclosure on transfers between Levels 1, 2 and 3 during the period ended June 30, 2018, see note 2 in the Notes to
Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 23
Russell Investment Funds
Balanced Strategy Fund
Fair Value of Derivative Instruments — June 30, 2018 (Unaudited)
Amounts in thousands
Foreign | ||||||||||||
Equity | Credit | Currency | Interest Rate | |||||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | Contracts | ||||||||
Location: Statement of Assets and Liabilities - Assets | ||||||||||||
Investments, at fair value* | $ | 2,297 | $ | — | $ | — | $ | — | ||||
Unrealized appreciation on foreign currency exchange contracts | — | — | 384 | — | ||||||||
Variation margin on futures contracts** | 869 | — | — | — | ||||||||
Total return swap contracts, at fair value | 991 | — | — | — | ||||||||
Credit default swap contracts, at fair value | — | 643 | — | — | ||||||||
Total | $ | 4,157 | $ | 643 | $ | 384 | $ | — | ||||
Location: Statement of Assets and Liabilities - Liabilities | ||||||||||||
Variation margin on futures contracts** | $ | 686 | $ | — | $ | — | $ | 46 | ||||
Unrealized depreciation on foreign currency exchange contracts | — | — | 122 | — | ||||||||
Options written, at fair value | 104 | — | — | — | ||||||||
Credit default swap contracts, at fair value | — | 254 | — | — | ||||||||
Total | $ | 790 | $ | 254 | $ | 122 | $ | 46 | ||||
Foreign | ||||||||||||
Equity | Credit | Currency | Interest Rate | |||||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | Contracts | ||||||||
Location: Statement of Operations - Net realized gain (loss) | ||||||||||||
Investments*** | $ | 1,151 | $ | — | $ | — | $ | — | ||||
Futures contracts | (1,488 | ) | — | — | 277 | |||||||
Total return swap contracts | (1,656 | ) | — | — | — | |||||||
Credit default swap contracts | — | (128 | ) | — | — | |||||||
Foreign currency exchange contracts | — | — | 36 | — | ||||||||
Total | $ | (1,993 | ) | $ | (128 | ) | $ | 36 | $ | 277 | ||
Location: Statement of Operations - Net change in unrealized appreciation | ||||||||||||
(depreciation) | ||||||||||||
Investments**** | $ | (828 | ) | $ | — | $ | — | $ | — | |||
Futures contracts | 744 | — | — | (2 | ) | |||||||
Options written | 760 | — | — | — | ||||||||
Total return swap contracts | 1,046 | — | — | — | ||||||||
Credit default swap contracts | — | 278 | — | — | ||||||||
Foreign currency exchange contracts | — | — | 693 | — | ||||||||
Total | $ | 1,722 | $ | 278 | $ | 693 | $ | (2 | ) |
* Fair value of purchased options.
** Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
*** Includes net realized gain (loss) on purchased options as reported in the Statement of Operations.
**** Includes net change in unrealized appreciation/depreciation on purchased options as reported in the Schedule of Investments.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
24 Balanced Strategy Fund
Russell Investment Funds
Balanced Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments —
June 30, 2018 (Unaudited)
Amounts in thousands | ||||||||||||
Offsetting of Financial Assets and Derivative Assets | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Assets | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||||||
Options Purchased Contracts | Investments, at fair value | $ | 2,297 | $ | — | $ | 2,297 | |||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 384 | — | 384 | ||||||||
Futures Contracts | Variation margin on futures contracts | 2,872 | — | 2,872 | ||||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 991 | — | 991 | ||||||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 643 | — | 643 | ||||||||
Total Financial and Derivative Assets | 7,187 | — | 7,187 | |||||||||
Financial and Derivative Assets not subject to a netting agreement | (5,812 | ) | — | (5,812 | ) | |||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 1,375 | $ | — | $ | 1,375 | ||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Assets | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | ||||||||
Bank of Montreal | $ | 64 | $ | 12 | $ | — | $ | 52 | ||||
Barclays | 991 | — | — | 991 | ||||||||
Commonwealth Bank of Australia | 62 | 12 | — | 50 | ||||||||
Royal Bank of Canada | 59 | 11 | — | 48 | ||||||||
State Street | 138 | 75 | — | 63 | ||||||||
Westpac | 61 | 12 | — | 49 | ||||||||
Total | $ | 1,375 | $ | 122 | $ | — | $ | 1,253 |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 25
Russell Investment Funds
Balanced Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
June 30, 2018 (Unaudited)
Amounts in thousands | ||||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Liabilities | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | ||||||||
Futures Contracts | Variation margin on futures contracts | $ | 63 | $ | — | $ | 63 | |||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 122 | — | 122 | ||||||||
Options Written Contracts | Options written, at fair value | 104 | — | 104 | ||||||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 254 | — | 254 | ||||||||
Total Financial and Derivative Liabilities | 543 | — | 543 | |||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (421 | ) | — | (421 | ) | |||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 122 | $ | — | $ | 122 | ||||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Liabilities | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | ||||||||
Bank of Montreal | $ | 12 | $ | 12 | $ | — | $ | — | ||||
Commonwealth Bank of Australia | 12 | 12 | — | — | ||||||||
Royal Bank of Canada | 11 | 11 | — | — | ||||||||
State Street | 75 | 75 | — | — | ||||||||
Westpac | 12 | 12 | — | — | ||||||||
Total | $ | 122 | $ | 122 | $ | — | $ | — |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
26 Balanced Strategy Fund
Russell Investment Funds
Balanced Strategy Fund
Statement of Assets and Liabilities — June 30, 2018 (Unaudited)
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 243,580 |
Investments, at fair value(>) | 270,115 | |
Cash | 10,216 | |
Unrealized appreciation on foreign currency exchange contracts | 384 | |
Receivables: | ||
Investments sold | 265 | |
From broker(a)(b)(c) | 21,009 | |
Variation margin on futures contracts | 2,872 | |
Prepaid expenses | 2 | |
Total return swap contracts, at fair value(8) | 991 | |
Credit default swap contracts, at fair value(+) | 643 | |
Total assets | 306,497 | |
Liabilities | ||
Payables: | ||
Due to broker (d)(e)(f) | 20,940 | |
Fund shares redeemed | 264 | |
Accrued fees to affiliates | 22 | |
Other accrued expenses | 60 | |
Variation margin on futures contracts | 63 | |
Unrealized depreciation on foreign currency exchange contracts | 122 | |
Options written, at fair value(x) | 104 | |
Credit default swap contracts, at fair value(+) | 254 | |
Total liabilities | 21,829 | |
Net Assets | $ | 284,668 |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 27
Russell Investment Funds
Balanced Strategy Fund
Statement of Assets and Liabilities, continued — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 1,211 | |
Accumulated net realized gain (loss) | (7,174 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | (528 | ) | |
Investments in affiliated funds | 27,063 | ||
Futures contracts | 137 | ||
Options written | 760 | ||
Foreign currency exchange contracts | 262 | ||
Total return swap contracts | 991 | ||
Credit default swap contracts | 127 | ||
Foreign currency-related transactions | (28 | ) | |
Shares of beneficial interest | 291 | ||
Additional paid-in capital | 261,556 | ||
Net Assets | $ | 284,668 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: (#) | $ | 9.78 | |
Net assets | $ | 284,667,537 | |
Shares outstanding ($. 01 par value) | 29,110,064 | ||
Amounts in thousands | |||
(x) Premiums received on options written | $ | 864 | |
(8) Total return swap contracts - premiums paid (received) | $ | — | |
(+) Credit default swap contracts - premiums paid (received) | $ | 262 | |
(>) Investments in affiliated funds | $ | 267,818 | |
(a) Receivable from Broker for Futures | $ | 700 | |
(b) Receivable from Broker for Swaps | $ | 18,894 | |
(c) Receivable from Broker for Options | $ | 1,415 | |
(d) Due to Broker for Futures | $ | 86 | |
(e) Due to Broker for Swaps | $ | 18,291 | |
(f) Due to Broker for Options | $ | 2,563 | |
(#) 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.
28 Balanced Strategy Fund
Russell Investment Funds
Balanced Strategy Fund
Statement of Operations — For the Period Ended June 30, 2018 (Unaudited)
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated funds | $ | 1,602 | |
Expenses | |||
Advisory fees | 290 | ||
Administrative fees | 62 | ||
Custodian fees | 20 | ||
Transfer agent fees | 6 | ||
Professional fees | 21 | ||
Trustees’ fees | 5 | ||
Printing fees | 24 | ||
Miscellaneous | 5 | ||
Expenses before reductions | 433 | ||
Expense reductions | (230 | ) | |
Net expenses | 203 | ||
Net investment income (loss) | 1,399 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 1,151 | ||
Investments in affiliated funds | (27 | ) | |
Futures contracts | (1,211 | ) | |
Foreign currency exchange contracts | 36 | ||
Total return swap contracts | (1,656 | ) | |
Credit default swap contracts | (128 | ) | |
Foreign currency-related transactions | 1 | ||
Capital gain distributions from affiliated funds | 1,944 | ||
Net realized gain (loss) | 110 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (828 | ) | |
Investments in affiliated funds | (5,893 | ) | |
Futures contracts | 742 | ||
Options written | 760 | ||
Foreign currency exchange contracts | 693 | ||
Total return swap contracts | 1,046 | ||
Credit default swap contracts | 278 | ||
Foreign currency-related transactions | (28 | ) | |
Net change in unrealized appreciation (depreciation) | (3,230 | ) | |
Net realized and unrealized gain (loss) | (3,120 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (1,721 | ) |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 29
Russell Investment Funds
Balanced Strategy Fund
Statements of Changes in Net Assets
Period | ||||||
Ended June 30, 2018 | Fiscal Year Ended | |||||
Amounts in thousands | (Unaudited) | December 31, 2017 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 1,399 | $ | 7,987 | ||
Net realized gain (loss) | 110 | 15,411 | ||||
Net change in unrealized appreciation (depreciation) | (3,230 | ) | 9,546 | |||
Net increase (decrease) in net assets from operations | (1,721 | ) | 32,944 | |||
Distributions | ||||||
From net investment income | (1,548 | ) | (6,805 | ) | ||
From net realized gain | (8,086 | ) | (13,379 | ) | ||
Net decrease in net assets from distributions | (9,634 | ) | (20,184 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 764 | 362 | ||||
Total Net Increase (Decrease) in Net Assets | (10,591 | ) | 13,122 | |||
Net Assets | ||||||
Beginning of period | 295,259 | 282,137 | ||||
End of period | $ | 284,668 | $ | 295,259 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 1,211 | $ | 1,360 |
* Share transaction amounts (in thousands) for the periods ended June 30, 2018 and December 31, 2017 were as follows: | ||||||||||||
2018 (Unaudited) | 2017 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Proceeds from shares sold | 454 | $ | 4,542 | 1,004 | $ | 10,195 | ||||||
Proceeds from reinvestment of distributions | 971 | 9,633 | 2,006 | 20,184 | ||||||||
Payments for shares redeemed | (1,341 | ) | (13,411 | ) | (2,951 | ) | (30,017 | ) | ||||
Total increase (decrease) | 84 | $ | 764 | 59 | $ | 362 |
See accompanying notes which are an integral part of the financial statements.
30 Balanced Strategy Fund
(This page intentionally left blank)
Russell Investment Funds
Balanced Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | ||||||||||||||||
$ | ||||||||||||||||
$ | Net | $ | $ | $ | $ | |||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | |||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | |||||||||||
Period | (a)(b)(f) | Gain (Loss) | Operations | Investment Income | Realized Gain | |||||||||||
June 30, 2018(1) | 10.17 | . 05 | (. 10 | ) | (. 05 | ) | (. 06 | ) | (. 28 | ) | ||||||
December 31, 2017 | 9.74 | . 28 | . 87 | 1.15 | (. 25 | ) | (. 47 | ) | ||||||||
December 31, 2016 | 9.38 | . 24 | . 60 | . 84 | (. 32 | ) | (. 16 | ) | ||||||||
December 31, 2015 | 10.40 | . 22 | (. 44 | ) | (. 22 | ) | (. 22 | ) | (. 58 | ) | ||||||
December 31, 2014 | 10.44 | . 31 | . 17 | . 48 | (. 31 | ) | (. 21 | ) | ||||||||
December 31, 2013 | 9.55 | . 21 | . 96 | 1.17 | (. 21 | ) | (. 07 | ) | ||||||||
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 32
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c)(h) | (000 | ) | Gross(d)(e) | Net(d)(e)(f) | Net Assets(b)(c)(f) | Turnover Rate(c) | |||||||||
(. 34 | ) | 9.78 | (. 58 | ) | 284,668 | . 30 | . 14 | . 48 | 7 | ||||||||
(. 72 | ) | 10.17 | 12.00 | 295,247 | . 31 | . 13 | 2.74 | 35 | |||||||||
(. 48 | ) | 9.74 | 9.05 | 282,137 | . 30 | . 11 | 2.55 | 19 | |||||||||
(. 80 | ) | 9.38 | (2.30 | ) | 288,675 | . 29 | . 11 | 2.16 | 23 | ||||||||
(. 52 | ) | 10.40 | 4.61 | 314,127 | . 31 | . 10 | 2.91 | 22 | |||||||||
(. 28 | ) | 10.44 | 12.43 | 304,103 | . 31 | . 10 | 2.09 | 11 |
See accompanying notes which are an integral part of the financial statements.
Balanced Strategy Fund 33
Russell Investment Funds
Balanced Strategy Fund
Related Party Transactions, Fees and Expenses (Unaudited)
Accrued fees payable to affiliates for the period ended June 30, 2018 were as follows: | ||
Advisory fees | $ | 10,050 |
Administration fees | 10,065 | |
Transfer agent fees | 1,042 | |
Trustee fees | 764 | |
$ | 21,921 |
Transactions (amounts in thousands) during the period ended June 30, 2018 with funds which are, or were, an affiliated company | ||||||||||||||||||||
are as follows: | ||||||||||||||||||||
Fair Value, | Change in | |||||||||||||||||||
Beginning of | Realized Gain | Unrealized | Fair Value, End | Income | Capital Gains | |||||||||||||||
Period | Purchases | Sales | (Loss) | Gain (Loss) | of Period | Distributions | Distributions | |||||||||||||
RIC Commodity Strategies Fund | $ | 9,884 | $ | 43 | $ | 1,040 | $ | (739 | ) | $ | 768 | $ | 8,916 | $ | — | $ | — | |||
RIC Global Infrastructure Fund | 5,684 | 98 | 217 | (9 | ) | (162 | ) | 5,394 | 7 | — | ||||||||||
RIF Global Real Estate Securities | ||||||||||||||||||||
Fund | 4,907 | 121 | 340 | (11 | ) | (51 | ) | 4,626 | 76 | 2 | ||||||||||
RIC U. S. Defensive Equity Fund | 5,651 | 51 | 514 | 16 | 87 | 5,291 | 11 | — | ||||||||||||
RIC U. S. Dynamic Equity Fund | 2,189 | 31 | 220 | (1 | ) | 38 | 2,037 | 5 | — | |||||||||||
RIF U. S. Small Cap Equity Fund | 16,601 | 1,321 | 2,168 | 8 | (120 | ) | 15,642 | 292 | 878 | |||||||||||
RIF U. S. Strategic Equity Fund | 4,324 | 194 | 438 | 9 | (59 | ) | 4,030 | 55 | 94 | |||||||||||
RIC Global Opportunistic Credit | ||||||||||||||||||||
Fund | 23,530 | 339 | 12,561 | 394 | (755 | ) | 10,947 | 162 | — | |||||||||||
RIC Unconstrained Total Return | ||||||||||||||||||||
Fund | 20,717 | 376 | 1,726 | (3 | ) | 169 | 19,533 | 242 | — | |||||||||||
RIF Strategic Bond Fund | 67,844 | 1,130 | 3,276 | (61 | ) | (1,628 | ) | 64,009 | 375 | — | ||||||||||
RIC Emerging Markets Fund | 23,969 | 806 | 2,667 | 361 | (1,864 | ) | 20,605 | — | — | |||||||||||
RIC Global Equity Fund | 53,997 | 398 | 4,507 | (87 | ) | 368 | 50,169 | — | — | |||||||||||
RIF International Developed Markets | ||||||||||||||||||||
Fund | 37,914 | 1,654 | 2,943 | 93 | (2,280 | ) | 34,438 | 195 | 970 | |||||||||||
RIC Multi-Strategy Income Fund | 11,946 | 11,791 | 1,165 | 3 | (404 | ) | 22,171 | 182 | — | |||||||||||
U. S. Cash Management Fund | 10 | — | — | — | — | 10 | — | — | ||||||||||||
$ | 289,167 | $ | 18,353 | $ | 33,782 | $ | (27 | ) | $ | (5,893 | ) | $ | 267,818 | $ | 1,602 | $ | 1,944 |
Federal Income Taxes (Unaudited) | |||||
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows: | |||||
Cost of Investments | $ | 248,185,426 | |||
Unrealized Appreciation | $ | 27,081,698 | |||
Unrealized Depreciation | (2,667,769 | ) | |||
Net Unrealized Appreciation (Depreciation) | $ | 24,413,929 |
Net investment income and net realized gains (losses) in the financial statements may differ from taxable net investment income and
net realized gains (losses). Capital accounts within the financial statements are adjusted for permanent differences between book and
tax accounting. Book-tax differences may be due to foreign currency gains and losses, reclassifications of dividends and differences in
treatment of income from swaps. These adjustments have no impact on the net assets. At June 30, 2018, there were no adjustments to
the Statement of Assets and Liabilities.
See accompanying notes which are an integral part of the financial statements.
34 Balanced Strategy Fund
Russell Investment Funds
Growth Strategy Fund
Shareholder Expense Example — June 30, 2018 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”) . | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. The fees and expenses shown in this | ||||||
administrative fees and other Fund expenses. The Example is | section do not reflect any Insurance Company Separate Account | ||||||
intended to help you understand your ongoing costs (in dollars) | or Policy Charges. | ||||||
of investing in the Fund and to compare these costs with the | Hypothetical | ||||||
ongoing costs of investing in other mutual funds. The Example | Performance (5% | ||||||
is based on an investment of $1,000 invested at the beginning of | Actual | return before | |||||
the period and held for the entire period indicated, which for this | Performance | expenses) | |||||
Beginning Account Value | |||||||
Fund is from January 1, 2018 to June 30, 2018. | January 1, 2018 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | ||||||
June 30, 2018 | $ | 997.60 | $ | 1,024.05 | |||
The information in the table under the heading “Actual | Expenses Paid During Period* | $ | 0.74 | $ | 0.75 | ||
Performance” provides information about actual account values | |||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.15% | ||||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 181/365 (to reflect the one-half | |||||||
that you paid over the period. Simply divide your account value by | year period) . May reflect amounts waived and/or reimbursed. Without any | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | waivers and/or reimbursements, expenses would have been higher. | ||||||
= 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. |
Growth Strategy Fund 35
Russell Investment Funds
Growth Strategy Fund
Schedule of Investments — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | ||||
Fair | ||||
Value | ||||
Shares | $ | |||
Investments in Affiliated Funds - 94.8% | ||||
Alternative - 7.5% | ||||
RIC Commodity Strategies Fund Class Y | 1,101,456 | 6,323 | ||
RIC Global Infrastructure Fund Class Y | 358,859 | 3,983 | ||
RIF Global Real Estate Securities Fund | 397,408 | 5,814 | ||
16,120 | ||||
Domestic Equities - 28.2% | ||||
RIC U. S. Defensive Equity Fund Class Y | 195,234 | 10,199 | ||
RIC U. S. Dynamic Equity Fund Class Y | 796,884 | 7,403 | ||
RIF U. S. Small Cap Equity Fund | 1,497,087 | 24,298 | ||
RIF U. S. Strategic Equity Fund | 1,030,695 | 18,810 | ||
60,710 | ||||
Fixed Income - 17.5% | ||||
RIC Global Opportunistic Credit Fund Class Y | 264,498 | 2,507 | ||
RIC Unconstrained Total Return Fund Class Y | 2,450,440 | 24,480 | ||
RIF Strategic Bond Fund | 1,061,487 | 10,732 | ||
37,719 | ||||
International Equities - 41.6% | ||||
RIC Emerging Markets Fund Class Y | 818,869 | 16,058 | ||
RIC Global Equity Fund Class Y | 3,447,109 | 37,332 | ||
RIF International Developed Markets Fund | 2,943,688 | 36,207 | ||
89,597 | ||||
Total Investments in Affiliated Funds | ||||
(cost $175,290) | 204,146 | |||
Options Purchased - 0.8% | ||||
(Number of Contracts) | ||||
S&P 500 Index | ||||
Goldman Sachs Sep 2018 2,725.00 Call (247) | USD | 67,308 | (ÿ) | 1,751 |
Total Options Purchased | ||||
(cost $2,154) | 1,751 | |||
Short-Term Investments - 0.0% | ||||
U. S. Cash Management Fund(@) | 18,844 | (8) | 19 | |
Total Short-Term Investments | ||||
(cost $19) | 19 | |||
Total Investments 95.6% | ||||
(identified cost $177,463) | 205,916 | |||
Other Assets and Liabilities, Net - 4.4% | 9,439 | |||
Net Assets - 100.0% | 215,355 |
See accompanying notes which are an integral part of the financial statements.
36 Growth Strategy Fund
Russell Investment Funds
Growth Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Futures Contracts | |||||||||
Amounts in thousands (except contract amounts) | |||||||||
Value and | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||
Contracts | Amount | Date | $ | ||||||
Long Positions | |||||||||
Amsterdam Index Futures | 10 | EUR | 1,103 | 07/18 | (29 | ) | |||
CAC40 Euro Index Futures | 60 | EUR | 3,192 | 07/18 | (94 | ) | |||
DAX Index Futures | 10 | EUR | 3,077 | 09/18 | (152 | ) | |||
Dow U. S. Real Estate Index Futures | 60 | USD | 1,919 | 09/18 | 50 | ||||
EURO STOXX 50 Index Futures | 57 | EUR | 1,933 | 09/18 | (33 | ) | |||
FTSE/MIB Index Futures | 7 | EUR | 755 | 09/18 | 12 | ||||
IBEX 35 Index Futures | 10 | EUR | 960 | 07/18 | (25 | ) | |||
MSCI EAFE Mini Index Futures | 15 | USD | 1,467 | 09/18 | (43 | ) | |||
MSCI Emerging Markets Mini Index Futures | 21 | USD | 1,116 | 09/18 | (69 | ) | |||
OMXS30 Index Futures | 44 | SEK | 6,868 | 07/18 | (1 | ) | |||
S&P/TSX 60 Index Futures | 1 | CAD | 193 | 09/18 | 1 | ||||
TOPIX Index Futures | 38 | JPY | 657,590 | 09/18 | (139 | ) | |||
United States 2 Year Treasury Note Futures | 10 | USD | 2,118 | 09/18 | 1 | ||||
United States 5 Year Treasury Note Futures | 34 | USD | 3,863 | 09/18 | 17 | ||||
United States 10 Year Treasury Note Futures | 79 | USD | 9,496 | 09/18 | 83 | ||||
United States Long Bond Futures | 2 | USD | 290 | 09/18 | 6 | ||||
Short Positions | |||||||||
FTSE 100 Index Futures | 45 | GBP | 3,421 | 09/18 | 26 | ||||
NASDAQ 100 E-Mini Index Futures | 34 | USD | 4,805 | 09/18 | 80 | ||||
Russell 1000 E-Mini Index Futures | 21 | USD | 1,588 | 09/18 | 31 | ||||
Russell 2000 E-Mini Index Futures | 54 | USD | 4,448 | 09/18 | 76 | ||||
S&P 400 E-Mini Index Futures | 12 | USD | 2,347 | 09/18 | 56 | ||||
S&P 500 E-Mini Index Futures | 259 | USD | 35,245 | 09/18 | 679 | ||||
S&P Financial Select Sector Index Futures | 12 | USD | 982 | 09/18 | 51 | ||||
SPI 200 Index Futures | 14 | AUD | 2,152 | 09/18 | (15 | ) | |||
Total Value and Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 569 |
Options Written | ||||||||||
Amounts in thousands (except contract amounts) | ||||||||||
Number of | Strike | Notional | Expiration | Fair Value | ||||||
Description | Counterparty | Call/Put | Contracts | Price | Amount | Date | $ | |||
iShares MSCI EAFE ETF Index | Goldman Sachs | Put | 458,915 | 40.75 | USD | 459 | 09/28/18 | — | ||
S&P 500 Index | Goldman Sachs | Put | 82 | 2,250.00 | USD | 18,450 | 09/28/18 | (79 | ) | |
Total Liability for Options Written (premiums received $656) (å) | (79 | ) |
Foreign Currency Exchange Contracts | |||||||||||
Amounts in thousands | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Amount | Amount | (Depreciation) | |||||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||||
Bank of Montreal | USD | 175 | CAD | 227 | 09/19/18 | (2 | ) | ||||
Bank of Montreal | USD | 267 | JPY | 29,128 | 09/19/18 | (2 | ) | ||||
Bank of Montreal | AUD | 113 | USD | 86 | 09/19/18 | 2 | |||||
Bank of Montreal | CHF | 388 | USD | 397 | 09/19/18 | 3 | |||||
Bank of Montreal | EUR | 2,462 | USD | 2,927 | 09/19/18 | 34 | |||||
Bank of Montreal | GBP | 1,451 | USD | 1,950 | 09/19/18 | 29 | |||||
Bank of Montreal | HKD | 893 | USD | 114 | 09/19/18 | — | |||||
Bank of Montreal | MXN | 760 | USD | 36 | 09/19/18 | (1 | ) | ||||
Bank of Montreal | SEK | 620 | USD | 72 | 09/19/18 | 3 | |||||
Bank of Montreal | SGD | 55 | USD | 41 | 09/19/18 | 1 | |||||
Bank of Montreal | ZAR | 133 | USD | 10 | 09/19/18 | — | |||||
Citibank | USD | 42 | RUB | 2,680 | 09/19/18 | — |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 37
Russell Investment Funds
Growth Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Exchange Contracts | ||||||||||
Amounts in thousands | ||||||||||
Unrealized | ||||||||||
Appreciation | ||||||||||
Amount | Amount | (Depreciation) | ||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||
Commonwealth Bank of Australia | USD | 175 | CAD | 227 | 09/19/18 | (2 | ) | |||
Commonwealth Bank of Australia | USD | 267 | JPY | 29,128 | 09/19/18 | (2 | ) | |||
Commonwealth Bank of Australia | AUD | 113 | USD | 86 | 09/19/18 | 2 | ||||
Commonwealth Bank of Australia | CHF | 388 | USD | 397 | 09/19/18 | 3 | ||||
Commonwealth Bank of Australia | EUR | 2,462 | USD | 2,924 | 09/19/18 | 32 | ||||
Commonwealth Bank of Australia | GBP | 1,451 | USD | 1,950 | 09/19/18 | 29 | ||||
Commonwealth Bank of Australia | HKD | 893 | USD | 114 | 09/19/18 | — | ||||
Commonwealth Bank of Australia | MXN | 760 | USD | 36 | 09/19/18 | (1 | ) | |||
Commonwealth Bank of Australia | SEK | 620 | USD | 72 | 09/19/18 | 3 | ||||
Commonwealth Bank of Australia | SGD | 55 | USD | 41 | 09/19/18 | 1 | ||||
Commonwealth Bank of Australia | ZAR | 133 | USD | 10 | 09/19/18 | — | ||||
Royal Bank of Canada | USD | 175 | CAD | 227 | 09/19/18 | (2 | ) | |||
Royal Bank of Canada | USD | 266 | JPY | 29,128 | 09/19/18 | (2 | ) | |||
Royal Bank of Canada | AUD | 113 | USD | 86 | 09/19/18 | 2 | ||||
Royal Bank of Canada | CHF | 388 | USD | 397 | 09/19/18 | 3 | ||||
Royal Bank of Canada | EUR | 2,462 | USD | 2,923 | 09/19/18 | 31 | ||||
Royal Bank of Canada | GBP | 1,451 | USD | 1,948 | 09/19/18 | 27 | ||||
Royal Bank of Canada | HKD | 893 | USD | 114 | 09/19/18 | — | ||||
Royal Bank of Canada | MXN | 760 | USD | 36 | 09/19/18 | (1 | ) | |||
Royal Bank of Canada | SEK | 620 | USD | 72 | 09/19/18 | 2 | ||||
Royal Bank of Canada | SGD | 55 | USD | 41 | 09/19/18 | 1 | ||||
Royal Bank of Canada | ZAR | 133 | USD | 10 | 09/19/18 | — | ||||
State Street | USD | 2,312 | CNY | 14,900 | 09/19/18 | (75 | ) | |||
State Street | KRW | 233,270 | USD | 218 | 09/19/18 | 8 | ||||
State Street | TWD | 28,550 | USD | 965 | 09/19/18 | 23 | ||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 149 |
Total Return Swap Contracts | ||||||||
Amounts in thousands | ||||||||
Premiums | Unrealized | |||||||
Paid | Appreciation | |||||||
Notional | Termination | (Received) | (Depreciation) | Fair Value | ||||
Underlying Reference Entity | Counterparty | Amount | Terms | Date | $ | $ | $ | |
Short | ||||||||
S&P 500 Total Return Index | Barclays | USD | 14,709 | 3 Month LIBOR + 0.900%(2) | 09/19/19 | — | 320 | 320 |
Total Open Total Return Swap Contracts (å) | — | 320 | 320 |
Credit Default Swap Contracts | ||||||||||||||
Amounts in thousands | ||||||||||||||
Credit Indices | ||||||||||||||
Premiums | Unrealized | |||||||||||||
Fund (Pays)/ | Paid/ | Appreciation | ||||||||||||
Purchase/Sell | Receives | Termination | (Received) | (Depreciation) | Fair Value | |||||||||
Reference Entity | Counterparty | Protection | Notional Amount | Fixed Rate | Date | $ | $ | $ | ||||||
CDX Emerging Markets | ||||||||||||||
Index | Bank of America | Sell | USD | 100 | 1.000%(2) | 06/20/23 | (2 | ) | (2 | ) | (4 | ) | ||
CDX Investment Grade | ||||||||||||||
Index | Bank of America | Sell | USD | 700 | 1.000%(2) | 06/20/23 | 19 | (8 | ) | 11 | ||||
CDX NA High Yield Index | Bank of America | Purchase | USD | 6,000 | (5.000%)(2) | 06/20/23 | (365 | ) | 11 | (354 | ) | |||
Total Open Credit Indices Contracts (å) | (348 | ) | 1 | (347 | ) |
See accompanying notes which are an integral part of the financial statements.
38 Growth Strategy Fund
Russell Investment Funds
Growth Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Presentation of Portfolio Holdings | |||||||||||||||||
Amounts in thousands | |||||||||||||||||
Fair Value | |||||||||||||||||
Practical | |||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | |||||||||||
Investments in Affiliated Funds | $ | 204,146 | $ | — | $ | — | $ | — | $ | 204,146 | 94.8 | ||||||
Options Purchased | 1,751 | — | — | — | 1,751 | 0.8 | |||||||||||
Short-Term Investments | — | — | — | 19 | 19 | — * | |||||||||||
Total Investments | 205,897 | — | — | 19 | 205,916 | 95.6 | |||||||||||
Other Assets and Liabilities, Net | 4.4 | ||||||||||||||||
100.0 | |||||||||||||||||
Other Financial Instruments | |||||||||||||||||
Assets | |||||||||||||||||
Futures Contracts | 1,169 | — | — | — | 1,169 | 0.5 | |||||||||||
Foreign Currency Exchange Contracts | — | 239 | — | — | 239 | 0.1 | |||||||||||
Total Return Swap Contracts | — | 320 | — | — | 320 | 0.1 | |||||||||||
Credit Default Swap Contracts | — | 11 | — | — | 11 | — * | |||||||||||
Liabilities | |||||||||||||||||
Futures Contracts | (600 | ) | — | — | — | (600 | ) | (0.3 | ) | ||||||||
Options Written | (79 | ) | — | — | — | (79 | ) | (—)* | |||||||||
Foreign Currency Exchange Contracts | — | (90 | ) | — | — | (90 | ) | (—)* | |||||||||
Credit Default Swap Contracts | — | (358 | ) | — | — | (358 | ) | (0.2 | ) | ||||||||
Total Other Financial Instruments** | $ | 490 | $ | 122 | $ | — | $ | — | $ | 612 |
* Less than 0.05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the investments.
(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified
in the fair value levels. The fair value amounts presented in the table are intended to permit reconciliation to the amounts presented in the Schedule of
Investments.
For a description of the Levels, see note 2 in the Notes to Financial Statements.
For a disclosure on transfers between Levels 1, 2 and 3 during the period ended June 30, 2018, see note 2 in the Notes to
Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 39
Russell Investment Funds
Growth Strategy Fund
Fair Value of Derivative Instruments — June 30, 2018 (Unaudited)
Amounts in thousands
Foreign | ||||||||||||
Equity | Credit | Currency | Interest Rate | |||||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | Contracts | ||||||||
Location: Statement of Assets and Liabilities - Assets | ||||||||||||
Investments, at fair value* | $ | 1,751 | $ | — | $ | — | $ | — | ||||
Unrealized appreciation on foreign currency exchange contracts | — | — | 239 | — | ||||||||
Variation margin on futures contracts** | 1,062 | — | — | 107 | ||||||||
Total return swap contracts, at fair value | 320 | — | — | — | ||||||||
Credit default swap contracts, at fair value | — | 11 | — | — | ||||||||
Total | $ | 3,133 | $ | 11 | $ | 239 | $ | 107 | ||||
Location: Statement of Assets and Liabilities - Liabilities | ||||||||||||
Variation margin on futures contracts** | $ | 600 | $ | — | $ | — | $ | — | ||||
Unrealized depreciation on foreign currency exchange contracts | — | — | 90 | — | ||||||||
Options written, at fair value | 79 | — | — | — | ||||||||
Credit default swap contracts, at fair value | — | 358 | — | — | ||||||||
Total | $ | 679 | $ | 358 | $ | 90 | $ | — | ||||
Foreign | ||||||||||||
Equity | Credit | Currency | Interest Rate | |||||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | Contracts | ||||||||
Location: Statement of Operations - Net realized gain (loss) | ||||||||||||
Investments*** | $ | 398 | $ | — | $ | — | $ | — | ||||
Futures contracts | (2,601 | ) | — | — | (240 | ) | ||||||
Total return swap contracts | (535 | ) | — | — | — | |||||||
Credit default swap contracts | — | (102 | ) | — | — | |||||||
Foreign currency exchange contracts | — | — | 233 | — | ||||||||
Total | $ | (2,738 | ) | $ | (102 | ) | $ | 233 | $ | (240 | ) | |
Location: Statement of Operations - Net change in unrealized appreciation | ||||||||||||
(depreciation) | ||||||||||||
Investments**** | $ | (501 | ) | $ | — | $ | — | $ | — | |||
Futures contracts | 867 | — | — | 146 | ||||||||
Options written | 577 | — | — | — | ||||||||
Total return swap contracts | 338 | — | — | — | ||||||||
Credit default swap contracts | — | 77 | — | — | ||||||||
Foreign currency exchange contracts**** | — | — | 497 | — | ||||||||
Total | $ | 1,281 | $ | 77 | $ | 497 | $ | 146 |
* Fair value of purchased options.
** Includes net realized gain (loss) on purchased options as reported in the Statement of Operations.
*** Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
**** Includes net change in unrealized appreciation/depreciation on purchased options as reported in the Schedule of Investments.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
40 Growth Strategy Fund
Russell Investment Funds
Growth Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||||
Offsetting of Financial Assets and Derivative Assets | |||||||||||
Gross | Net Amounts | ||||||||||
Amounts | of Assets | ||||||||||
Gross | Offset in the | Presented in | |||||||||
Amounts of | Statement of | the Statement | |||||||||
Recognized | Assets and | of Assets and | |||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | |||||||
Options Purchased Contracts | Investments, at fair value | $ | 1,751 | $ | — | $ | 1,751 | ||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 239 | — | 239 | |||||||
Futures Contracts | Variation margin on futures contracts | 1,652 | — | 1,652 | |||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 320 | — | 320 | |||||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 11 | — | 11 | |||||||
Total Financial and Derivative Assets | 3,973 | — | 3,973 | ||||||||
Financial and Derivative Assets not subject to a netting agreement | (3,413 | ) | — | (3,413 | ) | ||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 560 | $ | — | $ | 560 | |||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Assets | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | |||||||
Bank of Montreal | $ | 71 | $ | 6 | $ | — | $ | 65 | |||
Barclays | 320 | — | — | 320 | |||||||
Commonwealth Bank of Australia | 71 | 6 | — | 65 | |||||||
Royal Bank of Canada | 67 | 6 | — | 61 | |||||||
State Street | 31 | 31 | — | — | |||||||
Total | $ | 560 | $ | 49 | $ | — | $ | 511 |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 41
Russell Investment Funds
Growth Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||
Gross | Net Amounts | ||||||||||
Amounts | of Liabilities | ||||||||||
Gross | Offset in the | Presented in | |||||||||
Amounts of | Statement of | the Statement | |||||||||
Recognized | Assets and | of Assets and | |||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||||
Futures Contracts | Variation margin on futures contracts | $ | 67 | $ | — | $ | 67 | ||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 90 | — | 90 | |||||||
Options Written Contracts | Options written, at fair value | 79 | — | 79 | |||||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 358 | — | 358 | |||||||
Total Financial and Derivative Liabilities | 594 | — | 594 | ||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (503 | ) | — | (503 | ) | ||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 91 | $ | — | $ | 91 | |||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Liabilities | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||
Bank of Montreal | $ | 6 | $ | 6 | $ — | $ | — | ||||
Commonwealth Bank of Australia | 6 | 6 | — | — | |||||||
Royal Bank of Canada | 6 | 6 | — | — | |||||||
State Street | 73 | 31 | — | 42 | |||||||
Total | $ | 91 | $ | 49 | $ — | $ | 42 |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
42 Growth Strategy Fund
Russell Investment Funds
Growth Strategy Fund
Statement of Assets and Liabilities — June 30, 2018 (Unaudited)
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 177,463 |
Investments, at fair value(>) | 205,916 | |
Cash | 12,869 | |
Unrealized appreciation on foreign currency exchange contracts | 239 | |
Receivables: | ||
Investments sold | 19 | |
Fund shares sold | 1 | |
From broker(a)(b)(c) | 13,079 | |
Variation margin on futures contracts | 1,652 | |
Prepaid expenses | 1 | |
Total return swap contracts, at fair value(8) | 320 | |
Credit default swap contracts, at fair value(+) | 11 | |
Total assets | 234,107 | |
Liabilities | ||
Payables: | ||
Due to broker (d)(e) | 18,069 | |
Fund shares redeemed | 20 | |
Accrued fees to affiliates | 17 | |
Other accrued expenses | 52 | |
Variation margin on futures contracts | 67 | |
Unrealized depreciation on foreign currency exchange contracts | 90 | |
Options written, at fair value(x) | 79 | |
Credit default swap contracts, at fair value(+) | 358 | |
Total liabilities | 18,752 | |
Net Assets | $ | 215,355 |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 43
Russell Investment Funds
Growth Strategy Fund
Statement of Assets and Liabilities, continued — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 1,116 | |
Accumulated net realized gain (loss) | (5,296 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | (403 | ) | |
Investments in affiliated funds | 28,856 | ||
Futures contracts | 569 | ||
Options written | 577 | ||
Foreign currency exchange contracts | 149 | ||
Total return swap contracts | 320 | ||
Credit default swap contracts | 1 | ||
Foreign currency-related transactions | 8 | ||
Shares of beneficial interest | 215 | ||
Additional paid-in capital | 189,243 | ||
Net Assets | $ | 215,355 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: (#) | $ | 10.02 | |
Net assets | $ | 215,354,920 | |
Shares outstanding ($. 01 par value) | 21,492,669 | ||
Amounts in thousands | |||
(x) Premiums received on options written | $ | 656 | |
(+) Credit default swap contracts - premiums paid (received) | $ | (348 | ) |
(>) Investments in affiliated funds | $ | 204,165 | |
(8) Total return swap contracts - premiums paid (received) | $ | — | |
(a) Receivable from Broker for Futures | $ | 2,213 | |
(b) Receivable from Broker for Swaps | $ | 9,966 | |
(c) Receivable from Broker for Options | $ | 900 | |
(d) Due to Broker for Swaps | $ | 9,094 | |
(e) Due to Broker for Options | $ | 8,975 | |
(#) 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.
44 Growth Strategy Fund
Russell Investment Funds
Growth Strategy Fund
Statement of Operations — For the Period Ended June 30, 2018 (Unaudited)
Amounts in thousands | |||
Investment Income | |||
Dividends from affiliated funds | $ | 1,466 | |
Expenses | |||
Advisory fees | 219 | ||
Administrative fees | 47 | ||
Custodian fees | 18 | ||
Transfer agent fees | 5 | ||
Professional fees | 20 | ||
Trustees’ fees | 4 | ||
Printing fees | 18 | ||
Miscellaneous | 4 | ||
Expenses before reductions | 335 | ||
Expense reductions | (171 | ) | |
Net expenses | 164 | ||
Net investment income (loss) | 1,302 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 398 | ||
Investments in affiliated funds | 262 | ||
Futures contracts | (2,841 | ) | |
Foreign currency exchange contracts | 233 | ||
Total return swap contracts | (535 | ) | |
Credit default swap contracts | (102 | ) | |
Foreign currency-related transactions | (3 | ) | |
Capital gain distributions from affiliated funds | 2,851 | ||
Net realized gain (loss) | 263 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (501 | ) | |
Investments in affiliated funds | (4,109 | ) | |
Futures contracts | 1,013 | ||
Options written | 577 | ||
Foreign currency exchange contracts | 497 | ||
Total return swap contracts | 338 | ||
Credit default swap contracts | 77 | ||
Foreign currency-related transactions | 8 | ||
Net change in unrealized appreciation (depreciation) | (2,100 | ) | |
Net realized and unrealized gain (loss) | (1,837 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (535 | ) |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 45
Russell Investment Funds
Growth Strategy Fund
Statements of Changes in Net Assets
Period | ||||||
Ended June 30, 2018 | Fiscal Year Ended | |||||
Amounts in thousands | (Unaudited) | December 31, 2017 | ||||
Increase (Decrease) in Net Assets | ||||||
Operations | ||||||
Net investment income (loss) | $ | 1,302 | $ | 7,155 | ||
Net realized gain (loss) | 263 | 9,505 | ||||
Net change in unrealized appreciation (depreciation) | (2,100 | ) | 14,182 | |||
Net increase (decrease) in net assets from operations | (535 | ) | 30,842 | |||
Distributions | ||||||
From net investment income | (592 | ) | (6,529 | ) | ||
From net realized gain . | (8,298 | ) | (4,634 | ) | ||
Net decrease in net assets from distributions | (8,890 | ) | (11,163 | ) | ||
Share Transactions* | ||||||
Net increase (decrease) in net assets from share transactions | 3,945 | (4,788 | ) | |||
Total Net Increase (Decrease) in Net Assets | (5,480 | ) | 14,891 | |||
Net Assets | ||||||
Beginning of period | 220,835 | 205,944 | ||||
End of period | $ | 215,355 | $ | 220,835 | ||
Undistributed (overdistributed) net investment income included in net assets | $ | 1,116 | $ | 406 |
* Share transaction amounts (in thousands) for the periods ended June 30, 2018 and December 31, 2017 were as follows: | ||||||||||||
2018 (Unaudited) | 2017 | |||||||||||
Shares | Dollars | Shares | Dollars | |||||||||
Proceeds from shares sold | 405 | $ | 4,194 | 755 | $ | 7,645 | ||||||
Proceeds from reinvestment of distributions | 871 | 8,890 | 1,099 | 11,163 | ||||||||
Payments for shares redeemed | (889 | ) | (9,139 | ) | (2,354 | ) | (23,596 | ) | ||||
Total increase (decrease) | 387 | $ | 3,945 | (500 | ) | $ | (4,788 | ) |
See accompanying notes which are an integral part of the financial statements.
46 Growth Strategy Fund
(This page intentionally left blank)
Russell Investment Funds
Growth Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||||||
$ | $ | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Net | Net Realized | Total from | Distributions | Distributions | ||||||||||||
Beginning of | Investment | and Unrealized | Investment | from Net | from Net | ||||||||||||
Period | Income (Loss)(a)(b)(f) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||||
June 30, 2018(1) | 10.46 | . 06 | (. 08 | ) | (. 02 | ) | (. 03 | ) | (. 39 | ) | |||||||
December 31, 2017 | 9.53 | . 34 | 1.13 | 1.47 | (. 32 | ) | (. 22 | ) | |||||||||
December 31, 2016 | 8.94 | . 20 | . 66 | . 86 | (. 27 | ) | —(g) | ||||||||||
December 31, 2015 | 10.07 | . 17 | (. 48 | ) | (. 31 | ) | (. 18 | ) | (. 64 | ) | |||||||
December 31, 2014 | 10.23 | . 31 | . 07 | . 38 | (. 30 | ) | (. 24 | ) | |||||||||
December 31, 2013 | 8.97 | . 22 | 1.26 | 1.48 | (. 22 | ) | — | ||||||||||
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 48
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c)(h) | (000 | ) | Gross(d)(e) | Net(d)(e)(f) | Net Assets(b)(c)(f) | Turnover Rate(c) | |||||||||
(. 42 | ) | 10.02 | (. 24 | ) | 215,355 | . 31 | . 15 | . 59 | 9 | ||||||||
(. 54 | ) | 10.46 | 15.65 | 220,835 | . 32 | . 14 | 3.37 | 29 | |||||||||
(. 27 | ) | 9.53 | 9.73 | 205,944 | . 30 | . 12 | 2.14 | 18 | |||||||||
(. 82 | ) | 8.94 | (3.31 | ) | 200,116 | . 30 | . 11 | 1.78 | 23 | ||||||||
(. 54 | ) | 10.07 | 3.76 | 208,321 | . 32 | . 10 | 2.97 | 20 | |||||||||
(. 22 | ) | 10.23 | 16.56 | 189,956 | . 32 | . 10 | 2.29 | 12 |
See accompanying notes which are an integral part of the financial statements.
Growth Strategy Fund 49
Russell Investment Funds
Growth Strategy Fund
Related Party Transactions, Fees and Expenses (Unaudited)
Accrued fees payable to affiliates for the period ended June 30, 2018 were as follows: | ||
Advisory fees | $ | 7,798 |
Administration fees | 7,630 | |
Transfer agent fees | 790 | |
Trustee fees | 468 | |
$ | 16,686 |
Transactions (amounts in thousands) during the period ended June 30, 2018 with funds which are, or were, an affiliated company | ||||||||||||||||||||
are as follows: | ||||||||||||||||||||
Fair Value, | Change in | |||||||||||||||||||
Beginning of | Realized Gain | Unrealized | Fair Value, End | Income | Capital Gains | |||||||||||||||
Period | Purchases | Sales | (Loss) | Gain (Loss) | of Period | Distributions | Distributions | |||||||||||||
RIC Commodity Strategies Fund | $ | 6,835 | $ | 45 | $ | 575 | $ | (350 | ) | $ | 368 | $ | 6,323 | $ | — | $ | — | |||
RIC Global Infrastructure Fund | 6,214 | 211 | 2,351 | 154 | (245 | ) | 3,983 | 5 | — | |||||||||||
RIF Global Real Estate Securities | ||||||||||||||||||||
Fund | 5,997 | 328 | 440 | 39 | (110 | ) | 5,814 | 96 | 3 | |||||||||||
RIC U. S. Defensive Equity Fund | 10,693 | 112 | 797 | 26 | 165 | 10,199 | 21 | — | ||||||||||||
RIC U. S. Dynamic Equity Fund | 7,843 | 90 | 660 | (2 | ) | 132 | 7,403 | 19 | — | |||||||||||
RIF U. S. Small Cap Equity Fund | 25,585 | 2,043 | 3,150 | (4 | ) | (176 | ) | 24,298 | 470 | 1,378 | ||||||||||
RIF U. S. Strategic Equity Fund | 19,841 | 847 | 1,627 | 29 | (280 | ) | 18,810 | 258 | 444 | |||||||||||
RIC Global Opportunistic Credit | ||||||||||||||||||||
Fund | 12,662 | 190 | 10,297 | 104 | (152 | ) | 2,507 | 41 | — | |||||||||||
RIC Unconstrained Total Return | ||||||||||||||||||||
Fund | 18,247 | 7,292 | 1,200 | (3 | ) | 144 | 24,480 | 287 | — | |||||||||||
RIF Strategic Bond Fund | 10,938 | 392 | 322 | (5 | ) | (271 | ) | 10,732 | 63 | — | ||||||||||
RIC Emerging Markets Fund | 17,109 | 1,851 | 1,716 | 317 | (1,503 | ) | 16,058 | — | — | |||||||||||
RIC Global Equity Fund | 35,040 | 4,535 | 2,358 | (73 | ) | 188 | 37,332 | — | — | |||||||||||
RIF International Developed Markets | ||||||||||||||||||||
Fund | 38,786 | 2,036 | 2,276 | 30 | (2,369 | ) | 36,207 | 206 | 1,026 | |||||||||||
U. S. Cash Management Fund | 19 | — | — | — | — | 19 | — | — | ||||||||||||
$ | 215,809 | $ | 19,972 | $ | 27,769 | $ | 262 | $ | (4,109 | ) | $ | 204,165 | $ | 1,466 | $ | 2,851 |
Federal Income Taxes (Unaudited) | |||||
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows: | |||||
Cost of Investments | $ | 181,025,361 | |||
Unrealized Appreciation | $ | 29,665,394 | |||
Unrealized Depreciation | (3,514,244 | ) | |||
Net Unrealized Appreciation (Depreciation) | $ | 26,151,150 |
Net investment income and net realized gains (losses) in the financial statements may differ from taxable net investment income and
net realized gains (losses). Capital accounts within the financial statements are adjusted for permanent differences between book and
tax accounting. Book-tax differences may be due to foreign currency gains and losses, reclassifications of dividends and differences in
treatment of income from swaps. These adjustments have no impact on the net assets. At June 30, 2018, there were no adjustments to
the Statement of Assets and Liabilities.
See accompanying notes which are an integral part of the financial statements.
50 Growth Strategy Fund
Russell Investment Funds
Equity Growth Strategy Fund
Shareholder Expense Example — June 30, 2018 (Unaudited)
Fund Expenses | Please note that the expenses shown in the table are meant | ||||||
The following disclosure provides important information | to highlight your ongoing costs only and do not reflect any | ||||||
regarding the Fund’s Shareholder Expense Example | transactional costs. Therefore, the information under the heading | ||||||
(“Example”) . | “Hypothetical Performance (5% return before expenses)” is | ||||||
useful in comparing ongoing costs only, and will not help you | |||||||
Example | determine the relative total costs of owning different funds. In | ||||||
As a shareholder of the Fund, you incur two types of costs: (1) | addition, if these transactional costs were included, your costs | ||||||
transaction costs, and (2) ongoing costs, including advisory and | would have been higher. The fees and expenses shown in this | ||||||
administrative fees and other Fund expenses. The Example is | section do not reflect any Insurance Company Separate Account | ||||||
intended to help you understand your ongoing costs (in dollars) | or Policy Charges. | ||||||
of investing in the Fund and to compare these costs with the | Hypothetical | ||||||
ongoing costs of investing in other mutual funds. The Example | Performance (5% | ||||||
is based on an investment of $1,000 invested at the beginning of | Actual | return before | |||||
the period and held for the entire period indicated, which for this | Performance | expenses) | |||||
Beginning Account Value | |||||||
Fund is from January 1, 2018 to June 30, 2018. | January 1, 2018 | $ | 1,000.00 | $ | 1,000.00 | ||
Actual Expenses | Ending Account Value | ||||||
June 30, 2018 | $ | 1,001.10 | $ | 1,024.05 | |||
The information in the table under the heading “Actual | Expenses Paid During Period* | $ | 0.74 | $ | 0.75 | ||
Performance” provides information about actual account values | |||||||
and actual expenses. You may use the information in this column, | * Expenses are equal to the Fund's annualized expense ratio of 0.15% | ||||||
together with the amount you invested, to estimate the expenses | (representing the six month period annualized), multiplied by the average | ||||||
account value over the period, multiplied by 181/365 (to reflect the one-half | |||||||
that you paid over the period. Simply divide your account value by | year period) . May reflect amounts waived and/or reimbursed. Without any | ||||||
$1,000 (for example, an $8,600 account value divided by $1,000 | waivers and/or reimbursements, expenses would have been higher. | ||||||
= 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. |
Equity Growth Strategy Fund 51
Russell Investment Funds
Equity Growth Strategy Fund
Schedule of Investments — June 30, 2018 (Unaudited)
Amounts in thousands (except share amounts) | ||||
Fair | ||||
Value | ||||
Shares | $ | |||
Investments in Affiliated Funds - 94.2% | ||||
Alternative - 6.4% | ||||
RIC Commodity Strategies Fund Class Y | 277,495 | 1,593 | ||
RIC Global Infrastructure Fund Class Y | 106,793 | 1,185 | ||
RIF Global Real Estate Securities Fund | 50,324 | 736 | ||
3,514 | ||||
Domestic Equities - 31.9% | ||||
RIC U. S. Defensive Equity Fund Class Y | 74,168 | 3,875 | ||
RIC U. S. Dynamic Equity Fund Class Y | 306,181 | 2,844 | ||
RIF U. S. Small Cap Equity Fund | 484,102 | 7,856 | ||
RIF U. S. Strategic Equity Fund | 169,179 | 3,088 | ||
17,663 | ||||
Fixed Income - 8.4% | ||||
RIC Global Opportunistic Credit Fund Class Y | 46,249 | 438 | ||
RIC Unconstrained Total Return Fund Class Y | 421,434 | 4,211 | ||
4,649 | ||||
International Equities - 47.5% | ||||
RIC Emerging Markets Fund Class Y | 282,892 | 5,548 | ||
RIC Global Equity Fund Class Y | 1,039,731 | 11,261 | ||
RIF International Developed Markets Fund | 769,142 | 9,460 | ||
26,269 | ||||
Total Investments in Affiliated Funds | ||||
(cost $43,158) | 52,095 | |||
Options Purchased - 0.8% | ||||
(Number of Contracts) | ||||
S&P 500 Index | ||||
Goldman Sachs Sep 2018 2,725.00 Call (62) | USD | 16,895 | (ÿ) | 439 |
Total Options Purchased | ||||
(cost $541) | 439 | |||
Short-Term Investments - 0.0% | ||||
U. S. Cash Management Fund(@) | 19,655 | (8) | 20 | |
Total Short-Term Investments | ||||
(cost $20) | 20 | |||
Total Investments 95.0% | ||||
(identified cost $43,719) | 52,554 | |||
Other Assets and Liabilities, Net - 5.0% | 2,775 | |||
Net Assets - 100.0% | 55,329 |
See accompanying notes which are an integral part of the financial statements.
52 Equity Growth Strategy Fund
Russell Investment Funds
Equity Growth Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Futures Contracts | |||||||||
Amounts in thousands (except contract amounts) | |||||||||
Value and | |||||||||
Unrealized | |||||||||
Appreciation | |||||||||
Number of | Notional | Expiration | (Depreciation) | ||||||
Contracts | Amount | Date | $ | ||||||
Long Positions | |||||||||
Amsterdam Index Futures | 4 | EUR | 441 | 07/18 | (12 | ) | |||
CAC40 Euro Index Futures | 21 | EUR | 1,117 | 07/18 | (33 | ) | |||
DAX Index Futures | 4 | EUR | 1,231 | 09/18 | (61 | ) | |||
Dow U. S. Real Estate Index Futures | 66 | USD | 2,111 | 09/18 | 55 | ||||
EURO STOXX 50 Index Futures | 21 | EUR | 712 | 09/18 | (12 | ) | |||
FTSE/MIB Index Futures | 3 | EUR | 324 | 09/18 | 5 | ||||
IBEX 35 Index Futures | 4 | EUR | 384 | 07/18 | (10 | ) | |||
MSCI EAFE Mini Index Futures | 6 | USD | 587 | 09/18 | (17 | ) | |||
OMXS30 Index Futures | 17 | SEK | 2,654 | 07/18 | — | ||||
Russell 1000 E-Mini Index Futures | 1 | USD | 76 | 09/18 | (2 | ) | |||
TOPIX Index Futures | 11 | JPY | 190,354 | 09/18 | (40 | ) | |||
Short Positions | |||||||||
FTSE 100 Index Futures | 14 | GBP | 1,064 | 09/18 | 8 | ||||
MSCI Emerging Markets Mini Index Futures | 25 | USD | 1,329 | 09/18 | 41 | ||||
NASDAQ 100 E-Mini Index Futures | 10 | USD | 1,414 | 09/18 | 24 | ||||
Russell 2000 E-Mini Index Futures | 23 | USD | 1,895 | 09/18 | 32 | ||||
S&P 400 E-Mini Index Futures | 1 | USD | 196 | 09/18 | 5 | ||||
S&P 500 E-Mini Index Futures | 51 | USD | 6,940 | 09/18 | 145 | ||||
S&P Financial Select Sector Index Futures | 12 | USD | 982 | 09/18 | 51 | ||||
SPI 200 Index Futures | 6 | AUD | 922 | 09/18 | (6 | ) | |||
Total Value and Unrealized Appreciation (Depreciation) on Open Futures Contracts (å) | 173 |
Options Written | ||||||||||
Amounts in thousands (except contract amounts) | ||||||||||
Number of | Strike | Notional | Expiration | Fair Value | ||||||
Description | Counterparty | Call/Put | Contracts | Price | Amount | Date | $ | |||
iShares MSCI EAFE ETF Index | Goldman Sachs | Put | 104,299 | 40.75 | USD | 104 | 09/28/18 | — | ||
S&P 500 Index | Goldman Sachs | Put | 21 | 2,250.00 | USD | 4,725 | 09/28/18 | (20 | ) | |
Total Liability for Options Written (premiums received $157)(å) | (20 | ) |
Foreign Currency Exchange Contracts | |||||||||||
Amounts in thousands | |||||||||||
Unrealized | |||||||||||
Appreciation | |||||||||||
Amount | Amount | (Depreciation) | |||||||||
Counterparty | Sold | Bought | Settlement Date | $ | |||||||
Bank of Montreal | USD | 337 | AUD | 443 | 09/19/18 | (10 | ) | ||||
Bank of Montreal | USD | 175 | CAD | 227 | 09/19/18 | (2 | ) | ||||
Bank of Montreal | USD | 347 | JPY | 37,862 | 09/19/18 | (3 | ) | ||||
Bank of Montreal | USD | 9 | ZAR | 115 | 09/19/18 | — | |||||
Bank of Montreal | CHF | 223 | USD | 228 | 09/19/18 | 2 | |||||
Bank of Montreal | EUR | 882 | USD | 1,048 | 09/19/18 | 13 | |||||
Bank of Montreal | GBP | 420 | USD | 564 | 09/19/18 | 8 | |||||
Bank of Montreal | HKD | 360 | USD | 46 | 09/19/18 | — | |||||
Bank of Montreal | MXN | 2,025 | USD | 97 | 09/19/18 | (4 | ) | ||||
Bank of Montreal | SEK | 375 | USD | 44 | 09/19/18 | 2 | |||||
Bank of Montreal | SGD | 22 | USD | 17 | 09/19/18 | — | |||||
Citibank | USD | 23 | RUB | 1,490 | 09/19/18 | — | |||||
Royal Bank of Canada | USD | 337 | AUD | 443 | 09/19/18 | (9 | ) | ||||
Royal Bank of Canada | USD | 175 | CAD | 227 | 09/19/18 | (2 | ) | ||||
Royal Bank of Canada | USD | 346 | JPY | 37,862 | 09/19/18 | (2 | ) |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 53
Russell Investment Funds
Equity Growth Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Exchange Contracts | ||||||||||
Amounts in thousands | ||||||||||
Unrealized | ||||||||||
Appreciation | ||||||||||
Amount | Amount | (Depreciation) | ||||||||
Counterparty | Sold | Bought | Settlement Date | $ | ||||||
Royal Bank of Canada | USD | 9 | ZAR | 115 | 09/19/18 | — | ||||
Royal Bank of Canada | CHF | 223 | USD | 228 | 09/19/18 | 1 | ||||
Royal Bank of Canada | EUR | 882 | USD | 1,047 | 09/19/18 | 11 | ||||
Royal Bank of Canada | GBP | 420 | USD | 563 | 09/19/18 | 8 | ||||
Royal Bank of Canada | HKD | 360 | USD | 46 | 09/19/18 | — | ||||
Royal Bank of Canada | MXN | 2,025 | USD | 97 | 09/19/18 | (4 | ) | |||
Royal Bank of Canada | SEK | 375 | USD | 44 | 09/19/18 | 1 | ||||
Royal Bank of Canada | SGD | 22 | USD | 17 | 09/19/18 | — | ||||
State Street | USD | 543 | CNY | 3,500 | 09/19/18 | (19 | ) | |||
State Street | BRL | 980 | USD | 260 | 09/19/18 | 10 | ||||
State Street | INR | 12,940 | USD | 190 | 09/19/18 | 3 | ||||
State Street | KRW | 116,630 | USD | 109 | 09/19/18 | 4 | ||||
State Street | TWD | 9,520 | USD | 322 | 09/19/18 | 8 | ||||
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts | 16 |
Total Return Swap Contracts | ||||||||
Amounts in thousands | ||||||||
Premiums | Unrealized | |||||||
Paid | Appreciation | |||||||
Notional | Termination | (Received) | (Depreciation) | Fair Value | ||||
Underlying Reference Entity | Counterparty | Amount | Terms | Date | $ | $ | $ | |
Short | ||||||||
S&P 500 Total Return Index | Barclays | USD | 4,202 | 3 Month LIBOR + 0.900%(2) | 09/19/18 | — | 91 | 91 |
Total Open Total Return Swap Contracts (å) | — | 91 | 91 |
Credit Default Swap Contracts | ||||||||||||||
Amounts in thousands | ||||||||||||||
Credit Indices | ||||||||||||||
Premiums | Unrealized | |||||||||||||
Fund (Pays)/ | Paid/ | Appreciation | ||||||||||||
Purchase/Sell | Receives | Termination | (Received) | (Depreciation) | Fair Value | |||||||||
Reference Entity | Counterparty | Protection | Notional Amount | Fixed Rate | Date | $ | $ | $ | ||||||
CDX Emerging Markets | ||||||||||||||
Index | Bank of America | Sell | USD | 100 | 1.000%(2) | 06/20/23 | (2 | ) | (2 | ) | (4 | ) | ||
CDX NA High Yield Index | Bank of America | Purchase | USD | 1,300 | (5.000%)(2) | 06/20/23 | (79 | ) | 2 | (77 | ) | |||
Total Open Credit Indices Contracts (å) | (81 | ) | — | (81 | ) |
See accompanying notes which are an integral part of the financial statements.
54 Equity Growth Strategy Fund
Russell Investment Funds
Equity Growth Strategy Fund
Schedule of Investments, continued — June 30, 2018 (Unaudited)
Presentation of Portfolio Holdings | ||||||||||||||||||
Amounts in thousands | ||||||||||||||||||
Fair Value | ||||||||||||||||||
Practical | ||||||||||||||||||
Portfolio Summary | Level 1 | Level 2 | Level 3 | Expedient (a) | Total | % of Net Assets | ||||||||||||
Investments in Affiliated Funds | $ | 52,095 | $ | — | $ | — | $ | — | $ | 52,095 | 94.2 | |||||||
Options Purchased | 439 | — | — | — | 439 | 0.8 | ||||||||||||
Short-Term Investments | — | — | — | 20 | 20 | — * | ||||||||||||
Total Investments | 52,534 | — | — | 20 | 52,554 | 95.0 | ||||||||||||
Other Assets and Liabilities, Net | 5.0 | |||||||||||||||||
100.0 | ||||||||||||||||||
Other Financial Instruments | ||||||||||||||||||
Assets | ||||||||||||||||||
Futures Contracts | 366 | — | — | — | 366 | 0.7 | ||||||||||||
Foreign Currency Exchange Contracts | — | 71 | — | — | 71 | 0.1 | ||||||||||||
Total Return Swap Contracts | — | 91 | — | — | 91 | 0.2 | ||||||||||||
Liabilities | ||||||||||||||||||
Futures Contracts | (193 | ) | — | — | — | (193 | ) | (0.3 | ) | |||||||||
Options Written | (20 | ) | — | — | — | (20 | ) | (— *) | ||||||||||
Foreign Currency Exchange Contracts | — | (55 | ) | — | — | (55 | ) | (0.1 | ) | |||||||||
Credit Default Swap Contracts | — | (81 | ) | — | — | (81 | ) | (0.1 | ) | |||||||||
Total Other Financial Instruments** | $ | 153 | $ | 26 | $ | — | $ | — | $ | 179 |
* Less than 0.05% of net assets.
** Futures and foreign currency exchange contract values reflect the unrealized appreciation (depreciation) on the investments.
(a) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified
in the fair value levels. The fair value amounts presented in the table are intended to permit reconciliation to the amounts presented in the Schedule of
Investments.
For a description of the Levels, see note 2 in the Notes to Financial Statements.
For a disclosure on transfers between Levels 1, 2 and 3 during the period ended June 30, 2018, see note 2 in the Notes to
Financial Statements.
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 55
Russell Investment Funds
Equity Growth Strategy Fund
Fair Value of Derivative Instruments — June 30, 2018 (Unaudited)
Amounts in thousands
Foreign | |||||||||
Equity | Credit | Currency | |||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | ||||||
Location: Statement of Assets and Liabilities - Assets | |||||||||
Investments, at fair value* | $ | 439 | $ | — | $ | — | |||
Unrealized appreciation on foreign currency exchange contracts | — | — | 71 | ||||||
Variation margin on futures contracts** | 366 | — | — | ||||||
Total return swap contracts, at fair value | 91 | — | — | ||||||
Total | $ | 896 | $ | — | $ | 71 | |||
Location: Statement of Assets and Liabilities - Liabilities | |||||||||
Variation margin on futures contracts** | $ | 193 | $ | — | $ | — | |||
Unrealized depreciation on foreign currency exchange contracts | — | — | 55 | ||||||
Options written, at fair value | 20 | — | — | ||||||
Credit default swap contracts, at fair value | — | 81 | — | ||||||
Total | $ | 213 | $ | 81 | $ | 55 | |||
Foreign | |||||||||
Equity | Credit | Currency | |||||||
Derivatives not accounted for as hedging instruments | Contracts | Contracts | Contracts | ||||||
Location: Statement of Operations - Net realized gain (loss) | |||||||||
Investments*** | $ | 110 | $ | — | $ | — | |||
Futures contracts | (609 | ) | — | — | |||||
Total return swap contracts | (153 | ) | — | — | |||||
Credit default swap contracts | — | (24 | ) | — | |||||
Foreign currency exchange contracts | — | — | 65 | ||||||
Total | $ | (652 | ) | $ | (24 | ) | $ | 65 | |
Location: Statement of Operations - Net change in unrealized appreciation (depreciation) | |||||||||
Investments**** | $ | (130 | ) | $ | — | $ | — | ||
Futures contracts | 327 | — | — | ||||||
Options written | 137 | — | — | ||||||
Total return swap contracts | 96 | — | — | ||||||
Credit default swap contracts | — | 23 | — | ||||||
Foreign currency exchange contracts | — | — | 70 | ||||||
Total | $ | 430 | $ | 23 | $ | 70 |
* Fair value of purchased options.
** Includes cumulative appreciation/depreciation of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
Statement of Assets and Liabilities.
*** Includes net realized gain (loss) on purchased options as reported in the Statement of Operations.
**** Includes net change in unrealized appreciation/depreciation on purchased options as reported in the Schedule of Investments.
For further disclosure on derivatives see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
56 Equity Growth Strategy Fund
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Equity Growth Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments —
June 30, 2018 (Unaudited)
Amounts in thousands | ||||||||||||
Offsetting of Financial Assets and Derivative Assets | ||||||||||||
Gross | Net Amounts | |||||||||||
Amounts | of Assets | |||||||||||
Gross | Offset in the | Presented in | ||||||||||
Amounts of | Statement of | the Statement | ||||||||||
Recognized | Assets and | of Assets and | ||||||||||
Description | Location: Statement of Assets and Liabilities - Assets | Assets | Liabilities | Liabilities | ||||||||
Options Purchased Contracts | Investments, at fair value | $ | 439 | $ | — | $ | 439 | |||||
Foreign Currency Exchange Contracts | Unrealized appreciation on foreign currency exchange contracts | 71 | — | 71 | ||||||||
Futures Contracts | Variation margin on futures contracts | 615 | — | 615 | ||||||||
Total Return Swap Contracts | Total return swap contracts, at fair value | 91 | — | 91 | ||||||||
Total Financial and Derivative Assets | 1,216 | — | 1,216 | |||||||||
Financial and Derivative Assets not subject to a netting agreement | (1,054 | ) | — | (1,054 | ) | |||||||
Total Financial and Derivative Assets subject to a netting agreement | $ | 162 | $ | — | $ | 162 | ||||||
Financial Assets, Derivative Assets, and Collateral Held by Counterparty | ||||||||||||
Gross Amounts Not Offset in | ||||||||||||
the Statement of Assets and | ||||||||||||
Liabilities | ||||||||||||
Net Amounts | ||||||||||||
of Assets | ||||||||||||
Presented in | ||||||||||||
the Statement | Financial and | |||||||||||
of Assets and | Derivative | Collateral | ||||||||||
Counterparty | Liabilities | Instruments | Received^ | Net Amount | ||||||||
Bank of Montreal | $ | 25 | $ | 19 | $ | — | $ | 6 | ||||
Barclays | 91 | — | — | 91 | ||||||||
Royal Bank of Canada | 22 | 18 | — | 4 | ||||||||
State Street | 24 | 19 | — | 5 | ||||||||
Total | $ | 162 | $ | 56 | $ | — | $ | 106 |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 57
Russell Investment Funds
Equity Growth Strategy Fund
Balance Sheet Offsetting of Financial and Derivative Instruments, continued —
June 30, 2018 (Unaudited)
Amounts in thousands | |||||||||||
Offsetting of Financial Liabilities and Derivative Liabilities | |||||||||||
Gross | Net Amounts | ||||||||||
Amounts | of Liabilities | ||||||||||
Gross | Offset in the | Presented in | |||||||||
Amounts of | Statement of | the Statement | |||||||||
Recognized | Assets and | of Assets and | |||||||||
Description | Location: Statement of Assets and Liabilities - Liabilities | Liabilities | Liabilities | Liabilities | |||||||
Futures Contracts | Variation margin on futures contracts | $ | 39 | $ | — | $ | 39 | ||||
Foreign Currency Exchange Contracts | Unrealized depreciation on foreign currency exchange contracts | 55 | — | 55 | |||||||
Options Written Contracts | Options written, at fair value | 20 | — | 20 | |||||||
Credit Default Swap Contracts | Credit default swap contracts, at fair value | 81 | — | 81 | |||||||
Total Financial and Derivative Liabilities | 195 | — | 195 | ||||||||
Financial and Derivative Liabilities not subject to a netting agreement | (139 | ) | — | (139 | ) | ||||||
Total Financial and Derivative Liabilities subject to a netting agreement | $ | 56 | $ | — | $ | 56 | |||||
Financial Liabilities, Derivative Liabilities, and Collateral Pledged by Counterparty | |||||||||||
Gross Amounts Not Offset in | |||||||||||
the Statement of Assets and | |||||||||||
Liabilities | |||||||||||
Net Amounts | |||||||||||
of Liabilities | |||||||||||
Presented in | |||||||||||
the Statement | Financial and | ||||||||||
of Assets and | Derivative | Collateral | |||||||||
Counterparty | Liabilities | Instruments | Pledged^ | Net Amount | |||||||
Bank of Montreal | $ | 19 | $ | 19 | $ | — | $ | — | |||
Royal Bank of Canada | 18 | 18 | — | — | |||||||
State Street | 19 | 19 | — | — | |||||||
Total | $ | 56 | $ | 56 | $ | — | $ | — |
^ Collateral received or pledged amounts may not reconcile to those disclosed in the Statement of Assets and Liabilities due to the inclusion of off-Balance
Sheet collateral and adjustments made to exclude overcollateralization.
For further disclosure on derivatives and counterparty risk see note 2 in the Notes to Financial Statements.
See accompanying notes which are an integral part of the financial statements.
58 Equity Growth Strategy Fund
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Equity Growth Strategy Fund
Statement of Assets and Liabilities — June 30, 2018 (Unaudited)
Amounts in thousands | ||
Assets | ||
Investments, at identified cost | $ | 43,719 |
Investments, at fair value(>) | 52,554 | |
Cash | 23,837 | |
Unrealized appreciation on foreign currency exchange contracts | 71 | |
Receivables: | ||
Fund shares sold | 17 | |
From affiliates | 3 | |
From broker(a)(b)(c) | 3,311 | |
Variation margin on futures contracts | 615 | |
Total return swap contracts, at fair value(8) | 91 | |
Total assets | 80,499 | |
Liabilities | ||
Payables: | ||
Due to broker (d)(e) | 24,921 | |
Investments purchased | 17 | |
Accrued fees to affiliates | 2 | |
Other accrued expenses | 35 | |
Variation margin on futures contracts | 39 | |
Unrealized depreciation on foreign currency exchange contracts | 55 | |
Options written, at fair value(x) | 20 | |
Credit default swap contracts, at fair value(+) | 81 | |
Total liabilities | 25,170 | |
Net Assets | $ | 55,329 |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 59
Russell Investment Funds
Equity Growth Strategy Fund
Statement of Assets and Liabilities, continued — June 30, 2018 (Unaudited)
Amounts in thousands | |||
Net Assets Consist of: | |||
Undistributed (overdistributed) net investment income | $ | 229 | |
Accumulated net realized gain (loss) | (2,441 | ) | |
Unrealized appreciation (depreciation) on: | |||
Investments | (102 | ) | |
Investments in affiliated funds | 8,937 | ||
Futures contracts | 173 | ||
Options written | 137 | ||
Foreign currency exchange contracts | 16 | ||
Total return swap contracts | 91 | ||
Foreign currency-related transactions | 4 | ||
Shares of beneficial interest | 58 | ||
Additional paid-in capital | 48,227 | ||
Net Assets | $ | 55,329 | |
Net Asset Value, offering and redemption price per share: | |||
Net asset value per share: (#) | $ | 9.52 | |
Net assets | $ | 55,328,510 | |
Shares outstanding ($. 01 par value) | 5,814,280 | ||
Amounts in thousands | |||
(x) Premiums received on options written | $ | 157 | |
(8) Total return swap contracts - premiums paid (received) | $ | — | |
(+) Credit default swap contracts - premiums paid (received) | $ | (81 | ) |
(>) Investments in affiliated funds | $ | 52,115 | |
(a) Receivable from Broker for Futures | $ | 532 | |
(b) Receivable from Broker for Swaps | $ | 2,579 | |
(c) Receivable from Broker for Options | $ | 200 | |
(d) Due to Broker for Swaps | $ | 2,450 | |
(e) Due to Broker for Options | $ | 22,471 | |
(#) 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.
60 Equity Growth Strategy Fund
Russell Investment Funds
Equity Growth Strategy Fund
Statement of Operations — For the Period Ended June 30, 2018 (Unaudited)
Amounts in thousands | |||
Investment Income | |||
Income distributions from affiliated funds | $ | 328 | |
Expenses | |||
Advisory fees | 56 | ||
Administrative fees | 12 | ||
Custodian fees | 16 | ||
Transfer agent fees | 1 | ||
Professional fees | 17 | ||
Trustees’ fees | 1 | ||
Printing fees | 6 | ||
Miscellaneous | 5 | ||
Expenses before reductions | 114 | ||
Expense reductions | (72 | ) | |
Net expenses | 42 | ||
Net investment income (loss) | 286 | ||
Net Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investments | 110 | ||
Investments in affiliated funds | 62 | ||
Futures contracts | (609 | ) | |
Foreign currency exchange contracts | 65 | ||
Total return swap contracts | (153 | ) | |
Credit default swap contracts | (24 | ) | |
Capital gain distributions from affiliated funds | 775 | ||
Net realized gain (loss) | 226 | ||
Net change in unrealized appreciation (depreciation) on: | |||
Investments | (130 | ) | |
Investments in affiliated funds | (1,046 | ) | |
Futures contracts | 327 | ||
Options written | 137 | ||
Foreign currency exchange contracts | 70 | ||
Total return swap contracts | 96 | ||
Credit default swap contracts | 23 | ||
Foreign currency-related transactions | 4 | ||
Net change in unrealized appreciation (depreciation) | (519 | ) | |
Net realized and unrealized gain (loss) | (293 | ) | |
Net Increase (Decrease) in Net Assets from Operations | $ | (7 | ) |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 61
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Equity Growth Strategy Fund
Statements of Changes in Net Assets
Period | ||||||||||||||
Ended June 30, 2018 | Fiscal Year Ended | |||||||||||||
Amounts in thousands | (Unaudited) | December 31, 2017 | ||||||||||||
Increase (Decrease) in Net Assets | ||||||||||||||
Operations | ||||||||||||||
Net investment income (loss) | $ | 286 | $ | 1,940 | ||||||||||
Net realized gain (loss) | 226 | 3,504 | ||||||||||||
Net change in unrealized appreciation (depreciation) | (519 | ) | 3,000 | |||||||||||
Net increase (decrease) in net assets from operations | (7 | ) | 8,444 | |||||||||||
Distributions | ||||||||||||||
From net investment income | (155 | ) | (1,736 | ) | ||||||||||
From net realized gain | (2,402 | ) | (1,007 | ) | ||||||||||
Net decrease in net assets from distributions | (2,557 | ) | (2,743 | ) | ||||||||||
Share Transactions* | ||||||||||||||
Net increase (decrease) in net assets from share transactions | 1,947 | 2,081 | ||||||||||||
Total Net Increase (Decrease) in Net Assets | (617 | ) | 7,782 | |||||||||||
Net Assets | ||||||||||||||
Beginning of period | 55,946 | 48,164 | ||||||||||||
End of period | $ | 55,329 | $ | 55,946 | ||||||||||
Undistributed (overdistributed) net investment income included in net assets | $ | 229 | $ | 98 | ||||||||||
* Share transaction amounts (in thousands) for the periods ended June 30, 2018 and December 31, 2017 were as follows: | ||||||||||||||
2018 (Unaudited) | 2017 | |||||||||||||
Shares | Dollars | Shares | Dollars | |||||||||||
Proceeds from shares sold | 163 | $ | 1,586 | 790 | $ | 7,420 | ||||||||
Proceeds from reinvestment of distributions | 264 | 2,557 | 283 | 2,743 | ||||||||||
Payments for shares redeemed | (226 | ) | (2,196 | ) | (861 | ) | (8,082 | ) | ||||||
Total increase (decrease) | 201 | $ | 1,947 | 212 | $ | 2,081 |
See accompanying notes which are an integral part of the financial statements.
62 Equity Growth Strategy Fund
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Russell Investment Funds
Equity Growth Strategy Fund
Financial Highlights — For the Periods Ended
For a Share Outstanding Throughout Each Period. | |||||||||||||||||
$ | |||||||||||||||||
$ | Net | $ | $ | $ | $ | ||||||||||||
Net Asset Value, | Investment | Net Realized | Total from | Distributions | Distributions | ||||||||||||
Beginning of | Income (Loss) | and Unrealized | Investment | from Net | from Net | ||||||||||||
Period | (a)(b)(f) | Gain (Loss) | Operations | Investment Income | Realized Gain | ||||||||||||
June 30, 2018(1) | 9.97 | . 05 | (. 04 | ) | . 01 | (. 03 | ) | (. 43 | ) | ||||||||
December 31, 2017 | 8.92 | . 35 | 1.21 | 1.56 | (. 32 | ) | (. 19 | ) | |||||||||
December 31, 2016 | 8.28 | . 17 | . 72 | . 89 | (. 25 | ) | — | ||||||||||
December 31, 2015 | 9.46 | . 16 | (. 50 | ) | (. 34 | ) | (. 13 | ) | (. 71 | ) | |||||||
December 31, 2014 | 9.60 | . 30 | . 04 | . 34 | (. 32 | ) | (. 16 | ) | |||||||||
December 31, 2013 | 8.21 | . 23 | 1.39 | 1.62 | (. 23 | ) | — | ||||||||||
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 64
% | % | % | |||||||||||||||
$ | $ | Ratio of Expenses | Ratio of Expenses | Ratio of Net | |||||||||||||
Net Asset Value, | % | Net Assets, | to Average | to Average | Investment Income | % | |||||||||||
$ | End of | Total | End of Period | Net Assets, | Net Assets, | to Average | Portfolio | ||||||||||
Total Distributions | Period | Return(c)(h) | (000 | ) | Gross(d)(e) | Net(d)(e)(f) | Net Assets(b)(c)(f) | Turnover Rate(c) | |||||||||
(. 46 | ) | 9.52 | . 11 | 55,329 | . 41 | . 15 | 0.51 | 10 | |||||||||
(. 51 | ) | 9.97 | 17.67 | 55,946 | . 43 | . 14 | 3.72 | 35 | |||||||||
(. 25 | ) | 8.92 | 10.85 | 48,164 | . 40 | . 12 | 1.97 | 21 | |||||||||
(. 84 | ) | 8.28 | (3.87 | ) | 48,051 | . 39 | . 11 | 1.73 | 31 | ||||||||
(. 48 | ) | 9.46 | 3.48 | 52,403 | . 40 | . 10 | 3.04 | 25 | |||||||||
(. 23 | ) | 9.60 | 19.81 | 50,254 | . 41 | . 10 | 2.55 | 17 |
See accompanying notes which are an integral part of the financial statements.
Equity Growth Strategy Fund 65
Russell Investment Funds
Equity Growth Strategy Fund
Related Party Transactions, Fees and Expenses (Unaudited)
Accrued fees payable to affiliates for the period ended June 30, 2018 were as follows: | ||
Administration fees | $ | 1,962 |
Transfer agent fees | 203 | |
Trustee fees | 90 | |
$ | 2,255 |
Transactions (amounts in thousands) during the period ended June 30, 2018 with funds which are, or were, an affiliated company | ||||||||||||||||||||
are as follows: | ||||||||||||||||||||
Fair Value, | Change in | |||||||||||||||||||
Beginning of | Realized Gain | Unrealized | Fair Value, End | Income | Capital Gains | |||||||||||||||
Period | Purchases | Sales | (Loss) | Gain (Loss) | of Period | Distributions | Distributions | |||||||||||||
RIC Commodity Strategies Fund | $ | 1,707 | $ | 18 | $ | 136 | $ | (80 | ) | $ | 84 | $ | 1,593 | $ | — | $ | — | |||
RIC Global Infrastructure Fund | 1,636 | 74 | 495 | 15 | (45 | ) | 1,185 | 1 | — | |||||||||||
RIF Global Real Estate Securities | ||||||||||||||||||||
Fund | 300 | 501 | 56 | (2 | ) | (7 | ) | 736 | 12 | — | ||||||||||
RIC U. S. Defensive Equity Fund | 3,990 | 79 | 264 | 7 | 63 | 3,875 | 8 | — | ||||||||||||
RIC U. S. Dynamic Equity Fund | 2,956 | 61 | 221 | (1 | ) | 49 | 2,844 | 7 | — | |||||||||||
RIF U. S. Small Cap Equity Fund | 8,076 | 709 | 872 | — | (57 | ) | 7,856 | 151 | 438 | |||||||||||
RIF U. S. Strategic Equity Fund | 3,197 | 170 | 238 | 2 | (43 | ) | 3,088 | 42 | 72 | |||||||||||
RIC Global Opportunistic Credit | ||||||||||||||||||||
Fund | 2,772 | 52 | 2,380 | 52 | (58 | ) | 438 | 7 | — | |||||||||||
RIC Unconstrained Total Return | ||||||||||||||||||||
Fund | 2,494 | 1,972 | 273 | — | 18 | 4,211 | 47 | — | ||||||||||||
RIC Emerging Markets Fund | 5,865 | 656 | 562 | 65 | (476 | ) | 5,548 | — | — | |||||||||||
RIC Global Equity Fund | 11,434 | 362 | 582 | (20 | ) | 67 | 11,261 | — | — | |||||||||||
RIF International Developed Markets | ||||||||||||||||||||
Fund | 10,004 | 566 | 493 | 24 | (641 | ) | 9,460 | 53 | 265 | |||||||||||
U. S. Cash Management Fund | 19 | 1 | — | — | — | 20 | — | — | ||||||||||||
$ | 54,450 | $ | 5,221 | $ | 6,572 | $ | 62 | $ | (1,046 | ) | $ | 52,115 | $ | 328 | $ | 775 |
Federal Income Taxes (Unaudited) | ||||
At June 30, 2018, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows: | ||||
Cost of Investments | $ | 45,917,801 | ||
Unrealized Appreciation | $ | 7,569,984 | ||
Unrealized Depreciation | (599,832 | ) | ||
Net Unrealized Appreciation (Depreciation) | $ | 6,970,152 |
Net investment income and net realized gains (losses) in the financial statements may differ from taxable net investment
income and net realized gains (losses). Capital accounts within the financial statements are adjusted for permanent
differences between book and tax accounting. Book-tax differences may be due to foreign currency gains and losses,
reclassifications of dividends and differences in treatment of income from swaps. These adjustments have no impact on
the net assets. At June 30, 2018, there were no adjustments to the Statement of Assets and Liabilities.
See accompanying notes which are an integral part of the financial statements.
66 Equity Growth Strategy Fund
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Schedule of Investments — June 30, 2018 (Unaudited)
Footnotes:
(å) Currency balances were pledged in connection with futures contracts purchased (sold), options written, or swaps entered into by the
Fund. See Statement of Assets and Liabilities.
(ÿ) Notional Amount in thousands.
(8) Unrounded units.
(@) Affiliate
(1) Monthly payment frequency
(2) Quarterly payment frequency
(3) Semi-annual payment frequency
(4) Annual payment frequency
(5) Payment at termination
Abbreviations:
144A - Represents private placement security for qualified buyers according to rule 144A of the Securities Act of 1933.
ADR - American Depositary Receipt
ADS - American Depositary Share
BBSW - Bank Bill Swap Reference Rate
CIBOR - Copenhagen Interbank Offered Rate
CME - Chicago Mercantile Exchange
CMO - Collateralized Mortgage Obligation
CVO - Contingent Value Obligation
EMU - European Economic and Monetary Union
EURIBOR - Euro Interbank Offered Rate
FDIC - Federal Deposit Insurance Company
GDR - Global Depositary Receipt
GDS - Global Depositary Share
HIBOR – Hong Kong Interbank Offered Rate
LIBOR - London Interbank Offered Rate
NIBOR - Norwegian Interbank Offered Rate
PIK - Payment in Kind
PRIBOR – Prague Interbank Offered Rate
REMIC - Real Estate Mortgage Investment Conduit
SIBOR – Singapore Interbank Offered Rate
STRIP - Separate Trading of Registered Interest and Principal of Securities
TBA - To Be Announced Security
UK - United Kingdom
Notes to Schedule of Investments 67
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Schedule of Investments, continued — June 30, 2018 (Unaudited)
Foreign Currency Abbreviations: | ||
ARS - Argentine peso | HUF - Hungarian forint | PKR - Pakistani rupee |
AUD - Australian dollar | IDR - Indonesian rupiah | PLN - Polish zloty |
BRL - Brazilian real | ILS - Israeli shekel | RUB - Russian ruble |
CAD - Canadian dollar | INR - Indian rupee | SEK - Swedish krona |
CHF - Swiss franc | ISK - Icelandic krona | SGD - Singapore dollar |
CLP - Chilean peso | ITL - Italian lira | SKK - Slovakian koruna |
CNY - Chinese yuan renminbi | JPY - Japanese yen | THB - Thai baht |
COP - Colombian peso | KES - Kenyan schilling | TRY - Turkish lira |
CRC - Costa Rican colon | KRW - South Korean won | TWD - Taiwanese dollar |
CZK - Czech koruna | MXN - Mexican peso | USD - United States dollar |
DKK - Danish krone | MYR – Malaysian ringgit | VEB - Venezuelan bolivar |
EGP - Egyptian pound | NOK - Norwegian krone | VND - Vietnamese dong |
EUR - Euro | NZD - New Zealand dollar | ZAR - South African rand |
GBP - British pound sterling | PEN - Peruvian nuevo sol | |
HKD – Hong Kong dollar | PHP – Philippine peso |
68 Notes to Schedule of Investments
Russell Investment Funds
LifePoints® Variable Target Portfolio Series
Notes to Financial Highlights — June 30, 2018 (Unaudited)
(1) For the period ended June 30, 2018 (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) The calculation includes only those expenses charged directly to the Fund and does not include expenses charged to the Underlying Funds in which
the Fund invests.
(f) May reflect amounts waived and reimbursed by Russell Investment Management, LLC (“RIM”).
(g) Less than $.01 per share.
(h) The total return does not reflect any Insurance Company Separate Account or Policy Charges.
Notes to Financial Highlights 69
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements — June 30, 2018 (Unaudited)
1. Organization
Russell Investment Funds (the “Investment Company” or “RIF”) is a series investment company with nine different investment
portfolios referred to as funds (each a “Fund” and collectively the “Funds”). These financial statements report on four of these
Funds. The Investment Company provides the investment base for one or more variable insurance products issued by one or more
insurance companies. These Funds are offered at net asset value (“NAV”) to qualified insurance company separate accounts offering
variable insurance products. The Investment Company is registered under the Investment Company Act of 1940, as amended
(“Investment Company Act”), as an open-end management investment company. It is organized and operated as a Massachusetts
business trust under a Second Amended and Restated Master Trust Agreement dated March 1, 2018, as amended (“Master Trust
Agreement”), and the provisions of Massachusetts law governing the operation of a Massachusetts business trust. The Investment
Company’s Master Trust Agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial
interest. Each of the Funds is diversified. Under the Investment Company Act a diversified company is defined as a management
company which meets the following requirements: at least 75% of the value of its total assets is represented by cash and cash
equivalents (including receivables), government securities, securities of other investment companies, and other securities for the
purposes of this calculation limited in respect of any one issuer to an amount not greater in value than five percent of the value of
the total assets of such management company and to not more than 10% of the outstanding voting securities of such issuer.
Each of the Funds is a “fund of funds” and diversifies its assets by investing principally, in shares of several other RIF Funds and in
certain Russell Investment Company (“RIC”) Funds (the “Underlying Funds”). Each Fund seeks to achieve its specific investment
objective by investing in different combinations of the Underlying Funds. In addition to investing in the Underlying Funds, Russell
Investment Management, LLC (“RIM”), the Funds’ investment adviser, may seek to actively manage the Funds' overall exposures
by investing in derivatives, including futures, options, forwards and swaps, that RIM believes will achieve the desired exposures for
the Funds. The Funds may hold cash in connection with these investments. The Funds usually, but not always, pursue a strategy of
being fully invested by exposing their cash to the performance of segments of the global equity market by purchasing index futures
contracts (also known as "equitization").
Each Fund intends its strategy of investing in combinations of equity, fixed income, multi-asset and alternative Underlying Funds
to result in investment diversification that an investor could otherwise achieve only by holding numerous individual investments.
A Fund’s actual allocation may vary from the target strategic asset allocation at any point in time (1) due to market movements, (2)
by up to +/- 5% at the equity, fixed income, multi-asset or alternative category level based on RIM’s capital markets research, and/
or (3) due to the implementation over a period of time of a change to the target strategic asset allocation including the addition of a
new Underlying Fund. There may be no changes in the asset allocation or to the Underlying Funds in a given year or such changes
may be made one or more times in a year.
The following table shows the Funds' approximate expected target strategic asset allocation effective on or about May 1, 2018
to equity, fixed income, multi-asset, and alternative asset classes. The equity Underlying Funds in which the Funds may invest
include the RIC U.S. Defensive Equity, RIC U.S. Dynamic Equity, RIF U.S. Small Cap Equity, RIF U.S. Strategic Equity, RIC
Emerging Markets, RIC Global Equity, and RIF International Developed Markets Funds. The fixed income Underlying Funds in
which the Funds may invest include the RIC Global Opportunistic Credit, RIC Investment Grade Bond, RIC Short Duration Bond,
RIC Unconstrained Total Return, and RIF Strategic Bond Funds. The multi-asset Underlying Funds in which the Funds may invest
include the RIC Multi-Strategy Income Fund. The alternative Underlying Funds in which the Funds may invest include the RIC
Commodity Strategies, RIC Global Infrastructure and RIF Global Real Estate Securities Funds.
Asset Allocation* | ||||||||
Moderate | Balanced | Growth | ||||||
Strategy | Strategy | Strategy | Equity Growth | |||||
Fund | Fund | Fund | Strategy Fund | |||||
Equity | 29.5 | % | 51 | % | 70 | % | 85 | % |
Fixed Income | 53 | % | 38 | % | 22 | % | 7 | % |
Multi-Asset | 10 | % | 4 | % | - | % | - | % |
Alternative ** | 7.5 | % | 7 | % | 8 | % | 8 | % |
* Actual asset allocation may vary.
** Alternative Underlying Funds pursue investment strategies that differ from those of traditional broad market equity or fixed income funds.
70 Notes to Financial Statements
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
2. Significant Accounting Policies
The Funds’ financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”)
which require the use of management estimates and assumptions at the date of the financial statements. Actual results could differ
from those estimates. The Funds are considered investment companies under U.S. GAAP and follow the accounting and reporting
guidance applicable to investment companies. The following is a summary of the significant accounting policies consistently
followed by each Fund in the preparation of its financial statements.
Security Valuation
The Funds value portfolio securities according to Board-approved securities valuation procedures which include market and fair
value procedures. The Board has delegated the responsibility for administration of the securities valuation procedures to Russell
Investments Fund Services, LLC ("RIFUS"). The Funds value the shares of the Underlying Funds at the current NAV per share
of each Underlying Fund. The Funds have adopted the authoritative guidance under U.S. GAAP for estimating the fair value of
investments in funds that have calculated NAV per share in accordance with the specialized accounting guidance for investment
companies. Accordingly, the Funds estimate the fair value of an investment in a fund using the NAV per share without further
adjustment as a practical expedient, if the NAV per share of the investment is determined in accordance with the specialized
accounting guidance for investment companies as of the reporting entity’s measurement date.
U.S. GAAP defines fair value as the price that a Fund would receive to sell an asset or pay to transfer a liability in an orderly
transaction between market participants at the measurement date. It establishes a fair value hierarchy that prioritizes inputs to
valuation methods and requires a separate disclosure of the fair value hierarchy for each major category of assets and liabilities,
that segregates fair value measurements into levels (Level 1, 2, and 3). The inputs or methodology used for valuing securities are
not necessarily an indication of the risk associated with investing in those securities. Levels 1, 2 and 3 of the fair value hierarchy
are defined as follows:
• Level 1 — Quoted prices (unadjusted) in active markets or exchanges for identical assets and liabilities.
• Level 2 — Inputs other than quoted prices included within Level 1 that are observable, which may include, but are not
limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets
or liabilities in markets that are not active, and inputs such as interest rates, yield curves, implied volatilities, credit spreads
or other market corroborated inputs.
• Level 3 — Significant unobservable inputs based on the best information available in the circumstances, to the extent
observable inputs are not available, which may include assumptions made by RIFUS, acting at the discretion of the Board,
that are used in determining the fair value of investments.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for
example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and
other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable
or unobservable in the market, the determination of fair value requires more judgement. Accordingly, the degree of judgement
exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs or methodology used for valuing
securities are not necessarily an indication of the risk associated with investing in those securities.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes,
the level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that
is significant to the fair value measurement in its entirety.
The valuation techniques and significant inputs used in determining the fair market values of financial instruments categorized as
Level 1 and Level 2 of the fair value hierarchy are as follows:
Derivative instruments are instruments such as foreign currency contracts, futures contracts, options contracts, or swap agreements
that derive their value from underlying asset prices, indices, reference rates, and other inputs or a combination of these factors.
Derivatives may be classified into two groups depending upon the way that they are traded: privately traded over-the-counter
(“OTC”) derivatives that do not go through an exchange or intermediary and exchange-traded derivatives that are traded through
specialized derivatives exchanges or other regulated exchanges. OTC derivatives are normally valued on the basis of broker dealer
quotations or pricing service providers. Depending on the product and the terms of the transaction, the value of the derivative
instrument can be estimated by a pricing service provider using a series of techniques, including simulation pricing models.
The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest
Notes to Financial Statements 71
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
rates, yield curves, dividends and exchange rates. OTC derivatives that use these and similar valuation techniques and inputs as
described above are categorized as Level 2 of the fair value hierarchy, with the exception of foreign currency spot contracts which
are categorized as Level 1 of the fair value hierarchy. OTC derivatives that use broker dealer quotations are categorized as level 3 of
the fair value hierarchy. Exchange-traded derivatives are valued based on the last reported sales price on the day of valuation and
are categorized as Level 1 of the fair value hierarchy.
Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are valued at
the daily settlement price determined by the respective exchange. For centrally cleared credit default swaps, the clearing facility
requires its members to provide actionable levels across complete term structures. These levels along with external third-party
prices are used to produce daily settlement prices. These securities are categorized as Level 2 of the fair value hierarchy. Centrally
cleared interest rate swaps are valued using a pricing model that references the underlying rates including the Overnight Indexed
Swap Rate (“OIS”) and London Interbank Offered Rate (“LIBOR”) forward rate to produce the daily settlement price. These
securities are categorized as Level 2 of the fair value hierarchy.
For movements between the levels within the fair value hierarchy, the Funds have adopted a policy of recognizing the transfers as
of period end.
For the period ended June 30, 2018, there was no movement between levels of the fair value hierarchy.
Level 3 Fair Value Investments
The valuation techniques and significant inputs used in determining the fair values of financial instruments classified as Level 3 of
the fair value hierarchy are as follows:
Securities and other assets for which market quotes are not readily available, or are not reliable, are valued at fair value as
determined in good faith by RIFUS and are categorized as Level 3 of the fair value hierarchy. Market quotes are considered not
readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information or
broker quotes). When RIFUS applies fair valuation methods that use significant unobservable inputs to determine a Fund’s NAV,
securities will not be priced on the basis of quotes from the primary market in which they are traded, but instead may be priced by
another method that RIFUS believes accurately reflects fair value and will be categorized as Level 3 of the fair value hierarchy. Fair
value pricing may require subjective determinations about the value of a security. While the securities valuation procedures are
intended to result in a calculation of a Fund’s NAV that fairly reflects security values as of the time of pricing, the process cannot
guarantee that fair values determined by RIFUS would accurately reflect the price that a Fund could obtain for a security if it were
to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by a Fund may differ
from the value that would be realized if the security was sold.
RIFUS employs third party pricing vendors to provide fair value measurements. RIFUS oversees third-party pricing service
providers in order to support the valuation process throughout the year.
If third party evaluated vendor pricing is neither available nor deemed to be indicative of fair value, RIFUS may elect to obtain
indicative market quotations (“broker quotes”) directly from the broker or passed through from a third party vendor. In the event
that the source of fair value is from a single source broker quote, these securities are classified as Level 3 per the fair value
hierarchy. Broker quotes are typically received from established market participants. Although independently received on a daily
basis, RIFUS does not have the transparency to view the underlying inputs which support the broker quotes. Significant changes
in the broker quote would have direct and proportional changes in the fair value of the security. There is a third-party pricing
exception to the quantitative disclosure requirement when prices are not determined by the reporting entity. RIFUS is exercising
this exception and has made a reasonable attempt to obtain quantitative information from the third party pricing vendors regarding
the unobservable inputs used.
For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances
for reported fair values that present changes attributable to total realized and unrealized gains or losses, purchases and sales, and
transfers in/out of the Level 3 category during the period. Additionally, U.S. GAAP requires quantitative information regarding the
significant unobservable inputs used in the determination of fair value of assets categorized as Level 3 in the fair value hierarchy. In
accordance with the requirements of U.S. GAAP, a fair value hierarchy, a Level 3 reconciliation and an additional disclosure about
fair value measurements, if any, has been included in the Presentation of Portfolio Holdings for each respective Fund.
72 Notes to Financial Statements
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Investment Transactions
Investment transactions are reflected as of the trade date for financial reporting purposes. This may cause the NAV stated in the
financial statements to be different from the NAV at which shareholders may transact. Realized gains and losses from securities
transactions, if applicable, are recorded on the basis of specific identified cost incurred within a particular Fund.
Investment Income
Distributions of income and capital gains from the Underlying Funds are recorded on the ex-dividend date.
Federal Income Taxes
Since the Investment Company is a Massachusetts business trust, each Fund is a separate corporate taxpayer and determines its
net investment income and capital gains (or losses) and the amounts to be distributed to each Fund’s shareholders without regard
to the income and capital gains (or losses) of the other Funds.
For each year, each Fund intends to qualify or continue to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”) and intends to distribute all of its taxable income and capital gains.
Therefore, no federal income tax provision is required for the Funds.
Each Fund files a U.S. tax return. At June 30, 2018, the Funds had recorded no liabilities for net unrecognized tax benefits relating
to uncertain income tax positions they have taken or expect to take in future tax returns. While the statute of limitations remains
open to examine the Funds’ U.S. tax returns filed for the fiscal years ended December 31, 2015 through December 31, 2017, no
examinations are in progress or anticipated at this time. The Funds are not aware of any tax positions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
The Funds comply with the authoritative guidance for uncertainty in income taxes which requires management to determine whether
a tax position of the Funds is more likely than not to be sustained upon examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the
tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being
realized upon ultimate settlement with the relevant taxing authority. Management determined that no accruals need to be made in
the financial statements due to uncertain tax positions. Management continually reviews and adjusts the Funds’ liability for income
taxes based on analyses of tax laws and regulations, as well as their interpretations, and other relevant factors.
Dividends and Distributions to Shareholders
Income dividends, capital gain distributions and return of capital, if any, are recorded on the ex-dividend date. Income dividends
are generally declared and paid quarterly. Capital gain distributions are generally declared and paid annually. An additional
distribution may be paid by the Funds to avoid imposition of federal income and excise tax on any remaining undistributed capital
gains and net investment income.
The timing and characterization of certain income and capital gain distributions are determined in accordance with federal tax
regulations which may differ from U.S. GAAP. As a result, net investment income and net realized gain (or loss) from investment
transactions for a reporting period may differ significantly from distributions during such period. The differences between tax
regulations and U.S. GAAP primarily relate to investments in options, futures, forward contracts, swap contracts, the Underlying
Funds sold at a loss, wash sale deferrals and capital loss carryforwards. Accordingly, the Funds may periodically make reclassifications
among certain of their capital accounts without impacting their NAVs.
Expenses
Expenses included in the accompanying financial statements reflect the expenses of each Fund and do not include those expenses
incurred by the Underlying Funds. Because the Underlying Funds have varied expense and fee levels and the Funds may own
different proportions of the Underlying Funds at different times, the amount of the Underlying Funds’ fees and expenses incurred
indirectly by the Funds will vary.
The Funds pay their own expenses other than those expressly assumed by RIM, the Funds’ adviser, or RIFUS. Most expenses can
be directly attributed to the individual Funds. Expenses which cannot be directly attributed to a specific Fund are allocated among
all Funds principally based on their relative net assets.
Notes to Financial Statements 73
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Derivatives
The Funds may invest in derivatives. Derivatives are instruments or agreements whose value is derived from an underlying security
or index. They include options, futures, swaps and forwards. These instruments offer unique characteristics and risks that facilitate
the Funds’ investment strategies.
The Funds typically use derivatives in three ways: exposing cash to markets, hedging and return enhancement. In addition, the
Funds may enter into foreign exchange contracts for trade settlement purposes. The Funds may pursue their strategy of being fully
invested by exposing cash to the performance of segments of the global equity market by purchasing index futures contracts. This
is intended to cause the Funds to perform as though cash were actually invested in the global equity market.
Hedging may be used by the Funds to limit or control risks, such as adverse movements in exchange rates and interest rates. Return
enhancement can be accomplished through the use of derivatives in a Fund, including using derivatives as a substitute for holding
physical securities, and using them to express various macro views (e.g., interest rate movements, currency movements, and macro
credit strategies). By purchasing certain instruments, the Funds may more effectively achieve the desired portfolio characteristics
that assist them in meeting their investment objectives. Depending on how the derivatives are structured and utilized, the risks
associated with them may vary widely. These risks include, but are not limited to, market risk, liquidity risk, leveraging risk,
counterparty risk, basis risk, reinvestment risk, political risk, prepayment risk, extension risk, valuation risk and credit risk.
Futures, certain options and cleared swaps are traded or cleared on an exchange or central exchange clearing house. Exchange-
traded or exchange-cleared transactions generally present less counterparty risk to a Fund. The exchange’s clearing house stands
between the Fund and the broker to the contract and therefore, credit risk is generally limited to the failure of the clearing house and
the clearing member. Cleared swap contracts are subject to clearing house rules, including initial and variation margin requirement,
daily settlement of obligations and the clearing house guarantee of payments to the broker. There is, however, still counterparty risk
due to the insolvency of the broker with respect to any margin held in the brokers’ customer accounts. While clearing members are
required to segregate customer assets from their own assets, in the event of insolvency, there may be a shortfall in the amount of
margin held by the broker for its clients. Collateral and margin requirements for exchange-traded or exchange-cleared derivatives
are established through regulation, as well as set by the broker or applicable clearing house. Margin for exchange-traded and
exchange-cleared transactions are detailed in the Statements of Assets and Liabilities as Receivable from broker and Payable due
to broker for futures and swap contracts. Securities and cash pledged as collateral are reflected as assets on the Statements of Assets
and Liabilities as either a component of Investments at fair value (securities) or Receivable from broker. Cash collateral received
is not typically held in a segregated account and as such is reflected as a liability on the Statement of Assets and Liabilities as Due
to broker. Typically, the Funds and counterparties are not permitted to sell, repledge, rehypothecate or otherwise use collateral
pledged by the other party unless explicitly permitted by each respective governing agreement.
In addition, proposed regulatory changes by the Securities and Exchange Commission ("SEC") relating to a mutual fund's use of
derivatives could potentially limit or impact the Funds' ability to invest in derivatives and adversely affect the value or performance
of the Funds or their derivative investments.
The effects of derivative instruments, categorized by risk exposure, on the Statements of Assets and Liabilities and the Statements
of Operations, for the period ended June 30, 2018, if applicable, are disclosed in the Fair Value of Derivative Instruments table
following each applicable Fund’s Schedule of Investments.
Foreign Currency Exchange Contracts
The Funds may enter into foreign currency exchange spot contracts and forward foreign currency exchange contracts (“FX
contracts”). From time to time, the Funds may enter into FX contracts to hedge certain foreign currency-denominated assets. FX
contracts are recorded at fair value. Certain risks may arise upon entering into these FX contracts from the potential inability
of counterparties to meet the terms of their FX contracts and are generally limited to the amount of unrealized gain on the FX
contracts, if any, that are disclosed in the Statements of Assets and Liabilities.
For the period ended June 30, 2018, the following Funds entered into foreign currency exchange contracts primarily for the
strategies listed below:
74 Notes to Financial Statements
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Funds | Strategies |
Moderate Strategy Fund | Return enhancement and hedging |
Balanced Strategy Fund | Return enhancement and hedging |
Growth Strategy Fund | Return enhancement and hedging |
Equity Growth Strategy Fund | Return enhancement and hedging |
The Funds’ foreign currency contract notional dollar values outstanding fluctuate throughout the fiscal year as required to meet
strategic requirements. The following tables illustrate the quarterly volume of foreign currency contracts. For the purpose of this
disclosure, volume is measured by the amounts bought and sold in USD.
Outstanding Contract Amounts Sold | ||||||
Quarter Ended | March 31, 2018 | June 30, 2018 | ||||
Moderate Strategy Fund | $ | 5,194,256 | $ | 5,034,352 | ||
Balanced Strategy Fund | 31,556,544 | 28,068,632 | ||||
Growth Strategy Fund | 26,558,817 | 21,434,191 | ||||
Equity Growth Strategy Fund | 7,195,210 | 7,187,826 | ||||
Outstanding Contract Amounts Bought | ||||||
Quarter Ended | March 31, 2018 | June 30, 2018 | ||||
Moderate Strategy Fund | $ | 5,198,851 | $ | 5,017,773 | ||
Balanced Strategy Fund | 31,698,489 | 28,372,462 | ||||
Growth Strategy Fund | 26,737,195 | 21,673,531 | ||||
Equity Growth Strategy Fund | 7,220,785 | 7,217,624 |
Options
The Funds may purchase and sell (write) call and put options on securities and securities indices. Such options are traded on a
national securities exchange or in an OTC market. The Funds may also purchase and sell (write) call and put options on foreign
currencies.
When a Fund writes a covered call or a put option, an amount equal to the premium received by the Fund is included in the Fund’s
Statement of Assets and Liabilities as an asset and as an equivalent liability. The amount of the liability is subsequently marked-
to-market to reflect the current fair value of the option written. The Fund receives a premium on the sale of a call option but gives
up the opportunity to profit from any increase in the value of the underlying instrument above the exercise price of the option, and
when the Fund writes a put option it is exposed to a decline in the price of the underlying instrument.
When a Fund sells an uncovered call option, it does not simultaneously have a long position in the underlying security. When a
Fund sells an uncovered put option, it does not simultaneously have a short position in the underlying security. Uncovered options
are riskier than covered options because there is no underlying security held by the Fund that can act as a partial hedge.
Whether an option which the Fund has written expires on its stipulated expiration date or the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or loss, if the cost of a closing purchase transaction exceeds the premium received when the
option was sold) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is
extinguished. If a call option which the Fund has written is exercised, the Fund realizes a capital gain or loss from the sale of the
underlying security, and the proceeds from such sale are increased by the premium originally received. When a put option which
a Fund has written is exercised, the amount of the premium originally received will reduce the cost of the security which a Fund
purchases upon exercise of the option.
The Funds’ use of written options involves, to varying degrees, elements of market risk in excess of the amount recognized in the
Statements of Assets and Liabilities. The face or contract amounts of these instruments reflect the extent of the Funds’ exposure to
market risk. The risks may be caused by an imperfect correlation between movements in the price of the instrument and the price
of the underlying securities and interest rates.
The Funds may enter into a swaption (an option on a swap). In a swaption, in exchange for an option, the buyer gains the right but
not the obligation to enter into a specified swap agreement with the issuer on a specified future date. The writer of the contract
receives the premium and bears the risk of unfavorable changes in the preset rate on the underlying swap.
For the period ended June 30, 2018, the Funds purchased or sold options primarily for the strategies listed below:
Notes to Financial Statements 75
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Funds | Strategies |
Moderate Strategy Fund | Return enhancement, hedging and exposing cash to markets |
Balanced Strategy Fund | Return enhancement, hedging and exposing cash to markets |
Growth Strategy Fund | Return enhancement, hedging and exposing cash to markets |
Equity Growth Strategy Fund | Return enhancement, hedging and exposing cash to markets |
The Funds’ options contracts notional amounts fluctuate throughout the fiscal year as required to meet strategic requirements. The
following table illustrates the quarterly volume of options contracts measured by notional in USD.
Notional of Options Contracts Outstanding | ||||||
Funds | March 31, 2018 | June 30, 2018 | ||||
Moderate Strategy Fund | $ | 26,162,500 | $ | 11,257,579 | ||
Balanced Strategy Fund | 102,637,500 | 113,194,933 | ||||
Growth Strategy Fund | 32,200,000 | 86,216,415 | ||||
Equity Growth Strategy Fund | 9,487,500 | 21,724,299 |
Futures Contracts
The Funds may invest in futures contracts (i.e., interest rate, foreign currency and index futures contracts). The face or contract
value of these instruments reflect the extent of the Funds’ exposure to off balance sheet risk. The primary risks associated with the
use of futures contracts are an imperfect correlation between the change in fair value of the securities held by the Funds and the
prices of futures contracts, and the possibility of an illiquid market. Upon entering into a futures contract, the Funds are required to
deposit with a broker an amount, termed the initial margin, which typically represents 5% to 10% of the purchase price indicated
in the futures contract. Payments to and from the broker, known as variation margin, are typically required to be made on a daily
basis as the price of the futures contract fluctuates. Changes in initial settlement value are accounted for as unrealized appreciation
(depreciation) until the contracts are terminated, at which time realized gains and losses are recognized.
For the period ended June 30, 2018, the following Funds entered into futures contracts primarily for the strategies listed below:
Funds | Strategies |
Moderate Strategy Fund | Return enhancement, hedging, and exposing cash to markets |
Balanced Strategy Fund | Return enhancement, hedging, and exposing cash to markets |
Growth Strategy Fund | Return enhancement, hedging, and exposing cash to markets |
Equity Growth Strategy Fund | Return enhancement, hedging, and exposing cash to markets |
The Funds' futures contracts notional amounts fluctuate throughout the fiscal year as required to meet strategic requirements. The
following table illustrates the quarterly volume of futures contracts measured by notional in USD.
Notional of Futures Contracts Outstanding | ||||||
Funds | March 31, 2018 | June 30, 2018 | ||||
Moderate Strategy Fund | $ | 38,341,251 | $ | 33,321,061 | ||
Balanced Strategy Fund | 67,721,406 | 76,486,473 | ||||
Growth Strategy Fund | 55,414,444 | 95,512,928 | ||||
Equity Growth Strategy Fund | 16,835,245 | 24,545,890 |
Swap Agreements
The Funds may enter into swap agreements, on either an asset-based or liability-based basis, depending on whether they are
hedging their assets or their liabilities, and will usually enter into swaps on a net basis (i.e., the two payment streams are netted
out, with the Funds receiving or paying only the net amount of the two payments). When a Fund engages in a swap, it exchanges
its obligations to pay or rights to receive payments for the obligations to pay or rights to receive payments of another party (i.e., an
exchange of floating rate payments for fixed rate payments).
The Funds may enter into several different types of swap agreements including credit default, interest rate, total return and currency
swaps. Credit default swaps are a counterparty agreement which allows the transfer of third party credit risk (the possibility that
an issuer will default on its obligation by failing to pay principal or interest in a timely manner) from one party to another. The
lender faces the credit risk from a third party and the counterparty in the swap agrees to insure this risk in exchange for regular
periodic payments. Interest rate swaps are a counterparty agreement, can be customized to meet each party’s needs, and involve the
exchange of a fixed or variable payment per period for a payment that is not fixed. Total return swaps are a counterparty agreement
where two parties exchange two sets of cash flows on predetermined dates for an agreed upon amount of time. The cash flows will
typically be an equity index value swapped with a floating rate such as LIBOR plus or minus a pre-defined spread. Total return
76 Notes to Financial Statements
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
swap agreements are a counterparty agreement intended to expose cash to markets or to effect investment transactions consistent
with those Funds’ investment objectives and strategies. Currency swaps are a counterparty agreement where two parties exchange
specified amounts of different currencies which are followed by each paying the other a series of interest payments that are based
on the principal cash flow. At maturity the principal amounts are returned.
The Funds generally expect to enter into these transactions primarily to preserve a return or spread on a particular investment or
portion of their portfolios or to protect against any increase in the price of securities they anticipate purchasing at a later date, or for
return enhancement. Under most swap agreements entered into by a Fund, the parties' obligations are determined on a "net basis".
The net amount of the excess, if any, of the Funds’ obligations over their entitlements with respect to each swap will be accrued on a
daily basis and an amount of cash or liquid assets having an aggregate NAV at least equal to the accrued excess will be segregated.
To the extent that the Funds enter into swaps on other than a net basis, the amount maintained in a segregated account will be the
full amount of the Funds’ obligations, if any, with respect to such swaps, accrued on a daily basis. If there is a default by the other
party to such a transaction, the Funds will have contractual remedies pursuant to the agreement related to the transaction.
A Fund may not receive the expected amount under a swap agreement if the other party to the agreement defaults or becomes
bankrupt.
Credit Default Swaps
The Funds may enter into credit default swaps. A credit default swap can refer to corporate issues, government issues, asset-backed
securities or an index of assets, each known as the reference entity or underlying asset. Funds may act as either the buyer or the
seller of a credit default swap involving one party making a stream of payments to another party in exchange for the right to receive a
specified return in the event of a default or other credit event. Depending upon the terms of the contract, the credit default swap may
be closed via physical settlement. However, due to the possible or potential instability in the market, there is a risk that the Funds
may be unable to deliver the underlying debt security to the other party to the agreement. Additionally, the Funds may not receive
the expected amount under the swap agreement if the other party to the agreement defaults or becomes bankrupt. In an unhedged
credit default swap, Funds enter into a credit default swap without owning the underlying asset or debt issued by the reference
entity. Credit default swaps allow Funds to acquire or reduce credit exposure to a particular issuer, asset or basket of instruments.
As the seller of protection in a credit default swap, a Fund would be required to pay the par or other agreed-upon value (or otherwise
perform according to the swap contract) of a reference debt obligation to the counterparty in the event of a default (or other specified
credit event) and the counterparty would be required to surrender the reference debt obligation. In return, the Fund would receive
from the counterparty a periodic stream of payments over the term of the contract provided that no credit event has occurred. If no
credit event occurs, the Fund would keep the stream of payments and would have no payment obligations. As a seller of protection,
the Fund would effectively add leverage to its portfolio because, in addition to its total net assets, that Fund would be subject to
investment exposure on the notional amount of the swap.
The Funds may also purchase protection via credit default swap contracts in order to offset the risk of default of debt securities held
in their portfolios or to take a short position in a debt security, in which case the Fund would function as the counterparty referenced
in the preceding paragraph.
If a credit event occurs and cash settlement is not elected, a variety of other deliverable obligations may be delivered in lieu of
the specific referenced obligation. The ability to deliver other obligations may result in a cheapest-to-deliver option (the buyer of
protection’s right to choose the deliverable obligation with the lowest value following a credit event). The Funds may use credit
default swaps to provide a measure of protection against defaults of the issuers (i.e., to reduce risk where Funds own or have
exposure to the referenced obligation) or to take an active long or short position with respect to the likelihood (as measured by the
credit default swap’s spread) of a particular issuer’s default.
Deliverable obligations for credit default swaps on asset-backed securities in most instances are limited to the specific referenced
obligation as performance for asset-backed securities can vary across deals. Prepayments, principal paydowns, and other writedown
or loss events on the underlying mortgage loans will reduce the outstanding principal balance of the referenced obligation. These
reductions may be temporary or permanent as defined under the terms of the swap agreement and the notional amount for the swap
agreement generally will be adjusted by corresponding amounts. The Funds may use credit default swaps on asset-backed securities
to provide a measure of protection against defaults (or other defined credit events) of the referenced obligation or to take an active
long or short position with respect to the likelihood of a particular referenced obligation’s default (or another defined credit event).
Credit default swap agreements on credit indices involve one party making a stream of payments to another party in exchange for
the right to receive a specified return in the event of a write-down, principal shortfall, interest shortfall or default of all or part of
Notes to Financial Statements 77
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
the referenced entities comprising the credit index. A credit index is a basket of credit instruments or exposures designed to be
representative of some part of the credit market as a whole. These indices are made up of reference credits that are judged by a
poll of dealers to be the most liquid entities in the credit default swap market based on the sector of the index. Components of the
indices may include, but are not limited to, investment grade securities, high yield securities, asset-backed securities, emerging
markets, and/or various credit ratings within each sector. Credit indices are traded using credit default swaps with standardized
terms including a fixed spread and standard maturity dates. An index credit default swap references all the names in the index, and
if there is a default, the credit event is settled based on that name’s weight in the index. The composition of the indices changes
periodically, usually every six months, and, for most indices, each name has an equal weight in the index. Traders may use credit
default swaps on indices to speculate on changes in credit quality.
Implied credit spreads, represented in absolute terms, utilized in determining the fair value of credit default swap agreements on
corporate issues as of period-end are disclosed in the Schedules of Investments and generally serve as an indicator of the current
status of the payment/performance risk and represent the likelihood or risk of default (or other defined credit event) for the credit
derivative. The implied credit spread of a particular referenced entity reflects the cost of entering into a credit default swap and
may include upfront payments required to be made to enter into the agreement. For credit default swap agreements on asset-
backed securities and credit indices, the quoted market prices and resulting values serve as the indicator of the current status of
the payment/performance risk. Wider credit spreads and increasing fair values, in absolute terms when compared to the notional
amount of the swap, generally represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk
of default or other credit event occurring as defined under the terms of the agreement. The maximum potential amount of future
payments (undiscounted) that Funds as a seller of protection could be required to make under a credit default swap agreement
equals the notional amount of the agreement. Notional amounts of all credit default swap agreements outstanding as of June 30,
2018, for which a Fund is the seller of protection are disclosed in the Schedules of Investments. These potential amounts would be
partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the
agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by a Fund for
the same referenced entity or entities.
Credit default swaps could result in losses if the Funds do not correctly evaluate the creditworthiness of the company or companies
on which the credit default swap is based. Credit default swap agreements may involve greater risks than if the Funds had invested
in the reference obligation directly since, in addition to risks relating to the reference obligation, credit default swaps are subject
to illiquidity and counterparty risk. A Fund will generally incur a greater degree of risk when it sells a credit default swap than
when it purchases a credit default swap. As a buyer of a credit default swap, a Fund may lose its investment and recover nothing
should a credit event fail to occur and the swap is held to its termination date. As seller of a credit default swap, if a credit event
were to occur, the value of any deliverable obligation received by a Fund, coupled with the upfront or periodic payments previously
received, may be less than what it pays to the buyer, resulting in a loss of value to the Fund.
If the creditworthiness of a Fund’s swap counterparty declines, the risk that the counterparty may not perform could increase,
potentially resulting in a loss to the Fund. To limit the counterparty risk involved in swap agreements, the Funds will only enter
into swap agreements with counterparties that meet certain standards of creditworthiness. Although there can be no assurance that
the Funds will be able to do so, the Funds may be able to reduce or eliminate their exposure under a swap agreement either by
assignment or other disposition, or by entering into an offsetting swap agreement with the same party or another creditworthy party.
The Funds may have limited ability to eliminate their exposure under a credit default swap if the credit quality of the reference
entity or underlying asset has declined.
For the period ended June 30, 2018, the Funds entered into credit default swaps primarily for the strategies listed below:
Funds | Strategies |
Moderate Strategy Fund | Return enhancement, hedging and exposing cash to markets |
Balanced Strategy Fund | Return enhancement, hedging and exposing cash to markets |
Growth Strategy Fund | Return enhancement, hedging and exposing cash to markets |
Equity Growth Strategy Fund | Return enhancement, hedging and exposing cash to markets |
The Funds' period end credit default swap contract notional amounts outstanding fluctuate throughout the fiscal year as required to
meet strategic requirements. The following table illustrates the quarterly volume of credit default swap contracts. For the purpose
of this disclosure, volume is measured by notional amounts outstanding in USD at each quarter end.
78 Notes to Financial Statements
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Credit Default Swap Notional Amounts | ||||||
Outstanding | ||||||
Quarter Ended | March 31, 2018 | June 30, 2018 | ||||
Moderate Strategy Fund | $ | 7,900,000 | $ | 14,700,000 | ||
Balanced Strategy Fund | 13,500,000 | 29,100,000 | ||||
Growth Strategy Fund | 23,800,000 | 6,800,000 | ||||
Equity Growth Strategy Fund | 3,400,000 | 1,400,000 |
Total Return Swaps
The Funds may enter into total return swap agreements to expose cash to markets or to effect investment transactions. Total return
swap agreements are two party contracts entered into primarily by institutional investors for periods ranging from a few weeks to
more than one year. In a standard total return swap transaction, the two parties agree to exchange the returns (or differentials in
rates of return) earned or realized on particular investments or instruments.
The returns to be exchanged between the parties are calculated with respect to a “notional amount” (i.e., a specified dollar amount
that is hypothetically invested in a “basket” of securities representing a particular index).
For the period ended June 30, 2018, the Funds entered into total return swaps primarily for the strategies listed below:
Funds | Strategies |
Moderate Strategy Fund | Return enhancement, hedging and exposing cash to markets |
Balanced Strategy Fund | Return enhancement, hedging and exposing cash to markets |
Growth Strategy Fund | Return enhancement, hedging and exposing cash to markets |
Equity Growth Strategy Fund | Return enhancement, hedging and exposing cash to markets |
The Funds' period end total return swap contract notional amounts outstanding fluctuate throughout the fiscal year as required to
meet strategic requirements. The following table illustrates the quarterly volume of total return swap contracts. For the purpose of
this disclosure, volume is measured by notional amounts outstanding in USD at each quarter end.
Total Return Swap Notional Amounts | ||||||
Outstanding | ||||||
Quarter Ended | March 31, 2018 | June 30, 2018 | ||||
Moderate Strategy Fund | $ | 11,087,728 | $ | 11,206,336 | ||
Balanced Strategy Fund | 44,861,003 | 45,530,179 | ||||
Growth Strategy Fund | 14,504,708 | 14,708,657 | ||||
Equity Growth Strategy Fund | 4,144,202 | 4,201,693 |
Master Agreements
The Funds are parties to International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”)
with counterparties that govern transactions in OTC derivative and foreign exchange contracts entered into by the Funds and
those counterparties. The ISDA Master Agreements contain provisions for general obligations, representations, agreements,
collateral and events of default or termination. Events of termination and default include conditions that may entitle either party
to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement.
Any election to terminate early could be material to the financial statements. Since different types of forward and OTC financial
derivative transactions have different mechanics and are sometimes traded out of different legal entities of a particular counterparty
organization, each type of transaction may be covered by a different ISDA Master Agreement, resulting in the need for multiple
agreements with a single counterparty. As the ISDA Master Agreements are specific to unique operations of different asset types,
they allow a Fund to net its total exposure to a counterparty in the event of a default with respect to all the transactions governed
under a single agreement with a counterparty.
Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern the considerations and factors
surrounding the settlement of certain forward settling transactions, such as delayed delivery by and between a Fund and select
counterparties. The Master Forward Agreements maintain provisions for, among other things, initiation and confirmation, payment
and transfer, events of default, termination, and maintenance of collateral.
Notes to Financial Statements 79
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Disclosure about Offsetting Assets and Liabilities
Balance sheet disclosure is based on various netting agreements between brokers and counterparties, such as ISDA Master
Agreements and Master Forward Agreements. The Funds utilize multiple counterparties. The quantitative disclosure begins with
disaggregation of counterparties by legal entity and the roll up of the data to reflect a single counterparty in the table within the
Funds’ financial statements. Net exposure represents the net receivable (payable) that would be due from/to the counterparty in the
event of default. Exposure from OTC derivatives can only be netted across transactions governed under the same Master Agreement
with the same legal entity.
Guarantees
In the normal course of business, the Funds enter into contracts that contain a variety of representations which provide general
indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that
may be made against the Funds that have not yet occurred. However, the Funds expect the risk of loss to be remote.
Market, Credit and Counterparty Risk
In the normal course of business, the Funds and Underlying Funds trade financial instruments and enter into financial transactions
where risk of potential loss exists due to changes in the market (market risk) or failure of the other party to a transaction to perform
(credit risk). Similar to credit risk, the Funds and Underlying Funds may also be exposed to counterparty risk or risk that an
institution or other entity with which the Funds or Underlying Funds have unsettled or open transactions will default. The potential
loss could exceed the value of the relevant assets recorded in the Funds' and Underlying Funds' financial statements (the “Assets”).
The Assets consist principally of cash due from counterparties and investments. The extent of the Funds' and Underlying Funds'
exposure to market, credit and counterparty risks with respect to the Assets approximates their carrying value as recorded in the
Funds' and Underlying Funds' Statements of Assets and Liabilities.
Global economies and financial markets are becoming increasingly interconnected and political and economic conditions (including
recent instability and volatility) and events (including natural disasters) in one country, region or financial market may adversely
impact issuers in a different country, region or financial market. As a result, issuers of securities held by a Fund or an Underlying
Fund may experience significant declines in the value of their assets and even cease operations. Such conditions and/or events may
not have the same impact on all types of securities and may expose a Fund or an Underlying Fund to greater market and liquidity
risk and potential difficulty in valuing portfolio instruments held. This could cause a Fund or an Underlying Fund to underperform
other types of investments.
3. Investment Transactions
Securities
During the period ended June 30, 2018, purchases and sales of investment securities (excluding short-term investments, options
and futures) were as follows:
Purchases | Sales | |||||
Moderate Strategy Fund | $ | 14,076,542 | $ | 18,504,703 | ||
Balanced Strategy Fund | 18,352,733 | 33,781,992 | ||||
Growth Strategy Fund | 19,972,402 | 27,768,842 | ||||
Equity Growth Strategy Fund | 5,220,559 | 6,571,654 |
4. Related Party Transactions, Fees and Expenses
Adviser, Administrator, Transfer and Dividend Disbursing Agent
RIM provides or oversees the provision of all investment advisory and portfolio management services for the Funds, including
developing the investment program for each Fund and managing each Fund's overall exposures. RIFUS is the Funds' administrator
and transfer agent. RIFUS, in its capacity as the Funds' administrator, provides or oversees the provision of all administrative
services for the Funds. RIFUS, in its capacity as the Funds' transfer agent and dividend disbursing agent, is responsible for
providing transfer agency and dividend disbursing services to the Funds. RIFUS is a wholly-owned subsidiary of RIM. RIM is an
indirect, wholly-owned subsidiary of Russell Investments Group, Ltd., a Cayman company.
80 Notes to Financial Statements
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
The Funds are permitted to invest their cash (i.e., cash awaiting investment or cash held to meet redemption requests or to pay
expenses) in the U.S. Cash Management Fund, an unregistered fund advised by RIM. As of June 30, 2018, the Funds had invested
$48,210 in the U.S. Cash Management Fund.
An affiliated company is a company in which a Fund has ownership of at least 5% of the voting securities or which the Fund
controls, is controlled by or is under common control with. See each Fund’s Related Party Transactions, Fees and Expenses for
disclosure of transactions with affiliated companies.
The advisory fee of 0.20% is based upon the average daily net assets of each Fund and the administrative fee of up to 0.0425%
is based on the combined average daily net assets of the Funds. Advisory and administration fees are paid monthly. The following
table shows the total amount of each of these fees paid by the Funds for the period ended June 30, 2018:
Advisory | Administrative | |||||
Moderate Strategy Fund | $ | 112,123 | $ | 23,826 | ||
Balanced Strategy Fund | 290,158 | 61,659 | ||||
Growth Strategy Fund | 218,941 | 46,525 | ||||
Equity Growth Strategy Fund | 55,686 | 11,833 |
RIM has agreed to certain waivers of its advisory fees as follows:
For the Moderate Strategy Fund, RIM has contractually agreed, until April 30, 2019, to waive up to the full amount of its 0.20%
advisory fee and then to reimburse the Fund for other direct Fund-level expenses to the extent that direct Fund-level expenses
exceed 0.14% of the average daily net assets of the Fund on an annual basis. Direct Fund-level expenses do not include extraordinary
expenses or the expenses of other investment companies in which the Fund invests, including the Underlying Funds, which are
borne indirectly by the Fund. This waiver and reimbursement may not be terminated during the relevant period except with Board
approval.
For the Balanced Strategy Fund, RIM has contractually agreed, until April 30, 2019, to waive up to the full amount of its 0.20%
advisory fee and then to reimburse the Fund for other direct Fund-level expenses to the extent that direct Fund-level expenses
exceed 0.14% of the average daily net assets of the Fund on an annual basis. Direct Fund-level expenses do not include extraordinary
expenses or the expenses of other investment companies in which the Fund invests, including the Underlying Funds, which are
borne indirectly by the Fund. This waiver and reimbursement may not be terminated during the relevant period except with Board
approval.
For the Growth Strategy Fund, RIM has contractually agreed, until April 30, 2019, to waive up to the full amount of its 0.20% advisory
fee and then to reimburse the Fund for other direct Fund-level expenses to the extent that direct Fund-level expenses exceed 0.15%
of the average daily net assets of the Fund on an annual basis. Direct Fund-level expenses do not include extraordinary expenses or
the expenses of other investment companies in which the Fund invests, including the Underlying Funds, which are borne indirectly
by the Fund. This waiver and reimbursement may not be terminated during the relevant period except with Board approval.
For the Equity Growth Strategy Fund, RIM has contractually agreed, until April 30, 2019, to waive up to the full amount of its
0.20% advisory fee and then to reimburse the Fund for other direct Fund-level expenses to the extent that direct Fund-level
expenses exceed 0.15% of the average daily net assets of the Fund on an annual basis. Direct Fund-level expenses do not include
extraordinary expenses or the expenses of other investment companies in which the Fund invests, including the Underlying Funds,
which are borne indirectly by the Fund. This waiver and reimbursement may not be terminated during the relevant period except
with Board approval.
For the period ended June 30, 2018, RIM waived/reimbursed the following expenses:
Waiver | Reimbursement | Total | |||||||
Moderate Strategy Fund | $ | 112,123 | $ | 375 | $ | 112,498 | |||
Balanced Strategy Fund | 229,720 | — | 229,720 | ||||||
Growth Strategy Fund | 170,659 | — | 170,659 | ||||||
Equity Growth Strategy Fund | 55,686 | 15,933 | 71,619 |
RIM does not have the ability to recover amounts waived or reimbursed from previous periods.
Notes to Financial Statements 81
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Notes to Financial Statements, continued — June 30, 2018 (Unaudited)
Transfer and Dividend Disbursing Agent
RIFUS serves as transfer agent and provides dividend disbursing services to the Funds. For this service, RIFUS is paid a fee based
upon the average daily net assets of the Funds for transfer agency and dividend disbursing services. RIFUS 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. Transfer
agency fees paid by the Funds presented herein for the period ended June 30, 2018 were as follows:
Amount | |||
Moderate Strategy Fund | $ | 2,467 | |
Balanced Strategy Fund | 6,383 | ||
Growth Strategy Fund | 4,817 | ||
Equity Growth Strategy Fund | 1,225 |
Distributor
Russell Investments Financial Services, LLC, (the “Distributor”), a wholly-owned subsidiary of RIM, is the distributor for the
Investment Company pursuant to a distribution agreement with the Investment Company. The Distributor receives no compensation
from the Investment Company for its services.
Affiliated Brokerage Transactions
The Funds effect certain transactions through Russell Investments Implementation Services, LLC (“RIIS”). RIIS is a registered
broker and investment adviser and an affiliate of RIM. RIIS uses a multi-venue trade management approach whereby RIIS allocates
trades among RIIS’ network of independent brokers for execution, clearing and other services. RIM has authorized RIIS to effect
certain futures, swaps, OTC derivative transactions, and cleared swaps, including foreign currency spots, forwards and options
trading on behalf of the Funds.
Board of Trustees
The Russell Investments Fund Complex consists of RIC, which has 32 funds and RIF, which has 9 funds. Each of the Trustees is
a Trustee of RIC and RIF. The Russell Investments Fund Complex compensates each Trustee who is not an employee of RIM or
its affiliates. Trustee compensation and expenses are allocated to each Fund based on its net assets relative to other funds in the
Russell Investments Fund Complex.
For the period ended June 30, 2018, the regular compensation paid to the Trustees by the Russell Investments Fund Complex was
$884,750.
5. Federal Income Taxes
At June 30, 2018, the Funds did not have any capital losses available for carryforwards.
6. Record Ownership
As of June 30, 2018, the following table includes shareholders of record with greater than 10% of the total outstanding shares of
each respective Fund.
# of Shareholders | % | |||||
Moderate Strategy Fund | 1 | 89.8 | ||||
Balanced Strategy Fund | 1 | 90.3 | ||||
Growth Strategy Fund | 2 | 97.8 | ||||
Equity Growth Strategy Fund | 2 | 97.1 |
7. Subsequent Events
Management has evaluated the events and/or transactions that have occurred through the date the financial statements were issued
and noted no items requiring adjustments to the financial statements or additional disclosure.
On July 5, 2018, the Board declared dividends payable from net investment income. Dividends were paid on July 6, 2018 to
shareholder of record effective with the opening on July 5, 2018.
82 Notes to Financial Statements
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Basis for Approval of Investment Advisory Agreement —(Unaudited)
The Investment Company Act of 1940, as amended (the “1940 Act”), requires that the Board of Trustees (the “Board”), including a
majority of its members who are not considered to be “interested persons” under the 1940 Act (the “Independent Trustees”) voting
separately, approve for an initial term not to exceed two years and, thereafter, approve the continuation of the advisory agreement with
RIM (the “RIM Agreement”) and the portfolio management contract with each Money Manager of the funds (collectively, the “portfolio
management contracts” and, with the RIM Agreement, the “Agreements”) in which the Funds invest (the “Underlying Funds”) on
at least an annual basis and that the terms and conditions of the RIM Agreement and the terms and conditions of each portfolio
management contract provide for its termination if continuation is not approved annually. The RIM Agreement was approved by the
Board on December 16, 2015 (the “Approval Date”) and subsequently approved by the respective shareholders of each Fund and it
became effective on June 1, 2016 for an initial period of two years. The Board, including all of the Independent Trustees, considered
and approved the continuation of the Agreements at a meeting held in person on May 21, 2018 (the “Agreement Evaluation Meeting”).
During the course of a year, the Trustees receive a wide variety of materials regarding, among other things, the investment performance
of the Funds and Underlying Funds, sales and redemptions of the Funds’ and Underlying Funds’ shares, management of the Funds
and the Underlying Funds and other services provided by RIM (and its affiliates) and the Money Managers and compliance with
applicable regulatory requirements. In preparation for the annual review, the Independent Trustees, with the advice and assistance of
their independent counsel (“Independent Counsel”), also requested and the Board considered (1) information and reports prepared by
RIM relating to the services provided by RIM (and its affiliates) and the Money Managers to the Funds and the Underlying Funds; (2)
information and reports prepared by RIM relating to the profitability of each Fund and Underlying Fund to RIM (and its affiliates); and
(3) information (the “Third-Party Information”) received from an independent, nationally recognized provider of investment company
information comparing the performance of the Funds and the Underlying Funds and their respective operating expenses over various
periods of time with other peer funds not managed by RIM, believed by the provider and/or by RIM in the case of the custom peer
comparisons to be generally comparable to the Funds and the Underlying Funds. In the case of certain, but not all, Underlying Funds,
the Third-Party Information reflected changes in the Comparable Funds requested by RIM, which changes were noted in the Third-
Party Information. 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. The foregoing
and other information received by the Board, including the Independent Trustees, in connection with its evaluations of the Agreements
are collectively called the “Agreement Evaluation Information.” The Trustees’ evaluations also reflected the knowledge and familiarity
gained as Board members of the Funds and the other RIM-managed funds for which the Board has supervisory responsibility, including
the Underlying Funds (“Other RIM Funds”), with respect to services provided by RIM, RIM’s affiliates and each Money Manager. The
Trustees received a memorandum from counsel to the Funds and the Underlying Funds (“Fund Counsel”) discussing the legal standards
for their consideration of the continuations of the Agreements, and the Independent Trustees separately received a memorandum
regarding their responsibilities from Independent Counsel.
At a meeting held in person on April 24, 2018 (the “Agreement Information Review Meeting”), the Board, including the Independent
Trustees, in preparation for the Agreement Evaluation Meeting, met with representatives of RIM; met in an executive session with the
Chief Executive Officer of Russell Investments (as defined below); met in an executive session with a representative of TA Associates
(as defined below); and then the Independent Trustees met in a private session with Independent Counsel at which no representatives
of RIM or the Funds’ management were present to review the Agreement Evaluation Information received to that date and, on the
basis of that review, requested additional Agreement Evaluation Information. The Board met by conference telephone call in a private
session with the Chief Executive Officer of Russell Investments on May 7, 2018 to review and discuss additional Agreement Evaluation
Information regarding organizational developments and plans. The additional Agreement Evaluation Information requested in the
April 24, 2018 meeting was received on May 8, 2018 and May 15, 2018. On May 15, 2018, the Independent Trustees met by
conference telephone call in private session with Independent Counsel to review the additional Agreement Evaluation Information. On
May 15, 2018, following the aforementioned conference call, the Board Chair met telephonically with representatives of management
to request additional or revised Agreement Evaluation Information. The additional or revised Agreement Evaluation Information
requested by the Board Chair on her May 15, 2018 conference call with representatives of management was received on May 18, 2018.
At the Agreement Evaluation Meeting, the Independent Trustees again met in person in a private session with Independent Counsel
to review additional or revised Agreement Evaluation Information received to that date. At the Agreement Evaluation Meeting, the
Board, including the Independent Trustees, considered the proposed continuance of the Agreements with RIM, Fund management,
Independent Counsel and Fund Counsel. The Board considered that the Agreement Evaluation Information and presentations made
by RIM at the Agreement Evaluation Meeting as part of this review encompassed the Funds and all Other RIM Funds. Information
received by the Board, including the Independent Trustees, prior to and at the Agreement Information Review Meeting, the Agreement
Basis for Approval of Investment Advisory Agreement 83
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Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
Evaluation Meeting and other meetings identified above is included in the Agreement Evaluation Information. Prior to voting at the
Agreement Evaluation Meeting, the Independent Trustees met in private session with Independent Counsel to consider Agreement
Evaluation Information received from RIM and management at and prior to the Agreement Evaluation Meeting. The discussion below
reflects all of these reviews.
In evaluating the Agreements, the Board considered that each of the Underlying Funds employs a manager-of-managers method of
investment and RIM’s past expressed belief that the Underlying Funds, in employing a manager-of-managers method of investment,
operate in a manner that is different from most other investment companies. In the case of most other investment companies, an
investment 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. RIM, however, has engaged
multiple unaffiliated Money Managers for the Underlying Funds. A Money Manager may have (1) a discretionary asset management
assignment pursuant to which it is allocated a portion of an Underlying Fund’s assets to manage directly in its discretion; (2) a non-
discretionary assignment pursuant to which it provides a model portfolio to RIM representing its investment recommendations, based
upon which RIM purchases and sells securities for an Underlying Fund; or (3) both a discretionary and a non-discretionary assignment.
Money Managers may be paid fees at a lower rate for non-discretionary services than discretionary services.
The Board considered that RIM (rather than any Money Manager in the case of Underlying Funds) is responsible under the RIM
Agreement for determining, implementing and maintaining the investment program for each Fund and, in conducting each Fund’s
investment program, allocating assets of such Fund principally among its Underlying Funds. The assets of each Fund are principally
invested in different combinations of the Underlying Funds pursuant to target asset allocations set by RIM. RIM analyzes opportunities
and risks at the aggregate level of the three main asset classes – equities, fixed income and alternatives – and monitors exposure to
such asset classes using analytical tools to ensure that any deviations from the target asset allocations are intentional and tactical.
RIM continually evaluates each Fund’s allocation between asset classes to ensure that the allocations optimally match the Fund’s
stated investment objectives and risks profile. In addition to investing in the Underlying Funds, RIM may seek to actively manage
each Fund’s overall exposures (such as asset class, currency, capitalization size, industry, sector, region, credit exposure, country
risk, yield curve positioning or interest rates) by investing in derivatives that RIM believes will achieve the desired exposures for
the Fund. RIM may modify the target asset allocation for any Fund and/or the Underlying Funds in which the Funds invest. The
overall performance of each Fund therefore has reflected, in part, the performance of RIM in designing the investment program of
the Fund and in determining the Funds’ target strategic asset allocations. The overall performance of each Fund also has reflected
the performance of RIM in managing its Underlying Funds. The Board considered that, although RIM traditionally has managed
Underlying Fund exposures through the selection of and allocations to Money Managers, innovations in RIM portfolio management
techniques together with evolutions in available technology, tools and analytics have resulted in changes in RIM’s approach to its
Underlying Fund investment advisory services. In this regard, assets of each Underlying Fund generally have been allocated among
RIM and the multiple Money Manager strategies selected by RIM, subject to Board approval, for that Underlying Fund. RIM manages
the investment of each Underlying Fund’s cash and also may manage directly any portion of each Underlying Fund’s assets that RIM
determines not to allocate to the Money Manager strategies and portions of an Underlying Fund during transitions between Money
Managers. The Underlying Funds usually, but not always, pursue a strategy to be fully invested by exposing all or a portion of their cash
to the performance of appropriate markets by purchasing equity securities, fixed income securities and/or derivatives, which typically
include futures contracts. This cash “equitization” strategy is managed by RIM. In the case of non-discretionary Money Manager
assignments, RIM itself manages portions of an Underlying Fund based upon model portfolios provided by the non-discretionary
Money Managers. In the case of non-discretionary Money Manager assignments for equity funds, RIM implements model equity
portfolios through an “enhanced portfolio implementation,” or “emulation,” process designed to reduce trades and lower turnover, and
provide more flexibility to manage tax impacts of trades. In all cases, Underlying Fund assets are managed directly by RIM pursuant to
authority provided by the RIM Agreement. The Board noted the variety and complexity of investment advisory services that RIM has
provided directly or, through the Underlying Funds, indirectly to the Funds under the RIM Agreement.
In the case of Underlying Funds, RIM 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 or their strategies and RIM
itself. Each discretionary 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 RIM (each, a “segment”)
in accordance with the Underlying Fund’s applicable investment objective, policies and restrictions, any specific parameters
placed by RIM upon their selection of portfolio securities and the Money Manager’s specified role in an Underlying Fund. For each
Underlying Fund, RIM is responsible for, among other things, providing each Money Manager with a statement of the investment
84 Basis for Approval of Investment Advisory Agreement
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Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
parameters and policies for the assets allocated to it and any specific investment restrictions; monitoring the performance of each
Money Manager and Fund; generally supervising compliance by each Money Manager with each Fund’s investment objective and
policies; with respect to Funds with non-discretionary Money Managers, purchasing and selling securities for the Funds based on
model portfolios representing the investment recommendations of the non-discretionary Money Managers; managing Fund assets that
are not allocated to Money Manager strategies; managing the Funds’ cash balances; and recommending at least 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, RIM is responsible for recommending to the Board additions
or terminations of new Money Managers or replacements of existing Money Managers at any time when, based on RIM’s research
and ongoing review and analysis, such actions are, in RIM’s judgment, appropriate. RIM may impose specific investment or strategy
parameters from time to time for each Money Manager intended to capitalize on the strengths of that Money Manager or to coordinate
the investment activities of Money Managers for the Underlying Fund in a complementary manner. Therefore, RIM’s selection of
Money Managers for an Underlying Fund is made not only on the basis of performance considerations but also on the basis of other
factors, including anticipated compatibility with other Money Managers in the same Underlying Fund. In light of the foregoing, the
overall performance of each Underlying Fund has reflected, in great part, the performance of RIM in designing the Underlying Fund’s
investment program, structuring the Underlying Fund, selecting effective Money Managers on a discretionary or non-discretionary
basis, and allocating assets among the Money Managers or their strategies and RIM in a manner designed to achieve the investment
objectives of the Underlying Fund. The Agreement Evaluation Information noted the broad array of investment management services
provided to the Underlying Funds by RIM compared to the relatively narrow portfolio management services provided to the Underlying
Funds by Money Managers. RIM has advised the Board that while its portfolio construction process is “investment led,” it establishes
a reasonable Money Manager fee target (“Fee Target”) for each Underlying Fund to provide a cost framework for portfolio construction.
RIM in the Agreement Evaluation Information advised the Board that Money Manager fees, in the aggregate, “must allow RIM to
remain a going concern with sufficient resources to provide required services to the Funds and to earn a reasonable profit.” RIM further
advised the Board that it uses a number of tools in the portfolio construction process to meet a Fund’s objective taking into account the
Fee Target including the selection of Money Managers, allocation of assets among Money Managers, allocation of assets to itself, Money
Manager fee negotiations and guideline customization. RIM has advised the Board that Fee Targets for particular Underlying Funds
may be adjusted (higher or lower) from time to time.
The Board considered that the prospectuses for the Funds and the Underlying Funds and other public disclosures emphasize to
investors RIM’s role as the principal investment manager for each Underlying Fund, rather than the investment selection role of these
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 RIM’s
reputation for and performance record in managing the manager-of-managers structure of the Underlying Funds.
The Board also considered the demands and complexity of managing the Underlying Funds pursuant to the manager-of-managers
structure, the special expertise of RIM with respect to the manager-of-managers structure of the Underlying Funds and the possibility
that, at the current expense ratio of each Underlying Fund, there would be no acceptable alternative investment managers to replace RIM
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.
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 RIM 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 RIM;
2. The advisory fee paid by the Fund or the Underlying Fund to RIM (the “Advisory Fee”) and the fact that it encompasses all
investment advisory fees paid by the Fund or Underlying Fund, including, in the case of Underlying Funds, the fact that RIM pays the
fees for Money Managers of such Fund out of its Advisory Fee;
3. Information provided by RIM as to other fees and benefits received by RIM or its affiliates in connection with the Fund or the
Underlying Fund, including any administrative or transfer agent fees and any fees received for management or administration of
Basis for Approval of Investment Advisory Agreement 85
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Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
uninvested cash and securities lending cash collateral, soft dollar arrangements and commissions in connection with portfolio securities
and foreign exchange transactions;
4. Information provided by RIM as to expenses incurred by the Fund or Underlying Fund;
5. Information provided by RIM as to the profits that RIM derives from its mutual fund operations generally and from the Fund or the
Underlying Fund; and
6. Information provided by RIM concerning economies of scale and whether any scale economies are adequately shared with the Fund
or the 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 or the Underlying Funds, including Fund portfolio management services, the Board discussed with senior
representatives of RIM the impact on the Funds of changes in RIM’s senior management and other personnel providing investment
management and other services to the Funds and the Underlying Funds since the Approval Date and changes, and proposed changes,
to the operational and data infrastructure supporting the services provided by RIM to the Funds and the Underlying Funds and the
impact of delays and challenges that have been experienced in implementing such changes on the Funds and the Underlying Funds.
The Board was not advised of any diminution in the nature, scope or quality of the investment advisory or other services provided to the
Funds or the Underlying Funds resulting or expected to result from such changes. The Board also discussed with the Chief Compliance
Officer of the Funds (the “CCO”) whether personnel and other resources made available to her are adequate for the maintenance of
the Funds’ compliance program and the impact of organizational changes on the compliance programs of the Funds, the Underlying
Funds and RIM. The Board received assurances from the CCO that organizational and other changes since the Approval Date have
not resulted in any diminution in the scope and quality of the compliance programs of the Funds or the Underlying Funds, although
the CCO had previously noted her concerns as to the effectiveness of some aspects of the compliance program in connection with the
portions of Underlying Funds that are managed directly by RIM and other new and more complex investment products and investment
strategies. She and RIM senior management have advised the Board that measures, including the aforementioned operational and data
infrastructure changes, are in process that should better accommodate these new and more complex investment products and strategies.
Since June 1, 2016, RIM has been an indirect wholly-owned subsidiary of Russell Investments Group, Ltd., a Cayman company through
which the limited partners of certain private equity funds affiliated with TA Associates Management, L.P. (“TA Associates”) indirectly
have a majority ownership interest through alternative investment vehicles and the limited partners of certain private equity funds
affiliated with Reverence Capital Partners, L.P. (“Reverence Capital”) indirectly have a significant minority controlling ownership
interest through certain Reverence Capital funds and alternative investment vehicles in RIM and its affiliates (“Russell Investments”).
In connection with the Board’s initial approval of the RIM Agreement, TA Associates advised the Board of its plans ultimately to effect
a sale or other disposition of its ownership interest in Russell Investments. Any such future transaction (“Transaction”) could cause
a change of control of RIM resulting, among other things, in an assignment and termination of the RIM Agreement, as required by
the 1940 Act, and by the terms and conditions of the RIM Agreement. In the event of a Transaction, the Board would be required to
consider the approval of the terms and conditions of a replacement agreement (“Successor Agreement”) for the RIM Agreement and
thereafter to submit the Successor Agreement to each Fund’s shareholders for approval, as required by the 1940 Act. At the Agreement
Information Review Meeting, the Board met in executive session with a representative of TA Associates to discuss the status of its
indirect investment in RIM. The Board was not advised of any change in TA Associates’ plans regarding its ownership interest in
Russell Investments.
As noted above, RIM, in addition to managing the investment of each Underlying Fund’s cash, directly manages a portion (which
may represent a significant portion) of the Underlying Funds pursuant to the RIM Agreement, the actual allocation of Underlying
Fund assets among Money Managers and RIM being determined from time to time by the RIM portfolio manager. The nature and
scope of RIM’s direct management of Underlying Fund assets has evolved over the past several years. RIM utilizes quantitative and/
or rules-based processes and qualitative analysis to assess Underlying Fund characteristics and invests in securities and instruments
which provide the desired exposures (such as volatility, momentum, value, growth, quality, capitalization size, industry, sector, region,
currency, commodity, credit or mortgage exposure, country risk, yield curve positioning, or interest rates). RIM may utilize tools such
as “optimization,” which involves the analysis of tradeoffs between various risk and return factors as well as turnover and transaction
costs, in order to estimate optimal portfolio positioning. RIM may use strategies based on indexes, including optimized index sampling
(strategies that seek to purchase a sampling of securities using optimization and risk models) and/or index replication. RIM’s direct
management of assets for these purposes is hereinafter referred to as the “Direct Management Services.” RIM’s Direct Management
86 Basis for Approval of Investment Advisory Agreement
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Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
Services generally are not intended to be a primary driver of Underlying Funds’ investment results, although the services may have a
positive or negative impact on investment results, but rather are intended to enhance incrementally the ability of Underlying Funds
to carry out their investment programs. The Board has been advised that RIM intends to continue to expand its Direct Management
Services. In connection with this expansion, RIM expects that a larger portion of certain Underlying Funds will be managed directly
by RIM pursuant to the Direct Management Services. The Board considered that RIM is not required to pay investment advisory fees
to any Money Managers with respect to assets for which it provides Direct Management Services and that the profits derived by RIM
generally and from the Underlying Funds consequently may be increased, although RIM may incur additional costs in providing Direct
Management Services. Such increased profits ultimately may be partially offset by the impact of any new or additional fee waivers
or expense caps separately implemented from time to time for the affected Funds. RIM advised the Board that, while its portfolio
construction process is “investment led,” allocations, or increased allocations, of Underlying Fund assets to Direct Management
Services, together with Money Manager selection, allocations among Money Managers, renegotiation of Money Manager fees and
changes in existing Money Manager assignments from discretionary to non-discretionary assignments where there is a related Money
Manager fee reduction may reduce its costs of providing investment advisory services to the Underlying Funds, which would benefit
RIM. The Board considered that any such benefit ultimately may be partially offset by the impact of any new or additional fee waivers
or expense caps separately implemented from time to time for the affected Funds. The Board, however, also considered information
provided by RIM as to the potential benefits of the Direct Management Services to Underlying Funds; and the fact that the aggregate
Advisory Fees paid by the Underlying Funds are not increased as a result of RIM’s direct management of Underlying Fund assets as
part of the Direct Management Services or otherwise. RIM also noted in the Agreement Evaluation Information that it is implementing
a more concentrated pool of Money Managers eligible for selection for Underlying Funds with the primary objective of achieving
higher conviction in the Underlying Funds’ Money Manager lineups. RIM, however, will also benefit from this initiative in the form of
potential Money Manager fee savings and increased internal efficiencies. The Board considered that any such benefit ultimately may
be partially offset by the impact of any new or additional fee waivers or expense caps separately implemented from time to time for the
affected Funds.
In evaluating 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, RIM noted differences between the investment strategies of certain
Underlying Funds and their respective Comparable Funds in pursuing their investment objectives.
The Third-Party Information included, among other things, comparisons of the Funds’ Advisory Fees with the investment advisory
fees of their Comparable Funds on an actual basis (i.e., giving effect to any voluntary fee waivers implemented by RIM with respect to
a Fund and by the managers of such Fund’s Comparable Funds). The Third-Party Information, among other things, showed that each
Fund had an Advisory Fee which, compared with the investment advisory fees of its respective Comparable Funds on an actual basis,
was ranked in the first or second quintile of its Expense Universe for that expense component. In these rankings, the first quintile
represents funds with the lowest investment advisory fees of its comparable Fund among funds in the Expense Universe and the fifth
quintile represents funds with the highest investment advisory fees among the Expense Universe funds. The comparisons were based
upon the latest fiscal years for the Expense Universe funds.
In discussing the Advisory Fees for the Underlying Funds generally, RIM noted, among other things, that its Advisory Fees for
the Underlying Funds encompass services that are typical to services provided by investment advisers to the Underlying Funds’
Comparable Funds, as well as unique services that are distinctly different from those provided by investment advisers to the Underlying
Funds’ Comparable Funds, such as cash equitization and transition management efforts that enable efficient and cost-effective asset
transition events.
RIM also advised the Board that although its profitability generally and from its relationships with the Funds and Underlying Funds
improved in 2017, its pre-tax “margins” in providing investment advisory services to the Underlying Funds remain near the bottom
compared to the margins of public management company peers. RIM expressed the view that Advisory Fees should be considered in
the context of a Fund’s or Underlying Fund’s total expense ratio to obtain a complete picture. The Board, however, considered each
Fund’s and Underlying Fund’s Advisory Fee on both a standalone basis and in the context of the Fund’s or Underlying Fund’s total
expense ratio. The Board has engaged, and continues to engage in discussions with RIM to identify opportunities and establish goals,
where appropriate, for improving the total expense comparisons for certain Funds and Underlying Funds relative to their respective
Comparable Funds through Advisory Fee waivers or expense caps.
Based upon information provided by RIM, the Board considered for each Fund and Underlying Fund whether economies of scale have
been realized and whether the Advisory Fee for such Fund or Underlying Fund appropriately reflects or should be revised to reflect
Basis for Approval of Investment Advisory Agreement 87
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any such economies. The Funds are distributed exclusively through variable annuity and variable life insurance contracts issued by
insurance companies. Currently, the Funds are made available to holders of such insurance policies (“Insurance Contract Holders”) by
a few insurance companies. The Funds are primarily available through, and their assets are primarily attributed to, The Northwestern
Mutual Life Insurance Company (“Northwestern Mutual”). At the Agreement Evaluation Meeting, RIM expressed its belief that
Northwestern Mutual intends to continue to make the Funds available to its Insurance Contract Holders. However, the Board received
no direct assurances in this regard from Northwestern Mutual. If Northwestern Mutual were to discontinue its participation in the
Funds, the Board considered that it is unlikely that the Funds would remain viable. RIM has advised the Board that, while it is
assessing other potential opportunities, it does not expect that additional insurance companies will make the Funds available to their
variable annuity or variable life insurance policyholders in the near term s. Notwithstanding this expectation, RIM expressed its belief
that the Funds will remain viable in the near term. The Board considered, among other things, the potential negative implications for
significant future Fund asset growth if additional insurance companies do not make the Funds available to their variable annuity and
variable life insurance policyholders.
With respect to each Fund, the Board considered any Advisory Fee waivers or other expense limitation arrangements that had been
changed since the Approval Date.
The Board also considered that, since the Approval Date, RIM has renegotiated fees with certain Money Managers; changed certain
Money Manager assignments from discretionary to non-discretionary; reallocated assets among Money Managers; hired or terminated
certain Money Managers, including in connection with the implementation of an initiative to reduce the number of Money Managers for
each Underlying Fund; and increased its allocations to direct management of various Underlying Funds in recent years, each of which
alone may operate to reduce RIM’s costs of providing investment advisory and other services to the Underlying Funds contemplated
by the RIM Agreement. The Board also considered that any resulting benefit of the decrease in Money Manager fees paid by RIM in
respect of an Underlying Fund accrues to RIM, rather than such Fund. The Board also considered that such benefit ultimately may be
partially offset by any new or additional fee waivers or expense caps on such Fund.
The Board also considered, as a general matter, that fees payable to RIM or its affiliates by institutional clients with investment
objectives similar to those of the Funds and the Underlying Funds are lower, and, in some cases, may be substantially lower, than the
rates paid by the Funds, the Underlying Funds and Other RIM Funds. The Trustees considered the differences in the nature and scope
of services RIM provides to institutional clients and the Funds and the Underlying Funds. RIM explained, among other things, that
institutional clients have fewer compliance, administrative and other needs than the Funds and the Underlying Funds. RIM also noted
that since the Funds and the Underlying Funds must constantly issue and redeem their shares, they are more difficult to manage than
institutional accounts, where assets are relatively stable. In addition, RIM noted that the Funds and the Underlying Funds are subject
to heightened regulatory requirements relative to institutional clients. 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 the total expenses for each Fund ranked in the first
or second quintile of its Expense Universe. In these rankings, the first quintile represents the funds with the lowest total expenses
among funds in the Expense Universe and the fifth quintile represents funds with the highest total expenses among the Expense
Universe funds.
On the basis of the Agreement Evaluation Information, and other information previously received by the Board from RIM during the
course of prior years, or presented at or in connection with the Agreement Evaluation Meetings by RIM, the Board, in respect of each
Fund and Underlying Fund, found, after giving effect to any applicable waivers and/or reimbursements and considering any differences
in the composition of the Expense Universe and investment strategies of its respective Comparable Funds and in light of other factors
discussed above, (1) the Advisory Fee charged by RIM was acceptable in light of the nature, scope and overall quality of the investment
advisory and other services provided, and expected to be provided, to the Fund or Underlying Fund and to provide continuity of
investment advisory and other services by RIM to the Fund or Underlying Fund; (2) except as noted above, the relative expense ratio
of each Fund and Underlying Fund either was comparable to those of its Comparable Funds or RIM had provided an explanation
satisfactory to the Board as to why the relative expense ratio was not comparable to those of its Comparable Funds; (3) other benefits
and fees received by RIM or its affiliates from the Fund or Underlying Fund identified in the Agreement Evaluation Information were
not considered to be excessive; (4) RIM’s profitability with respect to the Fund and Underlying Fund was not considered to be excessive
in light of the nature, scope and overall quality of the investment management and other services provided by RIM and applicable
judicial and regulatory guidance; and (5) the Advisory Fee charged by RIM appropriately reflects any economies of scale realized by
88 Basis for Approval of Investment Advisory Agreement
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Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
such Fund or Underlying Fund in light of various factors, including potential negative implications for significant future Fund asset
growth if additional insurance companies do not make the Funds available to Insurance Contract Holders and other factors associated
with the manager-of-managers structure employed by the Underlying Funds, including the variability of Money Manager investment
advisory fees.
The Board concluded that, under the circumstances and based on RIM’s performance information and reviews for each Fund and
Underlying Fund, the performance of each of the Funds and Underlying Funds is consistent with continuation of the RIM Agreement.
The Board noted RIM’s advice that a key objective of the strategies pursued on behalf of the Underlying Funds is an improvement in
the consistency of their returns over time relative to Comparable Funds that are not multi-manager. In assessing the performance of the
Funds and the Underlying Funds with at least three years of performance history, the Board focused upon performance for the 3-year
period ended December 31, 2017 as most relevant, but also considered Fund and Underlying Fund performance for the 1-year and,
where applicable, 5-year periods ended such date. In reviewing the performance of the Funds and Underlying Funds generally, the
Board took into consideration various steps taken by RIM since the Approval Date to enhance the performance of certain Underlying
Funds, including changes in Money Managers or their allocations, and RIM’s implementation or expansion of its Direct Management
Services and other strategies, which may not yet be fully reflected in Underlying Fund investment results.
With respect to the Moderate Strategy Fund and Equity Growth Strategy Fund, the Third-Party Information showed that each Fund’s
performance was ranked in the fourth quintile of its Performance Universe for the 3-year period ended December 31, 2017. With
respect to the Balanced Strategy Fund and Growth Strategy Fund, the Third-Party Information showed that each Fund’s performance was
ranked in the third quintile of its Performance Universe for the 3-year period ended December 31, 2017. The Board considered RIM’s
explanation that the underperformance of the Moderate Strategy Fund and Equity Growth Strategy Fund relative to their respective
peer groups was primarily due to asset allocation differences compared to the Performance Universe. RIM noted, among other things,
that these Funds have exposure to more diversified growth-oriented asses classes beyond traditional equities (such as global high yield
debt, emerging market debt, global real estate, infrastructure and commodities), which are intended to provide diversification benefits
and dampen volatility. RIM explained that in the strong rising equity environment experienced over the period, the Funds’ exposures
to these asset classes, particularly to commodities, were headwinds relative to peers. The Board also considered RIM’s explanation
that Funds have a higher non-U.S. equity allocation and less U.S. bias than peers, which negatively impacted peer-relative performance
during the period.
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 RIM’s expressed belief
that the use of multi-manager strategies generally results in lower volatility and lower tracking error. The Board also considered the
Money Manager changes that have been made since the Approval Date and that the performance of Money Managers continues to
impact performance of the Funds and Underlying Funds for periods prior and subsequent to their termination, and that any incremental
positive or negative impact of the Direct Management Services to Underlying Funds, which continue to evolve in nature and scope,
was not yet fully reflected in the investment results of the Underlying Funds. Lastly, the Board considered the implementation of
additional strategies and refinements to strategies discussed at the Agreement Evaluation Meetings and prior Board meetings that may
be employed by RIM in respect of certain Funds and Underlying Funds.
After considering the foregoing and other relevant factors, the Board concluded in respect of each Fund and Underlying Fund
that continuation of the RIM Agreement would be in the best interests of such Fund and its shareholders and voted to approve the
continuation of the RIM Agreement.
At the Agreement Evaluation Meetings, 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 RIM reporting, among other things, for
each Money Manager, the Money Manager’s performance over various periods; RIM’s assessment of the performance of each Money
Manager; any significant business relationships between the Money Manager and RIM or Russell Investments Financial Services, LLC,
the Funds’ and Underlying Funds’ underwriter; and RIM’s recommendation to retain each discretionary or non-discretionary Money
Manager on the current terms and conditions, including at the current fee rate. The Board received reports during the course of the
year from the Funds’ CCO regarding her assessments of Money Manager compliance programs and any compliance issues. RIM did not
identify any benefits from the Funds’ portfolio transactions received by Money Managers or their affiliates other than benefits from their
soft dollar arrangements or commissions paid to any affiliated broker-dealer through which a Money Manager may execute trades. The
Agreement Evaluation Information described RIM’s oversight of Money Manager soft dollar arrangements. The Agreement Evaluation
Basis for Approval of Investment Advisory Agreement 89
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Basis for Approval of Investment Advisory Agreement, continued — (Unaudited)
Information expressed RIM’s belief that, based upon certifications from Money Managers and pre-hire and ongoing reviews of Money
Manager soft dollar arrangements, policies and procedures, the Money Managers’ soft dollar arrangements, policies and procedures
are consistent with applicable legal standards and with disclosures made by Money Managers in their investment adviser registration
statements filed with the Securities and Exchange Commission and by the Underlying Funds in their registration statements. The
Board was advised that, in the case of Money Managers using soft dollar arrangements, the CCO may from time to time request that
money managers provide information regarding their soft dollar program to RIM. The CCO and RIM do not obtain, and the Agreement
Evaluation Information therefore did not include, information regarding the value of soft dollar benefits derived by Money Managers
from Underlying Fund portfolio transactions.
RIM recommended that each of the Money Managers be retained for its current discretionary or non-discretionary assignment at its
current fee rate. In doing so, RIM, as it has in the past, 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 RIM; RIM is aware of the standard fee rates charged by Money Managers
to other clients; and RIM 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 RIM’s explanation of the relevance of Money Manager profitability
in light of RIM’s belief that such fees are reasonable; the Board’s findings as to the acceptability of the Advisory Fee paid by each
Underlying Fund; and the fact that each Money Manager’s fee is paid by RIM. At the Agreement Evaluation Meeting, RIM reported that
it planned to recommend termination of certain Money Managers to the Board at the May 22, 2018 meeting.
Based upon RIM’s recommendations, together with relevant Agreement Evaluation Information, the Board concluded that the fees paid
to the Money Managers of each Underlying Fund are acceptable in light of RIM’s assessment of 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 RIM Agreement or, other than RIM’s
recommendation, the portfolio management contract with any Money Manager for an Underlying Fund that was all-important or
controlling, except, in the case of the RIM Agreement, the need to continue the managers-of-managers structure of the Underlying
Funds, 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.
90 Basis for Approval of Investment Advisory Agreement
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Shareholder Requests for Additional Information — June 30, 2018 (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 on Form N-Q. These reports are available (i) free of charge, upon request, by calling the Funds at (800) 787-
7354; (ii) at the Securities and Exchange Commission’s website at www.sec.gov: and (iii) also the Funds’ Form N-Q may be reviewed
and copied at the Securities and Exchange Commission's Office of Investor Education and Advocacy (formerly, the Public Reference
Room) in Washington, DC. Information on the operation of the Office of Investor Education and Advocacy may be obtained by calling
1-202-551-8090.
The Board has delegated to RIM, as RIF’s investment adviser, the primary responsibility for monitoring, evaluating and voting proxies
solicited by or with respect to issuers of securities in which assets of the Underlying Funds may be invested. RIM has established a proxy
voting committee and has adopted written proxy voting policies and procedures (“P&P”) and proxy voting guidelines (“Guidelines”).
The Funds maintain a Portfolio Holdings Disclosure Policy that governs the timing and circumstances of disclosure to shareholders
and third parties of information regarding the portfolio investments held by the Funds. A description of the P&P, Guidelines, Portfolio
Holdings Disclosure Policy and additional information about Fund Trustees are contained in the Funds’ Statement of Additional
Information (“SAI”). The SAI and information regarding how the Underlying Funds voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30, 2017 are available (i) free of charge, upon request, by calling the Funds at (800) 787-
7354, and (ii) on the Securities and Exchange Commission’s website at www.sec.gov.
If possible, depending on contract owner registration and address information, and unless you have otherwise opted out, only one copy
of the RIF prospectus and each annual and semi-annual report will be sent to contract owners at the same address. If you would like
to receive a separate copy of these documents, please contact your Insurance Company. If you currently receive multiple copies of the
prospectus, annual report and semi-annual report and would like to request to receive a single copy of these documents in the future,
please call your Insurance Company.
Some Insurance Companies may offer electronic delivery of the Funds’ prospectuses and annual and semi-annual reports. Please
contact your Insurance Company 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 91
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Disclosure of Information about Fund Trustees and Officers — June 30, 2018
(Unaudited)
The following tables provide information for each officer and trustee of the Russell Investments Fund Complex. The Russell Investments
Fund Complex consists of Russell Investment Company (“RIC”), which has 33 funds and Russell Investment Funds (“RIF”), which has
9 funds. Each of the trustees is a trustee of RIC and RIF. The first table provides information for the interested trustee. The second table
provides information for the independent trustees. The third table provides information for the Trustee Emeritus. The fourth table provides
information for the officers. Furthermore, each Trustee possesses the following specific attributes: Mr. Alston has business, financial and
investment experience as a senior executive of an international real estate firm and is trained as a lawyer; Ms. Blake has had experience
as a certified public accountant and has had experience as a member of boards of directors/trustees of other investment companies; Ms.
Burgermeister has had experience as a certified public accountant and as a member of boards of directors/trustees of other investment
companies; Ms. Krysty has had business, financial and investment experience as the founder and senior executive of a registered
investment adviser focusing on high net worth individuals as well as a certified public accountant and a member of the boards of other
corporations and non-profit organizations; Mr. Tennison has had business, financial and investment experience as a senior executive
of a corporation with international activities and was trained as an accountant; and Mr. Thompson has had experience in business,
governance, investment and financial reporting matters as a senior executive of an organization sponsoring and managing other investment
companies, and, subsequently, has served as a board member of other investment companies. Mr. Spina has had experience with other
financial services companies, including companies engaged in the sponsorship, management and distribution of investment companies.
As a senior officer and/or director of the Funds, the Adviser and various affiliates of the Adviser providing services to the Funds, Mr.
Spina is in a position to provide the Board with such parties' perspectives on the management, operations and distribution of the Funds.
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
INTERESTED TRUSTEE | |||||
Mark Spina, # | Trustee since 2017 | Appointed until | • President and CEO, RIC and RIF | 42 | None |
Born June 8, 1970 | President and Chief | successor is | • Chairman of the Board, President, | ||
1301 Second Avenue, | Executive Officer | duly elected and | Russell Investments Financial | ||
18th Floor, Seattle, WA | since 2017 | qualified | Services, LLC (“RIFIS”) | ||
98101 | Appointed | • Chairman of the Board, President, | |||
until successor | Russell Investments Fund Services, | ||||
is chosen and | LLC (“RIFUS”) | ||||
qualified by | • Director, RIM. | ||||
Trustees | • From 2015-2016, Head of | ||||
Intermediary Distribution and | |||||
President of Pioneer Funds | |||||
Distributor | |||||
• From 2008-2015 Head of | |||||
Intermediary Distribution, Voya | |||||
Investment Management | |||||
INDEPENDENT TRUSTEES | |||||
Thaddas L. Alston, | Trustee since 2006 | Appointed until | Senior Vice President, Larco | 42 | Until October |
Born April 7, 1945 | successor is | Investments, Ltd. (real estate firm) | 2015, Trustee, | ||
1301 Second Avenue, | duly elected and | Russell | |||
18th Floor, Seattle, WA | qualified | Exchange | |||
98101 | Traded Funds | ||||
Trust |
92 Disclosure of Information about Fund Trustees and Officers
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Disclosure of Information about Fund Trustees and Officers, continued — June 30,
2018 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
Kristianne Blake, | Trustee since 2000 | Appointed until | • Lean Independent Director, Avista | 42 | • Lead |
Born January 22, 1954 | Chairman since 2005 | successor is | Corp (electric utilities) | Independent | |
1301 Second Avenue, | duly elected and | • Until May 2017, Director and | Director, | ||
18th Floor, Seattle, WA | qualified | Chairman of the Audit Committee, | Avista Corp | ||
98101 | Approved | Avista Corp (electric utilities) | (electric | ||
annually | • Regent, University of Washington | utilities) | |||
• President, Kristianne Gates Blake, | • Until May | ||||
P. S. (accounting services) | 2017, Director | ||||
• Until June 2014, Director, Ecova | Avista Corp | ||||
(total energy and sustainability | (electric | ||||
management) | Utilities) | ||||
• Until December 2013, Trustee | • Until June | ||||
and Chairman of the Operations | 2014, | ||||
Committee, Principal Investors Funds | Director, | ||||
and Principal Variable Contracts | Ecova (total | ||||
Funds (investment company) | energy and | ||||
sustainability | |||||
management) | |||||
• Until | |||||
December | |||||
2013, Trustee, | |||||
Principal | |||||
Investors | |||||
Funds | |||||
(investment | |||||
company) | |||||
• Until | |||||
December | |||||
2013, Trustee | |||||
Principal | |||||
Variable | |||||
Contracts | |||||
Funds | |||||
(investment | |||||
company) | |||||
• Until October | |||||
2015, Trustee, | |||||
Russell | |||||
Exchange | |||||
Traded Funds | |||||
Trust |
* Each Trustee is subject to mandatory retirement at age 75.
# Mr. Spina is also an officer and/or director of one or more affiliates of RIC and RIF and is therefore an Interested Trustee.
Disclosure of Information about Fund Trustees and Officers 93
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Disclosure of Information about Fund Trustees and Officers, continued — June 30,
2018 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
INDEPENDENT TRUSTEES (continued) | |||||
Cheryl Burgermeister, | Trustee since 2012 | Appointed until | • Retired | 42 | • Trustee and |
Born June 26, 1951 | Chairman of the | successor is | • Trustee and Chairperson of Select | Chairperson of | |
1301 Second Avenue, | Audit Committee | duly elected and | Sector SPDR Funds (investment | Select Sector | |
18th Floor, Seattle, WA | since 2017 | qualified | company) | SPDR Funds | |
98101 | Appointed until | • Until December 31, 2014, | (investment | ||
successor is | Chairperson of Audit Committee, | company) | |||
duly elected and | Select Sector SPDR Funds | • From August | |||
qualified | (investment company) | 2012 through | |||
May 2016, | |||||
Trustee, ALPS | |||||
Series Trust | |||||
(investment | |||||
company) | |||||
• Until October | |||||
2015, Trustee, | |||||
Russell | |||||
Exchange | |||||
Traded Funds | |||||
Trust | |||||
Katherine W. Krysty, | Trustee since 2014 | Appointed until | • Retired | 42 | Until October |
Born December 3, 1951 | successor is | • January 2011 through March 2013, | 2015, Trustee, | ||
1301 Second Avenue | duly elected and | President Emerita, Laird Norton | Russell | ||
18th Floor, Seattle, WA | qualified | Wealth Management (investment | Exchange | ||
98101 | company) | Traded Funds | |||
Trust | |||||
Raymond P. Tennison, Jr. , | Trustee since 2000 | Appointed until | • Retired | 42 | Until October |
Born December 21, 1955 | Chairman of | successor is | 2015, Trustee, | ||
1301 Second Avenue | the Nominating | duly elected and | Russell | ||
18th Floor, Seattle, WA | and Governance | qualified | Exchange | ||
98101 | Committee since | Appointed until | Traded Funds | ||
2007 | successor is | Trust | |||
duly elected and | |||||
qualified | |||||
Jack R. Thompson, | Trustee since 2005 | Appointed until | • Retired | 42 | • Until October |
Born March 21, 1949 | Chairman of | successor is | 2015, Trustee, | ||
1301 Second Avenue, | the Investment | duly elected and | Russell | ||
18th Floor, Seattle, WA | Committee since | qualified | Exchange | ||
98101 | 2015 | Appointed until | Traded Funds | ||
successor is | Trust | ||||
duly elected and | |||||
qualified |
* Each Trustee is subject to mandatory retirement at age 75.
94 Disclosure of Information about Fund Trustees and Officers
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Disclosure of Information about Fund Trustees and Officers, continued — June 30,
2018 (Unaudited)
Name, | Position(s) Held | Term | Principal Occupation(s) | No. of | Other |
Age, | With Fund and | of | During the | Portfolios | Directorships |
Address | Length of | Office * | Past 5 Years | in Russell | Held by Trustee |
Time Served | Fund | During the | |||
Complex | Past 5 Years | ||||
Overseen | |||||
by Trustee | |||||
TRUSTEE EMERITUS | |||||
George F. Russell, Jr. , | Trustee Emeritus and | Until resignation | • Director Emeritus, RIM | 42 | None |
Born July 3, 1932 | Chairman Emeritus | or removal | |||
1301 Second Avenue, | since 1999 | ||||
18th Floor, Seattle, WA | |||||
98101 |
Name, | Positions(s) Held | Term | Principal Occupation(s) |
Age, | With Fund and | of | During the |
Address | Length of | Office | Past 5 Years |
Time Served | |||
OFFICERS | |||
Mark Spina, | President and Chief | Until successor | • President and Chief Executive Officer, RIC and RIF |
Born June 8, 1970 | Executive Officer | is chosen and | • Chairman of the Board, President, RIFIS |
1301 Second Avenue | since 2017 | qualified by | • Chairman of the Board, RIFUS |
18th Floor, Seattle, WA | Trustees | • Director, RIM | |
98101 | • From 2015 to 2016, Head of Intermediary Distribution and President | ||
of Pioneer Funds Distributor | |||
• From 2008 to 2015, Head of Intermediary Distribution, Voya | |||
Investment Management | |||
Cheryl Wichers, | Chief Compliance | Until removed | • Chief Compliance Officer, RIC and RIF |
Born December 16, 1966 | Officer since 2005 | by Independent | • Chief Compliance Officer, RIFUS |
1301 Second Avenue | Trustees | • 2011 to 2016 Chief Compliance Officer, U. S. One , LLC | |
18th Floor, Seattle, WA | |||
98101 | |||
Mark E. Swanson, | Treasurer, Chief | Until successor | • Global Head of Fund Services, Russell Investments |
Born November 26, 1963 | Accounting Officer | is chosen and | • Treasurer, Chief Accounting Officer and CFO, RIC and RIF |
1301 Second Avenue | and Chief Financial | qualified by | • Director and President, RIFUS |
18th Floor, Seattle, WA | Officer since 1998 | Trustees | • Director RIM, Russell Investments Trust Company (“RITC”) and |
98101 | RIFIS | ||
• President and Chief Executive Officer, RIC and RIF, June 2016 to | |||
June 2017 | |||
• October 2011 to December 2013, Head of North America Operations | |||
Russell Investments | |||
Jeffrey T. Hussey, | Chief Investment | Until removed by | • Global Chief Investment Officer, Russell Investments |
Born May 2, 1969 | Officer since 2013 | Trustees | • Chief Investment Officer, RIC and RIF |
1301 Second Avenue, | • Chairman of the Board and President, RIM | ||
18th Floor, Seattle WA | • Director, RITC, Russell Investments Implementation Services, LLC | ||
98101 | and Russell Investments Delaware, LLC | ||
• Board of Managers, Russell Investments Funds Management, LLC | |||
• 2003 to 2013 Chief Investment Officer, Fixed Income, Russell | |||
Investments |
Disclosure of Information about Fund Trustees and Officers 95
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Disclosure of Information about Fund Trustees and Officers, continued — June 30,
2018 (Unaudited)
Name, | Positions(s) Held | Term | Principal Occupation(s) |
Age, | With Fund and | of | During the |
Address | Length of | Office | Past 5 Years |
Time Served | |||
Mary Beth R. Albaneze, | Secretary since 2010 | Until successor | • Associate General Counsel, Russell Investments |
Born April 25, 1969 | is chosen and | • Secretary, RIM, RIFUS and RIFIS | |
1301 Second Avenue, | qualified by | • Secretary and Chief Legal Officer, RIC and RIF | |
18th Floor, Seattle, WA | Trustees | • Assistant Secretary, Russell Investments Insurance Agency, LLC | |
98101 |
96 Disclosure of Information about Fund Trustees and Officers
Russell Investment Funds
LifePoints® Funds Variable Target Portfolio Series
Adviser and Service Providers — June 30, 2018 (Unaudited)
Interested Trustee | Administrator and Transfer and Dividend Disbursing |
Mark Spina | Agent |
Independent Trustees | Russell Investments Fund Services, LLC |
Thaddas L. Alston | 1301 Second Avenue |
Kristianne Blake | Seattle, WA 98101 |
Cheryl Burgermeister | Custodian |
Katherine W. Krysty | State Street Bank and Trust Company |
Raymond P. Tennison, Jr. | 1 Heritage Drive |
Jack R. Thompson | North Quincy, MA 02171 |
Trustee Emeritus | Office of Shareholder Inquiries |
George F. Russell, Jr. | 1301 Second Avenue |
Officers | Seattle, WA 98101 |
Mark Spina, President and Chief Executive Officer | (800) 787-7354 |
Mark E. Swanson, Treasurer, Chief Accounting Officer and | Legal Counsel |
Chief Financial Officer | Dechert LLP |
Cheryl Wichers, Chief Compliance Officer | One International Place, 40th Floor |
Jeffrey T. Hussey, Chief Investment Officer | 100 Oliver Street |
Mary Beth R. Albaneze, Secretary | Boston, MA 02110 |
Adviser | Distributor |
Russell Investment Management, LLC | Russell Investments Financial Services, LLC |
1301 Second Avenue | 1301 Second Avenue |
Seattle, WA 98101 | Seattle, WA 98101 |
Independent Registered Public Accounting Firm | |
PricewaterhouseCoopers LLP | |
1420 5th Avenue, Suite 2800 | |
Seattle, WA 98101 |
This report is prepared from the books and records of the Funds and is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless accompanied or preceded by an effective Prospectus. Nothing herein contained
is to be considered an offer of sale or a solicitation of an offer to buy shares of Russell Investment Funds. Such offering is made only by
Prospectus, which includes details as to offering price and other material information.
Adviser and Service Providers 97
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 Shareholders filed
under Item 1 of this form]
Items 7-9. [Not Applicable]
Item 10. Submission of Matters to a Vote of Security Holders
There have been no changes to the procedures by which shareholders may recommend
nominees to the Registrant’s Board of Trustees that would require disclosure herein.
Item 11. Controls and Procedures
(a) Registrant's principal executive officer and principal financial officer have concluded
that Registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under
the Investment Company Act of 1940 (the “Act”)) are effective, based on their evaluation
of these controls and procedures as of a date within 90 days of the date this report is filed
with the Securities and Exchange Commission.
(b) There were no significant changes in Registrant's internal control over financial
reporting that occurred during the period covered by this report that has materially
affected or is likely to materially affect Registrant's internal control over financial
reporting.
Item 12. Exhibit List
(a) 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.
(b) (b) Certification for principal executive officer and 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 Funds
By: /s/ Mark Spina
Mark Spina
President and Chief Executive Officer, Russell Investment Funds
Date: August 22, 2018
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.
By: /s/ Mark E. Swanson
Mark E. Swanson
Treasurer, Chief Accounting Officer and Chief Financial Officer, Russell Investment
Funds
Date: August 22, 2018