Fund Changes Effective March 10, 2015, manager and strategy changes will be implemented for three Russell Investment Company Funds The value of active management We believe an effective multi-asset portfolio is built using the best strategies. That s why we put our efforts into continually researching money managers and strategies around the world with the goal of finding top performers. Occasionally, necessary changes are identified by Russell Portfolio Managers. Changes effective March 10, 2015 Changes are occurring in the following Russell Investment Company (RIC) Funds: Russell U.S. Small Cap Equity Fund Russell Emerging Markets Fund Russell Global Opportunistic Credit Fund Unless otherwise noted, investment objectives, risk parameters and fund portfolio characteristics will not materially change as a result of these manager changes. Please see the funds manager profile documents for further details on all the managers and strategies in the funds. Russell U.S. Small Cap Equity Fund The Russell portfolio manager of this fund, Jon Eggins, recently made changes in an effort to: Take an opportunity to upgrade the manager in the deep value small cap space. NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Russell Investments // March 10, 2015 Fund Manager Changes
New money manager: Robeco Investment Management, Inc. Firm background: Robeco Investment Management, Inc. is an SEC-registered investment adviser consisting of three investment divisions: Boston Partners, Weiss, Peck & Greer, and Redwood, each offering distinctive investment capabilities. Headquarters is in Boston, MA Lead managers are Richard Shuster, CFA, and Greg Weiss The manager s intended role in the Fund: Robeco provides a small cap value strategy Targeted number of holdings: 80-120 Russell s analysis of the manager: Russell has researched this firm since approximately 2005. Robeco seeks companies that are experiencing above-average and increasing levels of return on invested capital as well as those that are priced below normalized historical valuations. Robeco s strategy is a deep value approach to picking small and micro-cap securities. This tends to have a contrarian flavor so market environments that favor higher momentum and growth stocks will tend to be a challenge for this manager. Robeco is expected to perform better in market environments that favor value stocks. This money manager was added now because Russell was seeking a higher conviction money manager in the small cap value space. Terminated money manager: Signia Capital Management, LLC Originally introduced into fund in 2008 Signia focused on small cap value stocks Signia is being removed from the fund because, after continuous evaluation, Russell is concerned about the probability of the manager s strategy turning performance around in the future. Targeted number of holdings: 40-60 What is the impact on the fund structure as a result of this change? The fund s expense ratio as stated in the current prospectus will not change. Fund assets have been reallocated. The percentages below represent the target allocation of the fund s assets to each money manager s strategy. Russell manages the fund s liquidity reserves and may manage assets to effect the fund s investment strategies and/or to actively manage the fund s overall exposures to seek to achieve the desired risk/return profile for the fund. This may constitute 5% or more of fund assets at any given time. Russell U.S. Small Cap Equity Fund MANAGER ROLE PREVIOUS CURRENT EAM Investors LLC Growth 7% 6% Falcon Point Capital, LLC Growth 10% 8% Next Century Growth Investors, LLC Growth 8% 8% Copeland Capital Management, LLC Market-Oriented 8% 8% Russell Investments // March 10, 2015 Fund Manager Changes / p 2
Netols Asset Management, Inc. Market-Oriented 10% 11% PENN Capital Management Company, Inc. Market-Oriented 6% 7% Ancora Advisors, LLC Market-Oriented 10% 11% Cardinal Capital Management, L.L.C. Value 6% 8% DePrince, Race & Zollo, Inc. Value 10% 11% Jacobs Levy Equity Management, Inc. Value 15% 14% Signia Capital Management, LLC Value 10% 0% Robeco Investment Management, Inc. Value 0% 8% Russell Emerging Markets Fund The Russell portfolio manager of this fund, Gustavo Galindo, recently made changes in an effort to: Introduce a strategic frontier markets exposure to the fund. New money manager: Consilium Investment Management, LLC Consilium will be hired as a non-discretionary manager in the fund. In this capacity, Consilium provides a model portfolio to Russell Investment Management Company (Russell) representing its investment recommendations, based upon which Russell purchases and sells securities for the fund. Russell may deviate from the model portfolio provided by Consiliuim for purposes of seeking tax efficiencies or minimizing transaction costs, but generally intends to implement the portfolio provided by Consilium. Firm background: Consilium Investment Management, LLC (Consilium) is a minority-owned investment management firm focusing on global emerging and frontier markets. Headquarters is in Fort Lauderdale, FL Lead manager is Jonathan Binder The manager s intended role in the Fund: Consilium provides a value oriented, frontier markets exposure to the fund Targeted number of holdings: 40-60 Russell s analysis of the manager: Russell has researched this firm since 2005. Consilium has a thematic understanding of the global risk appetite. The firm draws themes about how individual companies are expected to be impacted and how will they navigate through different risk environments. Once the firm understands the drivers in each country, the firm will conduct fundamental research. Analysts look for cheap stocks that are relatively good quality with some growth and fit within the firm s theme. Consilium s strategy is expected to do well when markets are focused on fundamentals. It is expected to struggle in unstable markets where risk aversion is high. This money manager was added now because Russell was seeking a dedicated, strategic exposure to frontier emerging markets. The existing managers in the fund may opportunistically invest in frontier markets, but none were dedicated to that market segment. Russell Investments // March 10, 2015 Fund Manager Changes / p 3
Terminated money manager: UBS Global Asset Management (Americas) Inc. Originally introduced into fund in 2007 UBS focused on small to mid-cap growth stocks UBS is being removed from the fund in an effort to introduce a higher conviction manager to the fund, and one that will provide the fund with frontier markets exposure, which UBS did not provide. Targeted number of holdings: 80-90 What is the impact on the fund structure as a result of this change? The fund s expense ratio as stated in the current prospectus will not change. Fund assets have been reallocated. The percentages below represent the target allocation of the fund s assets to each money manager s strategy. Russell manages the fund s liquidity reserves and may manage assets to effect the fund s investment strategies and/or to actively manage the fund s overall exposures to seek to achieve the desired risk/return profile for the fund. This may constitute 5% or more of fund assets at any given time. Russell Emerging Markets Fund MANAGER ROLE PREVIOUS CURRENT Consilium Investment Management, LLC Value 0% 5% Harding Loevner LP Growth 13% 14% Numeric Investors LLC Market-oriented 14% 15% Genesis Asset Managers, LLP Market-oriented 12% 12% Oaktree Capital Management, L.P. Market-oriented 15% 16% Westwood Management Corporation Growth 7% 7% AllianceBernstein L.P. Value 15% 16% Delaware Management Company Value 14% 15% UBS Global Asset Management (Americas) Inc. Growth 10% 0% Russell Global Opportunistic Credit Fund The Russell portfolio manager of this fund, Keith Brakebill, recently made changes in an effort to: Introduce a higher conviction, more nimble manager to the fund. New money manager: DuPont Capital Management Corporation Firm background: DuPont Capital Management Corporation (DuPont Capital) is a subsidiary of E.I. du Pont de Nemours and Company, an American chemical company founded in 1802. DuPont offers investment management services and global perspective to institutional investors. Headquarters is in Wilmington, DE Lead manager is Yong Zhu, PhD, CFA Russell Investments // March 10, 2015 Fund Manager Changes / p 4
The manager s intended role in the Fund: DuPont provides an emerging market debt strategy Targeted number of holdings: 75-100 Russell s analysis of the manager: Russell has researched this firm since 2012. DuPont invests in government bonds and some corporate bonds from emerging market countries primarily in hard currency. DuPont is a value-oriented firm that seeks opportunities across all types of credits that the firm categorizes as mature, stable, risky or distressed. The firm s investment approach takes an entire market cycle view. DuPont is expected to perform better in a bull market for emerging markets and is expected to struggle in a bear market for emerging markets. This money manager was added now because Russell was seeking a smaller, more nimble manager willing to take active risk positions in high yield credit. Terminated money manager: Stone Harbor Investment Partners L.P. Originally introduced into fund in 2010 Stone Harbor focused on emerging market debt Stone Harbor is being removed from the fund in an effort to introduce a higher conviction, more nimble manager to the fund. Targeted number of holdings: 80-100 What is the impact on the fund structure as a result of this change? The fund s expense ratio as stated in the current prospectus will not change. Fund assets have been reallocated. The percentages below represent the target allocation of the fund s assets to each money manager s strategy. Russell manages the fund s liquidity reserves and may manage assets to effect the fund s investment strategies and/or to actively manage the fund s overall exposures to seek to achieve the desired risk/return profile for the fund. This may constitute 5% or more of fund assets at any given time. Russell Global Opportunistic Credit Fund MANAGER ROLE PREVIOUS CURRENT DDJ Capital Management, LLC Specialist 15% 15% Lazard Asset Management LLC Specialist 18% 18% Oaktree Capital Management, L.P. Specialist 27% 27% Stone Harbor Investment Partners L.P. Specialist 30% 0% THL Credit Advisors LLC Specialist 10% 10% DuPont Capital Management Corporation Specialist 0% 30% Russell Investments // March 10, 2015 Fund Manager Changes / p 5
Fund objectives, risks, charges and expenses should be carefully considered before investing. A summary prospectus, if available, or a prospectus containing this and other important information can be obtained by calling (800) 787-7354 of visiting www.russell.com. Please read a prospectus carefully before investing. Mutual fund investing involves risk. Principal loss is possible. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. Money managers listed are current as of 3/10/2015. Subject to the fund's Board approval, Russell has the right to engage or terminate a money manager at any time and without a shareholder vote, based on an exemptive order from the Securities and Exchange Commission. Investments in the Funds are not deposits with or other liabilities of any of the money managers and are subject to investment risk, including loss of income and principal invested and possible delays in payment of redemption proceeds. The money managers do not guarantee the performance of any Fund or any particular rate of return. Investments in small cap, micro cap, and companies with capitalization smaller than the Russell 2000 Index, are subject to the risks of common stocks, may experience considerable price fluctuations and are more volatile than large company stocks. Generally, the smaller the company size, the greater the risks. Non-U.S. markets, which may include developed, emerging, and frontier markets, entail different risks than those typically associated with U.S. markets, including currency fluctuations, political and economic instability, accounting changes and foreign taxation. Non-U.S. securities may be less liquid and more volatile than U.S. securities. The risks associated with non-u.s. securities may be amplified for emerging markets securities. Because frontier markets are among the smallest, least developed, least liquid, and most volatile of the emerging markets, investments in frontier markets are generally subject to a greater risk of loss than investments in developed or traditional emerging markets. The investment styles employed by a Fund's money managers may not be complementary. This concentration may be beneficial or detrimental to a Fund's performance depending upon the performance of those securities and the overall economic environment. The multi-manager approach could increase a Fund's portfolio turnover rates which may result in higher levels of realized capital gains or losses with respect to a Fund's portfolio securities, higher brokerage commissions and other transaction costs. Consider how the combined risks of various asset classes impact your total investment portfolio and understand that different risks can lead to varying financial consequences, including loss of principal. Please see a prospectus for further details. Russell Investments is a trade name and registered trademark of Frank Russell Company, a Washington USA corporation, which operates through subsidiaries worldwide and is part of London Stock Exchange Group. Copyright Russell Investments 2015. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an as is basis without warranty. Securities products and services offered through Russell Financial Services, Inc., member FINRA, part of Russell Investments. First used: March 2015 RFS 15-14280 Russell Investments // March 10, 2015 Fund Manager Changes / p 6