Fund Updates Effective March 14, 2018, changes will be implemented for two Russell Investment Company Funds. The value of active management We are committed to providing highest conviction investing through an increasingly discriminating list of managers to help investors reach their desired investment outcomes. As a result of our ongoing manager research and deep portfolio review process, our Portfolio Managers have identified changes to certain funds, effective March 14, 2018. Changes are occurring in the following Russell Investment Company (RIC) Funds: Emerging Markets Fund Unless otherwise noted, investment objectives, risk parameters and fund portfolio characteristics will not materially change as a result of these changes. NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Russell Investments // March 2018 Fund Updates
Emerging Markets Fund The Russell Investments portfolio manager of this Fund, Gustavo Galindo, recently made changes in an effort to: Improve excess return potential of the Fund by moving to a higher conviction manager with a growthoriented strategy. Terminated money manager: Delaware Investments Fund Advisers, a series of Macquarie Investment Management Business Trust Originally introduced into the Fund in 2011 Targeted number of holdings: 60-90 The decision was a result of Russell Investment s desire to move to a higher conviction manager and to rotate the Fund towards more growth-oriented strategies. Russell Investments believes stocks with broad growth characteristics appear attractive in terms of valuation (relative to history) and continued expansion in emerging markets will lead to higher earnings growth broadly, creating medium-term opportunities for growth-oriented managers. New money manager: Axiom International Investors LLC Firm background: Firm headquarters is in Greenwich, CT Lead manager is Andrew Jacobson The manager s intended role in the Fund: Axiom provides the Fund with all cap emerging markets growth exposure. Axiom s strategy generally invests in stocks of companies with consistent growth characteristics such as higher than average earnings growth and higher potential for positive earnings revisions, and in companies believed to be higher quality. Targeted number of holdings: 150-200 Russell Investments analysis of the manager: Russell Investments has followed Axiom for over 10 years and has strong conviction in Axiom s lead portfolio manager and CIO, Andrew Jacobson. Russell Investments believes Andrew has a strong awareness of market dynamics combined with deep knowledge of companies in emerging markets. Axiom follows a growth process focused on identifying key growth drivers for emerging market companies. Their process is highly disciplined with a team of investment analysts monitoring and classifying news daily that could impact those growth drivers. 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 and Russell Investment Management, LLC s strategy. This does not include liquidity reserves managed directly by Russell Investment Management, LLC, which may constitute 5% or more of Fund assets at any given time. Emerging Markets Fund MANAGER ROLE PREVIOUS CURRENT AllianceBernstein L.P.* Value 15% 13% Axiom International Investors LLC* Growth 0% 20% Consilium Investment Management, LLC* Market-oriented 6% 6% Russell Investments // March 2018 Fund Updates / p 2
Delaware Investments Fund Advisers, a series of Macquarie Investment Management Business Trust* Value 14% 0% Harding Loevner LP Growth 13% 16% Numeric Investors LLC Market-oriented 14% 13% Oaktree Capital Management, L.P.* Market-oriented 15% 13% Westwood Management Corporation Growth 7% 6% Russell Investment Management, LLC ( RIM )** Positioning strategy 16% 13% *Indicated managers are non-discretionary managers. RIM manages these portions of the Fund s assets based upon model portfolio provided by the managers. **RIM manages this portion of the Fund s 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. Positioning strategies are used to seek excess return and manage portfolio risks by targeting specific exposures. These strategies are used in conjunction with allocations to third-party managers to fully reflect Russell Investments strategic and dynamic views with integrated liquidity and risk management. The Russell Investments portfolio manager of this Fund, Jon Eggins, recently made changes in an effort to: Improve excess return potential of the Fund through use of fewer, highest conviction managers. Terminated money manager: Delaware Investments Fund Advisers, a series of Macquarie Investment Management Business Trust Originally introduced into the Fund in 2015 Targeted number of holdings: 90-100 The decision was a result of Russell Investments desire to move from three emerging markets equity managers in the Fund to two AllianceBernstein L.P. and RWC Asset Advisors (US) LLC that Russell Investments has the highest conviction in. Terminated money manager: Fiera Capital Inc. Originally introduced into the Fund in 2016 Targeted number of holdings: 30-50 The decision was a result of Russell Investments desire to move to GQG Partners LLC an early lifecycle, high conviction manager in the consistent growth space. New money manager: GQG Partners LLC Firm background: Firm headquarters is in Fort Lauderdale, FL Lead manager is Rajiv Jain The manager s intended role in the Fund: GQG Partners brings a consistent growth strategy to the Fund with a flexible and adaptive approach to investing. They aim to build portfolios of sustainable quality and growth companies at attractive prices. Targeted number of holdings: 40-60 Russell Investments analysis of the manager: Russell Investments believes GQG Partners has a willingness to invest in improving quality companies, which Russell Investments believes is a positively differentiated feature of their investment approach. This willingness provides an expanded opportunity set of stocks to choose from relative to peers with a similar consistent growth investing style. Russell Investments has known and researched Rajiv Jain, the founder and lead portfolio manager for GQG, for many years while he was the lead portfolio manager of the global, international, and emerging Russell Investments // March 2018 Fund Updates / p 3
markets strategies for Vontobel Asset Management. Mr. Jain launched his own firm, GQG Partners, in June 2016. Russell Investments has high confidence in Mr. Jain and views the opportunity to be an early investor with a newer firm as attractive. 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 and Russell Investment Management, LLC s strategy. This does not include liquidity reserves managed directly by Russell Investment Management, LLC, which may constitute 5% or more of Fund assets at any given time. MANAGER ROLE PREVIOUS CURRENT AllianceBernstein L.P. Value 4.5% 7.5% Delaware Investments Fund Advisers, a series of Macquarie Investment Management Business Trust Value 6% 0% Fiera Capital Inc. Growth 15% 0% GQG Partners LLC Growth 0% 15% Janus Capital Management, LLC and Perkins Investment Management LLC Value 18% 18% Pzena Investment Management LLC Value 22% 22% RWC Asset Advisors (US) LLC Growth 4.5% 7.5% Russell Investment Management, LLC (RIM)* Positioning strategy 30% 30% All underlying third-party money managers of this Fund are non-discretionary money managers. RIM manages the respective portions of the Fund s assets based upon model portfolios provided by each firm. *RIM manages this portion of the Fund s 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. Positioning strategies are used to seek excess return and manage portfolio risks by targeting specific exposures. These strategies are used in conjunction with allocations to third-party managers to fully reflect Russell Investments strategic and dynamic views with integrated liquidity and risk management. Russell Investments // March 2018 Fund Updates / p 4
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 russellinvestments.com. Please read a prospectus carefully before investing. 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. 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. 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. Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the FTSE RUSSELL brand. Copyright 2018 Russell Investments Group, LLC. 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. Russell Investment Company mutual funds are distributed by Russell Investments Financial Services, LLC, member FINRA, part of Russell Investments. First used: March 2018 RIFIS 19722 Russell Investments // March 2018 Fund Updates / p 5