Quarterly Review - Seven Tax-Managed Model Strategies · Quarterly Review Seven Tax-Managed Model Strategies First quarter 2020. ... Overweight to lower quality securities, specifically

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Quarterly Review

Seven Tax-Managed Model Strategies

First quarter 2020

Russell Investments / Tax-Managed Model Strategies

Page

Asset class commentary 3

Performance review 4-5

Tax-Managed Model Strategy insights 6-7

Fund allocations by model strategy 8

Money managers 9

Additional information 10-14

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Contents


-20.9

-9.1

4.0 5.8

10.2

-22.8

-14.4

-1.8 -0.6

2.7

-23.6-17.7

-1.6-0.4

0.73.2

8.94.8

3.4 3.9

-0.6

3.9 4.0 3.2 4.2

-28.5-24.0

-3.9-2.1

4.4

-30.0

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

YTD 1 Year* 3 Years* 5 Years* 10 Years*

U.S. Equity Non-U.S. Developed Equity Emerging Markets U.S. Bonds Municipal Bonds Global REITs

Return (%) *Annualized

-0.6

3.2 0.4

-6.9

-23.6 -22.8 -20.2

-30.6-40.0

-30.0

-20.0

-10.0

0.0

10.0Return (%)

WHAT WORKEDAsset class commentary

Amid an indiscriminatory market environment, core

fixed income and treasuries finished the quarter

positive as investors flocked toward more perceived

“safe-haven” assets.

WHAT DIDN’T WORK

The global COVID-19 pandemic forced most

developed markets to go into lockdown, translating

to deep contraction of the global economy. This

caused investors to flee global equities and

alternatives.

Asset class returns – First quarter 2020

Capital markets review

1 A basis point(bps) is 1/100 of a percent.Source: Morningstar Direct. Data as of March 31st, 2020.Asset Class Definitions: U.S. Equity = Russell 3000® Index; U.S. Small Cap = Russell 2000® Index; U.S. Large Cap = Russell 1000® Index; Non-U.S Equity. = MSCI EAFE Net Index; Global REITs = FTSE EPRA/NAREIT Developed Index; Cash = FTSE Treasury Bill 3 Month Index; EM Equity = MSCI Emerging Markets Index; U.S. Bonds = Bloomberg Barclays U.S. Aggregate Bond Index; Municipal Bonds = Bloomberg Barclays Municipal Index; High Yield Munis = Bloomberg Barclays High Yield Municipal Index.Index returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. Indexes are unmanaged and cannot be invested in directly.

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U.S.

Large

Cap Equity

U.S.

Small

Cap Equity

High Yield

Municipal

Bonds

CashMunicipal

Bonds

U.S.

Bonds

Emerging

Market

Equity

Non-U.S.

Equity

EQUITIES FIXED INCOME

Equities > U.S. equities finished the quarter down 20.22% (Russell 1000) as COVID-19 prompted indiscriminatory selling

pressure, and U.S. small cap finished the quarter down 30.61% (Russell 2000) erasing all small cap market gains

going back to March 2016.

> Non-U.S. equities finished the first quarter down 21.1% experiencing one of the worst quarters since 2008.

> MSCI Emerging Markets Index declined 23.6% in the first quarter. Most of the decline came in March when risk

markets experienced an unprecedented velocity of selling as the COVID-19 virus spread worldwide. China was able

to ease restrictions on the Hubei province and was a relative standout this quarter down 10.2%. Brazil sank 50.2%

due to the lack of concerted efforts to prevent the spread, while Greece fell 45.2% as one of the weakest performing

markets.

Fixed income > U.S. bonds finished the period up 3.2%, as investors’ appetite for safe-haven assets increased. While investment-

grade credit spreads widened 149 bps1 to 241, and high yield credit spreads widened 544 bps1 to 880 and the

benchmark 10-year Treasury yield decreased to record lows down 125 bps1 to .67%. Across the pond, the yields of

the benchmark UK 10-year gilt decreased -46 bps1 to 0.36%, and the German 10-year bund decreased 28 bps1 to

-.47%.

Alternatives > Relative to global equities, real estate corrected more sharply, a direct result of the severe and sudden demand

shock inflicted by COVID-19. The FTSE EPRA NAREIT Developed Net Index declined 28.5%. Based on the

demand response to COVID-19 mitigation measures, sector returns experienced a wide dispersion. Heavily

impacted sectors were those vulnerable to social distancing and travel restrictions (retail, lodging and senior

housing). While more resilient sectors came in the form of those that have limited foot traffic (data centres, industrial

and storage).

> Commodities, as measured by the Bloomberg Commodities Index fell 23.3% for the quarter. All sectors were

negative, with energy being the weakest (-51%), as WTI crude oil (-66%) and Brent crude oil (-56%) were hit

hardest due to Russia rejecting OPECs proposal to cut production as Saudi Arabia responded by raising daily crude

output. Grains were the best performers up 7%, in part due to wheat prices increasing 2.06% from strong

household demand. Gold advanced 4.52%, as economic concerns resulted in a flight to safe-haven investments.


FIRST QUARTER 2020 RESULTS

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Fund returns (Class S) – First quarter 2020

EQUITIES ALTERNATIVES FIXED INCOME

-7.46

-11.22-13.23

-15.24-17.28

-19.22

-22.22

-7.46

-11.23-13.23

-15.24-17.28

-19.22

-22.22

-30.00

-20.00

-10.00

0.00

Pretax* After Taxes on Distributions**

Return (%)

Tax-Managed Model Strategy returns (Class S) – First quarter 2020

Conservative Equity

GrowthModerate GrowthModerate

Growth

Balanced Balanced

Growth

* Income from funds managed for tax efficiency may be subject to alternative minimum tax, and/or any applicable state and local taxes.** Return after taxes represents historical model strategy returns after taxes on underlying fund distributions but prior to any sale of underlying fund shares. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown.Historical data shown is not an indicator of future results. Investors should consult with their financial and tax advisors before investing.

Performance review

The more aggressive model strategies underperformed, largely due to their allocations to global equities and

overweight to high yield municipal bonds. However, the more conservative-to-moderate growth model strategies

produced better results during the quarter, as core fixed income produced better results in a wide-spread flight to

safe-haven investments.

-29.49

-19.72

-25.76

-27.80

-5.72

-1.96

-1.28

-35.00 -30.00 -25.00 -20.00 -15.00 -10.00 -5.00 0.00

Tax-Managed U.S. Mid & Small Cap

Tax-Managed U.S. Large Cap

Tax-Managed International Equity

Tax-Managed Real Assets

Tax-Exempt High Yield Bond

Tax-Exempt Bond

Strategic Bond

Return (%)

*Notice: Effective June 10, 2019, the RIC Tax-Managed Real Assets

Fund was launched and replaced the Global Infrastructure and the

Global Real Estate Funds allocation in the Tax Managed Model

Strategies.

Equities > The Tax-Managed U.S. Large Cap Equity Fund marginally underperformed. Tilts toward stocks with

below benchmark market capitalization detracted from performance. While a sector overweight to

information technology and underweight to the consumer staples sector were rewarded.

> The Tax-Managed International Equity Fund underperformed as an overweight to emerging markets

detracted from performance. While overweight to financials and underweight to the consumer

discretionary also detracted.

Fixed income > The Tax-Exempt Bond Fund underperformed for the quarter. Overweight to lower quality securities,

specifically BBB-rated credit, was a negative contributor, as lower-quality municipals underperformed

given forced selling by institutions and individuals.

Alternatives* > The Tax-Managed Real Asset Fund outperformed relative to the blended benchmark, while REITs,

infrastructure, and Natural Resources lagged equities. Infrastructure manager First Sentier helped

performance with sector underweights to airports.


Performance review – As of March 31, 2020

Tax-Managed Model Strategy performance (%) – Class SANNUALIZED

QuarterlyYear-to-

Date

1

Year

3

Years

5

Years

10

Years

Since

Inception

Inception

Date

Conservative Model Strategy -7.46 -7.46 -1.81 2.67 2.80 4.16 4.19 4/1/2003

Return After Taxes on Distributions* -7.46 -7.46 -1.94 2.51 2.61 3.97 4.06

Moderate Model Strategy -11.22 -11.22 -4.58 2.08 2.68 4.77 5.08 4/1/2003


Moderate Growth Model Strategy -13.23 -13.23 -6.09 1.81 -- -- 2.90 6/1/2016

Return After Taxes on Distributions* -13.23 -13.23 -6.23 1.65 -- -- 2.71

Balanced Model Strategy -15.24 -15.24 -7.70 1.42 2.60 5.37 6.05 4/1/2003


Balanced Growth Model Strategy -17.28 -17.28 -9.28 1.05 -- -- 3.01 6/1/2016

Return After Taxes on Distributions* -17.28 -17.28 -9.41 0.88 -- -- 2.81

Growth Model Strategy -19.22 -19.22 -10.82 0.69 2.41 5.93 6.72 4/1/2003


Equity Growth Model Strategy -22.22 -22.22 -13.20 0.07 2.20 6.34 7.30 4/1/2003

Return After Taxes on Distributions* -22.22 -22.22 -13.37 -0.16 1.94 5.97 6.91

ANNUALIZED Annual Fund Operating

Expenses

QuarterlyYear-to-

Date

1

Year

3

Years

5

Years

10

Years

Since

Inception

Inception

Date ‡Total Net †

Tax-Managed U.S. Large Cap †,(b)-19.72 -19.72 -8.29 3.29 4.97 9.34 6.89 10/7/1996 0.95 0.92

Pre-Liquidation After-Tax Return 2,3-19.72 -19.72 -8.47 3.07 4.76 9.07 6.66 10/7/1996 0.95 0.92

Post-Liquidation After-Tax Return 3-11.67 -11.67 -4.74 2.54 3.87 7.66 5.86 10/7/1996 0.95 0.92

Tax-Managed U.S. Mid & Small Cap †,(a),(b)-29.49 -29.49 -22.83 -3.52 -0.73 6.85 5.12 11/30/1999 1.29 1.20

Pre-Liquidation After-Tax Return 2,3-29.49 -29.49 -22.89 -3.58 -0.80 6.45 4.83 11/30/1999 1.29 1.20

Post-Liquidation After-Tax Return 3-17.46 -17.46 -13.45 -2.64 -0.55 5.52 4.24 11/30/1999 1.29 1.20

Tax-Managed International Equity †,(b)-25.76 -25.76 -19.16 -4.56 -- -- -2.67 6/1/2015 1.16 1.04

Pre-Liquidation After-Tax Return 2,3-25.76 -25.76 -19.34 -4.64 -- -- -2.80 6/1/2015 1.16 1.04

Post-Liquidation After-Tax Return 3-15.25 -15.25 -10.55 -3.01 -- -- -1.68 6/1/2015 1.16 1.04

Tax-Managed Real Assets †,(b)-27.80 -27.80 -- -- -- -- -22.65 6/10/2019 1.28 1.08

Pre-Liquidation After-Tax Return 2,3-27.80 -27.80 -- -- -- -- -22.86 6/10/2019 1.28 1.08

Post-Liquidation After-Tax Return 3-16.46 -16.46 -- -- -- -- -13.23 6/10/2019 1.28 1.08

Strategic Bond †,(a),(b)-1.28 -1.28 4.65 3.34 2.54 3.88 5.39 1/29/1993 0.75 0.58

Tax-Exempt Bond †,(a)-1.96 -1.96 2.23 3.23 2.62 3.21 4.33 9/5/1985 0.58 0.52

Tax-Exempt High Yield Bond †,(b)-5.72 -5.72 -0.02 4.31 -- -- 4.56 6/1/2015 0.81 0.64

2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Conservative Model Strategy 11.47 -1.02 9.18 2.95 1.27 6.46 4.03 7.28 4.96 5.55 14.14 -8.98 3.91 6.45 2.71

Moderate Model Strategy 14.36 -2.76 11.81 4.11 0.94 6.04 8.95 10.04 2.17 8.27 18.83 -18.16 5.25 8.78 4.11

Moderate Growth Model Strategy 16.14 -3.85 13.40 -- -- -- -- -- -- -- -- -- -- -- --

Balanced Model Strategy 17.86 -5.27 15.71 5.79 0.01 5.73 14.23 12.51 -0.55 11.01 24.77 -27.15 7.28 11.16 5.84

Balanced Growth Model Strategy 19.53 -6.14 16.96 -- -- -- -- -- -- -- -- -- -- -- --

Growth Model Strategy 21.41 -7.49 19.23 7.41 -0.97 5.61 19.67 15.38 -3.29 13.72 29.91 -35.06 8.63 13.30 7.06

Equity Growth Model Strategy 24.22 -9.10 21.56 8.16 -1.11 5.41 24.45 17.73 -5.74 16.10 34.90 -42.37 10.05 15.74 8.46

Performance information is historical and does not guarantee future results. Investment return and principal value will fluctuate so that redeemed shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Current to the most recent month-end performance for Russell Investments mutual funds is available by visiting: russellinvestments.com/us/funds/performance-prices. *Return after taxes represents historical model strategy returns after taxes on underlying fund distributions but prior to any sale of underlying fund shares. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and the 3.8% Medicare surtax, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. Performance of the Model Strategies represent target allocations of Russell Investment Company Class S Share funds. Your financial advisor may have access to a different share class for the underlying funds allocated in the Model Strategies that could be more or less expensive which will impact the returns of the Model Strategies shown. ‡ For information on the underlying fund performance since inception, see the performance notes on the disclosure page.Annual Fund Operating Expenses Effective 03/31/2020. †The Net Annual Operating Expense Ratio may be less than the Total Operating Expense Ratio and represents the actual expenses expected to be borne by shareholders after application of: (a) a contractual transfer agency fee or advisory fee waiver through February 28, 2021; (b) a contractual cap and reimbursement on expenses through February 28, 2021; (c) a contractual agreement to permanently waive the advisory and administrative fees paid by the Fund in an amount equal to the advisory and administrative fees paid by the Subsidiary. This contractual agreement may not be terminated. These contractual agreements may not be terminated during the relevant periods except at the Board of Trustee's discretion. Details of these agreements are in the current prospectus. Absent these reductions, the fund's return would have been lower. 1 Return after taxes on distributions. If an underlying fund has realized capital losses, the return after taxes on distributions and sale of fund shares may be higher than the return before taxes and the return after taxes on distributions. The calculation of return after taxes on distributions and sale of fund shares assumes that a shareholder has sufficient capital gains of the same character to offset any capital losses on a sale of fund shares and that the shareholder may therefore deduct the entire capital loss. 2 After-tax returns are calculated using the historical highest individual federal marginal income tax rates and the 3.8% Medicare surtax, and do not reflect the impact of state and local taxes. After-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. 3 Return after taxes on distributions and sales of fund shares. Returns After taxes on Distributions may be the same as Returns Before taxes for the same period if there were no distributions for that period. Model Strategy returns represent past performance and are not indicative of any specific investment. Model Strategy returns are calculated by obtaining the weighted monthly returns of the strategy component funds from the prior month-end to the current month-end. These weighted returns are then added to the prior month’s return history and annualized. Performance is calculated based upon the actual historical fund allocations at the beginning of each month during the periods shown, which may differ from the current allocation. The funds comprising the strategies and the allocations to those funds have changed over time and may change in the future. Actual historical performance has not been adjusted to reflect current fund allocations.

Calendar year returns(%) – Tax-Managed Model Strategies – Class S

Underlying fund performance (%) – RIC Funds – Class S

/ 5

Notice: Effective June 10, 2019, the RIC Tax-Managed Real Assets

Fund was launched.


-2.14%

-0,26%

-2.20%

-0.09%

-1.00%

-0.53%

-0.08% 0.00% -0.08% -0.01%

-2.50%

-2.00%

-1.50%

-1.00%

-0.50%

0.00%

Tax-Managed Model Strategy insights

Since the launch of our Tax-Exempt Bond Fund in 1985 and Tax-Managed U.S. Large Cap Fund in 1996, Russell

Investments’ goal has been to help investors maximize their after-tax wealth. As you can see below, our active tax-

management strategies in our tax-managed equity funds and broad diversification in our tax-exempt bond funds have

helped reduced tax drag and capital gain distributions over time—managing the tax impact to investors.

Tax-Managed

U.S. Large

Cap Fund

Tax-

Managed

U.S. Mid &

Small Cap

Fund

U.S. LARGE

CAPU.S. SMALL

CAP

Tax-Managed

Int’l Equity

FundTax-Exempt

Bond Fund

Tax-Exempt

High Yield

Bond Fund

U.S. Large

Cap Blend

Peer Group

U.S. Small

Cap Blend

Peer Group

Non-U.S.

Peer

Group

National

Municipal

Peer Group

High Yield

Municipal

Peer Group

INTERNATIONAL

EQUITY

NATIONAL MUNI

BONDS

HIGH YIELD

MUNI BONDS

3 year average annualized tax drag¹ (RIC Funds – Class S) - ending March 31, 2020

Jan Feb March April May June July Aug Sept Oct

Tax-Managed U.S. Large Cap Fund -0.69% -0.97% -2.89% -- -- -- -- -- -- --

Tax-Managed U.S. Mid & Small Cap Fund 0.77% -0.03% -4.53% -- -- -- -- -- -- --

Tax-Managed Real Assets Fund -1.93% -3.13% -10.46% -- -- -- -- -- -- --

Tax-Managed International Equity Fund -10.38% -11.78% -16.29% -- -- -- -- -- -- --

Tax-Exempt High Yield Bond Fund -0.30% -0.36% -1.28% -- -- -- -- -- -- --

Tax-Exempt Bond Fund -0.54% -0.60% -1.05% -- -- -- -- -- -- --

Estimated (annualized) capital gain distributions as a % of NAV

Tax-Managed & Tax-Exempt Funds – Class SNote: Negative numbers or percentages represent capital losses incurred in the current and/or prior years

¹See page 16 for Methodology for universe construction. The major portion of this year’s capital gains for some of the Russell Investment Company Funds will be distributed in mid-December. This distribution will consist of approximately 98.2% of all capital gains earned during the 3-month period ending March 31, 2020, less any previous distributions made for that time period.Remember, the above numbers are not the distributable amount. The distributable amounts will be affected by any adjustments to the gain or loss amounts. This distribution may also be affected by certain tax laws applicable only to excise and year-end distributions such as §1291 PFIC rules, §1256 Mark-to-Market rules, §988 Foreign Currency rules and §1091 Wash Sales rules. Additionally, distributions may be affected by redemptions in the Funds and changes in the outstanding shares. This information is an estimate of capital gains only. Actual capital gains will vary from those presented above. This data is for informational purposes only and does not constitute tax advice and should not be relied upon for tax planning. Please refer to Form 1099-DIV or 1099-INT, detailing for federal tax-reporting purposes the amount of the taxable and non-taxable portion of the distribution. You should contact your tax advisor and/or Financial Professional for guidance regarding this information. Historical data shown is not an indicator of future results. Investors should consult with their financial and tax advisors before investing.

2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

Tax-Managed U.S. Large Cap Fund 0.00% 0.00% 0.24% 0.00% 0.00% 4.23% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Tax-Managed U.S. Mid & Small Cap Fund 0.00% 0.00% 0.55% 0.00% 0.52% 5.54% 7.56% 0.12% 0.00% 0.00% 0.00% 0.00% 8.00% 1.37% 0.00% 0.00%

Tax-Managed International Equity Fund 0.00% 0.00% 0.00% 0.00% 0.00% -- -- -- -- -- -- -- -- -- -- --

Tax-Exempt Bond Fund 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Tax-Exempt High Yield Bond Fund 0.00% 0.09% 0.00% 0.16% 0.08% -- -- -- -- -- -- -- -- -- -- --

Historical capital gain distributions

Tax-Managed & Tax-Exempt Funds – Class S

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RE

TU

RN

S L

OS

T T

O T

AX

ES

/ Y

EA

R

Notice: Effective June 10, 2019, the RIC Tax-Managed Real Assets Fund was launched.


Tax-Managed Model Strategy insights

Since the launch of the Tax-Managed Model Strategies in 2003, Russell Investments’ goal has been to help

investors maximize their after-tax wealth. As you can see below, Russell Investments’ Tax-Managed Model

Strategies have historically helped investors keep nearly all of their pre-tax return through our tax-smart

investment approach.

Tax-Managed Model Strategies (Class S) annualized returns

Before & after taxes since inception - April 1, 2003 to March 31, 2020

Historical capital gain distributions

Tax-Managed Model Strategies– Class S

4.2%

5.1%

6.1%6.7%

7.3%

4.1%

4.9%

5.8%6.4%

6.9%

Conservative Moderate Balanced Growth Equity Growth

Return Before Taxes Return After Taxes

Jan Feb March April May June July Aug Sept Oct

Conservative Model Strategy 0.06% 0.19% 0.20% -- -- -- -- -- -- --

Moderate Model Strategy 0.06% 0.14% 0.15% -- -- -- -- -- -- --

Moderate Growth Model Strategy 0.06% 0.07% 0.08% -- -- -- -- -- -- --

Balanced Model Strategy 0.06% 0.00% 0.00% -- -- -- -- -- -- --

Balanced Growth Model Strategy 0.07% 0.00% 0.00% -- -- -- -- -- -- --

Growth Model Strategy 0.07% 0.00% 0.00% -- -- -- -- -- -- --

Equity Growth Model Strategy 0.07% 0.00% 0.00% -- -- -- -- -- -- --

Estimated (annualized) capital gain distributions

Tax-Managed Model Strategies – Class S

2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003

Conservative Model Strategy 0.04% 0.12% 0.28% 0.36% 0.27% 0.77% 0.18% 0.12% 0.05% 0.00% 0.00% 0.00% 0.39% 0.25% 0.10% 0.00% 0.00%

Moderate Model Strategy 0.03% 0.12% 0.31% 0.34% 0.26% 1.36% 0.54% 0.13% 0.13% 0.00% 0.00% 0.00% 1.74% 0.96% 0.35% 0.00% 0.00%

Moderate Growth Model

Strategy-- 0.12% 0.33% -- -- -- -- -- -- -- -- -- -- -- -- -- --

Balanced Model Strategy 0.00% 0.12% 0.35% 0.21% 0.21% 1.81% 0.66% 0.03% 0.16% 0.00% 0.00% 0.14% 3.10% 1.78% 0.58% 0.00% 0.00%

Balanced Growth Model

Strategy-- 0.12% 0.36% -- -- -- -- -- -- -- -- -- -- -- -- -- --

Growth Model Strategy 0.00% 0.12% 0.38% 0.21% 0.22% 2.48% 0.96% 0.04% 0.25% 0.00% 0.00% 0.19% 3.82% 2.18% 0.70% 0.00% 0.00%

Equity Growth Model Strategy 0.00% 0.18% 0.53% 0.30% 0.30% 2.99% 1.13% 0.05% 0.29% 0.00% 0.00% 0.24% 4.82% 2.78% 0.89% 0.00% 0.00%

This data is for informational purposes only and does not constitute tax advice and should not be relied upon for tax planning. Please refer to Form 1099-DIV or 1099-INT, detailing for federal tax-reporting purposes the amount of the taxable and non-taxable portion of the distribution. You should contact your tax advisor and/or Financial Professional for guidance regarding this information. Tax-Managed Model Strategies represent target allocations of Russell Investment Company funds; these models are not managed and cannot be invested in directly and therefore have no actual capital gains associated with the model strategies. The estimated capital gains of the Tax-Managed Model Strategies represent the weighted average of each of the strategies component funds. Please see each of the strategies component funds for their estimated capital gains.Historical data shown is not an indicator of future results. Investors should consult with their financial and tax advisors before investing.April 1, 2003 is the launch date of all Tax-Managed Model Strategies except for the Moderate Growth and Balanced Growth, which were launched on 6/1/16.

/ 7

Annualized returns are not shown for the Moderate Growth and Balanced Growth Model Strategies due to an inception date of 6/1/2016.

Performance information is historical and does not guarantee future results.


Fund allocations by model strategyTax-Managed Model Strategies – Class S

Equity

Growth

PO

TE

NT

IAL

RE

TU

RN

RISK

Conservative

Moderate

Moderate

Growth

Balanced

Balanced

Growth

Growth

EQUITIES

ALTERNATIVES

FIXED INCOME

TAX-MANAGED MODEL

STRATEGYConservative Moderate

Moderate

GrowthBalanced

Balanced

GrowthGrowth

Equity

Growth

Model % Tax-Aware 95% 96% 98% 100% 100% 100% 100%

Equity fund allocation 16% 33% 43% 53% 63% 73% 88%

Tax-Managed U.S. Large Cap 8% 18% 24% 30% 35% 41% 50%

Tax-Managed U.S. Mid & Small

Cap2% 3% 4% 5% 6% 7% 7%

Tax-Managed International

Equity6% 12% 15% 18% 22% 25% 31%

Alternatives fund allocation 5% 6% 6% 6% 6% 6% 7%

Tax-Managed Real Assets Fund 5% 6% 6% 6% 6% 6% 7%

Fixed Income fund allocation 79% 61% 51% 41% 31% 21% 5%

Strategic Bond 5% 4% 2% -- -- -- --

Tax-Exempt Bond 59% 44% 38% 31% 22% 13% --

Tax-Exempt High Yield Bond 15% 13% 11% 10% 9% 8% 5%

/ 8

As you move from left to right on the graph – increasing risk – there are model strategies that can offer higher return potential. However, as with any type

of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns or increase volatility.

Notice: Effective June 10, 2019, the RIC Tax-Managed Real

Assets Fund was launched.


The tables below list the funds' third party money managers. Russell Investment Management, LLC (“RIM”) manages the funds’ liquidity reserves

and may manage assets to effect the funds’ investment strategies and/or to actively manage the funds’ overall exposures to seek to achieve the

desired risk/return profile for the funds. This may constitute 5% or more of fund assets at any given time.

Due to rounding, totals may not equal 100%.

****The list above only includes those money managers whose strategies RIM has allocated Fund assets to as of March 31, 2020. Russell Investment

Management, LLC (RIM) may change a Fund's asset allocation at any time, including not allocating Fund assets to one or more money manager strategies. For a

complete list of a Fund's money managers, see the prospectus.

***RREEF America L.L.C. refers to RREEF America L.L.C. (Chicago, IL), Deutsche Investments Australia Limited (Sydney, Australia) and Deutsche Alternatives

Asset Management (Global) Limited (London, UK)

‡This money manager is a non-discretionary manager. Russell Investment Management, LLC (RIM) manages this portion of the fund's assets based upon a model

portfolio provided by the money manager.

*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. 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.

Money managers listed are current as of March 31, 2020. Subject to the Fund’s Board approval, RIM 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.

Income from funds managed for tax efficiency may be subject to the alternative minimum tax and/or any applicable state and local taxes.

Investments that are allocated across multiple types of securities may be exposed to a variety of risks based on the asset classes, investment styles, market

sectors, and size of companies preferred by the investment managers. Investors should consider how the combined risks impact their 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.

/ 9

Money managers

Notice: Effective June 10, 2019, the RIC Tax-Managed Real Assets Fund was launched.

Money manager changes – First quarter 2020Additional information on these changes can be found on our website.

Tax-Managed U.S. Large

Cap FundRole %

Barrow Hanley‡ Value 20.00%

J.P. Morgan‡ Market-Oriented 20.00%

SGA‡ Growth 20.00%

RIM* Positioning Strategies 40.00%

Tax-Managed U.S. Mid &

Small Cap FundRole %

Falcon Point Growth 9.00%

Summit Creek‡ Growth 10.00%

Ancora Market-Oriented 12.00%

Copeland Market-Oriented 8.00%

Cardinal Value 12.00%

Snow‡ Value 9.00%


Tax-Managed International

Equity FundRole %

AllianceBernstein‡ Value 7.50%

Intermede**** Growth 15.00%

Janus‡ Value 15.00%

Pzena‡ Value 15.00%

RWC‡ Market-Oriented 7.50%


Tax-Managed Real

Assets FundRole %

GMO Global Market-Oriented 21%

First Sentier‡ Global Market-Oriented 21%

RREEF America***‡ Market-Oriented 28%

RIM* Positioning Strategies 30%

Strategic Bond Fund Role %

Colchester Generalist 14.00%

Schroder Specialist 20.00%

Western Generalist 30.00%


Tax-Exempt High Yield

Bond FundRole %

Goldman Sachs Specialist 50.00%

MacKay Shield Specialist 50.00%

Tax-Exempt Bond

FundRole %

Goldman Sachs Specialist 30.00%

MacKay Shield Specialist 70.00%

https://russellinvestments.com/us/financial-professionals/client-services/manager-and-strategy-updates


Additional information


The COVID-19 virus has stalled the mini-cycle rebound and made a global recession likely. While the duration of the

virus pandemic is unpredictable, policy stimulus, pent-up demand and a lack of major imbalances argue for a solid

upswing when the virus threat clears.

Asset class outlook

/ 11

Global market outlook

The funds in the Tax-Managed Model Strategies are dynamically managed to adapt to changing market conditions.

As part of the dynamic management process, the Russell Investments Portfolio Managers take their global market

outlook into account, including Russell Investments’ strategists’ capital market views on the business cycle,

valuations, and market sentiment.

Positioning

Cycle, valuation, sentiment outlook

CYCLEOutlook for the global economy

VALUATIONCurrent asset prices

SENTIMENTInvestor behavior

Near term outlook for a

recession. But significant

policy stimulus, both fiscal and

monetary, expected to support

the eventual recovery

Severe market drop has

improved variation for most

territories; particularly

international and emerging

markets, with US equities

closer to fair value

Our contrarian signals suggest

equity markets have been

oversold, however offset with

weakened momentum

NEUTRAL POSITIVEPOSITIVE

Legend: Positive Neutral Negative

*39% Russell 3000® Index, 17% MSCI World Ex-USA Index, 34% Bloomberg Barclays U.S. Aggregate Bond Index, 6% ICE BofAML Global High Yield Index, and 4%

FTSE EPRA/NAREIT Developed Index.

Equities: Improved value

› We believe equity value has improved after the large market falls. The cycle outlook is supported by the substantial

amount of stimulus being implemented, even though our near-term outlook is for recession.

› The message from our composite sentiment indicator is that investors have panicked and herded into a pessimistic

outlook, which supports taking a contrarian view. The equity markets that have been hardest hit by the COVID-19

crisis should be those that benefit the most from the eventual rebound.

Fixed income: High-yield credit attractively priced

› We believe high-yield credit is now very attractively priced after selling off as a result of the COVID-19 shock and oil

price collapse. The spread to U.S. Treasuries on March 19 was close to 900 basis points.

› This historically has been a good entry point into high-yield exposure, although there is obviously considerable

uncertainty in the market and liquidity risk that investors will need to consider in deciding whether to take advantage.

› We see government bonds as universally expensive. They may rally further if the COVID-19 crisis escalates further,

but are at risk of underperforming once the post-virus recovery is underway.

Alternatives: Slightly overweight commodities, neutral infrastructure and underweight REITs

› We continue to maintain a slight commodities overweight relative to the simple benchmark* due to characteristics

relative to other risky asset classes. Managers are taking slightly more defensive positions in infrastructure and global

REITs after a strong year.

› Infrastructure and REIT managers have begun to selectively add risk after the violent first quarter sell-off.


The dials below provide guidance of our Tax-Managed Balanced Model Strategy’s positioning relative to its

simple benchmark. The black line indicates the estimated exposure of the Tax-Managed Balanced Model

Strategy as of the most recent quarter-end, while the simple benchmarks’ exposure to each asset class is

indicated by the arrow.

60% 40% 0%

Under Over Under Over Under Over

Equities Fixed income Alternatives

On the basis of our current global market outlook, we continue to position the models to be risk managers, not

risk takers. This translates to allocating less exposure to equities and diversifying into fixed income and

alternatives.

Tax-Managed Balanced Model Strategy positioning vs. simple benchmark*

As of March 31, 2020

- + - + - +

US EQUITIES INTERMEDIATE-TERM MUNICIPAL BONDS GLOBAL INFRASTRUCTURE

- + - + - +

NON-U.S. DEVELOPED EQUITIES HIGH YIELD MUNICIPAL BONDS GLOBAL REAL ESTATE SECURITIES

- +

EMERGING

40%

0%

40% 0%

Simple balanced benchmark exposure

Current Tax-Managed Balanced Model Strategy exposure

*40% S&P 500 Index, 20% MSCI World Ex-USA Index, 40% Bloomberg Barclays Municipal 1-15 Year Blend (1-17) Index.

20% 0% 0%

+8%-8% 0%-16% +16% +8%-8% 0%-16% +16% +8%-8% 0%-16% +16%

Equities > The Tax-Managed Balanced Model Strategy is underweight to U.S. equity, given continued

expensive valuations and a late-cycle market environment.

> The model is also underweight non-U.S. developed market equities to fund an out-of-

benchmark exposure to Emerging Markets.

Fixed income > The Tax-Managed Balanced Model Strategy maintains an underweight exposure to

intermediate-term municipal bonds to fund an out-of-benchmark exposure to high yield

municipal bonds.

Alternatives > The Tax-Managed Balanced Model Strategy currently holds modest out-of-benchmark

exposures to diversifying real assets like global infrastructure and global real estate.

/ 12

Legend

Tax-Managed Model Strategy positioning

Positioning commentary


TAX-MANAGED MODEL STRATEGY Conservative ModerateModerate

GrowthBalanced

Balanced

GrowthGrowth

Equity

Growth

Model Quarterly Return (%) -7.46 -11.22 -13.23 -15.24 -17.28 -19.22 -22.22

Equity fund contribution (%) -3.99 -7.96 -10.25 -12.50 -14.76 -16.94 -20.03

Tax-Managed U.S. Large Cap Fund -1.67 -3.70 -4.89 -6.06 -7.00 -8.13 -9.77

Tax-Managed U.S. Mid & Small Cap Fund -0.64 -0.95 -1.25 -1.55 -1.84 -2.13 -2.09

Tax-Managed International Equity Fund -1.68 -3.31 -4.11 -4.89 -5.92 -6.68 -8.17

Alternative fund contribution (%) -1.50 -1.77 -1.75 -1.74 -1.72 -1.70 -1.96

Tax-Managed Real Assets Fund -1.50 -1.77 -1.75 -1.74 -1.72 -1.70 -1.96

Fixed income fund contribution (%) -1.96 -1.49 -1.23 -1.01 -0.79 -0.58 -0.23

Strategic Bond Fund -0.06 -0.04 -0.02 -- -- -- --

Tax-Exempt Bond Fund -1.09 -0.77 -0.65 -0.51 -0.35 -0.20 --

Tax-Exempt High Yield Bond Fund -0.81 -0.68 -0.56 -0.50 -0.44 -0.38 -0.23

Performance information is historical and does not guarantee future results.

Contributions of each individual fund component may not sum to the Model’s quarterly return due to rounding.

Source: Russell Investments & Morningstar Direct. Data as of March 31, 2020.

/ 13

First quarter 2020 contribution to Tax-Managed Balanced Model Strategy – Class S

The data below illustrates the contribution of each Russell Investment Company fund to the Model Strategy’s total

return during the quarter. This data does not represent the fund’s total return for the quarter, rather, the measure

helps to identify which funds in the Tax-Managed Model Strategies contributed positively and negatively during the

quarter, after adjusting for the fund’s appropriate allocation within each Model Strategy.

Fund return contribution by model strategy

Notice: Effective June 10, 2019, the RIC Tax-Managed Real

Assets Fund was launched.

CO

NT

RIB

UT

ION

TO

TO

TA

L R

ET

UR

N %

1Q 2020 CONTRIBUTION TO TAX-MANAGED BALANCED MODEL

STRATEGY RETURN

1Q 2020 RETURN (%) − CLASS S SHARES

-0.6 -0.6

-1.5 -1.7

-5.7

-6.9-8.0

-6.0

-4.0

-2.0

0.0

Russell Inv Tax-Exempt Bond S

Russell Inv Tax-Exempt High Yield

Bond S

Russell Inv Tax-Managed U.S. Mid &

Small Cap S

Russell Inv Tax-Managed Real Assets

S

Russell Inv Tax-Managed

International Equity S

Russell Inv Tax-Managed U.S. Large

Cap S

Russell Tax-ManagedBalanced Model

-15.2


Risk & return statistics

*Over the trailing 10 year period (April 1, 2009 to March 31, 2020). †See last page for definitions.

Model statistics

Source: Morningstar Direct. Data as of March 31, 2020.

*Duration reflects the Average Effective Duration, except for the Bloomberg Barclays (BbgBarc) Municipal Bond Index which reflects Modified Adjusted

Duration.

**All data quoted for the Bloomberg Barclays (BbgBarc) Municipal Bond Index is sourced from Barclays Live. Data as of March 31, 2020.

/ 14

2%

4%

6%

8%

10%

2% 6% 10% 14% 18% 22%

Annualiz

ed tota

l re

turn

Annualized standard deviation

RISK & RETURN STATISTICSSince inception** as of March 31st, 2020

Return = 4.17%

Risk = 5.07%

Return = 5.04%

Risk = 8.96%

Return = 6.01%

Risk = 13.43%

Return = 6.66%

Risk = 18.04%

Return = 7.23%

Risk = 22.32%CONSERVATIVE

MODERATE

BALANCED

GROWTH

EQUITY

GROWTH

EQUITIES

ALTERNATIVES

FIXED INCOME

Performance information is historical and

does not guarantee future results.

Risk and return statistics are not available for the Tax-Managed Moderate Growth and Tax-Managed Balanced Growth Model Strategies due to an inception date of

6/1/2016.

**Risk & Return data illustrated is since inception of

each Model Strategy, which is 4/1/2003

Statistics by modelTax-Managed Model Strategies – Class S

STANDARD DEVIATION† (%) SHARPE RATIO†

BEST

QUARTER* (%)WORST

QUARTER* (%)

MAX

GAIN* (%)

MAX

DRAWDOWN†*

(%)3

YEARS

5

YEARS

10

YEARS

3

YEARS

5

YEARS

10

YEARS

Conservative Model

Strategy5.60 4.94 4.22 0.19 0.35 0.84 5.06 -7.46 65.74 -8.33

Moderate Model

Strategy7.37 6.49 6.21 0.08 0.26 0.68 7.03 -11.22 87.32 -11.51

Balanced Model

Strategy9.87 8.83 8.81 0.02 0.20 0.57 9.35 -15.24 112.98 -15.24

Growth Model

Strategy12.46 11.23 11.52 -0.02 0.16 0.50 11.41 -19.22 142.46 -19.22

Equity Growth Model

Strategy14.38 12.86 13.72 -0.04 0.14 0.47 13.70 -22.22 169.71 -22.22

Equity

AVERAGE

MARKET CAP

(MIL)

P/E† P/B† P/S† P/CF† LONG-TERM

EARNINGS† (%)

HISTORICAL

EARNINGS† (%)

Conservative Model Strategy $31,243.94 15.94 1.95 1.44 8.36 9.51 8.36

Moderate Model Strategy $37,787.39 15.72 2.02 1.44 8.60 9.59 8.63

Moderate Growth Model Strategy $39,604.39 15.67 2.05 1.44 8.70 9.69 8.81

Balanced Model Strategy $40,852.30 15.63 2.07 1.44 8.77 9.75 8.92

Balanced Growth Model Strategy $40,966.21 15.52 2.06 1.43 8.73 9.76 8.89

Growth Model Strategy $41,746.92 15.51 2.08 1.43 8.78 9.80 8.97

Equity Growth Model Strategy $43,402.52 15.49 2.08 1.43 8.78 9.73 8.91

S&P 500 Index $111,512.41 16.14 2.42 1.76 9.56 9.62 427.10

Fixed

Income

DURATION*AVERAGE CREDIT

QUALITY

AVERAGE

COUPON

Conservative Model Strategy 5.15 BB 4.61

Moderate Model Strategy 5.18 BB 4.61

Moderate Growth Model Strategy 5.14 BB 4.65

Balanced Model Strategy 5.11 BB 4.70

Balanced Growth Model Strategy 5.15 BB 4.71

Growth Model Strategy 5.24 BB 4.73

Equity Growth Model Strategy 5.81 BB 4.83

BbgBarc Municipal Bond Index** 5.36 AA2/AA3 4.59


Tax-Managed Model Strategies are allocations of Russell Investment Company funds that are not managed and cannot be invested in

directly. Depending upon individual investment objectives, you and your financial advisor may want to combine funds that differ from the

illustrated combinations.

Tax-Managed Model Strategies are exposed to the specific risks of the funds directly proportionate to their fund allocation. The funds comprising the

strategies and the allocations to those funds have changed over time and may change in the future.

Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of

any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment

advice from a licensed professional.

Performance of the Tax-Managed Model Strategies represent target allocations of Russell Investment Company Class S Share funds. Your financial

advisor may have access to a different share class for the underlying funds allocated in the Core Model Strategies that could be more or less

expensive which will impact the returns of the Core Model Strategies shown.

Performance is based on full investment in the Tax-Managed Model Strategy. You and your financial professional may implement your investment in

a different manner than the above-referenced strategy. For example, if you allocate up to 2% of your portfolio in a money market mutual fund to

facilitate the payment of advisory fees and charges, your actual performance may differ.

Please remember that all investments carry some level or risk, including the potential loss of principal invested. They do not typically grow at an even

rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at

certain times, unintentionally reduce returns.

Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets.

Mutual fund investing involves risk, principal loss is possible.

Investments in derivatives may cause the Fund’s losses to be greater than if it invests only in conventional securities and can cause the Fund to be

more volatile. Derivatives involve risks different from, or possibly greater than, the risks associated with other investments. The Fund’s use of

derivatives may cause the Fund’s investment returns to be impacted by the performance of securities the Fund does not own and result in the

Fund’s total investment exposure exceeding the value of its portfolio.

Alternative strategies may be subject to risks related to equity securities; fixed income securities; non-U.S. and emerging markets securities;

currency trading, which may involve instruments that have volatile prices, are illiquid or create economic leverage; commodity investments; illiquid

securities; and derivatives including futures, options, forwards and swaps.

Investments in infrastructure-related companies have greater exposure to adverse economic, financial, regulatory, and political risks, including

governmental regulations. Global securities may be significantly affected by political or economic conditions and regulatory requirements in a

particular country.

Declines in the value of real estate, economic conditions, property taxes, tax laws and interest rates all present potential risks. Investments in

international markets can involve risks of currency fluctuation, political and economic instability, different accounting standards, and foreign taxation.

Bond investors should carefully consider risks such as interest rate, credit, default and duration risks. Greater risk, such as increased volatility,

limited liquidity, prepayment, non payment and increased default risk, is inherent in portfolios that invest in high yield (“junk”) bonds or mortgage-

backed securities especially, mortgage-backed securities with exposure to sub-prime mortgages. Generally, when interest rates rise, prices of fixed

income securities fall. Interest rates in the United States are at, or near, historic lows, which may increase a Fund’s exposure to risks associated with

rising rates. Investment in non-U.S. and emerging market securities is subject to currency fluctuations and to economic and political risks associated

with such foreign countries.

Certain underlying Funds within the model strategies may invest in derivatives, including futures, options, forwards and swaps. Investments in

derivatives may cause the Fund’s losses to be greater than if it invests only in conventional securities and can cause the Fund to be more volatile.

Derivatives involve risks different from, or possibly greater than, the risks associated with other investments. The Fund’s use of derivatives may

cause the Fund’s investment returns to be impacted by the performance of securities the Fund does not own and result in the Fund’s total

investment exposure exceeding the value of its portfolio.

Indexes are unmanaged and cannot be invested in directly. Returns represent past performance, are not a guarantee of future performance, and are

not indicative of any specific investment.

The S&P 500 Index is a free-float capitalization-weighted index of the prices of 500 large-cap common stocks actively traded in the United States.

The Russell 1000® Index is an index of 1000 issues representative of the U.S. large capitalization securities market.

The Russell 2000® Index is an index of 2000 issues representative of the U.S. small capitalization securities market.

The Russell 3000® Index is a U.S. stock index which includes the 3000 largest U.S. stocks as measured by market capitalization.

The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure the equity market performance of developed

markets, excluding the U.S. and Canada.

The MSCI World Ex-USA Index captures large and mid cap representation across 22 of 23 Developed Markets (DM) countries--excluding the United

States.

The MSCI Emerging Markets Index is a float-adjusted market capitalization index that consists of indices in 21 emerging economies.

FTSE EPRA Nareit Developed Real Estate Index is a global market capitalization weighted index composed of listed real estate securities in the

North American, European and Asian real estate markets.

The Bloomberg Barclays U.S. Aggregate Bond Index is an index, with income reinvested, generally representative of intermediate-term government

bonds, investment grade corporate debt securities and mortgage-backed securities.

The Bloomberg Barclays Municipal Index is an unmanaged index that is considered representative of the broad market for investment grade, tax-

exempt bonds with a maturity of at least one year.

The Bloomberg Barclays Municipal 1-15 Year Blend Index measures the performance of municipal bonds with maturities between one and 15 years.

The Bloomberg Barclays High Yield Municipal Index covers the high yield portion of the USD-denominated long-term tax exempt bond market. The

index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and pre-refunded bonds.

The Citigroup 1-3 month T-Bill Index measures monthly return equivalents of yield averages that are not market to market.

The JP Morgan Emerging Markets Bond Index Plus tracks total returns for traded external debt instruments (external meaning foreign currency

denominated fixed income) in the emerging markets

/ 15


The S&P Global Infrastructure Index is designed to track 75 companies from around the world chosen to represent the listed infrastructure

industry while maintaining liquidity and tradability. To create diversified exposure, the index includes three distinct infrastructure clusters: energy,

transportation, and utilities.

METHODOLOGY FOR UNIVERSE CONSTRUCTION: Average of Morningstar’s Tax Cost Ratio for universes as defined. Large Cap: U.S.

Fund Large Blend, U.S. Fund Large Growth, U.S. Fund Large Value; Small Cap: U.S. Fund Small Blend, U.S. Fund Small Growth, U.S. Fund

Small Value; International: U.S. Fund China Region, U.S. Fund Diversified Emerging Markets, U.S. Fund Diversified Pacific/Asia, U.S. Fund

Europe Stock, U.S. Fund Foreign Large Blend, U.S. Fund Foreign Large Growth, U.S. Fund Foreign Large Value, U.S. Fund ForeignSmall/Mid

Blend, U.S. Fund Foreign Small/Mid Growth, U.S. Fund Foreign Small/Mid Value, U.S. Fund India Equity, U.S. Fund Japan Stock, U.S. Fund

Latin America Stock, U.S. Fund Miscellaneous Region, U.S. Fund Pacific/Asia ex-Japan Stock, U.S. Fund World Large Stock, U.S. Fund World

Small/Mid Stock; National Muni Bonds: U.S. Fund Muni National Intermediate; High Yield Muni Bonds: U.S. Fund High Yield Muni.

KEY TERMS:

Standard deviation defines how widely returns varied from a daily average over a given period of time. A higher standard deviation means a

more volatile Fund. For example, a Fund with a standard deviation of 6 and an average annual return of 10% saw annualized monthly returns

fall within 6 percentage points of that average (or between 4% and 16%) two-third of the time.

Sharpe ratio is a calculation that reflects the reward per each unit of risk in a portfolio. The higher the ratio, the better the Fund's risk-adjusted

return.

Max drawdown is the peak to trough decline during a specific record period of an investment or fund. It is usually quoted as the percentage

between the peak to the trough.

Price/projected earnings (P/E) for a stock is the ratio of the company’s most recent month-end share price to the company’s estimated earnings

per share (EPS) for the current fiscal year. If a third-party estimate for the current year EPS is not available, Morningstar will calculate an internal

estimate based on the most recently reported EPS and average historical earnings growth rates. Price/projected earnings is one of the five value

factors used to calculate the Morningstar Style Box. For portfolios, this data point is calculated by taking an asset-weighted average of the

earnings yields (E/P) of all the stocks in the portfolio and then taking the reciprocal of the result.

Price/book (projected) (P/B) for a stock is the ratio of the company’s most recent month-end share price to the company’s estimated book value

per share (BPS) for the current fiscal year. Book value is the total assets of a company, less total liabilities. Morningstarcalculates internal

estimates for the current year BPS based on the most recently reported BPS and average historical book value growth rates. Price/book

(projected) is one of the five value factors used to calculate the Morningstar Style Box. For portfolios, this data point is calculated by taking an

asset-weighted average of the book value yields (B/P) of all the stocks in the portfolio and then taking the reciprocal of the result.

Price/sales (projected) (P/S) for a stock is the ratio of the company’s most recent month-end share price to the company’s estimated sales per

share (SPS) for the current fiscal year. Morningstar calculates internal estimates for the current year SPS based on the mostrecently reported

SPS and average historical sales growth rates. Price/sales (projected) is one of the five value factors used to calculate theMorningstar Style

Box. For portfolios, this data point is calculated by taking an asset-weighted average of the sales yields (S/P) of all the stocks in the portfolio and

then taking the reciprocal of the result.

Price/cash flow (projected) (P/CF) for a stock is the ratio of the company’s most recent month-end share price to the company’s estimated cash

flow per share (CPS) for the current fiscal year. Cash flow measures the ability of a business to generate cash and it acts as a gauge of liquidity

and solvency. Morningstar calculates internal estimates for the current year CPS based on the most recently reported CPS and average

historical cash flow growth rates. Price/cash flow (projected) is one of the five value factors used to calculate the Morningstar Style Box. For

portfolios, this data point is calculated by taking an asset-weighted average of the cash flow yields (C/P) of all the stocks in the portfolio and then

taking the reciprocal of the results.

Long-Term Earnings Growth (%) is the estimated earnings growth over the next 5 years.

Historical Earnings Growth (%) is one of the factors in determining a portfolios growth orientation score. The rate is calculated by averaging the

growth rate for up to the previous 4 years for each stock in the portfolio. Once each stock’s rate has been calculated the value for the portfolio is

calculated. Please refer to the Morningstar Style Box Methodology document for more details.

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 or by visiting russellinvestments.com. Please read a

prospectus carefully before investing.

Copyright ©2020 Russell Investments Group, LLC. 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.

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.

Russell Investment Company mutual funds are distributed by Russell Investments Financial Services, LLC, member FINRA, part of

Russell Investments.

First used: April 2020

RIFIS 22730

/ 16

Not a Deposit. Not FDIC Insured. May Lose Value. Not Bank Guarantee. Not Insured by any Federal Government Agency.

Documents

Quarterly Review - Seven Tax-Managed Model Strategies · Quarterly Review Seven Tax-Managed Model Strategies First quarter 2020. ... Overweight to lower quality securities, specifically