Russell Fine-Tunes Index Rule on Inclusion Eligibility (Russell.com)

Russell Fine-Tunes Index Rule on Inclusion Eligibility

Tacoma, WA — December 14, 2006 — Russell Investment Group plans to enhance the portion of its rules-based methodology that defines a company's eligibility for inclusion to its family of U.S. equity indexes. Effective with the June 2007 reconstitution, companies that incorporate outside the United States for taxation, political or other benefits but otherwise behave primarily like a U.S. company will be considered for inclusion.

"This rule change better reflects U.S. investment manager behavior," said Rolf Agather, director of business development for Russell indexes. "This change for our U.S. family of indexes also ensures complete consistency and modularity within our soon-to-launch global index family."

Russell historically excluded these securities from eligibility due to the special benefits these companies receive by incorporating outside the United States.

"In today's increasingly global market, investment managers are more willing to include these types of securities in their U.S. portfolios," Agather said. "Accurate benchmarks are an integral part of Russell's ongoing process to monitor more than 6,600 investment manager products worldwide for Russell's $181 billion active investment management business."

An analysis of Russell's manager-research universe shows that a growing number of large-cap managers hold one or more Benefit-Driven Incorporation (BDI) companies in their U.S. portfolio. While the weighting of BDI companies in their portfolios tends to be small, they have increased substantially in recent years.

	# of large-cap managers	# invested in U.S. BDIs	% invested in U.S. BDIs
2002	376	209	55.6%
2006	419	314	74.9%

BDIs that are eligible for inclusion to Russell's U.S. indexes will be announced as part of the annual reconstitution's preliminary list notification process in early June.

Russell, which posts its index methodology and construction on www.russell.com, also plans to update its rules involving corporate actions effective February, 2007. Those slight changes will be outlined on the "construction and methodology" page in January.

Russell indexes rank as the most widely used set of U.S. equity performance benchmarks among institutional investment products and account for an industry-leading 54% of the benchmarks in funds used by corporate pension plans and other institutional investment organizations. In addition, Russell indexes account for more than half of all institutional assets benchmarked. More than $3.8 trillion in assets are benchmarked to Russell indexes, according to a cross-examination of Nelson Information's MarketPlace Web database, a Russell index client survey and Morningstar's Direct database.

About Russell
Russell Investment Group, global leader in multi-manager investing, provides investment products and services in 44 countries. Russell manages more than $181 billion in assets and advises clients worldwide representing more than $2.4 trillion. Founded in 1936, Russell is headquartered in Tacoma, Wash., with additional offices in New York, Toronto, London, Paris, Singapore, Sydney, Auckland and Tokyo. For more information about Russell, go to www.russell.com.

Contact:
Steve Claiborne, 253-439-1858

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

Indexes are unmanaged and cannot be invested in directly.

RC#4489