Nearly 60% of Institutional Funds Use Russell Indexes (Russell.com)

Nearly 60% of Institutional Funds Use Russell Indexes
Survey: Number of products benchmarked to Russell 2000 surpasses 500

Tacoma, WA — September 6, 2007 — An annual survey measuring market share of various stock index families shows Russell's family of U.S. indexes continues to gain in institutional usage while other index groups experience flat or declining market share. Russell indexes rank as the most widely used set of U.S. equity benchmarks among institutional investment products and account for an industry-leading 58.5% 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.

The survey also found Russell's U.S. indexes represent nine of the top 10 benchmarks in terms of the number of products as well as the amount of assets. The small-cap Russell 2000® Index continues to rank as the second most commonly used equity benchmark in the number of products, representing 511 benchmarks.

Nearly 99% of all institutional assets benchmarked to a small-cap index use Russell Indexes, primarily the Russell 2000 (44.2%), Russell 2000 Value Index (25.7%), Russell 2000 Growth Index (18.6%) and Russell 2500® Index (10%).

"Professional investors clearly and increasingly have positioned the Russell 2000 as the industry standard for the small-cap segment of the U.S. market," said Kelly Haughton, strategic director for Russell Indexes. "The same is true for our growth and value style indexes, particularly in the large-cap arena."

In terms of institutional assets, Russell's two large-cap style indexes-Russell 1000® Growth Index and Russell 1000® Value Index—account for more than $1 trillion combined and each has more assets benchmarked to it than the Russell 2000.

These findings were determined by an examination of 3,034 U.S. equity products listed in Nelson Information's Marketplace Web database that reported using a benchmark.

"Since Russell Indexes are a direct outgrowth of our multi-manager investment business, they were specifically created as broadly representative and unbiased performance benchmarks," said Haughton. "Investors are increasingly relying on our comprehensive approach to tracking the global equity market in order to measure the relative performance of their funds."

Again this year, Russell's family of indexes stand as the only major set of benchmarks to gain market share based on product usage, continuing a trend identified by Nelson in its original survey of benchmark usage in 1998. Russell's market share has increased from 18.5% in 1996 to 27.9% in 1998, 39.3% in 2002, 48.6% in 2004 and 54.5% in 2006.

Individually, the top 10 U.S. equity benchmarks ranked by the number of products are the Standard & Poors 500 Index, Russell 2000, Russell 1000® Growth Index, Russell 1000® Index Value, Russell 2000 Growth, Russell 2000 Value, Russell 2500, Russell Midcap® Growth Index, Russell Midcap® Value Index and Russell 3000® Index.

Russell originally developed and still uses its indexes as tools to help pension plan sponsors and other investors evaluate the performance of active investment managers. The indexes also help investors assemble and evaluate a total portfolio by using benchmarks that reflect particular market segments based on objective criteria, such as market capitalization and tradable shares.

More than $4 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 aims to improve financial security for people by providing strategic advice, world-class implementation, state-of-the-art performance benchmarks and a range of institutional-quality investment products. With $219.9 billion in assets under management, Russell serves individual, institutional and advisor clients in more than 40 countries. Russell provides access to some of the world's best money managers. It helps investors put this access to work in corporate defined benefit and defined contribution plans, and in the life savings of individual investors. Founded in 1936, Russell is headquartered in Tacoma, Wash., and has principal offices in Amsterdam, Auckland, Hong Kong, Johannesburg, London, Melbourne, New York, Paris, San Francisco, Singapore, Sydney, Tokyo and Toronto.

About Russell Indexes: Russell's comprehensive family of global equity indexes, including the industry-leading Russell U.S. indexes, allow investors to seamlessly track performance of distinct market segments worldwide without gaps or overlaps. Russell's index story began in 1984 when the multi-manager investment firm launched its family of U.S. indexes to accurately measure U.S. market segments and better track investment manager behavior. These indexes have become the most widely used benchmarks by institutional investors and today about $4 trillion in assets are benchmarked to them. In early 2007, Russell applied the same pioneering index methodology to the world's equity markets to create the Russell Global Index and hundreds of subcomponent global indexes that capture 98% of the investable global equity market.

Contact:
Steve Claiborne, 253-439-1858

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

Indexes are unmanaged and cannot be invested in directly.

Russell Investment Group is the owner of the trademarks, service marks, and copyrights related to its respective indexes.

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