Target Distribution Strategies
On December 16, 2011, the following LifePoints® Funds, Target Distribution Strategies were closed:
- 2017 Accelerated Distribution Fund - A Shares
- 2027 Extended Distribution Fund - A Shares
- 2017 Accelerated Distribution Fund - S Shares
- 2027 Extended Distribution Fund - S Shares
Helping address retirement funding challenges
Whoever said the money you saved for retirement should stop working just because you do? You've spent decades accumulating your retirement nest egg. Now you need an investment approach that will make the most use of your savings so you can enjoy your long-awaited retirement.
The LifePoints Funds, Target Distribution Strategies are designed specifically to address the needs of investors in or near retirement. They are strategically managed to deliver steady and predictable (but not guaranteed) annual distributions over a specific time period while seeking to perserve a portion of the capital initially invested. They are designed to complement other asset allocated strategies to create an overall portfolio designed to meet retirees current needs for cash flow while investing other assets for future goals.
About the funds
- Russell's expertise Russell has leveraged its expertise in asset-liability matching, developed through over 40 years of working for some of the world's largest pension managers, to bring another institutional-caliber investment solution to individuals via financial professionals.
- Fund of funds structure These funds currently invest in other underlying Russell Investment Company funds.
- Annual distributions Investors will receive a steady, but not guaranteed, distribution payment in December throughtout the term of the fund.
- Accessible and liquid Like other mutual funds, investors may access their money at any time (net asset value subject to market fluctuations).
- Potential to preserve capital Two of the funds have a secondary objective to seek preservation of a portion of the capital initially invested.
- Return of capital Occurs when insufficient income from interest, dividends and capital gains is generated by a fund to pay target distributions. This means investors will receive some of their initial investment back as part or all of an annual distribution.
- Distribution overages Occurs when income from interest, dividends and capital gains exceeds the stated target distribution. Overages must be immediately reinvested in order to receive expected future annual target distributions, otherwise future target distributions will be lower.
- Payout ratio changes The payout ratio of a fund is the target distribution per share divided by the NAV per share. Because the NAV changes daily, the payout ratio will change daily.
- Use in IRAs - Special tax considerations exist for investors using these funds in IRAs.
- S Shares 1% advice fee The funds' investment model assumes redemption of shares from investors' accounts to pay an annual 1% external advisory fee. Fees exceeding 1% will result in lower annual distributions and any remaining investment at the end of the term will be lower.
Refer to the fund overview pages and the funds' prospectuses for a wide range of helpful information, including a discussion about the structure of the funds, their underlying investments, fees and expenses and the risks associated with investing in them. These funds are new with no operating history, which may result in additional risk.
2017 Retirement Distribution Fund - S Shares
2017 Retirement Distribution Fund - A Shares
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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 the prospectus and reports page to download one. Please read the prospectus carefully before investing.
The LifePoints® Funds are a series of fund of funds which expose an investor to the risks of the underlying funds proportionate to their allocation. Investment in LifePoints Funds involves direct expenses of each fund and indirect expenses of the underlying funds, which together can be higher than those incurred when investing directly in an underlying fund.
The LifePoints® funds Target Distribution Strategies are new funds without operating history, which may result in additional risk. Each fund seeks to provide a steady, but not guaranteed, level of distributions to its shareholders for the term of the fund. This is contingent on the fund having sufficient assets to make such distributions. If a fund does not have sufficient assets to meet its investment objective(s), it will distribute the remaining assets and the fund will close prior to the end of its term. If this happens, your clients will stop receiving the target annual distributions and the fund may distribute its remaining assets at an inopportune time.
Each of the LifePoints® Funds Target Distribution Strategies is a "fund of funds" and seeks to achieve its objective primarily by investing in shares of several other Russell Investment Company (RIC) funds (the "Underlying Funds") representing various asset classes. This approach exposes an investor to the risks of the underlying funds proportionate to their allocation. Investment in LifePoints Funds involves direct expenses of each fund and indirect expenses of the underlying funds, which together can be higher than those incurred when investing directly in an underlying fund. Each fund is managed pursuant to a quantitative model and employs a dynamic asset allocation strategy.
These funds are not intended to be a complete solution to investors retirement income needs. Investors must weigh many factors when considering to invest in these funds, including how much an investor will need, how long will the investor need it for, what other sources the investor will have and, if the investor is purchasing shares in an IRA account, whether the fund's target distributions will meet IRS minimum distribution requirements once age 70 is reached.
Investors who purchase shares in subsequent years after the funds open may not receive the same results as investors who purchase shares during the initial investment period. This may include a different payout ratio (target distribution per share divided by net asset value per share) and/or a different amount of the investor initial investment remaining at the end of the period. Consequently, the funds may close to new investors and to additional investment by existing shareholders (except for reinvestment of Distribution Overages) if the funds determine that such further investment will result in the funds being less likely to meet their investment objectives.
Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets.
Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company.
LifePoints® and the Russell logo are registered trademarks and service marks of Russell Investments.
Securities products and services offered through Russell Financial Services, Inc., member FINRA, part of Russell Investments.
For information on the Financial Industry Regulatory Authority, go to www.finra.org.
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First used December 2011.
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