Russell U.S. Core Equity Fund Focusing on fundamentals Class S September 30, 2008 About the fund Russell carefully blends money managers for effectiveness during different phases of a market cycle. We belive this increases the fund's possibility of outperforming its benchmark in a wide variety of conditions. However, there is no guarantee this objective will be met. Each manager offers a distinct perspective designed to enhance diversification. For example, some of our managers select stocks that they see as currently depressed in value relative to their future potential. Other managers concentrate on equities with earnings they believe are rising and a market price that's gaining momentum. – Steve Skatrud Investment strategy   Seeks to provide long-term capital growth. Invests in stocks traded in the U.S. market. Core equity exposure blends growth, market-oriented and value styles, including stocks with medium to large capitalization. Fund highlights   Managers use a wide variety of investment strategies from a "bottom-up" or fundamental approach, to a "top-down" or macro-economic approach. Multi-level diversification means investment performance does not depend on a single market sector, style or trend. Managing money differently The Russell approach has been trusted for decades by many of the world's largest investors; our mutual funds allow you to employ that same approach. We identify investment managers we believe have exceptional capabilities, blend them to help manage risk through diversification, and constantly monitor them. Regardless of market conditions, Russell's investment approach remains constant. Allocation of fund assets     % Allocated   Year assigned Growth         Columbus Circle Investors   11%   2007 Marsico Capital Management, LLC   10%   1999 Montag & Caldwell, Inc.   9%   2002 Turner Investment Partners, Inc.   8%   2000 Market-oriented         Arnhold and S. Bleichroeder Advisers, LLC   6%   2007 Russell Investment Management Company*   5%   2005 Suffolk Capital Management, LLC   13%   2000 Value         Alliance Bernstein L.P.   8%   1998 Institutional Capital, LLC   12%   2004 MFS Institutional Advisors, Inc.   10%   2001 Schneider Capital Management Corporation   8%   2004 *The fund's adviser may employ a "select holding" strategy for a portion of the fund's assets that it determines not to allocate to the money managers. The strategy is designed to increase the fund's exposure to stocks that are viewed as attractive by multiple money managers. The use of the select holdings and strategy will amplify the Fund's security risk and potential underperformance. Money managers listed are current as of 09/30/08. Subject to the fund's Board approval, Russell 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. The investment strategies are the goals of the individual money managers; there is no assurance that the exact objective will always be met. Sector weightings   % of total equity Auto and Transportation Consumer Discretionary Consumer Staples Financial Services Health Care Integrated Oils Materials and Processing Other Energy Producer Durables Technology Utilities Miscellaneous   2.4 13.5 7.0 20.0 14.0 4.7 5.5 6.1 6.1 14.6 4.1 2.0 Due to rounding totals may not equal 100%. Top ten holdings   % of fund JPMorgan Chase & Co. Hewlett-Packard Co. Bank of America Corp. Lockheed Martin Corp. QUALCOMM, Inc. McDonald's Corp. The Coca-Cola Company Goldman Sachs Group, Inc. CVS Corp. PepsiCo, Inc.   2.6 2.0 2.0 1.9 1.8 1.8 1.7 1.7 1.7 1.5     18.7 *The top ten holdings list does not reflect the investment of cash reserves and cash collateral received in securities lending transactions in one or more of RIC's money market funds. Performance review | as of September 30, 2008 Russell U.S. Core Equity Fund - Class S         Annualized returns QTR   YTD   1 yr   3 yrs   5 yrs   10 yrs   Since inception 10/15/81 -12.00   -22.45   -23.73   -0.12   5.66   2.82   10.95 Fund Fees and Expenses Annual Fund Operating Expenses Total Net 0.83% 0.83% Growth of $10,000 - class S shares 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 mutual funds is available by visiting: www.russell.com/us/fundperformance. Characteristics Total net assets   Net asset value $5.2 billion   $25.52     Cusip   Ticker Class A   782494611   RSQAX Class C   782494595   REQSX Class E   782493290   REAEX Class I   782493100   REASX Class S   782494587   RLISX Class Y   782493282   REAYX The fund offers other classes of shares with higher fees and expenses. These other classes may charge up to a 0.75% distribution fee and a 0.25% shareholder servicing fee which will result in a higher expense ratio and lower performance than that shown above. For a full description of other available classes, please see the prospectus. The fund first issued class S shares on September 2, 2008. The returns shown for class S shares prior to that date are the returns of the fund’s class I shares. Fund objectives, risks, charges and expenses should be carefully considered before investing. For a prospectus containing this and other important information call Russell at 1-866-676-7680 or go to the prospectus and reports page to download one. Please read the prospectus carefully before investing. On September 2, 2008, the name of the Equity I Fund changed to Russell U.S. Core Equity Fund. Fund performance is reported net of fund advisory and administrative fees, and gross of financial intermediary fees. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. For more information on Russell Funds, contact your investment professional or plan administrator for assistance. 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. The Russell logo is a trademark and service mark of Russell Investments. Securities products and services offered through Russell Financial Services, Inc. (formerly Russell Fund Distributors, Inc.), member FINRA, part of Russell Investments. For information on the Financial Industry Regulatory Authority, go to www.finra.org. Copyright © Russell Investments 2007-2008. All rights reserved. First used October 2008. RFD 08-0663 Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.			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