Russell Tax Exempt Bond Fund Offering tax-sensitive diversification Class S September 30, 2008 About the fund For this fund, Russell selects managers who we believe are experts in municipal and federal tax-exempt bonds and combines them to complement each other. One may place an emphasis on specific security research and another may focus on identifying complex, unique and misunderstood bond structures not readily identified by other analysts. – Mike Ruff, CFA Investment strategy   Seeks to provide federal tax-exempt current income consistent with the preservation of capital. The fund will invest, under normal circumstances, at least 80% of the value of its assets in investments the income from which is exempt from federal income tax. Invests in tax-exempt securities of state and local government entities. Targets intermediate maturities. Fund highlights   Provides a diversified portfolio of high-quality tax-exempt bonds to help manage an investor's tax load. Adds stability to a diversified portfolio because bonds historically have been less volatile than equities. 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 Fully discretionary         Delaware Management Company (a series of Delaware Management Business Trust)   50%   2005 Standish Mellon Asset Management Company, LLC   50%   1988 Money managers listed are current as of 09/30/2008. 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. In general, when interest rates rise, the value of bonds held in the fund will decline. Bond investors should carefully consider risks such as interest rate, credit, repurchase and reverse repurchase transaction 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. Income from funds managed for tax efficiency may be subject to an alternative minimum tax, and/or any applicable state and local taxes. Quality rating1 As a % of market value2     U.S. Govt & Agency   0 AAA   31 AA   39 A   17 BBB   11 BB   1 Other   1 1 Moody's Investors Service Inc. and Standard & Poor's Corporation. For additional information on quality ratings, see the Statement of Additional Information. Due to rounding totals may not equal 100%. Sector weightings   % of total market value Cash Equivalents Education Revenue General Obligation Health Care Revenue Housing Revenue Industrial Revenue Leasing Revenue Other Revenue Pollution Control Revenue Refunded and Special Obligations Utility Revenue   5.8 8.6 36.0 7.7 1.3 11.2 1.7 11.9 2.1 0.2 13.3 Due to rounding totals may not equal 100%. Characteristics Total net assets   Weighted average duration1   30-day SEC yield2   Tax equivalent yield3 $425.0 million   4.8 years   3.46%   5.32% 1 Duration approximates the percentage change in the price of a bond or the value of a portfolio of bonds for every one percentage point shift in interest rates. 2 The fund's current yield for the 30-day period ending September 30, 2008 3 The tax equivalent yield is based on a tax rate of 35%.     Cusip   Ticker Class C   782493324   RTECX Class E   782493316   RTBEX Class S   782493837   RLVSX Performance review | as of September 30, 2008 Russell Tax Exempt Bond Fund - Class S         Annualized returns QTR   YTD   1 yr   3 yrs   5 yrs   10 yrs   Since inception 09/05/85 -0.89   -0.36   0.75   2.20   2.15   3.45   4.59 Fund Fees and Expenses Annual Fund Operating Expenses Total Net 0.61% 0.53% The Net Annual Operating Expense Ratio may be less than the Total Operating Expense Ratio and represents the actual expenses to be borne by shareholders after application of a contractual transfer agency fee waiver through February 28, 2010. These contractual agreements may not be terminated during the relevant periods except at the Board of Trustees discretion. Details of these agreements are in the current prospectus. Absent these reductions, the funds return would have been lower. View the recent 30-day SEC yield report 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. 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. 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 Tax Exempt Bond Fund changed to the Russell Tax Exempt Bond 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 08-0677 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.			Select a Russell fund Emerging Markets Global Equity International Developed Markets Investment Grade Bond Money Market Real Estate Securities Short Duration Bond Strategic Bond Tax Exempt Bond Tax-Managed Global Equity Tax-Managed U.S. Large Cap Tax-Managed U.S. Mid & Small Cap U.S. Core Equity U.S. Growth U.S. Quantitative Equity U.S. Small & Mid Cap U.S. Value Daily prices & performance   Download fund documents Prospectus Semiannual report Annual report Statement of additional information Tax information Month end holdings 30-day SEC yield report Printable fact sheet   Printer friendly version of this page Send feedback or comments Site Search

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