Russell Tax-Managed U.S. Large Cap Fund Combining tax-managed opportunities with multi-manager benefits Class S September 30, 2008 About the fund Managers in this fund are selected based on both their tax-sensitivity of their investment approach and their stock-selection abilities. Russell chooses managers that use many different investment styles, from looking for companies they believe have rapidly growing earnings to ones that are undervalued. Managers typically hold companies over a relatively longer investment horizon as long as a stock's fundamentals remain strong. As a result fo the fund managers' longer term investment horizon, their approach typically avoids short-term capital gains, which should produce a more tax-efficient portfolio over time. To help reduce the incidence of wash sales within the fund, while still employing a multi-manager, multi-style approach, all of the fund's managers are informed of sales. – Tereasa Gandhi Investment strategy   Seeks to provide long-term capital growth on an after-tax basis. Invests in stocks traded in the U.S. market. Selects managers with inherently tax-sensitive investment management approaches. Core equity exposure incorporates market-oriented, growth and value styles. Fund highlights   Helps tax-sensitive investors by seeking to maximize after-tax returns. Provides broad exposure to large capitalization stocks by blending managers that invest in diverse styles across the medium and large capitalization spectrum without the tax impact of a fund that buys and sells with no regard for taxes. 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         Sands Capital Management Inc.   18%   2003 Turner Investment Partners Inc.   15%   2005 Market-oriented         J.P. Morgan Investment Management, Inc.   35%   1996 Value         Armstrong Shaw Associates, Inc.   17%   2007 Palisades Investment Partners, LLC   15%   2006 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. Income from funds managed for tax efficiency may be subject to an alternative minimum tax, and/or any applicable state and local taxes. 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 14.4 7.0 16.8 16.2 6.0 3.0 6.5 4.6 15.3 5.8 2.1 Due to rounding totals may not equal 100%. Top ten holdings   % of fund Google, Inc. Exxon Mobil Corp. Hewlett-Packard Co. International Business Machines Corp. Schlumberger, Ltd. Chevron Corp. Procter & Gamble Co. Apple, Inc. United Technologies Corp. Abbott Laboratories   2.3 2.0 1.9 1.9 1.8 1.8 1.7 1.7 1.6 1.5     18.2 *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 Tax-Managed U.S. Large Cap Fund - Class S             Annualized returns     QTR   YTD   1 yr   5 yrs   10 yrs   Since inception 10/07/96 Return Before Taxes   -11.73   -23.32   -25.49   3.79   2.01   5.16 Pre-Liquidation After Tax Returns1,2   -11.73   -23.32   -25.57   3.67   1.84   4.98 Post-Liquidation After Tax Returns2,3   -7.63   -15.16   -16.41   3.27   1.67   4.46 Fund Fees and Expenses Annual Fund Operating Expenses Total Net 1.02% 0.94% 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. 1 Return after taxes on distributions. If the fund has realized capital losses, the return after taxes on distributions and sale of fund shares may be higher than the return before taxes and the return after taxes on distributions. The calculation of return after taxes on distributions and sale of fund share assumes that a shareholder has sufficient capital gains of the same character to offset any capital losses on a sale of fund shares and that the shareholder may therefore deduct the entire capital loss. 2 After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. 3 Return after taxes on distributions and sales of fund shares. Returns after taxes on distributions may be the same as returns before taxes for the same period if there were no distributions for that period. 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 $463.2 million   $16.93     Cusip   Ticker Class C   782478309   RTLCX Class E   782478879   RTLEX Class S   782493720   RETSX 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-Managed Large Cap Fund changed to Russell Tax-Managed U.S. Large Cap 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 08-0679 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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