Russell U.S. Quantitative Equity Fund Harnessing the power of research Class S September 30, 2008 About the fund This fund focuses on quantitative analysis of the U.S. equities market. Each manager Russell selects uses a different quantitative approach to determine a stock's relative attractiveness. When combined, the mix provides an opportunity for increasing return while attempting to manage risk. We analyze the various quantitative approaches and select managers whose styles are intended to be complementary. For example, one manager may select stocks by building models that look for undervalued large-cap securities that appear ready to rise in value. Another may have a more complex model, ranking stocks based on many factors and then building a portfolio of the topranked opportunities. In addition, they may use limited long/short strategies whereby Russell allows them to short a portion of their portfolio's value in stocks they find unattractive and then use those proceeds to purchase an additional corresponding amount in those names they rank attractive. In contrast, other fund managers may have long-only mandates. This illustrates how we blend together complementary styles and assignments to take advantage of a manager's unique strengths. – Tom Monroe Investment strategy   Seeks to provide long-term capital growth. Utilizes model-driven investment approaches. Core equity exposure emphasizes market-oriented styles. Invests in large to medium capitalized companies. Fund also sells securities short. Fund highlights   Managers use quantitative research and computer models to evaluate stocks. Multi-level diversification means investments won't be dependent 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 Market-oriented         Aronson+Johnson+Ortiz, L.P.   21%   2003 Enhanced Investment Technologies, LLC   21%   2008 Franklin Portfolio Associates, LLC   21%   1987 Goldman Sachs Asset Management, L.P.   6%   2004 Jacobs Levy Equity Management, Inc.   21%   1999 Russell Investment Management Company*   10%   2005 *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   2.0 12.8 10.5 18.0 13.9 8.1 4.5 4.1 5.2 12.9 5.8 2.4 Due to rounding totals may not equal 100%. Top ten holdings   % of fund Exxon Mobil Corp. Procter & Gamble Co. Pfizer, Inc. ConocoPhillips General Electric Co. Hewlett-Packard Co. Microsoft Corp. Johnson & Johnson AT&T, Inc. SYSCO Corp.   3.4 2.6 2.0 2.0 1.7 1.6 1.5 1.4 1.3 1.3     18.8 *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. Quantitative Equity Fund - Class S         Annualized returns QTR   YTD   1 yr   3 yrs   5 yrs   10 yrs   Since inception 05/29/87 -9.51   -19.99   -22.67   -1.43   4.34   3.31   9.14 Fund Fees and Expenses Annual Fund Operating Expenses Total Net 1.03% 1.03% 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 $5.1 billion   $27.33     Cusip   Ticker Class A   782494579   REQAX Class C   782494561   REQCX Class E   782493233   REQEX Class I   782493811   REDSX Class S   782494553   REQTX Class Y   782493225   REUYX 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 Q Fund changed to Russell U.S. Quantitative 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 08-0671 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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