31 August 2013

Russell Continental European Equity Fund

Fund objective

The Fund aims to achieve long term growth by investing in the shares of European companies (excluding UK), or companies that carry out a majority of their business in Europe. The Fund uses a multi-strategy investment approach and is broadly diversified across European countries, sectors and by market-capitalisation.
Russell fund update
Portfolio Manager Ronnie Sabel

Russell's European Equity team comprises 5 experienced professionals (including 3 manager research analysts) in Russells London office. The team has been researching equity managers and managing European equity portfolios for over 15 years. Currently they manage 1.3bn in multi-strategy portfolios, comprising growth, value and quantitative mandates.

Underperformance was driven by ineffective stock selection within the materials sector. Effective stock selection within the health care sector had a positive impact on performance. Our quant strategy Numeric lagged its peers in the Fund, however our global thematic growth manager THS mitigated performance. We prefer to keep active risk from rising too far in the current environment. We believe some market areas appear expensive, and as such we prefer to maintain a mix of quality and valuation conscious managers in the Fund.

Performance review
Performance to period end Returns shown in EUR 1 month % 3 months % Year to date % 12 months % 3 years %p.a. 5 years %p.a. Since inception %p.a.

Return gross of management fee Class B Acc Return net of management fee Class B Acc

-1.1 -1.2

0.9 0.5

13.2 11.9

21.8 19.8

10.6 8.7

3.9 2.2

4.8 3.0

Fund facts

Benchmark Russell Dev Europe ex UK Large Cap Net -0.9 -0.6 9.2 16.2 8.0 2.6 4.1

Share class; Dealing ccy Class B Acc; EUR Dealing frequency; Cut off

Performance history
Fund return gross of management fee 150 Russell Dev Europe ex UK Large Cap Net

Daily; 2.00pm GMT Domicile; Category Ireland; UCITS Fund size EUR 415.76m ISIN; Bloomberg IE0007356367; FRUCEBI ID Fund launch date 29 March 1996 Share class launch date
Number of equity holdings
100 50 0 -50
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
The current benchmark is Russell Dev Europe ex UK Large Cap Net Index. Prior to 1st April 2011 the benchmark was FTSE World Europe ex UK (Net), prior to 1st January 2009 it was gross of withholding tax, total return.

Portfolio statistics
Fund Benchmark Fund Benchmark

236 14.7 3.5 1.4 2.2

506 16.2 3.4 1.6 3.5

Volatility Tracking error Sharpe ratio Information ratio 3 year return 3 year excess return

14.7 2.0% 0.7 1.3 10.6% 2.7%

13.9 0.6 8.0% -

31 January 1998 Management fee 1.75% Share class NAV EUR 25.23

Price/earnings Dividend yield Price to book EPS growth (1 year)

Data as at 31 July 2013

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31 August 2013

Russell Continental European Equity Fund

Ten largest holdings by weight
Security Fund Benchmark

(continued)

Country weight
Fund Benchmark

Roche Holding AG Novartis AG ING Groep NV BNP Paribas Repsol YPF SA Nestle SA UPM-Kymmene Oyj Allianz AG Actelion Ltd. Vivendi Universal SA

3.7% 2.5% 2.2% 1.8% 1.6% 1.6% 1.5% 1.5% 1.5% 1.4%

3.0% 3.2% 0.7% 1.2% 0.3% 3.6% 0.1% 1.1% 0.1% 0.4%

Germany France Switzerland Spain Netherlands Norway Sweden Italy Belgium Others

19.4% 18.1% 15.4% 8.6% 7.8% 6.4% 6.4% 4.3% 3.3% 10.4%

18.3% 20.8% 19.3% 6.3% 7.9% 1.5% 6.9% 4.9% 2.7% 11.4%

Sector weights
Fund Benchmark

Financials Industrials Health Care Consumer Discretionary Materials Energy Consumer Staples Telecommunication Services Information Technology Utilities

19.9% 15.4% 13.6% 12.1% 8.8% 8.6% 7.6% 5.7% 5.7% 2.7%

20.2% 14.1% 14.2% 10.3% 7.7% 9.3% 11.9% 4.1% 4.7% 3.5%

Portfolio structure
Manager Style Target weight Actual weight

Invesco Perpetual Liontrust Manager in Transition Metropole Gestion Numeric Russell THS Cash & Other

Stock selection, mix of quality, growth and valuation Quality of earnings / earnings surprise Manager In Transition Value-oriented stock selection Multi-factor quantitative model Select Exposures, Defensive income Growth At a Reasonable Price

17.5% 20.0% 12.5% 27.5% 10.0% 12.5% -

20.7% 18.9% 0.1% 12.0% 25.4% 8.9% 12.9% 1.1%

Important Information
This material is not intended for distribution to retail clients. This material does not constitute an offer or invitation to anyone in any jurisdiction to invest in any Russell product or use any Russell services where such offer or invitation is not lawful, or in which the person making such offer or invitation is not qualified to do so, nor has it been prepared in connection with any such offer or invitation. Unless otherwise specified, Russell Investments is the source of all data. All information contained in this material is current at the time of issue and, to the best of our knowledge, accurate. Any opinion expressed is that of Russell Investments, is not a statement of fact, is subject to change and, unless it relates to a specified investment, does not constitute the regulated activity of advising on investments for the purposes of the Financial Services and Markets Act 2000. Decisions to invest should be based on the funds prospectus and Key Investor Information Document (KIID), with particular consideration to the risk warnings. Copies are available free of charge from Russell Investments. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested. Any reference to returns linked to currencies may increase or decrease as a result of currency fluctuations. Any references to tax treatments depend on the circumstances of the individual client and may be subject to change in the future. Issued by Russell Investments Limited. Company No. 02086230. Registered in England and Wales with registered office at: Rex House, 10 Regent Street, London SW1Y 4PE. Telephone 020 7024 6000. Authorised and regulated by the Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.

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