Loading...
Docoh

Russell Investment Funds

Filed: 2 Sep 08, 8:00pm
Table of Contents

OMB APPROVAL

OMB Number:

 3235-0570

Expires:

 August 31, 2011

Estimated average burden

hours per response:

 18.9

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

 

Investment Company Act file number: 811-05371

 

 

 

 

 

 

 

Russell Investment Funds

(Exact name of registrant as specified in charter)

 

 

909 A Street, Tacoma Washington 98402
(Address of principal executive offices) (Zip code)

 

 

Gregory J. Lyons, Assistant Secretary

Russell Investment Funds

909 A Street

Tacoma, Washington 98402

253-439-2406

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: 253-572-9500

 

Date of fiscal year end: December 31

 

Date of reporting period: January 1, 2008 – June 30, 2008


Table of Contents
Item 1.Reports to Stockholders


Table of Contents

LOGO

 

2008 SEMIANNUAL REPORT

 

 

Russell Investment Funds

LifePoints® Variable Target Portfolio Series

 

 

JUNE 30, 2008

FUND

Moderate Strategy Fund

Balanced Strategy Fund

Growth Strategy Fund

Equity Growth Strategy Fund

 

LOGO


Table of Contents

 

 

Russell Investment Funds

Russell Investment Funds is a series investment company with nine different investment portfolios referred to as Funds. These financial statements report on four of these Funds.


Table of Contents

 

Russell Investment Funds

LifePoints® Funds

Variable Target Portfolio Series

Semiannual Report

June 30, 2008 (Unaudited)

Table of Contents

 

   Page
Moderate Strategy Fund  3
Balanced Strategy Fund  5
Growth Strategy Fund  7
Equity Growth Strategy Fund  9
Statements of Assets and Liabilities  11
Statements of Operations  12
Statements of Changes in Net Assets  14
Financial Highlights  16
Notes to Financial Highlights  18
Notes to Financial Statements  19
Basis for Approval of Investment Advisory Contracts  27
Shareholder Requests for Additional Information  31
Disclosure of Information about Fund Trustees and Officers  32
Adviser, Money Managers and Service Providers  36


Table of Contents

 

Russell Investment Funds - LifePoints® Funds Variable Target Portfolio Series

Copyright© Russell Investments 2008. All rights reserved.

Russell Investments is a Washington, USA corporation, which operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company.

Fund objectives, risks, charges and expenses should be carefully considered before investing. A prospectus containing this and other important information must precede or accompany this material. Please read the prospectus carefully before investing.

Securities distributed through Russell Financial Services, Inc. (effective June 2, 2008, the name changed from Russell Fund Distributors, Inc.), member FINRA, part of Russell Investments.

Russell Investments and Standard & Poor’s Corporation are the owners of the trademarks, service marks, and copyrights related to their respective indexes. Index performance is not indicative of the performance of any specific investment. Indexes are not managed and may not be invested in directly.

Performance quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted.


Table of Contents

Russell Investment Funds

Moderate Strategy Fund

Shareholder Expense Example — June 30, 2008 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from January 1, 2008 to June 30, 2008.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

   Actual
Performance
  Hypothetical
Performance
(5% return
before expenses)
    

Beginning Account Value

January 1, 2008

  $1,000.00  $1,000.00

Ending Account Value

June 30, 2008

  $953.80  $1,024.32

Expenses Paid During Period*

  $0.53  $0.55

 

*Expenses are equal to the Fund’s annualized expense ratio of 0.11% (representing the one-half year period annualized), multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Moderate Strategy Fund 3


Table of Contents

Russell Investment Funds

Moderate Strategy Fund

Schedule of Investments — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Shares    Market
Value
$
 
      

Investments - 100.0%

      

Other Russell Investment Funds (“RIF”) and Russell Investment Company (“RIC”) Series Mutual Funds

      

Bonds - 60.4%

      

RIF Core Bond Fund

  1,175,102    11,786 
        

Domestic Equities - 25.7%

      

RIF Aggressive Equity Fund

  49,675    578 

RIF Multi-Style Equity Fund

  141,252    1,927 

RIC Quantitative Equity Fund

  56,888    1,930 

RIF Real Estate Securities Fund

  39,270    575 
        
      5,010 
        

International Equities - 13.9%

      

RIC Emerging Markets Fund

  18,858    387 

RIC Global Equity Fund

  62,454    583 

RIF Non-U.S. Fund

  150,880    1,749 
        
      2,719 
        
Total Investments - 100.0%      

(identified cost $20,242)

      19,515 
Other Assets and Liabilities, Net - (0.0%)      (7)
        
Net Assets - 100.0%      19,508 
        

 

 

Presentation of Portfolio Holdings — June 30, 2008 (Unaudited)

 

Categories  % of Net
Assets
 
  
  

Bonds

  60.4 

Domestic Equities

  25.7 

International Equities

  13.9 
    

Total Investments

  100.0 

Other Assets and Liabilities, Net

  (—)*
    
  100.0 
    

 

*Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

4 Moderate Strategy Fund


Table of Contents

Russell Investment Funds

Balanced Strategy Fund

Shareholder Expense Example — June 30, 2008 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from January 1, 2008 to June 30, 2008.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

   Actual
Performance
  Hypothetical
Performance
(5% return
before expenses)
    

Beginning Account Value

January 1, 2008

  $1,000.00  $1,000.00

Ending Account Value

June 30, 2008

  $934.40  $1,024.47

Expenses Paid During Period*

  $0.38  $0.40

 

*Expenses are equal to the Fund’s annualized expense ratio of 0.08% (representing the one-half year period annualized), multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Balanced Strategy Fund 5


Table of Contents

Russell Investment Funds

Balanced Strategy Fund

Schedule of Investments — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Shares    Market
Value
$
 
      

Investments - 100.0%

      

Other Russell Investment Funds (“RIF”) and Russell Investment Company (“RIC”) Series Mutual Funds

      

Bonds - 40.5%

      

RIF Core Bond Fund

  2,564,757    25,724 
        

Domestic Equities - 38.6%

      

RIF Aggressive Equity Fund

  215,786    2,510 

RIF Multi-Style Equity Fund

  689,772    9,409 

RIC Quantitative Equity Fund

  277,871    9,425 

RIF Real Estate Securities Fund

  213,520    3,128 
        
      24,472 
        

International Equities - 20.9%

      

RIC Emerging Markets Fund

  92,194    1,895 

RIC Global Equity Fund

  271,229    2,530 

RIF Non-U.S. Fund

  764,728    8,863 
        
      13,288 
        
Total Investments - 100.0%      

(identified cost $68,141)

      63,484 
Other Assets and Liabilities, Net - (0.0%)      (7)
        
Net Assets - 100.0%      63,477 
        

 

 

Presentation of Portfolio Holdings — June 30, 2008 (Unaudited)

 

Categories  % of Net
Assets
 
  

Bonds

  40.5 

Domestic Equities

  38.6 

International Equities

  20.9 
    

Total Investments

  100.0 

Other Assets and Liabilities, Net

  (—)*
    
  100.0 
    

 

*Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

6 Balanced Strategy Fund


Table of Contents

Russell Investment Funds

Growth Strategy Fund

Shareholder Expense Example — June 30, 2008 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from January 1, 2008 to June 30, 2008.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

   Actual
Performance
  Hypothetical
Performance

(5% return
before expenses)
    

Beginning Account Value

January 1, 2008

  $1,000.00  $1,000.00

Ending Account Value

June 30, 2008

  $914.20  $1,024.66

Expenses Paid During Period*

  $0.19  $0.20

 

*Expenses are equal to the Fund’s annualized expense ratio of 0.04% (representing the one-half year period annualized), multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Growth Strategy Fund 7


Table of Contents

Russell Investment Funds

Growth Strategy Fund

Schedule of Investments — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Shares    Market
Value
$
 
      

Investments - 100.0%

      

Other Russell Investment Funds
(“RIF”) and Russell Investment Company (“RIC”) Series Mutual
Funds

      

Bonds - 20.4%

      

RIF Core Bond Fund

  831,763    8,343 
        

Domestic Equities - 52.6%

      

RIF Aggressive Equity Fund

  209,240    2,433 

RIF Multi-Style Equity Fund

  624,837    8,523 

RIC Quantitative Equity Fund

  239,845    8,136 

RIF Real Estate Securities Fund

  166,214    2,435 
        
      21,527 
        

International Equities - 27.0%

      

RIC Emerging Markets Fund

  79,641    1,636 

RIC Global Equity Fund

  263,631    2,460 

RIF Non-U.S. Fund

  602,599    6,984 
        
      11,080 
        
Total Investments - 100.0%      

(identified cost $45,454)

      40,950 
Other Assets and Liabilities, Net - (0.0%)      (4)
        
Net Assets - 100.0%      40,946 
        

 

 

Presentation of Portfolio Holdings — June 30, 2008 (Unaudited)

 

Categories  % of Net
Assets
 
  
  

Bonds

  20.4 

Domestic Equities

  52.6 

International Equities

  27.0 
    

Total Investments

  100.0 

Other Assets and Liabilities, Net

  (—)*
    
  100.0 
    

 

*Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

8 Growth Strategy Fund


Table of Contents

Russell Investment Funds

Equity Growth Strategy Fund

Shareholder Expense Example — June 30, 2008 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $ 1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from January 1, 2008 to June 30, 2008.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

   Actual
Performance
  Hypothetical
Performance
(5% return
before expenses)
    

Beginning Account Value

January 1, 2008

  $1,000.00  $1,000.00

Ending Account Value

June 30, 2008

  $895.20  $1,024.66

Expenses Paid During Period*

  $0.19  $0.20

 

*Expenses are equal to the Fund’s annualized expense ratio of 0.04% (representing the one-half year period annualized), multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Equity Growth Strategy Fund 9


Table of Contents

Russell Investment Funds

Equity Growth Strategy Fund

Schedule of Investments — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Shares    Market
Value
$
 
      

Investments - 100.0%

      

Other Russell Investment Funds
(“RIF”) and Russell Investment Company (“RIC”) Series Mutual
Funds

      

Domestic Equities - 64.9%

      

RIF Aggressive Equity Fund

  96,542    1,123 

RIF Multi-Style Equity Fund

  305,671    4,169 

RIC Quantitative Equity Fund

  118,242    4,011 

RIF Real Estate Securities Fund

  76,519    1,121 
        
      10,424 
        

International Equities - 35.1%

      

RIC Emerging Markets Fund

  39,142    804 

RIC Global Equity Fund

  120,845    1,128 

RIF Non-U.S. Fund

  320,211    3,711 
        
      5,643 
        
Total Investments - 100.0%      

(identified cost $18,331)

      16,067 
Other Assets and Liabilities,
Net - (0.0%)
      (6)
        
Net Assets - 100.0%      16,061 
        

 

 

Presentation of Portfolio Holdings — June 30, 2008 (Unaudited)

 

Categories  % of Net
Assets
 
  
  

Domestic Equities

  64.9 

International Equities

  35.1 
    

Total Investments

  100.0 

Other Assets and Liabilities, Net

  (—)*
    
  100.0 
    

 

*Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

10 Equity Growth Strategy Fund


Table of Contents

Russell Investment Funds

LifePoints® Variable Target Portfolio Series

Statements of Assets and Liabilities — June 30, 2008 (Unaudited)

 

Amounts in thousands Moderate Strategy
Fund
  Balanced Strategy
Fund
  Growth Strategy
Fund
  Equity Growth Strategy
Fund
 
    

Assets

    

Investments, at identified cost

 $20,242  $68,141  $45,454  $18,331 

Investments, at market

  19,515   63,484   40,950   16,067 

Receivables:

    

Fund shares sold

  16   98   63   86 

From Transfer Agent

  11   17   17   12 
                

Total assets

  19,542   63,599   41,030   16,165 
                
Liabilities    

Payables:

    

Investments purchased

  17   98   63   85 

Accrued fees to affiliates

  1   3   2   1 

Other accrued expenses

  16   21   19   18 
                

Total liabilities

  34   122   84   104 
                
    

Net Assets

 $19,508  $63,477  $40,946  $16,061 
                

Net Assets Consist of:

    

Undistributed (overdistributed) net investment income

 $(5) $(8) $(3) $(1)

Accumulated net realized gain (loss)

  (337)  (449)  (152)  (535)

Unrealized appreciation (depreciation) on Investments

  (727)  (4,657)  (4,504)  (2,264)

Shares of beneficial interest

  21   71   47   19 

Additional paid-in capital

  20,556   68,520   45,558   18,842 
                

Net Assets

 $19,508  $63,477  $40,946  $16,061 
                
    
     

Net Asset Value, offering and redemption price per share:

    

Net asset value per share*

 $9.34  $8.95  $8.67  $8.28 

Net assets

 $19,508,474  $63,477,167  $40,945,966  $16,061,061 

Shares outstanding ($.01 par value)

  2,089,540   7,091,365   4,721,120   1,940,573 

*  Net asset value per share equals net assets divided by shares of beneficial interest outstanding.

    

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Assets and Liabilities 11


Table of Contents

Russell Investment Funds

LifePoints® Variable Target Portfolio Series

Statements of Operations — For the Period Ended June 30, 2008 (Unaudited)

 

Amounts in thousands Moderate Strategy
Fund
  Balanced Strategy
Fund
  Growth Strategy
Fund
  Equity Growth Strategy
Fund
 
    

Investment Income

    

Income distributions from Underlying Funds

 $168  $362  $165  $37 
                

Expenses

    

Advisory fees

  16   49   33   14 

Administrative fees

  4   12   8   4 

Custodian fees

  4   7   6   4 

Transfer agent fees

     1   1    

Professional fees

  15   16   16   15 

Trustees’ fees

     1       

Printing fees

  1   1      1 

Offering fees

  5   5   5   5 

Miscellaneous

     1       
                

Expenses before reductions

  45   93   69   43 

Expense reductions

  (36)  (73)  (63)  (40)
                

Net expenses

  9   20   6   3 
                

Net investment income (loss)

  159   342   159   34 
                

Net Realized and Unrealized Gain (Loss)

    

Net realized gain (loss) on:

    

Investments

  (361)  (578)  (250)  (543)

Capital gain distributions from Underlying Funds

  56   148   119   58 
                

Net realized gain (loss)

  (305)  (430)  (131)  (485)

Net change in unrealized appreciation (depreciation) on Investments

  (562)  (3,176)  (2,991)  (1,079)
                

Net realized and unrealized gain (loss)

  (867)  (3,606)  (3,122)  (1,564)
                

Net Increase (Decrease) in Net Assets from Operations

 $(708) $(3,264) $(2,963) $(1,530)
                
                 

 

See accompanying notes which are an integral part of the financial statements.

 

12 Statements of Operations


Table of Contents

 

(This page intentionally left blank)

 

 


Table of Contents

Russell Investment Funds

LifePoints® Variable Target Portfolio Series

Statements of Changes in Net Assets

 

  Moderate Strategy
Fund
 
Amounts in thousands 

Period

Ended
June 30, 2008
(Unaudited)

  

Period

Ended
December 31,

2007*

 
  

Increase (Decrease) in Net Assets

  

Operations

  

Net investment income (loss)

 $159  $194 

Net realized gain (loss)

  (305)  142 

Net change in unrealized appreciation (depreciation)

  (562)  (165)
        

Net increase (decrease) in net assets from operations

  (708)  171 
        

Distributions

  

From net investment income

  (164)  (207)

From net realized gain

  (160)  (2)
        

Net decrease in net assets from distributions

  (324)  (209)
        

Share Transactions

  

Net increase (decrease) in net assets from share transactions

  11,886   8,692 
        

Total Net Increase (Decrease) in Net Assets

  10,854   8,654 

Net Assets

  

Beginning of period

  8,654    
        

End of period

 $19,508  $8,654 
        

Undistributed (overdistributed) net investment income included in net assets

 $(5) $ 

 

*For the period April 30, 2007 (commencement of operations) to December 31, 2007.

 

See accompanying notes which are an integral part of the financial statements.

 

14 Statements of Changes in Net Assets


Table of Contents

 

Balanced Strategy
Fund
  Growth Strategy
Fund
  Equity Growth Strategy
Fund
 

Period

Ended
June 30, 2008
(Unaudited)

  

Period

Ended
December 31,

2007*

  

Period

Ended
June 30, 2008
(Unaudited)

  

Period

Ended
December 31,

2007*

  

Period

Ended
June 30, 2008
(Unaudited)

   

Period

Ended
December 31,

2007*

 
      
      
      
$342  $889  $159  $638  $34   $347 
 (430)  1,114   (131)  1,101   (485)   709 
 (3,176)  (1,481)  (2,991)  (1,513)  (1,079)   (1,185)
                        
 (3,264)  522   (2,963)  226   (1,530)   (129)
                        
      
 (350)  (901)  (162)  (651)  (35)   (358)
 (1,121)  (2)  (1,109)     (748)    
                        
 (1,471)  (903)  (1,271)  (651)  (783)   (358)
                        
      
 32,515   36,078   17,790   27,815   5,368    13,493 
                        
 27,780   35,697   13,556   27,390   3,055    13,006 
      
 35,697      27,390      13,006     
                        
$63,477  $35,697  $40,946  $27,390  $16,061   $13,006 
                        
$(8) $  $(3) $  $(1)  $ 

 

See accompanying notes which are an integral part of the financial statements.

 

Statements of Changes in Net Assets 15


Table of Contents

Russell Investment Funds

LifePoints® Variable Target Portfolio Series

Financial Highlights — For the Periods Ended

For a Share Outstanding Throughout the Period.

 

    $
Net Asset Value,
Beginning of
Period
  $
Net
Investment
Income (Loss)
(a)(b)
  $
Net Realized
and Unrealized
Gain (Loss)
  $
Total Income
(Loss) from
Operations
  $
Distributions
from Net
Investment Income
  $
Distributions
from Net
Realized Gain
 
Moderate Strategy Fund      

June 30, 2008**

  9.99  .10  (.56) (.46) (.10) (.09)

December 31, 2007*

  10.00  .46  (.11) .35  (.36) (g)
Balanced Strategy Fund      

June 30, 2008**

  9.93  .06  (.70) (.64) (.07) (.27)

December 31, 2007*

  10.00  .47  (.20) .27  (.34) (g)
Growth Strategy Fund      

June 30, 2008**

  9.90  .04  (.88) (.84) (.05) (.34)

December 31, 2007*

  10.00  .45  (.24) .21  (.31)  
Equity Growth Strategy Fund     

June 30, 2008**

  9.83  (g) (1.02) (1.02) (.02) (.51)

December 31, 2007*

  10.00  .50  (.38) .12  (.29)  

 

See accompanying notes which are an integral part of the financial statements.

 

16 Financial Highlights


Table of Contents

 

$
Total
Distributions
  $
Net Asset Value,
End of
Period
 %
Total
Return
(c)
  $
Net Assets,
End of Period
(000)
 %
Ratio of Expenses
to Average
Net Assets,
Net
(d)(e)(f)
 %
Ratio of Expenses
to Average
Net Assets,
Gross
(d)(e)
 %
Ratio of Net
Investment Income
to Average
Net Assets
(b)(c)(f)
 %
Portfolio
Turnover Rate
(c)
       
(.19) 9.34 (4.62) 19,508 .11 .57 2.04 22
(.36) 9.99 3.54  8,654 .11 2.01 5.37 24
       
(.34) 8.95 (6.56) 63,477 .08 .38 1.39 7
(.34) 9.93 2.73  35,697 .08 .74 5.37 11
       
(.39) 8.67 (8.58) 40,946 .04 .42 .97 4
(.31) 9.90 2.13  27,390 .04 .84 5.05 3
       
(.53) 8.28 (10.48) 16,061 .04 .60 .47 14
(.29) 9.83 1.25  13,006 .04 1.36 5.59 6

 

See accompanying notes which are an integral part of the financial statements.

 

Financial Highlights 17


Table of Contents

Russell Investment Funds

LifePoints® Variable Target Portfolio Series

Notes to Financial Highlights — June 30, 2008 (Unaudited)

 

 

 

*For the period April 30, 2007 (commencement of operations) to December 31, 2007.
**For the period ended June 30, 2008 (unaudited).
(a)Average month-end shares outstanding were used for this calculation.
(b)Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying Funds in which the Fund invests.
(c)Periods less than one year are not annualized.
(d)The ratios for periods less than one year are annualized.
(e)The calculation includes only those expenses charged directly to the Fund and does not include expenses charged to the Underlying Funds in which the Fund invests.
(f)May reflect amounts waived and reimbursed by RIMCO and RFSC, respectively.
(g)Less than $.01 per share.

 

See accompanying notes which are an integral part of the financial statements.

 

18 Notes to Financial Highlights


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Notes to Financial Statements — June 30, 2008 (Unaudited)

 

 

 

1. Organization

Russell Investment Funds (the “Investment Company” or “RIF”) is a series investment company with nine different investment portfolios referred to as Funds. These financial statements report on four of these Funds (each a “Fund” and collectively the “Funds”). The Investment Company provides the investment base for one or more variable insurance products issued by one or more insurance companies. These Funds are offered at net asset value to qualified insurance company separate accounts offering variable insurance products. The Investment Company is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. It is organized and operates as a Massachusetts business trust under a master trust agreement dated July 11, 1996, as amended. The Investment Company’s master trust agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest.

RIMCo is the Funds’ adviser and Russell Fund Services Company (“RFSC”), a wholly-owned subsidiary of RIMCo, is the Funds’ administrator and transfer agent.

Each of the Funds listed in the table below allocates its assets by investing in a combination of Russell Investment Company (“RIC”) funds and other of the Investment Company’s funds (the “Underlying Funds”). RIMCo, the Funds’ and Underlying Funds’ investment adviser, may modify the target asset allocation for any Fund and/or the Underlying Funds in which the Funds invest. From time to time, each Fund may adjust its investments within the ranges below based on RIMCo’s outlook for the economy, financial markets generally and relative market valuation of the asset classes represented by each Underlying Fund. Additionally, each Fund may deviate from the ranges below when, in RIMCo’s opinion, it is necessary to do so to pursue the Fund’s investment objective. In the future, the Funds may also invest in other funds which are not currently Underlying Funds.

 

   Asset Allocation Targets as set forth in current prospectus 
Asset Class/Underlying Funds  Moderate
Strategy Fund
  Balanced
Strategy Fund
  Growth
Strategy Fund
  Equity Growth
Strategy Fund
 

Bonds

     

RIF Core Bond Fund

  55-65% 35-45% 15-25% 0%

Domestic Equities

     

RIF Aggressive Equity Fund

  0-8  0-9  1-11  2-12 

RIF Multi-Style Equity Fund

  5-15  10-20  16-26  21-31 

RIC Quantitative Equity Fund

  5-15  10-20  15-25  20-30 

RIF Real Estate Securities Fund

  0-8  0-10  1-11  2-12 

International Equities

     

RIC Emerging Markets Fund

  0-7  0-8  0-9  0-10 

RIC Global Equity Fund

  0-8  0-9  1-11  2-12 

RIF Non-U.S. Fund

  14-24  9-19  12-22  18-28 

Investment Objectives of the Underlying Funds:

RIF Core Bond Fund

Seeks to provide current income, and as a secondary objective, capital appreciation.

RIF Aggressive Equity Fund

Seeks to provide long term capital growth.

RIF Multi-Style Equity Fund

Seeks to provide long term capital growth.

RIC Quantitative Equity Fund

Seeks to provide long term capital growth.

RIF Real Estate Securities Fund

Seeks to provide current income and long term capital growth.

RIC Emerging Markets Fund

 

Notes to Financial Statements 19


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Notes to Financial Statements, continued — June 30, 2008 (Unaudited)

 

 

 

Seeks to provide long term capital growth.

RIC Global Equity Fund

Seeks to provide long term capital growth.

RIF Non-U.S. Fund

Seeks to provide long term capital growth.

 

2. Significant Accounting Policies

The Funds’ financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) which require the use of management estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following is a summary of the significant accounting policies consistently followed by each Fund in the preparation of its financial statements.

Security Valuation

The Funds value their portfolio securities, the shares of the Underlying Funds, at the current net asset value per share of each Underlying Fund.

The Underlying Funds value portfolio securities according to Board-approved securities valuation procedures, including market value procedures, fair value procedures and pricing services. Debt obligation securities maturing within 60 days of the time of purchase are priced using the amortized cost method of valuation, unless the Board determines that amortized cost does not represent market value of short-term debt obligations. The Board has delegated the responsibility for administration of the securities valuation procedures to RFSC.

Ordinarily, the Underlying Funds value each portfolio security based on market quotations provided by pricing services or alternative pricing services or dealers (when permitted by the market value procedures). Generally, Underlying Fund securities are valued at the close of the market on which they are traded as follows:

 

  

US listed equities; equity and fixed income options: Last sale price; last bid price if no last sale price;

 

  

US over-the-counter equities: Official closing price; last bid price if no closing price;

 

  

Listed ADRs/GDRs: Last sale price; last bid price if no last sale price;

 

  

Municipal bonds, US bonds, Eurobonds/foreign bonds: Evaluated bid price; broker quote if no evaluated bid price;

 

  

Futures: Settlement price;

 

  

Investments in other mutual funds are valued at their net asset value per share, calculated at 4 p.m. Eastern time or as of the close of the New York Stock Exchange, whichever is earlier;

 

  

The value of swap agreements is equal to the Funds’ obligation (or rights) under swap contracts which will generally be equal to the net amounts to be paid or received under the contracts based upon the relative values of the positions held by each party to the contracts.

 

  

Equity securities traded on a national foreign securities exchange or a foreign over the counter market are valued on the basis of the official closing price, or lacking the official closing price, at the last sale price of the primary exchange on which the security is traded.

If market quotations are not readily available for a security or if subsequent events suggest that a market quotation is not reliable, the Underlying Funds will use the security’s fair value, as determined in accordance with the fair value procedures. The effect of fair value pricing is that securities may not be priced on the basis of quotations from the primary market on which they are traded, but rather may be priced by another method that the Funds’ Board of Trustees believes reflects fair value. The use of fair value pricing by an Underlying Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated using normal pricing methods. Fair value pricing could also cause discrepancies between the daily movement of the value of Underlying Fund shares and daily movement of the benchmark index if the index is valued using another pricing method.

 

20 Notes to Financial Statements


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Notes to Financial Statements, continued — June 30, 2008 (Unaudited)

 

 

 

This policy is intended to assure that the Underlying Funds’ net asset values fairly reflect security values as of the time of pricing. Events or circumstances affecting the values of Underlying Fund securities that occur between the closing of the principal markets on which they trade and the time the net asset value of Underlying Fund shares is determined may be reflected in the calculation of net asset values for each applicable Underlying Fund (and each Fund which invests in such Underlying Fund) when the Underlying Funds deem that the particular event or circumstance would materially affect such Underlying Fund’s net asset value. Underlying Funds that invest primarily in frequently traded exchange listed securities will use fair value pricing in limited circumstances since reliable market quotations will often be readily available. Underlying Funds that invest in foreign securities are likely to use fair value pricing more often since significant events may occur between the close of foreign markets and the time of pricing which would trigger fair value pricing of the foreign securities. Underlying Funds that invest in low rated debt securities are also likely to use fair value pricing more often since the markets in which such securities are traded are generally thinner, more limited and less active than those for higher rated securities. Examples of events that could trigger fair value pricing of one or more securities are: a material market movement of the US securities market (defined in the fair value procedures as the movement by any two of four major US Indexes greater than a certain percentage) or other significant event; foreign market holidays if on a daily basis, Fund exposure exceeds 20% in aggregate (all closed markets combined); a company development; a natural disaster; or an armed conflict.

Because foreign securities can trade on non-business days, the net asset value of a Fund’s portfolio that includes an Underlying Fund which invests in foreign securities may change on days when shareholders will not be able to purchase or redeem fund shares.

The Funds adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), effective January 1, 2008. In accordance with SFAS 157, fair value is defined as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. SFAS 157 established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including a pricing model and/or risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

 

  

Level 1 — quoted prices in active markets for identical investments

 

  

Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

 

  

Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

Inputs used in valuing the Funds’ investments carried at value for the period ended June 30, 2008 were as follows:

 

   Moderate Strategy
Fund
  Balanced Strategy
Fund
  Growth Strategy
Fund
  Equity Growth
Strategy Fund
    Investments in
Securities
  Investments in
Securities
  Investments in
Securities
  Investments in
Securities
        

Level 1

  $19,514,516  $63,484,386  $40,949,784  $16,067,013

Level 2

            

Level 3

            
                
  $19,514,516  $63,484,386  $40,949,784  $16,067,013
                

As of June 30, 2008, there were no Level 3 securities held by the Funds.

 

Notes to Financial Statements 21


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Notes to Financial Statements, continued — June 30, 2008 (Unaudited)

 

 

 

In March 2008, the Financial Accounting Standards board (“FASB”) issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”). SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures about Funds’ derivative and hedging activities. Management is currently evaluating the impact the adoption of SFAS 161 will have on the Funds’ financial statement disclosures.

Investment Transactions

Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions, if any, are recorded on the basis of specific identified cost.

Investment Income

Distributions of income and capital gains from the Underlying Funds are recorded on the ex-dividend date.

Federal Income Taxes

Since the Investment Company is a Massachusetts business trust, each Fund is a separate corporate taxpayer and determines its net investment income and capital gains (or losses) and the amounts to be distributed to each Fund’s shareholders without regard to the income and capital gains (or losses) of the other Funds.

It is each Fund’s intention to qualify as a regulated investment company and distribute all of its taxable income and capital gains. Therefore, no federal income tax provision is required for the Funds.

The FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109” (“FIN 48”), in June 2006. FIN 48 permits the recognition of tax benefits of an uncertain tax position only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. The Funds adopted the provisions of FIN 48 on January 1, 2007. Management has reviewed the Funds tax positions for all open tax years, and concluded that adoption had no effect on the Funds financial position or results of operations. At June 30, 2008, the Funds have recorded no liabilities for net unrecognized tax benefits relating to uncertain income tax positions they have taken or expect to take in future tax returns.

The Funds intend to file U.S. tax returns for the period ending December 31, 2007. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Dividends and Distributions to Shareholders

Income dividends and capital gain distributions, if any, are recorded on the ex-dividend date. Income dividends are generally declared and paid quarterly. Capital gain distributions are generally declared and paid annually. An additional distribution may be paid by the Funds to avoid imposition of federal income and excise tax on any remaining undistributed capital gains and net investment income.

The timing and characterization of certain income and capital gain distributions are determined in accordance with federal tax regulations which may differ from GAAP. As a result, net investment income and net realized gain (or loss) from investment transactions for a reporting period may differ significantly from distributions during such period. The differences between tax regulations and GAAP relate primarily to investments in the Underlying Funds sold at a loss, wash sale deferrals and capital loss carryforwards. Accordingly, the Funds may periodically make reclassifications among certain of their capital accounts without impacting their net asset value.

Expenses

Expenses included in the accompanying financial statements reflect the expenses of each Fund and do not include those expenses incurred by the Underlying Funds. Because the Underlying Funds have varied expense and fee levels and the Funds may own different proportions of the Underlying Funds at different times, the amount of the fees and expenses incurred indirectly by the Funds will vary. Most expenses can be directly attributed to the individual Funds. Expenses which cannot be directly attributed to a specific Fund are allocated among all Funds principally based on their relative net assets.

Guarantees

In the normal course of business the Funds enter into contracts that contain a variety of representations which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds expect the risk of loss to be remote.

 

22 Notes to Financial Statements


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Notes to Financial Statements, continued — June 30, 2008 (Unaudited)

 

 

 

3. Investment Transactions

Securities

During the period ended June 30, 2008, purchases and sales of the Underlying Funds (excluding short-term investments) were as follows:

 

Funds  Purchases  Sales
    

Moderate Strategy

  $15,328,626  $3,544,274

Balanced Strategy

   34,906,928   3,370,456

Growth Strategy

   18,188,285   1,388,437

Equity Growth Strategy

   6,692,163   2,008,808

 

4. Related Parties

Adviser and Administrator

RIMCo is the Funds Advisor and RFSC is the Funds’ administrator. RFSC is a wholly-owned subsidiary of RIMCo. RIMCo is a wholly-owned subsidiary of Frank Russell Company (a subsidiary of The Northwestern Mutual Life Insurance Company). Frank Russell Company provides money manager research services to RIMCo.

The Funds pay an advisory fee to RIMCo and an administrative fee to RFSC.

RIMCo has contractually agreed to waive, at least through April 29, 2009, its 0.20% advisory fee for each Fund. RFSC waives Transfer Agent fees and has contractually agreed to reimburse, at least through April 29, 2009, each Fund for other direct Fund-level expenses to the extent that direct Fund-level expenses exceed 0.11%, 0.08%, 0.04% and 0.04% of the average daily net assets of the Moderate Strategy, Balanced Strategy, Growth Strategy and Equity Growth Strategy Funds, respectively, on an annual basis. Direct Fund-level expenses for the Funds do not include the expenses of other investment companies in which the Fund invests which are borne indirectly by the Fund. These arrangements may not be terminated during the relevant period except at the Board’s discreation.

For the period ended June 30, 2008, the fees waived and reimbursed by RIMCo and RFSC amounted to:

 

Funds  RIMCo  RFSC  Total
      

Moderate Strategy

  $15,660  $20,331  $35,991

Balanced Strategy

   48,933   24,064   72,997

Growth Strategy

   32,949   29,822   62,771

Equity Growth Strategy

   14,431   25,902   40,333

RIMCo and RFSC do not have the ability to recover amounts waived or reimbursed from previous periods.

Transfer and Dividend Disbursing Agent

RFSC is the Transfer and Dividend Disbursing Agent for the Investment Company. For this service, RFSC is paid a fee for transfer agency and dividend disbursing services provided to the Funds. RFSC retains a portion of this fee for its services provided to the Funds and pays the balance to unaffiliated agents who assisted in providing these services.

Accrued Fees Payable to Affiliates

Accrued fees payable to affiliates for the period ended June 30, 2008 were as follows:

 

    

Moderate Strategy

Fund

  

Balanced Strategy

Fund

  

Growth Strategy

Fund

  

Equity Growth Strategy

Fund

        

Administrative fees

  $797  $2,583  $1,641  $671

Trustee fees

   34   116   17   23
                
  $831  $2,699  $1,658  $694
                

 

Notes to Financial Statements 23


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Notes to Financial Statements, continued — June 30, 2008 (Unaudited)

 

 

 

Distributor

On June 2, 2008, Russell Fund Distributor, Inc., a wholly-owned subsidiary of RIMCo, changed its name to Russell Financial Services, Inc. (“Distributor”).

Pursuant to the Distribution Agreement with the Investment Company, the Distributor serves as distributor for all Investment Company portfolio shares. The Distributor receives no compensation from the Investment Company for its services.

Board of Trustees

The Russell Fund Complex consists of RIC, which has 44 Funds, and RIF, which has nine Funds. Each of the Trustees is a Trustee of both RIC and RIF. During the period, the Russell Fund Complex paid each of its independent Trustees a retainer of $60,000 ($52,000 prior to January 1, 2008) per year, $6,500 for each regular quarterly meeting attended in person, $2,500 ($2,000 prior to January 1, 2008) for each special meeting attended in person, and $2,500 ($2,000 prior to January 1, 2008) for each Audit Committee meeting, Nominating and Governance Committee meeting, Investment Committee meeting or any other committee meeting established and approved by the Board that is attended in person. Each Trustee receives a $1,000 ($500 prior to January 1, 2008) fee for attending the quarterly and special meetings and a $500 fee for attending the committee meeting by phone instead of receiving the full fee had the member attended in person. Trustees’ out of pocket expenses are also paid by the Russell Fund Complex. The Audit Committee Chair and Investment Committee Chair are each paid a fee of $12,000 per year and the Nominating and Governance Committee Chair is paid a fee of $6,000 per year. The chairman of the Board receives additional annual compensation of $52,000.

Transactions With Affiliated Companies

An affiliated company is a company in which a Fund has ownership of at least 5% of the voting securities or under common control. Transactions during the period ended June 30, 2008 with Underlying Funds which are an affiliated company or under common control are as follows:

 

Affiliate  Purchases Cost  Sales Cost  Income
Distributions
  Capital Gains
Distributions
        

Moderate Strategy Fund

        

RIF Core Bond Fund

  $9,029,055  $2,103,416  $151,044  $28,839

RIF Aggressive Equity Fund

   456,127   131,748   885   102

RIF Multi-Style Equity Fund

   1,606,570   428,230   11,116   14,651

RIC Quantitative Equity Fund

   1,601,234   457,156   2,366   

RIF Real Estate Securities Fund

   462,091   164,289   2,606   

RIC Emerging Markets Fund

   298,669   102,427      

RIC Global Equity Fund

   470,604   123,853      

RIF Non-U.S. Fund

   1,404,276   394,556      12,557
                
  $15,328,626  $3,905,675  $168,017  $56,149
                

Balanced Strategy Fund

        

RIF Core Bond Fund

  $13,284,819  $1,239,573  $289,310  $46,857

RIF Aggressive Equity Fund

   1,365,282   164,381   3,507   333

RIF Multi-Style Equity Fund

   5,398,247   521,795   45,359   53,562

RIC Quantitative Equity Fund

   5,395,711   613,513   10,551   

RIF Real Estate Securities Fund

   1,914,020   582,800   12,913   

RIC Emerging Markets Fund

   1,038,852   122,770      

RIC Global Equity Fund

   1,422,758   148,366      

RIF Non-U.S. Fund

   5,087,239   555,572      47,603
                
  $34,906,928  $3,948,770  $361,640  $148,355
                

 

24 Notes to Financial Statements


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Notes to Financial Statements, continued — June 30, 2008 (Unaudited)

 

 

 

Affiliate  Purchases Cost  Sales Cost  Income
Distributions
  Capital Gains
Distributions
        

Growth Strategy Fund

        

RIF Core Bond Fund

  $3,371,621  $313,258  $97,947  $17,712

RIF Aggressive Equity Fund

   1,052,577   92,311   3,460   377

RIF Multi-Style Equity Fund

   3,956,176   305,447   44,382   56,648

RIC Quantitative Equity Fund

   3,676,350   267,105   9,255   

RIF Real Estate Securities Fund

   1,006,177   144,131   10,357   

RIC Emerging Markets Fund

   734,436   100,443      

RIC Global Equity Fund

   1,120,658   105,741      

RIF Non-U.S. Fund

   3,270,290   309,995      44,109
                
  $18,188,285  $1,638,431  $165,401  $118,846
                

Equity Growth Strategy Fund

        

RIF Aggressive Equity Fund

  $439,459  $166,307  $1,797  $194

RIF Multi-Style Equity Fund

   1,719,091   510,622   24,369   30,967

RIC Quantitative Equity Fund

   1,605,160   503,813   5,147   

RIF Real Estate Securities Fund

   497,223   334,763   5,291   

RIC Emerging Markets Fund

   342,621   187,249      

RIC Global Equity Fund

   457,554   158,427      

RIF Non-U.S. Fund

   1,631,055   690,746      26,476
                
  $6,692,163  $2,551,927  $36,604  $57,637
                

 

5. Federal Income Taxes

The Funds may have net tax basis capital loss carryforwards which may be applied against any realized net taxable gains in each succeeding year or until their respective expiration dates, whichever occurs first. At December 31, 2007, the Funds had no capital loss carryforwards.

At June 30, 2008, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

 

    Moderate
Strategy Fund
  Balanced
Strategy Fund
  Growth
Strategy Fund
  Equity Growth
Strategy Fund
 
     

Cost of Investments

  $20,633,680  $68,756,758  $45,723,711  $18,922,253 
                 

Unrealized Appreciation

  $  $  $  $ 

Unrealized Depreciation

   (119,164)  (5,272,373)  (4,773,927)  (2,855,240)
                 

Net Unrealized Appreciation (Depreciation)

  $(119,164) $(5,272,373) $(4,773,927) $(2,855,240)
                 

 

6. Fund Share Transactions (amounts in thousands)

Share transactions for the periods ended June 30, 2008 and December 31, 2007 were as follows:

 

   Shares  Dollars 
   2008  2007  2008  2007 
     
     

Moderate Strategy Fund

     

Proceeds from shares sold

  1,544  950  $14,964  $9,530 

Proceeds from reinvestment of distributions

  34  22   324   209 

Payments for shares redeemed

  (354) (106)  (3,402)  (1,047)
               

Net increase (decrease)

  1,224  866  $11,886  $8,692 
               
     

Balanced Strategy Fund

     

Proceeds from shares sold

  3,687  3,701  $34,315  $37,178 

Proceeds from reinvestment of distributions

  160  91   1,470   903 

Payments for shares redeemed

  (351) (197)  (3,270)  (2,003)
               

Net increase (decrease)

  3,496  3,595  $32,515  $36,078 
               

 

Notes to Financial Statements 25


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Notes to Financial Statements, continued — June 30, 2008 (Unaudited)

 

 

 

6. Fund Share Transactions (amounts in thousands) (continued)

 

   Shares  Dollars 
   2008  2007  2008  2007 
     
     

Growth Strategy Fund

     

Proceeds from shares sold

  1,966  2,762  $17,943  $27,787 

Proceeds from reinvestment of distributions

  143  66   1,271   651 

Payments for shares redeemed

  (155) (61)  (1,424)  (623)
               

Net increase (decrease)

  1,954  2,767  $17,790  $27,815 
               
     

Equity Growth Strategy Fund

     

Proceeds from shares sold

  762  1,332  $6,661  $13,593 

Proceeds from reinvestment of distributions

  92  37   783   358 

Payments for shares redeemed

  (236) (46)  (2,076)  (458)
               

Net increase (decrease)

  618  1,323  $5,368  $13,493 
               

 

7. Interfund Lending Program

The Investment Company has been granted permission from the Securities and Exchange Commission to participate in a joint lending and borrowing facility (the “Credit Facility”). Funds of the Investment Company and RIC Funds may borrow money from the RIC Money Market Fund for temporary purposes. All such borrowing and lending will be subject to a participating fund’s fundamental investment limitations. The RIC Money Market Fund will lend through the program only when the returns are higher than those available from an investment in repurchase agreements or short-term reserves. The Funds will borrow through the program only when the costs are equal to or lower than the cost of bank loans. Interfund loans and borrowings normally extend overnight, but can have a maximum duration of seven days. Loans may be called on one business day’s notice. A participating fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to the RIC Money Market Fund could result in a lost investment opportunity or additional borrowing costs. For the period ended June 30, 2008, the Funds presented herein did not participate in the interfund lending program.

 

8. Record Ownership

As of June 30, 2008, the following table includes shareholders of record with greater than 10% of the total outstanding shares of each respective Fund. The Northwestern Mutual Life Insurance Company accounts were the largest shareholders in each Fund.

 

Funds  # of Shareholders    %

Moderate Strategy

  1    98.6

Balanced Strategy

  1    98.2

Growth Strategy

  1    98.2

Equity Growth Strategy

  1    97.7

 

26 Notes to Financial Statements


Table of Contents

Russell Investment Funds (“RIF”)

LifePoints Variable Target Portfolio Funds

Basis for Approval of Investment Advisory Contracts

 

 

 

Approval of Investment Advisory Agreement

The Board of Trustees, including all of the Independent Trustees, last considered and approved the continuation of the advisory agreement with RIMCo (the “RIMCo Agreement”) and the portfolio management contract (collectively, the “portfolio management contracts”) with each Money Manager of the funds in which the Funds invest (the “Underlying Funds”) at a meeting held on April 22, 2008. During the course of a year, the Trustees receive a wide variety of materials regarding the investment performance of the Funds, sales and redemptions of the Funds’ and Underlying Funds’ shares, and the management of the Funds and the Underlying Funds by RIMCo. In preparation for the annual review, the Independent Trustees, with the advice and assistance of their independent counsel, also requested and the Board considered (1) information and reports prepared by RIMCo relating to the services provided by RIMCo (and its affiliates) to the Funds and the Underlying Funds; and (2) information (the “Third-Party Information”) received from an independent, nationally recognized provider of investment company information comparing the performance of each of the Funds and the Underlying Funds and their respective operating expenses over various periods of time with other peer funds (“Comparable Funds”) not managed by RIMCo believed by the provider to be generally comparable in investment objectives and size to the Funds and the Underlying Funds. The foregoing information requested by the Trustees or provided by RIMCo is collectively called the “Agreement Renewal Information.” The Trustees’ evaluations also reflected the knowledge and familiarity gained as Board members of the Funds and other funds in the same complex with respect to services provided by RIMCo, RIMCo’s affiliates and each Money Manager. The Trustees received a memorandum from counsel to the Funds discussing the legal standards for their consideration of the continuations of the RIMCo Agreement and the portfolio management contracts and the Independent Trustees separately received a memorandum regarding their responsibilities from their independent counsel.

On April 21, 2008, the Independent Trustees met to review the Agreement Renewal Information in a private session with their independent counsel at which no representatives of RIMCo or management were present. At the April 22 meeting of the Board of Trustees, the Board, including the Independent Trustees, reviewed the proposed continuance of the RIMCo Agreement and the portfolio management contracts with management and independent counsel to the Independent Trustees. Presentations made by RIMCo to the Board as part of this review encompassed the Funds and all other RIMCo-managed funds for which the Board has supervisory responsibility. Following this review, but prior to voting, the Independent Trustees again met in a private session with their independent counsel to evaluate additional information and analyses received from RIMCo and management at the Board meeting. The discussion below reflects all of these reviews.

In evaluating the portfolio management contracts, the Board considered that the Underlying Funds, in employing a manager-of-managers method of investment, operate in a manner that is distinctly different from most other investment companies. In the case of most other investment companies, an advisory fee is paid by the investment company to its adviser which in turn employs and compensates individual portfolio managers to make specific securities selections consistent with the adviser’s style and investment philosophy. RIMCo has engaged multiple unaffiliated Money Managers for all Underlying Funds.

The Board considered that RIMCo (rather than any Money Manager) is responsible under the RIMCo Agreement for allocating assets of each Fund among its Underlying Funds and for determining, implementing and maintaining the investment program for each Underlying Fund. The assets of each Fund are invested in different combinations of the Underlying Funds pursuant to target asset allocations set by RIMCo. RIMCo may modify the target asset allocation for any Fund and/or the Underlying Funds in which the Funds invest. Assets of each Underlying Fund generally have been allocated among the multiple Money Managers selected by RIMCo, subject to Board approval, for that Underlying Fund. RIMCo manages directly a portion of certain Underlying Funds’ assets employing a “select holdings strategy,” as described below, and directly manages the investment of each Underlying Fund’s cash reserves. RIMCo also may manage directly any portion of each Underlying Fund’s assets that RIMCo determines not to allocate to the Money Managers and portions of an Underlying Fund during transitions between Money Managers. In all cases, assets are managed directly by RIMCo pursuant to authority granted by the RIMCo Agreement.

RIMCo is responsible for selecting, subject to Board approval, Money Managers for each Underlying Fund and for actively managing allocations and reallocations of its assets among the Money Managers. RIMCo’s goal is to construct and manage diversified portfolios in a risk aware manner. Each Money Manager for an Underlying Fund in effect performs the function of an individual portfolio manager who is responsible for selecting portfolio securities for the portion of the Underlying Fund assigned to it by RIMCo (each, a “segment”) in accordance with the Fund’s applicable investment objective, policies and restrictions, any constraints placed by RIMCo upon their selection of portfolio securities and the Money Manager’s specified role in an Underlying Fund. RIMCo is responsible for communicating performance expectations to each Money Manager; supervising compliance by each Money Manager with each Underlying Fund’s investment objective and policies; authorizing Money Managers to engage in certain investment

 

Basis for Approval of Investment Advisory Contracts 27


Table of Contents

Russell Investment Funds (“RIF”)

LifePoints Variable Target Portfolio Funds

Basis for Approval of Investment Advisory Contracts, continued

 

 

 

strategies for an Underlying Fund; and recommending annually to the Board whether portfolio management contracts should be renewed, modified or terminated. In addition to its annual recommendation as to the renewal, modification or termination of portfolio management contracts, RIMCo is responsible for recommending to the Board additions of new Money Managers or replacements of existing Money Managers at any time when, based on RIMCo’s research and ongoing review and analysis, such actions are appropriate. RIMCo may impose specific investment constraints from time to time for each Money Manager intended to capitalize on the strengths of that Money Manager or to coordinate the investment activities of Money Managers for an Underlying Fund in a complementary manner. Therefore, the performance of individual Money Managers for an Underlying Fund may reflect the roles assigned to them by RIMCo in the Underlying Funds’ investment activities and any constraints placed by RIMCo upon their selection of portfolio securities. In light of the foregoing, the overall performance of each Underlying Fund over appropriate periods reflects, in great part, the performance of RIMCo in designing the Underlying Fund’s investment program, structuring an Underlying Fund, selecting an effective Money Manager with a particular investment style or sub-style for a segment that is complementary to the styles of the Money Managers of other Underlying Fund segments, and allocating assets among the Money Managers in a manner designed to achieve the objectives of the Underlying Fund.

The Board considered that the prospectuses for the Funds and the Underlying Funds and other public disclosures emphasize to investors RIMCo’s role as the principal investment manager for each Underlying Fund, rather than the investment selection role of the Underlying Funds’ Money Managers, and describe the manner in which the Funds or Underlying Funds operate so that investors may take that information into account when deciding to purchase shares of any Fund.

The Board also considered the demands and complexity of managing the Underlying Funds pursuant to the manager-or-managers structure, the special expertise of RIMCo with respect to the manager-of-managers structure of the Underlying Funds and the likelihood that, at the current expense ratio of each Underlying Fund, there would be no acceptable alternative investment managers to replace RIMCo on comparable terms given the need to continue the manager-of-managers strategy of each Underlying Fund selected by shareholders in purchasing their shares of a Fund or Underlying Fund.

In addition to these general factors relating to the manager-of-managers structure of the Underlying Funds, the Trustees considered, with respect to each Fund and Underlying Fund, various specific factors in evaluating renewal of the RIMCo Agreement, including the following:

 

 1.The nature, scope and quality of the services provided to the Fund and the Underlying Fund by RIMCo;

 

 2.The advisory fee paid by the Fund or the Underlying Fund to RIMCo and the fact that it encompasses all investment advisory fees paid by the Fund or Underlying Fund, including the fees for any Money Managers of such Underlying Fund;

 

 3.Information provided by RIMCo as to other fees and benefits received by RIMCo or its affiliates from the Fund or Underlying Fund, including any administrative, transfer agent, cash management and securities lending fees, soft dollar arrangements and commissions in connection with portfolio securities transactions;

 

 4.Information provided by RIMCo as to expenses incurred by the Fund or the Underlying Fund; and

 

 5.Information provided by RIMCo as to the profits that RIMCo derives from its mutual fund operations generally and from the Fund or Underlying Fund.

As noted above, RIMCo pursuant to the terms of the RIMCo Agreement directly managed a portion—up to 10%—of the assets of the RIF Multi-Style Equity Fund and the Russell Investment Company (“RIC”) Quantitative Equity Fund (each a “Participating Underlying Fund”) during the past year utilizing a select holdings strategy, the actual allocation being determined by each Participating Underlying Fund’s RIMCo portfolio manager. The select holdings strategy utilized by RIMCo in managing such assets for a Participating Underlying Fund is designed to increase the Participating Underlying Fund’s exposure to stocks that are viewed as attractive by multiple Money Managers of that Participating Underlying Fund. The Board reviewed the results of the select holdings strategy in respect of each Participating Underlying Fund since implementation taking into account that the strategy has been utilized for a limited period of time. With respect to each Participating Underlying Fund, the Trustees considered that RIMCo is not required to pay investment advisory fees to a Money Manager with respect to assets for which the select holdings strategy is utilized and that the profits derived by RIMCo generally and from the Participating Underlying Fund consequently may increase incrementally. The Board, however, also considered RIMCo’s advice that it pays certain Money Managers additional fees for providing information and other services in connection with the select holdings strategy and incurs additional costs in carrying out the select holdings strategy, the limited amount of assets that are managed directly by RIMCo pursuant to the select holdings strategy, and the fact that the aggregate investment advisory fees paid by the Participating Underlying Fund are not increased as a result of the select holdings strategy.

 

28 Basis for Approval of Investment Advisory Contracts


Table of Contents

Russell Investment Funds (“RIF”)

LifePoints Variable Target Portfolio Funds

Basis for Approval of Investment Advisory Contracts, continued

 

 

 

In evaluating the reasonableness of the Funds’ and Underlying Funds’ investment advisory fees in light of Fund and Underlying Fund performance, the Board considered that RIMCo, in the Agreement Renewal Information and at past meetings, noted differences between the investment strategies of certain Underlying Funds and their respective Comparable Funds in pursuing their investment objectives, including Fund strategies which seek to achieve a lower tracking error (i.e., the difference, whether positive or negative, between the return of a fund and its benchmark) and resulting lower return volatility than Comparable Funds. According to RIMCo, these strategies may be expected to result, and for certain Underlying Funds during the periods covered by the Third-Party Information did result, in lower performance of the Funds than that of some of their respective Comparable Funds. According to RIMCo, the strategies pursued by the Underlying Funds, among other things, are intended to result in less volatile, more moderate returns relative to each Fund’s performance benchmark rather than more volatile, more extreme returns that its Comparable Funds may experience over time.

The Board considered for each Fund and Underlying Fund whether economies of scale have been realized and whether the fees for such Fund or Underlying Fund appropriately reflect or should be revised to reflect any such economies. The Board determined that, after giving effect to any applicable fee or expense caps, waivers or reimbursements, the investment advisory fees for each Fund or Underlying Fund appropriately reflect any economies of scale realized by such Fund, based upon such factors as the variability of Money Manager investment advisory fees and other factors associated with the manager-of-managers structure employed by the Underlying Funds. The Trustees considered that fees payable to RIMCo by institutional clients with investment objectives similar to those of the Funds and other funds under the Board’s supervision, including the Underlying Funds are lower, and may, in some cases, be substantially lower, than the rates paid by funds supervised by the Board, including the Funds. The Trustees considered the differences in the scope of services it provides to institutional clients and the funds under its supervision, including the Underlying Funds. In response to the Trustees’ inquiries, RIMCo has previously noted, among other things, that institutional clients have fewer administrative needs than the Funds. RIMCo has in the past noted that since the Funds must constantly issue and redeem their shares, they are more difficult to manage than institutional accounts, where assets are relatively stable. Accordingly, the Trustees did not regard these fee differences as relevant to their deliberations.

On the basis of the Agreement Renewal Information, and other information previously received by the Board from RIMCo during the course of the current year or prior years or presented at the April 22 Board meeting by RIMCo, the Board, in respect of each Fund and Underlying Fund, found, after giving effect to waivers and/or reimbursements and considering differences in the composition and investment strategies of their respective Comparable Funds (1) the advisory fee charged by RIMCo to be reasonable in light of the nature, scope and quality of the services provided to the Funds or Underlying Funds; (2) the relative expense ratio of each Fund and Underlying Fund was comparable to those of its Comparable Funds; (3) RIMCo’s methodology of allocating expenses of operating funds in the complex was reasonable; and (4) RIMCo’s profitability with respect to the Fund and each Underlying Fund was not excessive in light of the nature, scope and quality of the services provided by RIMCo.

The Board further concluded that, under the circumstances, the performance of each of the Funds supported continuation of the RIMCo Agreement. In evaluating performance, the Board considered each Fund’s and Underlying Fund’s absolute performance and its performance relative to appropriate benchmarks and indices and its Comparable Funds. In assessing performance, the Board also considered RIMCo’s investment strategy of managing the Underlying Funds in a risk aware manner.

After considering the foregoing and other relevant factors, the Board concluded that continuation of the RIMCo Agreement on its current terms and conditions would be in the best interests of the Funds and their respective shareholders and voted to approve the continuation of the Agreement.

At the April 22 Board meeting, with respect to the evaluation of the terms of portfolio management contracts with Money Managers for the Underlying Funds, the Board received and considered information from RIMCo reporting, among other things, for each Money Manager, the Money Manager’s performance over various periods; RIMCo’s assessment of the performance of the Money Manager; any significant business relationships between the Money Manager and RIMCo or Russell Financial Services, Inc., the Funds’ and Underlying Funds’ underwriter; and RIMCo’s recommendation to retain the Money Manager at the current fee rate, to retain the Money Manager at a reduced fee rate or to terminate the Money Manager. RIMCo recommended that each Money Manager be retained at its current fee rate. RIMCo has advised the Board that it does not regard Money Manager profitability as relevant to its evaluation of the portfolio management contracts with Money Managers because the willingness of Money Managers to serve in such capacity depends upon arm’s-length negotiations with RIMCo; RIMCo is aware of the fees charged by Money Managers to other clients; and RIMCo believes that the fees agreed upon with Money Managers are reasonable in light of the anticipated quality of investment advisory services to be rendered. The Board accepted RIMCo’s explanation in light of the Board’s findings as to the reasonableness of the aggregate investment advisory fees paid by each Fund and Underlying Fund and the fact that each Money Manager’s fee is paid by RIMCo.

 

Basis for Approval of Investment Advisory Contracts 29


Table of Contents

Russell Investment Funds (“RIF”)

LifePoints Variable Target Portfolio Funds

Basis for Approval of Investment Advisory Contracts, continued

 

 

 

Based substantially upon RIMCo’s recommendations together with the information received from RIMCo in support of its recommendations at the April 22 meeting, the Board concluded that the fees paid to the Money Managers of each Underlying Fund are reasonable in light of the quality of the investment advisory services provided and that continuation of the portfolio management contract with each Money Manager of each Underlying Fund would be in the best interests of the Fund and its shareholders.

In their deliberations, the Trustees did not identify any particular information as to the RIMCo Agreement or, other than RIMCo’s recommendation, the portfolio management contract with any Money Manager for an Underlying Fund that was all-important or controlling and each Trustee attributed different weights to the various factors considered. The Trustees evaluated all information available to them on a Fund-by-Fund basis and their determinations were made in respect of each Fund and Underlying Fund.

Also, the Board of Trustees received a proposal from RIMCo at a meeting held on May 20, 2008, to effect a money manager change for the RIC Global Equity Fund. In the case of the proposed change, the Trustees approved the terms of the proposed portfolio management contract based substantially upon RIMCo’s recommendation to hire the Money Manager at the proposed fee rate; any significant business relationships between the Money Manager and RIMCo or RFS, the Fund’s underwriter; RIMCo’s explanation as to the lack of relevance of profitability to the evaluation of portfolio management contracts with money managers because the willingness of Money Managers to serve in such capacity depends upon arm’s-length negotiations with RIMCo; RIMCo’s awareness of the fees charged by the Money Manager to other clients; and RIMCo’s belief that the proposed investment advisory fees would be reasonable in light of the anticipated quality of investment advisory services to be rendered. The Trustees also considered their findings at their April 22, 2008 meeting as to the reasonableness of the aggregate investment advisory fees paid by the Fund, and the fact that the aggregate investment advisory fees paid by the Fund would not increase as a result of the implementation of the proposed money manager change because the money managers’ investment advisory fee is paid by RIMCo.

 

30 Basis for Approval of Investment Advisory Contracts


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Shareholder Requests for Additional Information — June 30, 2008 (Unaudited)

 

 

 

A complete unaudited schedule of investments is made available generally no later than 60 days after the end of the first and third quarters of each year. These reports are available (i) free of charge, upon request, by calling the Funds at (800) 787-7354, (ii) on the Securities and Exchange Commission’s website at www.sec.gov, and (iii) at the Securities and Exchange Commission’s public reference room.

The Board has delegated to RIMCo, as RIF’s investment adviser, the primary responsibility for monitoring, evaluating and voting proxies solicited by or with respect to issuers of securities in which assets of the Funds may be invested. RIMCo has established a proxy voting committee (“Committee”) and has adopted written proxy voting policies and procedures (“P&P”) and proxy voting guidelines (“Guidelines”). The Funds maintain a Portfolio Holdings Disclosure Policy that governs the timing and circumstances of disclosure to shareholders and third parties of information regarding the portfolio investments held by the Funds. A description of the P&P, Guidelines, Portfolio Holdings Disclosure Policy and additional information about Fund Trustees are contained in the Funds’ Statement of Additional Information (“SAI”). The SAI is available (i) free of charge, upon request, by calling the Funds at (800) 787-7354, and (ii) on the Securities and Exchange Commission’s website at www.sec.gov.

Financial Statements of the Underlying Funds can be obtained at no charge by calling the Funds at (800) 787-7354.

If possible, depending on contract owner registration and address information, and unless you have otherwise opted out, only one copy of the RIF prospectus and each annual and semi-annual report will be sent to contract owners at the same address. If you would like to receive a separate copy of these documents, please contact your Insurance Company. If you currently receive multiple copies of the prospectus, annual report and semi-annual report and would like to request to receive a single copy of these documents in the future, please call your Insurance Company.

Some Insurance Companies may offer electronic delivery of the Funds’ prospectus and annual and semiannual reports. Please contact your Insurance Company for further details.

 

Shareholder Requests for Additional Information 31


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Disclosure of Information about Fund Trustees and Officers — June 30, 2008 (Unaudited)

 

 

 

The following tables provide information for each officer and trustee of the Russell Fund Complex. The Russell Fund Complex consists of Russell Investment Company (“RIC”), which has 44 funds, and Russell Investment Funds (“RIF”), which has 9 funds. Each of the trustees is a trustee of both RIC and RIF. The first table provides information for the interested trustee. The second table provides information for the independent trustees. The third table provides information for the trustees emeritus. The fourth table provides information for the officers.

 

Name,
Age,
Address
 Position(s) Held
with Fund and
Length of
Time Served
 Term
of
Office*
 Principal Occupation(s)
During the
Past 5 Years
 No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee
 Other
Directorships Held
by Trustee

INTERESTED TRUSTEES

      

#Greg J. Stark

Born May 3, 1968

 

909 A Street

Tacoma, Washington 98402-1616

 

President and Chief Executive Officer since 2004

 

Trustee since 2007

 

Appointed until successor is duly elected and qualified

 

Until successor is chosen and qualified by Trustees

 

•  President and CEO RIC and RIF

•  Chairman of the Board, President and CEO, RIMCo

•  Chairman of the Board, President and CEO, RFD

•  Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”))

•  Until 2004, Managing Director, of Individual Investor Services, FRC

•  2000 to 2004 Managing Director, Sales and Client Service, RIMCo

 53 None

INDEPENDENT TRUSTEES

     

Thaddas L. Alston

Born April 7, 1945

 

909 A Street

Tacoma, Washington 98402-1616

 Trustee since 2006 Appointed until successor is duly elected and qualified 

•  Senior Vice President, Larco Investments, Ltd. (real estate firm)

 53 None
       

Kristianne Blake
Born January 22, 1954

 

909 A Street

Tacoma, Washington 98402-1616

 

Trustee
since 2000

 

Chairperson since 2005

 

Appointed until successor is duly elected and qualified

 

Annual

 

•  Director and Chairman of the Audit Committee, Avista Corp.

•  Trustee and Chairman of the Operations Committee, Principal Funds and Principal Variable Contracts Funds

•  Regent, University of Washington

•  President, Kristianne Gates Blake, P.S. (accounting services)

•  February 2002 to June 2005, Chairman of the Audit Committee, RIC and RIF

•  Trustee and Chairman of the Operations and Distribution Committee, WM Group of Funds, 1999–2006

 53 

•  Director, Avista Corp; (electric utilities)

•  Trustee, Principal Investors Funds (investment company);

•  Trustee, Principal Variable Contracts Funds (investment company)

 

#Mr. Stark is also an officer and/or director of one or more affiliates of RIC and RIF and is therefore an Interested Trustee.
*Each Trustee is subject to mandatory retirement at age 72.

 

32 Disclosure of Information about Fund Trustees and Officers


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Disclosure of Information about Fund Trustees and Officers, continued — June 30, 2008 (Unaudited)

 

 

 

Name,
Age,
Address
 Position(s) Held
with Fund and
Length of
Time Served
 Term
of
Office*
 Principal Occupation(s)
During the
Past 5 Years
 No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee
 Other
Directorships Held
by Trustee

INDEPENDENT TRUSTEES (continued)

     

Daniel P. Connealy Born June 6, 1946

 

909 A Street Tacoma, Washington 98402-1616

 

Trustee since 2003

 

Chairman of Audit Committee since 2005

 

Appointed until successor is duly elected and qualified

 

Appointed until successor is duly elected and qualified

 

•  June 2004 to present, Senior Vice President and Chief Financial Officer, Waddell & Reed Financial, Inc.

•  2001–2003, Vice President and Chief Financial Officer, Janus Capital Group Inc.

 53 None
       

Jonathan Fine Born July 8, 1954

 

909 A Street Tacoma, Washington 98402-1616

 Trustee since 2004 Appointed until successor is duly elected and qualified 

•  President and Chief Executive Officer, United Way of King County, WA

 53 None
       

Raymond P. Tennison, Jr. Born December 21, 1955

 

909 A Street Tacoma, Washington 98402-1616

 

Trustee since 2000

 

Chairman of the Nominating and Governance Committee since 2007

 

Appointed until successor is duly elected and qualified.

 

Appointed until successor is duly elected and qualified

 

•  President, Simpson Investment Company and several additional subsidiary companies, including Simpson Timber Company, Simpson Paper Company and Simpson Tacoma Kraft Company

 53 None
       

Jack R. Thompson Born March 21, 1949

 

909 A Street Tacoma, Washington 98402-1616

 Trustee since 2005 Appointed until successor is duly elected and qualified 

•  September 2003 to present, Independent Board Chair and Chairman of the Audit Committee, Sparx Funds

•  September 2007 to present, Director, Life Advantage Corporation (health products company)

•  May 1999 to May 2003, President, Chief Executive Officer and Director, Berger Financial Group, LLC

•  May 1999 to May 2003, President and Trustee, Berger Funds

 53 

•  Director, Sparx Japan Funds (investment company)

•  Director, Life Advantage Corporation (health products company)

       

Julie W.Weston Born October 2, 1943

 

909 A Street Tacoma, Washington 98402-1616

 

Trustee since 2002

 

Chairperson of the Investment Committee since 2006

 

Appointed until successor is duly elected and qualified

 

Appointed until successor is duly elected and qualified

 

•  Retired

 53 None

 

*Each Trustee is subject to mandatory retirement at age 72.

 

Disclosure of Information about Fund Trustees and Officers 33


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Disclosure of Information about Fund Trustees and Officers, continued — June 30, 2008 (Unaudited)

 

 

 

Name,
Age,
Address
 Position(s) Held
with Fund and
Length of
Time Served
 Term
of
Office
 Principal Occupation(s)
During the
Past 5 Years
 No. of
Portfolios
in Russell
Fund
Complex
Overseen
by Trustee
 Other
Directorships Held
by Trustee

TRUSTEES EMERITUS

      

*George F. Russell, Jr.

Born July 3, 1932

 

909 A Street

Tacoma, Washington 98402-1616

 Trustee Emeritus and Chairman Emeritus since 1999 Until resignation or removal 

•  Director Emeritus, Frank Russell Company (investment consultant to institutional investors (“FRC”)); and RIMCo

•  Chairman Emeritus, RIC and RIF; Russell Implementation Services Inc. (broker-dealer and investment adviser (“RIS”)); Russell 20-20 Association (non-profit corporation); and Russell Trust Company (non-depository trust company (“RTC”))

•  Chairman, Sunshine Management Services, LLC (investment adviser)

 53 None
       

Paul E. Anderson

Born October 15, 1931

 

909 A Street

Tacoma, Washington 98402-1616

 Trustee Emeritus since 2007 Five year term 

•  President, Anderson Management Group LLC (private investments consulting)

•  February 2002 to June 2005, Lead Trustee, RIC and RIF

•  Trustee of RIC and RIF Until 2006

•  Chairman of the Nominating and Governance Committee 2006

 53 None
       

William E. Baxter

Born June 8, 1925

 

909 A Street

Tacoma, Washington 98402-1616

 Trustee Emeritus since 2004 Five year term 

•  Retired since 1986

•  Trustee of RIC and RIF Until 2004

 53 None
       

Lee C. Gingrich

Born October 6, 1930

 

909 A Street

Tacoma, Washington 98402-1616

 Trustee Emeritus since 2006 Five year term 

•  Retired since 1995

•  Trustee of RIC and RIF Until 2005

•  Chairman of the Nominating and Governance Committee 2001–2005

 53 None
       

Eleanor W. Palmer

Born May 5, 1926

 

909 A Street

Tacoma, Washington 98402-1616

 Trustee Emeritus since 2004 Five year term 

•  Retired since 1981

•  Trustee of RIC and RIF Until 2004

 53 None

 

*Mr. Russell is also a director emeritus of one or more affiliates of RIC and RIF.

 

34 Disclosure of Information about Fund Trustees and Officers


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

Disclosure of Information about Fund Trustees and Officers, continued — June 30, 2008

(Unaudited)

 

 

 

Name,
Age,
Address
 Position(s) Held
with Fund and
Length of
Time Served
 Term
of
Office
 Principal Occupation(s)
During the
Past 5 Years

OFFICERS

    

Greg J. Stark

Born May 3, 1968

 

909 A Street

Tacoma, Washington 98402-1616

 President and Chief Executive Officer since 2004 Until successor is chosen and qualified by Trustees 

•  President and CEO, RIC and RTF

•  Chairman of the Board, President and CEO, RIMCo

•  Chairman of the Board, President and CEO, RFD

•  Chairman of the Board and President, Russell Insurance Agency, Inc. (insurance agency (“RIA”))

•  Until 2004, Managing Director of Individual Investor Services, FRC

•  2000 to 2004, Managing Director, Sales and Client Service, RIMCo

     

Cheryl Wichers

Born December 16, 1966

 

909 A Street

Tacoma, Washington 98402-1616

 Chief Compliance Officer since 2005 Until removed by Independent Trustees 

•  Chief Compliance Officer, RIC

•  Chief Compliance Officer, RTF

•  Chief Compliance Officer, RIMCo

•  April 2002–May 2005, Manager, Global Regulatory Policy

•  1998–2002, Compliance Supervisor, Russell Investment Group

     

Peter Gunning

Born February 22, 1967

 

909 A Street

Tacoma, Washington 98402-1616

 Chief Investment Officer since 2008 Until removed by Trustees 

•  Chief Investment Officer, RIC, RIF

•  1996 to 2008, Chief Financial Officer, Russell, Asia Pacific

     

Mark E. Swanson

Born November 26, 1963

 

909 A Street

Tacoma, Washington 98402-1616

 Treasurer and Chief Accounting Officer since 1998 Until successor is chosen and qualified by Trustees 

•  Treasurer, Chief Accounting Officer and CFO, RIC and RIF

•  Director, Funds Administration, RIMCo, RTC and RFD

•  Treasurer and Principal Accounting Officer, SSgA Funds

     

Gregory J. Lyons

Born August 24, 1960

 

909 A Street

Tacoma, Washington 98402-1616

 Secretary since 2007 Until successor is chosen and qualified by Trustees 

•  Associate General Counsel and Assistant Secretary FRC and RIA

•  Director and Secretary, RIMCo and RFD

•  Secretary and Chief Legal Counsel, RIC and RIF

 

Disclosure of Information about Fund Trustees and Officers 35


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

909 A Street, Tacoma, Washington 98402

(800) 787-7354

 

 

 

Interested Trustees

Greg J. Stark

Independent Trustees

Thaddas L. Alston

Kristianne Blake

Daniel P. Connealy

Jonathan Fine

Raymond P. Tennison, Jr.

Jack R. Thompson

Julie W. Weston

Trustees Emeritus

George F. Russell, Jr.

Paul E. Anderson

William E. Baxter

Lee C. Gingrich

Eleanor W. Palmer

Officers

Greg J. Stark, President and Chief Executive Officer

Cheryl Wichers, Chief Compliance Officer

Peter Gunning, Chief Investment Officer

Mark E. Swanson, Treasurer and Chief Accounting Officer

Gregory J. Lyons, Secretary

Adviser

Russell Investment Management Company

909 A Street

Tacoma, WA 98402

Administrator and Transfer and Dividend Disbursing Agent

Russell Fund Services Company

909 A Street

Tacoma, WA 98402

Custodian

State Street Bank and Trust Company

Josiah Quincy Building

200 Newport Avenue

North Quincy, MA 02171

Office of Shareholder Inquiries

909 A Street

Tacoma, WA 98402

(800) 787-7354

Legal Counsel

Dechert LLP

200 Clarendon Street, 27th Floor

Boston, MA 02116-5021

Distributor

Russell Financial Services, Inc.

909 A Street

Tacoma, WA 98402

Money Managers of Underlying Funds as of June 30, 2008

RIF Core Bond Fund

Goldman Sachs Asset Management, L.P., New York, NY

Metropolitan West Asset Management, LLC, Los Angeles, CA

Pacific Investment Management Company LLC, Newport Beach, CA

RIF Aggressive Equity Fund

ClariVest Asset Management LLC, San Diego, CA

DePrince, Race & Zollo, Inc., Winter Park, FL

Gould Investment Partners LLC, Berwyn, PA

Jacobs Levy Equity Management, Inc., Florham Park, NJ

PanAgora Asset Management, Inc., Boston, MA

Ranger Investment Management, L.P., Dallas, TX

Signia Capital Management, LLC, Spokane, WA

Tygh Capital Management, Inc., Portland, OR

RIF Multi-Style Equity Fund

Arnhold and S. Bleichroeder Advisers, LLC, New York, NY

Columbus Circle Investors, Stamford, CT

DePrince, Race & Zollo, Inc., Winter Park, FL

Institutional Capital LLC, Chicago, IL

Jacobs Levy Equity Management, Inc., Florham Park, NJ

Montag & Caldwell, Inc., Atlanta, GA

Suffolk Capital Management, LLC, New York, NY

Turner Investment Partners, Inc., Berwyn, PA

RIC Quantitative Equity Fund

Aronson+Johnson+Ortiz, LP, Philadelphia, PA

Franklin Portfolio Associates, LLC, Boston, MA

Goldman Sachs Asset Management, L.P., New York, NY

Jacobs Levy Equity Management, Inc., Florham Park, NJ

RIF Real Estate Securities Fund

AEW Management and Advisors, L.P., Boston, MA

Cohen & Steers Capital Management, Inc., New York, NY

Heitman Real Estate Securities LLC, Chicago, IL

INVESCO Institutional (N.A.), Inc. which acts as a money manager to the Fund through its INVESCO Real Estate division,

Dallas, TX RREEF America L.L.C., Chicago, IL


 

36 Adviser, Money Managers and Service Providers


Table of Contents

Russell Investment Funds

LifePoints® Funds Variable Target Portfolio Series

909 A Street, Tacoma, Washington 98402

(800) 787-7354

 

 

 

RIC Emerging Markets Fund

AllianceBernstein L.P., New York, NY

Arrowstreet Capital, Limited Partnership, Boston, MA

Genesis Asset Managers, LLP, London, United Kingdom

Harding, Loevner Management, L.P., Somerville, NJ

T. Rowe Price International, Inc., Baltimore, MD

UBS Global Asset Management (Americas) Inc., Chicago, IL

RIC Global Equity Fund

ClariVest Asset Management LLC, San Diego, CA

Gartmore Global Partners, London, United Kingdom

Harris Associates, L.P., Chicago, IL

Tradewinds Global Investors LLC, Los Angeles, CA

T. Rowe Price International, Inc., Baltimore, MD

RIF Non-U.S. Fund

Altrinsic Global Advisors, LLC, Stamford, CT

AQR Capital Management, LLC, Greenwich, CT

MFS Institutional Advisors, Inc., Boston, MA

Wellington Management Company, LLP, Boston, MA


 

This report is prepared from the books and records of the Funds and is submitted for the general information of shareholders and is not authorized for distribution to prospective investors unless accompanied or preceded by an effective Prospectus. Nothing herein contained is to be considered an offer of sale or a solicitation of an offer to buy shares of Russell Investment Company. Such offering is made only by Prospectus, which includes details as to offering price and other material information.

 

Adviser, Money Managers and Service Providers 37


Table of Contents

 

Russell Investment Funds  909 A Street    800-787-7354
  Tacoma, Washington 98402    Fax: 253-591-3495
      www.russell.com

 

LOGO

LOGO

36-08-188


Table of Contents

LOGO

 

2008 SEMIANNUAL REPORT

 

 

Russell Investment Funds

 

 

JUNE 30, 2008

FUND

Multi-Style Equity Fund

Aggressive Equity Fund

Non-U.S. Fund

Real Estate Securities Fund

Core Bond Fund

 

LOGO


Table of Contents

 

 

Russell Investment Funds

Russell Investment Funds is a series investment company with nine different investment portfolios referred to as Funds. These financial statements report on five of these Funds.


Table of Contents

 

Russell Investment Funds

Semiannual Report

June 30, 2008 (Unaudited)

Table of Contents

 

   Page
Multi-Style Equity Fund  3
Aggressive Equity Fund  10
Non-U.S. Fund  24
Real Estate Securities Fund  39
Core Bond Fund  44
Notes to Schedules of Investments  73
Statements of Assets and Liabilities  74
Statements of Operations  76
Statements of Changes in Net Assets  78
Financial Highlights  80
Notes to Financial Highlights  82
Notes to Financial Statements  83
Basis for Approval of Investment Advisory Contracts  97
Shareholder Requests for Additional Information  101
Disclosure of Information about Fund Trustees and Officers  102
Adviser, Money Managers and Service Providers  106


Table of Contents

 

Russell Investment Funds

Copyright © Russell Investments 2008. All rights reserved.

Russell Investments is a Washington, USA corporation, which operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company.

Fund objectives, risks, charges and expenses should be carefully considered before investing. A prospectus containing this and other important information must precede or accompany this material. Please read the prospectus carefully before investing.

Securities distributed through Russell Financial Services, Inc. (effective June 2, 2008, the name changed from Russell Fund Distributors, Inc.), member FINRA, part of Russell Investments.

Russell Investments and Standard & Poor’s Corporation are the owners of the trademarks, service marks, and copyrights related to their respective indexes. Index performance is not indicative of the performance of any specific investment. Indexes are not managed and may not be invested in directly.

Performance quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted.


Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Shareholder Expense Example — June 30, 2008 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from January 1, 2008 to June 30, 2008.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

   Actual
Performance
  Hypothetical
Performance
(5% return
before expenses)
    

Beginning Account Value

    

January 1, 2008

  $1,000.00  $1,000.00

Ending Account Value

    

June 30, 2008

  $885.50  $1,020.54

Expenses Paid During Period*

  $4.08  $4.37

 

*Expenses are equal to the Fund’s annualized expense ratio of 0.87% (representing the one-half year period annualized), multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

Multi-Style Equity Fund 3


Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      
Common Stocks - 93.7%      

Auto and Transportation - 1.1%

    

Arkansas Best Corp. (Ñ)

  1,200    44

Autoliv, Inc. (Ñ)

  6,700    312

Expeditors International of Washington, Inc. (Ñ)

  8,260    355

FedEx Corp.

  10,200    804

Genuine Parts Co. (Ñ)

  16,158    641

Lear Corp. (Æ)(Ñ)

  4,600    65

Skywest, Inc. (Ñ)

  6,800    86

TRW Automotive Holdings Corp. (Æ)

  8,000    148

Union Pacific Corp. (Ñ)

  31,360    2,368
       
      4,823
       

Consumer Discretionary - 13.4%

    

Activision, Inc. (Æ)

  12,400    423

Amazon.com, Inc. (Æ)(Ñ)

  7,800    572

AutoNation, Inc. (Æ)(Ñ)

  19,700    197

Avon Products, Inc.

  22,600    814

Barnes & Noble, Inc. (Ñ)

  3,700    92

BJ’s Wholesale Club, Inc. (Æ)(Ñ)

  3,700    143

Black & Decker Corp. (Ñ)

  9,600    552

Brinker International, Inc.

  43,900    830

CBS Corp. (Ñ)

  65,900    1,284

CEC Entertainment, Inc. (Æ)(Ñ)

  900    25

Clear Channel Outdoor Holdings, Inc. Class A (Æ)

  82,507    1,471

Coach, Inc. (Æ)

  15,300    442

Costco Wholesale Corp. (Ñ)

  17,500    1,227

DIRECTV Group, Inc. (The) (Æ)

  26,200    679

Discovery Holding Co. Class A (Æ)

  57,775    1,269

eBay, Inc. (Æ)(Ñ)

  76,955    2,103

Electronic Arts, Inc. Series C (Æ)

  37,700    1,675

Estee Lauder Cos., Inc. (The) Class A (Ñ)

  8,540    397

Foot Locker, Inc.

  51,200    637

GameStop Corp. Class A (Æ)(Ñ)

  2,950    119

Gap, Inc. (The) (Ñ)

  8,700    145

Google, Inc. Class A (Æ)

  14,160    7,454

Guess ?, Inc. (Ñ)

  29,480    1,104

Home Depot, Inc.

  32,000    749

Intercontinental Hotels Group PLC - ADR (Ñ)

  30,759    410

International Game Technology (Ñ)

  28,300    707

International Speedway Corp. Class A

  2,500    98

JC Penney Co., Inc. (Ñ)

  22,900    831

Jones Apparel Group, Inc. (Ñ)

  29,500    406

Kimberly-Clark Corp.

  14,800    885
   Principal
Amount ($)
or Shares
    Market
Value
$

Kohl’s Corp. (Æ)(Ñ)

  9,790    392

Leggett & Platt, Inc. (Ñ)

  11,700    196

Limited Brands, Inc. (Ñ)

  52,400    883

Lowe’s Cos., Inc. (Ñ)

  21,760    452

Macy’s, Inc.

  41,400    804

Manpower, Inc. (Ñ)

  1,900    111

McDonald’s Corp.

  101,098    5,684

McGraw-Hill Cos., Inc. (The) (Ñ)

  11,500    461

Mohawk Industries, Inc. (Æ)(Ñ)

  3,900    250

Newell Rubbermaid, Inc.

  22,200    373

News Corp. Class A

  109,850    1,652

Nike, Inc. Class B (Ñ)

  47,771    2,848

Office Depot, Inc. (Æ)(Ñ)

  16,400    179

OfficeMax, Inc. (Ñ)

  50,200    698

priceline.com, Inc. (Æ)(Ñ)

  3,910    451

RR Donnelley & Sons Co.

  18,700    555

Staples, Inc. (Ñ)

  35,240    837

Starwood Hotels & Resorts Worldwide, Inc. (Ñ)(ö)

  17,500    701

Target Corp. (Ñ)

  31,800    1,478

Time Warner, Inc.

  27,500    407

TJX Cos., Inc.

  11,200    353

VeriSign, Inc. (Æ)(Ñ)

  12,120    458

Viacom, Inc. Class B (Æ)

  56,200    1,716

Wal-Mart Stores, Inc.

  121,400    6,823

Watson Wyatt Worldwide, Inc. Class A (Ñ)

  1,100    58

WESCO International, Inc. (Æ)

  1,600    64

Whirlpool Corp. (Ñ)

  12,300    759

Williams-Sonoma, Inc. (Ñ)

  34,000    675
       
      58,058
       

Consumer Staples - 6.2%

      

Campbell Soup Co.

  24,800    830

Clorox Co.

  19,000    992

Coca-Cola Co. (The)

  131,480    6,834

Colgate-Palmolive Co.

  19,100    1,320

Fomento Economico Mexicano SAB de CV - ADR

  34,080    1,551

General Mills, Inc.

  19,000    1,155

Hershey Co. (The) (Ñ)

  24,700    810

Hormel Foods Corp. (Ñ)

  4,600    159

Kraft Foods, Inc. Class A

  35,100    999

Molson Coors Brewing Co. Class B (Ñ)

  26,130    1,420

Pepsi Bottling Group, Inc.

  11,000    307

PepsiCo, Inc.

  63,050    4,009

Procter & Gamble Co.

  85,100    5,175

SUPERVALU, Inc. (Ñ)

  9,500    293

 

4 Multi-Style Equity Fund


Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Tyson Foods, Inc. Class A

  16,800    251

Unilever NV

  33,400    948
       
      27,053
       

Financial Services - 13.9%

      

ACE, Ltd.

  36,500    2,011

Aflac, Inc.

  1,400    88

Alliance Data Systems Corp. (Æ)(Ñ)

  15,000    848

Allied World Assurance Co. Holdings, Ltd. (Ñ)

  2,900    115

American International Group, Inc.

  35,500    939

AmeriCredit Corp. (Æ)(Ñ)

  8,300    72

Annaly Capital Management, Inc. (ö)

  35,400    549

Arch Capital Group, Ltd. (Æ)

  4,900    325

Axis Capital Holdings, Ltd. (Ñ)

  9,300    277

Bank of America Corp.

  20,400    487

Bank of New York Mellon Corp. (The)

  69,426    2,626

BlackRock, Inc. Class A (Ñ)

  3,030    536

Brandywine Realty Trust (ö)

  7,700    121

Capital One Financial Corp. (Ñ)

  45,750    1,739

Cash America International, Inc.

  2,100    65

Charles Schwab Corp. (The)

  55,800    1,146

Chubb Corp. (Ñ)

  27,600    1,353

Citigroup, Inc.

  93,600    1,569

City National Corp. (Ñ)

  800    34

CNA Financial Corp. (Ñ)

  3,100    78

Colonial BancGroup, Inc. (The) (Ñ)

  42,700    189

Colonial Properties Trust (ö)(Ñ)

  5,300    106

Comerica, Inc. (Ñ)

  11,800    302

Discover Financial Services (Ñ)

  28,900    381

Duke Realty Corp. (ö)

  13,500    303

EastGroup Properties, Inc. (ö)

  1,600    69

Everest Re Group, Ltd.

  4,100    327

Federal National Mortgage Association (Ñ)

  55,500    1,083

Fifth Third Bancorp (Ñ)

  13,400    136

Fiserv, Inc. (Æ)(Ñ)

  14,390    653

Freddie Mac

  24,100    395

Genworth Financial, Inc. Class A

  11,200    199

Goldman Sachs Group, Inc. (The) (Ñ)

  24,030    4,203

H&R Block, Inc.

  21,000    449

Hartford Financial Services Group, Inc.

  25,700    1,659

HCC Insurance Holdings, Inc.

  8,600    182

Hospitality Properties Trust (ö)(Ñ)

  12,100    296

Host Hotels & Resorts, Inc. (ö)(Ñ)

  82,500    1,126

Huntington Bancshares, Inc. (Ñ)

  29,000    167

Jefferies Group, Inc. (Ñ)

  56,200    945
   Principal
Amount ($)
or Shares
    Market
Value
$

JPMorgan Chase & Co. (Ñ)

  155,200    5,325

Keycorp (Ñ)

  55,800    613

Liberty Property Trust (ö)(Ñ)

  4,500    149

Lincoln National Corp.

  20,600    934

M&T Bank Corp.

  15,500    1,093

Marshall & Ilsley Corp. (Ñ)

  15,300    235

Mastercard, Inc. Class A (Ñ)

  7,570    2,010

Mercury General Corp. (Ñ)

  19,800    925

Merrill Lynch & Co., Inc.

  23,400    742

MetLife, Inc.

  9,500    501

Morgan Stanley

  102,150    3,685

Nasdaq OMX Group (The) (Æ)(Ñ)

  3,300    88

Northern Trust Corp. (Ñ)

  6,700    459

Pacific Capital Bancorp NA (Ñ)

  2,800    39

Paychex, Inc.

  14,600    457

Pennsylvania Real Estate Investment Trust (ö)(Ñ)

  4,500    104

PNC Financial Services Group, Inc.

  5,600    320

Prologis (ö)(Ñ)

  5,500    299

Prosperity Bancshares, Inc. (Ñ)

  4,100    110

Protective Life Corp.

  17,900    681

Prudential Financial, Inc.

  16,300    974

Regions Financial Corp. (Ñ)

  29,200    319

RenaissanceRe Holdings, Ltd.

  4,600    205

StanCorp Financial Group, Inc. (Ñ)

  3,600    169

State Street Corp.

  12,232    783

Sunstone Hotel Investors, Inc. (ö)(Ñ)

  4,000    66

SunTrust Banks, Inc. (Ñ)

  35,550    1,288

T Rowe Price Group, Inc. (Ñ)

  11,740    663

Transatlantic Holdings, Inc. (Ñ)

  500    28

Travelers Cos., Inc. (The)

  38,100    1,654

UnionBanCal Corp. (Ñ)

  7,700    311

United Rentals, Inc. (Æ)(Ñ)

  6,600    129

Unum Group

  17,600    360

Visa, Inc.

  9,614    782

Wells Fargo & Co. (Ñ)

  122,350    2,906

Western Union Co. (The) (Ñ)

  33,800    836

Wilmington Trust Corp. (Ñ)

  29,400    777

WR Berkley Corp. (Ñ)

  14,400    348

XL Capital, Ltd. Class A (Ñ)

  13,200    271

Zions Bancorporation (Ñ)

  7,700    242
       
      60,028
       

Health Care - 12.8%

      

Abbott Laboratories

  47,700    2,527

Alcon, Inc.

  6,500    1,058

Alexion Pharmaceuticals, Inc. (Æ)(Ñ)

  5,720    415

Allergan, Inc.

  35,110    1,827

 

Multi-Style Equity Fund 5


Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

AMERIGROUP Corp. Class A (Æ)

  7,200    150

AmerisourceBergen Corp. Class A

  5,100    204

Baxter International, Inc.

  31,830    2,035

Bristol-Myers Squibb Co.

  42,900    881

Celgene Corp. (Æ)

  14,300    913

Charles River Laboratories International, Inc. (Æ)(Ñ)

  7,670    490

Cooper Cos., Inc. (The) (Ñ)

  15,000    557

CVS Caremark Corp.

  141,880    5,614

Dentsply International, Inc. (Ñ)

  12,840    473

Eli Lilly & Co.

  21,400    988

Express Scripts, Inc. Class A (Æ)

  13,900    872

Genzyme Corp. (Æ)

  17,090    1,231

Gilead Sciences, Inc. (Æ)

  111,540    5,906

Health Management Associates, Inc. Class A (Æ)(Ñ)

  17,200    112

Health Net, Inc. (Æ)

  7,400    178

Human Genome Sciences, Inc. (Æ)(Ñ)

  68,600    357

Humana, Inc. (Æ)

  5,200    207

Intuitive Surgical, Inc. (Æ)(Ñ)

  6,590    1,775

Johnson & Johnson

  56,700    3,648

Kindred Healthcare, Inc. (Æ)

  900    26

King Pharmaceuticals, Inc. (Æ)

  16,400    172

Laboratory Corp. of America Holdings (Æ)

  2,200    153

LifePoint Hospitals, Inc. (Æ)(Ñ)

  4,700    133

McKesson Corp.

  5,000    280

Mylan, Inc. (Æ)(Ñ)

  85,800    1,036

Owens & Minor, Inc. (Ñ)

  1,600    73

Pfizer, Inc.

  38,700    676

Sanofi-Aventis SA - ADR

  16,800    558

Savient Pharmaceuticals, Inc. (Æ)(Ñ)

  25,700    650

Schering-Plough Corp.

  235,100    4,629

St. Jude Medical, Inc. (Æ)

  14,528    594

Stericycle, Inc. (Æ)

  8,070    417

Stryker Corp. (Ñ)

  31,700    1,993

Teva Pharmaceutical Industries,
Ltd. - ADR

  29,030    1,330

Thermo Fisher Scientific, Inc. (Æ)(Ñ)

  55,090    3,070

Vertex Pharmaceuticals, Inc. (Æ)

  25,700    860

WellPoint, Inc. (Æ)

  10,300    491

Wyeth

  120,300    5,770
       
      55,329
       

Integrated Oils - 5.5%

      

BP PLC - ADR

  35,700    2,483

Chevron Corp.

  19,400    1,923

ConocoPhillips

  15,200    1,435

Exxon Mobil Corp.

  47,200    4,160
   Principal
Amount ($)
or Shares
    Market
Value
$

Hess Corp.

  14,500    1,830

Marathon Oil Corp.

  88,000    4,564

Occidental Petroleum Corp. (Ñ)

  76,650    6,888

Petroleo Brasileiro SA - ADR

  11,390    807
       
      24,090
       

Materials and Processing - 6.7%

    

Agrium, Inc.

  7,000    753

Alcoa, Inc.

  20,900    744

Archer-Daniels-Midland Co.

  14,300    483

Armstrong World Industries, Inc. (Ñ)

  3,300    96

Ashland, Inc. (Ñ)

  22,417    1,081

Avery Dennison Corp. (Ñ)

  12,800    562

Bemis Co., Inc. (Ñ)

  21,200    475

Bunge, Ltd.

  3,400    366

Cabot Corp. (Ñ)

  18,600    452

Celanese Corp. Class A

  12,870    588

Ceradyne, Inc. (Æ)(Ñ)

  900    31

CF Industries Holdings, Inc. (Ñ)

  500    76

Commercial Metals Co. (Ñ)

  3,600    136

Domtar Corp. (Æ)(Ñ)

  10,500    57

EI Du Pont de Nemours & Co. (Ñ)

  63,050    2,704

EMCOR Group, Inc. (Æ)

  2,300    66

Energizer Holdings, Inc. (Æ)(Ñ)

  7,700    563

Fluor Corp. (Ñ)

  11,470    2,134

Freeport-McMoRan Copper & Gold, Inc. Class B (Ñ)

  7,800    914

International Paper Co. (Ñ)

  45,823    1,068

KBR, Inc. (Æ)

  6,700    234

Masco Corp. (Ñ)

  88,500    1,392

MeadWestvaco Corp. (Ñ)

  25,600    610

Monsanto Co. (Ñ)

  28,100    3,553

Mosaic Co. (The) (Æ)

  3,700    535

Nucor Corp. (Ñ)

  14,274    1,066

Owens-Illinois, Inc. (Æ)

  9,290    387

Packaging Corp. of America

  21,600    465

Perini Corp. (Æ)(Ñ)

  1,200    40

Potash Corp. of Saskatchewan

  5,700    1,303

PPG Industries, Inc. (Ñ)

  8,600    493

Precision Castparts Corp.

  10,700    1,031

Rohm & Haas Co. (Ñ)

  23,100    1,073

RPM International, Inc. (Ñ)

  3,200    66

Smurfit-Stone Container Corp. (Æ)(Ñ)

  25,100    102

Sonoco Products Co.

  18,000    557

Steel Dynamics, Inc. (Ñ)

  3,500    137

United States Steel Corp.

  8,900    1,645

URS Corp. (Æ)

  9,600    403

Valspar Corp. (Ñ)

  27,000    511
       
      28,952
       

 

6 Multi-Style Equity Fund


Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Miscellaneous - 2.8%

      

Brunswick Corp. (Ñ)

  22,300    236

Eaton Corp.

  24,197    2,056

General Electric Co.

  171,294    4,572

Honeywell International, Inc.

  20,500    1,031

Johnson Controls, Inc.

  23,400    671

SPX Corp.

  3,250    428

Teleflex, Inc.

  15,300    851

Textron, Inc.

  43,540    2,087

Tyco International, Ltd. (Ñ)

  9,190    368
       
      12,300
       

Other Energy - 7.9%

      

Anadarko Petroleum Corp.

  22,300    1,669

Apache Corp.

  10,000    1,390

Baker Hughes, Inc. (Ñ)

  22,400    1,956

Cabot Oil & Gas Corp.

  15,500    1,050

Cameron International Corp. (Æ)

  48,250    2,671

Chesapeake Energy Corp. (Ñ)

  42,668    2,814

Consol Energy, Inc. (Ñ)

  8,090    909

Devon Energy Corp.

  43,871    5,272

Dynegy, Inc. Class A (Æ)(Ñ)

  52,600    450

Halliburton Co. (Ñ)

  110,500    5,864

Key Energy Services, Inc. (Æ)

  7,100    138

National Oilwell Varco, Inc. (Æ)(Ñ)

  13,000    1,153

Patterson-UTI Energy, Inc. (Ñ)

  9,500    342

Peabody Energy Corp. (Ñ)

  10,100    889

Pioneer Drilling Co. (Æ)

  1,400    26

Pioneer Natural Resources Co. (Ñ)

  11,200    877

Schlumberger, Ltd.

  27,000    2,901

Stone Energy Corp. (Æ)

  600    40

Sunoco, Inc. (Ñ)

  21,600    879

Transocean, Inc. (Æ)

  4,700    716

Valero Energy Corp.

  7,700    317

XTO Energy, Inc. (Ñ)

  25,747    1,764
       
      34,087
       

Producer Durables - 5.0%

      

AGCO Corp. (Æ)(Ñ)

  3,000    157

American Tower Corp. Class A (Æ)(Ñ)

  13,000    549

Applied Materials, Inc. (Ñ)

  205,100    3,915

Caterpillar, Inc. (Ñ)

  7,000    517

Deere & Co. (Ñ)

  33,200    2,395

Emerson Electric Co.

  73,600    3,639

Flowserve Corp.

  6,230    852

Gardner Denver, Inc. (Æ)

  3,900    221

Illinois Tool Works, Inc. (Ñ)

  13,000    618

Lam Research Corp. (Æ)

  7,490    271
   Principal
Amount ($)
or Shares
    Market
Value
$

Lennar Corp. Class A (Ñ)

  8,600    106

Lexmark International, Inc. Class A (Æ)(Ñ)

  3,100    104

Lockheed Martin Corp.

  26,431    2,608

MDC Holdings, Inc. (Ñ)

  1,300    51

Northrop Grumman Corp.

  18,600    1,244

NVR, Inc. (Æ)(Ñ)

  860    430

Parker Hannifin Corp.

  18,811    1,341

Plantronics, Inc.

  1,200    27

SBA Communications Corp. Class A (Æ)(Ñ)

  8,890    320

Spirit Aerosystems Holdings, Inc. Class A (Æ)

  2,900    56

Steelcase, Inc. Class A (Ñ)

  5,800    58

United Technologies Corp.

  28,700    1,771

Varian Semiconductor Equipment Associates, Inc. (Æ)(Ñ)

  9,100    317
       
      21,567
       

Technology - 14.7%

      

Akamai Technologies, Inc. (Æ)(Ñ)

  11,540    401

Altera Corp.

  21,640    448

Amphenol Corp. Class A

  53,393    2,396

Analog Devices, Inc.

  30,597    972

Apple, Inc. (Æ)

  42,820    7,170

Avnet, Inc. (Æ)(Ñ)

  3,000    82

Broadcom Corp. Class A (Æ)(Ñ)

  61,600    1,681

Cisco Systems, Inc. (Æ)(Ñ)

  283,260    6,589

Computer Sciences Corp. (Æ)(Ñ)

  8,800    412

Corning Inc.

  87,380    2,014

Cypress Semiconductor Corp. (Æ)(Ñ)

  22,200    549

EMC Corp./Massachusetts (Æ)

  35,860    527

First Solar, Inc. (Æ)(Ñ)

  5,440    1,484

General Dynamics Corp. (Ñ)

  6,900    581

Hewlett-Packard Co.

  176,950    7,823

Ingram Micro, Inc. Class A (Æ)(Ñ)

  5,200    92

Intel Corp.

  59,100    1,269

International Business Machines Corp.

  14,800    1,754

Jabil Circuit, Inc. (Ñ)

  25,400    417

Juniper Networks, Inc. (Æ)(Ñ)

  53,200    1,180

Linear Technology Corp.

  48,116    1,567

Marvell Technology Group, Ltd. (Æ)(Ñ)

  27,840    492

Maxim Integrated Products, Inc.

  88,300    1,868

MEMC Electronic Materials, Inc. (Æ)

  10,500    646

Microsoft Corp.

  112,000    3,081

Motorola, Inc.

  140,700    1,033

NetApp, Inc. (Æ)(Ñ)

  24,500    531

Nvidia Corp.

  18,100    339

 

Multi-Style Equity Fund 7


Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Qualcomm, Inc.

  164,460    7,297

Research In Motion, Ltd. (Æ)

  22,395    2,618

Rockwell Automation, Inc.

  15,400    673

Salesforce.com, Inc. (Æ)(Ñ)

  5,970    407

SanDisk Corp. (Æ)

  17,140    321

Seagate Technology (Ñ)

  10,200    195

Seagate Technology, Inc. (Æ)

  2,300    

Syniverse Holdings, Inc. (Æ)

  1,600    26

Tellabs, Inc. (Æ)(Ñ)

  14,200    66

Texas Instruments, Inc.

  59,550    1,677

Tyco Electronics, Ltd.

  66,684    2,389

Vishay Intertechnology, Inc. (Æ)

  5,200    46

Xilinx, Inc. (Ñ)

  15,800    399
       
      63,512
       

Utilities - 3.7%

      

AGL Resources, Inc.

  16,400    567

American Electric Power Co., Inc.

  11,600    467

Aqua America, Inc. (Ñ)

  36,100    577

AT&T, Inc.

  115,661    3,897

Atmos Energy Corp.

  1,800    50

CenturyTel, Inc. (Ñ)

  11,300    402

Cincinnati Bell, Inc. (Æ)

  12,400    49

Citizens Communications Co. (Ñ)

  73,100    829

Consolidated Edison, Inc. (Ñ)

  10,200    399

DTE Energy Co. (Ñ)

  9,600    407

Duke Energy Corp. (Ñ)

  28,700    499

Edison International

  9,600    493

Embarq Corp. (Ñ)

  9,500    449

MDU Resources Group, Inc.

  1,500    52

Millicom International Cellular SA

  3,940    408

New Jersey Resources Corp. (Ñ)

  3,600    118

Nicor, Inc. (Ñ)

  8,100    345

NiSource, Inc. (Ñ)

  41,000    735

NSTAR (Ñ)

  5,100    172

Pinnacle West Capital Corp.

  9,600    295

Progress Energy, Inc. (Ñ)

  4,100    172

Progress Energy, Inc. - CVO (Æ)(ß)

  1,300    

Qwest Communications International, Inc. (Ñ)

  43,800    172

South Jersey Industries, Inc. (Ñ)

  1,900    71

Southwest Gas Corp.

  2,900    86

Verizon Communications, Inc.

  50,000    1,770

Vodafone Group PLC - ADR

  72,550    2,137
   Principal
Amount ($)
or Shares
    Market
Value
$
 

WGL Holdings, Inc. (Ñ)

  5,500    191 

Windstream Corp. (Ñ)

  28,800    355 
        
      16,164 
        
Total Common Stocks      

(cost $401,545)

      405,963 
        
Short-Term Investments - 5.9%    

Russell Investment Company
Money Market Fund

  23,952,000    23,952 

United States Treasury Bills (ž)(§)

      

1.915% due 09/18/08

  1,600    1,592 
        
Total Short-Term Investments      

(cost $25,545)

      25,544 
        
Other Securities - 24.3%      

State Street Securities Lending
Quality Trust (×)

  105,067,283    105,067 
        
Total Other Securities      

(cost $105,067)

      105,067 
        
Total Investments - 123.9%    

(identified cost $532,157)

      536,574 
Other Assets and Liabilities, Net - (23.9%)      (103,625)
        
Net Assets - 100.0%      432,949 
        

A portion of the portfolio has been fair valued as of period end.


 

See accompanying notes which are an integral part of the financial statements.

 

8 Multi-Style Equity Fund


Table of Contents

Russell Investment Funds

Multi-Style Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts
(Number of Contracts)
 Notional
Amount
 Unrealized
Appreciation
(Depreciation)
$
 
   
   
Long Positions   
Russell 1000 Index
expiration date 09/08 (7)
 USD 1,465 (117)
Russell 1000 Mini (CME)
expiration date 09/08 (2)
 USD 141 (7)
S&P 500 E-Mini Index (CME)
expiration date 09/08 (92)
 USD 5,893 (242)
S&P 500 Index (CME)
expiration date 09/08 (21)
 USD 6,726 (317)
S&P Midcap 400 E-Mini Index (CME)
expiration date 09/08 (130)
 USD 10,676 (433)
     
Total Unrealized Appreciation
(Depreciation) on Open Futures
Contracts
   (1,116)
     

 

 

Presentation of Portfolio Holdings — June 30, 2008 (Unaudited)

 

Portfolio Summary    % of Net
Assets
 
    

Auto and Transportation

    1.1 

Consumer Discretionary

    13.4 

Consumer Staples

    6.2 

Financial Services

    13.9 

Health Care

    12.8 

Integrated Oils

    5.5 

Materials and Processing

    6.7 

Miscellaneous

    2.8 

Other Energy

    7.9 

Producer Durables

    5.0 

Technology

    14.7 

Utilities

    3.7 

Short-Term Investments

    5.9 

Other Securities

    24.3 
      

Total Investments

    123.9 

Other Assets and Liabilities, Net

    (23.9)
      
    100.0 
      

Futures Contracts

    (0.3)

 

See accompanying notes which are an integral part of the financial statements.

 

Multi-Style Equity Fund 9


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Shareholder Expense Example — June 30, 2008 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from January 1, 2008 to June 30, 2008.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

   Actual
Performance
  Hypothetical
Performance
(5% return
before expenses)
    

Beginning Account Value

    

January 1, 2008

  $1,000.00  $1,000.00

Ending Account Value

    

June 30, 2008

  $897.10  $1,019.64

Expenses Paid During Period*

  $4.95  $5.27

 

*Expenses are equal to the Fund’s annualized expense ratio of 1.05% (representing the one-half year period annualized), multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

10 Aggressive Equity Fund


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Common Stocks - 95.5%

      

Auto and Transportation - 3.7%

      

Accuride Corp. (Æ)(Ñ)

  248    1

Air Transport Services Group, Inc. (Æ)(Ñ)

  4,700    5

Alaska Air Group, Inc. (Æ)(Ñ)

  3,000    46

American Axle & Manufacturing Holdings, Inc. (Ñ)

  110    1

American Railcar Industries, Inc.

  26    

Arkansas Best Corp. (Ñ)

  8,922    327

Autoliv, Inc. (Ñ)

  7,776    362

BorgWarner, Inc. (Ñ)

  10,018    444

Commercial Vehicle Group, Inc. (Æ)

  5,700    53

Cooper Tire & Rubber Co. (Ñ)

  33,600    263

Dana Corp. (Æ)(ß)

  47,300    

Eagle Bulk Shipping, Inc. (Ñ)

  7,280    215

Expeditors International of Washington, Inc. (Ñ)

  5,443    234

ExpressJet Holdings, Inc. Class A (Æ)(Ñ)

  5,300    3

FreightCar America, Inc. (Ñ)

  1,200    43

Genco Shipping & Trading, Ltd. (Ñ)

  5,795    378

General Maritime Corp.

  6,300    164

HUB Group, Inc. Class A (Æ)

  5,535    189

Kansas City Southern (Æ)

  5,550    244

Kirby Corp. (Æ)(Ñ)

  14,584    700

Lear Corp. (Æ)(Ñ)

  10,200    145

Marten Transport, Ltd. (Æ)

  2,500    40

Monaco Coach Corp. (Ñ)

  20,700    63

Oshkosh Corp. (Ñ)

  165    3

Overseas Shipholding Group, Inc. (Ñ)

  3,700    294

Pacer International, Inc. (Ñ)

  10,442    225

PHI, Inc. (Æ)(Ñ)

  7,360    296

Polaris Industries, Inc. (Ñ)

  3,462    140

Republic Airways Holdings, Inc. (Æ)(Ñ)

  3,900    34

Saia, Inc. (Æ)

  2,300    25

Skywest, Inc. (Ñ)

  10,007    126

Spartan Motors, Inc. (Ñ)

  2,800    21

Standard Motor Products, Inc. (Ñ)

  97    1

Star Bulk Carriers Corp.

  16,100    190

Stoneridge, Inc. (Æ)(Ñ)

  1,600    27

Strattec Security Corp.

  7,970    281

Superior Industries International, Inc. (Ñ)

  12,240    207

TBS International, Ltd. Class A (Æ)(Ñ)

  600    24

Thor Industries, Inc. (Ñ)

  4,833    103
   Principal
Amount ($)
or Shares
    Market
Value
$

TRW Automotive Holdings Corp. (Æ)(Ñ)

  11,200    207

Ultrapetrol Bahamas, Ltd. (Æ)(Ñ)

  1,800    23

UTi Worldwide, Inc.

  11,989    239

Visteon Corp. (Æ)(Ñ)

  21,000    55

Wabash National Corp. (Ñ)

  2,851    21

WABCO Holdings, Inc. (Ñ)

  5,800    269

Wabtec Corp. (Ñ)

  16,058    781

Werner Enterprises, Inc. (Ñ)

  5,701    106
       
      7,618
       

Consumer Discretionary - 14.5%

    

4Kids Entertainment, Inc. (Æ)(Ñ)

  55,840    414

99 Cents Only Stores (Æ)(Ñ)

  55,027    363

Aaron Rents, Inc.

  1,837    41

Activision, Inc. (Æ)

  39,768    1,355

Administaff, Inc. (Ñ)

  842    23

Advance Auto Parts, Inc. (Ñ)

  9,311    362

Advisory Board Co. (The) (Æ)(Ñ)

  2,142    84

Aeropostale, Inc. (Æ)(Ñ)

  7,900    247

Allied Waste Industries, Inc. (Æ)

  3,216    41

Ameristar Casinos, Inc. (Ñ)

  25,700    355

AnnTaylor Stores Corp. (Æ)(Ñ)

  5,336    128

Apollo Group, Inc. Class A (Æ)

  4,882    216

Asbury Automotive Group, Inc. (Ñ)

  7,300    94

AutoNation, Inc. (Æ)(Ñ)

  19,000    190

Bally Technologies, Inc. (Æ)(Ñ)

  4,600    155

Barnes & Noble, Inc. (Ñ)

  3,700    92

Big Lots, Inc. (Æ)(Ñ)

  5,562    174

BJ’s Wholesale Club, Inc. (Æ)(Ñ)

  5,179    200

Black & Decker Corp. (Ñ)

  2,370    136

Blockbuster, Inc. Class A (Æ)(Ñ)

  34,500    86

Blyth, Inc. (Ñ)

  6,689    80

Books-A-Million, Inc. Class A (Ñ)

  231    2

Brightpoint, Inc. (Æ)(Ñ)

  9,574    70

Brink’s Co. (The)

  1,271    83

Brown Shoe Co., Inc. (Ñ)

  21,000    285

Build-A-Bear Workshop, Inc. Class A (Æ)(Ñ)

  3,900    28

Callaway Golf Co. (Ñ)

  861    10

Capella Education Co. (Æ)(Ñ)

  3,920    234

Career Education Corp. (Æ)(Ñ)

  9,981    146

CDI Corp. (Ñ)

  2,100    53

Central European Distribution Corp. (Æ)

  7,320    543

Central European Media Enterprises, Ltd. Class A (Æ)(Ñ)

  4,327    392

 

Aggressive Equity Fund 11


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Charming Shoppes, Inc. (Æ)(Ñ)

  2,417    11

Cheesecake Factory (The) (Æ)(Ñ)

  8,908    142

Chemed Corp. (Ñ)

  125    5

Churchill Downs, Inc. (Ñ)

  5,000    174

Cinemark Holdings, Inc. (Ñ)

  5,400    71

Cintas Corp.

  3,869    103

CKE Restaurants, Inc. (Ñ)

  23,900    298

Columbia Sportswear Co. (Ñ)

  3,300    121

Convergys Corp. (Æ)(Ñ)

  17,100    254

Corrections Corp. of America (Æ)

  27,200    747

Cox Radio, Inc. Class A (Æ)(Ñ)

  2,500    29

CRA International, Inc. (Æ)

  411    15

Cross Country Healthcare, Inc. (Æ)

  63    1

CSS Industries, Inc. (Ñ)

  2,000    48

Deckers Outdoor Corp. (Æ)(Ñ)

  1,188    165

DeVry, Inc. (Ñ)

  11,043    592

Dollar Tree, Inc. (Æ)

  7,500    245

DreamWorks Animation SKG, Inc. Class A (Æ)(Ñ)

  4,763    142

Earthlink, Inc. (Æ)(Ñ)

  39,600    343

Entercom Communications Corp. Class A (Ñ)

  4,400    31

Ethan Allen Interiors, Inc. (Ñ)

  2,223    55

Family Dollar Stores, Inc. (Ñ)

  213    4

Finish Line Class A (Æ)(Ñ)

  38,300    333

Focus Media Holding, Ltd. - ADR (Æ)(Ñ)

  24,443    678

Foot Locker, Inc. (Ñ)

  4,316    54

Fred’s, Inc. Class A (Ñ)

  4,100    46

FTD Group, Inc. (Ñ)

  17,976    240

Furniture Brands International, Inc. (Ñ)

  43,968    587

GameStop Corp. Class A (Æ)(Ñ)

  9,388    379

Geo Group, Inc. (The) (Æ)(Ñ)

  15,518    349

Gray Television, Inc. (Ñ)

  50,100    144

Group 1 Automotive, Inc. (Ñ)

  3,600    72

Guess ?, Inc. (Ñ)

  5,958    223

Harte-Hanks, Inc. (Ñ)

  687    8

Hasbro, Inc. (Ñ)

  15,220    544

Haverty Furniture Cos., Inc. (Ñ)

  1,900    19

Heidrick & Struggles International, Inc. (Ñ)

  3,761    104

Helen of Troy, Ltd. (Æ)(Ñ)

  20,700    334

Hewitt Associates, Inc. Class A (Æ)

  14,251    546

Hibbett Sports, Inc. (Æ)(Ñ)

  1,713    36

Hooker Furniture Corp. (Ñ)

  1,300    23

HOT Topic, Inc. (Æ)(Ñ)

  8,300    45

Houston Wire & Cable Co. (Ñ)

  1,057    21
   Principal
Amount ($)
or Shares
    Market
Value
$

ICF International, Inc. (Æ)

  5,900    98

Idearc, Inc. (Ñ)

  38,300    90

IKON Office Solutions, Inc. (Ñ)

  2,197    25

Infospace, Inc.

  434    4

Insight Enterprises, Inc. (Æ)

  6,800    80

International Speedway Corp. Class A

  4,600    180

inVentiv Health, Inc. (Æ)(Ñ)

  16,230    451

ITT Educational Services, Inc. (Æ)(Ñ)

  9,402    777

Jo-Ann Stores, Inc. (Æ)(Ñ)

  1,000    23

Journal Communications, Inc. Class A (Ñ)

  8,000    39

Kelly Services, Inc. Class A (Ñ)

  4,400    85

Kenneth Cole Productions, Inc. Class A (Ñ)

  14,579    185

Kforce, Inc. (Æ)

  400    3

La-Z-Boy, Inc. (Ñ)

  7,000    54

Lakeland Industries, Inc. (Æ)

  20,410    259

LECG Corp. (Æ)(Ñ)

  102    1

Leggett & Platt, Inc. (Ñ)

  44    1

LIN TV Corp. Class A (Æ)(Ñ)

  5,600    33

Lithia Motors, Inc. Class A (Ñ)

  3,500    17

Liz Claiborne, Inc. (Ñ)

  12,300    174

LKQ Corp. (Æ)(Ñ)

  20,435    369

LS Starrett Co.

  4,234    100

Maidenform Brands, Inc. (Æ)(Ñ)

  1,551    21

Manpower, Inc.

  2,235    130

Marcus Corp. (Ñ)

  1,700    25

MAXIMUS, Inc.

  646    22

Media General, Inc. Class A (Ñ)

  10,671    128

Men’s Wearhouse, Inc. (Ñ)

  13,400    218

Meredith Corp. (Ñ)

  3,082    87

Morton’s Restaurant Group, Inc. (Æ)(��)

  900    6

Movado Group, Inc. (Ñ)

  4,500    89

MSC Industrial Direct Co. Class A (Ñ)

  3,400    150

MWI Veterinary Supply, Inc. (Æ)(Ñ)

  100    3

Navigant Consulting, Inc. (Æ)(Ñ)

  11,466    224

Net 1 UEPS Technologies, Inc. (Æ)

  2,901    70

New York & Co., Inc. (Æ)

  4,800    44

Nu Skin Enterprises, Inc. Class A (Ñ)

  4,300    64

NutriSystem, Inc. (Ñ)

  3,101    44

O’Charleys, Inc. (Ñ)

  14,999    151

Office Depot, Inc. (Æ)

  27,300    299

On Assignment, Inc. (Æ)

  18,700    150

Pantry, Inc. (The) (Æ)(Ñ)

  4,400    47

Parlux Fragrances, Inc. (Æ)(Ñ)

  83,738    419

PC Connection, Inc. (Æ)(Ñ)

  2,800    26

Perry Ellis International, Inc. (Æ)(Ñ)

  2,000    42

 

12 Aggressive Equity Fund


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Phillips-Van Heusen Corp.

  4,261    156

Playboy Enterprises, Inc. Class B (Æ)(Ñ)

  3,246    16

Pool Corp. (Ñ)

  10,900    194

Prestige Brands Holdings, Inc. (Æ)(Ñ)

  26,989    288

priceline.com, Inc. (Æ)(Ñ)

  2,294    265

RadioShack Corp.

  8,939    110

Red Lion Hotels Corp. (Æ)

  18,380    146

Rent-A-Center, Inc. Class A (Æ)

  9,678    199

Republic Services, Inc. Class A

  16,978    504

Revlon, Inc. Class A (Æ)(Ñ)

  11,100    9

Ross Stores, Inc. (Ñ)

  10,299    366

Rush Enterprises, Inc. Class A (Æ)(Ñ)

  6,412    77

Rush Enterprises, Inc. Class B (Æ)

  122    1

Sally Beauty Holdings, Inc. (Æ)(Ñ)

  241    2

Scholastic Corp. (Æ)(Ñ)

  10,123    290

School Specialty, Inc. (Æ)(Ñ)

  643    19

Sealy Corp. (Æ)(Ñ)

  3,000    17

Sinclair Broadcast Group, Inc. Class A (Ñ)

  30,900    235

Skechers U.S.A., Inc. Class A (Æ)

  5,312    105

Sohu.com, Inc. (Æ)(Ñ)

  719    51

Sonic Automotive, Inc. Class A (Ñ)

  16,500    213

Speedway Motorsports, Inc. (Ñ)

  2,500    51

Stanley Furniture Co., Inc. (Ñ)

  1,200    13

Stein Mart, Inc. (Ñ)

  3,700    17

Steven Madden, Ltd. (Æ)

  1,200    22

Strayer Education, Inc. (Ñ)

  1,200    251

Talbots, Inc. (Ñ)

  6,458    75

Tech Data Corp. (Æ)(Ñ)

  9,494    322

Tempur-Pedic International, Inc. (Ñ)

  5,300    41

Toro Co. (Ñ)

  548    18

Tractor Supply Co. (Æ)(Ñ)

  1,785    52

True Religion Apparel, Inc. (Æ)(Ñ)

  5,000    133

Tuesday Morning Corp. (Æ)

  7,200    30

Tween Brands, Inc. (Æ)(Ñ)

  3,283    54

Unifirst Corp. (Ñ)

  800    36

United Online, Inc. (Ñ)

  62,400    626

Urban Outfitters, Inc. (Æ)(Ñ)

  26,110    814

VeriSign, Inc. (Æ)(Ñ)

  13,199    499

Viad Corp. (Ñ)

  100    3

Volt Information Sciences, Inc. (Æ)(Ñ)

  2,200    26

Warnaco Group, Inc. (The) (Æ)(Ñ)

  10,830    477

Warner Music Group Corp. (Ñ)

  4    

Waste Connections, Inc. (Æ)

  13,574    433

Waste Services, Inc. (Æ)(Ñ)

  102    1

Watson Wyatt Worldwide, Inc. Class A (Ñ)

  11,245    595
   Principal
Amount ($)
or Shares
    Market
Value
$

Weight Watchers International, Inc.

  507    18

WESCO International, Inc. (Æ)(Ñ)

  5,408    217

Wet Seal, Inc. (The) Class A (Æ)(Ñ)

  53,100    253

WMS Industries, Inc. (Æ)(Ñ)

  3,806    113

Wolverine World Wide, Inc. (Ñ)

  12,700    339
       
      29,362
       

Consumer Staples - 2.1%

      

B&G Foods, Inc. Class A (Ñ)

  7,740    72

Casey’s General Stores, Inc. (Ñ)

  2,798    65

Chiquita Brands International, Inc. (Æ)(Ñ)

  22,583    343

Church & Dwight Co., Inc. (Ñ)

  3,074    173

Constellation Brands, Inc. Class A (Æ)(Ñ)

  5,673    113

Del Monte Foods Co. (Ñ)

  32,731    232

Diamond Foods, Inc. (Ñ)

  4,469    103

Fresh Del Monte Produce, Inc. (Æ)(Ñ)

  24,900    587

Green Mountain Coffee Roasters, Inc. (Æ)(Ñ)

  7,250    272

Hormel Foods Corp. (Ñ)

  2,811    97

J&J Snack Foods Corp. (Ñ)

  9,500    260

JM Smucker Co. (The)

  654    27

Molson Coors Brewing Co. Class B (Ñ)

  8,900    484

Monterey Gourmet Foods, Inc. (Æ)

  125,695    254

Nash Finch Co. (Ñ)

  1,194    41

NBTY, Inc. (Æ)

  5,709    183

Pilgrim’s Pride Corp. (Ñ)

  2,404    31

Ralcorp Holdings, Inc. (Æ)(Ñ)

  78    4

Renesola, Ltd. - ADR (Æ)

  9,700    168

Sadia SA - ADR (Æ)

  5,400    115

Schweitzer-Mauduit International, Inc. (Ñ)

  3,787    64

SUPERVALU, Inc. (Ñ)

  2,450    76

Tootsie Roll Industries, Inc. (Ñ)

  2,434    61

TreeHouse Foods, Inc. (Æ)

  5,100    124

Weis Markets, Inc. (Ñ)

  10,270    333
       
      4,282
       

Financial Services - 13.8%

      

Advance America Cash Advance Centers, Inc. (Ñ)

  8,872    45

Advent Software, Inc. (Æ)(Ñ)

  1,642    59

Affiliated Managers Group, Inc. (Æ)(Ñ)

  5,032    453

Alexander’s, Inc. (Æ)(ö)(Ñ)

  9    3

Alexandria Real Estate Equities, Inc. (ö)(Ñ)

  604    59

Alliance Data Systems Corp. (Æ)(Ñ)

  8,720    493

 

Aggressive Equity Fund 13


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Allied Capital Corp. (Ñ)

  18,070    251

Allied World Assurance Co. Holdings, Ltd.

  5,400    214

AMB Property Corp. (ö)(Ñ)

  978    49

American Campus Communities, Inc. (ö)

  662    18

American Capital Agency Corp.

  600    10

American Equity Investment Life Holding Co.

  6,600    54

American Financial Group, Inc. (Ñ)

  9,019    241

AmeriCredit Corp. (Æ)(Ñ)

  24,000    207

Amerisafe, Inc. (Æ)

  3,600    57

Amtrust Financial Services, Inc. (Ñ)

  8,360    105

Anchor Bancorp Wisconsin, Inc. (Ñ)

  2,500    18

Annaly Capital Management, Inc. (ö)

  24,468    379

Anthracite Capital, Inc. (ö)(Ñ)

  19,700    139

Anworth Mortgage Asset Corp. (ö)

  55,600    362

Apartment Investment & Management Co. Class A (ö)(Ñ)

  4,400    150

Arch Capital Group, Ltd. (Æ)

  9,200    610

Arthur J Gallagher & Co. (Ñ)

  8,500    205

Ashford Hospitality Trust, Inc. (ö)(Ñ)

  23,700    109

Aspen Insurance Holdings, Ltd.

  10,900    258

Asset Acceptance Capital Corp. (Ñ)

  2,400    29

Assurant, Inc.

  2,540    168

Asta Funding, Inc.

  2,500    23

Astoria Financial Corp. (Ñ)

  2,100    42

Axis Capital Holdings, Ltd.

  5,500    164

Bancfirst Corp. (Ñ)

  1,000    43

Banco Latinoamericano de Exportaciones SA Class E (Ñ)

  4,800    78

Bancorp, Inc. (Æ)(Ñ)

  4,617    35

Bancorpsouth, Inc. (Ñ)

  10,221    179

Bank of Hawaii Corp. (Ñ)

  6,367    304

Bank of the Ozarks, Inc. (Ñ)

  2,183    32

Bankrate, Inc. (Æ)(Ñ)

  4,970    194

Banner Corp. (Ñ)

  1,300    12

BioMed Realty Trust, Inc. (ö)(Ñ)

  8,413    206

BOK Financial Corp. (Ñ)

  1,032    55

Boston Private Financial Holdings, Inc. (Ñ)

  6,521    37

Brandywine Realty Trust (ö)

  15,500    244

Broadridge Financial Solutions, Inc. (Ñ)

  2,503    53

Calamos Asset Management, Inc. Class A (Ñ)

  4,300    73

Capital City Bank Group, Inc. (Ñ)

  600    13

CapitalSource, Inc. (ö)(Ñ)

  4,194    46

Capitol Bancorp, Ltd. (Ñ)

  2,600    23
   Principal
Amount ($)
or Shares
    Market
Value
$

Capitol Federal Financial

  175    7

CapLease, Inc. (ö)(Ñ)

  4,100    31

Capstead Mortgage Corp. (ö)

  20,200    219

Cash America International, Inc. (Ñ)

  4,263    132

Castlepoint Holdings, Ltd. (Ñ)

  2,100    19

Cathay General Bancorp (Ñ)

  11,326    123

Cedar Shopping Centers, Inc. (ö)(Ñ)

  4,900    57

Center Financial Corp. (Ñ)

  1,510    13

City Bank (Ñ)

  1,200    10

City Holding Co. (Ñ)

  1,700    69

City National Corp. (Ñ)

  3,700    156

CNA Surety Corp. (Æ)(Ñ)

  5,340    67

Cohen & Steers, Inc.

  724    19

Colonial BancGroup, Inc. (The) (Ñ)

  32,900    145

Colonial Properties Trust (ö)(Ñ)

  9,200    184

Columbia Banking System, Inc.

  2,400    46

Commerce Bancshares, Inc. (Ñ)

  2,186    87

Community Trust Bancorp, Inc. (Ñ)

  1,000    26

Cowen Group, Inc. (Æ)(Ñ)

  1,000    8

Cullen/Frost Bankers, Inc. (Ñ)

  2,835    141

Cybersource Corp. (Æ)(Ñ)

  16,450    275

Darwin Professional Underwriters, Inc. (Æ)(Ñ)

  900    28

DCT Industrial Trust, Inc. (ö)(Ñ)

  4,529    38

Delphi Financial Group, Inc. Class A (Ñ)

  18,229    422

Deluxe Corp. (Ñ)

  40,622    724

Digital Realty Trust, Inc. (ö)(Ñ)

  4,053    166

Dime Community Bancshares (Ñ)

  1,383    23

Discover Financial Services (Ñ)

  6,300    83

EastGroup Properties, Inc. (ö)(Ñ)

  2,100    90

Education Realty Trust, Inc. (ö)(Ñ)

  4,700    55

Electro Rent Corp. (Ñ)

  24,137    303

EMC Insurance Group, Inc. (Ñ)

  900    22

Employers Holdings, Inc.

  6,100    126

Encore Capital Group, Inc. (Æ)

  1,700    15

Equity Lifestyle Properties, Inc. (ö)

  370    16

Equity One, Inc. (ö)(Ñ)

  4,818    99

Evercore Partners, Inc. Class A (Ñ)

  17,500    166

Extra Space Storage, Inc. (ö)(Ñ)

  12,800    197

Fair Isaac Corp. (Ñ)

  4,744    99

FBL Financial Group, Inc. Class A

  1,800    36

FCStone Group, Inc. (Æ)(Ñ)

  229    6

Federated Investors, Inc. Class B

  4,920    169

FelCor Lodging Trust, Inc. (ö)(Ñ)

  15,600    164

First American Corp. (Ñ)

  4,700    124

First Community Bancshares, Inc. (Ñ)

  400    11

First Financial Bancorp (Ñ)

  3,100    29

First Financial Bankshares, Inc. (Ñ)

  1,700    78

 

14 Aggressive Equity Fund


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

First Place Financial Corp. (Ñ)

  6,800    64

First Potomac Realty Trust (ö)(Ñ)

  5,500    84

First State Bancorporation (Ñ)

  3,600    20

Flagstar Bancorp, Inc.

  1,400    4

Flushing Financial Corp. (Ñ)

  13,400    254

Franklin Street Properties Corp. (ö)(Ñ)

  17,450    221

GAMCO Investors, Inc. Class A (Ñ)

  800    40

GFI Group, Inc. (Ñ)

  6,595    59

Glimcher Realty Trust (ö)

  5,800    65

Global Payments, Inc.

  27    1

Gramercy Capital Corp. (ö)(Ñ)

  460    5

Green Bankshares, Inc. (Ñ)

  2,000    28

Greenhill & Co., Inc. (Ñ)

  2,227    120

Hallmark Financial Services (Æ)(Ñ)

  2,135    21

Hanmi Financial Corp. (Ñ)

  8,230    43

Hanover Insurance Group, Inc. (The)

  9,400    400

Harleysville Group, Inc. (Ñ)

  2,000    68

HCC Insurance Holdings, Inc.

  9,750    206

HCP, Inc. (ö)(Ñ)

  3,054    97

Health Care REIT, Inc. (ö)(Ñ)

  3,127    139

Heartland Payment Systems, Inc. (Ñ)

  2,591    61

Hercules Technology Growth Capital, Inc. (Ñ)

  34,600    309

Hersha Hospitality Trust (ö)

  3,400    26

Home Bancshares, Inc. (Ñ)

  700    16

Hospitality Properties Trust (ö)

  11,000    269

HRPT Properties Trust (ö)

  34,500    234

Hudson City Bancorp, Inc. (Ñ)

  6,000    100

Huntington Bancshares, Inc.

  29,600    171

Hypercom Corp. (Æ)

  84,306    371

IBERIABANK Corp. (Ñ)

  400    18

Independent Bank Corp. (Ñ)

  2,300    9

Independent Bank Corp. (Ñ)

  1,700    41

infoGROUP, Inc. (Ñ)

  3,315    15

Inland Real Estate Corp. (ö)(Ñ)

  6,400    92

Interactive Brokers Group, Inc. Class A (Æ)(Ñ)

  2,650    85

Interactive Data Corp. (Ñ)

  3,438    86

Intersections, Inc. (Æ)

  27,069    296

Intervest Bancshares Corp. Class A (Ñ)

  2,300    12

Invesco, Ltd.

  12,603    302

Investment Technology Group, Inc. (Æ)

  1,496    50

Investors Bancorp, Inc. (Æ)

  16,200    212

Investors Real Estate Trust (ö)(Ñ)

  3,600    34

IPC Holdings, Ltd. (Ñ)

  16,000    425

Jack Henry & Associates, Inc. (Ñ)

  3,229    70

Jefferies Group, Inc. (Ñ)

  19,900    335

JER Investment Trust, Inc. (Æ)(Þ)

  9,200    58
   Principal
Amount ($)
or Shares
    Market
Value
$

Kayne Anderson Energy Development Co. (Ñ)

  1,100    25

Kite Realty Group Trust (ö)(Ñ)

  2,000    25

Knight Capital Group, Inc. Class A (Æ)(Ñ)

  26,347    474

Kohlberg Capital Corp. (Ñ)

  900    9

LaBranche & Co., Inc. (Æ)

  15,600    110

Lakeland Bancorp, Inc. (Ñ)

  767    9

LandAmerica Financial Group, Inc. Class A (Ñ)

  11,600    257

LTC Properties, Inc. (ö)(Ñ)

  4,235    108

Mack-Cali Realty Corp. (ö)

  8,900    304

MainSource Financial Group, Inc. (Ñ)

  5,100    79

Meadowbrook Insurance Group, Inc. (Ñ)

  4,000    21

Medical Properties Trust, Inc. (ö)(Ñ)

  12,685    128

MFA Mortgage Investments, Inc. (ö)(Ñ)

  16,800    110

Midwest Banc Holdings, Inc. (Ñ)

  12,988    63

MVC Capital, Inc.

  1,000    14

Nara Bancorp, Inc. (Ñ)

  3,822    41

Nasdaq OMX Group (The) (Æ)(Ñ)

  4,941    131

National Interstate Corp.

  227    4

National Penn Bancshares, Inc. (Ñ)

  8,342    111

National Retail Properties, Inc. (ö)(Ñ)

  11,904    249

Nationwide Health Properties, Inc. (ö)(Ñ)

  485    15

Navigators Group, Inc. (Æ)(Ñ)

  4,150    224

NBT Bancorp, Inc. (Ñ)

  400    8

NewStar Financial, Inc. (Æ)(Ñ)

  2,200    13

NorthStar Realty Finance Corp. (ö)(Ñ)

  19,364    161

OceanFirst Financial Corp. (Ñ)

  600    11

Old National Bancorp (Ñ)

  8,008    114

Old Second Bancorp, Inc. (Ñ)

  800    9

Omega Healthcare Investors, Inc. (ö)

  1,541    26

OneBeacon Insurance Group, Ltd. Class A (Ñ)

  3,500    61

optionsXpress Holdings, Inc. (Ñ)

  4,352    97

Oriental Financial Group, Inc.

  9,100    130

Oritani Financial Corp. (Æ)(Ñ)

  1,282    21

Pacific Capital Bancorp NA (Ñ)

  846    12

PacWest Bancorp (Ñ)

  1,137    17

Parkway Properties, Inc. (ö)(Ñ)

  3,400    115

Patriot Capital Funding, Inc. (Ñ)

  1,400    9

Pennsylvania Real Estate Investment Trust (ö)(Ñ)

  7,900    183

Permian Basin Royalty Trust (Ñ)

  13,300    351

Philadelphia Consolidated Holding Co. (Æ)(Ñ)

  5,349    182

Phoenix Cos., Inc. (The) (Ñ)

  13,100    100

 

Aggressive Equity Fund 15


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Piper Jaffray Cos. (Æ)(Ñ)

  11,010    323

Platinum Underwriters Holdings, Ltd.

  9,000    293

PMA Capital Corp. Class A (Æ)(Ñ)

  2,700    25

Post Properties, Inc. (ö)(Ñ)

  3,214    96

Potlatch Corp. (ö)(Ñ)

  9,667    436

Preferred Bank (Ñ)

  1,050    5

Procentury Corp.

  1,000    16

Prospect Capital Corp. (Ñ)

  2,900    38

Prosperity Bancshares, Inc. (Ñ)

  28    1

Protective Life Corp.

  7,600    289

Provident Bankshares Corp. (Ñ)

  8,000    51

Pzena Investment Management, Inc. (Ñ)

  17,100    218

Ramco-Gershenson Properties Trust (ö)(Ñ)

  2,800    58

Raymond James Financial, Inc. (Ñ)

  2,412    64

Rayonier, Inc. (ö)

  230    10

Reinsurance Group of America, Inc. (Ñ)

  2,700    118

RenaissanceRe Holdings, Ltd. (Ñ)

  6,700    299

S&T Bancorp, Inc. (Ñ)

  70    2

S1 Corp. (Æ)

  19,100    145

Safeco Corp.

  2,245    151

Safety Insurance Group, Inc.

  1,700    61

Sandy Spring Bancorp, Inc. (Ñ)

  1,700    28

Santander BanCorp

  1,900    20

SCBT Financial Corp. (Ñ)

  608    17

SeaBright Insurance Holdings, Inc. (Æ)

  1,700    25

SEI Investments Co.

  6,206    146

Senior Housing Properties Trust (ö)(Ñ)

  8,900    174

Simmons First National Corp. Class A (Ñ)

  600    17

Southside Bancshares, Inc. (Ñ)

  1,200    22

Southwest Bancorp, Inc. (Ñ)

  2,000    23

StanCorp Financial Group, Inc. (Ñ)

  7,685    361

Sterling Bancorp (Ñ)

  6,800    81

Stifel Financial Corp. (Æ)(Ñ)

  1,698    58

Sun Bancorp, Inc. (Æ)(Ñ)

  1,575    16

Sunstone Hotel Investors, Inc. (ö)(Ñ)

  10,500    174

SY Bancorp, Inc. (Ñ)

  900    19

Tompkins Financial Corp. (Ñ)

  600    22

TradeStation Group, Inc. (Æ)(Ñ)

  2,471    25

Transatlantic Holdings, Inc. (Ñ)

  1,600    90

Trico Bancshares (Ñ)

  1,400    15

U-Store-It Trust (ö)(Ñ)

  17,600    210

UDR, Inc. (ö)(Ñ)

  5,800    130

Umpqua Holdings Corp. (Ñ)

  10,800    131
   Principal
Amount ($)
or Shares
    Market
Value
$

United America Indemnity, Ltd. Class A (Æ)(Ñ)

  3,500    47

United Rentals, Inc. (Æ)(Ñ)

  17,425    342

Universal American Corp. (Æ)(Ñ)

  11,412    117

Urstadt Biddle Properties, Inc. Class A (ö)

  1,000    15

Ventas, Inc. (ö)

  3,973    169

ViewPoint Financial Group

  11,400    168

Waddell & Reed Financial, Inc. Class A

  1,700    60

Washington Federal, Inc. (Ñ)

  7,176    130

Webster Financial Corp. (Ñ)

  13,656    254

WesBanco, Inc. (Ñ)

  2,200    38

West Coast Bancorp (Ñ)

  2,500    22

Westfield Financial, Inc. (Ñ)

  1,300    12

Whitney Holding Corp. (Ñ)

  2,300    42

Wilmington Trust Corp. (Ñ)

  509    13

Wilshire Bancorp, Inc. (Ñ)

  3,400    29

Wintrust Financial Corp. (Ñ)

  1,000    24

World Acceptance Corp. (Æ)(Ñ)

  870    29

Zenith National Insurance Corp. (Ñ)

  13,800    485

Zions Bancorporation (Ñ)

  934    29
       
      28,019
       

Health Care - 9.6%

      

Adolor Corp. (Æ)(Ñ)

  15,300    84

Affymetrix, Inc. (Æ)

  18,510    190

Air Methods Corp. (Æ)(Ñ)

  195    5

AMERIGROUP Corp. Class A (Æ)(Ñ)

  7,500    156

Analogic Corp.

  4,210    265

Ariad Pharmaceuticals, Inc. (Æ)(Ñ)

  9,363    22

Arthrocare Corp. (Æ)(Ñ)

  7,834    320

Bio-Rad Laboratories, Inc. Class A (Æ)

  2,741    222

BioScrip, Inc. (Æ)

  84,983    220

Candela Corp. (Æ)

  108,629    253

Capital Senior Living Corp. (Æ)(Ñ)

  7,820    59

Caraco Pharmaceutical Laboratories, Ltd. (Æ)(Ñ)

  744    10

Centene Corp. (Æ)(Ñ)

  15,159    254

Cephalon, Inc. (Æ)(Ñ)

  2,072    138

Charles River Laboratories International, Inc. (Æ)(Ñ)

  8,237    526

Chattem, Inc. (Æ)

  662    43

Covance, Inc. (Æ)

  4,120    354

Datascope Corp. (Ñ)

  10,400    489

Dentsply International, Inc.

  1,575    58

Depomed, Inc. (Æ)(Ñ)

  2,767    9

Emergent Biosolutions, Inc. (Æ)(Ñ)

  300    3

 

16 Aggressive Equity Fund


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Endo Pharmaceuticals Holdings, Inc. (Æ)(Ñ)

  6,604    160

eResearchTechnology, Inc. (Æ)(Ñ)

  25,445    444

Gen-Probe, Inc. (Æ)

  6,165    293

Haemonetics Corp. (Æ)(Ñ)

  7,231    401

Hanger Orthopedic Group, Inc. (Æ)

  1,400    23

Harvard Bioscience, Inc. (Æ)(Ñ)

  37,566    175

Health Net, Inc. (Æ)(Ñ)

  2,584    62

HealthExtras, Inc. (Æ)

  420    13

Healthsouth Corp. (Æ)

  2,938    49

Healthspring, Inc. (Æ)(Ñ)

  29,223    493

Healthways, Inc. (Æ)(Ñ)

  2,537    75

Henry Schein, Inc. (Æ)(Ñ)

  352    18

Hill-Rom Holdings, Inc. (Ñ)

  5,187    140

HMS Holdings Corp. (Æ)(Ñ)

  24,844    533

Hologic, Inc. (Æ)(Ñ)

  34,869    760

Humana, Inc. (Æ)

  4,700    187

Icon PLC - ADR (Æ)

  8,157    616

ICU Medical, Inc. (Æ)(Ñ)

  6    

Illumina, Inc. (Æ)(Ñ)

  18,156    1,582

Immucor, Inc. (Æ)

  19,758    511

Intuitive Surgical, Inc. (Æ)

  12    3

Invacare Corp. (Ñ)

  7,920    162

Invitrogen Corp. (Æ)(Ñ)

  6,200    243

Isis Pharmaceuticals, Inc. (Æ)(Ñ)

  4,695    64

Kendle International, Inc. (Æ)(Ñ)

  3,467    126

Kensey Nash Corp. (Æ)(Ñ)

  4,119    132

Kindred Healthcare, Inc. (Æ)

  7,786    224

Kinetic Concepts, Inc. (Æ)(Ñ)

  2,906    116

King Pharmaceuticals, Inc. (Æ)(Ñ)

  57,370    601

Luminex Corp. (Æ)(Ñ)

  11,807    243

Magellan Health Services, Inc. (Æ)(Ñ)

  3,537    131

Martek Biosciences Corp. (Æ)(Ñ)

  1,547    52

Masimo Corp. (Æ)(Ñ)

  15,480    532

Medcath Corp. (Æ)(Ñ)

  31    1

Medical Action Industries, Inc. (Æ)(Ñ)

  667    7

Medicis Pharmaceutical Corp. Class A (Ñ)

  5,475    114

Meridian Bioscience, Inc. (Ñ)

  8,500    229

Merit Medical Systems, Inc. (Æ)

  11,627    171

Molina Healthcare, Inc. (Æ)(Ñ)

  5,502    134

Natus Medical, Inc. (Æ)

  10,870    228

NuVasive, Inc. (Æ)(Ñ)

  9,562    427

OSI Pharmaceuticals, Inc. (Æ)(Ñ)

  3,250    134

Owens & Minor, Inc. (Ñ)

  3,300    151

Parexel International Corp. (Æ)

  14,598    384

Patterson Cos., Inc. (Æ)(Ñ)

  17,366    510

Pediatrix Medical Group, Inc. (Æ)

  3,369    166

Perrigo Co. (Ñ)

  13,596    432
   Principal
Amount ($)
or Shares
    Market
Value
$

Pharmaceutical Product Development, Inc.

  3,600    154

PharmaNet Development Group, Inc. (Æ)

  2,250    35

Phase Forward, Inc. (Æ)(Ñ)

  11,500    207

Psychiatric Solutions, Inc. (Æ)(Ñ)

  14,631    554

RehabCare Group, Inc. (Æ)(Ñ)

  4,300    69

Repligen Corp. (Æ)(Ñ)

  396    2

Res-Care, Inc. (Æ)

  3,300    59

Retractable Technologies, Inc. (Æ)

  72,750    108

Sirona Dental Systems, Inc. (Æ)(Ñ)

  4,437    115

Somanetics Corp. (Æ)

  300    6

SonoSite, Inc. (Æ)(Ñ)

  1,915    54

Stericycle, Inc. (Æ)

  10,250    530

STERIS Corp. (Ñ)

  5,400    155

SurModics, Inc. (Æ)(Ñ)

  348    16

Symmetry Medical, Inc. (Æ)(Ñ)

  2,455    40

Techne Corp. (Æ)(Ñ)

  6,910    535

Universal Health Services, Inc. Class B (Ñ)

  2,900    183

Viropharma, Inc. (Æ)(Ñ)

  13,229    146

Watson Pharmaceuticals, Inc. Class B (Æ)(Ñ)

  13,410    364

West Pharmaceutical Services, Inc. (Ñ)

  7,000    303
       
      19,567
       

Integrated Oils - 0.1%

      

Vaalco Energy, Inc. (Æ)(Ñ)

  28,200    239
       

Materials and Processing - 11.4%

    

Aceto Corp.

  19,833    152

Airgas, Inc.

  7,293    426

AK Steel Holding Corp. (Ñ)

  4,481    309

AM Castle & Co. (Ñ)

  3,625    104

Andersons, Inc. (The) (Ñ)

  1,900    77

Apogee Enterprises, Inc. (Ñ)

  378    6

Armstrong World Industries, Inc. (Ñ)

  3,200    94

Ashland, Inc. (Ñ)

  5,471    264

Barnes Group, Inc. (Ñ)

  9,900    229

Beacon Roofing Supply, Inc. (Æ)

  607    6

Buckeye Technologies, Inc. (Æ)(Ñ)

  23,731    201

Cabot Corp. (Ñ)

  23,820    579

Calgon Carbon Corp. (Æ)(Ñ)

  4,173    65

Carpenter Technology Corp.

  565    25

Celanese Corp. Class A (Ñ)

  16,676    761

Ceradyne, Inc. (Æ)

  5,500    189

CF Industries Holdings, Inc. (Ñ)

  6,500    993

Chemtura Corp.

  46,831    274

Chicago Bridge & Iron Co. NV

  11,699    466

 

Aggressive Equity Fund 17


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Cie Generale de Geophysique-Veritas -ADR (Æ)

  3,151    149

Clean Harbors, Inc. (Æ)(Ñ)

  2,067    147

Cleveland-Cliffs, Inc. (Ñ)

  3,350    399

Coeur d’Alene Mines Corp. (Æ)(Ñ)

  67,778    197

Comfort Systems USA, Inc. (Ñ)

  9,800    132

Commercial Metals Co.

  1,360    51

Corn Products International, Inc.

  1,988    98

Cytec Industries, Inc.

  4,800    262

Domtar Corp. (Æ)

  33,000    180

DuPont Fabros Technology, Inc. (ö)(Ñ)

  13,600    254

Dycom Industries, Inc. (Æ)(Ñ)

  2,800    41

Eastman Chemical Co. (Ñ)

  1,049    72

EMCOR Group, Inc. (Æ)

  25,916    739

Encore Wire Corp. (Ñ)

  4,600    97

Energy Conversion Devices, Inc. (Æ)

  2,500    184

EnerSys (Æ)

  5,500    188

Ennis, Inc. (Ñ)

  5,900    92

Ferro Corp. (Ñ)

  15,001    281

FMC Corp. (Ñ)

  1,633    126

Gafisa SA - ADR (Ñ)

  1,550    53

Gibraltar Industries, Inc. (Ñ)

  19,300    308

Glatfelter (Ñ)

  24,000    324

GrafTech International, Ltd. (Æ)(Ñ)

  264    7

Granite Construction, Inc. (Ñ)

  5,500    173

Haynes International, Inc. (Æ)(Ñ)

  4,780    275

HB Fuller Co. (Ñ)

  5,200    117

Hecla Mining Co. (Æ)(Ñ)

  11    

Hercules, Inc. (Ñ)

  8,869    150

IAMGOLD Corp.

  54,544    330

Innophos Holdings, Inc. (Ñ)

  2,200    70

Innospec, Inc. (Ñ)

  5,294    100

Insituform Technologies, Inc. Class A (Æ)(Ñ)

  25,530    389

Insteel Industries, Inc.

  1,000    18

Interface, Inc. Class A (Ñ)

  1,660    21

Jacobs Engineering Group, Inc. (Æ)(Ñ)

  7,000    565

Kaiser Aluminum Corp. (Ñ)

  59    3

KBR, Inc.

  24,484    855

Koppers Holdings, Inc. (Ñ)

  2,607    109

LB Foster Co. Class A (Æ)(Ñ)

  2,396    80

Lennox International, Inc. (Ñ)

  4,024    117

LSB Industries, Inc. (Æ)

  2,020    40

LSI Industries, Inc. (Ñ)

  7,474    61

Lubrizol Corp. (Ñ)

  5,131    238

Lundin Mining Corp. (Æ)

  20,736    126

Lydall, Inc. (Æ)

  35,775    449

McDermott International, Inc. (Æ)

  16,943    1,049

MeadWestvaco Corp. (Ñ)

  4,484    107
   Principal
Amount ($)
or Shares
    Market
Value
$

Memry Corp. (Æ)

  7,169    17

Mercer International, Inc. (Æ)(Ñ)

  3,100    23

Myers Industries, Inc.

  23,100    188

Nalco Holding Co.

  7,727    163

Neenah Paper, Inc. (Ñ)

  2,500    42

NewMarket Corp. (Ñ)

  1,245    82

Olympic Steel, Inc. (Ñ)

  3,433    261

OM Group, Inc. (Æ)(Ñ)

  7,070    232

Owens Corning, Inc. (Æ)(Ñ)

  6,743    153

Owens-Illinois, Inc. (Æ)(Ñ)

  9,508    396

Penn Virginia GP Holdings, LP

  209    7

Perini Corp. (Æ)(Ñ)

  4,900    162

Precision Castparts Corp.

  1,499    144

Quanta Services, Inc. (Æ)(Ñ)

  11,235    374

Reliance Steel & Aluminum Co. (Ñ)

  3,125    241

Resource Capital Corp. (ö)(Ñ)

  2,800    20

Richmont Mines, Inc. (Æ)(Ñ)

  3,994    12

Rockwood Holdings, Inc. (Æ)

  529    18

Schnitzer Steel Industries, Inc. Class A (Ñ)

  4,786    548

Scotts Miracle-Gro Co. (The) Class A

  2,980    52

Shaw Group, Inc. (The) (Æ)(Ñ)

  4,844    299

Sigma-Aldrich Corp. (Ñ)

  5,700    307

Sims Group, Ltd. - ADR (Ñ)

  18,878    753

Sonoco Products Co.

  6,751    209

Spartech Corp.

  6,400    60

St. Joe Co. (The) (Æ)(Ñ)

  3,360    115

Standard Register Co. (The) (Ñ)

  2,100    20

Steel Dynamics, Inc. (Ñ)

  9,700    379

Superior Essex, Inc. (Æ)(Ñ)

  4,000    179

Symyx Technologies (Æ)(Ñ)

  52,800    369

Tejon Ranch Co. (Æ)

  134    5

Temple-Inland, Inc. (Ñ)

  48,300    544

Timken Co.

  10,700    352

Tredegar Corp. (Ñ)

  11,189    165

Universal Forest Products, Inc.

  2,500    75

Universal Stainless & Alloy (Æ)(Ñ)

  500    19

URS Corp. (Æ)

  24,902    1,045

US Concrete, Inc. (Æ)(Ñ)

  700    3

Valspar Corp.

  788    15

WCA Waste Corp. (Æ)

  24,871    158
       
      23,249
       

Miscellaneous - 0.9%

      

Carlisle Cos., Inc. (Ñ)

  17,300    501

Castlepoint Holdings, Ltd. (Æ)(Þ)

  30,900    281

Kaman Corp. Class A (Ñ)

  10,900    248

Lancaster Colony Corp. (Ñ)

  6,700    203

 

18 Aggressive Equity Fund


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Teleflex, Inc.

  5,700    317

Walter Industries, Inc. Class A

  2,317    252
       
      1,802
       

Other Energy - 12.9%

      

Allis-Chalmers Energy, Inc. (Æ)

  3,876    69

Atlas America, Inc. (Ñ)

  9,299    419

Atwood Oceanics, Inc. (Æ)

  7,100    883

Berry Petroleum Co. Class A (Ñ)

  9,166    540

Bois d’Arc Energy, Inc. (Æ)

  12,208    297

Brigham Exploration Co. (Æ)(Ñ)

  30,100    476

Bronco Drilling Co., Inc. (Æ)(Ñ)

  22,820    419

Callon Petroleum Co. (Æ)(Ñ)

  2,222    61

Cameron International Corp. (Æ)(Ñ)

  4,420    245

Carrizo Oil & Gas, Inc. (Æ)(Ñ)

  5,700    388

Cimarex Energy Co.

  15,438    1,076

Clayton Williams Energy, Inc. (Æ)(Ñ)

  640    70

Complete Production Services, Inc. (Æ)(Ñ)

  6,309    230

Comstock Resources, Inc. (Æ)(Ñ)

  771    65

Concho Resources, Inc. (Æ)

  7,200    269

Continental Resources, Inc. (Æ)(Ñ)

  11,739    814

Core Laboratories NV (Æ)(Ñ)

  5,385    767

Delek US Holdings, Inc. (Ñ)

  7,400    68

Denbury Resources, Inc. (Æ)

  27,929    1,019

Dril-Quip, Inc. (Æ)

  14,102    888

Encore Acquisition Co. (Æ)

  1,934    145

Endeavour International Corp. (Æ)(Ñ)

  10,249    22

Energy Partners, Ltd. (Æ)(Ñ)

  8,014    120

EXCO Resources, Inc. (Æ)(Ñ)

  21,968    811

Exterran Holdings, Inc. (Æ)(Ñ)

  9,115    652

FMC Technologies, Inc. (Æ)(Ñ)

  8,252    635

Forest Oil Corp. (Æ)(Ñ)

  2,747    205

Foundation Coal Holdings, Inc. (Ñ)

  2,366    210

Geokinetics, Inc. (Æ)(Ñ)

  14,517    263

Global Industries, Ltd. (Æ)

  1,344    24

GMX Resources, Inc. (Æ)(Ñ)

  1,200    89

Gran Tierra Energy, Inc. (Æ)(Ñ)

  8,690    69

Grey Wolf, Inc. (Æ)(Ñ)

  77,355    698

Gulf Island Fabrication, Inc. (Ñ)

  2,700    132

Helix Energy Solutions Group, Inc. (Æ)(Ñ)

  9,144    381

Helmerich & Payne, Inc.

  5,900    425

Hercules Offshore, Inc. (Æ)(Ñ)

  7,024    267

Hornbeck Offshore Services, Inc. (Æ)(Ñ)

  19,167    1,083

Hugoton Royalty Trust (Ñ)

  9,052    335

International Coal Group, Inc. (Æ)(Ñ)

  23,531    307
   Principal
Amount ($)
or Shares
    Market
Value
$

JA Solar Holdings Co., Ltd. - ADR (Æ)(Ñ)

  10,650    179

Key Energy Services, Inc. (Æ)

  3,339    65

Mariner Energy, Inc. (Æ)(Ñ)

  21,059    779

Massey Energy Co.

  2,975    279

McMoRan Exploration Co. (Æ)

  2,036    56

Meridian Resource Corp. (Æ)(Ñ)

  6,329    19

Newfield Exploration Co. (Æ)

  3,680    240

Oceaneering International, Inc. (Æ)

  11,437    881

Oil States International, Inc. (Æ)(Ñ)

  3,300    209

Penn Virginia Corp.

  3,802    287

PetroHawk Energy Corp. (Æ)(Ñ)

  15,348    711

Petroquest Energy, Inc. (Æ)(Ñ)

  19,130    515

Quicksilver Resources, Inc. (Æ)(Ñ)

  2,700    104

Range Resources Corp.

  3,650    239

Rosetta Resources, Inc. (Æ)(Ñ)

  15,100    430

Rowan Cos., Inc. (Ñ)

  8,808    412

Sabine Royalty Trust (Ñ)

  2,200    150

St. Mary Land & Exploration Co. (Ñ)

  6,100    394

Stone Energy Corp. (Æ)

  12,500    824

Superior Energy Services, Inc. (Æ)(Ñ)

  28,608    1,577

Swift Energy Co. (Æ)(Ñ)

  2,700    178

Tesoro Corp. (Ñ)

  2,211    44

Union Drilling, Inc. (Æ)(Ñ)

  1,300    28

Unit Corp. (Æ)

  15,079    1,251

W&T Offshore, Inc. (Ñ)

  6,452    377
       
      26,164
       

Producer Durables - 8.3%

      

Actuant Corp. Class A (Ñ)

  4,514    141

Aerovironment, Inc. (Æ)

  2,000    54

AGCO Corp. (Æ)(Ñ)

  12,194    639

Airvana, Inc. (Æ)(Ñ)

  1,400    7

Alliant Techsystems, Inc. (Æ)(Ñ)

  2,523    257

Ametek, Inc.

  3,300    156

AO Smith Corp. (Ñ)

  4,400    144

Argon ST, Inc. (Æ)

  6,400    159

Arris Group, Inc. (Æ)

  26    

ATMI, Inc. (Æ)(Ñ)

  746    21

AZZ, Inc. (Æ)

  54    2

Baldor Electric Co. (Ñ)

  3,500    122

BE Aerospace, Inc. (Æ)

  2,600    61

Belden, Inc. (Ñ)

  7,013    238

Bucyrus International, Inc. Class A

  7,150    522

Canadian Solar, Inc. (Æ)(Ñ)

  9,800    394

Cascade Corp. (Ñ)

  2,100    89

Chart Industries, Inc. (Æ)(Ñ)

  23,365    1,136

Cognex Corp. (Ñ)

  2,097    48

 

Aggressive Equity Fund 19


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Cohu, Inc. (Ñ)

  9,400    138

CommScope, Inc. (Æ)(Ñ)

  4,126    218

Covanta Holding Corp. (Æ)(Ñ)

  1,484    40

Crane Co. (Ñ)

  136    5

Credence Systems Corp. (Æ)(Ñ)

  79,211    103

CTS Corp.

  4,700    47

Darling International, Inc. (Æ)

  11,000    182

Desarrolladora Homex SAB de CV - ADR (Æ)

  900    53

Donaldson Co., Inc.

  11,150    498

Dover Corp.

  10,400    503

Ducommun, Inc. (Æ)

  1,900    44

Electro Scientific Industries, Inc. (Æ)(Ñ)

  31,105    441

EnergySolutions, Inc. (Ñ)

  4,700    105

EnPro Industries, Inc. (Æ)

  2,900    108

Esterline Technologies Corp. (Æ)

  2,911    143

Federal Signal Corp. (Ñ)

  10,000    120

Flowserve Corp.

  6,988    955

Gardner Denver, Inc. (Æ)

  5,600    318

Gehl Co. (Æ)(Ñ)

  800    12

General Cable Corp. (Æ)(Ñ)

  2,302    140

GenTek, Inc. (Æ)(Ñ)

  762    20

Goodrich Corp.

  6,688    317

Hardinge, Inc. (Ñ)

  2,200    29

Herman Miller, Inc. (Ñ)

  4,772    119

HNI Corp. (Ñ)

  3,329    59

Hovnanian Enterprises, Inc. Class A (Æ)

  9,589    53

Hubbell, Inc.

  35    2

Hubbell, Inc. Class B (Ñ)

  3,311    132

Itron, Inc. (Æ)(Ñ)

  3,692    363

Joy Global, Inc.

  14,495    1,099

Kennametal, Inc.

  192    6

Kimball International, Inc. Class B (Ñ)

  40,661    337

Lexmark International, Inc. Class A (Æ)(Ñ)

  5,842    195

Lincoln Electric Holdings, Inc. (Ñ)

  2,028    160

M/I Homes, Inc. (Ñ)

  6,100    96

MasTec, Inc. (Æ)(Ñ)

  4,200    45

MDC Holdings, Inc.

  489    19

Molex, Inc. (Ñ)

  7,700    188

Moog, Inc. Class A (Æ)(Ñ)

  833    31

NVR, Inc. (Æ)(Ñ)

  258    129

Orbital Sciences Corp. (Æ)(Ñ)

  2,419    57

Park-Ohio Holdings Corp. (Æ)(Ñ)

  1,100    16

Perceptron, Inc. (Æ)

  40,269    352

Plantronics, Inc. (Ñ)

  9,166    205
   Principal
Amount ($)
or Shares
    Market
Value
$

Powerwave Technologies, Inc. (Æ)(Ñ)

  17,000    72

Pulte Homes, Inc. (Ñ)

  2,236    21

Ritchie Bros Auctioneers, Inc.

  35,090    952

Robbins & Myers, Inc. (Ñ)

  17,638    880

SBA Communications Corp. Class A (Æ)(Ñ)

  12,678    457

Steelcase, Inc. Class A (Ñ)

  17,216    173

Sun Hydraulics Corp.

  1,900    61

Technitrol, Inc.

  16,900    287

Tecumseh Products Co. Class A (Æ)(Ñ)

  15,590    511

Thomas & Betts Corp. (Æ)(Ñ)

  100    4

Ultratech, Inc. (Æ)(Ñ)

  3,793    59

Varian Semiconductor Equipment Associates, Inc. (Æ)(Ñ)

  6,823    238

Waters Corp. (Æ)

  7,476    482

Watts Water Technologies, Inc. Class A

  72    2

Woodward Governor Co.

  4,800    171

Zygo Corp. (Æ)(Ñ)

  1,200    12
       
      16,774
       

Technology - 13.7%

      

3Com Corp. (Æ)(Ñ)

  26,000    55

Adaptec, Inc. (Æ)(Ñ)

  1,677    5

Adtran, Inc. (Ñ)

  12,200    291

Affiliated Computer Services, Inc. Class A (Æ)

  10,900    583

American Science & Engineering, Inc. (Ñ)

  1,800    93

Amkor Technology, Inc. (Æ)(Ñ)

  26,100    272

Amphenol Corp. lass A (Ñ)

  21,658    972

Anadigics, Inc. (Æ)(Ñ)

  20,800    205

Ansys, Inc. (Æ)(Ñ)

  19,293    909

Arrow Electronics, Inc. (Æ)(Ñ)

  5,450    167

AsiaInfo Holdings, Inc. (Æ)(Ñ)

  1,845    22

AuthenTec, Inc. (Æ)

  28,399    296

Avnet, Inc. (Æ)

  8,800    240

Avocent Corp. (Æ)(Ñ)

  1,225    23

Bel Fuse, Inc. lass B (Ñ)

  700    17

Benchmark Electronics, Inc. (Æ)(Ñ)

  24,600    402

BGC Partners, Inc. lass A (Æ)

  11,800    89

Blackbaud, Inc. (Ñ)

  5,522    118

Blackboard, Inc. (Æ)

  9,190    351

BMC Software, Inc. (Æ)(Ñ)

  6,456    232

Bookham, Inc. (Æ)

  12,600    21

CACI International, Inc. lass A (Æ)

  5,400    247

Cadence Design Systems, Inc. (Æ)(Ñ)

  10,990    111

Captaris, Inc. (Æ)(Ñ)

  1,168    5

 

20 Aggressive Equity Fund


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Cavium Networks, Inc. (Æ)(Ñ)

  20,574    432

Celestica, Inc. (Æ)(Ñ)

  35,688    301

Ciber, Inc. (Æ)(Ñ)

  16,200    101

Cognizant Technology Solutions Corp. Class A (Æ)(Ñ)

  6,860    223

Compuware Corp. (Æ)(Ñ)

  28,000    267

Comtech Telecommunications Corp. (Æ)(Ñ)

  315    15

Comverse Technology, Inc. (Æ)(Ñ)

  18,677    317

Conexant Systems, Inc. (Æ)

  1,980    9

Constant Contact, Inc. (Æ)(Ñ)

  5,550    105

Cray, Inc. (Æ)(Ñ)

  9,026    42

CSG Systems International, Inc. (Æ)(Ñ)

  6,089    67

Cubic Corp. (Ñ)

  8,400    187

Daktronics, Inc.

  144    3

Data Domain, Inc. (Æ)(Ñ)

  9,450    220

Digi International, Inc. (Æ)(Ñ)

  2,075    16

Digital River, Inc. (Æ)(Ñ)

  4,001    154

Double-Take Software, Inc. (Æ)(Ñ)

  2,750    38

DRS Technologies, Inc.

  539    42

Extreme Networks (Æ)(Ñ)

  16,200    46

F5 Networks, Inc. (Æ)(Ñ)

  13,116    373

First Solar, Inc. (Æ)(Ñ)

  2,835    773

Flextronics International, Ltd. (Æ)

  32,010    301

Flir Systems, Inc. (Æ)(Ñ)

  7,000    284

Foundry Networks, Inc. (Æ)

  4,344    51

Harris Corp.

  4,460    225

Hittite Microwave Corp. (Æ)(Ñ)

  5,700    203

II-VI, Inc. (Æ)(Ñ)

  124    4

Imation Corp. (Ñ)

  9,854    226

Informatica Corp. (Æ)(Ñ)

  18,540    279

Ingram Micro, Inc. Class A (Æ)

  18,100    321

Integrated Device Technology, Inc. (Æ)

  56,816    565

Integrated Silicon Solution, Inc. (Æ)

  800    4

Interactive Intelligence, Inc. (Æ)(Ñ)

  414    5

Intermec, Inc. (Æ)

  7,859    166

International Rectifier Corp. (Æ)(Ñ)

  11,775    226

Interwoven, Inc. (Æ)

  15,300    184

ION Geophysical Corp. (Æ)(Ñ)

  27    1

JDA Software Group, Inc. (Æ)

  4,500    81

Kemet Corp. (Æ)(Ñ)

  13,200    43

Mantech International Corp. Class A (Æ)(Ñ)

  3,850    185

Marvell Technology Group, Ltd. (Æ)(Ñ)

  20,485    362

MEMC Electronic Materials, Inc. (Æ)

  3,550    218

Methode Electronics, Inc. (Ñ)

  1,500    16

Micrel, Inc. (Ñ)

  46,190    423

Micros Systems, Inc. (Æ)(Ñ)

  37,233    1,135

Microsemi Corp. (Æ)(Ñ)

  19,424    489
   Principal
Amount ($)
or Shares
    Market
Value
$

MicroStrategy, Inc. lass A (Æ)(Ñ)

  1,790    116

Monolithic Power Systems, Inc. (Æ)(Ñ)

  13,400    290

NAM TAI Electronics, Inc.

  28,100    368

National Semiconductor Corp.

  6,697    138

NCR Corp. (Æ)

  19,354    488

Ness Technologies, Inc. (Æ)

  20,400    206

Netlogic Microsystems, Inc. (Æ)(Ñ)

  14,960    497

Nice Systems, Ltd. - ADR (Æ)

  34,863    1,031

Omniture, Inc. (Æ)(Ñ)

  12,442    231

ON Semiconductor Corp. (Æ)(Ñ)

  8,000    73

Oplink Communications, Inc. (Æ)(Ñ)

  61    1

OSI Systems, Inc. (Æ)(Ñ)

  12,417    266

Parametric Technology Corp. (Æ)

  1,040    17

PerkinElmer, Inc. (Ñ)

  30,598    852

Perot Systems Corp. Class A (Æ)

  972    15

Power Integrations, Inc. (Æ)(Ñ)

  10,700    338

QAD, Inc. (Ñ)

  264    2

RealNetworks, Inc. (Æ)(Ñ)

  21,500    142

SAIC, Inc. (Æ)(Ñ)

  13,300    277

Salesforce.com, Inc. (Æ)(Ñ)

  4,410    301

Sanmina-SCI Corp. (Æ)

  90,700    116

Satyam Computer Services, Ltd. - ADR (Ñ)

  9,070    222

Scansource, Inc. (Æ)(Ñ)

  4,708    126

Secure Computing Corp. (Æ)(Ñ)

  42    

Silicon Image, Inc. (Æ)(Ñ)

  10,280    75

Silicon Storage Technology, Inc. (Æ)(Ñ)

  1,500    4

Skyworks Solutions, Inc. (Æ)(Ñ)

  24,900    246

Solera Holdings, Inc. (Æ)

  12,770    353

SonicWALL, Inc. (Æ)(Ñ)

  16,300    105

Standard Microsystems Corp. (Æ)

  824    22

STEC, Inc. (Æ)(Ñ)

  8,267    85

Sybase, Inc. (Æ)(Ñ)

  21,665    637

Synaptics, Inc. (Æ)(Ñ)

  1,293    49

Syniverse Holdings, Inc. (Æ)

  26,030    422

SYNNEX Corp. (Æ)(Ñ)

  8,300    208

Synopsys, Inc. (Æ)(Ñ)

  6,829    163

Tellabs, Inc. (Æ)(Ñ)

  20,000    93

Tier Technologies, Inc. Class B (Æ)

  42,990    344

Trimble Navigation, Ltd. (Æ)(Ñ)

  10,048    359

TriQuint Semiconductor, Inc. (Æ)

  70,716    429

TTM Technologies, Inc. (Æ)

  15,277    202

Tyler Technologies, Inc. (Æ)(Ñ)

  97    1

Verint Systems, Inc. (Æ)

  7,211    169

Vignette Corp. (Æ)(Ñ)

  8,424    101

Vishay Intertechnology, Inc. (Æ)

  51,160    454

Vocus, Inc. (Æ)(Ñ)

  22,110    711

Volterra Semiconductor Corp. (Æ)

  11,800    204

 

Aggressive Equity Fund 21


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Western Digital Corp. (Æ)(Ñ)

  4,350    150

White Electronic Designs Corp. (Æ)

  94,514    434

Zebra Technologies Corp. Class A (Æ)

  1,764    58

Zoran Corp. (Æ)(Ñ)

  11,324    133
       
      27,778
       

Utilities - 4.5%

      

AGL Resources, Inc.

  5,463    189

Alaska Communications Systems Group, Inc. (Ñ)

  9,695    116

Alliant Energy Corp. (Ñ)

  10,861    372

Atlantic Tele-Network, Inc. (Ñ)

  1,600    44

Atmos Energy Corp. (Ñ)

  17,855    492

Aventine Renewable Energy Holdings, Inc. (Æ)

  6,800    30

Avista Corp. (Ñ)

  19,900    427

California Water Service Group (Ñ)

  2,100    69

CenturyTel, Inc. (Ñ)

  25,550    909

Citizens Communications Co. (Ñ)

  5,216    59

Cleco Corp. (Ñ)

  26,105    609

El Paso Electric Co. (Æ)

  209    4

Empire District Electric Co. (The)

  187    4

Energen Corp.

  6,733    525

Great Plains Energy, Inc. (Ñ)

  11,750    297

Idacorp, Inc. (Ñ)

  20,270    586

Iowa Telecommunications Services, Inc. (Ñ)

  8,828    156

Laclede Group, Inc. (The) (Ñ)

  3,500    141

MDU Resources Group, Inc.

  10,786    376

MGE Energy, Inc. (Ñ)

  300    10

New Jersey Resources Corp. (Ñ)

  6,750    220

NII Holdings, Inc. (Æ)

  4,700    223

NTELOS Holdings Corp. (Ñ)

  4,706    119

OGE Energy Corp.

  6,059    192

Oneok, Inc.

  5,300    259

Pepco Holdings, Inc.

  8,100    208

Pike Electric Corp. (Æ)(Ñ)

  761    13

Portland General Electric Co.

  4,900    110

Premiere Global Services, Inc. (Æ)

  11,100    162

RCN Corp. (Æ)(Ñ)

  500    5

SCANA Corp. (Ñ)

  4,481    166

Southern Union Co.

  5,561    150

Southwest Gas Corp.

  25,644    762

Southwest Water Co. (Ñ)

  2,500    25

Suburban Propane Partners, LP (Ñ)

  3,100    119

SureWest Communications (Ñ)

  1,200    10
   Principal
Amount ($)
or Shares
    Market
Value
$
 

Telephone & Data Systems, Inc. (Ñ)

  2,464    117 

UGI Corp.

  26,700    767 

USA Mobility, Inc. (Æ)(Ñ)

  3,600    27 
        
      9,069 
        
Total Common Stocks      

(cost $191,323)

      193,923 
        
Short-Term Investments - 4.0%    

Russell Investment Company
Money Market Fund

  7,078,000    7,078 

United States Treasury Bills (ž)(§)

      

1.915% due 09/18/08

  1,000    995 
        
Total Short-Term Investments      

(cost $8,074)

      8,073 
        
Other Securities - 43.0%      

State Street Securities Lending
Quality Trust (×)

  87,191,950    87,192 
        
Total Other Securities      

(cost $87,192)

      87,192 
        
Total Investments - 142.5%      

(identified cost $286,589)

      289,188 
Other Assets and Liabilities,
Net - (42.5%)
      (86,277)
        
Net Assets - 100.0%      202,911 
        

A portion of the portfolio has been fair valued as of period end.


 

See accompanying notes which are an integral part of the financial statements.

 

22 Aggressive Equity Fund


Table of Contents

Russell Investment Funds

Aggressive Equity Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts

(Number of Contracts)

 

Notional
Amount

 Unrealized
Appreciation
(Depreciation)
$
   
   
Long Positions   
Russell 2000 Mini Index (CME)
expiration date 09/08 (128)
 USD  8,854 (318)
    
Total Unrealized Appreciation
(Depreciation) on Open Futures
Contracts
   (318)
    

 

 

Presentation of Portfolio Holdings — June 30, 2008 (Unaudited)

 

Portfolio Summary    % of Net
Assets
 
    

Auto and Transportation

    3.7 

Consumer Discretionary

    14.5 

Consumer Staples

    2.1 

Financial Services

    13.8 

Health Care

    9.6 

Integrated Oils

    0.1 

Materials and Processing

    11.4 

Miscellaneous

    0.9 

Other Energy

    12.9 

Producer Durables

    8.3 

Technology

    13.7 

Utilities

    4.5 

Short-Term Investments

    4.0 

Other Securities

    43.0 
      

Total Investments

    142.5 

Other Assets and Liabilities, Net

    (42.5)
      
    100.0 
      

Futures Contracts

    (0.2)

 

See accompanying notes which are an integral part of the financial statements.

 

Aggressive Equity Fund 23


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Shareholder Expense Example — June 30, 2008 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from January 1, 2008 to June 30, 2008.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

   Actual
Performance
  Hypothetical
Performance
(5% return
before expenses)
    

Beginning Account Value

    

January 1, 2008

  $1,000.00  $1,000.00

Ending Account Value

    

June 30, 2008

  $886.40  $1,019.14

Expenses Paid During Period*

  $5.39  $5.77

 

*Expenses are equal to the Fund’s annualized expense ratio of 1.15% (representing the one-half year period annualized), multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

24 Non-U.S. Fund


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Common Stocks - 88.8%

      

Australia - 2.1%

      

Adelaide Brighton, Ltd.

  12,275    44

AGL Energy, Ltd.

  1,793    25

Allco Finance Group, Ltd. (Æ)

  15,541    6

AMP, Ltd.

  17,790    114

Ansell, Ltd. - GDR

  20,647    183

Austereo Group, Ltd.

  4,341    6

Australand Property Group (ö)

  13,244    15

Australia & New Zealand Banking Group, Ltd.

  15,910    285

AXA Asia Pacific Holdings, Ltd.

  19,165    86

BHP Billiton, Ltd.

  28,572    1,197

BlueScope Steel, Ltd.

  19,509    212

Boart Longyear Group

  779    2

Caltex Australia, Ltd.

  1,463    18

CFS Retail Property Trust (ö)

  5,738    10

Challenger Financial Services Group, Ltd.

  52,252    95

Coca-Cola Amatil, Ltd.

  7,934    53

Commonwealth Bank of Australia

  3,447    133

Consolidated Media Holdings, Ltd.

  2,975    9

Crown, Ltd.

  1,670    15

CSL, Ltd.

  40,935    1,401

CSR, Ltd.

  20,744    49

DB RREEF Trust (ö)

  28,562    38

Fairfax Media, Ltd.

  21,119    59

Fortescue Metals Group, Ltd. (Æ)

  6,326    72

Goodman Fielder, Ltd.

  73,205    99

Goodman Group (ö)

  7,452    22

GPT Group (ö)

  13,500    29

Harvey Norman Holdings, Ltd.

  19,429    58

ING Industrial Fund (ö)

  1,357    2

Lend Lease Corp., Ltd.

  4,402    40

Lion Nathan, Ltd.

  1,457    12

Macquarie Infrastructure Group

  11,085    25

Macquarie Office Trust (ö)

  10,185    8

Mirvac Group (ö)

  6,629    19

Mount Gibson Iron, Ltd. (Æ)

  2,364    7

National Australia Bank, Ltd.

  32,416    823

Newcrest Mining, Ltd.

  2,485    70

Orica, Ltd.

  1,615    45

Origin Energy, Ltd.

  4,962    77

Oxiana, Ltd. (Æ)

  5,849    15

Pacific Brands, Ltd.

  9,174    16

PaperlinX, Ltd.

  52,265    86

Qantas Airways, Ltd.

  61,933    180

QBE Insurance Group, Ltd.

  21,037    452
   Principal
Amount ($)
or Shares
    Market
Value
$

Rio Tinto, Ltd. (Ñ)

  1,892    246

Santos, Ltd.

  15,043    309

Sons of Gwalia, Ltd. (Æ)(Ñ)(ß)

  8,400    

SP Ausnet

  17,146    17

Stockland (ö)

  10,830    56

Suncorp-Metway, Ltd.

  12,909    161

TABCORP Holdings, Ltd.

  11,985    113

Telstra Corp., Ltd.

  16,703    68

Wesfarmers, Ltd.

  596    21

Westfield Group (ö)

  13,233    207

Westpac Banking Corp.

  13,091    251

Woodside Petroleum, Ltd.

  2,648    171

Woolworths, Ltd.

  17,785    417
       
      8,249
       

Austria - 0.5%

      

Erste Bank der Oesterreichischen Sparkassen AG

  32,183    2,003
       

Belgium - 0.5%

      

Colruyt SA

  436    115

D’ieteren SA

  138    38

Fortis

  10,340    165

Hansen Transmissions International NV (Æ)

  193,827    1,038

InBev NV

  2,117    147

KBC Groep NV (Æ)

  1,267    141

Nationale A Portefeuille (Æ)

  427    32

Solvay SA (Ñ)

  333    44

Umicore (Æ)

  3,616    179
       
      1,899
       

Bermuda - 0.9%

      

Benfield Group, Ltd.

  201,769    983

Catlin Group, Ltd.

  6,532    46

Esprit Holdings, Ltd.

  8,752    91

Giordano International, Ltd.

  47,474    19

Great Eagle Holdings, Ltd.

  4,000    12

Guoco Group, Ltd.

  2,000    20

Hiscox, Ltd.

  39,790    165

Jardine Matheson Holdings, Ltd.

  1,190    37

Jardine Strategic Holdings, Ltd.

  500    8

Li & Fung, Ltd.

  214,000    645

Midland Holdings, Ltd.

  17,333    11

Orient Overseas International, Ltd.

  5,300    26

Pacific Basin Shipping, Ltd.

  37,000    53

Seadrill, Ltd.

  30,100    920

Shangri-La Asia, Ltd.

  2,000    5

 

Non-U.S. Fund 25


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Vostok Gas, Ltd.

  2,278    214

VTech Holdings, Ltd.

  8,133    49
       
      3,304
       

Brazil - 0.4%

      

Cia Vale do Rio Doce - ADR (Æ)

  7,900    283

Petroleo Brasileiro SA - ADR

  4,800    340

Unibanco - Uniao de Bancos Brasileiros SA - GDR (Æ)

  5,670    720
       
      1,343
       

Canada - 1.6%

      

Cameco Corp.

  4,300    184

Canadian National Railway Co.

  23,120    1,112

Potash Corp. of Saskatchewan

  12,500    2,857

Research In Motion, Ltd. (Æ)

  16,900    1,976
       
      6,129
       

Cayman Islands - 0.4%

      

Hutchison Telecommunications International, Ltd.

  9,457    14

LDK Solar Co., Ltd. - ADR (Æ)(Ñ)

  43,800    1,659
       
      1,673
       

Czech Republic - 0.2%

      

Komercni Banka AS

  3,174    739
       

Denmark - 1.5%

      

A P Moller - Maersk A/S (Æ)

  2    24

Carlsberg A/S Class B (Ñ)

  15,260    1,474

D/S Norden A/S (Æ)

  1,825    197

East Asiatic Co., Ltd. A/S (Æ)

  2,925    203

Novo Nordisk A/S Series B Class B

  8,450    553

Vestas Wind Systems A/S (Æ)

  26,100    3,416
       
      5,867
       

Egypt - 0.3%

      

Orascom Telecom Holding
SAE - GDR

  16,600    1,062
       

Finland - 1.2%

      

Fortum OYJ

  19,667    999

Konecranes OYJ

  1,282    53

Nokia OYJ

  127,482    3,109

OKO Bank PLC Class A

  1,182    21

Oriola-KD OYJ

  3,400    14

Outotec OYJ

  4,374    279
       
      4,475
       
   Principal
Amount ($)
or Shares
    Market
Value
$

France - 11.8%

      

Air Liquide (Ñ)

  14,617    1,930

Alcatel-Lucent - ADR (Æ)(Ñ)

  125,840    760

Alstom (Ñ)

  6,428    1,484

Arkema

  4,547    257

AXA SA

  86,372    2,565

BNP Paribas

  24,713    2,239

Bouygues

  274    18

Carrefour SA

  24,860    1,408

Casino Guichard Perrachon SA (Ñ)

  1,650    187

Christian Dior SA

  1,328    137

Cie de Saint-Gobain

  2,004    125

CNP Assurances

  1,149    130

Credit Agricole SA (Ñ)

  4,635    95

Electricite de France

  1,253    119

Eramet (Æ)

  333    331

France Telecom SA

  23,203    684

Gaz de France SA (Ñ)

  32,578    2,094

L’Oreal SA

  10,667    1,161

Lafarge SA

  452    69

Legrand SA (Ñ)

  49,659    1,252

LVMH Moet Hennessy Louis Vuitton SA

  41,932    4,396

Nexans SA (Æ)

  532    66

NicOx SA (Ñ)

  204    3

Pernod-Ricard SA (Ñ)

  15,634    1,606

Rallye SA

  1,254    74

Rhodia SA (Æ)

  3,202    59

Sanofi-Aventis SA (Ñ)

  26,933    1,799

Schneider Electric SA (Ñ)

  28,220    3,048

Societe BIC SA (Ñ)

  318    17

Societe Generale (Ñ)

  16,168    1,407

Sodexho Alliance SA (Æ)

  8,598    565

Suez SA

  29,416    2,003

Suez SA (Æ)

  1,228    

Teleperformance - GDR (Æ)

  1,666    61

Thales SA

  8,498    484

Total SA

  86,903    7,416

UBISOFT Entertainment (Æ)

  3,502    307

Unibail-Rodamco (ö)

  123    28

Vallourec

  3,429    1,203

Vivendi

  110,434    4,190
       
      45,777
       

Germany - 9.5%

      

Adidas AG (Æ)

  6,699    423

Allianz SE

  17,428    3,070

Arcandor AG (Æ)(Ñ)

  127,884    1,486

 

26 Non-U.S. Fund


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Arques Industries AG (Ñ)

  4,161    38

BASF SE

  17,996    1,242

Bayer AG

  37,028    3,117

Bayerische Motoren Werke AG

  23,240    1,118

Commerzbank AG (Æ)(Ñ)

  46,628    1,383

Daimler AG

  6,980    432

Deutsche Bank AG

  2,813    243

Deutsche Boerse AG

  11,861    1,339

Deutsche Telekom AG

  60,041    983

E.ON AG

  16,656    3,361

Epcos AG

  5,832    96

Freenet AG (Ñ)

  4,991    92

GEA Group AG (Æ)

  1,212    43

Gildemeister AG (Æ)(Ñ)

  5,335    151

Hannover Rueckversicherung AG (Æ)

  4,708    232

Infineon Technologies AG (Æ)

  47,302    412

K+S AG (Æ)

  4,300    2,480

KUKA AG (Æ)(Ñ)

  1,974    64

Lanxess AG

  8,150    335

Linde AG (Ñ)

  22,970    3,230

MAN AG (Æ)

  908    101

Merck KGAA

  24,878    3,537

Metro AG

  24,289    1,550

Muenchener Rueckversicherungs AG

  2,472    433

Roth & Rau AG (Æ)

  413    90

RWE AG

  2,458    310

Salzgitter AG

  1,269    233

SAP AG

  20,900    1,094

Siemens AG

  11,136    1,236

Suedzucker AG (Ñ)

  5,973    108

Symrise AG

  49,417    1,074

ThyssenKrupp AG

  1,244    78

Tognum AG

  5,730    154

Volkswagen AG (Ñ)

  1,259    363

Vossloh AG

  607    79

Wacker Chemie AG (Æ)

  4,768    997

Wincor Nixdorf AG

  338    23

Wirecard AG (Æ)

  1,570    20
       
      36,850
       

Hong Kong - 0.5%

      

Bank of East Asia, Ltd.

  3,400    18

BOC Hong Kong Holdings, Ltd.

  50,000    132

Cheung Kong Holdings, Ltd.

  50,640    683

CLP Holdings, Ltd.

  11,000    94

Fubon Bank Hong Kong, Ltd.

  8,000    7

Hang Lung Group, Ltd.

  12,763    57

Hang Lung Properties, Ltd. - ADR

  8,780    28
   Principal
Amount ($)
or Shares
    Market
Value
$

Hang Seng Bank, Ltd.

  5,600    118

Henderson Land Development Co., Ltd.

  7,000    44

Hong Kong & China Gas Co.

  10,182    24

Hong Kong Exchanges and Clearing, Ltd.

  4,654    68

Hong Kong & Shanghai Hotels (The) (Æ)

  1,500    2

Hong Kong Electric Holdings

  13,500    81

Hopewell Holdings

  12,000    43

Hutchison Whampoa, Ltd.

  17,000    171

Hysan Development Co., Ltd.

  17,000    47

Link REIT (The) (ö)

  12,500    28

Minmetals Resources, Ltd.

  40,000    14

MTR Corp.

  8,500    27

New World Development, Ltd.

  12,000    24

PCCW, Ltd.

  14,000    9

Sun Hung Kai Properties, Ltd.

  9,667    131

Swire Pacific, Ltd.

  9,000    92

Television Broadcasts, Ltd.

  4,000    23

Wharf Holdings, Ltd.

  16,000    67

Wheelock & Co., Ltd.

  19,205    52

Wing Hang Bank, Ltd.

  2,500    33
       
      2,117
       

India - 0.3%

      

Infosys Technologies, Ltd. - ADR (Ñ)

  17,600    765

Satyam Computer Services, Ltd. - ADR (Ñ)

  20,550    504
       
      1,269
       

Indonesia - 0.0%

      

Telekomunikasi Indonesia Tbk PT - ADR

  1,750    56
       

Ireland - 0.8%

      

Elan Corp. PLC - ADR (Æ)(Ñ)

  60,100    2,137

Ryanair Holdings PLC - ADR (Æ)(Ñ)

  38,932    1,116
       
      3,253
       

Israel - 0.2%

      

Teva Pharmaceutical Industries, Ltd. - ADR (Ñ)

  20,000    916
       

Italy - 2.6%

      

A2A SpA (Æ)(Ñ)

  11,195    41

Alleanza Assicurazioni SpA

  93,388    1,014

Ansaldo STS SpA

  68,608    1,032

 

Non-U.S. Fund 27


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Arnoldo Mondadori Editore SpA (Æ)(Ñ)

  105,444    620

Assicurazioni Generali SpA

  2,865    110

Banca Italease SpA (Æ)

  16,985    162

Danieli SpA

  2,115    50

Enel SpA

  50,589    481

ENI SpA

  73,649    2,748

Fiat SpA (Æ)(Ñ)

  5,343    88

Fondiaria-Sai SpA

  1,743    58

Intesa Sanpaolo SpA

  209,908    1,199

Mediaset SpA (Ñ)

  5,955    39

Milano Assicurazioni SpA (Æ)

  1,241    6

Parmalat Finanziaria SpA (Ñ)(ß)

  12,500    

Prysmian SpA

  6,605    167

Saipem SpA (Æ)

  4,801    226

Telecom Italia SpA

  870,781    1,412

Terna Rete Elettrica Nazionale SpA

  37,856    160

UniCredit SpA

  72,651    445

Unione di Banche Italiane SCPA

  1,315    31
       
      10,089
       

Japan - 16.6%

      

77 Bank, Ltd. (The)

  16,000    101

Aeon Credit Service Co., Ltd.

  44,700    560

Aisin Seiki Co., Ltd.

  2,800    92

Alfresa Holdings Corp.

  1,500    107

Alpine Electronics, Inc.

  5,000    53

Alps Electric Co., Ltd.

  8,800    91

Aoyama Trading Co., Ltd.

  1,900    35

Asahi Kasei Corp.

  27,000    141

Astellas Pharma, Inc.

  6,000    254

Bank of Yokohama, Ltd. (The)

  134,366    929

Bridgestone Corp. (Ñ)

  52,400    801

Calsonic Kansei Corp.

  8,000    32

Canon Marketing Japan, Inc. (Ñ)

  4,200    74

Canon, Inc. (Ñ)

  84,000    4,319

Central Glass Co., Ltd.

  22,000    90

Chuo Mitsui Trust Holdings, Inc.

  13,000    77

Circle K Sunkus Co., Ltd.

  3,600    63

COMSYS Holdings Corp.

  21,000    185

Dai Nippon Printing Co., Ltd.

  13,000    192

Daiei, Inc. (The) (Æ)(Ñ)

  7,400    46

Daiichi Sankyo Co., Ltd.

  2,800    77

Daishi Bank, Ltd. (The)

  7,000    31

Daiwa Securities Group, Inc.

  68,950    634

Denki Kagaku Kogyo K K

  12,000    45

Denso Corp.

  3,000    103

Eisai Co., Ltd.

  1,900    67
   Principal
Amount ($)
or Shares
    Market
Value
$

Elpida Memory, Inc. (Æ)

  17,500    560

Exedy Corp.

  2,600    68

Ezaki Glico Co., Ltd. (Ñ)

  2,000    23

FamilyMart Co., Ltd.

  8,600    352

Fanuc, Ltd.

  13,100    1,279

FCC Co., Ltd.

  2,300    35

Fuji Fire & Marine Insurance Co., Ltd. (The)

  32,000    85

Fuji Television Network, Inc.

  554    835

FUJIFILM Holdings Corp.

  4,800    165

Fujitsu, Ltd.

  13,000    97

Funai Electric Co., Ltd.

  2,900    74

Glory, Ltd.

  4,600    108

H2O Retailing Corp. (Ñ)

  13,000    90

Hachijuni Bank, Ltd. (The)

  25,000    162

Higo Bank, Ltd. (The)

  10,000    60

Hino Motors, Ltd. (Ñ)

  28,000    174

Hirose Electric Co., Ltd. (Ñ)

  8,000    803

Hitachi Cable, Ltd. (Æ)(Ñ)

  8,000    30

Hitachi Capital Corp.

  2,300    37

Hitachi High-Technologies Corp. (Æ)

  2,600    60

Hitachi Kokusai Electric, Inc. (Ñ)

  16,000    143

Hitachi Transport System, Ltd.

  3,700    47

Hitachi, Ltd.

  17,000    123

Hokkaido Electric Power Co., Inc.

  3,000    61

Hokkoku Bank, Ltd. (The)

  12,000    47

Honda Motor Co., Ltd. (Ñ)

  8,000    272

Hoya Corp.

  66,200    1,531

Inpex Holdings, Inc.

  181    2,284

ITOCHU Corp.

  16,000    170

Itoham Foods, Inc.

  11,000    54

Iyo Bank, Ltd. (The) (Ñ)

  2,000    23

Japan Aviation Electronics Industry, Ltd. (Ñ)

  6,000    53

Japan Tobacco, Inc.

  13    55

JFE Holdings, Inc.

  3,400    171

JFE Shoji Holdings, Inc.

  31,000    233

JGC Corp.

  11,000    217

Joyo Bank, Ltd. (The) (Ñ)

  266,940    1,297

JTEKT Corp.

  3,000    48

Juki Corp. Class A (Ñ)

  22,000    63

Kagoshima Bank, Ltd. (The)

  15,000    114

Kaneka Corp. (Æ)

  4,000    27

Kao Corp.

  103,000    2,701

Kawasaki Kisen Kaisha, Ltd.

  5,000    47

Kayaba Industry Co., Ltd. (Ñ)

  8,000    35

KDDI Corp.

  18    111

Keihin Corp.

  7,600    115

 

28 Non-U.S. Fund


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Keiyo Bank, Ltd. (The)

  9,000    54

Keyence Corp. (Æ)

  2,066    492

Kintetsu World Express, Inc.

  4,200    107

Kobe Steel, Ltd.

  68,000    195

Komatsu, Ltd.

  28,300    789

Komori Corp.

  3,000    55

Kose Corp.

  60,140    1,342

Kyocera Corp. (Ñ)

  1,100    104

Kyoei Steel, Ltd. (Ñ)

  2,200    42

Kyowa Exeo Corp. (Æ)

  4,000    37

Lintec Corp. (Ñ)

  2,900    50

Makino Milling Machine Co., Ltd. (Ñ)

  5,000    32

Marubeni Corp.

  12,000    100

Matsushita Electric Industrial Co., Ltd.

  18,000    388

Matsushita Electric Works, Ltd.

  7,000    71

Mazda Motor Corp.

  16,000    83

Meiji Dairies Corp. (Ñ)

  15,000    77

MID Reit, Inc. (ö)(Ñ)

  180    587

Millea Holdings, Inc.

  5,800    226

Mitsubishi Corp.

  8,100    267

Mitsubishi Electric Corp.

  13,000    140

Mitsubishi Estate Co., Ltd. (Ñ)

  8,000    183

Mitsubishi Materials Corp.

  19,000    81

Mitsubishi UFJ Financial Group, Inc.

  100,630    892

Mitsui & Co., Ltd.

  4,000    88

Mitsui Fudosan Co., Ltd.

  7,000    150

Mitsui Mining & Smelting Co., Ltd.

  30,000    88

Mitsui OSK Lines, Ltd.

  9,000    128

Mitsui Sumitomo Insurance Group Holdings, Inc. (Æ)

  51,600    1,779

Mitsui-Soko Co., Ltd. (Ñ)

  114,560    551

Mizuho Financial Group, Inc.

  264    1,233

Musashino Bank, Ltd. (The)

  800    32

Nachi-Fujikoshi Corp.

  11,000    43

NEC Corp.

  20,000    105

NEC Electronics Corp. (Æ)(Ñ)

  5,100    127

New City Residence Investment Corp. (ö)

  94    191

Nichirei Corp.

  35,000    180

Nintendo Co., Ltd.

  5,000    2,821

Nippon Commercial Investment Corp. (ö)

  131    370

Nippon Express Co., Ltd.

  42,000    201

Nippon Kayaku Co., Ltd. (Ñ)

  18,000    112

Nippon Konpo Unyu Soko Co., Ltd.

  7,000    89

Nippon Mining Holdings, Inc.

  16,500    103

Nippon Oil Corp.

  43,000    289
   Principal
Amount ($)
or Shares
    Market
Value
$

Nippon Residential Investment Corp. (ö)

  117    352

Nippon Seiki Co., Ltd. (Ñ)

  2,000    27

Nippon Steel Corp.

  26,000    141

Nippon Telegraph & Telephone Corp.

  27    132

Nippon Yusen KK

  10,000    96

Nipponkoa Insurance Co., Ltd.

  239,490    2,077

Nissan Chemical Industries, Ltd.

  6,000    74

Nissan Shatai Co., Ltd.

  15,000    117

Nisshin Seifun Group, Inc. (Ñ)

  5,000    63

Nissin Kogyo Co., Ltd.

  6,300    96

Nomura Holdings, Inc.

  92,620    1,372

Nomura Research Institute, Ltd. (Æ)

  45,306    1,062

NTN Corp.

  12,000    80

NTT DoCoMo, Inc.

  35    51

Okinawa Electric Power Co., Inc. (The)

  600    30

Omron Corp.

  37,000    794

Onward Holdings Co., Ltd. (Ñ)

  5,000    53

ORIX Corp.

  890    127

Osaka Gas Co., Ltd.

  11,000    40

QP Corp.

  10,000    88

Resona Holdings, Inc. (Ñ)

  41    63

Ricoh Co., Ltd.

  97,000    1,750

Rohm Co., Ltd.

  1,400    81

San-In Godo Bank, Ltd. (The)

  3,000    26

Sankyo Co., Ltd.

  2,700    176

Seino Holdings Corp.

  6,000    37

Seven & I Holdings Co., Ltd.

  38,760    1,106

Shiga Bank, Ltd. (The) (Ñ)

  6,000    40

Shima Seiki Manufacturing, Ltd. - GDR (Ñ)

  1,200    33

Shimano, Inc. (Ñ)

  600    30

Shin-Etsu Chemical Co., Ltd.

  28,200    1,748

Shinwa Kaiun Kaisha, Ltd.

  9,000    49

Showa Shell Sekiyu KK

  14,300    157

SMC Corp.

  13,748    1,506

Sompo Japan Insurance, Inc.

  3,000    28

Sony Corp.

  13,700    599

Stanley Electric Co., Ltd.

  1,000    24

Star Micronics Co., Ltd.

  3,400    54

Sugi Pharmacy Co., Ltd. - GDR

  43,899    1,145

Sumco Corp. (Ñ)

  480    11

Sumitomo Bakelite Co., Ltd. (Ñ)

  198,250    1,081

Sumitomo Corp.

  9,400    124

Sumitomo Heavy Industries, Ltd.

  13,000    88

Sumitomo Metal Industries, Ltd.

  16,000    70

Sumitomo Metal Mining Co., Ltd.

  3,000    46

 

Non-U.S. Fund 29


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Sumitomo Mitsui Financial Group, Inc. (Ñ)

  22    166

Sumitomo Realty & Development Co., Ltd.

  2,000    40

Sumitomo Trust & Banking Co., Ltd. (The)

  198,033    1,384

Suzuken Co., Ltd.

  3,100    114

Suzuki Motor Corp. (Ñ)

  35,760    845

Takeda Pharmaceutical Co., Ltd.

  3,400    173

Takefuji Corp. (Ñ)

  3,260    45

TDK Corp.

  2,500    150

Teijin, Ltd. (Ñ)

  16,000    55

THK Co., Ltd.

  35,120    681

Toagosei Co., Ltd. (Æ)

  12,000    44

Toho Pharmaceutical Co., Ltd. (Ñ)

  7,590    146

Tokai Rika Co., Ltd. (Æ)

  1,800    37

Tokai Rubber Industries, Inc.

  8,400    108

Tokyo Electric Power Co., Inc. (The)

  6,400    165

Tokyo Gas Co., Ltd.

  117,000    472

Tokyo Steel Manufacturing Co., Ltd.

  7,800    90

Tokyu Land Corp.

  8,000    45

Toppan Printing Co., Ltd.

  16,000    176

Toshiba Machine Co., Ltd.

  16,000    109

Toshiba TEC Corp.

  27,000    169

Toyo Engineering Corp. Class A (Ñ)

  23,000    148

Toyo Ink Manufacturing Co., Ltd.

  5,000    17

Toyo Suisan Kaisha, Ltd.

  14,000    316

Toyota Auto Body Co., Ltd.

  5,800    108

Toyota Motor Corp.

  14,100    665

United Urban Investment Corp. (ö)(Ñ)

  80    360

Urban Corp. (Ñ)

  6,700    20

USS Co., Ltd.

  1,130    75

West Japan Railway Co.

  17    83

Yamaha Corp.

  8,400    162

Yamaha Motor Co., Ltd. (Ñ)

  4,800    90

Yamato Holdings Co., Ltd.

  29,000    405

Yamato Kogyo Co., Ltd. - GDR

  2,400    114
       
      64,133
       

Luxembourg - 0.3%

      

ArcelorMittal

  8,765    867

Millicom International Cellular SA (Æ)

  600    62

Oriflame Cosmetics SA (Æ)

  2,950    190
       
      1,119
       

Malaysia - 0.1%

      

Sime Darby Berhad

  86,417    245
       
   Principal
Amount ($)
or Shares
    Market
Value
$

Mauritius - 0.0%

      

Golden Agri-Resources, Ltd.

  77,176    51
       

Mexico - 0.4%

      

America Movil SAB de CV Series L

 ��14,300    754

Grupo Modelo SAB de CV

  124,300    625
       
      1,379
       

Netherlands - 3.9%

      

Akzo Nobel NV

  15,454    1,062

ASML Holding NV (Ñ)

  30,548    753

Gemalto NV (Æ)

  1,728    63

Heineken NV

  96,641    4,933

ING Groep NV

  30,673    978

Koninklijke Ahold NV

  37,548    505

Koninklijke Philips Electronics NV

  21,432    729

OCE NV

  4,987    291

OCE NV (Ñ)

  9,438    116

Rodamco Europe NV (ö)

  817    107

Royal KPN NV

  11,491    197

SNS Reaal

  5,355    104

TNT NV

  62,860    2,150

Unilever NV

  62,045    1,761

Wereldhave NV (Æ)(ö)

  170    18

Wolters Kluwer NV (Ñ)

  62,450    1,459
       
      15,226
       

Netherlands Antilles - 0.0%

      

Hunter Douglas NV

  1,358    82
       

Norway - 0.6%

      

Renewable Energy Corp. AS (Æ)

  47,050    1,220

StatoilHydro ASA

  29,402    1,096
       
      2,316
       

Papua New Guinea - 0.0%

      

Oil Search, Ltd.

  5,123    33
       

Portugal - 0.2%

      

Energias de Portugal SA

  148,542    775
       

Russia - 0.2%

      

Gazprom OAO - ADR

  8,400    487

Vimpel-Communications - ADR

  12,700    377
       
      864
       

 

30 Non-U.S. Fund


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Singapore - 0.8%

      

Allgreen Properties, Ltd.

  36,950    27

Ascendas Real Estate Investment Trust (ö)

  4,000    7

CapitaCommercial Trust (ö)

  4,000    6

CapitaLand, Ltd.

  4,343    18

CapitaMall Trust (ö)

  5,643    12

China Aviation Oil Singapore Corp., Ltd. (Æ)

  6,000    7

Creative Technology, Ltd.

  3,600    16

DBS Group Holdings, Ltd.

  48,000    665

Haw Par Corp., Ltd.

  5,000    24

Indofood Agri Resources, Ltd. (Æ)

  9,552    18

Jardine Cycle & Carriage, Ltd.

  3,800    48

Keppel Corp., Ltd.

  14,555    119

NatSteel, Ltd.

  1,656    2

Neptune Orient Lines, Ltd.

  25,038    59

Oversea-Chinese Banking Corp.

  14,000    84

Pacific Century Regional Developments, Ltd.

  61,000    16

SembCorp Industries, Ltd.

  10,880    33

Singapore Airlines, Ltd.

  2,970    32

Singapore Petroleum Co., Ltd.

  14,312    69

Singapore Telecommunications, Ltd.

  650,000    1,730

United Overseas Bank, Ltd.

  5,572    76

United Overseas Land, Ltd. (Æ)

  6,000    15
       
      3,083
       

South Africa - 0.3%

      

Gold Fields, Ltd. - ADR (Ñ)

  57,760    731

MTN Group, Ltd.

  35,230    560
       
      1,291
       

South Korea - 0.8%

      

Kookmin Bank - ADR

  11,560    676

Samsung Electronics Co., Ltd.

  4,007    2,394
       
      3,070
       

Spain - 1.6%

      

Banco Bilbao Vizcaya Argentaria SA

  27,983    536

Banco Santander SA

  50,240    923

Bankinter SA

  1,275    15

Enagas

  8,237    233

Gamesa Corp. Tecnologica SA

  16,890    830

Gas Natural SDG SA

  4,754    277

Grifols SA

  3,659    117

Iberdrola Renovables (Æ)

  154,501    1,197

Iberdrola SA

  22,195    297
   Principal
Amount ($)
or Shares
    Market
Value
$

Red Electrica de Espana

  888    58

Repsol YPF SA

  5,271    208

Tecnicas Reunidas SA

  1,571    132

Telefonica SA

  50,624    1,345

Vertice Trescientos Sesenta Grados (Æ)

  4,020    8
       
      6,176
       

Sweden - 1.0%

      

Alfa Laval AB

  4,400    69

D Carnegie & Co. AB (Ñ)

  3,700    49

Hennes & Mauritz AB Series B Class B (Æ)(Ñ)

  3,075    167

Investor AB Class B (Æ)

  800    17

Kinnevik Investment AB (Æ)

  1,600    30

NCC AB

  1,900    29

Nordea Bank AB

  52,465    724

Peab AB

  2,000    14

Scania AB Class B (Æ)(Ñ)

  27,600    378

Skanska AB Series B Class B (Æ)

  7,800    112

SKF AB Class B (Ñ)

  4,600    72

Tele2 AB Series B Class B (Ñ)

  13,900    272

Telefonaktiebolaget LM Ericsson Series B Class B

  156,866    1,636

TeliaSonera AB (Ñ)

  8,500    63

Volvo AB Class B (Æ)

  12,800    157
       
      3,789
       

Switzerland - 7.7%

      

ABB, Ltd.

  13,965    397

Actelion, Ltd. (Ñ)

  12,826    687

Baloise Holding AG

  837    88

BKW FMB Energie AG (Æ)

  255    35

Bucher Industries AG (Æ)

  104    28

Compagnie Financiere Richemont SA Class A

  771    43

Credit Suisse Group

  7,176    330

Givaudan SA

  2,220    1,984

Helvetia Holding AG

  532    207

Julius Baer Holding AG

  49,365    3,334

Nestle SA

  226,930    10,254

Novartis AG

  30,986    1,706

Roche Holding AG

  32,206    5,801

Swatch Group AG Class B (Æ)(Ñ)

  1,037    259

Swiss Life Holding

  1,356    362

Swiss Reinsurance

  19,019    1,267

Syngenta AG

  2,433    791

UBS AG

  99,093    2,080

Zurich Financial Services AG

  678    174
       
      29,827
       

 

Non-U.S. Fund 31


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Taiwan - 0.5%

      

High Tech Computer Corp.

  42,000    941

Taiwan Semiconductor Manufacturing Co., Ltd. - ADR (Ñ)

  81,340    887
       
      1,828
       

Thailand - 0.1%

      

Bangkok Bank PCL

  140,900    506
       

United Kingdom - 17.5%

      

3i Group PLC

  94,999    1,561

Anglo American PLC

  13,343    937

Antofagasta PLC

  1,661    22

ARM Holdings PLC

  928,840    1,577

AstraZeneca PLC

  9,984    426

Atkins WS PLC

  10,939    233

Autonomy Corp. PLC (Æ)

  77,800    1,405

Aviva PLC

  7,461    74

BAE Systems PLC

  160,215    1,412

BG Group PLC

  24,467    637

BHP Billiton PLC

  43,800    1,675

BP PLC - ADR

  23,720    1,650

BP PLC

  126,893    1,474

Brit Insurance Holdings PLC

  48,810    170

British Airways PLC

  239,340    1,026

British American Tobacco PLC

  5,055    175

British Energy Group PLC

  7,486    106

British Land Co. PLC (ö)

  3,265    46

BT Group PLC

  80,134    319

Burberry Group PLC

  73,000    659

Cadbury PLC

  170,601    2,149

Carphone Warehouse Group PLC

  268,985    1,060

Centrica PLC

  69,030    427

Charter PLC

  1,899    33

Close Brothers Group PLC

  26,169    288

Compass Group PLC

  62,129    470

CSR PLC (Æ)

  20,628    110

Davis Service Group PLC

  10,334    92

Dawnay Day Treveria PLC

  586,180    489

De La Rue PLC

  6,261    111

Diageo PLC

  255,650    4,705

Drax Group PLC (Æ)

  19,636    289

easyJet PLC (Æ)

  248,654    1,336

Eurasian Natural Resources Corp. (Æ)

  33,295    884

Experian Group, Ltd.

  218,071    1,623

Friends Provident PLC (Æ)

  8,085    17

GlaxoSmithKline PLC

  219,218    4,860

Hays PLC (Æ)

  65,267    118
   Principal
Amount ($)
or Shares
    Market
Value
$

HBOS PLC

  62,326    343

Home Retail Group PLC

  55,502    241

HSBC Holdings PLC

  89,584    1,384

IG Group Holdings PLC

  36,784    242

Kesa Electricals PLC

  48,962    154

Kingfisher PLC

  222,493    498

Ladbrokes PLC

  156,345    800

Land Securities Group PLC (ö)

  4,629    114

Legal & General Group PLC

  34,646    69

Lloyds TSB Group PLC

  32,425    201

Man Group PLC

  182,820    2,272

Michael Page International PLC

  193,709    902

Murata Manufacturing Co., Ltd.

  4,602    89

National Grid PLC

  36,961    486

Old Mutual PLC

  92,244    171

Petrofac, Ltd.

  17,172    253

Reckitt Benckiser Group PLC

  70,966    3,597

Reed Elsevier PLC

  3,794    44

Regus Group PLC

  101,211    163

Rio Tinto PLC

  6,772    811

Royal Bank of Scotland Group PLC

  36,058    154

Royal Dutch Shell PLC Class A

  82    3,385

Royal Dutch Shell PLC Class B

  29,389    1,183

SABMiller PLC

  6,207    142

Scottish & Southern Energy PLC

  33,029    923

Shire, Ltd.

  2,264    37

Smiths Group PLC

  73,017    1,580

Spectris PLC

  4,162    59

Stagecoach Group PLC

  1,292    7

Standard Chartered PLC

  20,456    583

Tesco PLC

  106,021    780

Thomson Reuters PLC (Æ)

  1,376    37

Tullett Prebon PLC

  20,391    175

Unilever PLC

  36,455    1,038

United Business Media PLC

  12,462    135

Vodafone Group PLC

  437,768    1,301

Vodafone Group PLC - ADR

  71,630    2,110

WH Smith PLC

  5,303    39

William Hill PLC

  197,407    1,259

WM Morrison Supermarkets PLC

  134,434    713

WPP Group PLC

  422,306    4,073

Xstrata PLC

  7,260    582
       
      67,774
       

United States - 0.9%

      

Dr Pepper Snapple Group, Inc. (Æ)(Ñ)

  13,874    291

NYSE Euronext Class A

  855    43

 

32 Non-U.S. Fund


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Philip Morris International, Inc.

  8,900    440

Synthes, Inc.

  18,277    2,519
       
      3,293
       
Total Common Stocks      

(cost $340,956)

      343,930
       
Preferred Stocks - 0.4%      

Germany - 0.4%

      

Fresenius SE (Æ)

  769    66

Henkel KGaA

  36,107    1,439

RWE AG (Æ)

  1,316    133

Volkswagen AG

  115    17
       
Total Preferred Stocks      

(cost $2,077)

      1,655
       
   

Notional
Amount

     
Options Purchased - 0.2%        

(Number of Contracts)

        

Switzerland - 0.2%

        

Swiss Market Index Futures
Sep 2008 7,273.83 Put (74)

  CHF  740    575
         
Total Options Purchased        

(cost $357)

        575
         
   

Principal

Amount ($)

or Shares

    Market
Value
$
 

Warrants & Rights - 0.0%

      

Untied Kingdom - 0.0%

      

HBOS PLC (Æ)

  24,939    5 
        
Total Warrants & Rights      

(cost $—)

      5 
        

Short-Term Investments - 8.7%

    

United States - 8.7%

      

Russell Investment Company Money Market Fund

  31,527,000    31,527 

United States Treasury Bills (ž)(§) 1.920% due 09/18/08

  2,200    2,190 
        
Total Short-Term Investments      

(cost $33,718)

      33,717 
        

Other Securities - 7.9%

      

State Street Securities Lending Quality Trust (×)

  30,431,052    30,431 
        
Total Other Securities      

(cost $30,431)

      30,431 
        
Total Investments - 106.0%      

(identified cost $407,539)

      410,313 
Other Assets and Liabilities,
Net - (6.0%)
      (23,102)
        
Net Assets - 100.0%      387,211 
        

A portion of the portfolio has been fair valued as of period end.


 

See accompanying notes which are an integral part of the financial statements.

 

Non-U.S. Fund 33


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except contracts)

 

Futures Contracts

(Number of Contracts)

 

Notional
Amount

    Unrealized
Appreciation
(Depreciation)
$
 
      

Long Positions

      

AEX Index (Netherlands) expiration date 07/08 (55)

 EUR 4,687    (540)

CAC-40 Index (France) expiration date 07/08 (65)

 EUR 2,889    (186)

DAX Index (Germany) expiration date 09/08 (14)

 EUR 2,268    (220)

EUR STOXX 50 Index (EMU) expiration date 09/08 (119)

 EUR 4,022    (275)

FTSE-100 Index (UK) expiration date 09/08 (132)

 GBP 7,455    (507)

Hang Seng Index (Hong Kong) expiration date 07/08 (27)

 HKD 29,862    (100)

MIB-30 (Italy) expiration date 09/08 (9)

 EUR 1,335    (111)

MSCI Singapore Index expiration date 07/08 (3)

 SGD 215    (3)

TOPIX Index (Japan) expiration date 09/08 (99)

 JPY 1,305,315    (665)

Short Positions

      

DAX Index (Germany) expiration date 09/08 (12)

 EUR 1,944    186 

IBEX Plus 35 Index (Spain) expiration date 07/08 (12)

 EUR 1,434    151 

OMX Stockholm 30 Index (Sweden)
expiration date 07/08 (133)

 SEK 11,471    203 

SPI 200 Index (Australia) expiration date 09/08 (45)

 AUD 5,842    231 
        

Total Unrealized Appreciation
(Depreciation) on Open Futures Contracts

      (1,836)
        

Options Written

(Number of Contracts)

 

Notional
Amount

        
Market
Value
$
 

Switzerland

      

Swiss Market Index Futures

      

Sep 2008 7,273.83 Call (74)

 CHF 740    (362)
        

Total Liability for Options Written (premiums received $357)

      (362)
        

 

See accompanying notes which are an integral part of the financial statements.

 

34 Non-U.S. Fund


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands

 

Index Swap Contracts                        

Fund Receives
Underlying Security

  Counter
Party
  Notional
Amount
  

Fund Pays
Floating Rate

  Termination
Date
  Unrealized
Appreciation
(Depreciation)
$
            

MSCI Denmark
Local Net Total Return Index

  Merrill Lynch  DKK  469  

1 Month EUR LIBOR
Minus 0.10%

  09/17/08  4

MSCI Denmark
Local Net Total Return Index

  Merrill Lynch  DKK  5,673  

1 Month EUR LIBOR
Minus 0.82%

  09/17/08  55

MSCI Denmark
Local Net Total Return Index

  Merrill Lynch  DKK  479  

1 Month EUR LIBOR

  09/17/08  151
             

Total Unrealized Appreciation (Depreciation) on Open Index Swap Contracts

  210
             

 

Industry Diversification  % of
Net
Assets
     Market
Value
$
 
      
      

Auto and Transportation

  4.1     15,870 

Consumer Discretionary

  9.0     34,825 

Consumer Staples

  11.4     43,968 

Financial Services

  15.9     61,419 

Health Care

  7.1     27,514 

Information Technology

  0.6     2,190 

Integrated Oils

  5.2     20,137 

Materials and Processing

  10.7     41,490 

Miscellaneous

  1.3     5,202 

Other Energy

  1.4     5,403 

Producer Durables

  8.8     34,232 

Technology

  5.3     20,658 

Utilities

  8.4     32,677 

Options Purchased

  0.2     575 

Warrants & Rights

       5 

Short-Term Investments

  8.7     33,717 

Other Securities

  7.9     30,431 
          

Total Investments

  106.0     410,313 

Other Assets and Liabilities, Net

  (6.0)    (23,102)
          

Net Assets

  100.0     387,211 
          

 

Geographic Diversification�� % of
Net
Assets
  Market
Value
$
 
   

Africa

  0.3  1,342 

Asia

  5.3  20,456 

Europe

  44.7  173,274 

Japan

  16.6  64,133 

Latin America

  2.0  7,699 

Middle East

  0.5  1,978 

Other Regions

  11.2  43,221 

United Kingdom

  17.5  67,779 

Other Securities

  7.9  30,431 
       

Total Investments

  106.0  410,313 

Other Assets and Liabilities, Net

  (6.0) (23,102)
       

Net Assets

  100.0  387,211 
       

 

See accompanying notes which are an integral part of the financial statements.

 

Non-U.S. Fund 35


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts 
     
Amount
Sold
 Amount
Bought
 Settlement
Date
 Unrealized
Appreciation

(Depreciation)
$
 
USD 374 CHF 381 07/03/08  
USD 2,872 CHF 2,988 09/17/08 55 
USD 38 DKK 179 07/01/08  
USD 2 DKK 9 07/02/08  
USD 8 DKK 37 09/17/08  
USD 16 EUR 10 07/01/08  
USD 218 EUR 138 07/01/08  
USD 25 EUR 16 07/02/08  
USD 80 EUR 51 07/02/08  
USD 66 EUR 42 07/03/08  
USD 8 EUR 5 09/17/08  
USD 77 EUR 50 09/17/08 1 
USD 154 EUR 100 09/17/08 2 
USD 540 EUR 350 09/17/08 9 
USD 618 EUR 400 09/17/08 9 
USD 764 EUR 500 09/17/08 20 
USD 784 EUR 500 09/17/08  
USD 1,005 EUR 650 09/17/08 15 
USD 1,492 EUR 961 09/17/08 16 
USD 1,534 EUR 989 09/17/08 16 
USD 4,483 EUR 2,900 09/17/08 64 
USD 14,355 EUR 9,300 09/17/08 230 
USD 16,304 EUR 10,550 09/17/08 241 
USD 19 GBP 10 07/01/08  
USD 376 GBP 189 07/01/08 1 
USD 58 GBP 29 07/02/08  
USD 102 GBP 51 07/02/08  
USD 81 GBP 41 07/03/08  
USD 768 GBP 392 09/05/08 9 
USD 881 GBP 450 09/05/08 11 
USD 1,362 GBP 696 09/05/08 17 
USD 291 GBP 150 09/17/08 6 
USD 293 GBP 150 09/17/08 4 
USD 387 GBP 200 09/17/08 9 
USD 391 GBP 200 09/17/08 4 
USD 395 GBP 200 09/17/08 1 
USD 875 GBP 450 09/17/08 16 
USD 1,041 GBP 531 09/17/08 11 
USD 1,051 GBP 537 09/17/08 11 
USD 1,439 GBP 740 09/17/08 26 
USD 2,346 GBP 1,201 09/17/08 32 
USD 8,548 GBP 4,400 09/17/08 165 
USD 9,329 GBP 4,800 09/17/08 176 
USD 23 HKD 183 09/17/08  
USD 169 HKD 1,319 09/17/08  
USD 4 JPY 390 07/01/08  
USD 12 JPY 1,178 07/01/08 (1)
Foreign Currency Exchange Contracts 
Amount
Sold
 Amount
Bought
 Settlement
Date
 Unrealized
Appreciation

(Depreciation)
$
 
USD 433 JPY 46,018 07/01/08 1 
USD 165 JPY 17,484 07/02/08  
USD 186 JPY 20,000 09/17/08 3 
USD 372 JPY 40,000 09/17/08 6 
USD 376 JPY 40,000 09/17/08 2 
USD 466 JPY 50,000 09/17/08 7 
USD 469 JPY 50,000 09/17/08 4 
USD 557 JPY 60,000 09/17/08 10 
USD 706 JPY 75,000 09/17/08 3 
USD 752 JPY 80,000 09/17/08 4 
USD 845 JPY 90,000 09/17/08 6 
USD 1,058 JPY 110,000 09/17/08 (18)
USD 2,118 JPY 225,000 09/17/08 10 
USD 2,997 JPY 322,132 09/17/08 50 
USD 3,063 JPY 325,000 09/17/08 11 
USD 4,710 JPY 500,000 09/17/08 19 
USD 5,408 JPY 575,000 09/17/08 30 
USD 14,042 NOK 73,277 09/17/08 234 
USD 16 SEK 100 09/17/08  
USD 103 SEK 623 09/17/08  
USD 138 SEK 841 09/17/08 1 
USD 1 SGD 2 07/01/08  
USD 1 SGD 1 09/17/08  
USD 29 SGD 40 09/17/08  
AUD 78 USD 75 07/01/08  
AUD 176 USD 166 09/17/08 (1)
AUD 2,238 USD 2,083 09/17/08 (39)
CHF 266 USD 260 07/01/08  
CHF 107 USD 103 09/17/08 (2)
CHF 345 USD 333 09/17/08 (5)
CHF 603 USD 583 09/17/08 (8)
DKK 9 USD 2 07/01/08  
DKK 3,442 USD 712 09/17/08 (11)
EUR 15 USD 23 07/01/08 (1)
EUR 29 USD 46 07/01/08  
EUR 51 USD 81 07/01/08  
EUR 219 USD 345 07/01/08  
EUR 626 USD 986 07/01/08 1 
EUR 34 USD 53 07/02/08  
EUR 104 USD 164 07/02/08  
EUR 286 USD 451 07/02/08 1 
EUR 100 USD 154 09/17/08 (3)
EUR 100 USD 155 09/17/08 (2)
EUR 100 USD 157 09/17/08  
EUR 100 USD 154 09/17/08 (3)
EUR 150 USD 235 09/17/08  
EUR 300 USD 467 09/17/08 (4)

 

See accompanying notes which are an integral part of the financial statements.

 

36 Non-U.S. Fund


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts 
     
Amount
Sold
 Amount
Bought
 Settlement
Date
 Unrealized
Appreciation

(Depreciation)
$
 
EUR 400 USD 619 09/17/08 (9)
EUR 400 USD 618 09/17/08 (10)
EUR 400 USD 617 09/17/08 (10)
EUR 600 USD 922 09/17/08 (19)
EUR 1,300 USD 2,008 09/17/08 (30)
EUR 2,300 USD 3,551 09/17/08 (56)
EUR 5,472 USD 8,444 09/17/08 (137)
EUR 9,750 USD 15,077 09/17/08 (212)
GBP 57 USD 114 07/01/08  
GBP 75 USD 149 07/01/08 (1)
GBP 18 USD 35 07/02/08  
GBP 13 USD 25 07/03/08  
GBP 769 USD 1,502 09/05/08 (22)
GBP 769 USD 1,502 09/05/08 (22)
GBP 50 USD 97 09/17/08 (2)
GBP 100 USD 196 09/17/08 (2)
GBP 100 USD 194 09/17/08 (4)
GBP 100 USD 196 09/17/08 (2)
GBP 150 USD 293 09/17/08 (4)
GBP 150 USD 291 09/17/08 (6)
GBP 150 USD 294 09/17/08 (3)
GBP 250 USD 486 09/17/08 (9)
GBP 300 USD 583 09/17/08 (11)
GBP 700 USD 1,358 09/17/08 (28)
GBP 2,405 USD 4,671 09/17/08 (90)
GBP 3,350 USD 6,510 09/17/08 (123)
HKD 149 USD 19 07/01/08  
JPY 9,590 USD 89 07/01/08 (1)
JPY 25,078 USD 236 07/02/08  
JPY 21,359 USD 201 07/03/08  
JPY 10,000 USD 94 09/17/08  
JPY 14,903 USD 139 09/17/08 (2)
JPY 20,000 USD 191 09/17/08 2 
JPY 30,000 USD 279 09/17/08 (5)
JPY 40,000 USD 375 09/17/08 (3)
JPY 50,000 USD 466 09/17/08 (7)
JPY 60,000 USD 562 09/17/08 (5)
JPY 80,000 USD 766 09/17/08 9 
JPY 170,000 USD 1,596 09/17/08 (12)
JPY 416,901 USD 3,901 09/17/08 (42)
JPY 755,000 USD 7,113 09/17/08 (27)
NOK 200 USD 40 07/01/08  
NOK 2,436 USD 468 09/17/08 (6)
NOK 2,478 USD 477 09/17/08 (6)
SEK 13 USD 4 07/01/08 1 
SEK 15,377 USD 2,539 09/17/08 (4)
SGD 1,171 USD 855 09/17/08 (9)
Foreign Currency Exchange Contracts 
Amount
Sold
 Amount
Bought
 Settlement
Date
 Unrealized
Appreciation

(Depreciation)
$
 
ZAR 1,122 USD 140 07/01/08 (4)
ZAR 1,223 USD 156 07/02/08 (1)
       
     548 
       

 

See accompanying notes which are an integral part of the financial statements.

 

Non-U.S. Fund 37


Table of Contents

Russell Investment Funds

Non-U.S. Fund

Presentation of Portfolio Holdings — June 30, 2008 (Unaudited)

 

Categories  

% of
Net

Assets

 
  
  

Australia

  2.1 

Austria

  0.5 

Belgium

  0.5 

Bermuda

  0.9 

Brazil

  0.4 

Canada

  1.6 

Cayman Islands

  0.4 

Czech Republic

  0.2 

Denmark

  1.5 

Egypt

  0.3 

Finland

  1.2 

France

  11.8 

Germany

  9.5 

Hong Kong

  0.5 

India

  0.3 

Indonesia

  *

Ireland

  0.8 

Israel

  0.2 

Italy

  2.6 

Japan

  16.6 

Luxembourg

  0.3 

Malaysia

  0.1 

Mauritius

  *

Mexico

  0.4 

Netherlands

  3.9 

Netherlands Antilles

  *

Norway

  0.6 

Papua New Guinea

  *

Portugal

  0.2 

Russia

  0.2 

Singapore

  0.8 

South Africa

  0.3 

South Korea

  0.8 

Spain

  1.6 

Sweden

  1.0 

Switzerland

  7.7 

Taiwan

  0.5 

Thailand

  0.1 

United Kingdom

  17.5 

United States

  0.9 

Preferred Stocks

  0.4 

Options Purchased

  0.2 

Warrants & Rights

  *
Categories  

% of
Net

Assets

 
  

Short-Term Investments

  8.7 

Other Securities

  7.9 
    

Total Investments

  106.0 

Other Assets and Liabilities Net

  (6.0)
    
  100.0 
    

Futures Contracts

  (0.5)

Options Written

  (0.1)

Foreign Currency Exchange Contracts

  0.1 

Index Swap Contracts

  0.1 

 

*Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

38 Non-U.S. Fund


Table of Contents

Russell Investment Funds

Real Estate Securities Fund

Shareholder Expense Example — June 30, 2008 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from January 1, 2008 to June 30, 2008.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

   Actual
Performance
  Hypothetical
Performance
(5% return
before expenses)
    

Beginning Account Value

    

January 1, 2008

  $1,000.00  $1,000.00

Ending Account Value

    

June 30, 2008

  $967.40  $1,020.29

Expenses Paid During Period*

  $4.50  $4.62

 

*Expenses are equal to the Fund’s annualized expense ratio of 0.92% (representing the one-half year period annualized), multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period).

 

Real Estate Securities Fund 39


Table of Contents

Russell Investment Funds

Real Estate Securities Fund

Schedule of Investments — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Common Stocks - 94.9%

      

Apartments - 14.5%

      

American Campus Communities, Inc. (ö)(Ñ)

  86,452    2,407

Apartment Investment & Management Co. Class A (ö)(Ñ)

  81,602    2,779

AvalonBay Communities, Inc. (ö)(Ñ)

  192,784    17,189

Boardwalk Real Estate Investment Trust (ö)

  11,022    412

BRE Properties, Inc. Class A (ö)(Ñ)

  153,678    6,651

Camden Property Trust (ö)(Ñ)

  167,950    7,433

Deutsche Wohnen AG

  7,747    117

Equity Residential (ö)(Ñ)

  460,064    17,607

Essex Property Trust, Inc. (ö)(Ñ)

  64,787    6,900

Mid-America Apartment Communities, Inc. (ö)

  39,200    2,001

Post Properties, Inc. (ö)(Ñ)

  78,950    2,349

UDR, Inc. (ö)(Ñ)

  92,599    2,072
       
      67,917
       

Diversified - 9.6%

      

British Land Co. PLC (ö)

  27,727    391

Canadian Real Estate Investment Trust (ö)

  8,663    249

CapitaLand, Ltd.

  93,000    390

Castellum AB (Ñ)

  9,086    87

Country Garden Holdings Co., Ltd. (Ñ)

  295,319    192

Dexus Property Group (ö)(Ñ)

  230,935    305

Forest City Enterprises, Inc. Class A (Ñ)

  5,093    164

GPT Group (ö)(Ñ)

  61,557    131

Great Eagle Holdings, Ltd.

  224,286    662

Henderson Land Development Co., Ltd.

  147,336    918

Hysan Development Co., Ltd.

  121,264    333

iStar Financial, Inc. (ö)(Ñ)

  61,000    806

Kenedix Realty Investment Corp. Class A (ö)

  23    136

Keppel Land, Ltd. (Æ)(Ñ)

  18,000    66

Kerry Properties, Ltd.

  38,500    202

Klepierre - GDR (ö)

  1,585    80

Land Securities Group PLC (ö)

  60,424    1,483

Mirvac Group (ö)(Ñ)

  143,406    407

Mitsubishi Estate Co., Ltd. (Ñ)

  131,000    2,998

Mitsui Fudosan Co., Ltd.

  131,900    2,820

New World China Land, Ltd. (Ñ)

  432,435    224

Segro PLC (ö)

  30,374    238

Sino Land Co. (Ñ)

  93,481    186
   Principal
Amount ($)
or Shares
    Market
Value
$

Sponda OYJ

  2,204    19

Stockland (ö)(Ñ)

  59,672    308

Sumitomo Realty & Development Co., Ltd.

  37,000    735

Sun Hung Kai Properties, Ltd.

  112,284    1,524

Suntec Real Estate Investment Trust (ö)

  110,000    110

Unibail-Rodamco (ö)(Ñ)

  9,498    2,197

Vornado Realty Trust (ö)(Ñ)

  271,084    23,855

Washington Real Estate Investment Trust (ö)(Ñ)

  89,200    2,680

Wharf Holdings, Ltd.

  51,358    215
       
      45,111
       

Free Standing Retail - 0.3%

      

National Retail Properties, Inc. (ö)

  40,700    851

Realty Income Corp. (ö)(Ñ)

  33,400    760
       
      1,611
       

Health Care - 9.0%

      

Cogdell Spencer, Inc. (ö)(Ñ)

  21,800    354

HCP, Inc. (ö)

  158,300    5,035

Health Care REIT, Inc. (ö)(Ñ)

  151,200    6,728

Healthcare Realty Trust, Inc. (ö)(Ñ)

  34,100    811

LTC Properties, Inc. (ö)

  49,950    1,277

Medical Properties Trust, Inc. (ö)(Ñ)

  104,304    1,056

Nationwide Health Properties, Inc. (ö)(Ñ)

  359,350    11,316

Omega Healthcare Investors, Inc. (ö)

  140,651    2,342

Senior Housing Properties Trust (ö)

  224,790    4,390

Ventas, Inc. (ö)(Ñ)

  212,600    9,050
       
      42,359
       

Industrial - 7.8%

      

AMB Property Corp. (ö)(Ñ)

  160,200    8,071

DCT Industrial Trust, Inc. (ö)(Ñ)

  396,300    3,281

EastGroup Properties, Inc. (ö)(Ñ)

  10,417    447

First Potomac Realty Trust (ö)(Ñ)

  62,800    957

Goodman Group (ö)(Ñ)

  50,648    150

Prologis (ö)(Ñ)

  437,951    23,803
       
      36,709
       

Lodging/Resorts - 4.4%

      

Ashford Hospitality Trust, Inc. (ö)

  125,800    581

DiamondRock Hospitality Co. (ö)(Ñ)

  178,800    1,947

Hospitality Properties Trust (ö)

  12,000    294

Host Hotels & Resorts, Inc. (ö)(Ñ)

  1,028,311    14,036

Shangri-La Asia, Ltd.

  39,234    92

 

40 Real Estate Securities Fund


Table of Contents

Russell Investment Funds

Real Estate Securities Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Starwood Hotels & Resorts Worldwide, Inc. (Ñ)

  93,082    3,730

Sunstone Hotel Investors, Inc. (ö)(Ñ)

  5,007    83
       
      20,763
       

Manufactured Homes - 0.6%

      

Equity Lifestyle Properties, Inc. (ö)(Ñ)

  62,970    2,771
       

Mixed Industrial/Office - 2.1%

    

Liberty Property Trust (ö)(Ñ)

  224,244    7,433

PS Business Parks, Inc. (ö)

  43,642    2,252
       
      9,685
       

Office - 12.4%

      

Alexandria Real Estate Equities, Inc. (ö)(Ñ)

  60,700    5,909

Beni Stabili SpA (Æ)

  101,793    101

BioMed Realty Trust, Inc. (ö)(Ñ)

  210,250    5,157

Boston Properties, Inc. (ö)(Ñ)

  204,689    18,467

Brandywine Realty Trust (ö)

  139,781    2,203

Brookfield Properties Corp.

  168,577    2,999

CapitaCommercial Trust (ö)(Ñ)

  227,000    319

Commonwealth Property Office Fund (ö)

  159,303    189

Corporate Office Properties Trust SBI MD (ö)

  57,400    1,971

Derwent London PLC (ö)

  25,975    522

Douglas Emmett, Inc. (ö)(Ñ)

  53,106    1,167

Great Portland Estates PLC (ö)(Ñ)

  95,504    643

Hongkong Land Holdings, Ltd. (Ñ)

  331,000    1,403

HRPT Properties Trust (ö)

  153,200    1,037

ICADE (Æ)(ö)

  4,340    507

Japan Real Estate Investment Corp. Class A (ö)

  21    221

Kilroy Realty Corp. (ö)

  46,600    2,192

Mack-Cali Realty Corp. (ö)

  62,600    2,139

Maguire Properties, Inc. (ö)(Ñ)

  44,632    543

Nomura Real Estate Office Fund, Inc. Class A (ö)(Ñ)

  18    135

Norwegian Property ASA(Ñ)

  14,059    33

NTT Urban Development Corp.

  179    234

SL Green Realty Corp. (ö)

  112,354    9,294

Societe Immobiliere de Location pour l’Industrie et le Commerce (ö)

  942    118

Tishman Speyer Office Fund (ö)

  125,133    164

Tokyo Tatemono Co., Ltd. (Ñ)

  36,000    233
       
      57,900
       
   Principal
Amount ($)
or Shares
    Market
Value
$

Regional Malls - 15.7%

      

CBL & Associates Properties, Inc. (ö)(Ñ)

  54,200    1,238

General Growth Properties, Inc. (ö)(Ñ)

  476,681    16,698

Macerich Co. (The) (ö)(Ñ)

  144,429    8,973

Simon Property Group, Inc. (ö)

  423,557    38,074

Taubman Centers, Inc. (ö)(Ñ)

  146,250    7,115

Westfield Group (ö)(Ñ)

  107,972    1,685
       
      73,783
       

Self Storage - 5.0%

      

Extra Space Storage, Inc. (ö)(Ñ)

  154,550    2,374

Public Storage (ö)(Ñ)

  257,080    20,770

Safestore Holdings, Ltd.

  41,112    121
       
      23,265
       

Shopping Centers - 10.3%

      

Acadia Realty Trust (ö)(Ñ)

  5,241    121

Citycon OYJ (Æ)

  18,725    95

Corio NV (ö)

  9,115    712

Developers Diversified Realty Corp. (ö)

  232,200    8,060

Eurocommercial Properties NV (ö)

  4,274    204

Federal Realty Investment Trust (ö)(Ñ)

  192,903    13,310

Hammerson PLC (ö)

  39,616    704

Kimco Realty Corp. (ö)(Ñ)

  190,500    6,576

Kite Realty Group Trust (ö)

  85,800    1,073

Liberty International PLC (ö)(Ñ)

  14,539    250

Mercialys SA (ö)

  4,833    213

Primaris Retail Real Estate Investment Trust (ö)

  6,754    121

Regency Centers Corp. (ö)(Ñ)

  208,005    12,297

Saul Centers, Inc. (ö)

  9,500    446

Tanger Factory Outlet Centers (ö)(Ñ)

  118,550    4,260
       
      48,442
       

Specialty - 3.2%

      

Digital Realty Trust, Inc. (ö)(Ñ)

  236,232    9,664

DuPont Fabros Technology, Inc. (ö)(Ñ)

  70,000    1,305

Plum Creek Timber Co., Inc. (ö)(Ñ)

  56,349    2,407

Rayonier, Inc. (ö)(Ñ)

  35,782    1,519
       
      14,895
       
Total Common Stocks      

(cost $389,176)

      445,211
       

 

Real Estate Securities Fund 41


Table of Contents

Russell Investment Funds

Real Estate Securities Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
 
      

Short-Term Investments - 5.0%

    

Russell Investment Company
Money Market Fund

  23,256,000    23,256 
        
Total Short-Term Investments      

(cost $23,256)

      23,256 
        
Other Securities - 23.7%      

State Street Securities Lending Quality Trust (×)

  111,278,095    111,278 
        
Total Other Securities      

(cost $111,278)

      111,278 
        
Total Investments - 123.6%    

(identified cost $523,710)

      579,745 
Other Assets and Liabilities, Net - (23.6%)      (110,704)
        
Net Assets - 100.0%      469,041 
        

 


 

See accompanying notes which are an integral part of the financial statements.

 

42 Real Estate Securities Fund


Table of Contents

Russell Investment Funds

Real Estate Securities Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands

 

Foreign Currency Exchange Contracts  
     
Amount
Sold
 Amount
Bought
 Settlement
Date
 Unrealized
Appreciation
(Depreciation)
$
     
USD 6 AUD 7 07/01/08 
USD 8 AUD 8 07/02/08 
USD 64 AUD 67 07/02/08 
USD 3 CAD 3 07/02/08 
USD 1 CAD 1 07/03/08 
USD 13 CAD 14 07/03/08 
USD 4 EUR 2 07/01/08 
USD 33 EUR 21 07/01/08 
USD 4 EUR 3 07/02/08 
USD 22 EUR 14 07/02/08 
USD 24 EUR 15 07/02/08 
USD 13 JPY 1,388 07/01/08 
USD 9 JPY 966 07/02/08 
USD 42 JPY 4,474 07/02/08 
USD 8 SGD 11 07/01/08 
AUD 4 USD 3 07/01/08 
Foreign Currency Exchange Contracts  
Amount
Sold
 Amount
Bought
 Settlement
Date
 Unrealized
Appreciation
(Depreciation)
$
     
AUD 1 USD 1 07/02/08 
EUR 2 USD 2 07/01/08 
EUR 6 USD 10 07/01/08 
HKD 48 USD 6 07/02/08 
HKD 97 USD 12 07/02/08 
HKD 109 USD 14 07/02/08 
HKD 182 USD 23 07/02/08 
JPY 3,358 USD 32 07/02/08 
SGD 20 USD 15 07/02/08 
      
Total Unrealized Appreciation (Depreciation) on Open Foreign Currency Exchange Contracts 
      

 

 

Presentation of Portfolio Holdings — June 30, 2008 (Unaudited)

 

Categories    % of Net
Assets
 
    

Apartments

    14.5 

Diversified

    9.6 

Free Standing Retail

    0.3 

Health Care

    9.0 

Industrial

    7.8 

Lodging/Resorts

    4.4 

Manufactured Homes

    0.6 

Mixed Industrial/Office

    2.1 

Office

    12.4 

Regional Malls

    15.7 

Self Storage

    5.0 

Shopping Centers

    10.3 

Specialty

    3.2 

Short-Term Investments

    5.0 

Other Securities

    23.7 
      

Total Investments

    123.6 

Other Assets and Liabilities, Net

    (23.6)
      
    100.0 
      

Foreign Currency Exchange Contracts

    *

 

*Less than .05% of net assets.

 

See accompanying notes which are an integral part of the financial statements.

 

Real Estate Securities Fund 43


Table of Contents

Russell Investment Funds

Core Bond Fund

Shareholder Expense Example — June 30, 2008 (Unaudited)

 

 

 

Fund Expenses

The following disclosure provides important information regarding each Fund’s Expense Example, which appears on each Fund’s individual page in this Semiannual Report. Please refer to this information when reviewing the Expense Example for a Fund.

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. The Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for this Fund is from January 1, 2008 to June 30, 2008.

Actual Expenses

The information in the table under the heading “Actual Performance” provides information about actual account values and actual expenses. You may use the information in this column, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first column in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The information in the table under the heading “Hypothetical Performance (5% return before expenses)” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the information under the heading “Hypothetical Performance (5% return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

   Actual
Performance
  Hypothetical
Performance
(5% return
before expenses)
    

Beginning Account Value

    

January 1, 2008

  $1,000.00  $1,000.00

Ending Account Value

    

June 30, 2008

  $990.10  $1,021.38

Expenses Paid During Period*

  $3.46  $3.52

 

*Expenses are equal to the Fund’s annualized expense ratio of 0.70% (representing the one-half year period annualized), multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Reflects amounts waived and/or reimbursed. Without the waiver and/or reimbursement, expenses would have been higher.

 

44 Core Bond Fund


Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Long-Term Investments - 96.3%

    

Asset-Backed Securities - 3.9%

    

Accredited Mortgage Loan Trust (Ê)

      

Series 2004-2 Class A2
2.783% due 07/25/34

  39    17

ACE Securities Corp. (Ê)

      

Series 2003-OP1 Class M2
3.983% due 12/25/33

  44    38

Series 2005-SD3 Class A
2.883% due 08/25/45

  205    187

Aegis Asset Backed Securities Trust (Ê)

      

Series 2003-3 Class M2
4.133% due 01/25/34

  110    64

American Express Credit
Account Master Trust (Ê)(Þ)

      

Series 2004-C Class C
2.971% due 02/15/12

  32    31

Ameriquest Mortgage Securities, Inc. (Ê)

      

Series 2002-D Class M1
6.233% due 02/25/33

  90    63

Series 2004-R8 Class A5
2.853% due 09/25/34

  20    20

Series 2004-R10 Class A5
2.873% due 11/25/34

      

Bank of America Credit Card Trust (Ê)

      

Series 2008-A1 Class A1
3.051% due 04/15/13

  200    200

Bayview Financial Acquisition Trust

      

Series 2006-A Class 1A3
5.865% due 02/28/41

  190    159

CIT Mortgage Loan Trust (Ê)(Å)

      

Series 2007-1 Class 2A1
3.483% due 10/01/37

  383    345

Series 2007-1 Class 2A2
3.733% due 10/01/37

  130    85

Series 2007-1 Class 2A3
3.933% due 10/01/37

  180    90

Countrywide Asset-Backed Certificates

      

Series 2004-13 Class AF3
3.989% due 02/25/31

  5    5

Series 2004-AB2 Class M3 (Ê)
3.083% due 05/25/36

  95    70

Series 2004-BC1 Class M1 (Ê)
2.983% due 02/25/34

  95    72
   Principal
Amount ($)
or Shares
    Market
Value
$

Series 2006-11 Class 1AF4
6.300% due 09/25/46

  170    121

Countrywide Home Equity Loan Trust (Ê)

      

Series 2006-HW Class 2A1B
2.621% due 11/15/36

  605    481

First Franklin Mortgage Loan
Asset Backed Certificates (Ê)

      

Series 2006-FF1 Class A3
2.533% due 11/25/36

  174    167

GMAC Mortgage Corp. Loan Trust

      

Series 2007-HE3 Class 2A1
7.000% due 09/25/37

  87    61

GSAA Trust

      

Series 2006-2 Class 2A3 (Ê)
2.753% due 12/25/35

  320    195

Series 2006-4 Class 1A2
5.952% due 03/25/36

  224    141

Series 2006-4 Class 3A1
6.111% due 03/25/36

  1,525    1,191

GSAMP Trust (Ê)

      

Series 2003-HE2 Class M1
3.133% due 08/25/33

  96    81

Series 2004-SEA Class A2A
2.773% due 03/25/34

  43    42

HFC Home Equity Loan Asset Backed Certificates (Ê)

      

Series 2005-1 Class A
2.772% due 01/20/34

  205    181

Series 2007-1 Class AS
2.682% due 03/20/36

  893    778

Series 2007-3 Class APT
3.658 % due 11/20/36

  393    332

HSI Asset Securitization Corp. Trust (Ê)

      

Series 2006-HE2 Class 2A1
2.533% due 12/25/36

  58    56

Indymac Residential Asset Backed Trust (Ê)

      

Series 2006-H2 Class A
2.633% due 06/28/36

  402    242

Lehman XS Trust (Ê)

      

Series 2005-1 Class 2A2
4.660% due 07/25/35

  98    72

Series 2006-2N Class 1A2
2.823% due 02/25/46

  222    129

Series 2006-16N Class A1A
2.563% due 11/25/46

  144    137

 

Core Bond Fund 45


Table of Contents

Russell Investment Funds

Core Bond Fund

Schedule of Investments, continued — June 30, 2008 (Unaudited)

Amounts in thousands (except share amounts)

 

   Principal
Amount ($)
or Shares
    Market
Value
$
      

Series 2007-4N Class 3A2A
4.544% due 04/25/37

  894    645

Long Beach Mortgage Loan Trust (Ê)

      

Series 2004-4 Class 1A1
2.763% due 10/25/34

  5    4

Series 2006-9 Class 2A1
2.543% due 10/25/36

  442    432

Mastr Asset Backed Securities Trust (Ê)

      

Series 2003-WMC Class M2
4.958% due 08/25/33

  57    34

Series 2006-WMC Class A4
2.643% due 08/25/36

  850    405

Morgan Stanley ABS Capital I (Ê)

      

Series 2003-NC8 Class M3
5.633% due 09/25/33

  33    23

Series 2006-HE7 Class A2A
2.533% due 09/25/36

  412    407

New Century Home Equity Loan Trust (Ê)

      

Series 2004-4 Class M2
3.013% due 02/25/35

  215    175

Option One Mortgage Loan Trust (Ê)

      

Series 2003-2 Class M2
5.033% due 04/25/33

  44    22

Series 2003-3 Class M3
4.483% due 06/25/33

  38    12

Series 2003-4 Class M2
4.133% due 07/25/33

  29    17

Park Place Securities, Inc. (Ê)

      

Series 2005-WCW Class M1
2.933% due 09/25/35

  210    164

Popular ABS Mortgage Pass-Through Trust

      

Series 2005-6 Class A3
5.680% due 01/25/36

  230    230

Renaissance Home Equity Loan Trust

      

Series 2005-1 Class M1
5.357% due 05/25/35

  80    59

Series 2005-2 Class AF4
4.934% due 08/25/35

  85    78

Series 2006-1 Class AF6
5.746% due 05/25/36

  175    145

Residential Asset Mortgage Products, Inc.

      

Series 2003-RS1 Class AI6A
5.980% due 12/25/33

  174    148

Series 2006-RZ4 Class A1A (Ê)
2.563% due 10/25/36

  497    466