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LifePoints® Funds quarterly commentary Target Date Series JUMP AHEAD TO 2015 Strategy Fund 2020 Strategy Fund 2025 Strategy Fund 2030 - 2055 Strategy Funds March 31, 2012 Review the primary contributing and detracting factors to LifePoints Funds Target Date Series performance during the last 3-month and 12-month periods. In Retirement Fund 3-month contributors: Fixed income strategies were positive for the quarter, driven by exposure to credit spread sectors such as financials, high yield, and emerging market debt. Global equities strategies contributed positively to performance as emerging markets bounced back from a difficult 2011. U.S. core equity strategies contributed positively, driven by strong stock selection in financials, and an underweight to the utility sector which was the worst performing sector of the broad U.S. market. 3-month detractors: Commodity strategies detracted from performance for the period largely because of weighting differences. Due to its diversified allocation to various commodity sectors, the strategy can underperform individual sector products, such as gold exchange traded funds (ETFs), at times. Global real estate strategies underperformed due to poor stock selection in the Asia Pacific Ex-Japan region. Global infrastructure strategies had marginal contribution to performance as the asset class lagged broader equities. 12-month contributors: Fixed income strategies contributed positively to returns for the 12-months, driven by exposure to credit spread sectors and underweights to treasuries. Infrastructure strategies were positive for the 12-months driven by strong stock selection, particularly within the electric utilities, multi-utilities and oil & gas storage & transportation sectors. Quantitative equity strategies posted strong performance during the 12 month period. These strategies provided positive absolute returns, reflective of improving market conditions for quantitative managers. This can be attributed to improved breadth of factor payoffs, as beta no longer dominated returns. 12-month detractors: Core U.S. equity strategies detracted from performance for the 12-month period as the moderate economic growth positioning was a headwind during the risk-off market cycle of third quarter. Commodity strategies detracted from performance for the period largely because of weighting differences. Due to its diversified allocation to various commodity sectors, the strategy can underperform individual sector products, such as gold exchange traded funds (ETFs), at times. International developed market strategies detracted from performance as non-U.S. markets struggled due to the uncertainty in Europe. Exposure to emerging markets was a headwind as well. 2015 Strategy Fund 3-month contributors: Fixed income strategies were positive for the quarter, driven by exposure to credit spread sectors such as financials, high yield, and emerging market debt. Global equities strategies contributed positively to performance as emerging markets bounced back from a difficult 2011. U.S. core equity strategies contributed positively, driven by strong stock selection in financials, and an underweight to the utility sector which was the worst performing sector of the broad U.S. market. 3-month detractors: Commodity strategies detracted from performance for the period largely because of weighting differences. Due to its diversified allocation to various commodity sectors, the strategy can underperform individual sector products, such as gold exchange traded funds (ETFs), at times. Global infrastructure strategies had marginal contribution to performance as the asset class lagged broader equities. Global real estate strategies underperformed due to poor stock selection in the Asia Pacific Ex-Japan region. 12-month contributors: Small Cap strategies were positive, benefitting from positive stock selection within consumer discretionary and materials & processing. Infrastructure strategies were positive for the 12-months driven by strong stock selection, particularly within the electric utilities, multi-utilities and oil & gas storage & transportation sectors. Quantitative equity strategies posted strong performance during the 12 month period. These strategies provided positive absolute returns, reflective of improving market conditions for quantitative managers. This can be attributed to improved breadth of factor payoffs, as beta no longer dominated returns. 12-month detractors: Core U.S. equity strategies detracted from performance for the 12-month period as the moderate economic growth positioning was a headwind during the risk-off market cycle of third quarter. International developed market strategies detracted from performance as non-U.S. markets struggled due to the uncertainty in Europe. Exposure to emerging markets was a headwind as well. Commodity strategies detracted from performance for the period largely because of weighting differences. Due to its diversified allocation to various commodity sectors, the strategy can underperform individual sector products, such as gold exchange traded funds (ETFs), at times. 2020 Strategy Fund 3-month contributors: Global equities strategies contributed positively to performance as emerging markets bounced back from a difficult 2011. U.S. core equity strategies contributed positively, driven by strong stock selection in financials, and an underweight to the utility sector which was the worst performing sector of the broad U.S. market. Fixed income strategies were positive for the quarter, driven by exposure to credit spread sectors such as financials, high yield, and emerging market debt. 3-month detractors: Commodity strategies detracted from performance for the period largely because of weighting differences. Due to its diversified allocation to various commodity sectors, the strategy can underperform individual sector products, such as gold exchange traded funds (ETFs), at times. Global infrastructure strategies had marginal contribution to performance as the asset class lagged broader equities. Global real estate strategies underperformed due to poor stock selection in the Asia Pacific Ex-Japan region. 12-month contributors: Small Cap strategies were positive, benefitting from positive stock selection within consumer discretionary and materials & processing. Infrastructure strategies were positive for the 12-months driven by strong stock selection, particularly within the electric utilities, multi-utilities and oil & gas storage & transportation sectors. Quantitative equity strategies posted strong performance during the 12 month period. These strategies provided positive absolute returns, reflective of improving market conditions for quantitative managers. This can be attributed to improved breadth of factor payoffs, as beta no longer dominated returns. 12-month detractors: Core U.S. equity strategies detracted from performance for the 12-month period as the moderate economic growth positioning was a headwind during the risk-off market cycle of third quarter. International developed market strategies detracted from performance as non-U.S. markets struggled due to the uncertainty in Europe. Exposure to emerging markets was a headwind as well. Commodity strategies detracted from performance for the period largely because of weighting differences. Due to its diversified allocation to various commodity sectors, the strategy can underperform individual sector products, such as gold exchange traded funds (ETFs), at times. 2025 Strategy Fund 3-month contributors: Global equities strategies contributed positively to performance as emerging markets bounced back from a difficult 2011. U.S. core equity strategies contributed positively, driven by strong stock selection in financials, and an underweight to the utility sector which was the worst performing sector of the broad U.S. market. Fixed income strategies were positive for the quarter, driven by exposure to credit spread sectors such as financials, high yield, and emerging market debt. 3-month detractors: Commodity strategies detracted from performance for the period largely because of weighting differences. Due to its diversified allocation to various commodity sectors, the strategy can underperform individual sector products, such as gold exchange traded funds (ETFs), at times. Global infrastructure strategies had marginal contribution to performance as the asset class lagged broader equities. Global real estate strategies underperformed due to poor stock selection in the Asia Pacific Ex-Japan region. 12-month contributors: Small Cap strategies were positive, benefitting from positive stock selection within consumer discretionary and materials & processing. Infrastructure strategies were positive for the 12-months driven by strong stock selection, particularly within the electric utilities, multi-utilities and oil & gas storage & transportation sectors. Quantitative equity strategies posted strong performance during the 12 month period. These strategies provided positive absolute returns, reflective of improving market conditions for quantitative managers. This can be attributed to improved breadth of factor payoffs, as beta no longer dominated returns. 12-month detractors: Core U.S. equity strategies detracted from performance for the 12-month period as the moderate economic growth positioning was a headwind during the risk-off market cycle of third quarter. International developed market strategies detracted from performance as non-U.S. markets struggled due to the uncertainty in Europe. Exposure to emerging markets was a headwind as well. Commodity strategies detracted from performance for the period largely because of weighting differences. Due to its diversified allocation to various commodity sectors, the strategy can underperform individual sector products, such as gold exchange traded funds (ETFs), at times. 2030 - 2055 Strategy Funds 3-month contributors: Global equities strategies contributed positively to performance as emerging markets bounced back from a difficult 2011. U.S. core equity strategies contributed positively, driven by strong stock selection in financials, and an underweight to the utility sector which was the worst performing sector of the broad U.S. market. U.S. Small cap equity strategies were positive, driven by stock selection and microcap exposure. 3-month detractors: Commodity strategies detracted from performance for the period largely because of weighting differences. Due to its diversified allocation to various commodity sectors, the strategy can underperform individual sector products, such as gold exchange traded funds (ETFs), at times. Global infrastructure strategies had marginal contribution to performance as the asset class lagged broader equities. Global real estate strategies underperformed due to poor stock selection in the Asia Pacific Ex-Japan region. 12-month contributors: Small Cap strategies were positive, benefitting from positive stock selection within consumer discretionary and materials & processing. Quantitative equity strategies posted strong performance during the 12 month period. These strategies provided positive absolute returns, reflective of improving market conditions for quantitative managers. This can be attributed to improved breadth of factor payoffs, as beta no longer dominated returns. Infrastructure strategies were positive for the 12-months driven by strong stock selection, particularly within the electric utilities, multi-utilities and oil & gas storage & transportation sectors. 12-month detractors: Commodity strategies detracted from performance for the period largely because of weighting differences. Due to its diversified allocation to various commodity sectors, the strategy can underperform individual sector products, such as gold exchange traded funds (ETFs), at times. International developed market strategies detracted from performance as non-U.S. markets struggled due to the uncertainty in Europe. Exposure to emerging markets was a headwind as well. Core U.S. equity strategies detracted from performance for the 12-month period as the moderate economic growth positioning was a headwind during the risk-off market cycle of third quarter. Significant changes None Fund objectives, risks, charges and expenses should be carefully considered before investing. For a prospectus containing this and other important information call Russell at 1-866-676-7680 or go to the prospectus and reports page to download one. Please read the prospectus carefully before investing. The LifePoints® Funds are a series of fund of funds which expose an investor to the risks of the underlying funds proportionate to their allocation. Investment in LifePoints Funds involves direct expenses of each fund and indirect expenses of the underlying funds, which together can be higher than those incurred when investing directly in an underlying fund. Each of the LifePoints® Funds, Target Date Series funds, invests its assets in shares of a number of underlying Russell Funds. The allocation of each Strategy Fund’s assets is based solely on time horizon and will become more conservative over time until approximately the year indicated in the Fund’s name, at which time the allocation will remain fixed. The asset allocation of the In Retirement Fund is fixed. From time to time, the fund’s adviser expects to modify the target strategic asset allocation for any fund and/or the underlying funds in which a fund invests including the addition of new underlying funds. In addition, the fund’s adviser may also manage assets of the underlying funds directly for a variety of purposes. Please note that with target date funds, the date in each fund name represents the approximate retirement year. The principal value of the fund is not guaranteed at the target date, nor at any time. Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns. Investments that are allocated across multiple types of securities may be exposed to a variety of risks based on the asset classes, investment styles, market sectors, and size of companies preferred by the investment managers. Investors should consider how the combined risks impact their total investment portfolio and understand that different risks can lead to varying financial consequences, including loss of principal. Please see a prospectus for further details. The underlying funds of LifePoints® Target Date Series consist of the following asset classes: Stocks: Although stocks have historically outperformed bonds, they also have historically been more volatile. Investors should carefully consider their ability to invest during volatile periods in the market. Bonds: Bond investors should carefully consider risks such as interest rate, credit, repurchase and reverse repurchase transaction risks. Greater risk, such as increased volatility, limited liquidity, prepayment, non-payment and increased default risk, is inherent in portfolios that invest in high yield ("junk") bonds or mortgage backed securities, especially mortgage backed securities with exposure to sub-prime mortgages. Investment in non-U.S. and emerging market securities is subject to the risk of currency fluctuations and to economic and political risks associated with such foreign countries. Real estate: Specific sector investing can be subject to different and greater risks than more diversified investments. Declines in the value of real estate, economic conditions, property taxes, tax laws and interest rates all present potential risks to real estate investments. Fund investments in non-U.S. markets can involve risks of currency fluctuation, political and economic instability, different accounting standards and foreign taxation. Small cap: Small capitalization (small cap) investments involve stocks of companies with smaller levels of market capitalization (generally less than $2 billion) than larger company stocks (large cap). Small cap investments are subject to considerable price fluctuations and are more volatile than large company stocks. Investors should consider the additional risks involved in small cap investments. Large cap: Large capitalization (large cap) investments involve stocks of companies generally having a market capitalization between $10 billion and $200 billion. The value of securities will rise and fall in response to the activities of the company that issued them, general market conditions and/or economic conditions. Mid cap: Middle capitalization (mid cap) investments involve stocks of companies generally having a market capitalization between $2 billion and $10 billion and considered more volatile than large cap companies. Mid cap investments are often considered to offer more growth potential than larger caps (but less than small caps) and less risk than small caps (but more than large caps). Non-U.S.: Non-U.S. markets entail different risks than those typically associated with the U.S. markets, including currency fluctuations, political and economic instability, accounting changes, and foreign taxation. Securities may be less liquid and more volatile. Emerging markets: Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which can be expected to have less stability than those of more developed countries. Securities may be less liquid and more volatile than U.S. and longer-established non-U.S. markets. Global equity: Global equity involves risk associated with investments primarily in equity securities of companies located around the world, including the United States. International securities can involve risks relating to political and economic instability or regulatory conditions. Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which have less stability than those of more developed countries. Commodities: Exposure to the commodities markets may subject the fund to greater volatility than investments in traditional securities, particularly if the investments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or sectors affecting a particular industry or commodity and international economic, political and regulatory developments. The use of leveraged commodity-linked derivatives creates an opportunity for increased return, but also creates the possibility for a greater loss. Copyright © Russell Investments 2012. All rights reserved. This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an "as is" basis without warranty. LifePoints® and the Russell logo are trademarks and service marks of Russell Investments. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company. Securities products and services offered through Russell Financial Services, Inc., member FINRA, part of Russell Investments. For information on the Financial Industry Regulatory Authority, go to www.finra.org. First used January 2012 RFS-7469			Learn more about Russell's LifePoints Target Date funds Printer friendly version of this page

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