2016 SEMI ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
30 September 2016
Russell Investment Company II plcan umbrella fund with segregated liability between sub-funds
Russell Emerging Market Debt Local Currency Fund
Russell Emerging Markets Extended Opportunities Fund
Russell Euro Fixed Income Fund
Russell Global Bond (Euro Hedged) Fund
Russell Global Defensive Equity Fund
Russell Pan European Equity Fund
Russell U.K. Equity Plus Fund
Russell U.S. Quant Fund
Russell World Equity Fund
Russell Investment Company II plc
Contents
Contents
Administration of the Company .............................................................................................................................. 2 Background to the Company ................................................................................................................................. 6 Combined Financial Statements ............................................................................................................................ 7 Russell Emerging Market Debt Local Currency Fund ........................................................................................... 10 Russell Emerging Markets Extended Opportunities Fund ..................................................................................... 25 Russell Euro Fixed Income Fund ........................................................................................................................... 44 Russell Global Bond (Euro Hedged) Fund ............................................................................................................ 68 Russell Global Defensive Equity Fund .................................................................................................................. 110 Russell Pan European Equity Fund ....................................................................................................................... 125 Russell U.K. Equity Plus Fund ............................................................................................................................... 138 Russell U.S. Quant Fund ....................................................................................................................................... 147 Russell World Equity Fund .................................................................................................................................... 159 Notes to the Financial Statements ......................................................................................................................... 180
Russell Investment Company II plc
Administration of the Company
2 Administration of the Company
Board of Directors of the Company* Global Sub-Custodian
Mr. James Firn (Chairman) State Street Bank and Trust Company
Mr. James Beveridge Copley Place
Mr. Peter Gonella 100 Huntington Avenue
Mr. Neil Jenkins Boston, MA 02116
Mr. John McMurray United States of America
Mr. Tom Murray
Mr. William Roberts Company Secretary
Mr. David Shubotham MFD Secretaries Limited
Mr. Kenneth Willman 2nd Floor, Beaux Lane House
Mercer Street Lower
Members of the Manager’s Audit Committee Dublin 2
Mr. David Shubotham (Chairman) Ireland
Mr. Tom Murray
Mr. William Roberts Adviser, Promoter and Distributor
Russell Investments Limited
Registered Office Rex House
78 Sir John Rogerson’s Quay 10 Regent Street, St. James’
Dublin 2 London SW1Y 4PE
Ireland England
Manager Money Managers for Russell Emerging Market Debt Local
Russell Investments Ireland Limited Currency Fund 78 Sir John Rogerson’s Quay Babson Capital Management LLC
Dublin 2 1500 Main Street, Suite 2200
Ireland Springfield, MA 01115-5189
United States of America
Independent Auditors
PricewaterhouseCoopers GLG Partners LP
Chartered Accountants and Statutory Audit Firm One Curzon Street
One Spencer Dock London, W1J 5HB
North Wall Quay United Kingdom
Dublin 1
Ireland Pictet Asset Management Ltd.
Level 11, Moor House
Legal Advisers 120 London Wall
Maples and Calder London, EC2Y 5ET
75 St. Stephen’s Green England
Dublin 2
Ireland Money Managers for Russell Emerging Markets Extended
Opportunities Fund
Administrator Barrow, Hanley, Mewhinney & Strauss Inc.
State Street Fund Services (Ireland) Limited JP Morgan Chase Tower
78 Sir John Rogerson’s Quay 2200 Ross Avenue, 31th Floor
Dublin 2 Dallas, TX 75201
Ireland United States of America
Depositary**
State Street Custodial Services (Ireland) Limited
78 Sir John Rogerson’s Quay
Dublin 2
Ireland
* As of 30 September 2016.
** UCITS V Directive
The regulations transposing the UCITS V Directive (Directive 2014/91/EU) (“UCITS V”) into Irish Law came into effect on 21 March
2016. UCITS V places an increased responsibility on the party acting as depositary of a UCITS fund. Prior to the implantation of UCITS
V, State Street Custodial Services (Ireland) Limited (the “Depositary”) acted as, custodian and trustee to the Company under a custody
agreement. The Depositary has now been appointed as a Depositary under a new depositary agreement that replaces the existing custody
agreement and as such is hereinafter referred to as the Depositary.
Russell Investment Company II plc
Administration of the Company - continued
Administration of the Company 3
BlackRock International Limited Money Managers for Russell Euro Fixed Income Fund
16/F Cheung Kong Centre Fidelity Investments International Limited
2 Queen’s Road Central Oakhill House
Hong Kong 130 Tonbridge Road
Hildenborough
East Capital Asset Management AB Tonbridge
Kungsgatan 33, Box 1364 Kent TN11 9DZ
111 93 Stockholm England
Sweden
Pioneer Investments
Imara Asset Management Ltd. 10 S LaSalle Street
Imara House Chicago, IL 60603
257 Oxford Road United States of America
Illovo 2196
Johannesburg Russell Investments Implementation Services, LLC
South Africa 1301 Second Avenue, 18th Floor
Seattle, WA 98101
Jardim Botanico Investimentos United States of America
Rua Alexandre Dumas
1601 / conj. 52 São Paulo Russell Investment Management LLC
SP 1301 Second Avenue
Brazil 18th Floor
Seattle, WA 98101
JK Capital Management Ltd. United States
Suite 1101, Chinachem Tower
34-37 Connaught Road Central Western Asset Management
Hong Kong 155 Bishopsgate
London, EC2M 3XG
Oaktree Capital Management L.P. England
680 Washington Blvd., 6th Floor
Stamford, CT 06901 Money Managers for Russell Global Bond (Euro Hedged)
United States of America Fund
BlueBay Asset Management Limited
Quantum Advisors 77 Grosvenor Street
PH Los Pinos, Planta Baja London, W1K 3JR
Calle 49, Bella Vista England
Panama
Colchester Global Investors Limited
Russell Investments Limited Heathcoat House
Rex House Rex House 20 Savile Row
10 Regent Street 10 Regent Street London W1S 3PR
London, SW1Y 4PE London, SW1Y 4PE
England England
Russell Investment Management, LLC Insight Asset Management
1301 Second Avenue, 18th Floor 160 Queen Victoria Street
Seattle, WA 98101 London, EC4V 4LA
United States of America England
Russell Investments Implementation Services, LLC Loomis, Sayles & Company, L.P.
1301 Second Avenue, 18th Floor One Financial Center
Seattle, WA 98101 Boston, MA 02111
United States of America United States of America
RWC Partners Pacific Investment Management Company
60 Petty France 650 Newport Center Drive
London, SW1H 9EU Newport Beach, CA 92660
England United States of America
Russell Investment Company II plc
Administration of the Company - continued
4 Administration of the Company
Russell Investments Implementation Services, LLC Russell Investments Limited
1301 Second Avenue, 18th Floor Rex House
Seattle, WA 98101 10 Regent Street
United States of America London, SW1Y 4PE
England
Schroder Investment Management Inc.
875 Third Avenue, 22nd Floor Money Managers for Russell U.K. Equity Plus Fund
New York, NY 10022- 6225 BlackRock International Limited
United States of America 12 Throgmorton Avenue
London EC2N 2DL
Money Managers for Russell Global Defensive Equity Fund England
Intech Investment Management, LLC
525 Okeechobee Blvd GLG Partners LP
West Palm Beach, FL 33401 One Curzon Street
United States of America London, W1J 5HB
United Kingdom
Perkins Investment Management, LLC
311 S. Wacker Drive, Suite 6000 Russell Investments Limited
Chicago, IL 60606 Rex House
United States of America 10 Regent Street
London, SW1Y 4PE
Russell Investments Limited England
Rex House
10 Regent Street Standard Life Investments
London, SW1Y 4PE 1 George Street
England Edinburgh EH2 2LL
Scotland
Russell Investment Management, LLC
1301 Second Avenue, 18th Floor Money Managers for Russell U.S. Quant Fund
Seattle, WA 98101 Aronson and Johnson and Ortiz, L.P.
United States of America 230 South Broad Street, 20th Floor
Philadelphia, PA 19102
Money Managers for Russell Pan European Equity Fund United States of America
GAM Holdings AG
Hardstrasse 201 Jacobs Levy Equity Management Inc.
P.O. Box 8037 101 Campus Drive, P.O. Box 650
Zurich Florham Park, NJ 07932-0650
Switzerland United States of America
Hermes Sourcecap Limited Numeric Investors, L.P.
1 Portsoken Street 1 Memorial Drive
London, E1 8HZ Cambridge, MA 02142
England United States of America
Numeric Investors, L.P. PanAgora Asset Management Inc.
1 Memorial Drive 470 Atlantic Avenue, 8th Floor
Cambridge, MA 02142 Boston, MA 02210
United States of America United States of America
Pyramis Global Advisor Russell Investments Management, LLC
900 Salem Street 1301 Second Avenue, 18th Floor
Smithfield Seattle, WA 98101
Rhode Island, RI 02917 United States of America
United States of America
S.W. Mitchell Capital, LLP
Pzena Investment Management 8 Jermyn Street
120 West 45th Street, 20th Floor Princes House
New York, NY 10036 London, SWIY 6DN
United States of America England
Russell Investment Company II plc
Administration of the Company - continued
Administration of the Company 5
Money Managers for Russell World Equity Fund Paying and Information Agent in France
Axiom International Investors, LLC Société Générale
55 Railroad Avenue, 3rd Floor 29, boulevard Haussmann
Greenwich, CT 06830 75009 Paris
United States of America France
Harris Associates, L.P. Paying and Information Agent in Germany*
2 North LaSalle Street, Suite 500 Marcard, Stein & Co AG
Chicago, IL 60602 Ballindamm 36
United States of America 20095 Hamburg
Germany
MFS Investment Management
111 Huntington Avenue Paying and Information Agent in Italy
Boston, MA 02199-7632 BNP Paribas Securities Services, Milan Branch
United States of America Via Ansperto 5
20121 Milan
Numeric Investors, L.P. Italy
1 Memorial Drive
Cambridge, MA 02142 Paying Agent in Italy
United States of America SGSS S.p.A
Via Benigno Crespi, 19/A-MAC2
Russell Investments Limited 20159 Milan
Rex House Italy
10 Regent Street
London, SW1Y 4PE Information Agent and Representative in the Netherlands England Deutsche Bank AG
Amsterdam Branch
Sustainable Growth Advisors, L.P. Herengracht 450 - 454
3 Stamford Plaza 1017 CA Amsterdam
301 Tresser Boulevard, Suite 1310 The Netherlands
Stamford, CT 06901
United States of America
Paying and Information Agent in Austria
UniCredit Bank Austria AG
Schottengasse 6-8
1010 Vienna
Austria
* The Company’s Memorandum and Articles of Association, the Prospectus, the Key Investor Information Documents, the unaudited semi-
annual reports, as well as the audited annual reports can be obtained free of charge from the office of the paying and information agent via
regular mail or per e-mail. The net asset value of each of the Funds and the subscription and redemption prices of the shares of the Funds are
published jointly and daily on “www.fundinfo.com” for information purposes only and do not constitute an invitation to subscribe for or
repurchase the Company’s shares at those prices.
Russell Investment Company II plc
Background to the Company
6 Background to the Company
Russell Investment Company II plc (the “Company”) was incorporated in Ireland as a public limited company on 1 November
2000. The Company operates pursuant to Irish company law under the Companies Act 2014, and has been authorised since 8
November 2000 by the Central Bank of Ireland (the “Central Bank”).
The Company is an open-ended investment company with variable capital which is authorised by the Central Bank under the
European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (as amended) (the
“UCITS Regulations”) and under the Central Bank (Supervision & Enforcement) Act 2013 (Section 48(1) (Undertakings for
Collective Investment in Transferable Securities) Regulations 2015, as amended.
The Company is organised in the form of an umbrella fund with segregated liability between sub-funds and as at 30 September
2016, has ten constituent funds available for investment (each a “Fund”, collectively the “Funds”).
Please refer to the Prospectus for details of the investment objectives and strategies of the particular Fund.
The Adviser, the Manager and their affiliated group companies are referred to collectively as “Russell Investments” in these
financial statements.
The net assets under management for the Funds as at 30 September 2016 amounted to EUR 4,332,702,269 (as at 31 March 2016:
EUR 4,259,099,826; as at 30 September 2015: EUR 4,630,583,137) are broken down as follows:
Fund
Funded during
the year ended
Functional
Currency
Net Assets
30 September 2016
‘000
Net Assets
31 March 2016
‘000
Net Assets
30 September 2015
‘000
Russell Emerging Market Debt Local Currency Fund 31 March 2013 USD 545,822 435,807 359,644
Russell Emerging Markets Extended Opportunities Fund 31 March 2012 USD 792,642 695,844 709,931
Russell Euro Fixed Income Fund 31 March 2002 EUR 283,579 292,422 308,708
Russell Global Bond (Euro Hedged) Fund 31 March 2002 EUR 361,511 410,199 559,656
Russell Global Defensive Equity Fund 31 March 2013 USD 151,050 133,836 147,888
Russell Pan European Equity Fund 31 March 2002 EUR 520,532 522,434 496,345
Russell U.K. Equity Plus Fund 31 March 2007 GBP 58,489 90,915 99,055
Russell U.S. Quant Fund 31 March 2002 USD 233,221 264,084 249,201
Russell World Equity Fund 31 March 2005 USD 1,760,449 1,797,342 2,028,664
Russell U.S. Equity Plus Fund remained unfunded as at 30 September 2016.
All share classes are Accumulation Class Shares unless otherwise indicated in the name of the share class.
All references to “net assets” throughout this document refer to net assets attributable to holders of redeemable participating
shares unless otherwise stated.
Notice to the Shareholders: Fund Performance and Market Commentary
For information regarding six months Fund performance and market commentary please contact the client executive.
Alternatively please email [email protected]
Investment Objectives
During the period, there has been no change to investment objective as stated within the Prospectus.
Russell Investment Company II plc
Combined Balance Sheet
As at 30 September 2016
The accompanying notes are an integral part of the financial statements.
Combined Balance Sheet 7
Total
30 September 2016
(Unaudited)
EUR ‘000
Total
31 March 2016
(Audited)
EUR ‘000
Assets
Financial assets at fair value through profit or loss ................................................................... 4,285,493 4,275,619
Cash at bank .......................................................................................................................... 85,604 60,180
Cash held with brokers and counterparties for open financial derivative instruments ........... 34,742 17,881
Debtors:
Receivable for investments sold ................................................................................... 41,250 66,858
Receivable on fund shares issued ................................................................................. 2,812 8,284
Dividends receivable .................................................................................................... 5,794 7,841
Interest receivable ........................................................................................................ 10,260 10,926
Prepayments and other debtors .................................................................................... 33 24
4,465,988 4,447,613
Liabilities
Financial liabilities at fair value through profit or loss .......................................................... (17,537) (32,664)
Creditors – amounts falling due within one financial year:
Bank overdraft ............................................................................................................. - (1,025)
Cash due to brokers and counterparties for open financial derivative instruments ...... (2,508) (3,984)
Payable for investments purchased .............................................................................. (101,960) (77,094)
Payable on fund shares redeemed ................................................................................ (2,948) (65,122)
Distributions payable on income share classes ............................................................ (3,046) (2,623)
Management fees payable ............................................................................................ (3,834) (3,755)
Performance fees payable ............................................................................................ (828) (1,550)
Depositary fees payable ............................................................................................... (94) (50)
Sub-custodian fees payable .......................................................................................... (328) (303)
Administration fees payable ......................................................................................... (88) (152)
Audit fees payable ........................................................................................................ (94) (171)
Other fees payable ........................................................................................................ (21) (20)
(133,286) (188,513)
Net assets attributable to redeemable participating shareholders .......................... 4,332,702 4,259,100
Russell Investment Company II plc
Combined Profit and Loss Account
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
8 Combined Profit and Loss Account
Total
Six months ended
30 September 2016
(Unaudited)
EUR ‘000
Total
Six months ended
30 September 2015
(Unaudited)
EUR ‘000
Income
Dividends ..................................................................................................................... 48,594 57,738
Interest income ............................................................................................................. 18,262 20,826
66,856 78,564
Net gain (loss) on investment activities ......................................................................... 170,559 (450,217)
Total investment income (expense) ............................................................................. 237,415 (371,653)
Expenses
Management fees ......................................................................................................... (22,721) (27,107)
Performance fees .......................................................................................................... (556) (543)
Depositary fees ............................................................................................................. (294) (207)
Sub-custodian fees ....................................................................................................... (1,168) (1,148)
Administration and transfer agency fees ...................................................................... (885) (975)
Audit fees ..................................................................................................................... (89) (89)
Professional fees .......................................................................................................... (61) (271)
Other fees ..................................................................................................................... (137) (208)
Total operating expenses .............................................................................................. (25,911) (30,548)
Net income (expense) .................................................................................................... 211,504 (402,201)
Finance costs
Distributions .................................................................................................................. (35,654) (40,266)
Profit (loss) for the financial period before taxation ................................................. 175,850 (442,467)
Taxation
Capital gains tax ........................................................................................................... (54) (153)
Withholding tax ........................................................................................................... (6,467) (7,689)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ...................................................................... 169,329 (450,309)
All amounts for the six months ended 30 September 2016 arose solely from continuing operations. There are no recognised gains or losses other
than those dealt with in the Profit and Loss Account.
Russell Investment Company II plc
Combined Statement of Changes in Net Assets Attributable to Redeemable Participating
Shareholders
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
Combined Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders 9
Total
Six months ended
30 September 2016
(Unaudited)
EUR ‘000
Total
Six months ended
30 September 2015
(Unaudited)
EUR ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ...................................................................... 169,329 (450,309)
Share transactions
Reinvestment of deemed distributions on accumulation shares ................................... 29,554 35,153
Net increase (decrease) in net assets resulting from redeemable participating share
transactions .................................................................................................................. (158,861) (351,501)
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders ........................................................................................... 40,022 (766,657)
Currency translation (Note 1) ............................................................................................. 33,580 (150,542)
Net assets attributable to redeemable participating shareholders
Beginning of financial period ....................................................................................... 4,259,100 5,547,782
End of financial period ................................................................................................. 4,332,702 4,630,583
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Balance Sheet
As at 30 September 2016
The accompanying notes are an integral part of the financial statements.
10 Russell Emerging Market Debt Local Currency Fund
30 September 2016
(Unaudited)
USD ‘000
31 March 2016
(Audited)
USD ‘000
Assets
Financial assets at fair value through profit or loss .......................................................... 510,495 385,794
Cash at bank (Note 2) ....................................................................................................... 54,803 32,814
Cash held with brokers and counterparties for open financial derivative instruments
(Note 2) ............................................................................................................................ 791 7,110
Debtors:
Receivable for investments sold .................................................................................... 967 14,226
Receivable on fund shares issued .................................................................................. 465 77
Interest receivable .......................................................................................................... 6,359 6,394
573,880 446,415
Liabilities
Financial liabilities at fair value through profit or loss .................................................... (4,710) (6,905)
Creditors – amounts falling due within one financial year:
Cash due to brokers and counterparties for open financial derivative positions
(Note 2) .......................................................................................................................... (700) (880)
Payable for investments purchased ................................................................................ (19,949) (1,052)
Payable on fund shares redeemed .................................................................................. - (3)
Distributions payable on income share classes .............................................................. (2,076) (1,246)
Management fees payable ............................................................................................. (525) (436)
Depositary fees payable ................................................................................................. (12) (5)
Sub-custodian fees payable ........................................................................................... (61) (39)
Administration and transfer agency fees payable ........................................................... (11) (16)
Audit fees payable ......................................................................................................... (12) (24)
Other fees payable ......................................................................................................... (2) (2)
(28,058) (10,608)
Net asset value attributable to redeemable participating shareholders .................... 545,822 435,807
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Profit and Loss Account
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Market Debt Local Currency Fund 11
Six months ended
30 September 2016
(Unaudited)
USD ‘000
Six months ended
30 September 2015
(Unaudited)
USD ‘000
Income
Interest income .............................................................................................................. 12,932 13,126
Net gain (loss) on investment activities ........................................................................... 10,432 (64,122)
Total investment income (expense) ............................................................................... 23,364 (50,996)
Expenses
Management fees (Note 3) ............................................................................................ (2,840) (2,357)
Performance fee (Note 3) .............................................................................................. - (28)
Depositary fees (Note 4) ............................................................................................... (33) (17)
Sub-custodian fees (Note 4) .......................................................................................... (211) (146)
Administration and transfer agency fees (Note 4) ........................................................ (96) (88)
Audit fees ...................................................................................................................... (12) (12)
Professional fees ........................................................................................................... (5) (25)
Other fees ...................................................................................................................... (30) (23)
Total operating expenses ............................................................................................... (3,227) (2,696)
Net income (expense) ..................................................................................................... 20,137 (53,692)
Finance costs
Distributions (Note 6) ................................................................................................... (9,938) (8,420)
Profit (loss) for the financial period before taxation ................................................... 10,199 (62,112)
Taxation (Note 7)
Capital gains tax ............................................................................................................ (61) (28)
Withholding tax ............................................................................................................. (353) (250)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 9,785 (62,390)
All amounts arose solely from continuing operations. There are no recognised gains or losses other than those dealt with in the Profit and Loss
Account.
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
12 Russell Emerging Market Debt Local Currency Fund
Six months ended
30 September 2016
(Unaudited)
USD ‘000
Six months ended
30 September 2015
(Unaudited)
USD ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 9,785 (62,390)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 6) ..................... 6,645 6,634
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 8) ..................................................................................................... 93,585 33,366
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders ............................................................................................. 110,015 (22,390)
Net assets attributable to redeemable participating shareholders
Beginning of financial period ....................................................................................... 435,807 382,034
End of financial period ................................................................................................. 545,822 359,644
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Market Debt Local Currency Fund 13
Principal
Amount
Fair Value
USD ‘000
Fund
%
Transferable Securities (80.54%)
Long Term Bonds and Notes (78.26%)
Brazil (4.90%)
Brazil Notas do Tesouro
Nacional Serie B
BRL 8,806,000 6.000% due 15/08/20 ....... 8,042 1.47
5,400,000 6.000% due 15/08/50 ....... 5,121 0.94
Brazil Notas do Tesouro
Nacional Serie F
12,021,000 10.000% due 01/01/21 ..... 3,629 0.66
20,416,000 10.000% due 01/01/23 ..... 6,050 1.11
6,427,000 10.000% due 01/01/25 ..... 1,879 0.34
7,106,000 10.000% due 01/01/27 ..... 2,049 0.38
26,770 4.90
Chile (0.29%)
CLP
Chile Government
International Bond
966,200,000 5.500% due 05/08/20 ....... 1,564 0.29
Colombia (6.36%)
COP
Colombia Government
International Bond
1,160,000,000 7.750% due 14/04/21 ....... 431 0.08
995,000,000 9.850% due 28/06/27 ....... 423 0.08
Colombian TES
5,380,500,000 5.000% due 21/11/18 ....... 1,826 0.33
4,335,000,000 7.000% due 11/09/19 ....... 1,534 0.28
7,200,000 11.000% due 24/07/20 ..... 2,879 0.53
5,771,000,000 7.000% due 04/05/22 ....... 2,047 0.38
29,218,800,000 10.000% due 24/07/24 ..... 12,085 2.21
9,632,100,000 7.500% due 26/08/26 ....... 3,480 0.64
29,059,900,000 6.000% due 28/04/28 ....... 9,286 1.70
1,910,000,000 7.750% due 18/09/30 ....... 703 0.13
34,694 6.36
Croatia (0.53%)
Croatia Government Bond
HRK 18,000,000 4.250% due 14/12/26 ....... 2,914 0.53
Ghana (0.27%)
Ghana Government Bond
GHS 5,650,000 24.750% due 19/07/21 ..... 1,485 0.27
Hungary (2.72%)
HUF Hungary Government Bond
440,000,000 6.750% due 24/11/17 ....... 1,715 0.31
220,000,000 2.500% due 22/06/18 ....... 823 0.15
513,000,000 6.500% due 24/06/19 ....... 2,132 0.39
175,000,000 3.500% due 24/06/20 ....... 682 0.12
213,000,000 7.500% due 12/11/20 ....... 957 0.18
200,030,000 7.000% due 24/06/22 ....... 918 0.17
617,010,000 6.000% due 24/11/23 ....... 2,787 0.51
150,000,000 3.000% due 26/06/24 ....... 562 0.10
Principal
Amount
Fair Value
USD ‘000
Fund
%
298,560,000 5.500% due 24/06/25 ...... 1,321 0.24
592,000,000 6.750% due 22/10/28 ...... 2,980 0.55
14,877 2.72
Indonesia (8.01%)
IDR Indonesia Treasury Bond
160,000,000 12.800% due 15/06/21 .... 15 0.00
13,370,000,000 8.250% due 15/07/21 ...... 1,084 0.20
1,070,000,000 5.625% due 15/05/23 ...... 77 0.01
94,378,000,000 8.375% due 15/03/24 ...... 7,843 1.44
43,000,000,000 8.375% due 15/09/26 ...... 3,591 0.66
7,303,000,000 6.125% due 15/05/28 ...... 512 0.09
49,364,000,000 9.000% due 15/03/29 ...... 4,325 0.79
2,200,000,000 9.500% due 15/07/31 ...... 201 0.04
49,100,000,000 8.250% due 15/06/32 ...... 4,100 0.75
32,363,000,000 6.625% due 15/05/33 ...... 2,294 0.42
35,820,000,000 8.375% due 15/03/34 ...... 3,000 0.55
119,284,000,000 8.250% due 15/05/36 ...... 9,900 1.81
29,379,000,000 10.500% due 15/07/38 .... 2,932 0.54
5,108,000,000 6.375% due 15/04/42 ...... 340 0.06
41,306,000,000 8.750% due 15/02/44 ...... 3,552 0.65
43,766 8.01
Korea, Republic of (0.50%)
Export-Import Bank of
Korea
20,000,000,000 8.000% due 15/05/18 ...... 1,533 0.28
15,300,000,000 8.000% due 17/10/19 ...... 1,186 0.22
2,719 0.50
Malaysia (8.40%)
Malaysia Government
Bond
MYR 13,550,000 3.759% due 15/03/19 ...... 3,345 0.61
7,820,000 3.654% due 31/10/19 ...... 1,927 0.35
2,550,000 4.378% due 29/11/19 ...... 642 0.12
54,735,000 3.492% due 31/03/20 ...... 13,362 2.45
3,650,000 3.889% due 31/07/20 ...... 903 0.17
5,330,000 3.659% due 15/10/20 ...... 1,310 0.24
1,450,000 4.160% due 15/07/21 ...... 364 0.07
11,660,000 4.048% due 30/09/21 ...... 2,920 0.53
10,500,000 3.620% due 30/11/21 ...... 2,583 0.47
3,940,000 3.418% due 15/08/22 ...... 951 0.17
11,390,000 3.795% due 30/09/22 ...... 2,805 0.51
3,530,000 3.480% due 15/03/23 ...... 854 0.16
4,010,000 4.181% due 15/07/24 ...... 1,009 0.18
2,230,000 4.392% due 15/04/26 ...... 569 0.10
7,000,000 3.892% due 15/03/27 ...... 1,708 0.31
10,046,000 4.498% due 15/04/30 ...... 2,559 0.47
2,162,000 4.127% due 15/04/32 ...... 524 0.10
23,580,000 3.844% due 15/04/33 ...... 5,481 1.00
800,000 4.254% due 31/05/35 ...... 197 0.04
7,364,000 4.935% due 30/09/43 ...... 1,888 0.35
45,901 8.40
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
14 Russell Emerging Market Debt Local Currency Fund
Principal
Amount
Fair Value
USD ‘000
Fund
%
Mexico (10.70%)
Mexican Bonos
MXN 54,936,000 7.750% due 14/12/17 ....... 2,930 0.54
29,480,000 8.500% due 13/12/18 ....... 1,617 0.30
18,400,000 5.000% due 11/12/19 ....... 934 0.17
246,740,000 8.000% due 11/06/20 ....... 13,751 2.52
36,650,000 6.500% due 10/06/21 ....... 1,953 0.36
140,158,000 6.500% due 09/06/22 ....... 7,488 1.37
26,658,000 8.000% due 07/12/23 ....... 1,551 0.28
79,200,000 10.000% due 05/12/24 ..... 5,177 0.95
116,047,300 5.750% due 05/03/26 ....... 5,890 1.08
53,620,000 7.500% due 03/06/27 ....... 3,070 0.56
43,038,000 7.750% due 29/05/31 ....... 2,520 0.46
16,903,500 7.750% due 23/11/34 ....... 994 0.18
42,704,000 10.000% due 20/11/36 ..... 3,082 0.56
20,270,100 8.500% due 18/11/38 ....... 1,294 0.24
45,469,800 7.750% due 13/11/42 ....... 2,719 0.50
54,970 10.70
Peru (2.17%)
Peru Government Bond
PEN 6,292,000 7.840% due 12/08/20 ....... 2,058 0.38
3,150,000 5.700% due 12/08/24 ....... 950 0.17
7,885,000 6.950% due 12/08/31 ....... 2,523 0.46
8,700,000 6.850% due 12/02/42 ....... 2,727 0.50
Peruvian Government
International Bond
2,600,000 7.840% due 12/08/20 ....... 850 0.16
2,550,000 5.700% due 12/08/24 ....... 769 0.14
1,760,000 8.200% due 12/08/26 ....... 615 0.11
3,000,000 6.950% due 12/08/31 ....... 960 0.18
570,000 6.900% due 12/08/37 ....... 181 0.03
670,000 6.850% due 12/02/42 ....... 210 0.04
11,843 2.17
Philippines (0.75%)
Philippine Government
International Bond
PHP 71,000,000 4.950% due 15/01/21 ....... 1,536 0.28
102,000,000 3.900% due 26/11/22 ....... 2,109 0.39
18,000,000 6.250% due 14/01/36 ....... 431 0.08
4,076 0.75
Poland (5.39%)
Poland Government Bond
PLN 16,050,000 5.250% due 25/10/17 ....... 4,355 0.80
40,569,000 2.500% due 25/07/18 ....... 10,760 1.97
3,590,000 3.250% due 25/07/19 ....... 974 0.18
6,140,000 1.500% due 25/04/20 ....... 1,574 0.29
3,500,000 5.250% due 25/10/20 ....... 1,024 0.19
3,700,000 2.000% due 25/04/21 ....... 959 0.18
7,780,000 1.750% due 25/07/21 ....... 1,984 0.36
5,400,000 5.750% due 25/10/21 ....... 1,639 0.30
4,800,000 5.750% due 23/09/22 ....... 1,485 0.27
Principal
Amount
Fair Value
USD ‘000
Fund
%
9,580,000 4.000% due 25/10/23 ...... 2,719 0.50
1,759,000 3.250% due 25/07/25 ...... 474 0.09
5,640,000 2.500% due 25/07/26 ...... 1,424 0.26
29,371 5.39
Romania (1.94%)
Romania Government
Bond
RON 3,950,000 5.600% due 28/11/18 ...... 1,096 0.20
11,050,000 4.750% due 24/06/19 ...... 3,041 0.56
3,450,000 5.750% due 29/04/20 ...... 993 0.18
1,800,000 5.950% due 11/06/21 ...... 531 0.10
3,700,000 5.850% due 26/04/23 ...... 1,120 0.21
5,105,000 4.750% due 24/02/25 ...... 1,472 0.27
7,200,000 5.800% due 26/07/27 ...... 2,277 0.42
10,530 1.94
Russia (4.61%)
RUB
Russian Federal Bond -
OFZ
120,000,000 7.500% due 15/03/18 ...... 1,886 0.35
200,000,000 7.500% due 27/02/19 ...... 3,120 0.57
70,000,000 6.700% due 15/05/19 ...... 1,071 0.20
141,000,000 6.400% due 27/05/20 ...... 2,114 0.39
53,300,000 7.600% due 20/07/22 ...... 824 0.15
57,500,000 7.000% due 25/01/23 ...... 865 0.16
125,000,000 7.000% due 16/08/23 ...... 1,876 0.34
41,500,000 8.150% due 03/02/27 ...... 668 0.12
420,460,000 7.050% due 19/01/28 ...... 6,220 1.14
Russian Federal Inflation
Linked Bond
406,449,900 2.500% due 16/08/23 ...... 6,332 1.16
Russian Foreign Bond -
Eurobond
10,000,000 7.850% due 10/03/18 ...... 157 0.03
25,133 4.61
South Africa (10.78%)
South Africa Government
Bond
ZAR 54,500,000 7.000% due 28/02/31 ...... 3,317 0.61
6,800,000 9.000% due 31/01/40 ...... 480 0.09
35,600,000 8.000% due 21/12/18 ...... 2,605 0.48
21,620,000 7.250% due 15/01/20 ...... 1,545 0.28
27,080,000 6.750% due 31/03/21 ...... 1,875 0.34
31,000,000 7.750% due 28/02/23 ...... 2,190 0.40
246,525,000 10.500% due 21/12/26 .... 20,123 3.69
59,470,000 7.000% due 28/02/31 ...... 3,620 0.66
25,891,818 8.250% due 31/03/32 ...... 1,744 0.32
87,455,000 6.250% due 31/03/36 ...... 4,651 0.85
55,634,000 8.500% due 31/01/37 ...... 3,748 0.69
49,700,000 6.500% due 28/02/41 ...... 2,644 0.48
32,910,000 8.750% due 31/01/44 ...... 2,242 0.41
118,685,889 8.750% due 28/02/48 ...... 8,068 1.48
58,852 10.78
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Market Debt Local Currency Fund 15
Principal
Amount
Fair Value
USD ‘000
Fund
%
Thailand (4.54%)
Thailand Government Bond
THB 86,980,704 1.200% due 14/07/21 ....... 2,455 0.45
448,437,000 3.650% due 17/12/21 ....... 14,152 2.59
18,500,000 2.125% due 17/12/26 ....... 534 0.10
17,747,000 3.580% due 17/12/27 ....... 581 0.11
102,808,044 1.250% due 12/03/28 ....... 2,770 0.51
33,860,000 4.875% due 22/06/29 ....... 1,252 0.23
21,535,000 3.400% due 17/06/36 ....... 702 0.13
63,200,000 4.260% due 12/12/37 ....... 2,313 0.42
24,759 4.54
Turkey (4.67%)
Turkey Government Bond
TRY 7,000,000 6.300% due 14/02/18 ....... 2,275 0.42
3,000,000 8.800% due 14/11/18 ....... 1,007 0.18
5,940,000 10.400% due 27/03/19 ..... 2,058 0.38
3,450,000 10.500% due 15/01/20 ..... 1,209 0.22
3,080,000 7.400% due 05/02/20 ....... 985 0.18
5,990,000 9.400% due 08/07/20 ....... 2,027 0.37
1,300,000 10.700% due 17/02/21 ..... 459 0.08
2,810,000 9.500% due 12/01/22 ....... 950 0.17
6,640,000 7.100% due 08/03/23 ....... 1,979 0.36
1,900,000 8.800% due 27/09/23 ....... 614 0.11
1,740,153 10.400% due 20/03/24 ..... 610 0.11
3,810,000 9.000% due 24/07/24 ....... 1,239 0.23
18,300,000 8.000% due 12/03/25 ....... 5,598 1.03
9,299,179 2.000% due 16/04/25 ....... 2,989 0.55
4,280,000 10.600% due 11/02/26 ..... 1,523 0.28
25,522 4.67
Ukraine (0.18%)
Ukraine Government
International Bond
USD 3,000,000
Zero Coupon due
31/05/40 ........................... 972 0.18
Uruguay (0.55%)
Uruguay Government
International Bond
UYU 93,029,733 4.375% due 15/12/28 ....... 3,008 0.55
Total Long Term Bonds
and Notes ............................ 423,726 78.26
Short Term Investments (2.28%)
Mexico (1.08%)
MXN Mexican Bonos
111,500,000 7.250% due 15/12/16 ....... 5,791 1.06
1,800,000 5.000% due 15/06/17 ....... 93 0.02
5,884 1.08
Poland (1.06%)
Poland Government Bond
PLN 22,000,000 4.750% due 25/10/16 ....... 5,766 1.06
Principal
Amount
Fair Value
USD ‘000
Fund
%
South Africa (0.09%)
South Africa Government
Bond
ZAR 6,600,000 8.250% due 15/09/17 ...... 483 0.09
Thailand (0.05%)
Thailand Government Bond
THB 10,000,000 3.250% due 16/06/17 ...... 292 0.05
Total Short Term
Investments ........................ 12,425 2.28
Total Transferable
Securities ........................... 436,151 80.54
Money Market Instruments (7.58%)
Brazil (4.65%)
Brazil Letras do Tesouro
Nacional
BRL 4,500,000
Zero Coupon due
01/10/17 .......................... 1,232 0.23
18,055,000
Zero Coupon due
01/01/18 .......................... 4,820 0.88
6,000,000
Zero Coupon due
01/07/18 .......................... 1,521 0.28
67,195,000
Zero Coupon due
01/01/19 .......................... 16,201 2.97
5,000,000
Zero Coupon due
01/07/19 .......................... 1,143 0.21
2,000,000
Zero Coupon due
01/01/20 .......................... 432 0.08
25,349 4.65
United States (2.93%)
U.S. Treasury Bill
USD 10,000,000
Zero Coupon due
20/10/16 .......................... 9,999 1.83
6,000,000
Zero Coupon due
03/11/16 .......................... 5,999 1.10
15,998 2.93
Total Money Market
Instruments ....................... 41,347 7.58
Number
of Shares
Investment Funds (4.86%)
Ireland (4.86%)
26,453
Russell Investment Company
III Plc - The US Dollar Cash
Fund II - Class R Roll-Up
Shares ................................. 26,550 4.86
Total Investment Funds .... 26,550 4.86
Total Investments
excluding Financial
Derivative Instruments ..... 504,048 92.98
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
16 Russell Emerging Market Debt Local Currency Fund
Financial Derivative Instruments (0.29%)
Open Futures Contracts (0.00%)
Notional
Amount
USD ‘000
Average
Cost Price
USD
Unrealised
Gain (Loss)
USD ‘000
Fund
%
(512)
(170.83)
3 of U.S. Long Treasury Bond Futures
Short Futures Contracts
Expiring December 2016 .......................................... 8 0.00
2,362
131.23
18 of 10 Year U.S. Treasury Note Futures
Short Futures Contracts
Expiring December 2016 .......................................... (2) 0.00
5,628
0.10
56 of 10 Year Korea Bond Futures
Long Futures Contracts
Expiring December 2016 .......................................... 15 0.00
(1,314)
(0.12)
11 of 10 Year Korea Bond Futures
Short Futures Contracts
Expiring December 2016 .......................................... (17) 0.00
Unrealised gain on open futures contracts ...................................................................... 23 0.00
Unrealised loss on open futures contracts ....................................................................... (19) 0.00
Net unrealised gain (loss) on open futures contracts ................................................. 4 0.00
Open Forward Foreign Currency Exchange Contracts (0.23%)
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
04/10/2016 BRL 1,321 USD 400 7 0.00
04/10/2016 BRL 5,463 USD 1,681 1 0.00
18/10/2016 BRL 1,774 USD 544 - 0.00
18/10/2016 BRL 5,400 USD 1,617 39 0.01
28/10/2016 BRL 9,457 USD 2,906 (15) 0.00
03/11/2016 BRL 730 USD 223 - 0.00
21/12/2016 BRL 24,290 USD 7,308 (1) 0.00
12/01/2017 CLP 1,728,676 USD 2,570 32 0.01
05/04/2017 CNY 33,227 USD 4,944 9 0.00
13/10/2016 COP 1,590,000 USD 552 (1) 0.00
18/10/2016 COP 9,173,432 USD 3,086 91 0.02
25/10/2016 COP 4,201,423 USD 1,426 27 0.00
28/10/2016 COP 6,079,025 USD 2,091 10 0.00
12/01/2017 COP 23,928,100 USD 7,828 343 0.06
12/01/2017 COP 11,473,000 USD 3,850 67 0.01
12/01/2017 COP 9,582,000 USD 3,000 273 0.05
18/10/2016 EUR 14,456 HRK 108,549 26 0.00
18/10/2016 EUR 2,749 HUF 854,527 (16) 0.00
15/11/2016 EUR 1,372 USD 1,535 10 0.00
22/11/2016 EUR 273 USD 311 (3) 0.00
18/10/2016 HRK 54,274 EUR 7,242 (29) (0.01)
18/10/2016 HRK 54,274 EUR 7,224 (8) 0.00
18/10/2016 HUF 1,577,163 EUR 4,998 114 0.02
15/11/2016 HUF 445,000 EUR 1,440 (3) 0.00
18/10/2016 HUF 987,915 USD 3,600 (8) 0.00
18/10/2016 HUF 357,583 USD 1,250 50 0.01
28/10/2016 HUF 227,390 USD 829 (2) 0.00
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Market Debt Local Currency Fund 17
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
28/10/2016 HUF 214,079 USD 780 (2) 0.00
13/01/2017 HUF 2,165,296 USD 7,642 240 0.04
13/01/2017 HUF 686,275 USD 2,500 (2) 0.00
05/10/2016 IDR 26,598,781 USD 1,995 42 0.01
17/10/2016 IDR 43,100,000 USD 3,336 (40) (0.01)
24/10/2016 IDR 2,400,000 USD 185 (2) 0.00
28/10/2016 IDR 38,761,950 USD 2,993 (34) (0.01)
21/12/2016 IDR 6,860,765 USD 521 (2) 0.00
12/01/2017 IDR 4,793,160 USD 354 8 0.00
12/01/2017 IDR 6,491,725 USD 485 5 0.00
13/01/2017 ILS 8,956 USD 2,388 5 0.00
13/01/2017 KRW 4,050,585 USD 3,629 47 0.01
18/10/2016 KZT 1,008,324 USD 2,897 89 0.02
11/10/2016 MXN 70,800 USD 3,832 (177) (0.03)
11/10/2016 MXN 21,100 USD 1,070 20 0.00
12/10/2016 MXN 40,700 USD 2,168 (67) (0.01)
18/10/2016 MXN 82,422 USD 4,393 (142) (0.03)
18/10/2016 MXN 22,157 USD 1,132 11 0.00
18/10/2016 MXN 14,609 USD 764 (10) 0.00
18/10/2016 MXN 28,166 USD 1,487 (34) (0.01)
28/10/2016 MXN 28,095 USD 1,439 9 0.00
28/10/2016 MXN 20,556 USD 1,053 6 0.00
12/01/2017 MXN 156,069 USD 8,261 (285) (0.05)
12/01/2017 MXN 2,154 USD 108 2 0.00
12/01/2017 MXN 63,376 USD 3,197 42 0.01
12/01/2017 MXN 19,914 USD 1,040 (22) 0.00
12/01/2017 MXN 7,450 USD 400 (19) 0.00
12/01/2017 MXN 23,607 USD 1,180 26 0.00
18/10/2016 MYR 311 USD 77 (2) 0.00
28/10/2016 MYR 10,283 USD 2,487 (4) 0.00
11/01/2017 MYR 4,459 USD 1,100 (27) 0.00
11/01/2017 MYR 4,152 USD 1,000 (1) 0.00
11/01/2017 MYR 1,938 USD 472 (6) 0.00
13/01/2017 PEN 1,851 USD 545 (7) 0.00
18/10/2016 PHP 118,749 USD 2,514 (66) (0.01)
13/02/2017 PHP 13,625 USD 280 - 0.00
18/10/2016 PLN 51,006 EUR 11,593 286 0.05
30/11/2016 PLN 2,240 EUR 519 - 0.00
18/10/2016 PLN 20,335 USD 5,202 110 0.02
28/10/2016 PLN 5,664 USD 1,483 (4) 0.00
28/10/2016 PLN 5,614 USD 1,469 (3) 0.00
30/11/2016 PLN 12,378 USD 3,228 2 0.00
13/01/2017 PLN 51,609 USD 12,853 608 0.11
18/10/2016 RON 6,399 EUR 1,429 9 0.00
11/10/2016 RON 2,398 USD 606 - 0.00
18/10/2016 RON 4,551 USD 1,124 26 0.00
13/01/2017 RON 1,208 USD 298 8 0.00
13/01/2017 RON 4,749 USD 1,200 2 0.00
03/10/2016 RUB 79,951 USD 1,219 49 0.01
18/10/2016 RUB 309,961 USD 4,740 162 0.03
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
18 Russell Emerging Market Debt Local Currency Fund
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
18/10/2016 RUB 31,612 USD 476 24 0.00
18/10/2016 RUB 129,001 USD 1,984 56 0.01
28/10/2016 RUB 104,265 USD 1,622 24 0.00
31/10/2016 RUB 3,219 USD 50 1 0.00
11/01/2017 RUB 147,917 USD 2,260 35 0.01
11/01/2017 RUB 122,122 USD 1,820 74 0.01
11/01/2017 RUB 85,137 USD 1,300 21 0.00
18/10/2016 SEK 38,883 USD 4,539 2 0.00
13/01/2017 SGD 2,276 USD 1,700 (30) (0.01)
13/01/2017 SGD 4,779 USD 3,547 (40) (0.01)
18/10/2016 THB 372,591 USD 10,755 (5) 0.00
21/10/2016 THB 161,925 USD 4,670 1 0.00
28/10/2016 THB 78,830 USD 2,279 (5) 0.00
13/01/2017 THB 107,327 USD 3,100 (6) 0.00
17/10/2016 TRY 764 USD 254 - 0.00
18/10/2016 TRY 11,354 USD 3,646 127 0.02
28/10/2016 TRY 4,263 USD 1,426 (13) 0.00
28/10/2016 TRY 3,951 USD 1,322 (12) 0.00
06/02/2017 TRY 28,174 USD 8,951 208 0.04
06/02/2017 TRY 8,861 USD 2,900 (20) 0.00
06/02/2017 TRY 684 USD 223 (1) 0.00
13/01/2017 TWD 37,680 USD 1,200 5 0.00
18/10/2016 USD 3,053 AUD 4,099 (83) (0.02)
06/01/2017 USD 1,063 AUD 1,390 2 0.00
04/10/2016 USD 7,457 BRL 24,418 (59) (0.01)
04/10/2016 USD 2,132 BRL 6,784 44 0.01
18/10/2016 USD 2,171 BRL 7,174 (28) (0.01)
03/11/2016 USD 7,442 BRL 24,418 (9) 0.00
02/02/2017 USD 1,622 BRL 5,463 (1) 0.00
18/10/2016 USD 2,277 CAD 2,979 10 0.00
18/10/2016 USD 2,854 CHF 2,811 (48) (0.01)
18/10/2016 USD 2,762 CLP 1,815,341 10 0.00
25/11/2016 USD 2,184 CLP 1,475,000 (45) (0.01)
05/04/2017 USD 4,900 CNY 33,227 (53) (0.01)
06/09/2017 USD 1,700 CNY 11,608 (26) 0.00
06/09/2017 USD 5,250 CNY 35,931 (91) (0.02)
13/10/2016 USD 1,088 COP 3,180,000 (14) 0.00
25/10/2016 USD 385 COP 1,120,000 (2) 0.00
25/10/2016 USD 672 COP 1,931,818 4 0.00
12/01/2017 USD 2,695 COP 8,095,780 (69) (0.01)
12/01/2017 USD 4,160 COP 12,039,040 49 0.01
12/01/2017 USD 5,738 COP 17,053,336 (85) (0.02)
07/10/2016 USD 7,787 EUR 6,943 (17) 0.00
07/10/2016 USD 180 EUR 160 - 0.00
18/10/2016 USD 2,287 EUR 2,069 (40) (0.01)
18/10/2016 USD 7,576 HKD 58,699 6 0.00
03/10/2016 USD 675 HUF 184,415 4 0.00
03/11/2016 USD 671 HUF 184,415 1 0.00
15/11/2016 USD 1,561 HUF 434,000 (17) 0.00
13/01/2017 USD 1,321 HUF 364,176 (5) 0.00
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Market Debt Local Currency Fund 19
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
17/10/2016 USD 3,278 IDR 43,200,000 (25) 0.00
24/10/2016 USD 268 IDR 3,478,902 2 0.00
18/10/2016 USD 2,853 ILS 10,987 (75) (0.01)
18/10/2016 USD 1,846 ILS 6,982 (15) 0.00
13/01/2017 USD 2,320 ILS 8,958 (73) (0.01)
18/10/2016 USD 1,493 JPY 158,570 (74) (0.01)
14/10/2016 USD 103 KRW 115,000 (2) 0.00
13/01/2017 USD 3,516 KRW 4,050,585 (161) (0.03)
11/10/2016 USD 8,648 MXN 160,425 366 0.07
15/12/2016 USD 5,939 MXN 113,731 109 0.02
12/01/2017 USD 4,660 MXN 92,958 (91) (0.02)
12/01/2017 USD 7,020 MXN 129,954 378 0.07
11/10/2016 USD 3,090 MYR 12,363 102 0.02
04/11/2016 USD 579 MYR 2,360 10 0.00
18/10/2016 USD 3,791 NOK 32,186 (236) (0.04)
21/12/2016 USD 3,126 NZD 4,286 18 0.00
15/11/2016 USD 246 PEN 841 - 0.00
21/12/2016 USD 1,529 PEN 5,179 22 0.00
13/01/2017 USD 197 PEN 677 - 0.00
18/10/2016 USD 7,644 PHP 362,141 179 0.03
18/10/2016 USD 353 PHP 16,948 4 0.00
25/10/2016 USD 5,950 PLN 22,976 (50) (0.01)
13/01/2017 USD 223 PLN 866 (3) 0.00
03/10/2016 USD 1,320 RUB 86,832 (58) (0.01)
18/10/2016 USD 3,030 RUB 196,864 (84) (0.02)
20/10/2016 USD 5,328 RUB 354,600 (278) (0.05)
31/10/2016 USD 371 RUB 23,900 (6) 0.00
11/01/2017 USD 1,423 RUB 94,918 (49) (0.01)
11/01/2017 USD 2,390 RUB 160,704 (103) (0.02)
11/01/2017 USD 1,711 RUB 113,816 (55) (0.01)
18/10/2016 USD 7,252 SGD 9,853 24 0.00
22/11/2016 USD 262 SGD 352 4 0.00
13/01/2017 USD 5,212 SGD 7,054 36 0.01
07/10/2016 USD 546 THB 18,900 1 0.00
17/10/2016 USD 2,158 THB 75,400 (18) 0.00
17/10/2016 USD 7,424 TRY 22,220 40 0.01
13/01/2017 USD 1,200 TWD 38,598 (35) (0.01)
18/10/2016 USD 2,036 ZAR 29,663 (116) (0.02)
25/10/2016 USD 8,475 ZAR 122,419 (391) (0.07)
25/10/2016 USD 1,103 ZAR 15,100 10 0.00
12/01/2017 USD 6,795 ZAR 97,621 (167) (0.03)
12/01/2017 USD 283 ZAR 4,282 (22) 0.00
12/01/2017 USD 3,598 ZAR 49,097 97 0.02
12/01/2017 USD 995 ZAR 14,393 (31) (0.01)
25/10/2016 ZAR 10,900 USD 794 (5) 0.00
25/10/2016 ZAR 29,810 USD 2,060 100 0.02
28/10/2016 ZAR 19,543 USD 1,445 (30) (0.01)
28/10/2016 ZAR 21,524 USD 1,592 (34) (0.01)
12/01/2017 ZAR 52,886 USD 3,850 (78) (0.01)
12/01/2017 ZAR 88,615 USD 5,920 399 0.07
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
20 Russell Emerging Market Debt Local Currency Fund
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
12/01/2017 ZAR 56,699 USD 3,926 118 0.02
Unrealised gain on open forward foreign currency exchange contracts ............................... 5,640 0.97
Unrealised loss on open forward foreign currency exchange contracts ................................ (4,233) (0.74)
Net unrealised gain (loss) on open forward foreign currency exchange contracts ....... 1,407 0.23
Options Purchased (0.00%)
Notional
Amount
USD‘000
Fair Value
USD ‘000
Fund
%
545
Put at 98.00 on Euro Futures Option
Expiring June 2017 ............................................................................................................ 1 0.00
Options purchase at fair value (Premium paid USD 5,450) ....................................................... 1 0.00
Interest Rate Swaps (0.03%)
Ccy
Notional
Amount
‘000
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
USD ‘000
Fund
%
HKD 19,600 1.95%
HKD 3 Month
HIBOR 16/10/2021 (105) (0.02)
SGD 1,663
SGD 6 Month
LIBOR 2.00% 17/10/2021 18 0.00
HKD 2,500 2.28%
HKD 3 Month
LIBOR 28/10/2024 (25) 0.00
CNY 4,500
CNY 3 Month
SHIFT 3.75% 06/11/2016 1 0.00
CNY 8,900
CNY 3 Month
LIBOR 3.68% 11/11/2016 3 0.00
HKD 10,800 1.57%
HKD 3 Month
LIBOR 12/02/2021 (29) (0.01)
CNY 17,900
CNY 3 Month
LIBOR 2.67% 29/04/2018 3 0.00
SGD 1,600 2.04%
SGD 6 Month
LIBOR 01/08/2026 6 0.00
ZAR 180,000
ZAR 3 Month
JIBAR 9.12% 13/07/2025 232 0.05
CZK 75,000 0.82%
CZK 6 Month
PRIBO 29/10/2025 (113) (0.02)
CZK 55,000 0.25%
CZK 6 Month
PRIBO 16/02/2021 7 0.00
CLP 2,141,923 1.26%
CLP 6 Month
CLICP 28/04/2021 (81) (0.01)
ILS 5,285
ILS 3 Month
TELBO 1.67% 23/05/2026 33 0.01
KRW 3,301,000 1.64%
KRW 3 Month
KSDA 20/05/2026 (96) (0.02)
PLN 51,000 1.79%
PLN 6 Month
WIBOR 21/06/2019 (9) 0.00
PLN 16,600
PLN 6 Month
WIBOR 2.46% 21/06/2026 79 0.01
BRL 6,657
BRL 12 Month
BZDIO 12.50% 02/01/2025 213 0.04
CZK 135,600 0.26%
CZK 6 Month
PRIBO 15/07/2021 26 0.00
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Market Debt Local Currency Fund 21
Ccy
Notional
Amount
‘000
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
USD ‘000
Fund
%
BRL 13,742
BRL 12 Month
BZDIO
BRL 12 Month
BZDIO 02/01/2023 - 0.00
Total interest rate at positive fair value ...................................................................................................................................... 621 0.11
Total interest rate at negative fair value ...................................................................................................................................... (458) (0.08)
Interest rate swaps at fair value ............................................................................................................................................. 163 0.03
Currency Swaps (0.03%)
Notional
Amount
‘000 Ccy
Fund
Pays Ccy
Fund
Receives
Termination
Date
Fair Value
USD ‘000
Fund
%
8,256,000 IDR
6 Month
LIBOR USD 9.80% 09/10/2022 162 0.03
Currency swaps at fair value .................................................................................................................................................. 162 0.03
Total Financial Derivative Instruments .................................................................................................................................. 1,737 0.29
Fair Value
USD ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or
Loss (94.09%) ...................................................................................................................... 510,495 94.09
Total Financial Liabilities at Fair Value through Profit or
Loss ((0.82)%) ...................................................................................................................... (4,710) (0.82)
Net Financial Assets at Fair Value through Profit or Loss
(93.27%) .................................................................................................................................................... 505,785 93.27
Other Net Assets (6.73%) ........................................................................................................................ 40,037 6.73
Net Assets .................................................................................................................................................. 545,822 100.00
Analysis of gross assets
% of
gross assets
Transferable securities and money market instruments admitted to an official stock exchange listing .................. 65.70
Transferable securities dealt in on another regulated market ................................................................................... 14.63
Other transferable securities of the type referred to in Regulation 68 (1)(a), (b) and (c) ........................................ 2.88
Investment funds (UCITS) ...................................................................................................................................... 4.63
Over the counter financial derivative instruments ................................................................................................... 1.12
Other assets .............................................................................................................................................................. 11.04
100.00
The broker for the open futures contracts is JP Morgan.
The counterparties for the open forward foreign currency exchange contracts are:
Barclays
Bank of America
BNP Paribas
Citibank
Goldman Sachs
HSBC Bank
JP Morgan
Standard Chartered
State Street Bank
Toronto Dominion Bank
UBS
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
22 Russell Emerging Market Debt Local Currency Fund
The counterparty for the option purchased is JP Morgan.
The counterparties for the interest rate swaps are:
Bank of America
BNP Paribas
Citibank
Citigroup Global Markets
JP Morgan
UBS
The counterparty for the currency swap is JP Morgan.
Fair Value Hierarchy (Note 10)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 30 September 2016 and 31 March 2016.
As at 30 September 2016
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ................................................................ - 436,151 - 436,151
Money market instruments ........................................................ - 41,347 - 41,347
Investment funds ........................................................................ - 26,550 - 26,550
Unrealised gain on open futures contracts ................................. 23 - - 23
Unrealised gain on forward foreign currency exchange
contracts .................................................................................... - 5,640 - 5,640
Options purchased at fair value ................................................. 1 - - 1
Currency swaps at fair value ..................................................... - 162 - 162
Interest rate swaps at fair value ................................................. - 621 - 621
Total assets ...................................................................................... 24 510,471 - 510,495
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ..................................... (19) - - (19)
Unrealised loss on forward foreign currency exchange
contracts ........................................................................................ - (4,233) - (4,233)
Interest rate swaps at fair value ..................................................... - (458) - (458)
Total liabilities ................................................................................ (19) (4,691) - (4,710)
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Market Debt Local Currency Fund 23
As at 31 March 2016
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ................................................................ - 364,696 - 364,696
Investment funds ........................................................................ - 4,038 - 4,038
Unrealised gain on open futures contracts ................................. 13 - 13
Unrealised gain on forward foreign currency exchange
contracts .................................................................................... - 6,758 - 6,758
Total return swaps at fair value ................................................. - 9,903 - 9,903
Currency swaps at fair value ..................................................... - 124 - 124
Interest rate swaps at fair value ................................................. - 262 - 262
Total assets ...................................................................................... 13 385,781 - 385,794
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ..................................... (2) - - (2)
Unrealised loss on forward foreign currency exchange
contracts ........................................................................................ - (6,211) - (6,211)
Interest rate swaps at fair value ...................................................... - (692) - (692)
Total liabilities ................................................................................ (2) (6,903) - (6,905)
Russell Investment Company II plc
Russell Emerging Market Debt Local Currency Fund
Statement of Changes in Composition of Portfolio
Listed below are 20 largest cumulative investment purchases and cumulative investment sales in excess of 1% of total investment
sales during the six months ended 30 September 2016.
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
24 Russell Emerging Market Debt Local Currency Fund
Portfolio Securities
Acquisition Cost
USD ‘000 Portfolio Securities
Disposal Proceeds
USD ‘000
Russell Investment Company III Russell Investment Company III
The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II
Class R Roll-Up Shares 137,012 Class R Roll-Up Shares (114,535)
Indonesia Treasury Bond Poland Government Bond
8.375% due 15/03/2024 12,954 5.250% due 25/10/2020 (17,246)
Brazil Letras do Tesouro Nacional 5.750% due 25/04/2029 (10,290)
Zero Coupon due 01/01/2019 11,402 Turkey Government Bond
Mexican Bonos 10.400% due 20/03/2024 (9,976)
8.000% due 11/06/2020 11,122 Colombian TES
Turkey Government Bond 7.750% due 18/09/2030 (8,301)
10.400% due 20/03/2024 10,689 Turkey Government Bond
Poland Government Bond 7.400% due 05/02/2020 (6,785)
5.750% due 25/04/2029 10,669 Russian Federal Bond - OFZ
2.500% due 25/07/2018 10,439 7.600% due 14/04/2021 (5,642)
U.S. Treasury Bill Indonesia Treasury Bond
Zero Coupon due 20/10/2016 9,997 8.375% due 15/03/2024 (5,628)
Colombian TES Inflation Linked Korea Treasury Bond
10.000% due 24/07/2024 7,821 1.125% due 10/06/2023 (4,716)
Brazil Notas do Tesouro Nacional Serie B Hungary Government Bond
6.000% due 15/08/2020 7,002 7.000% due 24/06/2022 (3,773)
Colombian TES Malaysia Government Bond
11.000% due 24/07/2020 6,508 3.580% due 28/09/2018 (3,507)
U.S. Treasury Bill Hungary Government Bond
Zero Coupon due 03/11/2016 5,998 6.750% due 22/10/2028 (3,372)
Russian Federal Bond - OFZ Brazil Notas do Tesouro Nacional Serie B
7.050% due 19/01/2028 5,974 6.000% due 15/08/2020 (3,310)
Indonesia Treasury Bond Mexican Bonos
8.250% due 15/05/2036 5,962 6.500% due 09/06/2022 (3,288)
Mexican Bonos Indonesia Treasury Bond
7.250% due 15/12/2016 5,956 8.375% due 15/03/2034 (3,057)
Poland Government Bond Poland Government Bond
4.750% due 25/10/2016 5,750 Zero coupon due 25/07/2017 (2,693)
U.S. Treasury Bill Serbia Treasury Bonds
Zero Coupon due 25/08/2016 5,000 10.000% due 05/02/2022 (2,535)
Zero Coupon due 08/09/2016 4,999 Mexican Bonos
South Africa Government Bond 7.750% due 13/11/2042 (2,255)
10.500% due 21/12/2026 4,936 Hungary Government Bond
Inflation Linked Korea Treasury Bond 6.750% due 24/11/2017 (2,205)
1.125% due 10/06/2023 4,765 South Africa Government Bond
Brazil Notas do Tesouro Nacional Serie B 8.750% due 28/02/2048 (1,923)
6.000% due 15/08/2050 4,426
Mexican Bonos
5.750% due 05/03/2026 3,976
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Balance Sheet
As at 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Markets Extended Opportunities Fund 25
30 September 2016
(Unaudited)
USD ‘000
31 March 2016
(Audited)
USD ‘000
Assets
Financial assets at fair value through profit or loss ............................................................................................................................... 775,954 688,190
Cash at bank (Note 2) ............................................................................................................................................................................ 17,943 12,485
Cash held with brokers and counterparties for open financial derivative instruments
(Note 2) .................................................................................................................................................................................................. 1,200 502
Debtors:
Receivable for investments sold .................................................................................................................... 992 1,297
Dividends receivable ..................................................................................................................................... 1,525 2,080
797,614 704,554
Liabilities
Financial liabilities at fair value through profit or loss ......................................................................................................................... (481) (770)
Creditors – amounts falling due within one financial year:
Cash due to brokers and counterparties for open financial derivative positions
(Note 2) ......................................................................................................................................................... - (557)
Payable for investments purchased ................................................................................................................ (2,653) (5,620)
Management fees payable ............................................................................................................................. (877) (738)
Performance fees payable .............................................................................................................................. (791) (866)
Depositary fees payable ................................................................................................................................. (18) (9)
Sub-custodian fees payable ........................................................................................................................... (124) (104)
Administration fees payable .......................................................................................................................... (17) (27)
Audit fees payable ......................................................................................................................................... (8) (18)
Other fees payable ......................................................................................................................................... (3) (1)
(4,972) (8,710)
Net asset value attributable to redeemable participating shareholders ............................................................... 792,642 695,844
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Profit and Loss Account
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
26 Russell Emerging Markets Extended Opportunities Fund
Six months ended
30 September 2016
(Unaudited)
USD ‘000
Six months ended
30 September 2015
(Unaudited)
USD ‘000
Income
Dividends ....................................................................................................................... 14,270 17,014
Interest Income .............................................................................................................. 17 -
14,287 17,014
Net gain (loss) on investment activities ........................................................................... 68,576 (144,572)
Total investment income (expense) ............................................................................... 82,863 (127,558)
Expenses
Management fees (Note 3) ............................................................................................ (4,800) (5,383)
Performance fees (Note 3) ............................................................................................. (935) (163)
Depositary fees (Note 4) ................................................................................................ (51) (35)
Sub-custodian fees (Note 4) .......................................................................................... (441) (454)
Administration and transfer agency fees (Note 4) ......................................................... (129) (138)
Audit fees ...................................................................................................................... (9) (9)
Professional fees ............................................................................................................ (21) (71)
Other fees ...................................................................................................................... (17) (41)
Total operating expenses ............................................................................................... (6,403) (6,294)
Net income (expense) ....................................................................................................... 76,460 (133,852)
Finance costs
Distributions (Note 6) ................................................................................................... (6,464) (9,048)
Profit (loss) for the financial period before taxation ................................................... 69,996 (142,900)
Taxation (Note 7)
Capital gains tax ............................................................................................................ - (141)
Withholding tax ............................................................................................................. (1,436) (1,678)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 68,560 (144,719)
All amounts arose solely from continuing operations. There are no recognised gains or losses other than those dealt with in the Profit and Loss
Account.
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Markets Extended Opportunities Fund 27
Six months ended
30 September 2016
(Unaudited)
USD ‘000
Six months ended
30 September 2015
(Unaudited)
USD ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 68,560 (144,719)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 8) ...................... 6,464 9,048
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 8) ..................................................................................................... 21,774 (202)
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders ............................................................................................. 96,798 (135,873)
Net assets attributable to redeemable participating shareholders
Beginning of financial period ........................................................................................ 695,844 845,804
End of financial period .................................................................................................. 792,642 709,931
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
28 Russell Emerging Markets Extended Opportunities Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Transferable Securities (93.45%)
Common Stock (89.77%)
Argentina (0.43%)
Banks
88,139
Grupo Financiero Galicia SA
ADR .................................... 2,742 0.35
Electric Utilities
20,370 Pampa Energia SA ADR ..... 660 0.08
3,402 0.43
Australia (0.11%)
Banks
381,424
Macquarie Bank Ltd
(Vingroup) ........................... 761 0.10
Metals and Mining
4,327,080 Tiger Resources Ltd ............ 70 0.01
831 0.11
Austria (0.19%)
Banks
18,732 Erste Group Bank AG ......... 555 0.07
49,200
Raiffeisen Bank
International AG .................. 749 0.09
Food Products
2,650 DO & CO AG ...................... 214 0.03
1,518 0.19
Bangladesh (0.13%)
Telecommunications
302,300 GrameenPhone Ltd .............. 1,041 0.13
Bermuda (2.00%)
Automobiles
1,258,000
Brilliance China Automotive
Holdings Ltd ....................... 1,411 0.18
Banks
13,913 Credicorp Ltd ...................... 2,118 0.27
Commercial Services and Supplies
84,000 COSCO Shipping Ports Ltd 86 0.01
Food Products
2,068,000 China Foods Ltd .................. 947 0.12
Gas Utilities
492,000
China Resources Gas Group
Ltd ....................................... 1,681 0.21
Holding Companies - Diversified Operations
1,014,587 NWS Holdings Ltd .............. 1,693 0.21
Home Furnishings
935,973
Haier Electronics Group Co
Ltd ....................................... 1,547 0.20
778,000
Skyworth Digital Holdings
Ltd ....................................... 560 0.07
Media
128,820
Central European Media
Enterprises Ltd .................... 298 0.04
Oil and Gas
777,500 Kunlun Energy Co Ltd ........ 595 0.07
Number
of Shares
Fair Value
USD ‘000
Fund
%
Paper and Forest Products
255,000
Nine Dragons Paper
Holdings Ltd ....................... 238 0.03
Real Estate
88,000
Hopson Development
Holdings Ltd ....................... 87 0.01
Retail Trade
2,810,000
Giordano International
Ltd ...................................... 1,449 0.18
888,000
GOME Electrical Appliances
Holding Ltd ......................... 109 0.02
Telecommunications
280,722 VimpelCom Ltd ADR ......... 977 0.12
Water Utilities
3,050,000
Beijing Enterprises Water
Group Ltd ........................... 2,061 0.26
15,857 2.00
Botswana (0.14%)
Diversified Financials
4,751,430 Letshego Holdings Ltd ........ 1,074 0.14
Brazil (5.27%)
Advertising
68,900 Multiplus SA ....................... 933 0.12
Aerospace and Defence
193,100 Embraer SA ........................ 833 0.10
Banks
123,130 Banco Bradesco SA ADR ... 1,117 0.14
379,925
Itau Unibanco Holding SA
ADR .................................... 4,156 0.52
Beverages
467,200 Ambev SA .......................... 2,850 0.36
192,940 Ambev SA ADR ................. 1,175 0.15
Building Products
797,571 Duratex SA ......................... 2,111 0.27
Commercial Services and Supplies
336,200
EcoRodovias Infraestrutura e
Logistica SA ....................... 920 0.11
133,179 Kroton Educacional SA ...... 606 0.08
1,232,200
Mills Estruturas e Servicos
de Engenharia SA ............... 1,737 0.22
Construction and Engineering
104,400
Multiplan Empreendimentos
Imobiliarios SA ................... 2,031 0.26
Diversified Financials
277,061
BM&FBovespa SA - Bolsa
de Valores Mercadorias e
Futuros ................................ 1,434 0.18
126,900
CETIP SA - Mercados
Organizados SA .................. 1,675 0.21
Electric Utilities
427,056 AES Tiete Energia SA ........ 2,104 0.27
228,200
EDP - Energias do Brasil
SA ....................................... 1,010 0.13
27,874 Energisa SA ........................ 178 0.02
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Markets Extended Opportunities Fund 29
Number
of Shares
Fair Value
USD ‘000
Fund
%
Food Products
91,000 BRF SA ............................... 1,550 0.20
Health Care Providers and Services
16,406 Fleury SA ............................ 194 0.02
Hotels, Restaurants and Leisure
125,400
CVC Brasil Operadora e
Agencia de Viagens SA ....... 928 0.12
Iron and Steel
419,401 Gerdau SA ADR ................. 1,141 0.14
424,018
Vale SA (Germany Listed)
ADR .................................... 1,997 0.25
137,655
Vale SA (US Listed)
ADR .................................... 757 0.10
Oil and Gas
59,926
Petroleo Brasileiro SA (Non-
voting Rights) ADR ............ 498 0.06
1,182,900 QGEP Participacoes SA ...... 1,693 0.22
43,200 Ultrapar Participacoes SA ... 945 0.12
Personal Products
90,650 Natura Cosmeticos SA ........ 871 0.11
Real Estate
455,900
Cyrela Brazil Realty SA
Empreendimentos e
Participacoes ....................... 1,436 0.18
1,391,600
Helbor Empreendimentos
SA ....................................... 878 0.11
Retail Trade
22,237 Lojas Renner SA ................. 167 0.02
317,400 Via Varejo SA ..................... 622 0.08
Telecommunications
91,985 Telefonica Brasil SA ADR .. 1,331 0.17
Transport
96,018
Rumo Logistica Operadora
Multimodal SA .................... 187 0.02
498,200
Tegma Gestao Logistica
SA ....................................... 1,273 0.16
Water Utilities
42,922
Cia de Saneamento Basico
do Estado de Sao Paulo
ADR .................................... 397 0.05
41,735 5.27
Canada (0.23%)
Metals and Mining
177,483 First Quantum Minerals Ltd 1,467 0.18
Oil and Gas
234,900 Africa Oil Corp ................... 372 0.05
1,839 0.23
Cayman Islands (11.23%)
Auto Components
1,831,000
Nexteer Automotive Group
Ltd ....................................... 2,384 0.30
3,479,700 Xinyi Glass Holdings Ltd .... 3,145 0.40
Automobiles
1,405,000
Geely Automobile Holdings
Ltd ....................................... 1,254 0.16
Number
of Shares
Fair Value
USD ‘000
Fund
%
Biotechnology
2,755,307 3SBio Inc ............................ 3,119 0.39
Building Products
830,000
China Resources Cement
Holdings Ltd ....................... 332 0.04
Chemicals
229,000
Kingboard Chemical
Holdings Ltd ....................... 694 0.09
Commercial Services and Supplies
67,283
New Oriental Education &
Technology Group Inc ADR 3,119 0.39
Containers and Packaging
83,000
Lee & Man Paper
Manufacturing Ltd .............. 75 0.01
Electrical Equipment
345,019
AAC Technologies Holdings
Inc ....................................... 3,468 0.44
31,000 Casetek Holdings Ltd ......... 113 0.01
302,000
China High Speed
Transmission Equipment
Group Co Ltd ...................... 306 0.04
1,233,000
Q Technology Group Co
Ltd ...................................... 510 0.06
270,000
Tianneng Power
International Ltd ................. 230 0.03
7,150,000 Tongda Group Holdings Ltd 1,742 0.22
379,460
Zhen Ding Technology
Holding Ltd ......................... 832 0.11
Energy Equipment and Services
3,788,000
GCL-Poly Energy Holdings
Ltd ...................................... 503 0.06
129,756 Trina Solar Ltd ADR .......... 1,329 0.17
1,762,000 Xinyi Solar Holdings Ltd .... 659 0.08
Food Products
422,400
China Mengniu Dairy Co
Ltd ...................................... 784 0.10
654,300
Tingyi Cayman Islands
Holding Corp ...................... 758 0.09
678,900 WH Group Ltd .................... 546 0.07
Health Care Equipment and Supplies
901,500
Phoenix Healthcare Group
Co Ltd ................................. 1,602 0.20
Household Products
2,109,000
Goodbaby International
Holdings Ltd ....................... 1,093 0.14
Internet Software and Services
119,141
Alibaba Group Holding Ltd
ADR .................................... 12,604 1.59
13,818 Baidu Inc ADR ................... 2,516 0.32
739,441 Tencent Holdings Ltd ......... 20,307 2.56
10,321 Weibo Corp ADR ............... 517 0.06
Lodging
805,600 MGM China Holdings Ltd .. 1,398 0.18
1,116,887 Sands China Ltd .................. 4,846 0.61
Metals and Mining
504,800
China Zhongwang Holdings
Ltd ...................................... 243 0.03
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
30 Russell Emerging Markets Extended Opportunities Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Miscellaneous Manufacturers
140,000 Airtac International Group .. 1,246 0.16
77,000
Sunny Optical Technology
Group Co Ltd ...................... 380 0.05
Real Estate
144,000 Agile Group Holdings Ltd ... 82 0.01
820,000 China Resources Land Ltd .. 2,284 0.29
1,075,000 Fullshare Holdings Ltd ........ 624 0.08
833,500 KWG Property Holding Ltd 547 0.07
608,100 Longfor Properties Co Ltd .. 933 0.12
436,500 Shui On Land Ltd ................ 119 0.01
Retail Trade
1,117,400
Belle International Holdings
Ltd ....................................... 766 0.10
978,300
Chow Tai Fook Jewellery
Group Ltd ............................ 711 0.09
2,467,000 Li Ning Co Ltd .................... 1,683 0.21
Semiconductor Equipment and Products
17,346,000
Semiconductor
Manufacturing International
Corp ..................................... 1,946 0.25
Software
9,316 NetEase Inc ADR ................ 2,243 0.28
Textile and Apparel
692,000
Pacific Textiles Holdings
Ltd ....................................... 898 0.11
367,000
Shenzhou International
Group Holdings Ltd ............ 2,555 0.32
751,000 Texhong Textile Group Ltd . 1,003 0.13
89,048 11.23
Chile (0.26%)
Electric Utilities
119,769 Enersis Americas SA ADR . 981 0.12
41,469 Enersis Chile SA ADR ........ 197 0.03
Retail Trade
122,681 SACI Falabella .................... 897 0.11
2,075 0.26
China (8.97%)
Airlines
588,000
China Eastern Airlines Corp
Ltd ....................................... 271 0.03
Automobiles
1,051,800
Chongqing Changan
Automobile Co Ltd ............. 1,714 0.22
1,488,504
Dongfeng Motor Group Co
Ltd ....................................... 1,487 0.19
632,000
Guangzhou Automobile
Group Co Ltd ...................... 812 0.10
Banks
1,604,000
Agricultural Bank of China
Ltd ....................................... 687 0.09
8,074,000 Bank of China Ltd ............... 3,685 0.47
210,000
Bank of Communications Co
Ltd ....................................... 160 0.02
10,872,000
China Construction Bank
Corp ..................................... 8,060 1.02
Number
of Shares
Fair Value
USD ‘000
Fund
%
1,932,000
China Everbright Bank Co
Ltd ...................................... 899 0.11
536,500
China Merchants Bank Co
Ltd ...................................... 1,352 0.17
2,235,000
Chongqing Rural
Commercial Bank Co
Ltd ...................................... 1,377 0.17
362,000 Harbin Bank Co Ltd ............ 111 0.01
8,029,000
Industrial & Commercial
Bank of China Ltd .............. 5,021 0.63
159,418 Shengjing Bank Co Ltd ....... 164 0.02
Beverages
28,089 Kweichow Moutai Co Ltd .. 1,255 0.16
Building Products
781,500
Anhui Conch Cement Co
Ltd ...................................... 2,141 0.27
6,528,000 BBMG Corp ....................... 2,508 0.32
Chemicals
758,000
Sinopec Shanghai
Petrochemical Co Ltd ......... 382 0.05
Construction and Engineering
581,150
Beijing Capital International
Airport Co Ltd .................... 659 0.08
383,000
China Communications
Construction Co Ltd ........... 402 0.05
2,200,000
China Communications
Services Corp Ltd ............... 1,376 0.17
347,000
China Machinery
Engineering Corp ................ 204 0.03
305,467
Shanghai International
Airport Co Ltd .................... 1,235 0.16
Diversified Financials
788,000
China Cinda Asset
Management Co Ltd ........... 278 0.04
1,170,000
China Galaxy Securities Co
Ltd ...................................... 1,067 0.13
368,600 CITIC Securities Co Ltd ..... 782 0.10
Electric Utilities
230,000
Huaneng Power International
Inc ....................................... 144 0.02
Electrical Equipment
765,600
Dongfang Electric Corp
Ltd ...................................... 605 0.08
Energy Equipment and Services
3,508,000
China Longyuan Power
Group Corp Ltd .................. 2,849 0.36
Health Care Equipment and Supplies
1,286,500
Shandong Weigao Group
Medical Polymer Co Ltd ..... 863 0.11
Home Furnishings
899,800
Red Star Macalline Group
Corp Ltd .............................. 863 0.11
Insurance
1,778,000
China Life Insurance Co
Ltd ...................................... 4,585 0.58
559,100
China Pacific Insurance
Group Co Ltd ...................... 2,065 0.26
74,000
PICC Property & Casualty
Co Ltd ................................. 123 0.01
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Markets Extended Opportunities Fund 31
Number
of Shares
Fair Value
USD ‘000
Fund
%
Metals and Mining
2,758,000
Aluminum Corp of China
Ltd ....................................... 999 0.12
1,164,966
China Shenhua Energy Co
Ltd ....................................... 2,277 0.29
Oil and Gas
4,086,653
China Petroleum &
Chemical Corp .................... 2,977 0.38
8,264
China Petroleum &
Chemical Corp ADR ........... 610 0.08
5,966,542 PetroChina Co Ltd ............... 3,916 0.49
Oil and Gas Services
803,081
China Oilfield Services
Ltd ....................................... 697 0.08
352,000
Sinopec Engineering Group
Co Ltd ................................. 303 0.04
Pharmaceuticals
558,000
Shanghai Fosun
Pharmaceutical Group Co
Ltd ....................................... 1,734 0.22
155,721 Sinopharm Group Co Ltd .... 748 0.09
Real Estate
116,145
Guangzhou R&F Properties
Co Ltd ................................. 183 0.02
Retail Trade
765,085
Shanghai Pharmaceuticals
Holding Co Ltd ................... 2,062 0.26
Software
390,000
TravelSky Technology
Ltd ....................................... 925 0.12
Telecommunications
704,280 ZTE Corp ............................ 1,024 0.13
Transport
4,356,000
Guangshen Railway Co
Ltd ....................................... 2,252 0.28
441,000 Sinotrans Ltd ....................... 215 0.03
71,108 8.97
Colombia (0.46%)
Banks
71,268 Bancolombia SA ADR ........ 2,782 0.35
27,100
Grupo Aval Acciones y
Valores SA ADR ................. 239 0.03
Oil and Gas
67,600 Ecopetrol SA ADR .............. 592 0.08
3,613 0.46
Cyprus (0.03%)
Transport
58,577
Globaltrans Investment Plc
GDR .................................... 275 0.03
Czech Republic (0.16%)
Banks
21,650 Komercni Banka AS ............ 749 0.10
156,200
Moneta Money Bank
AS ....................................... 498 0.06
1,247 0.16
Number
of Shares
Fair Value
USD ‘000
Fund
%
Egypt (1.11%)
Agriculture
61,861 Eastern Tobacco .................. 1,498 0.19
Banks
412,810
Commercial International
Bank Egypt SAE ................. 2,220 0.28
9,854
Commercial International
Bank Egypt SAE GDR ....... 39 0.01
187,509
Commercial International
Bank Egypt SAE GDR (U.K.
Listed) ................................. 740 0.09
Food Products
100,614
Edita Food Industries
SAE .................................... 108 0.01
Pharmaceuticals
170,946
Egyptian International
Pharmaceuticals EIPICO .... 1,309 0.16
Real Estate
1,182,210
Emaar Misr for
Development SAE .............. 297 0.04
3,985,076
Palm Hills Developments
SAE .................................... 1,055 0.13
Telecommunications
801,711
Global Telecom Holding
SAE GDR ........................... 1,555 0.20
8,821 1.11
Greece (0.91%)
Airlines
68,200 Aegean Airlines SA ............ 463 0.06
Banks
1,509,110 Alpha Bank AE ................... 2,510 0.32
2,387,600 Eurobank Ergasias SA ........ 1,363 0.17
3,369,488
National Bank of Greece
SA ....................................... 697 0.09
Distributors
139,690 Fourlis Holdings SA ........... 601 0.08
Retail Trade
46,185 FF Group ............................ 1,147 0.14
Telecommunications
46,900
Hellenic
Telecommunications
Organization SA ................. 411 0.05
7,192 0.91
Guernsey, Channel Islands (0.10%)
Real Estate
278,500 Etalon Group Ltd GDR ....... 766 0.10
Hong Kong (3.48%)
Banks
82,000 CITIC Ltd ........................... 117 0.01
Diversified Financials
471,300 China Everbright Ltd .......... 964 0.12
Electric Utilities
26,000
China Resources Power
Holdings Co Ltd ................. 45 0.01
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
32 Russell Emerging Markets Extended Opportunities Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Environmental Control
1,527,800
China Everbright
International Ltd .................. 1,816 0.23
Gas Utilities
136,200
Beijing Enterprises Holdings
Ltd ....................................... 690 0.09
Insurance
133,400 AIA Group Ltd .................... 887 0.11
Iron and Steel
135,000 Fosun International Ltd ....... 203 0.02
Lodging
854,700 SJM Holdings Ltd ............... 628 0.08
Media
186,100 Television Broadcasts Ltd ... 710 0.09
Oil and Gas
1,105,000 CNOOC Ltd ........................ 1,371 0.17
8,538 CNOOC Ltd ADR ............... 1,080 0.14
Real Estate
2,416,000
China Jinmao Holdings
Group Ltd ............................ 744 0.09
1,552,000
China Overseas Land &
Investment Ltd .................... 5,263 0.67
375,200 Hang Lung Properties Ltd ... 844 0.11
558,000 Shenzhen Investment Ltd .... 265 0.03
Real Estate Investment Trust
2,376,000 Champion REIT .................. 1,440 0.18
3,658,000
Hui Xian Real Estate
Investment Trust .................. 1,804 0.23
3,526,000
Yuexiu Real Estate
Investment Trust .................. 2,146 0.27
Telecommunications
424,400 China Mobile Ltd ................ 5,135 0.65
983,000 HKT Trust & HKT Ltd ....... 1,387 0.17
Water Utilities
36,000
Guangdong Investment
Ltd ....................................... 57 0.01
27,596 3.48
Hungary (0.37%)
Banks
64,287 OTP Bank Plc ...................... 1,683 0.21
Oil and Gas
11,923
MOL Hungarian Oil & Gas
Plc ....................................... 736 0.09
Pharmaceuticals
10,050 Richter Gedeon Nyrt ........... 204 0.03
Telecommunications
173,308
Magyar Telekom
Telecommunications Plc ..... 284 0.04
2,907 0.37
India (9.36%)
Automobiles
1,590 Maruti Suzuki India Ltd ...... 131 0.02
495,064 Tata Motors Ltd ................... 3,975 0.50
53,907 Tata Motors Ltd ADR ......... 2,155 0.27
Number
of Shares
Fair Value
USD ‘000
Fund
%
Banks
284,225 Axis Bank Ltd ..................... 2,318 0.29
13,541 HDFC Bank Ltd ADR ........ 973 0.12
398,611 ICICI Bank Ltd ................... 1,511 0.19
308,353 ICICI Bank Ltd ADR .......... 2,303 0.29
73,485 Kotak Mahindra Bank Ltd .. 861 0.11
521,810 State Bank of India ............. 1,975 0.25
10,446 State Bank of India GDR .... 389 0.05
Building Products
18,363 UltraTech Cement Ltd ........ 1,063 0.13
Chemicals
424,923 Godrej Industries Ltd .......... 2,741 0.35
195,874 Tata Chemicals Ltd ............. 1,539 0.19
215,293 UPL Ltd .............................. 2,183 0.28
Computers and Peripherals
167,136 Infosys Ltd .......................... 2,595 0.33
40,995 Infosys Ltd ADR ................ 647 0.08
57,056
Tata Consultancy Services
Ltd ...................................... 2,084 0.26
151,494 Wipro Ltd ........................... 1,090 0.14
Construction and Engineering
109,052 J Kumar Infraprojects Ltd ... 297 0.04
8,516
L&T Technology Services
Ltd ...................................... 108 0.01
103,951 Larsen & Toubro Ltd .......... 2,244 0.28
Diversified Financials
143,048
Housing Development
Finance Corp Ltd ................ 2,997 0.38
502,600 Power Finance Corp Ltd ..... 907 0.11
Electric Utilities
1,441,067 JSW Energy Ltd .................. 1,591 0.20
1,791,717 NTPC Ltd ........................... 4,003 0.51
452,494
Power Grid Corp of India
Ltd ...................................... 1,198 0.15
1,017,110 PTC India Ltd ..................... 1,138 0.14
71,400
Reliance Infrastructure
Ltd ...................................... 592 0.08
Electrical Equipment
538,391 Exide Industries Ltd ............ 1,481 0.19
3,266,306 Suzlon Energy Ltd .............. 731 0.09
Gas Utilities
239,047 GAIL India Ltd ................... 1,343 0.17
Hotels, Restaurants and Leisure
73,189 Bajaj Auto Ltd .................... 3,122 0.39
107,240 Hero MotoCorp Ltd ............ 5,502 0.70
Iron and Steel
154,297 Tata Steel Ltd ...................... 870 0.11
Lodging
775,353 Indian Hotels Co Ltd .......... 1,539 0.19
Media
102,600 Sun TV Network Ltd .......... 777 0.10
Oil and Gas
248,386 Bharat Petroleum Corp Ltd . 2,289 0.29
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Markets Extended Opportunities Fund 33
Number
of Shares
Fair Value
USD ‘000
Fund
%
225,023 Indian Oil Corp Ltd ............. 1,977 0.25
401,840 Oil & Natural Gas Corp Ltd 1,551 0.19
9,757 Reliance Industries Ltd ........ 159 0.02
Pharmaceuticals
108,066 Aurobindo Pharma Ltd ........ 1,391 0.17
152,542 Cipla Ltd ............................. 1,328 0.17
Pipelines
251,602 Petronet LNG Ltd ................ 1,304 0.17
Real Estate
339,587 Oberoi Realty Ltd ................ 1,489 0.19
Telecommunications
227,461 Bharti Airtel Ltd .................. 1,071 0.14
Transport
7,637 Blue Dart Express Ltd ......... 636 0.08
74,168 9.36
Indonesia (2.58%)
Agriculture
5,041,000
Perusahaan Perkebunan
London Sumatra Indonesia
Tbk PT ................................ 577 0.07
Banks
1,505,500 Bank Central Asia Tbk PT .. 1,811 0.23
6,674,200
Bank Negara Indonesia
Persero Tbk PT .................... 2,838 0.36
4,655,500
Bank Rakyat Indonesia
Persero Tbk PT .................... 4,352 0.55
Electric Utilities
10,317,651
Cikarang Listrindo Tbk
PT ........................................ 1,178 0.15
Food Products
4,050,000
Ultrajaya Milk Industry &
Trading Co Tbk PT ............. 1,347 0.17
Gas Utilities
13,421,600
Perusahaan Gas Negara
Persero Tbk ......................... 2,951 0.37
Machinery
580,100 United Tractors Tbk PT ....... 787 0.10
Metals and Mining
2,873,000 Adaro Energy Tbk PT ......... 265 0.03
Real Estate
37,100,000 Pakuwon Jati Tbk PT .......... 1,919 0.24
Retail Trade
3,825,300 Astra International Tbk PT .. 2,418 0.31
20,443 2.58
Jersey, Channel Islands (0.11%)
Health Care Providers and Services
266,293
Integrated Diagnostics
Holdings Plc ........................ 900 0.11
Kazakhstan (0.30%)
Banks
199,600
Halyk Savings Bank of
Kazakhstan JSC GDR (UK
Listed) ................................. 1,277 0.16
Number
of Shares
Fair Value
USD ‘000
Fund
%
Telecommunications
12,972 KCell JSC GDR .................. 44 0.01
308,617
KCell JSC GDR (UK
Listed) ................................. 1,037 0.13
2,358 0.30
Kenya (1.05%)
Agriculture
142,200
British American Tobacco
Kenya Ltd ........................... 1,152 0.15
Banks
6,504,800
Barclays Bank of Kenya
Ltd ...................................... 540 0.07
3,024,483 Equity Group Holdings Ltd 971 0.12
Beverages
1,252,200 East African Breweries Ltd . 3,438 0.43
Telecommunications
11,169,520 Safaricom Ltd ..................... 2,195 0.28
8,296 1.05
Korea, Republic of (10.01%)
Aerospace and Defence
21,813
Korea Aerospace Industries
Ltd ...................................... 1,511 0.19
Agriculture
30,051 KT&G Corp ........................ 3,411 0.43
Auto Components
12,120 Hankook Tire Co Ltd .......... 654 0.08
24,299 Hanon Systems ................... 274 0.04
8,028 Hyundai Mobis Co Ltd ....... 2,005 0.25
12,664 Hyundai Wia Corp .............. 996 0.13
Automobiles
13,946 Hyundai Motor Co .............. 1,716 0.22
55,150 Kia Motors Corp ................. 2,111 0.26
Banks
82,797 Industrial Bank of Korea ..... 898 0.11
128,659 Woori Bank ......................... 1,332 0.17
Beverages
25,065 Hite Jinro Co Ltd ................ 513 0.07
280 Muhak Co Ltd ..................... 6 0.00
Chemicals
1,610 LG Chem Ltd ...................... 353 0.04
3,179 Lotte Chemical Corp ........... 860 0.11
Commercial Services and Supplies
589 S-1 Corp .............................. 54 0.01
Computers and Peripherals
1,422 SK Holdings Co Ltd ........... 274 0.03
Construction and Engineering
6,108 Daelim Industrial Co Ltd .... 460 0.06
10,929
Hyundai Development Co-
Engineering & Construction 509 0.06
21,399
Hyundai Engineering &
Construction Co Ltd ........... 763 0.10
Distributors
5,781 LG Corp .............................. 340 0.04
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
34 Russell Emerging Markets Extended Opportunities Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Diversified Financials
21,694 BNK Financial Group Inc ... 169 0.02
155,168 Hana Financial Group Inc ... 3,924 0.50
37,617 KB Financial Group Inc ...... 1,293 0.16
21,487 Samsung Card Co Ltd ......... 977 0.12
90,987
Shinhan Financial Group Co
Ltd ....................................... 3,317 0.42
Electric Utilities
36,529 Korea Electric Power Corp .. 1,791 0.23
Electrical Equipment
23,765 LG Display Co Ltd .............. 606 0.08
25,104 LG Electronics Inc .............. 1,092 0.14
17,450
LS Industrial Systems Co
Ltd ....................................... 665 0.08
760 Neo Holdings ...................... - 0.00
Food Products
930 CJ CheilJedang Corp ........... 307 0.04
20,408 Daesang Corp ...................... 547 0.07
Gas Utilities
1,635 Korea Gas Corp ................... 66 0.01
Home Furnishings
1,150 Coway Co Ltd ..................... 100 0.01
Household Products
68,884 Lock&Lock Co Ltd ............. 776 0.10
Insurance
10,476 Dongbu Insurance Co Ltd ... 649 0.08
9,406
Hyundai Marine & Fire
Insurance Co Ltd ................. 310 0.04
859
Samsung Fire & Marine
Insurance Co Ltd ................. 218 0.03
11,895
Samsung Life Insurance Co
Ltd ....................................... 1,139 0.14
Internet Software and Services
2,819 NAVER Corp ...................... 2,260 0.28
267 NCSoft Corp ....................... 72 0.01
Iron and Steel
6,334 Hyundai Steel Co ................ 292 0.04
16,882 POSCO ................................ 3,480 0.44
11,793 POSCO ADR ...................... 602 0.07
Lodging
32,000
Grand Korea Leisure Co
Ltd ....................................... 716 0.09
3,581 Kangwon Land Inc .............. 128 0.02
Metals and Mining
429 Korea Zinc Co Ltd ............... 187 0.02
Oil and Gas
3,488 S-Oil Corp ........................... 257 0.03
Personal Products
3,212 Amorepacific Corp .............. 1,134 0.14
3,758
LG Household & Health
Care Ltd ............................... 3,259 0.41
Pharmaceuticals
4,785 Celltrion Inc ........................ 462 0.06
210 Yuhan Corp ......................... 53 0.01
Number
of Shares
Fair Value
USD ‘000
Fund
%
Retail Trade
503 BGF retail Co Ltd ............... 88 0.01
4,804 CJ O Shopping Co Ltd ........ 702 0.09
673 E-MART Inc ....................... 96 0.01
2,032
Hyundai Department Store
Co Ltd ................................. 219 0.03
984 Lotte Shopping Co Ltd ....... 184 0.02
Semiconductor Equipment and Products
16,316 Samsung Electronics Co Ltd 23,674 2.99
92,396 SK Hynix Inc ...................... 3,373 0.42
Telecommunications
100,641 LG Uplus Corp ................... 1,074 0.14
Transport
469 Hyundai Glovis Co Ltd ....... 77 0.01
79,375 10.01
Kuwait (0.42%)
Agriculture
362,250 Mezzan Holding Co KSCC . 1,190 0.15
Banks
1,075,574
National Bank of Kuwait
SAKP .................................. 2,105 0.27
3,295 0.42
Luxembourg (0.05%)
Agriculture
44,364 MHP SA GDR .................... 417 0.05
Malaysia (0.34%)
Banks
521,300
CIMB Group Holdings
Bhd ..................................... 594 0.07
Electric Utilities
473,600 Tenaga Nasional Bhd .......... 1,638 0.21
Lodging
259,100 Genting Bhd ........................ 497 0.06
2,729 0.34
Mauritius (0.17%)
Diversified Financials
215,264 MCB Group Ltd .................. 1,341 0.17
Mexico (2.24%)
Auto Components
62,008 Nemak SAB de CV ............. 68 0.01
Banks
38,362 Gentera SAB de CV ............ 69 0.01
381,333
Grupo Financiero Banorte
SAB de CV ......................... 2,006 0.25
Beverages
162,434
Arca Continental SAB de
CV ...................................... 969 0.12
139,461
Coca-Cola Femsa SAB de
CV ...................................... 1,048 0.14
78,130
Fomento Economico
Mexicano SAB de CV ........ 720 0.09
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Markets Extended Opportunities Fund 35
Number
of Shares
Fair Value
USD ‘000
Fund
%
19,881
Fomento Economico
Mexicano SAB de CV ADR 1,830 0.23
Building Products
389,913 Cemex SAB de CV ADR .... 3,096 0.39
Chemicals
300,254 Alpek SAB de CV ............... 510 0.06
246,597 Mexichem SAB de CV ........ 552 0.07
Commercial Services and Supplies
467,685 OHL Mexico SAB de CV ... 622 0.08
Construction and Engineering
5,217
Grupo Aeroportuario del
Sureste SAB de CV ............. 76 0.01
9,186
Promotora y Operadora de
Infraestructura SAB de CV . 84 0.01
13,737
Promotora y Operadora de
Infraestructura SAB de CV
(U.S. Listed) ........................ 148 0.02
Food Products
91,053 Gruma SAB de CV .............. 1,197 0.15
55,965 Grupo Lala SAB de CV ....... 107 0.01
71,651
Industrias Bachoco SAB de
CV ....................................... 300 0.04
23,115
Organizacion Soriana SAB
de CV .................................. 57 0.01
Holding Companies - Diversified Operations
25,777 Grupo Carso SAB de CV .... 104 0.01
Household Products
70,751
Kimberly-Clark de Mexico
SAB de CV .......................... 160 0.02
Media
141,757
Megacable Holdings SAB de
CV ....................................... 545 0.07
Metals and Mining
700,700
Grupo Mexico SAB de
CV ....................................... 1,717 0.22
11,186
Industrias Penoles SAB de
CV ....................................... 268 0.03
Real Estate Investment Trust
46,565
Concentradora Fibra Danhos
SA de CV ............................ 84 0.01
526,400
Macquarie Mexico Real
Estate Management SA de
CV ....................................... 646 0.08
Retail Trade
45,126
Grupo Sanborns SAB de
CV ....................................... 51 0.01
55,245 La Comer SAB de CV ......... 51 0.01
312,073
Wal-Mart de Mexico SAB
de CV .................................. 685 0.08
17,770 2.24
Morocco (0.47%)
Banks
56,520 Attijariwafa Bank ................ 2,066 0.26
Telecommunications
124,440 Maroc Telecom ................... 1,634 0.21
3,700 0.47
Number
of Shares
Fair Value
USD ‘000
Fund
%
Netherlands (0.32%)
Food Products
48,800 X5 Retail Group NV GDR .. 1,414 0.18
Home Furnishings
38,420
Steinhoff International
Holdings NV ....................... 219 0.03
Internet Software and Services
42,000 Yandex NV ......................... 884 0.11
2,517 0.32
Nigeria (1.00%)
Banks
21,699,396 Guaranty Trust Bank Plc ..... 1,653 0.21
10,603,413 Stanbic IBTC Holdings Plc . 578 0.07
27,878,759 Zenith Bank Plc .................. 1,329 0.17
Beverages
1,275,649 Guinness Nigeria Plc .......... 397 0.05
2,635,489 Nigerian Breweries Plc ....... 1,255 0.16
Food Products
348,794 Nestle Nigeria Plc ............... 908 0.11
4,330,210 Unilever Nigeria Plc ........... 629 0.08
Oil and Gas
927,392
SEPLAT Petroleum
Development Co Plc ........... 976 0.12
234,000
SEPLAT Petroleum
Development Co Plc (U.K.
Listed) ................................. 238 0.03
7,963 1.00
Pakistan (1.09%)
Banks
515,170 Habib Bank Ltd .................. 1,090 0.14
2,129,870 United Bank Ltd ................. 4,058 0.51
Chemicals
4,130,000 Engro Fertilizers Ltd ........... 2,432 0.31
Oil and Gas
273,000 Pakistan State Oil Co Ltd .... 1,082 0.13
8,662 1.09
Panama (0.48%)
Airlines
96,024
Avianca Holdings SA
ADR .................................... 622 0.08
21,026 Copa Holdings SA .............. 1,849 0.23
Retail Trade
73,451 InRetail Peru Corp .............. 1,344 0.17
3,815 0.48
Peru (0.27%)
Metals and Mining
154,738
Cia de Minas Buenaventura
SAA ADR ........................... 2,142 0.27
Philippines (1.37%)
Banks
1,061,940 BDO Unibank Inc ............... 2,404 0.30
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
36 Russell Emerging Markets Extended Opportunities Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
703,810
Metropolitan Bank & Trust
Co ........................................ 1,238 0.16
Building Products
4,713,400
CEMEX Holdings
Philippines Inc ..................... 1,166 0.15
Metals and Mining
2,481,916 Nickel Asia Corp ................. 368 0.04
Other Finance
27,590 GT Capital Holdings Inc ..... 819 0.10
Real Estate
3,367,000 Cosco Capital Inc ................ 576 0.07
9,523,700 Megaworld Corp ................. 927 0.12
Retail Trade
289,360 Jollibee Foods Corp ............. 1,474 0.19
1,211,200 Puregold Price Club Inc ...... 1,061 0.13
Software
2,840,000 Xurpas Inc ........................... 855 0.11
10,888 1.37
Poland (0.96%)
Banks
13,820 Bank Pekao SA ................... 447 0.06
15,200 Bank Zachodni WBK SA .... 1,235 0.15
72,700
Powszechna Kasa
Oszczednosci Bank Polski
SA ....................................... 496 0.06
Commercial Services and Supplies
7,100 KRUK SA ........................... 442 0.06
Diversified Financials
36,300 Alior Bank SA ..................... 440 0.06
Food Products
20,900 Eurocash SA ........................ 232 0.03
Insurance
109,240
Powszechny Zaklad
Ubezpieczen SA .................. 696 0.09
Internet Software and Services
76,626
Wirtualna Polska Holding
SA ....................................... 1,119 0.14
Media
31,517 Cyfrowy Polsat SA .............. 202 0.03
Metals and Mining
18,332 KGHM Polska Miedz SA .... 357 0.04
Oil and Gas
40,000
Polski Koncern Naftowy
Orlen SA ............................. 679 0.09
Retail Trade
15,700 CCC SA .............................. 726 0.09
Telecommunications
121,000 Orange Polska SA ............... 190 0.02
Textile and Apparel
250 LPP SA ................................ 257 0.03
Transport
12,000 Integer.pl SA ....................... 79 0.01
7,597 0.96
Number
of Shares
Fair Value
USD ‘000
Fund
%
Qatar (0.10%)
Chemicals
27,255 Industries Qatar QSC .......... 808 0.10
Romania (0.73%)
Banks
6,359,183 Banca Transilvania SA ....... 3,797 0.48
128,890
BRD-Groupe Societe
Generale SA ........................ 358 0.04
Closed End Funds
38,497
Fondul Proprietatea SA
GDR .................................... 400 0.05
Oil and Gas
110,317
Societatea Nationala de Gaze
Naturale ROMGAZ SA ...... 648 0.08
102,544
Societatea Nationala de Gaze
Naturale ROMGAZ SA
GDR .................................... 595 0.08
5,798 0.73
Russia (3.50%)
Airlines
1,027,406
Aeroflot - Russian Airlines
PJSC ................................... 1,906 0.24
Banks
463,792 Bank St Petersburg PJSC .... 433 0.05
1,425,432 Sberbank of Russia PJSC .... 3,287 0.42
240,302
Sberbank of Russia PJSC
ADR .................................... 2,254 0.28
Chemicals
81,234 PhosAgro OAO GDR ......... 1,048 0.13
Diversified Financials
294,630
Moscow Exchange MICEX-
RTS PJSC ........................... 593 0.07
217,500
Moscow Exchange MICEX-
RTS PJSC (U.S. Listed) ...... 437 0.06
Electric Utilities
10,064,500 RusHydro PJSC .................. 124 0.02
Food Products
4,175 Magnit PJSC ....................... 688 0.09
Iron and Steel
29,100
Novolipetsk Steel PJSC
GDR .................................... 378 0.05
Metals and Mining
903,100 Alrosa PJSC ........................ 1,241 0.16
36,169
MMC Norilsk Nickel PJSC
ADR .................................... 578 0.07
55,270
MMC Norilsk Nickel PJSC
ADR (U.S. Listed) .............. 887 0.11
Oil and Gas
457,532 Gazprom PJSC ADR .......... 1,935 0.24
42,342 Lukoil PJSC ADR ............... 2,062 0.26
63,362
Lukoil PJSC ADR (U.S.
Listed) ................................. 3,088 0.39
17,200 Novatek OJSC GDR ........... 1,892 0.24
148,000 Rosneft PJSC GDR ............. 808 0.10
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Markets Extended Opportunities Fund 37
Number
of Shares
Fair Value
USD ‘000
Fund
%
Real Estate
20,838 LSR Group PJSC ................. 295 0.04
193,520 LSR Group PJSC GDR ....... 549 0.07
Retail Trade
253,508 M.Video PAO ..................... 1,381 0.17
Telecommunications
80,902 MegaFon PJSC GDR .......... 773 0.10
25,101 Mobile TeleSystems PJSC .. 91 0.01
1,036
Mobile TeleSystems PJSC
ADR .................................... 8 0.00
800,480 Sistema PJSC FC ................. 258 0.03
434,000
Sistema PJSC FC (U.S.
Listed) ................................. 140 0.02
76,917 Sistema PJSC FC GDR ....... 571 0.07
Transport
1,582,311 Far Eastern Shipping Co Plc 47 0.01
27,752 3.50
Serbia & Montenegro (0.02%)
Banks
9,500
Komercijalna Banka AD
Beograd ............................... 134 0.02
Singapore (0.27%)
Diversified Financials
101,007 BOC Aviation Ltd ............... 520 0.06
Real Estate
2,875,000
Yoma Strategic Holdings
Ltd ....................................... 1,244 0.16
Shipbuilding
724,100
Yangzijiang Shipbuilding
Holdings Ltd ....................... 398 0.05
2,162 0.27
Slovenia (0.14%)
Insurance
21,054 Zavarovalnica Triglav DD ... 532 0.07
Oil and Gas
1,675 Petrol DD Ljubljana ............ 576 0.07
1,108 0.14
South Africa (3.67%)
Banks
103,609 Barclays Africa Group Ltd .. 1,138 0.14
512,864 FirstRand Ltd ...................... 1,772 0.23
110,966 Standard Bank Group Ltd .... 1,135 0.14
Computers and Peripherals
112,000 EOH Holdings Ltd .............. 1,366 0.17
Diversified Financials
1,948 Capitec Bank Holdings Ltd . 91 0.01
Food Products
51,871 Bid Corp Ltd ....................... 978 0.12
113,785 Bidvest Group Ltd ............... 1,337 0.17
49,066 Shoprite Holdings Ltd ......... 683 0.09
22,550 SPAR Group Ltd ................. 315 0.04
Number
of Shares
Fair Value
USD ‘000
Fund
%
23,327 Tiger Brands Ltd ................. 645 0.08
87,000 Tongaat Hulett Ltd .............. 747 0.09
Health Care Providers and Services
171,355 Netcare Ltd ......................... 419 0.05
Holding Companies - Diversified Operations
7,908 AVI Ltd .............................. 54 0.01
72,370 Imperial Holdings Ltd ......... 879 0.10
3,441 Remgro Ltd ......................... 57 0.01
Insurance
87,000 Discovery Ltd ..................... 715 0.09
38,506 Liberty Holdings Ltd .......... 327 0.04
95,193 Sanlam Ltd .......................... 442 0.06
Iron and Steel
52,720 Kumba Iron Ore Ltd ........... 475 0.06
Lodging
336,301 Tsogo Sun Holdings Ltd ..... 762 0.10
Media
26,750 Naspers Ltd ......................... 4,620 0.58
Metals and Mining
119,368
AngloGold Ashanti Ltd
ADR .................................... 1,900 0.24
40,254 Exxaro Resources Ltd ......... 248 0.03
44,379
Impala Platinum Holdings
Ltd ...................................... 224 0.03
Oil and Gas
76,824 Sasol Ltd ............................. 2,101 0.27
Paper and Forest Products
135,787 Sappi Ltd ............................ 701 0.09
Real Estate Investment Trust
35,303 Growthpoint Properties Ltd 65 0.01
64,996 Resilient REIT Ltd .............. 542 0.07
Retail Trade
56,000 Mr Price Group Ltd ............ 618 0.08
159,297 Truworths International Ltd 822 0.10
206,000 Woolworths Holdings Ltd .. 1,158 0.15
Telecommunications
147,297 MTN Group Ltd .................. 1,258 0.16
103,212 Telkom SA SOC Ltd .......... 454 0.06
29,048 3.67
Spain (0.09%)
Building Products
196,726
Cemex Latam Holdings
SA ....................................... 749 0.09
Switzerland (0.12%)
Retail Trade
7,377 Dufry AG ............................ 925 0.12
Taiwan (6.80%)
Auto Components
189,390
Cheng Shin Rubber Industry
Co Ltd ................................. 398 0.05
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
38 Russell Emerging Markets Extended Opportunities Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Building Products
176,000 Asia Cement Corp ............... 154 0.02
48,000
Nien Made Enterprise Co
Ltd ....................................... 618 0.08
488,000 Taiwan Cement Corp .......... 555 0.07
Chemicals
336,538 Nan Ya Plastics Corp .......... 666 0.08
Computers and Peripherals
72,556 Advantech Co Ltd ............... 623 0.08
24,000 Asustek Computer Inc ......... 214 0.03
273,113 Chicony Electronics Co Ltd 691 0.09
378,000 Compal Electronics Inc ....... 233 0.03
603,562
Foxconn Technology Co
Ltd ....................................... 1,768 0.22
608,000 Inventec Corp ...................... 497 0.06
383,313 Lite-On Technology Corp ... 552 0.07
148,000 Primax Electronics Ltd ........ 217 0.03
Diversified Financials
1,009,214
CTBC Financial Holding Co
Ltd ....................................... 586 0.08
1,616,900
E.Sun Financial Holding Co
Ltd ....................................... 921 0.12
480,418
Taishin Financial Holding
Co Ltd ................................. 179 0.02
2,036,286
Yuanta Financial Holding
Co Ltd ................................. 728 0.09
Electrical Equipment
688,068 Delta Electronics Inc ........... 3,666 0.46
42,000 Elite Advanced Laser Corp . 151 0.02
170,085 FLEXium Interconnect Inc .. 506 0.06
1,243,771
Hon Hai Precision Industry
Co Ltd ................................. 3,135 0.40
574,163 Pegatron Corp ...................... 1,476 0.19
Food Products
230,889
Uni-President Enterprises
Corp ..................................... 433 0.05
Home Furnishings
338,235 E Ink Holdings Inc .............. 260 0.03
Insurance
454,847
China Life Insurance Co Ltd
............................................. 416 0.05
Iron and Steel
1,050,016 China Steel Corp ................. 740 0.09
Metals and Mining
25,000 Catcher Technology Co Ltd 203 0.03
Miscellaneous Manufacturers
33,000 Largan Precision Co Ltd ...... 3,980 0.50
Pharmaceuticals
61,774 PharmaEngine Inc ............... 472 0.06
Real Estate
441,500
Highwealth Construction
Corp ..................................... 683 0.09
Semiconductor Equipment and Products
1,802,000
Advanced Semiconductor
Engineering Inc ................... 2,162 0.27
Number
of Shares
Fair Value
USD ‘000
Fund
%
95,679 MediaTek Inc ...................... 731 0.09
126,000 Nanya Technology Corp ..... 158 0.02
16,000
Novatek Microelectronics
Corp .................................... 56 0.01
96,000
Realtek Semiconductor
Corp .................................... 314 0.04
2,372,200
Taiwan Semiconductor
Manufacturing Co Ltd ........ 13,810 1.74
285,838
Taiwan Semiconductor
Manufacturing Co Ltd ADR 8,743 1.10
1,363,000
United Microelectronics
Corp .................................... 501 0.07
Telecommunications
370,000 Chunghwa Telecom Co Ltd 1,303 0.16
Textile and Apparel
543,808
Far Eastern New Century
Corp .................................... 406 0.05
53,905 6.80
Thailand (1.91%)
Banks
334,500
Kasikornbank PCL (Alien
Market) ............................... 1,810 0.23
577,700 Kasikornbank PCL NVDR . 3,126 0.39
574,000 Thanachart Capital PCL ...... 671 0.09
Chemicals
239,900 PTT Global Chemical PCL . 407 0.05
Construction and Engineering
2,350,600
Sino-Thai Engineering &
Construction PCL ............... 1,601 0.20
Holding Companies - Diversified Operations
1,992,700
Jasmine Broadband Internet
Infrastructure Fund ............. 673 0.08
185,600 Siam Cement PCL NVDR .. 2,764 0.35
Home Builders
4,855,984 Land & Houses PCL NVDR 1,254 0.16
Oil and Gas
155,000 PTT PCL NVDR ................ 1,516 0.19
Real Estate
438,500 Supalai PCL ........................ 308 0.04
Retail Trade
912,450 Minor International PCL ..... 1,027 0.13
15,157 1.91
Turkey (1.52%)
Airlines
117,884 Turk Hava Yollari AO ........ 202 0.03
Automobiles
47,100
Tofas Turk Otomobil
Fabrikasi AS ....................... 344 0.04
Banks
217,675 Akbank TAS ....................... 583 0.07
772,645 Turkiye Garanti Bankasi AS 2,047 0.26
848,208 Turkiye Halk Bankasi AS ... 2,578 0.33
260,000 Turkiye Is Bankasi .............. 412 0.05
542,529
Turkiye Vakiflar Bankasi
TAO .................................... 830 0.10
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Markets Extended Opportunities Fund 39
Number
of Shares
Fair Value
USD ‘000
Fund
%
238,000 Yapi ve Kredi Bankasi AS .. 291 0.04
Building Products
48,281
Cimsa Cimento Sanayi VE
Ticaret AS ........................... 240 0.03
Construction and Engineering
73,208 Enka Insaat ve Sanayi AS ... 107 0.01
Diversified Financials
360,753
Turkiye Sinai Kalkinma
Bankasi AS .......................... 160 0.02
Food Products
96,200 Migros Ticaret AS ............... 586 0.08
Holding Companies - Diversified Operations
399,002
Haci Omer Sabanci Holding
AS ....................................... 1,235 0.15
272,182 KOC Holding AS ................ 1,169 0.15
Metals and Mining
131,500 Koza Altin Isletmeleri AS ... 742 0.09
Oil and Gas
11,333
Tupras Turkiye Petrol
Rafinerileri AS .................... 215 0.03
Retail Trade
93,000
Dogus Otomotiv Servis ve
Ticaret AS ........................... 311 0.04
12,052 1.52
United Arab Emirates (0.68%)
Banks
691,606 Dubai Islamic Bank PJSC ... 1,021 0.13
Real Estate
1,508,073
DAMAC Properties Dubai
Co PJSC .............................. 944 0.12
1,751,168 Emaar Properties PJSC ........ 3,385 0.43
5,350 0.68
United Kingdom (1.04%)
Banks
40,400 BGEO Group Plc ................. 1,524 0.19
90,608
HSBC Bank Plc (The
Cooperative Insurance)* ...... 1,980 0.25
4,717
HSBC Bank Plc (United
International Transportation)
(U.S. Listed)* ...................... 34 0.00
28,415
HSBC Bank Plc (United
International
Transportation)* .................. 205 0.03
Health Care Providers and Services
72,441 NMC Health Plc .................. 1,289 0.16
Metals and Mining
19,391 Fresnillo Plc ........................ 457 0.06
541,156 KAZ Minerals Plc ............... 1,553 0.20
2,318,139 Pan African Resources Plc .. 640 0.08
2,181,861
Pan African Resources Plc
(South Africa Listed) ........... 595 0.07
8,277 1.04
United States (0.55%)
Biotechnology
13,443 China Biologic Products Inc 1,673 0.21
Number
of Shares
Fair Value
USD ‘000
Fund
%
Oil and Gas
243,200 Gran Tierra Energy Inc ....... 732 0.09
Retail Trade
23,304 PriceSmart Inc .................... 1,952 0.25
4,357 0.55
Vietnam (0.08%)
Real Estate
319,269 Vingroup JSC ..................... 637 0.08
Virgin Islands, British (0.24%)
Chemicals
7,876,000
Tianhe Chemicals Group Ltd
............................................. 711 0.09
Internet Software and Services
24,000 Mail.Ru Group Ltd GDR .... 421 0.05
Retail Trade
146,700
Arcos Dorados Holdings
Inc ....................................... 773 0.10
1,905 0.24
Zimbabwe (0.14%)
Holding Companies - Diversified Operations
1,837,954 Delta Corp Ltd .................... 1,103 0.14
Total Common Stock ........ 711,548 89.77
Preferred Stock (2.44%)
Brazil (1.90%)
Auto Components
1,116,000 Marcopolo SA ..................... 1,075 0.14
Food Products
229,600
Cia Brasileira de
Distribuicao ........................ 3,753 0.47
Holding Companies - Diversified Operations
3,998,098
Itausa - Investimentos Itau
SA ....................................... 10,263 1.29
15,091 1.90
Colombia (0.14%)
Banks
107,277 Banco Davivienda SA ......... 1,099 0.14
Korea, Republic of (0.33%)
Semiconductor Equipment and Products
2,253 Samsung Electronics Co Ltd 2,639 0.33
Philippines (0.00%)
Banks
1,267,172 Security Bank Corp ............. - 0.00
Russia (0.07%)
Oil and Gas
1,248,232 Surgutneftegas OJSC .......... 574 0.07
Total Preferred Stock ....... 19,403 2.44
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
40 Russell Emerging Markets Extended Opportunities Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Warrants (1.23%)
Netherlands (0.52%)
277,673
Bherti Airtel International
Netherlands BV ................... 1,307 0.16
155,694
Reliance Industries Ltd
(02/17) ................................. 2,536 0.32
17,750
Reliance Industries Ltd
(07/19) ................................. 289 0.04
4,132 0.52
Curacao (0.64%)
98,581
Fawaz Abdulaziz Al Hokair
& Co .................................... 886 0.11
40,032
Mouwasat Medical Services
Co ........................................ 1,259 0.16
666,693
National Industrialization
Co ........................................ 2,212 0.28
93,808
United International
Transportation Co ................ 678 0.09
5,035 0.64
Australia (0.07%)
890,100 Macquarie Bank Ltd ............ 595 0.07
Total Warrants .................. 9,762 1.23
Rights (0.01%)
Brazil (0.01%)
376,645 Helbor Empreendimentos .... 39 0.01
Total Rights ....................... 39 0.01
Total Transferable
Securities ............................ 740,752 93.45
Number
of Shares
Fair Value
USD ‘000
Fund
%
Investment Funds (4.44%)
Ireland (4.27%)
56
Russell Investment Company
III Plc - The Sterling
Liquidity Fund - Class R
Roll-Up Shares ................... 73 0.01
33,670
Russell Investment Company
III Plc - The U.S. Dollar
Cash Fund II - Class R Roll-
Up Shares ............................ 33,795 4.26
1
Russell Investment Company
Plc - Russell Euro Liquidity
Fund - Class R Roll-Up
Shares ................................. 1 0.00
33,869 4.27
Romania (0.17%)
6,576,661 Fondul Proprietatea SA ....... 1,333 0.17
Total Investment Funds .... 35,202 4.44
Total Investments
excluding Financial
Derivative Instruments ..... 775,954 97.89
Financial Derivative Instruments ((0.06)%)
Open Futures Contracts ((0.06)%)
Notional
Amount
USD ‘000
Average
Cost Price
USD
Unrealised
Gain (Loss)
USD ‘000
Fund
%
12,938
924.18
280 of Mini MSCI Emerging Markets
Long Futures Contracts
Expiring December 2016 ........................................... (164) (0.02)
11,375
0.24
96 of KOSPI Index Futures
Long Futures Contracts
Expiring December 2016 ........................................... (122) (0.02)
11,531
346.28
333 of MSCI Taiwan Index Futures
Long Futures Contracts
Expiring October 2016 .............................................. (152) (0.02)
Net unrealised gain (loss) on open futures contracts .................................................... (438) (0.06)
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Emerging Markets Extended Opportunities Fund 41
Open Forward Foreign Currency Exchange Contracts ((0.00)%)
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
21/12/2016 KRW 7,527,000 USD 6,875 (43) (0.00)
Net unrealised gain (loss) on open forward foreign currency exchange contracts ....... (43) (0.00)
Total Financial Derivative Instruments ............................................................................ (481) (0.06)
Fair Value
USD ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or Loss
(97.89%) ....................................................................................................................................................... 775,954 97.89
Total Financial Liabilities at Fair Value through Profit or
Loss ((0.06)%) ............................................................................................................................................. (481) (0.06)
Net Financial Assets at Fair Value through Profit or Loss
(97.83%) .................................................................................................................................................... 775,473 97.83
Other Net Assets (2.17%) ......................................................................................................................... 17,169 2.17
Net Assets .................................................................................................................................................. 792,642 100.00
Abbreviation used:
ADR - American Depository Receipt
GDR - Global Depository Receipt
NVDR - Non-Voting Depository Receipt
* Equity Linked Note (ELN). The first named entity is the issuer of the ELN and the underlying entity of the ELN follows in brackets.
Analysis of gross assets
% of
gross assets
Transferable securities admitted to an official stock exchange listing ...................................................................... 92.09
Other transferable securities of the type referred to in Regulation 68(1)(a), (b) and (c) .......................................... 0.78
Investment funds (UCITS) ....................................................................................................................................... 4.41
Other assets ............................................................................................................................................................... 2.72
100.00
The broker for the open futures contracts is Goldman Sachs.
The counterparty for the open forward foreign currency exchange contracts is Bank of America.
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
42 Russell Emerging Markets Extended Opportunities Fund
Fair Value Hierarchy (Note 10)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 30 September 2016 and 31 March 2016.
As at 30 September 2016
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 728,185 11,856 711 740,752
Investment funds ........................................................................ 1,333 33,869 - 35,202
Total assets ...................................................................................... 729,518 45,725 711 775,954
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ................................... (438) - - (438)
Unrealised loss on forward foreign currency exchange
contracts ...................................................................................... - (43) - (43)
Total liabilities ................................................................................ (438) (43) - (481)
As at 31 March 2016
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 631,844 13,946 1,739 647,529
Money market instruments ........................................................ - 2,399 - 2,399
Investment funds ........................................................................ 1,416 35,117 - 36,533
Unrealised gain on open futures contracts ................................... 1,071 - - 1,071
Unrealised gain on forward foreign currency exchange
contracts ...................................................................................... - 658 - 658
Total assets ...................................................................................... 634,331 52,120 1,739 688,190
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ................................... (425) - - (425)
Unrealised loss on forward foreign currency exchange
contracts ...................................................................................... - (345) - (345)
Total liabilities ................................................................................ (425) (345) - (770)
Russell Investment Company II plc
Russell Emerging Markets Extended Opportunities Fund
Statement of Changes in Composition of Portfolio
Listed below are the 20 largest cumulative investment purchases and sales during the six months ended 30 September 2016.
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
Russell Emerging Markets Extended Opportunities Fund 43
Portfolio Securities
Acquisition Cost
USD ‘000 Portfolio Securities
Disposal Proceeds
USD ‘000
Russell Investment Company III plc Russell Investment Company III plc
The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II
Class R Roll-Up Shares 121,304 Class R Roll-Up Shares (122,619)
Alibaba Group Holding Ltd ADR 8,398 Ping An Insurance Group Co of China
Taiwan Semiconductor Manufacturing Co Ltd (5,337)
Ltd 6,032 JD.com Inc ADR (4,393)
Tencent Holdings Ltd 4,856 Samsung Electronics Co Ltd (4,132)
Samsung Electronics Co Ltd 4,277 China Mobile Ltd (3,452)
PetroChina Co Ltd 3,407 Silicon Motion Technology Corp ADR (2,986)
KT&G Corp 3,199 Hon Hai Precision Industry Co Ltd (2,796)
China Life Insurance Co Ltd 3,047 Naspers Ltd (2,476)
Itausa - Investimentos Itau SA 3,009 Hyundai Motor Co (2,396)
Largan Precision Co Ltd 2,906 SK Hynix Inc (2,387)
Engro Fertilizers Ltd 2,601 Taiwan Semiconductor Manufacturing
Alpha Bank AE 2,182 Co Ltd (2,311)
Astra International Tbk PT 2,123 Tencent Holdings Ltd (2,255)
Advanced Semiconductor Engineering Inc 2,097 U.S. Treasury Bill
Gazprom PAO ADR 2,090 Zero Coupon due 23/06/2016 (2,000)
Delta Electronics Inc 2,024 PTT PCL NVDR (1,967)
New Oriental Education & Technology Pegatron Corp (1,934)
Group Inc ADR 1,911 OTP Bank Plc (1,895)
Semiconductor Manufacturing Gazprom PAO ADR (1,881)
International Corp 1,891 Alibaba Group Holding Ltd ADR (1,834)
AAC Technologies Holdings Inc 1,792 Dongfeng Motor Group Co Ltd (1,831)
NAVER Corp 1,744 Bharti Infratel Ltd (1,818)
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Balance Sheet
As at 30 September 2016
The accompanying notes are an integral part of the financial statements.
44 Russell Euro Fixed Income Fund
30 September 2016
(Unaudited)
EUR ‘000
31 March 2016
(Audited)
EUR ‘000
Assets
Financial assets at fair value through profit or loss .......................................................... 281,664 291,926
Cash at bank (Note 2) ....................................................................................................... 2,497 209
Cash held with brokers and counterparties for open financial derivative instruments
(Note 2) ............................................................................................................................ 2,547 1,126
Debtors:
Receivable for investments sold .................................................................................... 1,299 7,475
Receivable on fund shares issued .................................................................................. 63 104
Interest receivable .......................................................................................................... 2,362 2,770
Prepayments and other debtors ...................................................................................... 16 7
290,448 303,617
Liabilities
Financial liabilities at fair value through profit or loss .................................................... (3,990) (3,400)
Creditors – amounts falling due within one financial year:
Bank overdraft (Note 2) ................................................................................................. - (1,025)
Cash due to brokers and counterparties for open financial derivative positions
(Note 2) .......................................................................................................................... (189) -
Payable for investments purchased ................................................................................ (1,894) (5,849)
Payable on fund shares redeemed .................................................................................. (163) (100)
Distributions payable on income share classes .............................................................. (413) (583)
Management fees payable ............................................................................................. (175) (182)
Depositary fees payable ................................................................................................. (7) (4)
Sub-custodian fees payable ........................................................................................... (18) (18)
Administration fees payable .......................................................................................... (8) (12)
Audit fees payable ......................................................................................................... (12) (22)
(6,869) (11,195)
Net asset value attributable to redeemable participating shareholders .................... 283,579 292,422
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Profit and Loss Account
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 45
Six months ended
30 September 2016
(Unaudited)
EUR ‘000
Six months ended
30 September 2015
(Unaudited)
EUR ‘000
Income
Interest income .............................................................................................................. 3,009 2,234
Net gain (loss) on investment activities ........................................................................... (3,054) (14,461)
Total investment income (expense) ............................................................................... (45) (12,227)
Expenses
Management fees (Note 3) ............................................................................................ (1,043) (1,033)
Depositary fees (Note 4) ................................................................................................ (20) (12)
Sub-custodian fees (Note 4) .......................................................................................... (65) (39)
Administration and transfer agency fees (Note 4) ......................................................... (73) (65)
Audit fees ...................................................................................................................... (11) (10)
Professional fees ............................................................................................................ (4) (17)
Other fees ...................................................................................................................... (9) (11)
Total operating expenses ............................................................................................... (1,225) (1,187)
Net income (expense) ...................................................................................................... (1,270) (13,414)
Finance costs
Distributions (Note 6) ................................................................................................... (1,764) (2,351)
Profit (loss) for the financial period before taxation ................................................... (3,034) (15,765)
Taxation
Withholding tax (Note 7) ............................................................................................... (3) (4)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ (3,037) (15,769)
All amounts arose solely from continuing operations. There are no recognised gains or losses other than those dealt with in the Profit and Loss
Account.
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
46 Russell Euro Fixed Income Fund
Six months ended
30 September 2016
(Unaudited)
EUR ‘000
Six months ended
30 September 2015
(Unaudited)
EUR ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ (3,037) (15,769)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 8) ...................... 840 1,075
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 8) ..................................................................................................... (6,646) 79,335
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders ............................................................................................. (8,843) 64,641
Net assets attributable to redeemable participating shareholders
Beginning of financial period ........................................................................................ 292,422 244,067
End of financial period .................................................................................................. 283,579 308,708
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 47
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Transferable Securities (92.42%)
Long Term Bonds and Notes (88.25%)
Australia (0.58%)
BHP Billiton Finance Ltd
EUR 376,000 1.500% due 29/04/30 ....... 396 0.14
Commonwealth Bank of
Australia
530,000 2.000% due 22/04/27 ....... 530 0.19
National Australia Bank
Ltd
250,000 1.875% due 13/01/23 ....... 280 0.10
Westpac Banking Corp
400,000 4.125% due 25/05/18 ....... 428 0.15
1,634 0.58
Austria (0.70%)
Austria Government Bond
510,000 3.650% due 20/04/22 ....... 627 0.22
350,000 4.850% due 15/03/26 ....... 514 0.18
200,000 4.150% due 15/03/37 ....... 340 0.12
127,000 3.800% due 26/01/62 ....... 260 0.09
Erste Group Bank AG
100,000 7.125% due 10/10/22 ....... 126 0.05
100,000 0.625% due 19/01/23 ....... 105 0.04
1,972 0.70
Belgium (6.31%)
Anheuser-Busch InBev
SA/NV
58,000 0.625% due 17/03/20 ....... 59 0.02
592,000 1.500% due 17/03/25 ....... 634 0.22
286,000 1.500% due 18/04/30 ....... 301 0.11
280,000 2.750% due 17/03/36 ....... 337 0.12
Belgium Government
Bond
710,000 1.250% due 22/06/18 ....... 733 0.26
450,000 3.750% due 28/09/20 ....... 528 0.19
EUR 590,000 2.600% due 22/06/24 ....... 718 0.25
7,850,000 1.000% due 22/06/26 ....... 8,503 3.00
250,000 4.500% due 28/03/26 ....... 357 0.13
390,000 4.000% due 28/03/32 ....... 595 0.21
370,000 4.250% due 28/03/41 ....... 651 0.23
660,000 3.750% due 22/06/45 ....... 1,125 0.40
608,000 2.150% due 22/06/66 ....... 770 0.27
Elia System Operator
SA/NV
100,000 3.250% due 04/04/28 ....... 128 0.04
European Union
350,000 2.750% due 04/04/22 ....... 412 0.14
300,000 0.625% due 04/11/23 ....... 321 0.11
KBC Bank NV
200,000 0.450% due 22/01/22 ....... 207 0.07
100,000 0.375% due 01/09/22 ....... 103 0.04
KBC Groep NV
1,300,000 1.875% due 11/03/27 ....... 1,315 0.46
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Solvay SA
100,000 1.625% due 02/12/22 ...... 107 0.04
17,904 6.31
Canada (0.65%)
Canadian Imperial Bank of
Commerce
530,000 1.250% due 07/08/18 ...... 545 0.19
Royal Bank of Canada
600,000 0.132% due 06/08/20 ...... 604 0.21
Toronto-Dominion Bank
681,000 0.375% due 27/04/23 ...... 699 0.25
1,848 0.65
Cayman Islands (0.03%)
UPCB Finance IV Ltd
100,000 4.000% due 15/01/27 ...... 100 0.03
Cyprus (0.04%)
Aroundtown Property
Holdings Plc
100,000 1.500% due 15/07/24 ...... 100 0.04
Denmark (0.90%)
Danske Bank A/S
370,000 0.500% due 06/05/21 ...... 377 0.13
100,000 0.750% due 02/06/23 ...... 103 0.04
280,000 3.875% due 04/10/23 ...... 299 0.10
Nykredit Realkredit A/S
200,000 0.750% due 14/07/21 ...... 202 0.07
4,300,000 2.000% due 01/10/47 ...... 565 0.20
3,100,000 2.500% due 01/10/47 ...... 422 0.15
Realkredit Danmark A/S
4,500,000 2.000% due 01/10/47 ...... 599 0.21
2,567 0.90
Finland (1.37%)
Elenia Finance OYJ
EUR 292,000 2.875% due 17/12/20 ...... 318 0.11
Finland Government Bond
1,900,000 3.375% due 15/04/20 ...... 2,168 0.77
490,000 3.500% due 15/04/21 ...... 580 0.20
220,000 2.750% due 04/07/28 ...... 288 0.10
OP Mortgage Bank
200,000 0.625% due 04/09/22 ...... 210 0.07
100,000 1.000% due 28/11/24 ...... 108 0.04
Sampo OYJ
100,000 1.125% due 24/05/19 ...... 103 0.04
SATO OYJ
100,000 2.375% due 24/03/21 ...... 106 0.04
3,881 1.37
France (11.78%)
Accor SA
200,000 2.625% due 05/02/21 ...... 219 0.08
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
48 Russell Euro Fixed Income Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Agence Francaise de
Developpement
300,000 0.125% due 31/03/21 ....... 306 0.11
Air Liquide Finance SA
100,000 2.125% due 15/10/21 ....... 111 0.04
Autoroutes du Sud de la
France SA
50,000 5.625% due 04/07/22 ....... 66 0.02
AXA SA
100,000 5.250% due 16/04/40 ....... 112 0.04
100,000 3.375% due 06/07/47 ....... 103 0.04
200,000 3.875%* ........................... 205 0.07
Banque Federative du Credit
Mutuel
900,000 0.171% due 03/06/20 ....... 906 0.32
100,000 2.625% due 24/02/21 ....... 111 0.04
100,000 1.625% due 19/01/26 ....... 110 0.04
Banque PSA Finance
SA
USD 55,000 5.750% due 04/04/21 ....... 55 0.02
BNP Paribas Home Loan
SFH SA
EUR 100,000 1.375% due 17/06/20 ....... 107 0.04
200,000 3.125% due 22/03/22 ....... 238 0.08
BNP Paribas SA
150,000 0.750% due 11/11/22 ....... 154 0.05
BPCE SA
100,000 2.000% due 24/04/18 ....... 103 0.04
100,000 0.625% due 20/04/20 ....... 102 0.04
100,000 0.375% due 05/10/23 ....... 100 0.03
100,000 2.875% due 22/04/26 ....... 105 0.04
300,000 2.750% due 30/11/27 ....... 311 0.11
Bureau Veritas SA
100,000 3.125% due 21/01/21 ....... 110 0.04
Caisse
d'Amortissement de
la Dette Sociale
400,000 0.500% due 25/05/23 ....... 419 0.15
220,000 2.375% due 25/01/24 ....... 262 0.09
Caisse de Refinancement de
l'Habitat SA
300,000 3.600% due 08/03/24 ....... 383 0.13
Carrefour SA
100,000 0.750% due 26/04/24 ....... 102 0.04
Casino Guichard Perrachon
SA
100,000 5.976% due 26/05/21 ....... 118 0.04
100,000 3.248% due 07/03/24 ....... 109 0.04
Council Of Europe
Development Bank
300,000 0.375% due 27/10/22 ....... 313 0.11
400,000 0.750% due 09/06/25 ....... 427 0.15
Credit Agricole Assurances
SA
200,000 4.750% due 27/09/48 ....... 201 0.07
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Credit Agricole Home Loan
SFH SA
200,000 0.375% due 24/03/23 ...... 208 0.07
200,000 0.625% due 11/09/23 ...... 211 0.07
Credit Agricole SA
200,000 4.000% due 29/06/21 ...... 235 0.08
100,000 0.875% due 19/01/22 ...... 104 0.04
370,000 2.625% due 17/03/27 ...... 385 0.14
Credit Mutuel - CIC Home
Loan SFH
300,000 2.500% due 11/09/23 ...... 356 0.12
Electricite de France SA
100,000 4.250%* .......................... 102 0.04
France Government Bond
OAT
540,000 4.250% due 25/10/18 ...... 595 0.21
2,590,000 3.750% due 25/10/19 ...... 2,937 1.03
2,200,000 3.500% due 25/04/20 ...... 2,521 0.89
350,000 2.250% due 25/10/22 ...... 406 0.14
400,000 1.750% due 25/05/23 ...... 455 0.16
6,920,000 0.500% due 25/05/26 ...... 7,172 2.53
315,000 5.750% due 25/10/32 ...... 571 0.20
960,000 4.000% due 25/10/38 ...... 1,587 0.56
2,275,000 3.250% due 25/05/45 ...... 3,564 1.26
110,000 1.750% due 25/05/66 ...... 128 0.04
HSBC SFH France SA
100,000 2.000% due 16/10/23 ...... 115 0.04
Kering
100,000 1.250% due 10/05/26 ...... 105 0.04
La Banque Postale Home
Loan SFH
100,000 1.875% due 11/09/20 ...... 109 0.04
mFinance France SA
80,000 1.398% due 26/09/20 ...... 80 0.03
Orange SA
200,000 3.125% due 09/01/24 ...... 241 0.08
Pernod Ricard SA
100,000 2.125% due 27/09/24 ...... 113 0.04
RCI Banque
340,000 0.375% due 10/07/19 ...... 343 0.12
Renault SA
220,000 3.125% due 05/03/21 ...... 247 0.09
SA de Gestion de Stocks de
Securite
300,000 0.625% due 25/05/23 ...... 314 0.11
Sanofi
840,000 1.000% due 14/11/17 ...... 851 0.30
100,000 0.875% due 22/09/21 ...... 104 0.04
SCOR SE
300,000 3.000% due 08/06/46 ...... 306 0.11
Societe Des Autoroutes
Paris-Rhin-Rhone
100,000 1.500% due 15/01/24 ...... 108 0.04
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 49
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Societe Generale SA
100,000 0.750% due 19/02/21 ....... 103 0.04
100,000 0.750% due 26/05/23 ....... 103 0.04
Societe Generale SFH SA
300,000 2.875% due 14/03/19 ....... 324 0.11
Solvay Finance SA
100,000 5.118%* ........................... 106 0.04
Suez
300,000 1.250% due 19/05/28 ....... 321 0.11
TOTAL SA
750,000 2.708% * .......................... 751 0.26
200,000 2.250% * .......................... 199 0.07
UNEDIC
200,000 0.300% due 04/11/21 ....... 207 0.07
100,000 0.875% due 25/10/22 ....... 107 0.04
200,000 0.625% due 17/02/25 ....... 210 0.07
100,000 1.250% due 21/10/27 ....... 111 0.04
Vivendi SA
100,000 0.750% due 26/05/21 ....... 103 0.04
Wendel SA
200,000 2.750% due 02/10/24 ....... 222 0.08
33,408 11.78
Germany (6.61%)
Allianz SE
100,000 2.241% due 07/07/45 ....... 98 0.03
200,000 4.750% * .......................... 223 0.08
Alstria Office REIT AG
100,000 2.125% due 12/04/23 ....... 108 0.04
Bayer AG
60,000 3.000% due 01/07/75 ....... 61 0.02
Bertelsmann SE & Co
KGaA
100,000 1.125% due 27/04/26 ....... 106 0.04
Bundesrepublik Deutschland
9,580,000 0.500% due 15/02/26 ....... 10,204 3.60
625,000 5.500% due 04/01/31 ....... 1,113 0.39
310,000 3.250% due 04/07/42 ....... 528 0.19
810,000 2.500% due 15/08/46 ....... 1,274 0.45
Commerzbank AG
149,000
Zero Coupon due
11/07/24 ........................... 151 0.05
101,000 4.000% due 23/03/26 ....... 101 0.04
Covestro AG
30,000 1.000% due 07/10/21 ....... 31 0.01
100,000 1.750% due 25/09/24 ....... 109 0.04
Daimler AG
45,000 0.500% due 09/09/19 ....... 46 0.02
EnBW Energie Baden-
Wuerttemberg AG
500,000 3.375% due 05/04/77 ....... 497 0.17
HeidelbergCement AG
775,000 2.250% due 03/06/24 ....... 818 0.29
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Hella KGaA Hueck &
Co
100,000 2.375% due 24/01/20 ...... 108 0.04
KFW
EUR 400,000 0.625% due 04/07/22 ...... 423 0.15
380,000 0.375% due 15/03/23 ...... 397 0.14
250,000 0.625% due 15/01/25 ...... 267 0.09
200,000 0.375% due 09/03/26 ...... 207 0.07
200,000 0.375% due 23/04/30 ...... 202 0.07
150,000 1.250% due 04/07/36 ...... 172 0.06
Landwirtschaftliche
Rentenbank
200,000 0.375% due 16/03/26 ...... 208 0.07
Muenchener
Rueckversicherungs-
Gesellschaft AG in
Muenchen
300,000 6.250% due 26/05/42 ...... 370 0.13
Volkswagen Bank
GmbH
110,000 1.125% due 08/02/18 ...... 112 0.04
WPP Finance Deutschland
GmbH
780,000 1.625% due 23/03/30 ...... 819 0.29
18,753 6.61
Ireland (4.97%)
AIB Mortgage Bank
300,000 0.875% due 04/02/23 ...... 316 0.11
Allied Irish Banks Plc
500,000 2.750% due 16/04/19 ...... 530 0.19
CRH Finance Ltd
150,000 3.125% due 03/04/23 ...... 176 0.06
DAA Finance Plc
100,000 1.554% due 07/06/28 ...... 107 0.04
Eaton Capital Unlimited
Co
100,000 0.750% due 20/09/24 ...... 101 0.04
FCA Capital Ireland
Plc
230,000 1.250% due 23/09/20 ...... 236 0.08
GE Capital European
Funding Unlimited Co
350,000 5.375% due 23/01/20 ...... 413 0.15
Ireland Government
Bond
190,000 5.500% due 18/10/17 ...... 202 0.07
270,000 3.400% due 18/03/24 ...... 337 0.12
8,550,000 1.000% due 15/05/26 ...... 9,097 3.21
240,000 2.400% due 15/05/30 ...... 295 0.10
700,000 2.000% due 18/02/45 ...... 844 0.30
PartnerRe Ireland Finance
DAC
100,000 1.250% due 15/09/26 ...... 101 0.04
Ryanair Ltd
200,000 1.875% due 17/06/21 ...... 214 0.07
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
50 Russell Euro Fixed Income Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Shire Acquisitions
Investments Ireland DAC
USD 1,250,000 2.400% due 23/09/21 ....... 1,115 0.39
14,084 4.97
Italy (19.17%)
Assicurazioni Generali
SpA
EUR 112,000 2.875% due 14/01/20 ....... 122 0.04
100,000 4.125% due 04/05/26 ....... 106 0.04
700,000 7.750% due 12/12/42 ....... 824 0.29
Autostrade per l'Italia
SpA
100,000 1.625% due 12/06/23 ....... 107 0.04
Banca Popolare di Milano
Scarl
150,000 0.875% due 14/09/22 ....... 158 0.06
180,000 0.625% due 08/06/23 ....... 186 0.07
Banca Popolare di Sondrio
Scarl
138,000 0.750% due 04/04/23 ....... 144 0.05
Cassa Depositi e Prestiti
SpA
200,000 2.375% due 12/02/19 ....... 211 0.07
320,000 2.750% due 31/05/21 ....... 355 0.12
Davide Campari-Milano
SpA
886,000 4.500% due 25/10/19 ....... 986 0.35
Intesa Sanpaolo SpA
1,950,000 1.125% due 04/03/22 ....... 1,975 0.70
100,000 3.625% due 05/12/22 ....... 123 0.04
100,000 0.625% due 23/03/23 ....... 104 0.04
Italy Buoni Poliennali Del
Tesoro
1,010,000 0.750% due 15/01/18 ....... 1,022 0.36
4,550,000 0.250% due 15/05/18 ....... 4,577 1.61
1,800,000 4.500% due 01/03/19 ....... 1,997 0.70
2,100,000 4.000% due 01/09/20 ....... 2,420 0.85
6,300,000 0.450% due 01/06/21 ....... 6,355 2.24
1,020,000 1.350% due 15/04/22 ....... 1,071 0.38
16,830,000 4.500% due 01/03/24 ....... 21,295 7.51
500,000 1.600% due 01/06/26 ....... 519 0.18
1,320,000 5.250% due 01/11/29 ....... 1,920 0.68
980,000 5.000% due 01/09/40 ....... 1,520 0.54
3,600,000 3.250% due 01/09/46 ....... 4,428 1.56
1,000,000 2.700% due 01/03/47 ....... 1,103 0.39
UniCredit SpA
700,000 2.000% due 04/03/23 ....... 724 0.26
54,352 19.17
Jersey, Channel Islands (0.66%)
Atrium European Real Estate
Ltd
170,000 3.625% due 17/10/22 ....... 188 0.07
Delphi Automotive Plc
USD 110,000 3.150% due 19/11/20 ....... 101 0.03
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Kennedy Wilson Europe
Real Estate
EUR 200,000 3.250% due 12/11/25 ...... 211 0.07
Swiss Re Admin Re Ltd
137,000 1.375% due 27/05/23 ...... 143 0.05
UBS Group Funding Jersey
Ltd
560,000 1.750% due 16/11/22 ...... 595 0.21
650,000 1.250% due 01/09/26 ...... 647 0.23
1,885 0.66
Luxembourg (2.24%)
Alpha Trains Finance SA
560,000 2.064% due 30/06/25 ...... 560 0.20
Eurofins Scientific SE
500,000 3.375% due 30/01/23 ...... 526 0.18
European Financial Stability
Facility
300,000 0.500% due 20/01/23 ...... 316 0.11
360,000 0.200% due 28/04/25 ...... 369 0.13
100,000 0.400% due 31/05/26 ...... 104 0.04
European Investment Bank
500,000 4.750% due 15/10/17 ...... 527 0.19
230,000 0.500% due 15/11/23 ...... 243 0.09
350,000 0.125% due 15/04/25 ...... 357 0.13
300,000 3.500% due 15/04/27 ...... 410 0.14
European Stability
Mechanism
EUR 340,000 2.125% due 20/11/23 ...... 399 0.14
350,000 1.000% due 23/09/25 ...... 383 0.13
200,000 0.500% due 02/03/26 ...... 209 0.07
Glencore Finance Europe SA
770,000 1.750% due 17/03/25 ...... 734 0.26
Grand City Properties SA
400,000 1.500% due 17/04/25 ...... 413 0.15
Holcim Finance
Luxembourg SA
145,000 2.250% due 26/05/28 ...... 161 0.06
450,000 5.750% due 14/09/40 ...... 520 0.18
Holcim US Finance Sarl &
Cie SCS
100,000 2.625% due 07/09/20 ...... 110 0.04
6,341 2.24
Mexico (0.38%)
America Movil SAB de CV
100,000 1.500% due 10/03/24 ...... 105 0.04
100,000 2.125% due 10/03/28 ...... 108 0.04
Petroleos Mexicanos
660,000 5.500% due 24/02/25 ...... 750 0.26
USD 144,000 6.375% due 23/01/45 ...... 123 0.04
1,086 0.38
Netherlands (6.83%)
ABN Amro Bank NV
250,000 4.750% due 11/01/19 ...... 278 0.10
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 51
Principal
Amount
Fair Value
EUR ‘000
Fund
%
100,000 6.375% due 27/04/21 ....... 123 0.04
EUR 58,000 0.625% due 31/05/22 ....... 59 0.02
1,000,000 7.125% due 06/07/22 ....... 1,292 0.45
150,000 2.500% due 05/09/23 ....... 178 0.06
100,000 2.375% due 23/01/24 ....... 118 0.04
120,000 1.000% due 16/04/25 ....... 126 0.04
140,000 2.875% due 30/06/25 ....... 147 0.05
Allianz Finance II BV
300,000 5.750% due 08/07/41 ....... 350 0.12
Bank Nederlandse
Gemeenten NV
300,000 0.250% due 22/02/23 ....... 308 0.11
Coca-Cola HBC Finance BV
100,000 2.375% due 18/06/20 ....... 108 0.04
Cooperatieve Rabobank UA
100,000 4.750% due 15/01/18 ....... 106 0.04
1,200,000 6.875% due 19/03/20 ....... 1,421 0.50
200,000 4.000% due 11/01/22 ....... 240 0.08
510,000 3.875% due 25/07/23 ....... 593 0.21
400,000 6.625%* ........................... 423 0.15
Demeter Investments BV for
Zurich Insurance Co Ltd
1,000,000 3.500% due 01/10/46 ....... 1,045 0.37
Deutsche Telekom
International Finance BV
280,000 1.500% due 03/04/28 ....... 300 0.10
50,000 7.500% due 24/01/33 ....... 96 0.03
EDP Finance BV
200,000 2.375% due 23/03/23 ....... 212 0.07
750,000 1.125% due 12/02/24 ....... 726 0.26
ELM BV for Swiss Life
Insurance & Pension Group
100,000 4.500%* ........................... 102 0.04
Enel Finance International
NV
259,000 1.375% due 01/06/26 ....... 273 0.10
Gas Natural Fenosa Finance
BV
100,000 1.375% due 21/01/25 ....... 107 0.04
100,000 4.125%* ........................... 103 0.04
ING Bank NV
140,000 0.700% due 16/04/20 ....... 143 0.05
140,000 1.875% due 22/05/23 ....... 159 0.06
250,000 6.125% due 29/05/23 ....... 273 0.10
500,000 3.000% due 11/04/28 ....... 532 0.19
JAB Holdings BV
100,000 1.750% due 25/05/23 ....... 107 0.04
Nederlandse
Waterschapsbank NV
200,000 0.500% due 19/01/23 ....... 209 0.07
Netherlands Government
Bond
170,000 1.250% due 15/01/18 ....... 174 0.06
400,000 1.250% due 15/01/19 ....... 417 0.15
Principal
Amount
Fair Value
EUR ‘000
Fund
%
2,110,000 0.250% due 15/01/20 ...... 2,172 0.77
510,000 1.750% due 15/07/23 ...... 585 0.21
1,820,000 0.500% due 15/07/26 ...... 1,908 0.67
160,000 5.500% due 15/01/28 ...... 259 0.09
320,000 4.000% due 15/01/37 ...... 551 0.19
170,000 3.750% due 15/01/42 ...... 306 0.11
Petrobras Global Finance
BV
578,000 5.875% due 07/03/22 ...... 594 0.21
Repsol International Finance
BV
100,000 3.625% due 07/10/21 ...... 116 0.04
Roche Finance Europe
BV
100,000 0.875% due 25/02/25 ...... 106 0.04
Shell International Finance
BV
135,000 0.375% due 15/02/25 ...... 135 0.05
USD 700,000 3.750% due 12/09/46 ...... 617 0.22
Swiss Reinsurance Co via
ELM BV
EUR 300,000 2.600%* .......................... 290 0.10
Teva Pharmaceutical
Finance Netherlands II
BV
100,000 1.875% due 31/03/27 ...... 106 0.04
Teva Pharmaceutical
Finance Netherlands III
BV
USD 500,000 4.100% due 01/10/46 ...... 445 0.16
Vonovia Finance BV
EUR 200,000 1.625% due 15/12/20 ...... 212 0.07
100,000 4.000%* .......................... 106 0.04
19,356 6.83
New Zealand (0.52%)
ANZ New Zealand Int'l
Ltd/London
150,000 0.625% due 27/01/22 ...... 155 0.06
ASB Finance Ltd
1,300,000 0.500% due 17/06/20 ...... 1,316 0.46
1,471 0.52
Norway (0.48%)
DNB Boligkreditt AS
350,000 2.750% due 21/03/22 ...... 406 0.14
SpareBank 1
Boligkreditt
139,000 0.250% due 30/08/26 ...... 139 0.05
SpareBank 1 SMN
400,000 0.750% due 08/06/21 ...... 411 0.15
Statoil ASA
270,000 1.250% due 17/02/27 ...... 287 0.10
Telenor ASA
100,000 2.500% due 22/05/25 ...... 117 0.04
1,360 0.48
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
52 Russell Euro Fixed Income Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Portugal (0.04%)
Brisa Concessao Rodoviaria
SA
100,000 3.875% due 01/04/21 ....... 114 0.04
Spain (8.84%)
Adif - Alta Velocidad
300,000 1.875% due 22/09/22 ....... 327 0.12
Banco Bilbao Vizcaya
Argentaria SA
200,000 0.750% due 20/01/22 ....... 210 0.07
200,000 0.625% due 18/03/23 ....... 209 0.07
Banco Popular Espanol SA
200,000 1.000% due 03/03/22 ....... 212 0.07
Banco Santander SA
300,000 0.750% due 09/09/22 ....... 316 0.11
200,000 6.250%* ........................... 180 0.06
Bankinter SA
300,000 0.875% due 03/08/22 ....... 317 0.11
400,000 8.625%* ........................... 431 0.15
BBVA Subordinated Capital
SAU
200,000 3.500% due 11/04/24 ....... 209 0.07
FADE - Fondo de
Amortizacion del Deficit
Electrico
200,000 0.850% due 17/09/19 ....... 205 0.07
100,000 5.900% due 17/03/21 ....... 126 0.04
Instituto de Credito Oficial
500,000 4.375% due 20/05/19 ....... 558 0.20
Kutxabank SA
300,000 1.750% due 27/05/21 ....... 327 0.12
Mapfre SA
100,000 1.625% due 19/05/26 ....... 106 0.04
Merlin Properties Socimi SA
137,000 2.225% due 25/04/23 ....... 145 0.05
Metrovacesa SA
100,000 2.375% due 23/05/22 ....... 106 0.04
Santander Consumer Finance
SA
100,000 1.000% due 26/05/21 ....... 102 0.04
Santander Issuances SAU
200,000 2.500% due 18/03/25 ....... 197 0.07
300,000 3.250% due 04/04/26 ....... 307 0.11
Spain Government Bond
1,060,000 4.600% due 30/07/19 ....... 1,201 0.42
870,000 4.850% due 31/10/20 ....... 1,043 0.37
850,000 0.750% due 30/07/21 ....... 879 0.31
740,000 3.800% due 30/04/24 ....... 917 0.32
210,000 3.800% due 30/04/24 ....... 260 0.09
9,825,000 2.750% due 31/10/24 ....... 11,442 4.04
280,000 4.650% due 30/07/25 ....... 372 0.13
950,000 6.000% due 31/01/29 ....... 1,482 0.52
Principal
Amount
Fair Value
EUR ‘000
Fund
%
610,000 4.700% due 30/07/41 ...... 961 0.34
1,050,000 2.900% due 31/10/46 ...... 1,266 0.45
151,000 3.450% due 30/07/66 ...... 192 0.07
Telefonica Emisiones
SAU
100,000 3.987% due 23/01/23 ...... 122 0.04
300,000 2.932% due 17/10/29 ...... 356 0.13
25,083 8.84
Sweden (1.98%)
Nordea Bank
100,000 1.000% due 07/09/26 ...... 100 0.03
Skandinaviska Enskilda
Banken AB
1,467,000 0.302% due 26/05/20 ...... 1,486 0.52
350,000 4.000% due 12/09/22 ...... 362 0.13
125,000 0.625% due 30/01/23 ...... 131 0.05
Svenska Handelsbanken
AB
110,000 2.656% due 15/01/24 ...... 115 0.04
Swedbank Hypotek AB
900,000 0.625% due 04/01/21 ...... 923 0.33
200,000 0.150% due 10/02/21 ...... 204 0.07
Sweden Government Bond
SEK 8,470,000 3.500% due 30/03/39 ...... 1,324 0.47
Sweden Government
International Bond
EUR 541,000 0.750% due 02/05/19 ...... 557 0.20
Telia Co AB
200,000 4.000% due 22/03/22 ...... 241 0.08
Vattenfall AB
180,000 3.000% due 19/03/77 ...... 167 0.06
5,610 1.98
Switzerland (0.55%)
Credit Suisse AG
1,000,000 5.750% due 18/09/25 ...... 1,089 0.38
EUROFIMA
113,000 0.250% due 25/04/23 ...... 115 0.04
UBS AG
140,000 1.125% due 30/06/20 ...... 146 0.05
100,000 1.250% due 03/09/21 ...... 106 0.04
100,000 4.750% due 12/02/26 ...... 107 0.04
1,563 0.55
United Kingdom (7.54%)
Aviva Plc
102,000 6.125% due 05/07/43 ...... 119 0.04
100,000 3.875% due 03/07/44 ...... 103 0.04
1,020,000 3.375% due 04/12/45 ...... 1,009 0.36
Bank of Scotland Plc
300,000 3.875% due 07/02/20 ...... 341 0.12
Barclays Bank Plc
100,000 6.000% due 14/01/21 ...... 117 0.04
USD 250,000 7.750% due 10/04/23 ...... 233 0.08
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 53
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Barclays Plc
1,000,000 3.200% due 10/08/21 ....... 895 0.32
BAT International Finance
Plc
EUR 180,000 3.625% due 09/11/21 ....... 212 0.07
346,000 1.250% due 13/03/27 ....... 363 0.13
170,000 3.125% due 06/03/29 ....... 212 0.07
BP Capital Markets Plc
280,000 1.573% due 16/02/27 ....... 299 0.11
British Telecommunications
Plc
310,000 1.750% due 10/03/26 ....... 340 0.12
Dignity Finance Plc
GBP 242,000 4.696* .............................. 359 0.13
HSBC Bank Plc
1,000,000 5.000% due 20/03/23 ....... 1,207 0.43
HSBC Holdings Plc
330,000 3.375% due 10/01/24 ....... 347 0.12
750,000 0.875% due 06/09/24 ....... 748 0.26
EUR 400,000 3.125% due 07/06/28 ....... 433 0.15
Imperial Brands Finance
Plc
114,000 2.250% due 26/02/21 ....... 123 0.04
270,000 3.375% due 26/02/26 ....... 327 0.12
ITV Plc
100,000 2.125% due 21/09/22 ....... 105 0.04
Leeds Building Society
350,000 0.125% due 21/04/20 ....... 353 0.12
220,000 1.375% due 05/05/22 ....... 221 0.08
Lloyds Bank Plc
240,000 1.875% due 10/10/18 ....... 249 0.09
100,000 1.000% due 19/11/21 ....... 104 0.04
150,000 11.875% due 16/12/21 ..... 153 0.05
100,000 1.375% due 08/09/22 ....... 105 0.04
400,000 10.375% due 12/02/24 ..... 482 0.17
Mondi Finance Plc
300,000 1.500% due 15/04/24 ....... 319 0.11
National Grid Gas Finance
Plc
300,000 0.625% due 22/09/24 ....... 303 0.11
Nationwide Building Society
810,000 0.500% due 29/10/19 ....... 819 0.29
206,000 0.125% due 25/01/21 ....... 208 0.07
250,000 1.125% due 03/06/22 ....... 259 0.09
230,000 0.750% due 26/10/22 ....... 241 0.08
1,500,000 4.125% due 20/03/23 ....... 1,559 0.55
EUR 180,000 1.250% due 03/03/25 ....... 188 0.07
NGG Finance Plc
160,000 4.250% due 18/06/76 ....... 173 0.06
Pearson Funding Five Plc
170,000 1.375% due 06/05/25 ....... 176 0.06
Rolls-Royce Plc
300,000 2.125% due 18/06/21 ....... 326 0.11
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Royal Bank of Scotland
Group Plc
900,000 1.625% due 25/06/19 ...... 919 0.32
752,000 2.500% due 22/03/23 ...... 761 0.27
480,000 3.625% due 25/03/24 ...... 477 0.17
Royal Bank of Scotland Plc
700,000 6.934% due 09/04/18 ...... 762 0.27
Santander UK Plc
140,000 2.000% due 14/01/19 ...... 146 0.05
100,000 0.875% due 13/01/20 ...... 102 0.04
Sky Plc
300,000 1.875% due 24/11/23 ...... 323 0.11
610,000 2.250% due 17/11/25 ...... 670 0.24
750,000 2.500% due 15/09/26 ...... 836 0.29
Standard Chartered Plc
270,000 3.625% due 23/11/22 ...... 290 0.10
620,000 3.125% due 19/11/24 ...... 651 0.23
Tesco Property Finance 3 Plc
GBP 225,504 5.744% due 13/04/40 ...... 270 0.10
Vodafone Group Plc
EUR 390,000 2.200% due 25/08/26 ...... 435 0.15
WM Morrison
Supermarkets
100,000 2.250% due 19/06/20 ...... 106 0.04
Yorkshire Building Society
510,000 1.250% due 17/03/22 ...... 514 0.18
21,392 7.54
United States (5.04%)
Albemarle Corp
350,000 1.875% due 08/12/21 ...... 371 0.13
Altria Group Inc
USD 450,000 3.875% due 16/09/46 ...... 417 0.15
Anheuser-Busch InBev
Finance Inc
570,000 4.900% due 01/02/46 ...... 606 0.21
Apple Inc
EUR 100,000 1.375% due 17/01/24 ...... 108 0.04
AT&T Inc
100,000 2.400% due 15/03/24 ...... 113 0.04
200,000 3.550% due 17/12/32 ...... 250 0.09
Bank of America Corp
100,000 2.500% due 27/07/20 ...... 109 0.04
100,000 1.625% due 14/09/22 ...... 106 0.04
195,000 0.750% due 26/07/23 ...... 196 0.07
Berkshire Hathaway Inc
350,000 1.125% due 16/03/27 ...... 358 0.13
Blackstone Holdings Finance
LLC
510,000 1.000% due 05/10/26 ...... 501 0.18
Citigroup Inc
1,080,000 0.531% due 24/05/21 ...... 1,100 0.39
430,000 1.750% due 28/01/25 ...... 463 0.16
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
54 Russell Euro Fixed Income Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Coca-Cola Co
100,000 1.625% due 09/03/35 ....... 110 0.04
Colgate-Palmolive Co
800,000
Zero Coupon due
14/05/19 ........................... 803 0.28
General Electric Co
360,000 1.875% due 28/05/27 ....... 405 0.14
General Mills Inc
100,000 1.000% due 27/04/23 ....... 104 0.04
Goldman Sachs Group
Inc
100,000 1.375% due 26/07/22 ....... 105 0.04
570,000 2.000% due 27/07/23 ....... 614 0.22
500,000 2.125% due 30/09/24 ....... 543 0.19
400,000 3.000% due 12/02/31 ....... 456 0.16
Johnson & Johnson
100,000 0.650% due 20/05/24 ....... 103 0.04
JPMorgan Chase & Co
120,000 1.375% due 16/09/21 ....... 127 0.04
100,000 0.625% due 25/01/24 ....... 100 0.03
100,000 1.500% due 29/10/26 ....... 105 0.04
Kraft Heinz Foods Co
500,000 2.250% due 25/05/28 ....... 543 0.19
Liberty Mutual Group
Inc
118,000 2.750% due 04/05/26 ....... 128 0.04
McDonald's Corp
300,000 2.625% due 11/06/29 ....... 359 0.13
Molson Coors Brewing Co
600,000 1.250% due 15/07/24 ....... 619 0.22
Mondelez International
Inc
470,000 2.375% due 06/03/35 ....... 503 0.18
Morgan Stanley
100,000 1.750% due 11/03/24 ....... 106 0.04
Priceline Group Inc
200,000 2.150% due 25/11/22 ....... 215 0.07
1,100,000 1.800% due 03/03/27 ....... 1,110 0.39
Verizon Communications
Inc
170,000 3.250% due 17/02/26 ....... 208 0.07
USD 653,000 5.012% due 21/08/54 ....... 645 0.23
Wells Fargo & Co
EUR 910,000 0.323% due 26/04/21 ....... 917 0.32
150,000 2.250% due 02/05/23 ....... 167 0.06
347,000 1.625% due 02/06/25 ....... 372 0.13
120,000 1.000% due 02/02/27 ....... 119 0.04
14,284 5.04
Virgin Islands, British (0.04%)
Global Switch Holdings Ltd
100,000 5.500% due 18/04/18 ....... 108 0.04
Total Long Term Bonds
and Notes ............................ 250,256 88.25
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Short Term Investments (4.17%)
Australia (0.21%)
Australia & New Zealand
Banking Group Ltd
182,000
Zero Coupon due
04/10/16 .......................... 182 0.07
400,000 0.286% due 04/10/16 ...... 400 0.14
582 0.21
Denmark (0.25%)
Danske Bank A/S
700,000 3.875% due 28/02/17 ...... 709 0.25
France (0.50%)
French Republic
Government Bond OAT
625,000 5.000% due 25/10/16 ...... 627 0.22
Societe Generale
EUR 800,000
Zero Coupon due
16/01/17 .......................... 801 0.28
1,428 0.50
Ireland (0.23%)
GE Capital European
Funding
644,000 4.250% due 01/03/17 ...... 656 0.23
Netherlands (0.02%)
Cooperatieve Rabobank
UA
55,000 4.250% due 16/01/17 ...... 56 0.02
Spain (0.57%)
Spain Government Bond
1,550,000 5.500% due 30/07/17 ...... 1,624 0.57
Sweden (0.62%)
Svenska Handelsbanken
AB
800,000 3.750% due 24/02/17 ...... 812 0.29
Sweden Government
International Bond
950,000 0.250% due 27/11/16 ...... 951 0.33
1,763 0.62
Switzerland (0.62%)
Credit Suisse/London
750,000 3.875% due 25/01/17 ...... 759 0.27
UBS AG/London
500,000
Zero Coupon due
15/05/17 .......................... 501 0.17
500,000 0.101% due 15/05/17 ...... 501 0.18
1,761 0.62
United States (1.15%)
BMW US Capital LLC
1,000,000 1.000% due 18/07/17 ...... 1,009 0.36
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 55
Principal
Amount
Fair Value
EUR ‘000
Fund
%
JPMorgan Chase & Co
800,000 0.102% due 19/02/17 ....... 801 0.28
Pfizer Inc
800,000 4.550% due 15/05/17 ....... 824 0.29
Toyota Motor Credit
615,000
Zero Coupon due
08/09/17 ........................... 616 0.22
3,250 1.15
Total Short Term
Investments ........................ 11,829 4.17
Total Transferable
Securities ............................ 262,085 92.42
Certificates of Deposit (0.88%)
Japan (0.70%)
Bank of Tokyo Mitsubishi
UFJ Ltd
1,000,000
Zero Coupon due
28/02/17 ........................... 1,001 0.35
Sumitomo Mitsui
Banking
1,000,000
Zero Coupon due
02/12/16 ........................... 1,001 0.35
2,002 0.70
Netherlands (0.18%)
Cooperatieve Rabobank
UA
500,000
Zero Coupon due
04/11/16 ........................... 500 0.18
Total Certificates of
Deposit ................................ 2,502 0.88
Commercial Paper (1.41%)
France (0.35%)
LMA SA
1,000,000
Zero Coupon due
17/10/16 ........................... 1,000 0.35
Germany (0.35%)
DZ Bank AG
1,000,000
Zero Coupon due
11/10/16 ........................... 1,000 0.35
Ireland (0.35%)
Matchpoint Finance Public
1,000,000
Zero Coupon due
13/12/16 ........................... 1,000 0.35
Netherlands (0.36%)
Unilever NV
1,000,000
Zero Coupon due
10/03/17 ........................... 1,002 0.36
Total Commercial
Paper .................................. 4,002 1.41
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Money Market Instruments (0.91%)
Belgium (0.43%)
Belgium Treasury Bill
1,200,000
Zero Coupon due
12/01/17 .......................... 1,203 0.43
France (0.48%)
France Treasury Bill BTF
250,000
Zero Coupon due
07/12/16 .......................... 250 0.09
225,000
Zero Coupon due
16/11/16 .......................... 225 0.08
880,000
Zero Coupon due
23/11/16 .......................... 881 0.31
1,356 0.48
Total Money Market
Instruments ....................... 2,559 0.91
Number
of Shares
Investment Fund (3.28%)
Ireland (2.39%)
76
Russell Investment Company
III Plc - The Sterling
Liquidity Fund - Class R
Roll-Up Shares ................... 88 0.03
431
Russell Investment Company
III Plc - The US Dollar Cash
Fund II - Class R Roll-Up
Shares ................................. 385 0.14
4,025
Russell Investment Company
Plc - Russell Euro Liquidity
Fund - Class R Roll-Up
Shares ................................. 4,001 1.41
2,096
Russell Investment Company
Plc Russell Global Credit
Fund Class EH-C Shares ..... 2,289 0.81
6,763 2.39
Luxembourg (0.89%)
2,041
Pioneer Institutional Funds -
Currency High Alpha .......... 2,532 0.89
Total Investment Fund ..... 9,295 3.28
Total Investments
excluding Financial
Derivative Instruments ..... 280,443 98.90
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
56 Russell Euro Fixed Income Fund
Financial Derivative Instruments ((1.00)%)
Open Futures Contracts (0.06%)
Notional
Amount
EUR ‘000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
3,263
112.50
29 of 2 Year Euro Swapnote Futures
Long Futures Contracts
Expiring December 2016 ......................................... - 0.00
(6,270)
(130.63)
48 of 5 Year Euro Swapnote Futures
Short Futures Contracts
Expiring December 2016 ......................................... (10) 0.00
397
66.16
6 of 10 Year Australian Treasury Bond Futures
Long Futures Contracts
Expiring December 2016 ......................................... 4 0.00
8,033
66.94
120 of 3 Year Australian Treasury Bond Futures
Long Futures Contracts
Expiring December 2016 ......................................... 20 0.01
(1,574)
(98.38)
16 of 10 Year Canadian Treasury Bond Futures
Short Futures Contracts
Expiring December 2016 ......................................... (17) (0.01)
2,426
186.59
13 of 30 Year Euro BUXL Bond Futures
Long Futures Contracts
Expiring December 2016 ......................................... 73 0.03
5,530
131.66
42 of Euro Bobl Futures
Long Futures Contracts
Expiring December 2016 ......................................... 18 0.01
1,291
143.49
9 of Euro BTP Futures
Long Futures Contracts
Expiring December 2016 ......................................... (4) 0.00
(1,307)
(163.39)
8 of Euro Bund Futures
Short Futures Contracts
Expiring December 2016 ......................................... (18) (0.01)
319
159.33
2 of Euro OAT Futures
Long Futures Contracts
Expiring December 2016 ......................................... 2 0.00
1,569
112.08
14 of Euro Schatz Futures
Long Futures Contracts
Expiring December 2016 ......................................... 1 0.00
(1,331)
(1.33)
1 of 10 Year Japan Bond Futures
Short Futures Contracts
Expiring December 2016 ......................................... (8) 0.00
2,552
150.09
17 of Long Gilt Bond Futures
Long Futures Contracts
Expiring December 2016 ......................................... 8 0.00
1,979
116.41
17 of 10 Year U.S. Treasury Note Futures
Long Futures Contracts
Expiring December 2016 ......................................... 5 0.00
(216)
(107.92)
2 of 5 Year U.S. Treasury Note Futures
Short Futures Contracts
Expiring December 2016 ......................................... - 0.00
497
165.72
3 of U.S. Ultra Bond Futures
Long Futures Contracts
Expiring December 2016 ......................................... (6) 0.00
90
89.93
1 of 5 Year U.S. Irs Prim Futures
Long Futures Contracts
Expiring December 2016 ......................................... - 0.00
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 57
Notional
Amount
EUR ‘000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
(3,689)
(131.76)
28 of Euro Bobl Futures
Short Futures Contracts
Expiring December 2016 ......................................... (9) 0.00
(8,230)
(164.61)
50 of Euro Bund Futures
Short Futures Contracts
Expiring December 2016 ......................................... (56) (0.02)
(1,060)
(151.48)
7 of Long Gilt Bond Futures
Short Futures Contracts
Expiring December 2016 ......................................... 6 0.00
(4,789)
(116.80)
41 of 10 Year U.S. Treasury Note
Futures Short Futures Contracts
Expiring December 2016 ......................................... 5 0.00
(320)
(159.87)
2 of U.S. Ultra Bond Futures
Short Futures Contracts
Expiring December 2016 ......................................... (7) 0.00
793
132.17
6 of Euro Bobl Futures
Long Futures Contracts
Expiring December 2016 ......................................... - 0.00
1,491
165.70
9 of Euro Bund Futures
Long Futures Contracts
Expiring December 2016 ......................................... - 0.00
112
112.12
1 of Euro Schatz Futures
Long Futures Contracts
Expiring December 2016 ......................................... - 0.00
1,977
131.81
15 of Euro Bobl Futures
Long Futures Contracts
Expiring December 2016 ......................................... 4 0.00
3,454
143.91
24 of Euro BTP Futures
Long Futures Contracts
Expiring December 2016 ......................................... (20) (0.01)
5,940
165.00
36 of Euro Bund Futures
Long Futures Contracts
Expiring December 2016 ......................................... 25 0.01
2,017
112.07
18 of Euro Schatz Futures
Long Futures Contracts
Expiring December 2016 ......................................... 1 0.00
6,707
65.76
102 of 10 Year Australian Treasury Bond Futures
Long Futures Contracts
Expiring December 2016 ......................................... 106 0.04
(3,077)
(99.25)
31 of 10 Year Canadian Treasury Bond Futures
Short Futures Contracts
Expiring December 2016 ......................................... (7) 0.00
2,109
131.83
16 of Euro Bobl Futures
Long Futures Contracts
Expiring December 2016 ......................................... 4 0.00
4,028
143.85
28 of Euro BTP Futures
Long Futures Contracts
Expiring December 2016 ......................................... (21) (0.01)
6,765
165.00
41 of Euro Bund Futures
Long Futures Contracts
Expiring December 2016 ......................................... 29 0.01
(8,744)
(164.98)
53 of Euro Bund Futures
Short Futures Contracts
Expiring December 2016 ......................................... (39) (0.01)
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
58 Russell Euro Fixed Income Fund
Notional
Amount
EUR ‘000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
2,353
112.07
21 of Euro Schatz Futures
Long Futures Contracts
Expiring December 2016 ......................................... 1 0.00
(2,876)
(151.34)
19 of Long Gilt Bond Futures
Short Futures Contracts
Expiring December 2016 ......................................... 15 0.01
7,799
116.40
67 of 10 Year U.S. Treasury Note Futures
Long Futures Contracts
Expiring December 2016 ......................................... 19 0.01
Unrealised gain on open futures contracts .............................................................................. 346 0.13
Unrealised loss on open futures contracts ............................................................................... (222) (0.07)
Net unrealised gain (loss) on open futures contracts ........................................................ 124 0.06
Open Forward Foreign Currency Exchange Contracts ((1.01)%)
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
06/10/2016 AUD 3,313 EUR 2,231 24 0.01
20/10/2016 AUD 135 EUR 91 1 0.00
05/10/2016 BRL 94 USD 29 - 0.00
05/10/2016 BRL 183 USD 57 - 0.00
06/10/2016 CAD 3,267 EUR 2,231 (20) (0.01)
20/10/2016 CAD 84 USD 64 - 0.00
20/10/2016 CAD 166 USD 128 (2) 0.00
06/10/2016 EUR 2,231 AUD 3,313 (24) (0.01)
06/10/2016 EUR 3,134 CHF 3,438 (21) (0.01)
20/10/2016 EUR 403 DKK 3,000 1 0.00
20/10/2016 EUR 1,183 DKK 8,800 1 0.00
06/10/2016 EUR 1,369 GBP 1,150 40 0.01
20/10/2016 EUR 143 GBP 120 4 0.00
10/11/2016 EUR 739 GBP 623 20 0.01
16/11/2016 EUR 1,157 GBP 993 11 0.00
06/10/2016 EUR 2,231 NOK 20,829 (88) (0.03)
20/10/2016 EUR 306 NZD 473 1 0.00
20/10/2016 EUR 97 NZD 150 - 0.00
06/10/2016 EUR 2,222 SEK 21,264 13 0.00
20/10/2016 EUR 168 SEK 1,600 1 0.00
10/11/2016 EUR 1,131 SEK 10,770 12 0.00
06/10/2016 EUR 1,350 USD 1,504 11 0.00
20/10/2016 EUR 490 USD 551 - 0.00
20/10/2016 EUR 382 USD 425 4 0.00
10/11/2016 EUR 1,746 USD 1,952 12 0.00
10/11/2016 EUR 584 USD 660 (2) 0.00
10/11/2016 EUR 214 USD 240 1 0.00
16/11/2016 EUR 389 USD 438 - 0.00
16/11/2016 EUR 1,133 USD 1,266 8 0.00
16/11/2016 EUR 1,496 USD 1,679 5 0.00
06/10/2016 GBP 29,615 EUR 34,898 (668) (0.24)
06/10/2016 GBP 29,608 EUR 34,898 (676) (0.24)
06/10/2016 GBP 29,603 EUR 34,898 (683) (0.24)
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 59
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
06/10/2016 GBP 145 EUR 170 (3) 0.00
06/10/2016 GBP 1,917 EUR 2,282 (66) (0.02)
06/10/2016 GBP 29,601 EUR 34,898 (684) (0.24)
20/10/2016 GBP 160 EUR 185 - 0.00
07/12/2016 INR 5,786 USD 86 - 0.00
06/10/2016 JPY 153,628 EUR 1,328 22 0.01
20/10/2016 JPY 21,852 USD 217 (1) 0.00
20/10/2016 JPY 11,123 USD 108 2 0.00
06/10/2016 NZD 3,460 EUR 2,242 (4) 0.00
20/10/2016 NZD 150 EUR 98 (1) 0.00
20/10/2016 NZD 321 EUR 207 - 0.00
20/10/2016 NZD 155 EUR 101 - 0.00
10/11/2016 SEK 14,000 EUR 1,471 (16) (0.01)
05/10/2016 USD 85 BRL 283 (2) 0.00
20/10/2016 USD 371 CAD 489 (1) 0.00
20/10/2016 USD 7 CAD 9 - 0.00
12/12/2016 USD 490 CNY 3,292 (2) 0.00
12/12/2016 USD 490 CNY 3,294 (2) 0.00
06/10/2016 USD 1,003 EUR 900 (8) 0.00
20/10/2016 USD 304 EUR 273 (3) 0.00
20/10/2016 USD 142 EUR 127 - 0.00
07/12/2016 USD 86 INR 5,834 - 0.00
20/10/2016 USD 13 JPY 1,368 - 0.00
Unrealised gain on open forward foreign currency exchange contracts ............................... 194 0.04
Unrealised loss on open forward foreign currency exchange contracts ................................ (2,977) (1.05)
Net unrealised gain (loss) on open forward foreign currency exchange contracts ....... (2,783) (1.01)
Currency Options Purchase (0.03%)
Notional
Amount
EUR ‘000
Fair Value
EUR ‘000
Fund
%
1,900
Call at 6.4 USD CNY
Expiring October 2016 ................................................................................................................ 71 0.03
Options purchased at fair value (Premium paid EUR 85,645) .................................................. 71 0.03
Currency Options Written ((0.01)%)
Notional
Amount
EUR ‘000
Fair Value
EUR ‘000
Fund
%
(500)
Call at 6.4 USD CNY
Expiring October 2016 ................................................................................................................ (19) (0.01)
Options written at fair value (Premium received EUR 22,097) ................................................. (19) (0.01)
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
60 Russell Euro Fixed Income Fund
Swaptions Purchased (0.02%)
Notional
Amount
EUR ‘000 Description
Fair Value
EUR ‘000
Fund
%
1,600
Put at 1.500 on 30 Year RTP
Expiring January 2017 ................................................................................................................ 2 0.00
4,000
Put at 75 on CDX RTP
Expiring October 2016 ................................................................................................................ - 0.00
1,520
Call at 1.450 on 10 Year RTR
Expiring January 2017 ................................................................................................................ 20 0.01
1,520
Call at 1.450 on 10 Year RTR
Expiring January 2017 ................................................................................................................ 20 0.01
Swaptions purchased at fair value (Premium paid EUR 58,959) .............................................. 42 0.02
Swaptions Written (0.00%)
Notional
Amount
EUR ‘000 Description
Fair Value
EUR ‘000
Fund
%
(400)
Put at 90 on CDX RTP
Expiring October 2016 ................................................................................................................ - 0.00
Swaptions written at fair value (Premium received EUR 2,406) ............................................... 0.00 0.00
Interest Rate Swaps ((0.01)%)
Ccy
Notional
Amount
‘000
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
CAD 6,704
CAD 6 Month
LIBOR 0.88% 11/04/2018 2 0.00
CAD 6,633
CAD 6 Month
LIBOR 0.89% 13/04/2018 3 0.00
CAD 6,215
CAD 6 Month
LIBOR 0.90% 14/04/2018 3 0.00
CAD 6,309
CAD 6 Month
LIBOR 0.93% 19/04/2018 6 0.00
CAD 6,309
CAD 6 Month
LIBOR 1.02% 25/04/2018 13 0.00
CAD 5,634 1.01%
CAD 6 Month
LIBOR 11/05/2021 (19) (0.01)
CAD 7,097 1.02%
CAD 6 Month
LIBOR 09/06/2021 (27) (0.01)
CAD 2,470
CAD 6 Month
LIBOR 0.87% 11/07/2021 (3) 0.00
CAD 6,289
CAD 6 Month
LIBOR 0.91% 04/08/2019 6 0.00
CAD 6,185
CAD 6 Month
LIBOR 0.90% 19/08/2018 4 0.00
CAD 6,185
CAD 6 Month
LIBOR 0.89% 22/08/2018 3 0.00
EUR 3,530
EUR 6 Month
LIBOR 1.30% 16/02/2055 177 0.06
EUR 3,340 1.05%
EUR 6 Month
LIBOR 16/02/2065 (150) (0.05)
EUR 2,070
EUR 6 Month
LIBOR 0.73% 30/05/2027 79 0.03
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 61
Ccy
Notional
Amount
‘000
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
EUR 750 1.17%
EUR 6 Month
LIBOR 30/05/2047 (82) (0.03)
EUR 1,100 0.63%
EUR 6 Month
LIBOR 18/06/2026 (26) (0.01)
EUR 900
EUR 6 Month
LIBOR 1.42% 18/06/2036 19 0.01
EUR 246
EUR 6 Month
LIBOR 0.64% 15/08/2031 2 0.00
EUR 246 0.78%
EUR 6 Month
LIBOR 15/08/2046 (2) 0.00
EUR 226
EUR 12 Month
LIBOR 1.49% 15/08/2046 (3) 0.00
EUR 226 1.24%
EUR 12 Month
LIBOR 15/08/2031 2 0.00
EUR 247 0.76%
EUR 6 Month
LIBOR 15/08/2046 - 0.00
EUR 247
EUR 6 Month
LIBOR 0.60% 15/08/2031 1 0.00
EUR 227 1.25%
EUR 12 Month
LIBOR 15/08/2031 2 0.00
EUR 227
EUR 12 Month
LIBOR 1.50% 15/08/2046 (3) 0.00
EUR 268
EUR 6 Month
LIBOR 0.58% 15/08/2031 - 0.00
EUR 268 0.73%
EUR 6 Month
LIBOR 15/08/2046 1 0.00
EUR 256 1.26%
EUR 12 Month
LIBOR 15/08/2031 2 0.00
EUR 256
EUR 12 Month
LIBOR 1.50% 15/08/2046 (3) 0.00
EUR 5,050 0.82%
EUR 6 Month
LIBOR 13/09/2026 (37) (0.01)
EUR 2,500 0.82%
EUR 6 Month
LIBOR 13/09/2026 (18) (0.01)
GBP 700
GBP 6 Month
LIBOR 1.45% 20/04/2026 57 0.02
GBP 300 1.70%
GBP 6 Month
LIBOR 20/04/2046 (67) (0.02)
GBP 2,050 0.79%
GBP 6 Month
LIBOR 07/09/2025 (23) (0.01)
GBP 531 0.86%
GBP 6 Month
LIBOR 25/08/2046 15 0.01
GBP 2,914
GBP 6 Month
LIBOR 0.48% 25/08/2021 - 0.00
JPY 260,000
JPY 6 Month
LIBOR 0.00% 18/06/2026 (7) 0.00
JPY 200,000 0.48%
JPY 6 Month
LIBOR 18/06/2036 31 0.01
NZD 3,377
NZD 3 Month
NZDBB 1.94% 25/08/2018 (1) 0.00
NZD 1,689
NZD 3 Month
NZDBB 1.90% 26/08/2018 (1) 0.00
NZD 1,689
NZD 3 Month
NZDBB 1.90% 30/08/2018 (1) 0.00
NZD 3,377
NZD 3 Month
NZDBB 1.90% 01/09/2018 (1) 0.00
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
62 Russell Euro Fixed Income Fund
Ccy
Notional
Amount
‘000
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
NZD 3,377
NZD 3 Month
NZDBB 1.90% 02/09/2018 (1) 0.00
SEK 3,430 0.61%
SEK 3 Month
STIBO 06/09/2026 - 0.00
SEK 3,430 0.75%
SEK 3 Month
LIBOR 22/09/2026 (5) 0.00
USD 1,896 0.99%
USD 3 Month
LIBOR 13/07/2021 9 0.00
USD 4,250 0.89%
USD 12 Month
LIBOR 31/05/2023 (4) 0.00
USD 2,150
USD 3 Month
LIBOR 1.29% 31/05/2023 4 0.00
USD 4,841 1.00%
USD 3 Month
LIBOR 23/08/2018 (2) 0.00
USD 4,842 1.01%
USD 3 Month
LIBOR 24/08/2018 (2) 0.00
USD 7,790
USD 3 Month
LIBOR 1.33% 06/09/2022 27 0.01
USD 1,530 1.77%
USD 3 Month
LIBOR 06/09/2047 (5) 0.00
Interest rate swaps at positive fair value ........................................................................................ 468 0.15
Interest rate swaps at negative fair value ....................................................................................... (493) (0.16)
Interest rate swaps at fair value ................................................................................................. (25) (0.01)
Credit Default Swaps ((0.10)%)
Ccy
Notional
Amount
EUR ‘000
Security
Name
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
EUR 15,980 iTraxx Europe # 1.00% 20/12/2021 (221) (0.08)
EUR 60 Hammerson Plc 1.00% # 20/12/2020 - 0.00
EUR 100 Next Plc 1.00% # 20/06/2021 - 0.00
EUR 40
British
Telecommunicat
ions Plc # 1.00% 20/06/2021 - 0.00
EUR 40
Vodafone Group
Plc 1.00% # 20/06/2021 - 0.00
EUR 100
Marks and
Spencer Plc 1.00% # 20/06/2021 2 0.00
EUR 40 Orange 1.00% # 20/06/2021 (1) 0.00
EUR 60 TESCO Plc 1.00% # 20/06/2021 3 0.00
EUR 30
Deutsche
Telekom AG 1.00% # 20/06/2021 (1) 0.00
EUR 170
Casino
Guichard-
Perrachon # 1.00% 20/06/2021 (12) 0.00
EUR 85 TESCO Plc 1.00% # 20/06/2021 4 0.00
USD 1,700 CDX.NA.IG.26 1.00% # 20/06/2021 (20) (0.01)
USD 2,100 CDX.NA.IG.26 1.00% # 20/06/2021 (24) (0.01)
EUR 325
iTraxx Europe
Senior
Financials S26 1.00% # 20/12/2021 - 0.00
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 63
Ccy
Notional
Amount
EUR ‘000
Security
Name
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
USD 450
Mexico
Government
International
Bond 1.00% # 20/12/2021 13 0.00
USD 450
Mexico
Government
International
Bond 1.00% # 20/12/2021 14 0.00
EUR 40
Assicurazioni
Generali -
Societa per
Azioni 1.00% # 20/12/2021 1 0.00
Credit default swaps at positive fair value .................................................................................................... 37 0.00
Credit default swaps at negative fair value ................................................................................................... (279) (0.10)
Credit default swaps at fair value ............................................................................................................. (242) (0.10)
# In the event of bankruptcy or modified restructuring, the Fund will pay/receive the notional amount from/to the counterparty.
Currency Swap (0.02%)
Notional
Amount
‘000
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
12,524 CHF 0.00% SEK 2.16% 16/01/2024 63 0.02
Currency swap at fair value ....................................................................................................... 63 0.02
Total Financial Derivative Instruments .................................................................................................... (2,769) (1.00)
Fair Value
EUR ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or Loss
(99.29%) .................................................................................................................................................... 281,664 99.29
Total Financial Liabilities at Fair Value through Profit or
Loss ((1.39)%) .......................................................................................................................................... (3,990) (1.39)
Net Financial Assets at Fair Value through Profit or Loss
(97.90%) .................................................................................................................................................... 277,674 97.90
Other Net Assets (2.10%) ......................................................................................................................... 5,905 2.10
Net Assets .................................................................................................................................................. 283,579 100
* Perpetual Bond.
Analysis of gross assets
% of
gross assets
Transferable securities and money market instruments admitted to an official stock exchange listing ...................... 66.40
Transferable securities dealt in on another regulated market ...................................................................................... 19.37
Other transferable securities of the type referred to in Regulation 68(1)(a), (b) and (c) ............................................. 5.58
Certificate of deposits ................................................................................................................................................. 0.69
Commercial paper ....................................................................................................................................................... 1.38
Investment Fund (UCITS) .......................................................................................................................................... 3.20
Exchange traded financial derivative instruments ...................................................................................................... 0.14
Over the counter financial derivative instruments ...................................................................................................... 0.28
Other assets ................................................................................................................................................................. 2.96
100.00
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
64 Russell Euro Fixed Income Fund
The brokers for the open futures contracts are:
Goldman Sachs
Merrill Lynch
UBS AG
The counterparties for the open forward foreign currency exchange contracts are:
Bank of Montreal
Barclays Bank
BNP Paribas
Citigroup Global Markets
Commonwealth Bank of Australia
Deutsche Bank AG
Goldman Sachs
HSBC Bank
JP Morgan Chase Bank
Merrill Lynch
Morgan Stanley
Nomura International
Royal Bank of Canada
State Street Bank & Trust Company
UBS
The counterparties for the currency options purchased and currency options written are:
Bank of America Deutsche Bank
The counterparties for the swaptions purchased and the swaptions written are:
Citigroup Global Markets
BNP Paribas
BNP London
UBS AG
The counterparties for the interest rate swaps are:
Barclays Capital
BNP Paribas
Citigroup
Goldman Sachs
JP Morgan Chase Bank
Morgan Stanley
UBS AG
The counterparties for the credit default swaps are:
Bank of America
Barclays Capital
BNP Paribas
Citigroup
JPMorgan
Societe Generale
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Euro Fixed Income Fund 65
Fair Value Hierarchy (Note 10)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 30 September 2016 and 31 March 2016.
As at 30 September 2016
Level 1
EUR ‘000
Level 2
EUR ‘000
Level 3
EUR ‘000
Total
EUR ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... - 262,085 - 262,085
Money market instruments ........................................................ - 2,559 - 2,559
Certificate of deposits ................................................................ - 2,502 - 2,502
Commercial papers .................................................................... - 4,002 - 4,002
Investment funds ......................................................................... - 9,295 - 9,295
Unrealised gain on open futures contracts ................................. 346 - - 346
Unrealised gain on forward foreign currency exchange
contracts .................................................................................... - 194 - 194
Options purchased at fair value ................................................. - 71 - 71
Swaptions purchased at value .................................................... - 42 42
Credit default swaps at fair value .............................................. - 37 - 37
Interest rate swaps at fair value ................................................. - 468 - 468
Currency swap at fair value ....................................................... - 63 - 63
Total assets ...................................................................................... 346 281,318 - 281,664
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ................................. (222) - - (222)
Unrealised loss on forward foreign currency exchange
contracts .................................................................................... - (2,977) - (2,977)
Options written at value ............................................................ - (19) - (19)
Credit default swaps at fair value .............................................. - (279) - (279)
Interest rate swaps at fair value ................................................. - (493) - (493)
Total liabilities ................................................................................ (222) (3,768) - (3,990)
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
66 Russell Euro Fixed Income Fund
As at 31 March 2016
Level 1
EUR ‘000
Level 2
EUR ‘000
Level 3
EUR ‘000
Total
EUR ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... - 273,626 - 273,626
Certificate of deposits ................................................................ - 1,000 - 1,000
Commercial papers .................................................................... - 1,500 - 1,500
Investment funds ......................................................................... - 13,746 - 13,746
Unrealised gain on open futures contracts ................................. 153 - - 153
Unrealised gain on forward foreign currency exchange
contracts .................................................................................... - 643 - 643
Swaptions purchased at value .................................................... - 150 - 150
Credit default swaps at fair value .............................................. - 162 - 162
Interest rate swaps at fair value ................................................. - 890 - 890
Currency options purchased at fair value .................................. - 56 - 56
Total assets ...................................................................................... 153 291,773 - 291,926
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ................................. (238) - - (238)
Unrealised loss on forward foreign currency exchange
contracts .................................................................................... - (2,162) - (2,162)
Swaptions written at value ........................................................ - (55) - (55)
Interest rate swaps at fair value ................................................. - (773) - (773)
Credit default swaps at fair value .............................................. - (160) - (160)
Currency swap at fair value ....................................................... - (12) - (12)
Total liabilities ................................................................................ (238) (3,162) - (3,400)
Russell Investment Company II plc
Russell Euro Fixed Income Fund
Statement of Changes in Composition of Portfolio
Listed below are 20 largest cumulative investment purchases and cumulative investment sales in excess of 1% of total investment
sales during the six months ended 30 September 2016.
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
Russell Euro Fixed Income Fund 67
Portfolio Securities
Acquisition Cost
EUR ‘000 Portfolio Securities
Disposal Proceeds
EUR ‘000
Russell Investment Company plc
Russell Euro Liquidity Fund
Class R Roll-Up Shares 44,113
Russell Investment Company plc
Russell Euro Liquidity Fund
Class R Roll-Up Shares (48,530)
Italy Buoni Poliennali Del Tesoro
4.500% due 01/03/2024 15,985
Italy Buoni Poliennali Del Tesoro
4.500% due 01/03/2024 (14,742)
Bundesrepublik Deutschland
0.500% due 15/02/2026 11,263
Kingdom of Belgium Government Bond
3.000% due 28/09/2019 (13,769)
France Government Bond OAT
1.750% due 25/05/2023 9,409
France Government Bond OAT
2.500% due 25/10/2020 (9,899)
Spain Government Bond 1.750% due 25/05/2023 (9,031)
2.750% due 31/10/2024 9,206 Spain Government Bond
Italy Buoni Poliennali Del Tesoro 0.750% due 30/07/2021 (7,423)
0.250% due 15/05/2018 8,845 Ireland Government Bond
France Government Bond OAT 5.000% due 18/10/2020 (7,342)
0.500% due 25/05/2026 8,701 Italy Buoni Poliennali Del Tesoro
Kingdom of Belgium Government Bond 1.500% due 01/08/2019 (6,810)
1.000% due 22/06/2026 8,467 Kingdom of Belgium Government Bond
Spain Government Bond 2.250% due 22/06/2023 (6,580)
0.750% due 30/07/2021 8,299 Spain Government Inflation Linked Bond
Italy Buoni Poliennali Del Tesoro 0.550% due 30/11/2019 (6,270)
0.450% due 01/06/2021 8,088 Kingdom of Belgium Government Bond
Ireland Government Bond 0.800% due 22/06/2025 (6,204)
1.000% due 15/05/2026 7,947 Italy Buoni Poliennali Del Tesoro
Italy Buoni Poliennali Del Tesoro 1.450% due 15/09/2022 (5,291)
1.500% due 01/08/2019 6,808 0.450% due 01/06/2021 (5,154)
Ireland Government Bond Bundesrepublik Deutschland
5.000% due 18/10/2020 6,793 1.000% due 15/08/2024 (4,574)
Spain Government Inflation Linked Bond
0.550% due 30/11/2019 6,246
France Government Bond OAT
1.000% due 25/11/2025 (4,454)
Kingdom of Belgium Government Bond
0.800% due 22/06/2025 6,047
Netherlands Government Bond
0.500% due 15/07/2026 (4,298)
Italy Buoni Poliennali Del Tesoro
1.450% due 15/09/2022 4,802
Italy Buoni Poliennali Del Tesoro
0.250% due 15/05/2018 (4,275)
France Government Bond OAT
2.500% due 25/07/2016 2,819
Spain Government Bond
1.150% due 30/07/2020 (4,133)
Zero coupon due 15/06/2016 2,383 3.800% due 30/04/2024 (3,353)
Netherlands Government Bond Bundesobligation
0.500% due 15/07/2026 2,012 Zero coupon due 17/04/2020 (3,014)
Russell Investment Company III plc Netherlands Government Bond
The U.S. Dollar Cash Fund II 1.750% due 15/07/2023 (2,981)
Class R Roll-Up Shares 1,793 France Government Bond OAT
2.500% due 25/07/2016 (2,803)
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Balance Sheet As at 30 September 2016
The accompanying notes are an integral part of the financial statements.
68 Russell Global Bond (Euro Hedged) Fund
30 September 2016
(Unaudited)
EUR ‘000
31 March 2016
(Audited)
EUR ‘000
Assets
Financial assets at fair value through profit or loss .......................................................... 390,189 434,680
Cash at bank (Note 2) ....................................................................................................... 10,997 8,289
Cash held with brokers and counterparties for open financial derivative instruments
(Note 2) ............................................................................................................................ 5,687 5,324
Debtors:
Receivable for investments sold .................................................................................... 29,374 28,972
Receivable on fund shares issued .................................................................................. 1,447 -
Interest receivable ......................................................................................................... 2,240 2,545
439,934 479,810
Liabilities
Financial liabilities at fair value through profit or loss .................................................... (6,575) (12,739)
Creditors – amounts falling due within one financial year:
Cash due to brokers and counterparties for open financial derivative positions
(Note 2) ......................................................................................................................... (582) (1,609)
Payable for investments purchased ............................................................................... (70,408) (54,335)
Payable on fund shares redeemed ................................................................................. (4) (6)
Distributions payable on income share classes ............................................................. (530) (515)
Management fees payable ............................................................................................. (247) (291)
Depositary fees payable ................................................................................................ (8) (6)
Sub-custodian fees payable ........................................................................................... (42) (63)
Administration fees payable .......................................................................................... (8) (17)
Audit fees payable ......................................................................................................... (15) (27)
Other fees payable ......................................................................................................... (4) (3)
(78,423) (69,611)
Net asset value attributable to redeemable participating shareholders .................... 361,511 410,199
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Profit and Loss Account
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 69
Six months ended
30 September 2016
(Unaudited)
EUR ‘000
Six months ended
30 September 2015
(Unaudited)
EUR ‘000
Income
Dividends ...................................................................................................................... - 82
Interest income ............................................................................................................... 4,830 6,732
4,830 6,814
Net gain (loss) on investment activities ........................................................................... 2,119 (19,657)
Total investment income (expense) ............................................................................... 6,949 (12,843)
Expenses
Management fees (Note 3) ............................................................................................ (1,616) (2,391)
Depositary fees (Note 4) ............................................................................................... (27) (24)
Sub-custodian fees (Note 4) .......................................................................................... (143) (125)
Administration and transfer agency fees (Note 4) ......................................................... (79) (108)
Audit fees ...................................................................................................................... (14) (13)
Professional fees ........................................................................................................... (5) (27)
Other fees ...................................................................................................................... (11) (18)
Total operating expenses ............................................................................................... (1,895) (2,706)
Net income (expense) ..................................................................................................... 5,054 (15,549)
Finance costs
Distributions (Note 6) .................................................................................................... (3,364) (5,100)
Profit (loss) for the financial period before taxation ................................................... 1,690 (20,649)
Taxation
Withholding tax (Note 7) .............................................................................................. (10) (41)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 1,680 (20,690)
All amounts arose solely from continuing operations. There are no recognised gains or losses other than those dealt with in the Profit and Loss
Account.
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
70 Russell Global Bond (Euro Hedged) Fund
Six months ended
30 September 2016
(Unaudited)
EUR ‘000
Six months ended
30 September 2015
(Unaudited)
EUR ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 1,680 (20,690)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 8) ...................... 2,364 3,973
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 8) ..................................................................................................... (52,732) 10,964
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders ............................................................................................. (48,688) (5,753)
Net assets attributable to redeemable participating shareholders
Beginning of financial period ........................................................................................ 410,199 565,409
End of financial period .................................................................................................. 361,511 559,656
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 71
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Transferable Securities (99.12%)
Long Term Bonds and Notes (93.41%)
Argentina (0.07%)
Argentine Republic
Government International
Bond
USD 250,000 6.875% due 22/04/21 ....... 243 0.07
Australia (2.06%)
Asciano Finance Ltd
150,000 5.000% due 07/04/18 ....... 138 0.04
Australia Government Bond
AUD 1,760,000 5.500% due 21/01/18 ....... 1,259 0.35
2,688,000 5.250% due 15/03/19 ....... 1,994 0.55
1,100,000 4.250% due 21/04/26 ....... 902 0.25
36,000 3.750% due 21/04/37 ....... 29 0.01
Commonwealth Bank of
Australia
USD 1,351,000 2.000% due 18/06/19 ....... 1,220 0.34
GBP 160,000 3.000% due 04/09/26 ....... 213 0.06
National Australia Bank Ltd
AUD 250,000 5.000% due 11/03/24 ....... 197 0.05
New South Wales Treasury Corp
500,000 6.000% due 01/03/22 ....... 413 0.11
300,000 2.750% due 20/11/25 ....... 303 0.08
Telstra Corp Ltd
80,000 4.000% due 15/11/17 ....... 55 0.02
240,000 4.500% due 13/11/18 ....... 170 0.05
Westpac Banking Corp
USD 600,000 2.100% due 25/02/21 ....... 542 0.15
7,435 2.06
Austria (0.14%)
Austria Government Bond
EUR 140,000 3.900% due 15/07/20 ....... 164 0.05
100,000 1.750% due 20/10/23 ....... 115 0.03
32,000 3.150% due 20/06/44 ....... 52 0.01
Erste Group Bank AG
USD 200,000 5.500% due 26/05/25 ....... 184 0.05
515 0.14
Belgium (0.27%)
Anheuser-Busch InBev SA/NV
EUR 250,000 0.625% due 17/03/20 ....... 255 0.07
Belgium Government Bond
182,848 4.000% due 28/03/19 ....... 204 0.06
200,508 4.250% due 28/09/21 ....... 248 0.07
100,782 2.600% due 22/06/24 ....... 123 0.03
89,234 5.000% due 28/03/35 ....... 158 0.04
988 0.27
Bermuda (0.12%)
Cronos Containers Program I Ltd
USD 199,074 3.270% due 18/11/29 ....... 172 0.05
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Global Container Assets Ltd
280,000 3.300% due 05/11/28 ...... 247 0.07
419 0.12
Brazil (1.32%)
Banco do Brasil SA
EUR 200,000 3.750% due 25/07/18 ...... 204 0.06
Brazil Letras do Tesouro
Nacional
BRL 2,500,000
Zero Coupon due
01/10/17 .......................... 609 0.17
Brazil Notas do Tesouro
Nacional Serie B
1,790,000 6.000% due 15/05/45 ...... 1,515 0.42
232,000 6.000% due 15/08/50 ...... 196 0.05
Brazil Notas do Tesouro
Nacional Serie F
2,880,000 10.000% due 01/01/21 .... 774 0.21
2,130,000 10.000% due 01/01/23 .... 562 0.16
2,640,000 10.000% due 01/01/25 .... 687 0.19
Brazilian Government
International Bond
EUR 115,000 2.875% due 01/04/21 ...... 118 0.03
BRL 350,000 8.500% due 05/01/24 ...... 90 0.03
4,755 1.32
Bulgaria (0.16%)
Bulgaria Government
International Bond
EUR 552,000 3.125% due 26/03/35 ...... 575 0.16
Canada (2.51%)
Alimentation Couche-Tard
Inc
CAD 160,000 3.319% due 01/11/19 ...... 113 0.03
EUR 120,000 1.875% due 06/05/26 ...... 129 0.04
Bank of Nova Scotia
500,000
Zero Coupon due
10/09/18 .......................... 502 0.14
USD 250,000 1.516% due 14/06/19 ...... 223 0.06
400,000 1.875% due 26/04/21 ...... 359 0.10
Canadian Government Bond
CAD 490,000 1.750% due 01/09/19 ...... 344 0.10
450,000 3.500% due 01/06/20 ...... 337 0.09
100,000 1.500% due 01/06/23 ...... 71 0.02
1,220,000 2.500% due 01/06/24 ...... 929 0.26
300,000 5.000% due 01/06/37 ...... 323 0.09
310,000 4.000% due 01/06/41 ...... 309 0.09
331,000 3.500% due 01/12/45 ...... 319 0.09
Canadian Natural Resources
Ltd
220,000 3.310% due 11/02/22 ...... 151 0.04
Province of British
Columbia
100,000 2.700% due 18/12/22 ...... 73 0.02
EUR 140,000 0.875% due 08/10/25 ...... 148 0.04
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
72 Russell Global Bond (Euro Hedged) Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Province of Manitoba Canada
CAD 300,000 4.400% due 05/09/25 ....... 243 0.07
Province of Ontario Canada
USD 575,000 3.000% due 16/07/18 ....... 529 0.15
CAD 500,000 3.150% due 02/06/22 ....... 372 0.10
400,000 1.950% due 27/01/23 ....... 280 0.08
400,000 3.500% due 02/06/24 ....... 307 0.08
125,000 4.650% due 02/06/41 ....... 115 0.03
CAD 300,000 3.450% due 02/06/45 ....... 235 0.06
Province of Quebec Canada
USD 160,000 1.065% due 04/09/18 ....... 143 0.04
220,000 0.977% due 21/07/19 ....... 196 0.05
200,000 2.750% due 25/08/21 ....... 188 0.05
CAD 400,000 4.250% due 01/12/21 ....... 310 0.09
400,000 3.500% due 01/12/22 ....... 304 0.08
400,000 3.000% due 01/09/23 ....... 297 0.08
200,000 5.000% due 01/12/38 ....... 188 0.05
100,000 5.000% due 01/12/41 ....... 96 0.03
Royal Bank of Canada
USD 400,000 2.300% due 22/03/21 ....... 366 0.10
SCG Hotel Issuer Inc
CAD 150,749 3.442% due 12/10/18 ....... 105 0.03
Toronto-Dominion Bank
USD 350,000 1.542% due 22/01/19 ....... 314 0.09
Transcanada Trust
150,000 5.875% due 15/08/76 ....... 142 0.04
9,060 2.51
Cayman Islands (0.87%)
BlueMountain CLO Ltd
520,000 2.179% due 13/04/27 ....... 465 0.13
Cent CLO 22 Ltd
500,000 2.268% due 07/11/26 ....... 444 0.12
CK Hutchison Finance 16
Ltd
EUR 250,000 0.875% due 03/10/24 ....... 248 0.07
CK Hutchison International
16 Ltd
USD 200,000 1.875% due 03/10/21 ....... 177 0.05
Dryden 37 Senior Loan Fund
500,000 2.180% due 15/04/27 ....... 446 0.12
Magnetite IX Ltd
640,000 2.135% due 25/07/26 ....... 568 0.16
Noble Holding International
Ltd
15,000 6.200% due 01/08/40 ....... 8 0.00
10,000 6.050% due 01/03/41 ....... 5 0.00
25,000 5.250% due 15/03/42 ....... 13 0.00
Seneca Park CLO Ltd
395,000 2.159% due 17/07/26 ....... 351 0.10
Treman Park CLO Ltd
475,000 2.196% due 20/04/27 ....... 422 0.12
3,147 0.87
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Chile (0.15%)
Corp Nacional del Cobre de
Chile
320,000 4.500% due 16/09/25 ...... 301 0.08
Latam Airlines Pass Through
Trust
290,184 4.200% due 15/11/27 ...... 254 0.07
555 0.15
Colombia (0.23%)
Colombia Government
International Bond
200,000 5.000% due 15/06/45 ...... 194 0.05
COP Colombian TES
1,977,300,000 7.500% due 26/08/26 ...... 636 0.18
830 0.23
Croatia (0.04%)
Croatia Government
International Bond
EUR 150,000 3.000% due 11/03/25 ...... 153 0.04
Cyprus (0.53%)
Aroundtown Property
Holdings Plc
500,000 1.500% due 03/05/22 ...... 508 0.14
100,000 1.500% due 15/07/24 ...... 100 0.03
Cyprus Government
International Bond
270,000 4.625% due 03/02/20 ...... 292 0.08
100,000 3.875% due 06/05/22 ...... 104 0.03
200,000 3.750% due 26/07/23 ...... 206 0.06
644,000 4.250% due 04/11/25 ...... 686 0.19
1,896 0.53
Czech Republic (0.20%)
Czech Republic Government
Bond
CZK 1,270,000 2.400% due 17/09/25 ...... 56 0.01
Czech Republic International
EUR 590,000
4.125% due
18/03/20 .......................... 680 0.19
736 0.20
Denmark (0.20%)
Denmark Government Bond
DKK 1,482,191 1.500% due 15/11/23 ...... 223 0.06
3,310,000 1.750% due 15/11/25 ...... 516 0.14
739 0.20
Finland (0.18%)
Finland Government Bond
EUR 146,000
2.000% due
15/04/24 .......................... 171 0.05
Nordic Investment Bank
NOK 4,320,000
1.375% due
15/07/20 .......................... 486 0.13
657 0.18
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 73
Principal
Amount
Fair Value
EUR ‘000
Fund
%
France (1.07%)
Autoroutes du Sud de la
France SA
EUR 100,000 1.000% due 13/05/26 ....... 105 0.03
BNP Paribas SA
GBP 55,000 5.750% due 24/01/22 ....... 75 0.02
EUR 125,000 2.375% due 17/02/25 ....... 129 0.04
100,000 2.875% due 01/10/26 ....... 106 0.03
200,000 4.032%* ........................... 199 0.05
BPCE SA
USD 400,000 4.625% due 11/07/24 ....... 364 0.10
Credit Agricole Assurances
SA
EUR 200,000 4.750% due 27/09/48 ....... 201 0.06
Credit Agricole SA
USD 270,000 4.375% due 17/03/25 ....... 246 0.07
France Government Bond
OAT
EUR 380,000 2.250% due 25/10/22 ....... 441 0.12
215,000 1.750% due 25/11/24 ....... 248 0.07
180,000 2.750% due 25/10/27 ....... 230 0.06
510,000 1.750% due 25/05/66 ....... 591 0.16
Groupama SA
100,000 6.375%* ........................... 93 0.03
mFinance France SA
300,000 2.375% due 01/04/19 ....... 310 0.09
Pernod Ricard SA
USD 150,000 5.500% due 15/01/42 ....... 163 0.04
SFR Group SA
300,000 7.375% due 01/05/26 ....... 273 0.07
Societe Generale SA
EUR 100,000 2.625% due 27/02/25 ....... 104 0.03
3,878 1.07
Germany (1.85%)
Allianz SE
100,000 2.241% due 07/07/45 ....... 98 0.03
Bundesrepublik Deutschland
120,000 4.250% due 04/07/18 ....... 130 0.04
905,000 0.500% due 15/02/26 ....... 964 0.27
348,110
Zero Coupon due
15/08/26 ........................... 352 0.10
111,932 4.750% due 04/07/28 ....... 176 0.05
395,000 4.250% due 04/07/39 ....... 737 0.20
725,000 2.500% due 04/07/44 ....... 1,121 0.31
Bundesrepublik Deutschland
Bundesobligation Inflation
Linked Bond
318,465 0.750% due 15/04/18 ....... 327 0.09
Commerzbank AG
155,000 4.000% due 23/03/26 ....... 155 0.04
Deutsche Bank AG
USD 200,000 2.717% due 10/05/19 ....... 174 0.05
300,000 2.850% due 10/05/19 ....... 261 0.07
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Deutsche Bundesrepublik
Inflation Linked Bond
EUR 206,852 0.100% due 15/04/23 ...... 227 0.06
HeidelbergCement AG
105,000 2.250% due 03/06/24 ...... 111 0.03
KFW
410,000 0.625% due 15/01/25 ...... 437 0.12
GBP 54,000 5.750% due 07/06/32 ...... 102 0.03
Muenchener
Rueckversicherungs-
Gesellschaft AG in
Muenchen
EUR 100,000 6.250% due 26/05/42 ...... 123 0.03
Red & Black Auto Germany
2
40,129
Zero Coupon due
15/09/22 .......................... 40 0.01
State of Hesse
700,000 0.375% due 04/07/22 ...... 727 0.20
State of North Rhine-
Westphalia
400,000 0.625% due 17/11/23 ...... 423 0.12
6,685 1.85
Greece (0.09%)
Hellenic Republic
Government Bond
380,000 3.000% due 24/02/24 ...... 280 0.08
46,284 3.000% due 24/02/41 ...... 27 0.01
307 0.09
Guernsey, Channel Islands (0.20%)
Credit Suisse Group Funding
Guernsey Ltd
USD 250,000 3.125% due 10/12/20 ...... 226 0.06
300,000 3.800% due 15/09/22 ...... 273 0.08
250,000 3.800% due 09/06/23 ...... 226 0.06
725 0.20
Hong Kong (0.05%)
AIA Group Ltd
200,000 3.200% due 11/03/25 ...... 182 0.05
Iceland (0.51%)
Iceland Government
International Bond
900,000 5.875% due 11/05/22 ...... 942 0.26
Iceland Rikisbref
ISK 23,843,831 7.250% due 26/10/22 ...... 205 0.06
26,942,438 8.000% due 12/06/25 ...... 249 0.07
49,046,724 6.500% due 24/01/31 ...... 429 0.12
1,825 0.51
Indonesia (0.68%)
Indonesia Government
International Bond
EUR 500,000 2.875% due 08/07/21 ...... 536 0.15
323,000 3.375% due 30/07/25 ...... 350 0.10
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
74 Russell Global Bond (Euro Hedged) Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
IDR Indonesia Treasury Bond
12,836,000,000 7.875% due 15/04/19 ....... 905 0.25
Pertamina Persero PT
USD 200,000 4.300% due 20/05/23 ....... 187 0.05
Perusahaan Penerbit SBSN
Indonesia III
500,000 4.550% due 29/03/26 ....... 483 0.13
2,461 0.68
Ireland (1.32%)
AerCap Ireland Capital Ltd /
AerCap Global Aviation
Trust
185,000 3.950% due 01/02/22 ....... 169 0.05
Allied Irish Banks Plc
EUR 100,000 4.125% due 26/11/25 ....... 97 0.03
Aquarius and Investments
Plc for Zurich Insurance Co
Ltd
150,000 4.250% due 02/10/43 ....... 167 0.05
Avoca CLO XI Ltd
250,000 3.205% due 15/07/27 ....... 239 0.06
Ireland Government
Bond
168,035 3.900% due 20/03/23 ....... 212 0.06
1,840,000 5.400% due 13/03/25 ....... 2,635 0.73
275,000 2.000% due 18/02/45 ....... 332 0.09
Lansdowne Mortgage
Securities No 2 Plc
423,451
Zero Coupon due
16/09/48 ........................... 274 0.07
Orwell Park CLO
Designated Activity Co
300,000 3.250% due 18/07/29 ....... 278 0.08
Shire Acquisitions
Investments Ireland DAC
USD 200,000 1.900% due 23/09/19 ....... 178 0.05
Taurus DEU DAC
EUR 190,000 1.300% due 17/11/26 ....... 192 0.05
4,773 1.32
Israel (0.02%)
Israel Government
Bond
ILS 301,000 3.750% due 31/03/24 ....... 84 0.02
Italy (2.57%)
Asti RMBS Srl
EUR 106,545 0.948% due 27/12/60 ....... 108 0.03
Banca Carige SpA
300,000 3.875% due 24/10/18 ....... 319 0.09
Berica 8 Residential MBS
Srl
43,217
Zero Coupon due
31/03/48 ........................... 43 0.01
Berica ABS 3 Srl
291,027 0.748% due 30/06/61 ....... 295 0.08
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Berica ABS Srl
127,324
Zero Coupon due
31/12/55 .......................... 127 0.03
Claris ABS 2011 Srl
140,317 0.208% due 31/10/60 ...... 140 0.04
Claris RMBS 2014 Srl
91,873 0.847% due 28/12/61 ...... 93 0.02
Enel SpA
GBP 85,000 5.750% due 22/06/37 ...... 136 0.04
EUR 289,000 6.500% due 10/01/74 ...... 313 0.09
Intesa Sanpaolo SpA
USD 360,000 5.710% due 15/01/26 ...... 302 0.08
EUR 100,000 3.928% due 15/09/26 ...... 101 0.03
Italy Buoni Poliennali Del
Tesoro
414,000 4.000% due 01/09/20 ...... 477 0.13
420,000 5.000% due 01/03/22 ...... 523 0.14
1,073,073 2.350% due 15/09/24 ...... 1,260 0.35
900,000 5.000% due 01/03/25 ...... 1,191 0.33
200,000 1.250% due 01/12/26 ...... 200 0.05
219,000 4.750% due 01/09/28 ...... 300 0.08
265,000 5.250% due 01/11/29 ...... 385 0.11
107,000 5.000% due 01/08/34 ...... 160 0.04
600,000 5.000% due 01/09/40 ...... 930 0.26
135,000 3.250% due 01/09/46 ...... 166 0.05
160,000 2.700% due 01/03/47 ...... 176 0.05
Italy Government
International Bond
GBP 200,000 6.000% due 04/08/28 ...... 304 0.08
Marche Mutui 4 Srl
EUR 59,627 0.108% due 25/02/55 ...... 60 0.02
Sestante Finance Srl
1
Zero Coupon due
23/07/46 .......................... - 0.00
Siviglia SPV Srl
169,697 0.203% due 25/10/55 ...... 168 0.05
Towers CQ Srl
453,999 0.647% due 28/12/33 ...... 457 0.13
UniCredit SpA
458,000 4.375% due 03/01/27 ...... 455 0.13
Vela Home Srl
29,468
Zero Coupon due
25/10/42 .......................... 29 0.01
Voba N 3 Srl
61,283 0.702% due 23/11/47 ...... 62 0.02
9,280 2.57
Japan (7.09%)
Central Nippon Expressway
Co Ltd
USD 400,000 2.362% due 28/05/21 ...... 362 0.10
Development Bank of Japan
Inc
400,000 1.625% due 01/09/21 ...... 356 0.10
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 75
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Japan Bank for International
Cooperation
360,000 3.375% due 31/07/23 ....... 352 0.10
Japan Expressway Holding and
Debt Repayment Agency
JPY 30,000,000 2.850% due 18/03/39 ....... 361 0.10
Japan Government Five Year
Bond
237,900,000 0.200% due 20/06/19 ....... 2,118 0.59
138,050,000 0.100% due 20/12/19 ....... 1,228 0.34
53,550,000 0.100% due 20/03/20 ....... 477 0.13
525,000,000 0.100% due 20/09/21 ....... 4,693 1.30
Japan Government Forty
Year Bond
12,300,000 0.400% due 20/03/56 ....... 104 0.03
Japan Government Ten Year
Bond
90,000,000 1.400% due 20/03/20 ....... 837 0.23
170,000,000 1.300% due 20/03/21 ....... 1,598 0.44
Japan Government Thirty
Year Bond
136,450,000 2.000% due 20/12/33 ....... 1,561 0.43
113,000,000 2.300% due 20/03/35 ....... 1,354 0.37
17,000,000 2.400% due 20/03/37 ....... 209 0.06
33,750,000 2.000% due 20/03/42 ....... 410 0.11
58,200,000 1.700% due 20/12/43 ....... 678 0.19
10,000,000 1.700% due 20/09/44 ....... 117 0.03
9,450,000 1.500% due 20/12/44 ....... 107 0.03
79,000,000 0.300% due 20/06/46 ....... 664 0.18
Japan Government Twenty
Year Bond
75,000,000 2.100% due 20/12/27 ....... 817 0.23
70,000,000 2.100% due 20/03/30 ....... 784 0.22
50,000,000 1.700% due 20/09/32 ....... 546 0.15
100,000,000 1.500% due 20/06/34 ....... 1,069 0.30
87,500,000 0.400% due 20/03/36 ....... 778 0.21
Japan Government Two
Year Bond
195,000,000 0.100% due 15/08/18 ....... 1,726 0.48
Japanese Government CPI
Linked Bond
20,696,000 0.100% due 10/09/24 ....... 191 0.05
108,772,700 0.100% due 10/03/25 ....... 1,006 0.28
67,911,514 0.100% due 10/03/26 ....... 630 0.17
Mitsubishi UFJ Financial
Group Inc
USD 310,000 2.190% due 13/09/21 ....... 275 0.08
243,000 2.757% due 13/09/26 ....... 216 0.06
25,624 7.09
Jersey, Channel Islands (0.18%)
Delphi Automotive Plc
60,000 3.150% due 19/11/20 ....... 55 0.02
EUR 100,000 1.500% due 10/03/25 ....... 104 0.03
Heathrow Funding Ltd
GBP 106,000 2.750% due 09/08/49 ....... 127 0.03
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Petrofac Ltd
USD 200,000 3.400% due 10/10/18 ...... 179 0.05
UBS Group Funding Jersey
Ltd
200,000 2.337% due 01/02/22 ...... 180 0.05
645 0.18
Kazakhstan (0.28%)
KazAgro National
Management Holding JSC
EUR 850,000 3.255% due 22/05/19 ...... 841 0.23
USD 200,000 4.625% due 24/05/23 ...... 172 0.05
1,013 0.28
Korea, Republic of (0.30%)
Export-Import Bank of
Korea
NOK 1,775,000 3.000% due 22/05/18 ...... 202 0.05
Kookmin Bank
USD 230,000 2.125% due 21/10/20 ...... 207 0.06
Korea International
Bond
EUR 600,000 2.125% due 10/06/24 ...... 686 0.19
1,095 0.30
Latvia (0.07%)
Latvia Government
International Bond
240,000 1.375% due 16/05/36 ...... 261 0.07
Liberia (0.13%)
Royal Caribbean Cruises Ltd
USD 500,000 5.250% due 15/11/22 ...... 486 0.13
Lithuania (0.35%)
Lithuania Government
International Bond
EUR 170,000 2.125% due 29/10/26 ...... 200 0.05
896,000 2.125% due 22/10/35 ...... 1,070 0.30
1,270 0.35
Luxembourg (0.98%)
Actavis Funding SCS
USD 249,000 3.000% due 12/03/20 ...... 229 0.06
171,000 4.550% due 15/03/35 ...... 162 0.05
Altice Luxembourg SA
EUR 400,000 7.250% due 15/05/22 ...... 422 0.12
Compartment Driver UK
Two SA
GBP 38,699 0.686% due 25/01/23 ...... 45 0.01
European Investment Bank
AUD 1,010,000 6.500% due 07/08/19 ...... 772 0.21
1,230,000 6.000% due 06/08/20 ...... 953 0.26
USD 66,000 2.875% due 15/09/20 ...... 62 0.02
EUR 80,000 4.000% due 15/10/37 ...... 135 0.04
36,000 1.750% due 15/09/45 ...... 45 0.01
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
76 Russell Global Bond (Euro Hedged) Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Holcim US Finance Sarl &
Cie SCS
USD 230,000 5.150% due 12/09/23 ....... 232 0.06
SES SA
EUR 340,000 4.625%* ........................... 352 0.10
Telecom Italia Capital SA
USD 135,000 7.200% due 18/07/36 ....... 129 0.04
3,538 0.98
Macedonia (0.23%)
Macedonia Government
International Bond
EUR 600,000 4.875% due 01/12/20 ....... 637 0.17
200,000 3.975% due 24/07/21 ....... 206 0.06
843 0.23
Malaysia (1.10%)
Malaysia Government Bond
MYR 7,300,000 4.048% due 30/09/21 ....... 1,627 0.45
1,130,000 3.795% due 30/09/22 ....... 248 0.07
1,390,000 4.181% due 15/07/24 ....... 311 0.08
8,210,000 3.955% due 15/09/25 ....... 1,803 0.50
3,989 1.10
Mexico (2.70%)
Mexican Bonos
MXN 17,210,000 7.750% due 14/12/17 ....... 817 0.22
27,630,000 8.000% due 11/06/20 ....... 1,370 0.38
34,239,300 6.500% due 10/06/21 ....... 1,624 0.45
44,904,800 10.000% due 05/12/24 ..... 2,612 0.72
3,760,000 5.750% due 05/03/26 ....... 170 0.05
5,900,000 7.750% due 29/05/31 ....... 307 0.08
5,500,000 8.500% due 18/11/38 ....... 312 0.09
14,315,000 7.750% due 13/11/42 ....... 762 0.21
Mexico Government
International Bond
USD 226,000 3.625% due 15/03/22 ....... 212 0.06
EUR 408,000 3.625% due 09/04/29 ....... 487 0.13
180,000 4.000% due 15/03/15 ....... 171 0.05
Petroleos Mexicanos
USD 800,000 5.750% due 01/03/18 ....... 749 0.21
Sigma Alimentos SA de CV
200,000 4.125% due 02/05/26 ....... 179 0.05
9,772 2.70
Morocco (0.19%)
Morocco Government
International Bond
EUR 200,000 4.500% due 05/10/20 ....... 226 0.06
USD 263,000 4.250% due 11/12/22 ....... 249 0.07
OCP SA
215,000 6.875% due 25/04/44 ....... 218 0.06
693 0.19
Netherlands (1.60%)
ABN Amro Bank NV
EUR 100,000 2.875% due 30/06/25 ....... 105 0.03
Principal
Amount
Fair Value
EUR ‘000
Fund
%
USD 270,000 4.750% due 28/07/25 ...... 253 0.07
Cooperatieve Rabobank UA
EUR 200,000 6.875% due 19/03/20 ...... 237 0.07
CRH Funding BV
150,000 1.875% due 09/01/24 ...... 164 0.05
EDP Finance BV
USD 190,000 6.000% due 02/02/18 ...... 177 0.05
240,000 4.125% due 15/01/20 ...... 222 0.06
EUR 120,000 2.000% due 22/04/25 ...... 122 0.03
Embraer Netherlands
Finance BV
USD 270,000 5.050% due 15/06/25 ...... 243 0.07
LeasePlan Corp NV
300,000 2.500% due 16/05/18 ...... 267 0.07
Mylan NV
420,000 3.150% due 15/06/21 ...... 381 0.11
Netherlands Government
Bond
EUR 800,000 1.250% due 15/01/19 ...... 835 0.23
289,273 4.000% due 15/07/19 ...... 327 0.09
100,000 2.250% due 15/07/22 ...... 116 0.03
62,600 3.750% due 15/01/42 ...... 113 0.03
Petrobras Global Finance
BV
USD 300,000 3.737% due 17/03/20 ...... 262 0.07
200,000 4.875% due 17/03/20 ...... 179 0.05
30,000 4.375% due 20/05/23 ...... 24 0.01
GBP 130,000 6.250% due 14/12/26 ...... 141 0.04
Schaeffler Finance BV
EUR 130,000 2.500% due 15/05/20 ...... 133 0.04
SNS Bank NV
357,000 3.750% due 05/11/25 ...... 364 0.10
Telefonica Europe BV
200,000 3.750%* .......................... 199 0.05
Teva Pharmaceutical
Finance Netherlands II BV
100,000 1.125% due 15/10/24 ...... 102 0.03
100,000 1.625% due 15/10/28 ...... 102 0.03
Teva Pharmaceutical
Finance Netherlands III BV
USD 180,000 2.800% due 21/07/23 ...... 161 0.04
110,000 3.150% due 01/10/26 ...... 99 0.03
53,000 4.100% due 01/10/46 ...... 47 0.01
Vonovia Finance BV
300,000 3.200% due 02/10/17 ...... 270 0.07
Ziggo Bond Finance
BV
155,000 6.000% due 15/01/27 ...... 138 0.04
5,783 1.60
New Zealand (1.96%)
Fonterra Co-operative Group
Ltd
AUD 400,000 4.500% due 30/06/21 ...... 290 0.08
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 77
Principal
Amount
Fair Value
EUR ‘000
Fund
%
New Zealand Government
Bond
NZD 3,140,000 6.000% due 15/12/17 ....... 2,131 0.59
4,520,000 5.000% due 15/03/19 ....... 3,141 0.87
340,000 6.000% due 15/05/21 ....... 259 0.07
633,000 5.500% due 15/04/23 ....... 496 0.14
1,080,000 2.000% due 20/09/25 ....... 759 0.21
7,076 1.96
Norway (1.32%)
Norway Government Bond
NOK 1,557,000 4.500% due 22/05/19 ....... 190 0.05
11,570,000 3.750% due 25/05/21 ....... 1,456 0.40
8,205,000 2.000% due 24/05/23 ....... 972 0.27
8,230,000 3.000% due 14/03/24 ....... 1,043 0.29
9,750,000 1.500% due 19/02/26 ....... 1,116 0.31
4,777 1.32
Philippines (0.05%)
Philippine Government
International Bond
USD 129,000 6.375% due 23/10/34 ....... 167 0.05
Poland (0.93%)
Poland Government Bond
PLN 1,215,000 3.250% due 25/07/19 ....... 293 0.08
2,435,000 1.500% due 25/04/20 ....... 556 0.15
2,630,000 2.000% due 25/04/21 ....... 606 0.17
5,231,000 4.000% due 25/10/23 ....... 1,321 0.37
2,060,000 2.500% due 25/07/26 ....... 463 0.13
Poland Government
International Bond
EUR 110,000 5.625% due 20/06/18 ....... 121 0.03
3,360 0.93
Portugal (0.42%)
Galp Gas Natural
Distribuicao SA
100,000 1.375% due 19/09/23 ....... 99 0.03
Portugal Obrigacoes do
Tesouro OT
780,000 2.875% due 15/10/25 ....... 765 0.21
650,000 4.100% due 15/02/45 ....... 634 0.18
1,498 0.42
Romania (0.20%)
Romanian Government
International Bond
120,000 2.875% due 28/10/24 ....... 133 0.03
225,000 2.750% due 29/10/25 ....... 246 0.07
310,000 3.875% due 29/10/35 ....... 356 0.10
735 0.20
Singapore (0.98%)
Singapore Government Bond
SGD 530,000 0.500% due 01/04/18 ....... 344 0.10
440,000 2.000% due 01/07/20 ....... 296 0.08
Principal
Amount
Fair Value
EUR ‘000
Fund
%
500,000 2.250% due 01/06/21 ...... 340 0.10
1,230,000 3.125% due 01/09/22 ...... 878 0.24
490,000 2.750% due 01/07/23 ...... 344 0.10
1,064,000 3.000% due 01/09/24 ...... 762 0.21
330,000 2.375% due 01/06/25 ...... 226 0.06
450,000 3.500% due 01/03/27 ...... 340 0.09
3,530 0.98
Slovakia (0.09%)
Slovakia Government Bond
EUR 240,000 3.625% due 16/01/29 ...... 328 0.09
Slovenia (0.21%)
Slovenia Government
International Bond
USD 647,000 5.500% due 26/10/22 ...... 673 0.18
Slovenska Izvozna in
Razvojna Banka dd
EUR 100,000 0.875% due 04/08/18 ...... 101 0.03
774 0.21
South Africa (1.00%)
South Africa Government
Bond
ZAR 2,800,000 8.000% due 21/12/18 ...... 182 0.05
15,953,481 6.750% due 31/03/21 ...... 983 0.27
17,350,000 10.500% due 21/12/26 .... 1,260 0.35
12,800,000 7.000% due 28/02/31 ...... 693 0.19
10,250,000 6.500% due 28/02/41 ...... 485 0.14
3,603 1.00
Spain (1.34%)
Autonomous Community of
Catalonia
EUR 734,000 4.750% due 04/06/18 ...... 763 0.21
123,000 4.950% due 11/02/20 ...... 131 0.04
100,000 5.900% due 28/05/30 ...... 106 0.03
Instituto de Credito
Oficial
CAD 200,000 5.000% due 31/03/20 ...... 147 0.04
Santander Issuances
SAU
USD 200,000 5.179% due 19/11/25 ...... 182 0.05
EUR 200,000 3.250% due 04/04/26 ...... 205 0.06
Spain Government Bond
110,000 4.000% due 30/04/20 ...... 126 0.04
245,000 5.850% due 31/01/22 ...... 320 0.09
80,000 5.400% due 31/01/23 ...... 106 0.03
800,000 2.750% due 31/10/24 ...... 932 0.26
378,000 1.950% due 30/04/26 ...... 415 0.11
80,000 5.150% due 31/10/28 ...... 116 0.03
380,000 4.200% due 31/01/37 ...... 548 0.15
50,000 5.150% due 31/10/44 ...... 85 0.02
525,000 3.450% due 30/07/66 ...... 666 0.18
4,848 1.34
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
78 Russell Global Bond (Euro Hedged) Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Sweden (0.29%)
Nordea Bank AB
USD 200,000 2.250% due 27/05/21 ....... 181 0.05
Stadshypotek AB
AUD 600,000 4.250% due 10/10/17 ....... 416 0.11
Sweden Government
Bond
SEK 2,395,000 1.500% due 13/11/23 ....... 280 0.08
1,295,000 2.500% due 12/05/25 ....... 164 0.05
1,041 0.29
Switzerland (0.50%)
Eurofima
AUD 810,000 6.250% due 28/12/18 ....... 601 0.17
Raiffeisen Schweiz
Genossenschaft
CHF 245,000 3.000%* ........................... 235 0.06
Switzerland Government
Bond
305,000 3.000% due 12/05/19 ....... 310 0.08
100,000 1.500% due 24/07/25 ....... 110 0.03
51,000 1.250% due 27/06/37 ....... 61 0.02
UBS AG
EUR 466,000 4.750% due 12/02/26 ....... 498 0.14
1,815 0.50
Thailand (0.10%)
Thailand Government Bond
THB 13,126,000 5.625% due 12/01/19 ....... 367 0.10
Togo (0.06%)
Banque Ouest Africaine de
Developpement
USD 245,000 5.500% due 06/05/21 ....... 232 0.06
Turkey (0.04%)
Turkey Government Bond
TRY 489,407 8.800% due 14/11/18 ....... 146 0.04
United Arab Emirates (0.05%)
Emirates
Telecommunications Group
Co PJSC
USD 200,000 2.375% due 18/06/19 ....... 181 0.05
United Kingdom (5.12%)
Auburn Securities 4 Plc
GBP 32,837 0.667% due 01/10/41 ....... 37 0.01
Aviva Plc
EUR 135,000 6.125% due 05/07/43 ....... 158 0.04
Barclays Bank Plc
USD 400,000 7.750% due 10/04/23 ....... 373 0.10
Barclays Plc
EUR 250,000 2.625% due 11/11/25 ....... 243 0.07
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Business Mortgage Finance
7 Plc
GBP 340,741 2.386% due 15/02/41 ...... 376 0.10
Clavis Securities Plc
EUR 42,692
Zero Coupon due
15/12/31 .......................... 39 0.01
Co-Operative Bank Plc
GBP 150,000 4.750% due 11/11/21 ...... 198 0.05
Dukinfield 2 Plc
115,000 1.612% due 20/12/52 ...... 133 0.04
E-Carat 3 Plc
37,748 0.737% due 18/03/22 ...... 44 0.01
Eurosail Plc
185,558 0.540% due 10/12/44 ...... 209 0.06
29,430 0.539% due 13/03/45 ...... 33 0.01
FCE Bank Plc
EUR 100,000 1.528% due 09/11/20 ...... 105 0.03
Friary No 2 Plc
GBP 62,298 1.096% due 21/10/46 ...... 72 0.02
Gemgarto
100,000 2.636% due 14/05/45 ...... 115 0.03
Gemgarto Plc
250,000 2.484% due 16/02/47 ...... 277 0.08
85,922 1.834% due 16/02/54 ...... 100 0.03
Great Hall Mortgages No 1
Plc
EUR 450,000 0.229% due 18/06/39 ...... 321 0.09
HBOS Plc
120,000 4.500% due 18/03/30 ...... 134 0.04
HSBC Holdings Plc
USD 300,000 3.400% due 08/03/21 ...... 276 0.08
350,000 2.650% due 05/01/22 ...... 311 0.09
75,000 4.000% due 30/03/22 ...... 71 0.02
GBP 95,000 5.750% due 20/12/27 ...... 131 0.04
110,000 2.625% due 16/08/28 ...... 127 0.03
Legal & General Group Plc
110,000 5.500% due 27/06/64 ...... 131 0.04
Lloyds Bank Plc
USD 200,000 12.000%* ........................ 245 0.07
EUR 100,000 11.875% due 16/12/21 .... 102 0.03
263,000 10.375% due 12/02/24 .... 317 0.09
GBP 220,000 6.000% due 08/02/29 ...... 379 0.10
Mansard Mortgages Plc
177,553 1.032% due 15/12/49 ...... 194 0.05
Motor Plc
5,033 0.766% due 25/08/21 ...... 6 0.00
Nationwide Building Society
EUR 500,000 0.203% due 02/11/18 ...... 502 0.14
Network Rail Infrastructure
Finance Plc
234,000 4.375% due 09/12/30 ...... 375 0.10
NewDay Funding
GBP 300,000 2.770% due 15/07/23 ...... 340 0.09
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 79
Principal
Amount
Fair Value
EUR ‘000
Fund
%
OAK No.1 Plc
51,660 1.060% due 26/02/52 ....... 60 0.02
Paragon Secured Finance No
1 Plc
181,965 2.386% due 15/11/35 ....... 186 0.05
Pearson Dollar Finance Two
Plc
USD 300,000 6.250% due 06/05/18 ....... 284 0.08
Precise Mortgage Funding
Plc
GBP 61,177 1.180% due 12/09/47 ....... 70 0.02
RAC Bond Co Plc
100,000 4.565% due 06/05/23 ....... 130 0.04
Residential Mortgage
Securities 20 Plc
38,997 0.641% due 10/08/38 ....... 42 0.01
Residential Mortgage
Securities 21 Plc
33,165 0.789% due 12/11/38 ....... 36 0.01
Residential Mortgage
Securities 22 Plc
30,340 0.746% due 14/11/39 ....... 33 0.01
Rmac Plc
EUR 35,172
Zero Coupon due
12/06/43 ........................... 33 0.01
GBP 129,424 0.721% due 12/12/43 ....... 139 0.04
Rochester Financing No 2
Plc
274,250 1.679% due 20/06/45 ....... 316 0.09
Royal Bank of Scotland
Group Plc
USD 130,000 6.125% due 15/12/22 ....... 123 0.03
450,000 3.875% due 12/09/23 ....... 395 0.11
315,000 5.125% due 28/05/24 ....... 281 0.08
Santander UK Group
Holdings Plc
100,000 3.125% due 08/01/21 ....... 91 0.03
300,000 2.875% due 05/08/21 ....... 267 0.07
320,000 4.750% due 15/09/25 ....... 286 0.08
Santander UK Plc
EUR 500,000 0.253% due 12/02/18 ....... 502 0.14
Scottish Widows Ltd
GBP 100,000 7.000% due 16/06/43 ....... 135 0.04
Sky Plc
USD 200,000 3.750% due 16/09/24 ....... 188 0.05
EUR 325,000 2.250% due 17/11/25 ....... 357 0.10
Standard Chartered Plc
USD 380,000 5.700% due 26/03/44 ....... 361 0.10
Tesco Plc
GBP 75,000 5.000% due 24/03/23 ....... 95 0.03
Towd Point Mortgage
Funding Plc
105,000 1.923% due 20/07/46 ....... 121 0.03
United Kingdom Gilt
310,000 4.750% due 07/03/20 ....... 415 0.11
Principal
Amount
Fair Value
EUR ‘000
Fund
%
340,000 3.750% due 07/09/21 ...... 461 0.13
325,000 4.250% due 07/06/32 ...... 541 0.15
100,000 4.250% due 07/03/36 ...... 173 0.05
200,000 4.750% due 07/12/38 ...... 378 0.10
130,000 4.250% due 07/09/39 ...... 232 0.06
200,000 4.250% due 07/12/40 ...... 362 0.10
1,520,000 3.250% due 22/01/44 ...... 2,443 0.68
500,000 3.500% due 22/01/45 ...... 844 0.23
150,000 4.250% due 07/12/55 ...... 321 0.09
Virgin Media Finance Plc
EUR 125,000 4.500% due 15/01/25 ...... 124 0.03
Virgin Media Secured
Finance Plc
GBP 270,000 6.000% due 15/04/21 ...... 325 0.09
100,000 4.875% due 15/01/27 ...... 116 0.03
Vodafone Group Plc
224,000 3.000% due 12/08/56 ...... 246 0.07
Warwick Finance
Residential Mortgages No
One Plc
82,768 1.376% due 21/09/49 ...... 95 0.03
300,000 2.576% due 21/09/49 ...... 328 0.09
WPP Finance 2010
USD 80,000 5.625% due 15/11/43 ...... 85 0.02
18,494 5.12
United States (46.14%)
A10 Term Asset Financing
LLC
77,156 2.620% due 15/11/27 ...... 69 0.02
AbbVie Inc
320,000 2.300% due 14/05/21 ...... 288 0.08
220,000 2.850% due 14/05/23 ...... 199 0.06
Accredited Mortgage Loan
Trust
560,000 0.804% due 25/04/36 ...... 453 0.13
1,200,000 0.785% due 25/09/36 ...... 945 0.26
Aetna Inc
145,000 2.400% due 15/06/21 ...... 131 0.04
175,000 3.200% due 15/06/26 ...... 159 0.04
50,000 4.375% due 15/06/46 ...... 47 0.01
AFC Home Equity Loan
Trust
179 1.235% due 22/12/27 ...... - 0.00
Ally Financial Inc
135,000 3.500% due 27/01/19 ...... 121 0.03
45,000 4.250% due 15/04/21 ...... 41 0.01
170,000 4.125% due 13/02/22 ...... 153 0.04
Alternative Loan Trust
24,937 5.250% due 25/06/35 ...... 21 0.01
121,767 1.931% due 25/11/35 ...... 86 0.02
270,107 1.507% due 25/12/35 ...... 194 0.05
35,299 6.250% due 25/08/37 ...... 28 0.01
215,179 0.742% due 20/03/46 ...... 143 0.04
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
80 Russell Global Bond (Euro Hedged) Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
31,224 0.715% due 25/09/46 ....... 21 0.01
777,716 0.665% due 25/04/47 ....... 595 0.16
Altria Group Inc
212,000 3.875% due 16/09/46 ....... 197 0.05
American Express Credit
Account Master Trust
600,000 1.260% due 15/01/20 ....... 535 0.15
American Home Mortgage
Assets Trust
301,213 1.207% due 25/02/47 ....... 161 0.04
AmeriCredit Automobile
Receivables Trust
210,000 1.520% due 08/01/19 ....... 187 0.05
533,123 1.520% due 10/06/19 ....... 476 0.13
383,000 1.420% due 08/10/19 ....... 341 0.09
Ameriquest Mortgage
Securities Inc Asset-Backed
Pass-Through Certificates
410,000 1.635% due 25/03/35 ....... 299 0.08
94,588 0.955% due 25/07/35 ....... 84 0.02
Anadarko Petroleum Corp
210,000 4.850% due 15/03/21 ....... 201 0.06
120,000 5.550% due 15/03/26 ....... 121 0.03
Anheuser-Busch InBev
Finance Inc
105,000 2.650% due 01/02/21 ....... 97 0.03
110,000 3.300% due 01/02/23 ....... 103 0.03
155,000 3.650% due 01/02/26 ....... 148 0.04
280,000 4.700% due 01/02/36 ....... 287 0.08
434,000 4.900% due 01/02/46 ....... 461 0.13
Apple Inc
764,000 1.009% due 03/05/18 ....... 682 0.19
AT&T Inc
100,000 1.739% due 27/11/18 ....... 90 0.03
200,000 2.800% due 17/02/21 ....... 183 0.05
320,000 3.600% due 17/02/23 ....... 301 0.08
200,000 3.400% due 15/05/25 ....... 183 0.05
100,000 4.300% due 15/12/42 ....... 88 0.02
15,000 4.800% due 15/06/44 ....... 14 0.00
105,000 4.350% due 15/06/45 ....... 92 0.03
109,000 4.750% due 15/05/46 ....... 102 0.03
410,000 5.650% due 15/02/47 ....... 432 0.12
AvalonBay Communities
Inc
300,000 3.500% due 15/11/24 ....... 280 0.08
Aviation Capital Group
Corp
300,000 7.125% due 15/10/20 ....... 315 0.09
195,000 4.875% due 01/10/25 ....... 188 0.05
BA Credit Card Trust
280,000 5.170% due 15/06/19 ....... 252 0.07
BAMLL Commercial
Mortgage Securities Trust
200,000 3.524% due 15/12/33 ....... 181 0.05
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Banc of America
Commercial Mortgage Trust
510,000 5.421% due 10/10/45 ...... 453 0.13
220,000 5.552% due 10/06/49 ...... 196 0.05
Banc of America Funding
Trust
550,000 3.309% due 20/07/36 ...... 480 0.13
73,245 3.298% due 20/10/46 ...... 49 0.01
46,529 3.002% due 20/01/47 ...... 35 0.01
Banc of America Mortgage
Trust
91,896 3.222% due 25/05/35 ...... 77 0.02
Bank of America Corp
500,000 6.875% due 25/04/18 ...... 480 0.13
200,000 2.108% due 19/04/21 ...... 180 0.05
400,000 2.625% due 19/04/21 ...... 362 0.10
130,000 3.950% due 21/04/25 ...... 120 0.03
Bay Area Toll Authority
225,000 6.263% due 01/04/49 ...... 306 0.08
Bayer US Finance LLC
280,000 3.375% due 08/10/24 ...... 258 0.07
Bayview Commercial Asset
Trust
341,949 0.955% due 25/08/34 ...... 282 0.08
BCAP LLC Trust
830,000 0.814% due 26/07/45 ...... 668 0.19
Bear Stearns Adjustable Rate
Mortgage Trust
108,447 2.884% due 25/01/35 ...... 94 0.03
156,183 2.920% due 25/03/35 ...... 140 0.04
Bear Stearns Alt-A Trust
42,360 3.142% due 25/09/35 ...... 33 0.01
131,491 2.980% due 25/11/35 ...... 96 0.03
316,688 2.801% due 25/01/36 ...... 233 0.06
304,008 2.950% due 25/08/36 ...... 202 0.06
82,476 3.106% due 25/08/36 ...... 54 0.02
72,570 3.086% due 25/11/36 ...... 48 0.01
Bear Stearns Asset Backed
Securities I Trust
32,093 0.635% due 25/04/31 ...... 29 0.01
Bear Stearns Mortgage
Funding Trust
576,757 0.695% due 25/06/47 ...... 416 0.12
Bear Stearns Second Lien
Trust
192,692 1.025% due 25/12/36 ...... 168 0.05
Bear Stearns Structured
Products Inc
36,384 2.966% due 26/01/36 ...... 26 0.01
80,204 3.280% due 26/12/46 ...... 54 0.02
BLCP Hotel Trust
150,000 3.024% due 15/08/29 ...... 132 0.04
BorgWarner Inc
EUR 170,000 1.800% due 07/11/22 ...... 182 0.05
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 81
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Brambles USA Inc
USD 200,000 4.125% due 23/10/25 ....... 190 0.05
BXHTL Mortgage Trust
780,000 3.375% due 15/05/29 ....... 685 0.19
450,000 3.753% due 15/05/29 ....... 396 0.11
Cargill Inc
500,000 6.000% due 27/11/17 ....... 468 0.13
CDGJ Commercial
Mortgage Trust
176,019 1.924% due 15/12/27 ....... 157 0.04
Celgene Corp
65,000 5.000% due 15/08/45 ....... 65 0.02
Centre Point Funding LLC
97,775 2.610% due 20/08/21 ....... 86 0.02
Chase Issuance Trust
750,000 0.774% due 15/11/18 ....... 668 0.19
Chevron Corp
500,000 1.318% due 16/05/18 ....... 447 0.12
CHL Mortgage Pass-
Through Trust
23,156 3.200% due 19/11/33 ....... 20 0.01
31,631 1.165% due 25/03/35 ....... 23 0.01
35,425 3.148% due 20/10/35 ....... 28 0.01
36,904 3.309% due 20/02/36 ....... 29 0.01
CIT Group Inc
100,000 5.250% due 15/03/18 ....... 93 0.03
100,000 5.500% due 15/02/19 ....... 94 0.03
Citibank Credit Card
Issuance Trust
500,000 1.020% due 22/02/19 ....... 445 0.12
Citigroup Commercial
Mortgage Trust
210,000 3.251% due 10/05/35 ....... 198 0.05
Citigroup Inc
100,000 1.763% due 07/06/19 ....... 90 0.03
245,000 2.650% due 26/10/20 ....... 223 0.06
100,000 2.700% due 30/03/21 ....... 91 0.03
95,000 4.000% due 05/08/24 ....... 89 0.02
Citigroup Mortgage Loan
Trust
933,037 2.766% due 25/08/36 ....... 713 0.20
240,281 3.296% due 25/09/37 ....... 197 0.05
Citigroup Mortgage Loan
Trust Inc
37,912 2.887% due 25/03/34 ....... 33 0.01
1 3.000% due 25/12/35 ....... - 0.00
1,413,000 0.795% due 25/08/36 ....... 1,052 0.29
City of Chicago IL
200,000 7.375% due 01/01/33 ....... 197 0.05
COBALT CMBS
Commercial Mortgage Trust
193,167 5.484% due 15/04/47 ....... 173 0.05
Comcast Corp
176,000 3.400% due 15/07/46 ....... 153 0.04
Principal
Amount
Fair Value
EUR ‘000
Fund
%
COMM Mortgage Trust
207,283 2.225% due 13/05/31 ...... 183 0.05
125,000 2.275% due 15/06/34 ...... 110 0.03
Commercial Mortgage Trust
370,371 5.736% due 10/12/49 ...... 338 0.09
Continental Airlines Pass
Thru Certificates
205,000 6.125% due 29/04/18 ...... 191 0.05
Continental Resources Inc
120,000 3.800% due 01/06/24 ...... 98 0.03
Countrywide Asset-Backed
Certificates
381,440 5.555% due 25/04/36 ...... 338 0.09
244,429 5.588% due 25/08/36 ...... 216 0.06
256,630 0.865% due 25/12/36 ...... 119 0.03
County of Montgomery OH
500,000 0.640% due 15/11/39 ...... 445 0.12
CPS Auto Receivables Trust
8,695 1.210% due 15/08/18 ...... 8 0.00
60,175 1.110% due 15/11/18 ...... 54 0.02
Crown Castle International
Corp
160,000 3.400% due 15/02/21 ...... 149 0.04
53,000 3.700% due 15/06/26 ...... 49 0.01
CSAB Mortgage Backed
Trust
50,808 5.684% due 25/12/36 ...... 23 0.01
CSMC Trust
700,000 3.374% due 15/08/30 ...... 613 0.17
45,600 6.500% due 26/07/36 ...... 23 0.01
Delta Air Lines Pass
Through Trust
172,966 4.250% due 30/07/23 ...... 159 0.04
Deutsche Alt-A Securities
Mortgage Loan Trust
259,343 0.725% due 25/08/47 ...... 190 0.05
Deutsche Alt-B Securities
Mortgage Loan Trust
38,862 5.886% due 25/10/36 ...... 29 0.01
Devon Energy Corp
40,000 3.250% due 15/05/22 ...... 35 0.01
85,000 5.850% due 15/12/25 ...... 85 0.02
Diamond 1 Finance Corp /
Diamond 2 Finance Corp
200,000 4.420% due 15/06/21 ...... 186 0.05
Diamond Offshore Drilling
Inc
30,000 4.875% due 01/11/43 ...... 19 0.01
Discovery Communications
LLC
EUR 100,000 1.900% due 19/03/27 ...... 99 0.03
DSLA Mortgage Loan Trust
USD 376,310 1.351% due 19/09/44 ...... 322 0.09
DT Auto Owner Trust
13,163 2.640% due 15/10/19 ...... 12 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
82 Russell Global Bond (Euro Hedged) Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
80,000 3.540% due 15/10/21 ....... 72 0.02
Duke Energy Corp
200,000 2.650% due 01/09/26 ....... 175 0.05
Education Realty Operating
Partnership LP
400,000 4.600% due 01/12/24 ....... 372 0.10
EMC Mortgage Loan Trust
35,273 1.264% due 25/05/40 ....... 29 0.01
Energy Transfer Partners LP
220,000 3.600% due 01/02/23 ....... 193 0.05
135,000 5.150% due 15/03/45 ....... 112 0.03
45,000 6.125% due 15/12/45 ....... 42 0.01
Express Scripts Holding Co
350,000 3.400% due 01/03/27 ....... 314 0.09
Fannie Mae Grantor Trust
44,928 6.000% due 25/02/44 ....... 46 0.01
Fannie Mae Pool
503,513 2.500% due 15/10/31 ....... 464 0.13
438,173 3.000% due 15/10/31 ....... 409 0.11
1,253,332 3.500% due 15/10/31 ....... 1,176 0.33
77,899 2.256% due 01/12/34 ....... 72 0.02
230,568 2.535% due 01/02/35 ....... 217 0.06
6,773 1.707% due 01/10/44 ....... 6 0.00
739,913 3.000% due 15/10/46 ....... 684 0.19
3,159,604 3.500% due 15/10/46 ....... 2,967 0.82
836,900 4.000% due 15/10/46 ....... 800 0.22
544,710 4.500% due 15/10/46 ....... 531 0.15
165,160 5.500% due 15/10/46 ....... 166 0.05
945,000 3.000% due 15/11/46 ....... 872 0.24
9,710,000 3.500% due 15/11/46 ....... 9,107 2.52
3,390,000 4.000% due 15/11/46 ....... 3,236 0.90
2,000,000 4.500% due 15/11/46 ....... 1,947 0.54
8,000,000 3.000% due 15/12/46 ....... 7,367 2.04
Fannie Mae REMIC Trust
155,227 6.000% due 25/07/44 ....... 161 0.04
Fannie Mae REMICS
23,701 1.175% due 25/09/23 ....... 21 0.01
74,018 6.000% due 25/06/33 ....... 13 0.00
96,782 0.645% due 25/03/34 ....... 85 0.02
36,063 6.000% due 25/04/43 ....... 35 0.01
Fannie Mae Trust
240,685 0.875% due 25/09/42 ....... 213 0.06
First Frankin Mortgage Loan
Trust
502,081 1.015% due 25/09/35 ....... 441 0.12
First Horizon Alternative
Mortgage Securities Trust
504,794 5.500% due 25/09/35 ....... 398 0.11
477,445 1.175% due 25/11/35 ....... 289 0.08
212,498 1.225% due 25/12/35 ....... 128 0.04
First Horizon Asset
Securities Inc
43,592 5.250% due 25/03/35 ....... 40 0.01
Principal
Amount
Fair Value
EUR ‘000
Fund
%
FirstEnergy Corp
164,000 4.250% due 15/03/23 ...... 155 0.04
Flagship Credit Auto Trust
32,227 1.430% due 16/12/19 ...... 29 0.01
Ford Credit Auto Owner
Trust
60,123 0.790% due 15/05/18 ...... 53 0.01
Ford Motor Credit Co LLC
AUD 310,000 4.050% due 10/12/18 ...... 217 0.06
USD 380,000 3.664% due 08/09/24 ...... 349 0.10
Freddie Mac Gold Pool
800,000 2.500% due 15/10/31 ...... 738 0.20
59,801 4.500% due 01/07/39 ...... 59 0.02
197,892 5.000% due 15/06/40 ...... 195 0.05
856,648 3.500% due 15/10/42 ...... 804 0.22
409,009 3.000% due 15/10/46 ...... 378 0.10
252,439 4.000% due 15/10/46 ...... 241 0.07
Freeport-McMoRan Inc
5,000 5.400% due 14/11/34 ...... 4 0.00
50,000 5.450% due 15/03/43 ...... 36 0.01
General Electric Co
200,000 4.625% due 30/01/43 ...... 182 0.05
General Motors Co
40,000 6.250% due 02/10/43 ...... 42 0.01
165,000 5.200% due 01/04/45 ...... 153 0.04
General Motors Financial Co
Inc
170,000 4.000% due 15/01/25 ...... 153 0.04
Gilead Sciences Inc
35,000 4.750% due 01/03/46 ...... 35 0.01
135,000 4.150% due 01/03/47 ...... 123 0.03
Ginnie Mae II Pool
4,666 1.875% due 20/09/25 ...... 4 0.00
3,904 1.875% due 20/09/26 ...... 4 0.00
1,198,470 4.500% due 20/09/41 ...... 1,151 0.32
1,301,258 3.000% due 15/10/46 ...... 1,213 0.34
1,478,758 3.500% due 15/10/46 ...... 1,398 0.39
470,534 4.000% due 15/10/46 ...... 449 0.12
245,000 3.000% due 15/11/46 ...... 228 0.06
240,000 3.500% due 15/11/46 ...... 227 0.06
207,621 4.658% due 20/03/62 ...... 195 0.05
108,541 2.825% due 20/10/63 ...... 104 0.03
82,237 2.290% due 20/05/64 ...... 77 0.02
108,683 4.668% due 20/05/64 ...... 109 0.03
79,399 4.613% due 20/07/64 ...... 80 0.02
121,966 4.673% due 20/07/64 ...... 122 0.03
115,898 2.572% due 20/11/64 ...... 110 0.03
86,535 2.662% due 20/11/64 ...... 83 0.02
138,990 4.564% due 20/02/65 ...... 140 0.04
Goldman Sachs Group Inc
AUD 600,000 3.680% due 29/11/17 ...... 413 0.11
EUR 500,000 0.399% due 18/12/17 ...... 503 0.14
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 83
Principal
Amount
Fair Value
EUR ‘000
Fund
%
USD 90,000 3.850% due 08/07/24 ....... 85 0.02
Government National
Mortgage Association
272,247 0.954% due 20/06/65 ....... 241 0.07
677,249 1.094% due 20/07/65 ....... 597 0.17
291,282 1.094% due 20/09/65 ....... 257 0.07
496,660 1.014% due 20/10/65 ....... 440 0.12
396,596 1.244% due 20/12/65 ....... 352 0.10
199,575 1.532% due 20/01/66 ....... 180 0.05
298,171 1.344% due 20/04/66 ....... 267 0.07
GP Portfolio Trust
123,741 1.474% due 15/02/27 ....... 110 0.03
Greenpoint Manufactured
Housing
461,142 7.270% due 15/06/29 ....... 409 0.11
GreenPoint Mortgage
Funding Trust
53,234 0.795% due 25/11/45 ....... 41 0.01
GSR Mortgage Loan Trust
188,507 2.917% due 25/09/35 ....... 171 0.05
182,109 2.952% due 25/01/36 ....... 152 0.04
HarborView Mortgage Loan
Trust
32,044 2.894% due 19/05/33 ....... 28 0.01
40,177 0.711% due 19/07/46 ....... 21 0.01
HCA Holdings Inc
70,000 6.250% due 15/02/21 ....... 68 0.02
HCA Inc
300,000 3.750% due 15/03/19 ....... 277 0.08
100,000 6.500% due 15/02/20 ....... 99 0.03
135,000 4.750% due 01/05/23 ....... 126 0.04
85,000 5.375% due 01/02/25 ....... 78 0.02
Hewlett Packard Enterprise Co
55,000 6.200% due 15/10/35 ....... 51 0.01
110,000 6.350% due 15/10/45 ....... 101 0.03
Hilton USA Trust
590,000 4.407% due 05/11/30 ....... 526 0.15
Home Equity Asset Trust
562,000 0.935% due 25/04/36 ....... 463 0.13
700,000 0.915% due 25/07/36 ....... 530 0.15
266,000 0.805% due 25/08/36 ....... 209 0.06
Home Equity Mortgage
Loan Asset-Backed Trust
577,677 0.685% due 25/07/37 ....... 324 0.09
Home Equity Mortgage
Trust
85,780 6.000% due 25/01/37 ....... 33 0.01
Honda Auto Receivables
Owner Trust
57,427 0.920% due 20/11/17 ....... 51 0.01
300,000 1.130% due 17/09/18 ....... 267 0.07
Hudsons Bay Simon JV
Trust
340,000 4.173% due 05/08/34 ....... 300 0.08
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Hyatt Hotel Portfolio Trust
210,000 1.781% due 15/11/29 ...... 187 0.05
310,000 4.324% due 15/11/29 ...... 274 0.08
Hyundai Auto Receivables
Trust
56,788 1.010% due 15/02/18 ...... 51 0.01
IndyMac INDA Mortgage
Loan Trust
166,935 3.163% due 25/03/37 ...... 143 0.04
438,770 3.374% due 25/07/37 ...... 347 0.10
IndyMac INDX Mortgage
Loan Trust
92,233 0.765% due 25/07/35 ...... 72 0.02
191,352 0.794% due 25/06/37 ...... 126 0.04
Inter-American
Development Bank
NZD 500,000 6.000% due 15/12/17 ...... 337 0.09
International Bank for
Reconstruction &
Development
USD 180,000 2.500% due 29/07/25 ...... 170 0.05
International Business
Machines Corp
700,000 1.188% due 12/02/19 ...... 626 0.17
INVISTA Finance LLC
340,000 4.250% due 15/10/19 ...... 303 0.08
Iowa Tobacco Settlement
Authority
180,000 6.500% due 01/06/23 ...... 162 0.04
IXIS Real Estate Capital
Trust
139,084 0.725% due 25/03/36 ...... 79 0.02
376,783 0.825% due 25/03/36 ...... 218 0.06
759,205 0.685% due 25/08/36 ...... 275 0.08
1,203,093 0.635% due 25/05/37 ...... 420 0.12
JP Morgan Chase
Commercial Mortgage
Securities Trust
135,000 1.724% due 15/08/27 ...... 120 0.03
125,192 2.285% due 15/12/30 ...... 111 0.03
124,260 1.504% due 15/07/31 ...... 111 0.03
132,259 5.440% due 12/06/47 ...... 118 0.03
160,000 5.882% due 12/02/51 ...... 147 0.04
166,280 5.716% due 15/02/51 ...... 152 0.04
JP Morgan Mortgage Trust
60,410 3.033% due 25/07/35 ...... 53 0.01
100,029 3.137% due 25/07/35 ...... 88 0.02
231,501 3.234% due 25/08/35 ...... 207 0.06
270,436 7.000% due 25/08/37 ...... 217 0.06
JP Morgan Resecuritization
Trust
43,254 2.409% due 26/09/35 ...... 38 0.01
733,835 2.026% due 26/01/37 ...... 549 0.15
JPMorgan Chase & Co
250,000 1.615% due 25/01/18 ...... 224 0.06
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
84 Russell Global Bond (Euro Hedged) Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
300,000 2.550% due 29/10/20 ....... 272 0.08
400,000 2.322% due 01/03/21 ....... 365 0.10
300,000 3.875% due 01/02/24 ....... 288 0.08
70,000 3.125% due 23/01/25 ....... 64 0.02
EUR 170,000 1.500% due 29/10/26 ....... 179 0.05
KB Home
USD 100,000 4.750% due 15/05/19 ....... 91 0.03
Kinder Morgan Inc
300,000 5.000% due 15/02/21 ....... 289 0.08
Kraft Heinz Foods Co
500,000 3.000% due 01/06/26 ....... 449 0.12
EUR 155,000 2.250% due 25/05/28 ....... 168 0.05
USD 55,000 4.375% due 01/06/46 ....... 52 0.01
LB-UBS Commercial
Mortgage Trust
157,713 5.430% due 15/02/40 ....... 142 0.04
170,000 5.484% due 15/02/40 ....... 152 0.04
491,000 6.454% due 15/09/45 ....... 440 0.12
Lehman ABS Manufactured
Housing Contract Trust
450,000 6.630% due 15/04/40 ....... 429 0.12
Lehman Brothers Holdings Inc
GBP 600,000 7.875% due 08/05/18 ....... 68 0.02
Lehman XS Trust Series
393,426 0.715% due 25/11/46 ....... 291 0.08
Liberty Mutual Group
Inc
225,000 4.850% due 01/08/44 ....... 209 0.06
Los Angeles County Public
Works Financing Authority
100,000 7.488% due 01/08/33 ....... 124 0.03
Marathon Oil Corp
148,000 2.800% due 01/11/22 ....... 122 0.03
Mastr Asset Backed
Securities Trust
364,975 1.025% due 25/11/35 ....... 221 0.06
506,561 1.225% due 25/11/35 ....... 316 0.09
1,080,076 0.675% due 25/08/36 ....... 507 0.14
448,502 0.735% due 25/10/36 ....... 253 0.07
263,517 0.685% due 25/11/36 ....... 156 0.04
Meccanica Holdings USA
Inc
100,000 6.250% due 15/01/40 ....... 88 0.02
Merck & Co Inc
605,000 1.161% due 18/05/18 ....... 541 0.15
Merrill Lynch Mortgage
Investors Trust
346,908 1.145% due 25/08/28 ....... 297 0.08
86,097 2.228% due 25/10/35 ....... 74 0.02
702,568 2.920% due 25/12/35 ....... 600 0.17
161,697 2.636% due 25/02/36 ....... 143 0.04
417,113 1.125% due 25/09/36 ....... 342 0.09
126,059 2.871% due 25/06/37 ....... 108 0.03
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Mid-State Capital Trust
280,950 6.497% due 15/08/37 ...... 271 0.08
Moody's Corp
EUR 160,000 1.750% due 09/03/27 ...... 172 0.05
Morgan Stanley
USD 120,000 3.750% due 25/02/23 ...... 114 0.03
Morgan Stanley Capital I
Trust
250,000 5.818% due 11/06/42 ...... 216 0.06
210,000 5.692% due 15/04/49 ...... 189 0.05
383,000 5.574% due 12/11/49 ...... 338 0.09
Morgan Stanley Re-REMIC
Trust
100,000 5.988% due 12/08/45 ...... 90 0.03
Morgan Stanley
Resecuritization Trust
545,000 0.784% due 26/04/47 ...... 334 0.09
MPLX LP
55,000 5.500% due 15/02/23 ...... 51 0.01
465,000 4.500% due 15/07/23 ...... 422 0.12
55,000 4.875% due 01/12/24 ...... 51 0.01
55,000 4.875% due 01/06/25 ...... 51 0.01
Municipal Electric Authority
of Georgia
200,000 6.655% due 01/04/57 ...... 239 0.07
Nationstar Home Equity
Loan Trust
946,000 0.855% due 25/09/36 ...... 713 0.20
760,000 0.755% due 25/03/37 ...... 594 0.16
New York State Dormitory
Authority
250,000 5.600% due 15/03/40 ...... 302 0.08
Newell Brands Inc
160,000 2.600% due 29/03/19 ...... 146 0.04
80,000 3.150% due 01/04/21 ...... 74 0.02
150,000 4.200% due 01/04/26 ...... 146 0.04
Newfield Exploration Co
40,000 5.625% due 01/07/24 ...... 37 0.01
Nissan Auto Receivables
Owner Trust
346,309 0.720% due 15/08/18 ...... 308 0.09
Noble Energy Inc
100,000 5.250% due 15/11/43 ...... 91 0.03
Nomura Asset Acceptance
Corp Alternative Loan
Trust
612,780 1.125% due 25/12/34 ...... 511 0.14
197,212 3.033% due 25/10/35 ...... 165 0.05
Nomura Resecuritization
Trust
500,000 0.674% due 26/10/36 ...... 372 0.10
263,000 0.684% due 26/10/36 ...... 210 0.06
705,934 1.479% due 26/06/46 ...... 599 0.17
241,878 1.259% due 26/04/47 ...... 205 0.06
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 85
Principal
Amount
Fair Value
EUR ‘000
Fund
%
OneMain Financial Issuance
Trust
125,000 4.100% due 20/03/28 ....... 115 0.03
ONEOK Partners LP
200,000 8.625% due 01/03/19 ....... 202 0.06
Park Place Securities Inc
410,000 0.995% due 25/09/35 ....... 338 0.09
Pfizer Inc
135,000 1.150% due 15/06/18 ....... 121 0.03
Philip Morris International
Inc
EUR 145,000 2.750% due 19/03/25 ....... 171 0.05
Pioneer Natural Resources
Co
USD 95,000 3.950% due 15/07/22 ....... 90 0.03
PPG Industries Inc
179,000 6.650% due 15/03/18 ....... 171 0.05
Procter & Gamble Co
800,000 1.027% due 01/11/19 ....... 714 0.20
Quicken Loans Inc
145,000 5.750% due 01/05/25 ....... 129 0.04
RALI Trust
728,688 0.684% due 25/01/37 ....... 552 0.15
318,265 0.795% due 25/02/46 ....... 170 0.05
212,928 0.735% due 25/04/46 ....... 87 0.02
181,910 0.705% due 25/06/46 ....... 72 0.02
323,666 0.675% due 25/02/47 ....... 166 0.05
RAMP Trust
1,036 1.084% due 25/06/32 ....... 1 0.00
RBSCF Trust
150,000 5.695% due 16/09/40 ....... 135 0.04
Regency Energy Partners LP
/ Regency Energy Finance
Corp
300,000 4.500% due 01/11/23 ....... 269 0.07
Resource Capital Corp Ltd
126,018 1.580% due 15/04/32 ....... 111 0.03
RFMSI Trust
287,263 3.428% due 25/09/35 ....... 204 0.06
27,070 3.913% due 25/02/36 ....... 22 0.01
Santander Drive Auto
Receivables Trust
352,328 1.120% due 17/12/18 ....... 314 0.09
398,132 1.304% due 15/07/19 ....... 355 0.10
240,000 2.650% due 17/08/20 ....... 217 0.06
Santander Holdings USA Inc
300,000 2.275% due 24/11/17 ....... 269 0.07
Saxon Asset Securities Trust
1,250,647 0.705% due 25/05/37 ....... 802 0.22
Securitized Asset Backed
Receivables LLC Trust
79,558 1.185% due 25/10/35 ....... 71 0.02
48,178 0.655% due 25/05/37 ....... 34 0.01
814,038 0.725% due 25/05/37 ....... 459 0.13
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Sequoia Mortgage Trust
205,001 0.882% due 20/07/33 ...... 172 0.05
Soundview Home Loan
Trust
610,000 0.995% due 25/03/36 ...... 488 0.14
Southern Co Gas Capital
Corp
264,000 4.400% due 01/06/43 ...... 254 0.07
70,000 3.950% due 01/10/46 ...... 63 0.02
Spirit Airlines Pass Through
Trust
218,000 4.450% due 01/04/24 ...... 195 0.05
SpringCastle America
Funding LLC
71,617 2.700% due 25/05/23 ...... 64 0.02
105,000 3.050% due 25/04/29 ...... 93 0.03
Springleaf Finance Corp
200,000 8.250% due 15/12/20 ...... 196 0.05
Structured Adjustable Rate
Mortgage Loan Trust
26,967 3.052% due 25/02/34 ...... 24 0.01
51,701 2.993% due 25/04/34 ...... 46 0.01
315,146 3.041% due 25/08/35 ...... 262 0.07
Structured Asset Investment
Loan Trust
295,549 0.705% due 25/04/36 ...... 240 0.07
Structured Asset Mortgage
Investments II Trust
302,387 0.745% due 25/05/36 ...... 209 0.06
262,134 0.645% due 25/08/36 ...... 177 0.05
40,960 0.715% due 25/07/46 ...... 31 0.01
Structured Asset Securities
Corp Mortgage Loan Trust
326,312 0.695% due 25/12/36 ...... 268 0.07
845,742 0.695% due 25/01/37 ...... 696 0.19
801,750 0.655% due 25/02/37 ...... 656 0.18
Sysco Corp
60,000 2.500% due 15/07/21 ...... 55 0.02
TAL Advantage V LLC
75,250 3.550% due 20/11/38 ...... 66 0.02
Targa Resources Partners LP
/ Targa Resources Partners
Finance Corp
145,000 5.000% due 15/01/18 ...... 134 0.04
Tender Option Bond Trust
Receipts/Certificates
300,000 0.690% due 01/08/49 ...... 267 0.07
Tenet Healthcare Corp
195,000 4.500% due 01/04/21 ...... 175 0.05
55,000 4.375% due 01/10/21 ...... 49 0.01
Tennessee Valley Authority
200,000 5.880% due 01/04/36 ...... 259 0.07
Thermo Fisher Scientific
Inc
EUR 202,000 1.375% due 12/09/28 ...... 203 0.06
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
86 Russell Global Bond (Euro Hedged) Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Thornburg Mortgage
Securities Trust
18,927 2.781% due 25/06/47 ....... 15 0.00
Time Warner Cable LLC
55,000 5.500% due 01/09/41 ....... 52 0.01
115,000 4.500% due 15/09/42 ....... 98 0.03
Toyota Auto Receivables
Owner Trust
381,427 0.760% due 15/03/18 ....... 339 0.09
Trinity Rail Leasing LLC
261,657 5.194% due 16/10/40 ....... 230 0.06
U.S. Treasury Bonds
305,700 5.250% due 15/11/28 ....... 377 0.10
360,000 5.375% due 15/02/31 ....... 467 0.13
115,000 4.500% due 15/02/36 ....... 144 0.04
USD 214,000 3.500% due 15/02/39 ....... 236 0.07
580,000 4.250% due 15/05/39 ....... 708 0.20
200,000 4.375% due 15/05/40 ....... 249 0.07
200,000 3.000% due 15/05/42 ....... 203 0.06
300,000 2.750% due 15/08/42 ....... 291 0.08
200,000 2.750% due 15/11/42 ....... 194 0.05
75,000 2.500% due 15/02/45 ....... 69 0.02
200,000 2.875% due 15/08/45 ....... 198 0.05
95,000 2.500% due 15/05/46 ....... 87 0.02
1,350,000 2.250% due 15/08/46 ....... 1,180 0.33
U.S. Treasury Inflation
Indexed Bonds
869,119 1.125% due 15/01/21 ....... 824 0.23
U.S. Treasury Notes
2,270,000 3.500% due 15/02/18 ....... 2,096 0.58
3,190,000 3.750% due 15/11/18 ....... 3,015 0.83
2,945,000 1.500% due 31/12/18** ... 2,660 0.74
3,680,000 1.625% due 31/08/19 ....... 3,344 0.93
1,665,000 1.625% due 30/11/20 ....... 1,514 0.42
345,000 1.125% due 28/02/21 ....... 307 0.09
1,695,000 1.125% due 30/06/21 ....... 1,507 0.42
750,000 2.000% due 31/08/21 ....... 693 0.19
335,000 1.750% due 30/09/22 ....... 306 0.08
55,000 1.375% due 30/06/23 ....... 49 0.01
340,000 1.250% due 31/07/23 ....... 299 0.08
345,000 1.375% due 31/08/23 ....... 306 0.08
745,000 1.625% due 15/05/26 ....... 664 0.18
United Airlines Pass
Through Trust
69,484 5.375% due 15/08/21 ....... 64 0.02
United States Small Business
Administration
78,394 6.290% due 01/01/21 ....... 74 0.02
United States Treasury
Inflation Indexed Bonds
1,418,185 0.125% due 15/04/20 ....... 1,287 0.36
2,509,424 0.625% due 15/07/21 ....... 2,346 0.65
1,382,277 0.125% due 15/01/22 ....... 1,256 0.35
Principal
Amount
Fair Value
EUR ‘000
Fund
%
1,042,620 0.125% due 15/01/23 ...... 943 0.26
1,330,519 0.625% due 15/01/24 ...... 1,243 0.34
912,186 0.125% due 15/07/24 ...... 824 0.23
599,481 0.250% due 15/01/25 ...... 544 0.15
2,681,459 2.375% due 15/01/25 ...... 2,845 0.79
304,449 0.375% due 15/07/25 ...... 280 0.08
5,834,123 0.625% due 15/01/26 ...... 5,463 1.51
358,011 2.375% due 15/01/27 ...... 391 0.11
229,750 1.750% due 15/01/28 ...... 240 0.07
2,354,020 2.500% due 15/01/29 ...... 2,662 0.74
146,393 3.875% due 15/04/29 ...... 188 0.05
978,066 2.125% due 15/02/41 ...... 1,170 0.32
1,649,491 1.375% due 15/02/44 ...... 1,744 0.48
715,393 0.750% due 15/02/45 ...... 657 0.18
304,704 1.000% due 15/02/46 ...... 300 0.08
Verizon Communications
Inc
82,000 2.625% due 21/02/20 ...... 75 0.02
70,000 3.000% due 01/11/21 ...... 65 0.02
115,000 4.400% due 01/11/34 ...... 109 0.03
155,000 4.272% due 15/01/36 ...... 144 0.04
100,000 3.850% due 01/11/42 ...... 85 0.02
90,000 4.522% due 15/09/48 ...... 85 0.02
Viacom Inc
165,000 4.375% due 15/03/43 ...... 135 0.04
5,000 5.250% due 01/04/44 ...... 5 0.00
Volkswagen Group of
America Finance LLC
600,000 1.600% due 20/11/17 ...... 533 0.15
VOLT XLII LLC
180,479 4.250% due 26/03/46 ...... 163 0.05
Wachovia Bank Commercial
Mortgage Trust
330,000 5.342% due 15/12/43 ...... 296 0.08
220,000 5.383% due 15/12/43 ...... 198 0.05
230,000 5.413% due 15/12/43 ...... 205 0.06
550,000 6.158% due 15/02/51 ...... 491 0.14
Wachovia Mortgage Loan
Trust LLC
42,278 3.050% due 20/03/37 ...... 36 0.01
Waldorf Astoria Boca Raton
Trust
480,000 5.124% due 15/06/29 ...... 428 0.12
Walgreens Boots Alliance
Inc
300,000 3.450% due 01/06/26 ...... 278 0.08
WaMu Asset-Backed
Certificates
469,905 0.775% due 25/04/37 ...... 206 0.06
WaMu Mortgage Pass-
Through Certificates
303,024 1.245% due 25/11/34 ...... 258 0.07
484,209 2.791% due 25/09/36 ...... 392 0.11
484,319 3.696% due 25/12/36 ...... 396 0.11
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 87
Principal
Amount
Fair Value
EUR ‘000
Fund
%
208,171 2.766% due 25/03/37 ....... 176 0.05
81,063 2.303% due 25/04/37 ....... 63 0.02
877,683 0.755% due 25/04/45 ....... 738 0.20
456,444 0.845% due 25/08/45 ....... 379 0.10
295,519 0.795% due 25/12/45 ....... 251 0.07
162,215 1.207% due 25/03/47 ....... 110 0.03
Washington Mutual
Mortgage Pass-Through
Certificates
197,998 5.750% due 25/01/36 ....... 156 0.04
373,439 0.625% due 25/06/37 ....... 263 0.07
62,295 1.447% due 25/07/46 ....... 37 0.01
Wells Fargo & Co
100,000 2.175% due 04/03/21 ....... 91 0.03
Wells Fargo Mortgage
Backed Securities Trust
191,228 3.015% due 25/09/34 ....... 174 0.05
262,017 3.076% due 25/03/35 ....... 235 0.07
191,721 2.956% due 25/06/35 ....... 178 0.05
69,867 3.070% due 25/10/35 ....... 62 0.02
325,434 3.088% due 25/05/36 ....... 277 0.07
Westlake Chemical Corp
70,000 3.600% due 15/08/26 ....... 63 0.02
75,000 5.000% due 15/08/46 ....... 67 0.02
Whiting Petroleum Corp
180,000 5.000% due 15/03/19 ....... 156 0.04
45,000 5.750% due 15/03/21 ....... 38 0.01
Williams Partners LP
200,000 4.000% due 15/11/21 ....... 184 0.05
Wisconsin Power & Light
Co
100,000 4.100% due 15/10/44 ....... 98 0.03
Zimmer Biomet Holdings
Inc
50,000 3.550% due 01/04/25 ....... 46 0.01
Zoetis Inc
237,000 3.250% due 01/02/23 ....... 218 0.06
166,798 46.14
Total Long Term Bonds
and Notes ............................ 337,685 93.41
Short Term Investments (5.71%)
Australia (0.29%)
National Australia Bank Ltd
695,000 1.269% due 02/12/16 ....... 619 0.17
Queensland Treasury Corp
NZD 640,000 7.125% due 18/09/17 ....... 433 0.12
1,052 0.29
Bermuda (0.08%)
Sirius International Group
Ltd
USD 310,000 6.375% due 20/03/17 ....... 280 0.08
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Brazil (0.25%)
Brazil Letras do Tesouro
Nacional
BRL 1,500,000 Zero Coupon due 01/04/17 386 0.11
Brazil Notas do Tesouro
Nacional Serie F
1,890,000 10.000% due 01/01/17 .... 527 0.14
913 0.25
Canada (0.45%)
Caisse Centrale Desjardins
USD 460,000 1.253% due 27/03/17 ...... 410 0.11
Canadian Government
Bond
CAD 313,000 4.000% due 01/06/17 ...... 217 0.06
Canadian Imperial Bank of
Commerce
USD 415,000 0.986% due 21/02/17 ...... 369 0.10
Royal Bank of Canada
720,000 1.019% due 03/02/17 ...... 641 0.18
1,637 0.45
Denmark (0.61%)
Realkredit Danmark A/S
DKK 2,000,000 1.000% due 01/01/17 ...... 270 0.07
2,000,000 2.000% due 01/01/17 ...... 270 0.07
8,700,000 1.000% due 01/04/17 ...... 1,177 0.33
3,600,000 2.000% due 01/04/17 ...... 489 0.14
2,206 0.61
France (0.48%)
Banque Federative du Credit
Mutuel SA
EUR 1,000,000
Zero Coupon due
23/03/17 .......................... 1,001 0.28
BPCE SA
500,000
Zero Coupon due
10/03/17 .......................... 500 0.14
Dexia Credit Local SA
USD 250,000 1.168% due 07/11/16 ...... 223 0.06
1,724 0.48
Greece (0.14%)
Hellenic Railways
Organization SA
EUR 200,000 4.028% due 17/03/17 ...... 197 0.05
Hellenic Republic
Government International
Bond
JPY 24,000,000 3.800% due 08/08/17 ...... 204 0.06
National Bank of Greece
SA
EUR 100,000 3.875% due 07/10/16 ...... 100 0.03
501 0.14
Japan (0.42%)
Japan Government Ten Year
Bond
JPY 170,000,000 1.700% due 20/09/17 ...... 1,523 0.42
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
88 Russell Global Bond (Euro Hedged) Fund
Principal
Amount
Fair Value
EUR ‘000
Fund
%
Morocco (0.15%)
Morocco Government
International Bond
EUR 517,000 5.375% due 27/06/17 ....... 537 0.15
Netherlands (0.14%)
Shell International Finance
BV
USD 590,000 1.027% due 15/11/16 ....... 525 0.14
Switzerland (0.14%)
Credit Suisse AG
EUR 500,000 Zero Coupon due 30/03/17 500 0.14
United Kingdom (0.38%)
Experian Finance
Plc
USD 400,000 2.375% due 15/06/17 ....... 358 0.10
Lloyds Bank Plc
EUR 1,000,000 0.241% due 21/08/17 ....... 1,003 0.28
1,361 0.38
United States (2.18%)
American Express Credit
Corp
USD 250,000 1.125% due 05/06/17 ....... 222 0.06
Anheuser-Busch InBev
Finance Inc
527,000 0.924% due 27/01/17 ....... 469 0.13
AT&T Inc
400,000 1.700% due 01/06/17 ....... 357 0.10
Bank of America Corp
925,000 6.400% due 28/08/17 ....... 859 0.24
Bank of America NA
250,000 5.300% due 15/03/17 ....... 226 0.06
BMW US Capital LLC
400,000 1.179% due 02/06/17 ....... 356 0.10
eBay Inc
400,000 0.943% due 28/07/17 ....... 356 0.10
Exxon Mobil Corp
510,000 0.890% due 15/03/17 ....... 454 0.13
Federal Home Loan Bank
Discount Notes
100,000
Zero Coupon due
25/11/16 ........................... 89 0.02
Ford Motor Credit Co
LLC
800,000 4.250% due 03/02/17 ....... 719 0.20
Freddie Mac Discount Notes
400,000 Zero Coupon due 28/10/16 356 0.10
Honda Auto Receivables
Owner Trust
131,002 0.690% due 21/08/17 ....... 117 0.03
Johnson & Johnson
505,000 0.899% due 28/11/16 ....... 450 0.12
Principal
Amount
Fair Value
EUR ‘000
Fund
%
JPMorgan Chase & Co
EUR 300,000 0.102% due 19/02/17 ...... 300 0.08
Kellogg Co
USD 400,000 1.875% due 17/11/16 ...... 356 0.10
Lehman Brothers Holdings
Inc
400,000 1.000% due 25/05/10 ...... 26 0.01
500,000 6.200% due 26/09/14 ...... 34 0.01
Nissan Auto Receivables
Owner Trust
222,931 0.630% due 15/05/17 ...... 198 0.05
Pfizer Inc
400,000 0.967% due 15/05/17 ...... 356 0.10
Sprint Communications Inc
300,000 9.125% due 01/03/17 ...... 274 0.08
US Bank NA
825,000 1.045% due 11/09/17 ...... 734 0.20
Wachovia Corp
655,000 1.120% due 15/06/17 ...... 583 0.16
7,891 2.18
Total Short Term
Investments ........................ 20,650 5.71
Total Transferable
Securities ........................... 358,335 99.12
Money Market Instruments (2.19%)
Japan (1.48%)
Japan Treasury Discount Bill
JPY 160,000,000 Zero Coupon due 31/10/16 1,406 0.39
130,000,000 Zero Coupon due 21/11/16 1,143 0.32
80,000,000 Zero Coupon due 14/11/16 703 0.19
180,000,000 Zero Coupon due 07/11/16 1,582 0.44
60,000,000 Zero Coupon due 12/12/16 528 0.14
5,362 1.48
United States (0.71%)
U.S. Treasury Bill
2,865,000 Zero Coupon due 27/10/16 2,545 0.71
Total Money Market
Instruments ....................... 7,907 2.19
Certificates of Deposit (0.40%)
Canada (0.22%)
Bank of Nova Scotia
350,000 1.583% due 28/03/18 ...... 311 0.08
National Bank of Canada
400,000 1.225% due 24/05/17 ...... 355 0.10
Toronto-Dominion Bank
150,000 0.877% due 01/11/16 ...... 133 0.04
799 0.22
Switzerland (0.12%)
Credit Suisse AG
500,000 1.645% due 12/09/17 ...... 445 0.12
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 89
Principal
Amount
Fair Value
EUR ‘000
Fund
%
United States (0.06%)
State Street Bank & Trust
Co
250,000 1.278% due 13/04/17 ....... 222 0.06
Total Certificates of
Deposit ................................ 1,466 0.40
Commercial Paper (1.18%)
Canada (0.12%)
Ontario Teachers' Finance
Trust
250,000 Zero Coupon due 02/12/16 222 0.06
250,000 Zero Coupon due 17/01/17 222 0.06
444 0.12
New Zealand (0.06%)
ANZ New Zealand Int'l Ltd
250,000 Zero Coupon due 21/02/17 222 0.06
United Kingdom (0.15%)
Vodafone Group
600,000 Zero Coupon due 05/09/17 526 0.15
United States (0.85%)
Barton Capital LLC
400,000 Zero Coupon due 20/12/16 355 0.10
Chariot Funding LLC
250,000 Zero Coupon due 31/03/17 221 0.06
CRC Funding LLC
250,000 Zero Coupon due 05/01/17 222 0.06
Gotham Funding Corp
500,000 Zero Coupon due 22/12/16 444 0.12
Liberty Street Funding Corp
350,000 Zero Coupon due 11/10/16 311 0.09
Principal
Amount
Fair Value
EUR ‘000
Fund
%
LMA SA
550,000 Zero Coupon due 01/03/17 487 0.14
Old Line Funding LLC
250,000 Zero Coupon due 09/01/17 222 0.06
Schlumberger Holdings Corp
400,000 Zero Coupon due 02/12/16 355 0.10
Starbird Funding Corp
500,000 Zero Coupon due 01/11/16 446 0.12
3,063 0.85
Total Commercial Paper .. 4,255 1.18
Number
of Shares
Investment Funds (4.03%)
Ireland (3.51%)
7,608
Russell Investment Company
Plc - Russell Euro Liquidity
Fund - Class C Income
Shares ................................. 7,568 2.09
338
Russell Investment Company
III Plc - The Sterling
Liquidity Fund - Class R
Roll-Up Shares ................... 392 0.11
5,304
Russell Investment Company
III Plc - The U.S. Dollar
Cash Fund II - Class R Roll-
Up Shares ............................ 4,738 1.31
12,698 3.51
Luxembourg (0.52%)
13,942
Natixis International Funds
LUX I Debt and Currencies
Fund .................................... 1,871 0.52
Total Investment Funds .... 14,569 4.03
Total Investments
excluding Financial
Derivative Instruments ..... 386,532 106.92
Financial Derivative Instruments ((0.81)%)
Open Futures Contracts (0.00%)
Notional
Amount
EUR '000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
(12,960)
(87.87)
59 of 90 Day Euro Futures
Short Futures Contracts
Expiring March 2018 ................................................ (22) (0.01)
(6,880)
(114.67)
48 of 90 Day Sterling Futures
Short Futures Contracts
Expiring June 2018 ................................................... (36) (0.01)
(3,285)
(114.27)
23 of 90 Day Sterling Futures
Short Futures Contracts
Expiring March 2018 ................................................ (29) (0.01) (1,886)
(99.27)
19 of Canada 10 Year Bond Futures Short Futures Contracts Expiring December 2016 .......................................... (4) 0.00
1,578
131.52
12 of Euro-BOBL Futures Long Futures Contracts Expiring December 2016 .......................................... 7 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
90 Russell Global Bond (Euro Hedged) Fund
Notional
Amount
EUR '000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
(429)
(143.16)
3 of Euro-BTP Futures
Short Futures Contracts
Expiring December 2016 .......................................... - 0.00
2,794
164.34
17 of Euro-Bund Futures
Long Futures Contracts
Expiring December 2016 .......................................... 23 0.01
8,854
112.07
79 of Euro Schatz Futures
Long Futures Contracts
Expiring December 2016 .......................................... 5 0.00
(1,333)
(1.33)
1 of Japan 10 Year Government Bond Futures
Short Futures Contracts
Expiring December 2016 .......................................... (5) 0.00
1,973
151.76
13 of Long Gilt Futures
Long Futures Contracts
Expiring December 2016 .......................................... (16) 0.00
3,732
116.63
32 of U.S. 10 Year Note Futures
Long Futures Contracts
Expiring December 2016 .......................................... 2 0.00
7,378
97.08
38 of U.S. 2 Year Note Futures
Long Futures Contracts
Expiring December 2016 9 0.00
15,783
108.10
146 of U.S. 5 Year Note Futures
Long Futures Contracts
Expiring December 2016 .......................................... 4 0.00
(2,272)
(151.47)
15 of U.S. Long Bond Futures
Short Futures Contracts
Expiring December 2016 .......................................... 28 0.01
2,110
131.89
16 of Euro-BOBL Futures
Long Futures Contracts
Expiring December 2016 .......................................... 3 0.00
(658)
(164.44)
4 of Euro-Bund Futures
Short Futures Contracts
Expiring December 2016 .......................................... (5) 0.00
1,329
1.33
1 of Japan 10 Year Government Bond Futures
Long Futures Contracts
Expiring December 2016 .......................................... 9 0.00
(1,748)
(116.56)
15 of U.S. 10 Year Note Futures
Short Futures Contracts
Expiring December 2016 .......................................... (2) 0.00
(167)
(167.14)
1 of U.S. Ultra Bond Futures
Short Futures Contracts
Expiring December 2016 .......................................... 4 0.00
42,929
1.00
342 of Euro Currency Futures
Long Futures Contracts
Expiring December 2016 .......................................... (30) (0.01)
(1,750)
(97.21)
9 of U.S. 2 Year Note Futures
Short Futures Contracts
Expiring December 2016 .......................................... - 0.00
(1,511)
(107.93)
14 of U.S. 5 Year Note Futures
Short Futures Contracts
Expiring December 2016 .......................................... (3) 0.00
2,935
1.33
22 of 10 Year Mini JGB Futures
Long Futures Contracts
Expiring December 2016 .......................................... 10 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 91
Notional
Amount
EUR '000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
5,932
131.82
45 of Euro-BOBL Futures
Long Futures Contracts
Expiring December 2016 .......................................... 12 0.00
13,030
164.94
79 of Euro-Bund Futures
Long Futures Contracts
Expiring December 2016 .......................................... 60 0.03
17,336
1.33
13 of Japan 10 Year Government Bond
Futures Long Futures Contracts
Expiring December 2016 .......................................... 66 0.03
4,248
151.70
28 of Long Gilt Futures
Long Futures Contracts
Expiring December 2016 .......................................... (32) (0.01)
4,302
116.27
37 of U.S. 10 Year Note Futures
Long Futures Contracts
Expiring December 2016 .......................................... 15 0.00
9,509
97.03
49 of U.S. 2 Year Note Futures
Long Futures Contracts
Expiring December 2016 .......................................... 17 0.00
10,987
107.72
102 of U.S. 5 Year Note Futures
Long Futures Contracts
Expiring December 2016 .......................................... 43 0.01
8,150
150.92
54 of U.S. Long Bond Futures
Long Futures Contracts
Expiring December 2016 .......................................... (70) (0.03)
396
132.14
3 of Euro-BOBL Futures
Long Futures Contracts
Expiring December 2016 .......................................... - 0.00
112
112.10
1 of Euro Schatz Futures
Long Futures Contracts
Expiring December 2016 .......................................... - 0.00
301
150.35
2 of Long Gilt Futures
Long Futures Contracts
Expiring December 2016 .......................................... - 0.00
350
116.70
3 of U.S. 10 Year Note Futures
Long Futures Contracts
Expiring December 2016 .......................................... - 0.00
583
97.20
3 of U.S. 2 Year Note Futures
Long Futures Contracts
Expiring December 2016 .......................................... - 0.00
598
149.53
4 of U.S. Long Bond Futures
Long Futures Contracts
Expiring December 2016 .......................................... - 0.00
199
66.36
3 of 10 Year Australian Treasury Bond Futures
Long Futures Contracts
Expiring December 2016 .......................................... 1 0.00
296
98.82
3 of Canada 10 Year Bond Futures
Long Futures Contracts
Expiring December 2016 .......................................... 2 0.00
(946)
(189.16)
5 of Euro BUXL 30 Year Bond Futures
Short Futures Contracts
Expiring December 2016 .......................................... (15) 0.00
(9,492)
(131.83)
72 of Euro-BOBL Futures
Short Futures Contracts
Expiring December 2016 .......................................... (19) (0.01)
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
92 Russell Global Bond (Euro Hedged) Fund
Notional
Amount
EUR '000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
1,432
143.15
10 of Euro-BTP Futures
Long Futures Contracts
Expiring December 2016 .......................................... (1) 0.00
(5,259)
(164.35)
32 of Euro-Bund Futures
Short Futures Contracts
Expiring December 2016 .......................................... (43) (0.01)
318
159.22
2 of Euro-Oat Futures
Long Futures Contracts
Expiring December 2016 .......................................... 2 0.00
(448)
(112.04)
4 of Euro Schatz Futures
Short Futures Contracts
Expiring December 2016 .......................................... - 0.00
(1,214)
(151.74)
8 of Long Gilt Futures
Short Futures Contracts
Expiring December 2016 .......................................... 9 0.00
(2,100)
(116.64)
18 of U.S. 10 Year Note Futures
Short Futures Contracts
Expiring December 2016 .......................................... (1) 0.00
(1,944)
(97.19)
10 of U.S. 2 Year Note Futures
Short Futures Contracts
Expiring December 2016 .......................................... - 0.00
(3,891)
(108.07)
36 of U.S. 5 Year Note Futures
Short Futures Contracts
Expiring December 2016 .......................................... (2) 0.00
(1,184)
(148.02)
8 of U.S. Long Bond Futures
Short Futures Contracts
Expiring December 2016 .......................................... (13) 0.00
(827)
(165.35)
5 of U.S. Ultra Bond Futures
Short Futures Contracts
Expiring December 2016 .......................................... 9 0.00
695
99.30
7 of Canada 10 Year Bond Futures
Long Futures Contracts
Expiring December 2016 .......................................... 1 0.00
(3,723)
(143.18)
26 of Euro-BTP Futures
Short Futures Contracts
Expiring December 2016 .......................................... 2 0.00
4,278
164.52
26 of Euro-Bund Futures
Long Futures Contracts
Expiring December 2016 .......................................... 31 0.01
3,997
1.33
3 of Japan 10 Year Government Bond Futures
Long Futures Contracts
Expiring December 2016 .......................................... 19 0.01
(9,492)
151.75
3 of Long Gilt Futures
Long Futures Contracts
Expiring December 2016 .......................................... (4) 0.00
1,432
(116.46)
12 of U.S. 10 Year Note Futures
Short Futures Contracts
Expiring December 2016 .......................................... (3) 0.00
(5,259)
(97.08)
22 of U.S. 2 Year Note Futures
Short Futures Contracts
Expiring December 2016 .......................................... (5) 0.00
318
107.76
10 of U.S. 5 Year Note Futures
Long Futures Contracts
Expiring December 2016 .......................................... 4 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 93
Notional
Amount
EUR '000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
(448)
149.07
6 of U.S. Long Bond Futures
Long Futures Contracts
Expiring December 2016 .......................................... 3 0.00
(1,214)
166.49
12 of U.S. Ultra Bond Futures
Long Futures Contracts
Expiring December 2016 .......................................... (34) (0.01)
Unrealised gain on open futures contracts ......................................................................... 400 0.11
Unrealised loss on open futures contracts .......................................................................... (394) (0.11)
Net unrealised gain (loss) on open futures contracts ................................................. 6 0.00
Open Forward Foreign Currency Exchange Contracts ((0.63)%)
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
07/12/2016 AUD 140 EUR 95 - 0.00
21/10/2016 AUD 530 NZD 564 (4) 0.00
04/10/2016 AUD 102 USD 77 1 0.00
04/10/2016 AUD 2,173 USD 1,667 (4) 0.00
06/10/2016 AUD 5,468 USD 4,106 70 0.02
07/10/2016 AUD 1,291 USD 982 5 0.00
13/10/2016 AUD 261 USD 200 - 0.00
04/10/2016 BRL 1,070 USD 328 2 0.00
04/10/2016 BRL 1,986 USD 468 128 0.04
04/10/2016 BRL 200 USD 60 1 0.00
04/10/2016 BRL 1,000 USD 299 8 0.00
07/10/2016 BRL 4,904 USD 1,508 - 0.00
17/10/2016 BRL 658 USD 202 - 0.00
04/10/2016 CAD 148 USD 114 (2) 0.00
04/10/2016 CAD 1,560 USD 1,206 (17) (0.01)
04/10/2016 CAD 417 USD 323 (5) 0.00
04/10/2016 CAD 3,516 USD 2,657 16 0.01
06/10/2016 CAD 5,391 USD 4,106 (3) 0.00
09/12/2016 CAD 2,723 USD 2,111 (34) (0.01)
09/12/2016 CAD 103 USD 78 - 0.00
11/10/2016 CNH 1,280 USD 188 3 0.00
11/10/2016 CNH 2,582 USD 378 8 0.00
11/10/2016 CNH 2,465 USD 362 7 0.00
11/10/2016 CNH 458 USD 68 - 0.00
24/10/2016 CNH 1,069 USD 160 - 0.00
05/12/2016 CNH 1,317 USD 193 3 0.00
07/12/2016 CNH 1,395 USD 205 3 0.00
07/10/2016 COP 9,479,718 USD 3,192 87 0.02
09/11/2016 COP 8,612,882 USD 2,938 28 0.01
03/10/2016 DKK 4,500 USD 677 2 0.00
03/10/2016 DKK 42,785 USD 6,411 41 0.02
21/10/2016 EUR 358 AUD 531 (3) 0.00
07/12/2016 EUR 102 AUD 150 - 0.00
21/10/2016 EUR 848 CAD 1,248 4 0.00
07/12/2016 EUR 166 CAD 240 4 0.00
21/10/2016 EUR 488 CHF 529 3 0.00
21/10/2016 EUR 53 CZK 1,441 - 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
94 Russell Global Bond (Euro Hedged) Fund
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
21/10/2016 EUR 215 DKK 1,597 - 0.00
21/12/2016 EUR 510 DKK 3,800 - 0.00
21/10/2016 EUR 144 GBP 123 2 0.00
21/10/2016 EUR 3,181 GBP 2,678 87 0.02
21/10/2016 EUR 975 GBP 840 4 0.00
07/12/2016 EUR 1,490 GBP 1,250 47 0.02
21/12/2016 EUR 692 GBP 590 11 0.00
06/10/2016 EUR 238 GBP 202 4 0.00
21/10/2016 EUR 80 ILS 342 (1) 0.00
21/10/2016 EUR 5,440 JPY 616,228 26 0.01
21/10/2016 EUR 4,601 JPY 528,963 (47) (0.02)
07/12/2016 EUR 5,065 JPY 584,000 (65) (0.02)
21/12/2016 EUR 17,379 JPY 1,988,160 (87) (0.02)
21/12/2016 EUR 1,136 JPY 130,000 (6) 0.00
21/10/2016 EUR 1,118 MXN 23,952 20 0.01
07/12/2016 EUR 174 MXN 3,650 8 0.00
21/10/2016 EUR 104 NOK 982 (6) 0.00
21/10/2016 EUR 1,081 NOK 10,031 (35) (0.02)
21/12/2016 EUR 614 NOK 5,700 (19) (0.01)
21/10/2016 EUR 68 NZD 107 (1) 0.00
21/10/2016 EUR 555 PLN 2,403 (3) 0.00
21/12/2016 EUR 265 PLN 1,150 (1) 0.00
21/10/2016 EUR 160 SEK 1,518 2 0.00
21/10/2016 EUR 78 SGD 117 1 0.00
21/10/2016 EUR 364 THB 14,317 (3) 0.00
21/10/2016 EUR 133 TRY 457 (2) 0.00
04/10/2016 EUR 22,116 USD 24,762 82 0.02
04/10/2016 EUR 37 USD 41 - 0.00
04/10/2016 EUR 12,856 USD 14,381 59 0.02
04/10/2016 EUR 363 USD 408 - 0.00
04/10/2016 EUR 96 USD 108 - 0.00
04/10/2016 EUR 21,793 USD 24,649 (141) (0.04)
06/10/2016 EUR 3,705 USD 4,129 31 0.01
07/10/2016 EUR 63,761 USD 71,769 (93) (0.03)
07/10/2016 EUR 68 USD 76 1 0.00
13/10/2016 EUR 3,191 USD 3,569 17 0.01
21/10/2016 EUR 546 USD 616 (2) 0.00
21/10/2016 EUR 12,563 USD 14,116 12 0.00
02/11/2016 EUR 22,178 USD 24,891 59 0.02
02/11/2016 EUR 22,189 USD 24,936 32 0.01
07/12/2016 EUR 450 USD 507 - 0.00
07/12/2016 EUR 44 USD 50 - 0.00
07/12/2016 EUR 14,278 USD 16,000 82 0.02
12/12/2016 EUR 250 USD 282 - 0.00
12/12/2016 EUR 250 USD 282 - 0.00
21/12/2016 EUR 8,264 USD 9,350 (25) (0.01)
21/12/2016 EUR 28,537 USD 32,220 (27) (0.01)
21/12/2016 EUR 1,935 USD 2,190 (6) 0.00
21/12/2016 EUR 8,265 USD 9,350 (24) (0.01)
21/10/2016 EUR 197 ZAR 3,152 (6) 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 95
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
21/12/2016 EUR 640 ZAR 10,600 (33) (0.01)
21/10/2016 GBP 201 EUR 231 1 0.00
06/10/2016 GBP 20,441 EUR 24,088 (461) (0.13)
06/10/2016 GBP 20,437 EUR 24,088 (467) (0.13)
06/10/2016 GBP 20,433 EUR 24,088 (471) (0.13)
06/10/2016 GBP 20,432 EUR 24,088 (472) (0.13)
04/10/2016 GBP 4,271 USD 5,557 (8) 0.00
04/10/2016 GBP 117 USD 155 (3) 0.00
06/10/2016 GBP 3,164 USD 4,197 (77) (0.02)
13/10/2016 GBP 307 USD 400 (1) 0.00
13/10/2016 GBP 153 USD 200 (1) 0.00
13/10/2016 GBP 154 USD 200 - 0.00
13/10/2016 GBP 306 USD 400 (2) 0.00
13/10/2016 GBP 305 USD 400 (3) 0.00
07/12/2016 GBP 30 USD 39 - 0.00
07/10/2016 IDR 632,510 USD 49 - 0.00
21/12/2016 JPY 222,541 AUD 2,870 11 0.00
21/10/2016 JPY 187,166 EUR 1,619 25 0.01
21/12/2016 JPY 17,000 EUR 149 - 0.00
21/12/2016 JPY 57,189 IDR 7,500,000 (1) 0.00
04/10/2016 JPY 10,200 USD 99 2 0.00
04/10/2016 JPY 200,800 USD 1,994 (10) 0.00
06/10/2016 JPY 253,545 USD 2,442 55 0.02
07/10/2016 JPY 129,576 USD 1,289 (8) 0.00
13/10/2016 JPY 20,384 USD 200 1 0.00
13/10/2016 JPY 20,129 USD 200 (1) 0.00
13/10/2016 JPY 40,768 USD 400 2 0.00
13/10/2016 JPY 20,297 USD 200 - 0.00
02/11/2016 JPY 84,500 USD 834 1 0.00
20/12/2016 JPY 155,259 USD 1,550 (10) 0.00
21/12/2016 JPY 898,000 USD 8,800 87 0.02
13/10/2016 KRW 210,000 USD 192 (2) 0.00
10/11/2016 KRW 258,431 USD 231 3 0.00
21/10/2016 MXN 5,648 USD 300 (8) 0.00
21/10/2016 MXN 3,936 USD 200 3 0.00
21/10/2016 MXN 14,755 USD 794 (30) (0.01)
09/12/2016 MXN 5,715 USD 287 5 0.00
07/10/2016 MYR 4,696 USD 1,134 1 0.00
20/12/2016 MYR 1,648 USD 400 (3) 0.00
21/12/2016 NOK 2,825 SEK 2,900 12 0.00
21/10/2016 NOK 3,368 USD 400 19 0.01
09/12/2016 NOK 27,809 USD 3,370 98 0.03
21/10/2016 NZD 564 AUD 527 6 0.00
06/10/2016 NZD 5,711 USD 4,126 24 0.01
13/10/2016 NZD 273 USD 200 (1) 0.00
04/11/2016 NZD 554 USD 400 2 0.00
07/10/2016 PHP 111,427 USD 2,308 (9) 0.00
09/12/2016 PLN 1,651 USD 424 6 0.00
13/10/2016 RUB 12,800 USD 193 9 0.00
18/10/2016 RUB 3,974 USD 62 1 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
96 Russell Global Bond (Euro Hedged) Fund
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
21/10/2016 SEK 8,400 EUR 884 (12) 0.00
10/11/2016 SGD 53 USD 39 - 0.00
10/11/2016 SGD 189 USD 139 - 0.00
10/11/2016 SGD 506 USD 372 - 0.00
09/12/2016 SGD 205 USD 151 - 0.00
07/10/2016 THB 78,512 USD 2,268 (2) 0.00
21/10/2016 TRY 417 USD 141 (2) 0.00
21/10/2016 TRY 278 USD 94 (1) 0.00
21/10/2016 TRY 759 USD 257 (4) 0.00
09/12/2016 TRY 7,118 USD 2,374 (30) (0.01)
20/12/2016 TRY 1,198 USD 400 (6) 0.00
04/10/2016 USD 1,381 AUD 1,812 (5) 0.00
04/10/2016 USD 354 AUD 463 - 0.00
06/10/2016 USD 4,106 AUD 5,468 (70) (0.02)
07/10/2016 USD 11,371 AUD 14,931 (49) (0.02)
07/10/2016 USD 256 AUD 333 1 0.00
13/10/2016 USD 200 AUD 261 - 0.00
13/10/2016 USD 200 AUD 261 - 0.00
13/10/2016 USD 200 AUD 264 (2) 0.00
13/10/2016 USD 90 AUD 118 - 0.00
02/11/2016 USD 1,666 AUD 2,173 3 0.00
21/12/2016 USD 433 AUD 580 (9) 0.00
04/10/2016 USD 405 BRL 1,650 (92) (0.03)
04/10/2016 USD 302 BRL 1,010 (8) 0.00
04/10/2016 USD 405 BRL 1,650 (92) (0.03)
07/10/2016 USD 1,497 BRL 4,904 (10) 0.00
17/10/2016 USD 1,654 BRL 5,327 18 0.01
09/11/2016 USD 1,494 BRL 4,904 1 0.00
21/12/2016 USD 116 BRL 400 (4) 0.00
04/01/2017 USD 291 BRL 1,000 (7) 0.00
04/04/2017 USD 383 BRL 1,300 3 0.00
04/04/2017 USD 57 BRL 200 (1) 0.00
03/10/2017 USD 368 BRL 1,300 4 0.00
03/10/2017 USD 326 BRL 1,200 (8) 0.00
04/10/2016 USD 3,397 CAD 4,386 53 0.01
04/10/2016 USD 63 CAD 82 - 0.00
04/10/2016 USD 912 CAD 1,173 18 0.01
21/10/2016 USD 800 CAD 1,043 6 0.00
02/11/2016 USD 2,658 CAD 3,516 (16) (0.01)
21/12/2016 USD 1,656 CAD 2,157 12 0.00
06/10/2016 USD 5,767 CHF 5,673 (77) (0.02)
09/12/2016 USD 5,458 CHF 5,323 (48) (0.02)
21/12/2016 USD 250 CHF 240 1 0.00
11/10/2016 USD 298 CNH 2,027 (5) 0.00
11/10/2016 USD 738 CNH 4,840 11 0.00
11/10/2016 USD 148 CNH 1,004 (2) 0.00
05/12/2016 USD 198 CNH 1,317 1 0.00
07/12/2016 USD 210 CNH 1,395 1 0.00
20/12/2016 USD 800 CNY 5,370 (3) 0.00
07/10/2016 USD 3,250 COP 9,479,718 (35) (0.02)
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 97
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
03/10/2016 USD 6,408 DKK 42,635 (23) (0.01)
03/10/2016 USD 682 DKK 4,595 (10) 0.00
03/01/2017 USD 624 DKK 4,060 8 0.00
03/04/2017 USD 683 DKK 4,500 (2) 0.00
03/04/2017 USD 1,203 DKK 7,959 (8) 0.00
04/10/2016 USD 24,861 EUR 22,178 (55) (0.02)
04/10/2016 USD 24,905 EUR 22,189 (28) (0.01)
06/10/2016 USD 1,652 EUR 1,482 (12) 0.00
21/10/2016 USD 150 EUR 134 (1) 0.00
21/10/2016 USD 761 EUR 673 3 0.00
21/10/2016 USD 556 EUR 498 (3) 0.00
21/10/2016 USD 392 EUR 350 (1) 0.00
21/10/2016 USD 229 EUR 202 2 0.00
21/10/2016 USD 448 EUR 399 - 0.00
07/12/2016 USD 500 EUR 444 - 0.00
21/12/2016 USD 880 EUR 785 (5) 0.00
21/12/2016 USD 150 EUR 133 - 0.00
06/10/2016 USD 2,702 EUR 2,416 (12) 0.00
06/10/2016 USD 15,233 EUR 13,664 (110) (0.03)
06/10/2016 USD 15,240 EUR 13,664 (104) (0.03)
06/10/2016 USD 15,237 EUR 13,664 (106) (0.03)
06/10/2016 USD 50 EUR 45 0 0.00
06/10/2016 USD 15,236 EUR 13,664 (107) (0.03)
04/10/2016 USD 5,806 GBP 4,388 95 0.03
06/10/2016 USD 2,518 GBP 1,898 46 0.02
13/10/2016 USD 800 GBP 608 9 0.00
13/10/2016 USD 596 GBP 446 14 0.00
21/10/2016 USD 1,314 GBP 1,000 13 0.00
02/11/2016 USD 5,560 GBP 4,271 7 0.00
07/12/2016 USD 130 GBP 100 - 0.00
21/12/2016 USD 3,109 GBP 2,350 45 0.02
07/10/2016 USD 47 IDR 632,510 (1) 0.00
09/11/2016 USD 49 IDR 632,510 - 0.00
10/11/2016 USD 30 INR 2,031 - 0.00
04/10/2016 USD 833 JPY 84,500 (1) 0.00
04/10/2016 USD 1,261 JPY 126,500 11 0.00
07/10/2016 USD 1,897 JPY 196,098 (36) (0.02)
07/10/2016 USD 7,944 JPY 799,935 39 0.02
13/10/2016 USD 400 JPY 41,115 (5) 0.00
13/10/2016 USD 1,029 JPY 106,258 (18) (0.01)
31/10/2016 USD 781 JPY 80,000 (9) 0.00
31/10/2016 USD 765 JPY 80,000 (23) (0.01)
07/11/2016 USD 1,094 JPY 110,000 6 0.00
07/11/2016 USD 696 JPY 70,000 3 0.00
14/11/2016 USD 794 JPY 80,000 3 0.00
21/11/2016 USD 1,301 JPY 130,000 13 0.00
12/12/2016 USD 587 JPY 60,000 (6) 0.00
20/12/2016 USD 400 JPY 40,511 (1) 0.00
13/10/2016 USD 186 KRW 210,000 (4) 0.00
10/11/2016 USD 243 KRW 271,384 (3) 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
98 Russell Global Bond (Euro Hedged) Fund
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
10/11/2016 USD 304 KRW 334,157 1 0.00
10/11/2016 USD 106 KRW 116,724 - 0.00
10/11/2016 USD 701 KRW 770,606 1 0.00
10/11/2016 USD 36 KRW 40,202 - 0.00
10/11/2016 USD 570 KRW 625,932 2 0.00
10/11/2016 USD 280 KRW 312,847 (3) 0.00
10/11/2016 USD 115 KRW 126,673 - 0.00
20/10/2016 USD 147 MXN 2,888 (2) 0.00
20/10/2016 USD 706 MXN 13,891 (10) 0.00
20/10/2016 USD 186 MXN 3,671 (3) 0.00
21/10/2016 USD 114 MXN 2,240 (1) 0.00
21/10/2016 USD 183 MXN 3,372 8 0.00
09/12/2016 USD 149 MXN 2,966 (3) 0.00
09/12/2016 USD 1,004 MXN 18,767 37 0.01
21/12/2016 USD 579 MXN 10,800 23 0.01
07/10/2016 USD 1,153 MYR 4,696 16 0.01
09/11/2016 USD 1,132 MYR 4,696 (1) 0.00
15/11/2016 USD 285 MYR 1,153 6 0.00
15/11/2016 USD 92 MYR 374 1 0.00
06/10/2016 USD 4,104 NOK 34,376 (177) (0.05)
21/10/2016 USD 407 NOK 3,368 (13) 0.00
09/12/2016 USD 452 NOK 3,674 (7) 0.00
07/10/2016 USD 16,800 NZD 23,225 (78) (0.02)
07/10/2016 USD 285 NZD 390 1 0.00
13/10/2016 USD 200 NZD 274 1 0.00
13/10/2016 USD 876 NZD 1,193 8 0.00
04/11/2016 USD 410 NZD 554 7 0.00
07/10/2016 USD 2,385 PHP 111,427 78 0.02
09/11/2016 USD 2,298 PHP 111,427 3 0.00
18/10/2016 USD 61 RUB 3,974 (2) 0.00
15/12/2016 USD 61 RUB 3,974 (1) 0.00
05/10/2016 USD 904 SAR 3,400 (2) 0.00
06/10/2016 USD 4,088 SEK 35,094 (8) 0.00
10/11/2016 USD 74 SGD 101 - 0.00
10/11/2016 USD 571 SGD 773 4 0.00
10/11/2016 USD 102 SGD 138 1 0.00
10/11/2016 USD 554 SGD 746 6 0.00
09/12/2016 USD 8,301 SGD 11,266 31 0.01
07/10/2016 USD 2,265 THB 78,512 (1) 0.00
09/11/2016 USD 2,267 THB 78,512 2 0.00
21/10/2016 USD 237 TRY 728 (4) 0.00
21/10/2016 USD 237 TRY 727 (4) 0.00
10/11/2016 USD 375 TWD 11,960 (6) 0.00
10/11/2016 USD 248 TWD 7,884 (3) 0.00
10/11/2016 USD 65 TWD 2,055 (1) 0.00
10/11/2016 USD 85 TWD 2,690 (1) 0.00
10/11/2016 USD 127 TWD 4,042 (2) 0.00
10/11/2016 USD 222 ZAR 3,155 (5) 0.00
09/12/2016 USD 148 ZAR 2,054 1 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 99
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
21/12/2016 USD 238 ZAR 3,500 (11) 0.00
09/12/2016 ZAR 26,194 USD 1,809 63 0.02
Unrealised gain on open forward foreign currency exchange contracts ............................... 2,136 0.59
Unrealised loss on open forward foreign currency exchange contracts ................................ (4,397) (1.22)
Net unrealised gain (loss) on open forward foreign currency exchange contracts ........ (2,261) (0.63)
Options Purchased (0.00%)
Notional
Amount
EUR ‘000
Fair Value
EUR ‘000
Fund
%
800 Call at 1.30 USD GBP Expiring October 2016 ............................................................................. 3 0.00
800 Call at 1.24 USD GBP Expiring October 2016 ............................................................................. - 0.00
800 Call at 1.30 USD GBP Expiring October 2016 ............................................................................. 4 0.00
Futures options purchased at fair value (Premium received EUR 34,353) ............................... 7 0.00
Options Written (0.00%)
Notional
Amount
EUR ‘000
Fair Value
EUR ‘000
Fund
%
(200) Call at 87.00 USD RUB Expiring December 2016 ....................................................................... - 0.00
(500) Put at 0.75 AUD USD Expiring October 2016 ............................................................................. (1) 0.00
(700) Call at 20.50 USD MXN Expiring October 2016 ......................................................................... (2) 0.00
(300) Call at 20.50 USD MXN Expiring October 2016 ......................................................................... (1) 0.00
(800) Call at 1.24 USD GBP Expiring October 2016 ............................................................................. - 0.00
(800) Call at 1.24 USD GBP Expiring October 2016 ............................................................................. - 0.00
Futures options written at fair value (Premium received EUR 32,326) .................................... (4) 0.00
Swaptions Purchased (0.00%)
Notional
Amount
EUR ‘000 Description
Fair Value
EUR ‘000
Fund
%
200 Put at 2.94 on 30 Year IRO Expiring August 2018 ....................................................................... 4 0.00
800 Call at 1.00 on 5 Year IRO Expiring December 2016 .................................................................. 2 0.00
800 Call at 1.00 on 5 Year IRO Expiring December 2016 .................................................................. 1 0.00
1,200 Call at 1.00 on 5 Year IRO Expiring December 2016 .................................................................. 2 0.00
2,700 Call at 287.50 on 5 Year Xover Expiring October 2016 ............................................................... 1 0.00
Swaptions purchased at fair value (Premium paid EUR 49,363) .............................................. 10 0.00
Swaptions Written (0.00%)
Notional
Amount
EUR ‘000 Description
Fair Value
EUR ‘000
Fund
%
(700) Put at 2.80 on 5 Year IRO Expiring August 2018 ......................................................................... (1) 0.00
(1,600) Call at 0.77 on 5 Year IRO Expiring December 2016 .................................................................. (1) 0.00
(1,600) Call at 0.77 on 5 Year IRO Expiring December 2016 .................................................................. (1) 0.00
(2,400) Call at 0.77 on 5 Year IRO Expiring December 2016 .................................................................. (1) 0.00
(2,700) Put at 400.00 on 5 Year Xover Expiring October 2016 ................................................................ (1) 0.00
Swaptions written at fair value (Premium received EUR 45,635) ............................................. (5) 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
100 Russell Global Bond (Euro Hedged) Fund
Interest Rate Swaps ((0.10)%)
Ccy
Notional
Amount
‘000
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
USD 4,890 1.05%
USD 3 Month
LIBOR 30/11/2020
8 0.00
USD 2,300 1.03%
USD 6 Month
LIBOR 01/11/2026
- 0.00
GBP 60 0.98%
GBP 6 Month
LIBOR 07/11/2056
(2) 0.00
JPY 34,400 0.56%
JPY 6 Month
LIBOR 08/12/2046
(10) 0.00
GBP 400 0.79%
GBP 6 Month
LIBOR 28/09/2066
14 0.00
GBP 1,500 2.25%
GBP 6 Month
LIBOR 17/12/2019
(108) (0.03)
CAD 300 2.30%
CAD 3 Month
CDOR 15/12/2025
(22) (0.01)
USD 6,500 2.00%
USD 3 Month
LIBOR 16/12/2020
(244) (0.07)
USD 2,500 2.25%
USD 3 Month
LIBOR 16/12/2022
(151) (0.04)
USD 5,600 2.25%
USD 3 Month
LIBOR 15/06/2026
(414) (0.12)
USD 4,800 2.00%
USD 3 Month
LIBOR 15/06/2021
(193) (0.05)
GBP 300 1.75%
GBP 6 Month
LIBOR 15/03/2047
(73) (0.02)
USD 42,200 1.50%
USD 3 Month
LIBOR 15/06/2019
(183) (0.05)
USD 2,600 1.45%
USD 3 Month
LIBOR 28/06/2021
(7) 0.00
GBP 3,900 0.50%
GBP 6 Month
LIBOR 15/03/2019
(9) 0.00
KRW 1,700,000
KRW 3 Month
KWCDC 1.85% 30/07/2020
33 0.01
CAD
400
CAD 3 Month
CDOR 5.80% 19/12/2023
62 0.02
JPY
350,000
JPY 6 Month
LIBOR 1.50% 19/06/2033
649 0.19
JPY
100,000
JPY 6 Month
LIBOR 0.50% 17/09/2021
26 0.01
JPY
420,000
JPY 6 Month
LIBOR 0.25% 20/12/2019
46 0.01
JPY
86,000
JPY 6 Month
LIBOR 1.25% 17/06/2035
135 0.04
JPY
25,000
JPY 6 Month
LIBOR 0.30% 18/03/2026
6 0.00
JPY
250,000
JPY 6 Month
LIBOR 0.00% 20/09/2019
7 0.00
GBP
800
GBP 12 Month UK
RPI 3.40% 15/06/2030
42 0.01
GBP
100
GBP 12 Month
LIBOR 3.33% 12/01/2045
8 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 101
Ccy
Notional
Amount
‘000
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
GBP
940
GBP Less than
Month UKRPI 3.14% 14/01/2030
9 0.00
Interest rate swaps at positive fair value ........................................................................................ 1,045 0.29
Interest rate swaps at negative fair value ....................................................................................... (1,416) (0.39)
Interest rate swaps at fair value ................................................................................................. (371) (0.10)
Credit Default Swaps ((0.08)%)
Ccy
Notional
Amount
‘000
Security
Name
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
USD 2,600
Italy
Government
International
Bond # 1.00% 20/09/2020
(27) (0.02)
EUR 29 Volkswagen AG # 1.00% 20/12/2020 - 0.00
EUR 15 Volkswagen AG # 1.00% 20/12/2020 - 0.00
EUR 37 Volkswagen AG # 1.00% 20/12/2020 - 0.00
EUR 29 Volkswagen AG # 1.00% 20/12/2020 - 0.00
EUR 34 Volkswagen AG # 1.00% 20/12/2020 - 0.00
EUR 34 Volkswagen AG # 1.00% 20/12/2020 - 0.00
EUR 13 Volkswagen AG # 1.00% 20/12/2020 - 0.00
EUR 29 Volkswagen AG # 1.00% 20/12/2020 - 0.00
EUR 81 Volkswagen AG # 1.00% 20/12/2020 - 0.00
EUR 37 Volkswagen AG # 1.00% 20/12/2020 - 0.00
EUR 24
Anheuser Busch
InBev NV # 1.00% 20/12/2020 1 0.00
EUR 24
Anheuser Busch
InBev NV # 1.00% 20/12/2020 1 0.00
EUR 59
Anheuser Busch
InBev NV # 1.00% 20/12/2020 1 0.00
EUR 23
Anheuser Busch
InBev NV # 1.00% 20/12/2020 1 0.00
EUR 23
Anheuser Busch
InBev NV # 1.00% 20/12/2020 1 0.00
EUR 23
Anheuser Busch
InBev NV # 1.00% 20/12/2020 1 0.00
EUR 49
Anheuser-Busch
InBev SA/NV # 1.00% 20/12/2020 1 0.00
EUR 25
Anheuser Busch
InBev NV # 1.00% 20/12/2020 1 0.00
EUR 20
Anheuser Busch
InBev NV # 1.00% 20/12/2020 - 0.00
EUR 21
Vodafone Group
Plc 1.00% # 20/12/2020 - 0.00
USD 143
Newell
Rubbermaid Inc 1.00% # 20/12/2020 (2) 0.00
EUR 100
Vodafone Group
Plc 1.00% # 20/12/2020 (1) 0.00
EUR 65
Anheuser Busch
InBev NV # 1.00% 20/12/2020 2 0.00
EUR 3
Anheuser Busch
InBev NV # 1.00% 20/12/2020 - 0.00
USD 212 Republic of Italy # 1.00% 20/12/2020 (3) 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
102 Russell Global Bond (Euro Hedged) Fund
Ccy
Notional
Amount
‘000
Security
Name
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
USD 195 Stora Enso Corp 1.00% # 20/12/2020 (5) 0.00
USD 313
Republic of
Korea 1.00% # 20/12/2020 (8) 0.00
USD 147
Republic of
Korea 1.00% # 20/12/2020
(4) 0.00
EUR 81 Atlantia SpA 1.00% # 20/06/2021 (2) 0.00
USD 249 Republic of Italy # 1.00% 20/06/2021 (4) 0.00
USD 406 Republic of Italy # 1.00% 20/06/2021 (7) 0.00
USD 243 Republic of Italy # 1.00% 20/06/2021 (4) 0.00
USD 84
Italy
Government
International
Bond # 1.00% 20/06/2021 (1) 0.00
USD 61
Italy
Government
International
Bond # 1.00% 20/06/2021 (1) 0.00
USD 1,400 Republic of Italy # 1.00% 20/06/2021 (24) (0.02)
USD 20 Republic of Italy # 1.00% 20/06/2021 - 0.00
USD 253 Republic of Italy # 1.00% 20/06/2021 (4) 0.00
USD 247 Republic of Italy # 1.00% 20/06/2021 (4) 0.00
USD 500 Republic of Italy # 1.00% 20/06/2021 (9) 0.00
USD 720 Republic of Italy # 1.00% 20/06/2021 (12) (0.01)
EUR 427
iTraxx Europe
Senior Financials # 1.00% 20/06/2021 1 0.00
EUR 213
iTraxx Europe
Senior Financials # 1.00% 20/06/2021 1 0.00
EUR 54
iTraxx Europe
Senior Financials # 1.00% 20/06/2021 - 0.00
USD 150 Republic of Italy # 1.00% 20/06/2021 (3) 0.00
USD 360 Republic of Italy # 1.00% 20/06/2021 (6) 0.00
USD 261
Italy
Government
International
Bond # 1.00% 20/06/2021 (4) 0.00
USD 348 Republic of Italy # 1.00% 20/06/2021 (6) 0.00
USD 77
Italy
Government
International
Bond # 1.00% 20/06/2021 (1) 0.00
EUR 228 Fortum Oyj 1.00% # 20/06/2022 (3) 0.00
EUR 62 Fortum Oyj 1.00% # 20/06/2022 (1) 0.00
EUR 150
Anglo American
Capital Plc 5.00% # 20/12/2021 (11) 0.00
EUR 170
Jaguar Land
Rover
Automotive Plc 5.00% # 20/12/2021 (24) (0.02)
EUR 600 Volkswagen AG # 1.00% 20/09/2018 6 0.00
EUR 650
Commerzbank
AG # 1.00% 20/12/2020 (50) (0.02)
EUR 1,450
Commerzbank
AG 1.00% # 20/12/2020 5 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 103
Ccy
Notional
Amount
‘000
Security
Name
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
EUR 250
Imperial
Tobacco Group
Plc # 1.00% 20/12/2020 4 0.00
USD 250
Reynolds
American Inc 1.00% # 20/12/2020 (6) 0.00
EUR 150
Imperial
Tobacco Group
Plc # 1.00% 20/12/2020 2 0.00
USD 200
Reynolds
American Inc 1.00% # 20/12/2020 (5) 0.00
EUR 100
Imperial
Tobacco Group
Plc # 1.00% 20/12/2020 1 0.00
USD 100
Reynolds
American Inc 1.00% # 20/12/2020 (3) 0.00
EUR 50
Imperial
Tobacco Group
Plc # 1.00% 20/12/2020 1 0.00
USD 50
Reynolds
American Inc 1.00% # 20/12/2020 (1) 0.00
EUR 150
Veolia
Environnement 1.00% # 20/12/2020 (4) 0.00
EUR 100
LVMH Moet
Hennessy Louis
Vuitton 1.00% # 20/12/2020 (3) 0.00
USD 200
Omnicom Group
Inc 1.00% # 20/12/2020 (5) 0.00
USD 150
Omnicom Group
Inc 1.00% # 20/12/2020 (4) 0.00
USD 100
Omnicom Group
Inc 1.00% # 20/12/2020 (3) 0.00
EUR 200
Koninklijke
DSM NV 1.00% # 20/12/2020 (7) 0.00
EUR 600 HSBC Bank Plc 1.00% # 20/12/2020 (9) 0.00
EUR 100
LVMH Moet
Hennessy Louis
Vuitton 1.00% # 20/12/2020 (3) 0.00
USD 650
General Mills
Inc 1.00% # 20/12/2020 (18) (0.01)
EUR 50
LVMH Moet
Hennessy Louis
Vuitton 1.00% # 20/12/2020 (2) 0.00
EUR 100
LVMH Moet
Hennessy Louis
Vuitton 1.00% # 20/12/2020 (3) 0.00
EUR 300
Standard
Chartered Bank 1.00% # 20/12/2021 20 0.02
USD 257 MetLife Inc # 1.00% 20/12/2021 (2) 0.00
USD 257
American
International
Group Inc 1.00% # 20/12/2021 (2) 0.00
EUR 200
Bayerische
Landesbank 1.00% # 20/12/2021 (2) 0.00
EUR 424
iTraxx Europe
Senior Financials # 1.00% 20/06/2021 1 0.00
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
104 Russell Global Bond (Euro Hedged) Fund
Ccy
Notional
Amount
‘000
Security
Name
Fund
Pays
Fund
Receives
Termination
Date
Fair Value
EUR ‘000
Fund
%
USD 344 Republic of Italy # 1.00% 20/06/2021 (6) 0.00
USD 261
Italy
Government
International
Bond # 1.00% 20/06/2021 (4) 0.00
USD 64
Italy
Government
International
Bond # 1.00% 20/06/2021 (1) 0.00
EUR 2,500
iTraxx Europe
Senior Financials # 1.00% 20/12/2021 (3) 0.00
EUR 1,166
iTraxx Europe
Senior Financials # 1.00% 20/12/2021 (1) 0.00
EUR 266
iTraxx Europe
Senior Financials # 1.00% 20/12/2021 - 0.00
EUR 951
iTraxx Europe
Senior Financials # 1.00% 20/12/2021 (1) 0.00
EUR 1,306
iTraxx Europe
Senior Financials # 1.00% 20/12/2021 (1) 0.00
EUR 812
iTraxx Europe
Senior Financials # 1.00% 20/12/2021 (1) 0.00
USD 100
Mexico
Government
International
Bond # 1.00% 20/09/2019 - 0.00
USD 100
Mexico
Government
International
Bond # 1.00% 20/09/2019 - 0.00
EUR 300 Tesco Plc # 1.00% 20/12/2019 (3) 0.00
EUR 200 Tesco Plc # 1.00% 20/12/2019 (2) 0.00
EUR 100 Tesco Plc # 1.00% 20/12/2019 (1) 0.00
EUR 500
Volkswagen
International
Finance NV # 1.00% 20/03/2017 2 0.00
USD 400
CMBX.NA.AA
A.8 # 0.50% 17/10/2057 (9) 0.00
USD 200 MetLife Inc # 1.00% 20/12/2020 - 0.00
USD 400 Citigroup Inc # 1.00% 20/12/2020 5 0.00
USD 400 MetLife Inc # 1.00% 20/12/2021 (4) 0.00
USD 1,000
PPG Industries
Inc 0.82% # 20/03/2018 (9) 0.00
Credit default swaps at positive fair value .................................................................................................... 59 0.02
Credit default swaps at negative fair value ................................................................................................... (359) (0.10)
Credit default swaps at fair value ............................................................................................................. (300) (0.08)
Total Financial Derivative Instruments .................................................................................................... (2,918) (0.81)
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 105
Fair Value
EUR ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or Loss
(107.93%) ..................................................................................................................................................... 390,189 107.93
Total Financial Liabilities at Fair Value through Profit or
Loss ((1.82)%) ............................................................................................................................................. (6,575) (1.82)
Net Financial Assets at Fair Value through Profit or Loss
(106.11%) .................................................................................................................................................. 383,614 106.11
Other Net Liabilities ((6.11)%) ............................................................................................................... (22,103) (6.11)
Net Assets .................................................................................................................................................. 361,511 100.00
#
In the event of bankruptcy or modified restructuring, the Fund will pay/receive the notional amount to/from the counterparty.
* Perpetual Bond.
** Partly held as collateral by the brokers and counterparties in connection with the margin requirements for futures held by the Fund.
Analysis of gross assets
% of
gross assets
Transferable securities admitted to an official stock exchange listing .................................................................... 46.25
Transferable securities dealt in on a regulated market ........................................................................................... 30.84
Other transferable securities of the type referred to in Regulation 68(1)(a), (b) and (c) ........................................ 6.03
Certificates of deposits ........................................................................................................................................... 0.33
Commercial papers ................................................................................................................................................ 0.97
Investment funds (UCITS) ..................................................................................................................................... 3.31
Exchange traded financial derivative instruments ................................................................................................. 0.09
Over the counter financial derivative instruments ................................................................................................. 0.74
Other assets ............................................................................................................................................................ 11.44
100.00
The brokers for the open futures contracts are:
Credit Suisse
Goldman Sachs
JP Morgan Chase Bank
Merrill Lynch
UBS
The counterparties for the open forward foreign currency exchange contracts are:
Australia and New Zealand Banking Group JP Morgan
Bank of America Merrill Lynch International
Bank of Montreal Morgan Stanley
Barclays Bank National Australia Bank
BNP Paribas Royal Bank of Canada
Brown Brothers Harriman Royal Bank of Scotland
Citibank Société Générale
Citigroup Standard Chartered Bank
Commonwealth Bank of Australia State Street Bank
Credit Suisse Toronto Dominion Bank
Deutsche Bank UBS AG
Goldman Sachs Westpac Banking Corporation
HSBC
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
106 Russell Global Bond (Euro Hedged) Fund
The counterparties for the options purchased are:
Citigroup
Goldman Sachs
The counterparties for the options written are:
Citigroup
Credit Suisse
Goldman Sachs
HSBC Bank
The counterparties for the swaptions purchased are:
Citibank
Goldman Sachs
Merrill Lynch
Morgan Stanley
The counterparties for the swaptions written are:
Citibank
Goldman Sachs
Merrill Lynch
Morgan Stanley
The counterparties for the interest rate swaps are:
Citibank
Citigroup
Credit Suisse
Goldman Sachs
JP Morgan
The counterparties for the credit default swaps are:
Barclays Bank
BNP Paribas
Citibank
Credit Suisse
Goldman Sachs
HSBC Bank
JP Morgan
Merrill Lynch
Morgan Stanley
Société Generale
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Bond (Euro Hedged) Fund 107
Fair Value Hierarchy (Note 10)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 30 September 2016 and 31 March 2016.
As at 30 September 2016
Level 1
EUR ‘000
Level 2
EUR ‘000
Level 3
EUR ‘000
Total
EUR ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... - 357,975 360 358,335
Money market instruments ........................................................ - 7,907 - 7,907
Certificate of deposits ................................................................ - 1,466 - 1,466
Commercial paper ...................................................................... - 4,255 - 4,255
Investment funds ........................................................................ - 14,569 - 14,569
Unrealised gain on open futures contracts ...................................... 400 - - 400
Unrealised gain on forward foreign currency exchange
contracts ......................................................................................... - 2,136 - 2,136
Options purchased at fair value ...................................................... - 7 - 7
Swaptions purchased at fair value .................................................. - 10 - 10
Credit default swaps at fair value ................................................... - 59 - 59
Interest rate swaps at fair value ...................................................... - 1,045 - 1,045
Total assets ...................................................................................... 400 389,429 360 390,189
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ...................................... (394) - - (394)
Unrealised loss on forward foreign currency exchange
contracts ......................................................................................... - (4,397) - (4,397)
Options written at fair value ........................................................... - (4) - (4)
Swaptions written at fair value ....................................................... - (5) - (5)
Credit default swaps at fair value ................................................... - (359) - (359)
Interest rate swaps at fair value ...................................................... - (1,416) - (1,416)
Total liabilities ................................................................................ (394) (6,181) - (6,575)
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
108 Russell Global Bond (Euro Hedged) Fund
As at 31 March 2016
Level 1
EUR ‘000
Level 2
EUR ‘000
Level 3
EUR ‘000
Total
EUR ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... - 378,929 175 379,104
Money market instruments ........................................................ - 6,959 - 6,959
Certificate of deposits ................................................................ - 903 - 903
Commercial Paper ..................................................................... - 2,454 - 2,454
Investment funds ........................................................................ - 28,202 - 28,202
Unrealised gain on open futures contracts ...................................... 1,929 - - 1,929
Unrealised gain on forward foreign currency exchange
contracts ......................................................................................... - 13,808 - 13,808
Futures options purchased at fair value .......................................... 34 - - 34
Swaptions purchased at fair value .................................................. - 24 - 24
Credit default swaps at fair value ................................................... - 268 - 268
Interest rate swaps at fair value ...................................................... - 995 - 995
Total assets ...................................................................................... 1,963 432,542 175 434,680
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ...................................... (397) - - (397)
Unrealised loss on forward foreign currency exchange
contracts ......................................................................................... - (10,943) - (10,943)
Currency options written at fair value ............................................ - (101) - (101)
Futures options written at fair value ............................................... (14) - (14)
Swaptions written at fair value ....................................................... - (17) - (17)
Credit default swaps at fair value ................................................... - (430) - (430)
Interest rate swaps at fair value ...................................................... - (837) - (837)
Total liabilities ................................................................................ (411) (12,328) - (12,739)
Russell Investment Company II plc
Russell Global Bond (Euro Hedged) Fund
Statement of Changes in Composition of Portfolio
Listed below are 20 largest cumulative investment purchases and cumulative investment sales during the six months ended 30
September 2016.
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
Russell Global Bond (Euro Hedged) Fund 109
Portfolio Securities
Acquisition Cost
EUR ‘000 Portfolio Securities
Disposal Proceeds
EUR ‘000
Russell Investment Company plc Russell Investment Company plc
Russell Euro Liquidity Fund Russell Euro Liquidity Fund
Class R Roll-Up Shares 86,364 Class R Roll-Up Shares (96,444)
Russell Investment Company III plc Russell Investment Company III plc
The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II
Class R Roll-Up Shares 69,728 Class R Roll-Up Shares (73,516)
Fannie Mae Pool Fannie Mae Pool
3.500% due 13/10/2046 12,665 3.500% due 14/09/2046 (11,026)
3.500% due 14/09/2046 11,099 3.500% due 13/10/2046 (9,737)
3.500% due 14/07/2046 9,430 3.500% due 14/07/2046 (9,443)
3.500% due 16/08/2046 9,229 3.500% due 16/08/2046 (9,331)
3.500% due 14/11/2046 9,134 3.000% due 16/08/2046 (8,360)
3.000% due 14/09/2046 8,288 3.000% due 14/07/2046 (8,218)
3.000% due 16/08/2046 8,279 3.000% due 14/09/2046 (8,194)
3.000% due 14/07/2046 8,200 4.000% due 14/07/2046 (7,496)
4.000% due 14/09/2046 7,480 3.500% due 13/06/2046 (7,473)
4.000% due 14/07/2046 7,437 4.000% due 16/08/2046 (7,457)
4.000% due 16/08/2046 7,378 3.000% due 13/06/2046 (7,444)
3.000% due 13/12/2046 7,375 4.000% due 14/09/2046 (7,420)
3.000% due 13/10/2046 7,059 3.000% due 13/10/2046 (6,360)
3.000% due 14/11/2046 6,347 3.000% due 14/11/2046 (5,542)
4.000% due 13/10/2046 4,813 3.500% due 12/05/2046 (5,409)
U.S. Treasury Inflation Indexed Bonds Freddie Mac Gold Pool
2.375% due 15/01/2025 4,691 3.000% due 18/05/2031 (4,623)
Japan Government Five Year Bond 3.000% due 18/04/2031 (4,587)
0.100% due 20/09/2021 4,635 Fannie Mae Pool
Fannie Mae Pool 3.000% due 13/06/2046 (4,457)
3.500% due 13/06/2046 4,635
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Balance Sheet
As at 30 September 2016
The accompanying notes are an integral part of the financial statements.
110 Russell Global Defensive Equity Fund
30 September 2016
(Unaudited)
USD ‘000
31 March 2016
(Audited)
USD ‘000
Assets
Financial assets at fair value through profit or loss .......................................................... 149,305 132,985
Cash at bank (Note 2) ....................................................................................................... 761 1,295
Cash held with brokers and counterparties for open financial derivative instruments
(Note 2) ............................................................................................................................ 592 511
Debtors:
Receivable for investments sold .................................................................................... 415 178
Receivable on fund shares issued .................................................................................. 506 13
Dividends receivable ..................................................................................................... 337 426
151,916 135,408
Liabilities
Financial liabilities at fair value through profit or loss .................................................... (301) (1,066)
Creditors – amounts falling due within one financial year:
Payable for investments purchased ................................................................................ (346) (258)
Distributions payable on income share classes .............................................................. (56) (85)
Management fees payable ............................................................................................. (129) (118)
Depositary fees payable ................................................................................................. (3) (2)
Sub-custodian fees payable ........................................................................................... (9) (12)
Administration fees payable .......................................................................................... (3) (6)
Audit fees payable ......................................................................................................... (18) (20)
Other fees payable ......................................................................................................... (1) (5)
(866) (1,572)
Net asset value attributable to redeemable participating shareholders .................... 151,050 133,836
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Profit and Loss Account
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Defensive Equity Fund 111
Six months ended
30 September 2016
(Unaudited)
USD ‘000
Six months ended
30 September 2015
(Unaudited)
USD ‘000
Income
Dividends ...................................................................................................................... 2,185 2,286
Net gain (loss) on investment activities .......................................................................... 4,237 (12,447)
Total investment income (expense) ............................................................................... 6,422 (10,161)
Expenses
Management fees (Note 3) ............................................................................................ (762) (836)
Depositary fees (Note 4) ............................................................................................... (10) (7)
Sub-custodian fees (Note 4) .......................................................................................... (36) (47)
Administration and transfer agency fees (Note 4) ........................................................ (42) (46)
Audit fees ...................................................................................................................... (13) (15)
Professional fees ........................................................................................................... (4) (24)
Other fees ...................................................................................................................... (5) (20)
Total operating expenses ............................................................................................... (872) (995)
Net income (expense) ..................................................................................................... 5,550 (11,156)
Finance costs
Distributions (Note 8) ................................................................................................... (1,024) (892)
Profit (loss) for the financial period before taxation .................................................. 4,526 (12,048)
Taxation
Withholding tax (Note 7) .............................................................................................. (356) (411)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 4,170 (12,459)
All amounts arose solely from continuing operations. There are no recognised gains or losses other than those dealt with in the Profit and Loss
Account.
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
112 Russell Global Defensive Equity Fund
Six months ended
30 September 2016
(Unaudited)
USD ‘000
Six months ended
30 September 2015
(Unaudited)
USD ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 4,170 (12,459)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 8) ..................... 753 859
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 8) ..................................................................................................... 12,291 8,833
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders ............................................................................................. 17,214 (2,767)
Net assets attributable to redeemable participating shareholders
Beginning of financial period ....................................................................................... 133,836 150,655
End of financial period ................................................................................................. 151,050 147,888
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Defensive Equity Fund 113
Number
of Shares
Fair Value
USD ‘000
Fund
%
Transferable Securities (94.51%)
Common Stock (94.51%)
Australia (1.23%)
Banks
38,402
Australia & New Zealand
Banking Group Ltd ............. 812 0.53
2,403
Commonwealth Bank of
Australia .............................. 133 0.09
Commercial Services and Supplies
9,372 Brambles Ltd ....................... 86 0.06
Containers and Packaging
6,969 Amcor Ltd ........................... 81 0.05
Diversified Financials
1,170 ASX Ltd .............................. 43 0.03
Electric Utilities
3,154 AGL Energy Ltd ................. 46 0.03
Entertainment
9,416 Tatts Group Ltd ................... 26 0.02
Food Products
4,848 Wesfarmers Ltd ................... 164 0.11
7,441 Woolworths Ltd .................. 133 0.09
Health Care Providers and Services
1,823 Sonic Healthcare Ltd ........... 31 0.02
Holding Companies - Diversified Operations
584
Washington H Soul
Pattinson & Co Ltd .............. 7 0.00
Hotels, Restaurants and Leisure
623
Flight Centre Travel Group
Ltd ....................................... 17 0.01
Insurance
12,876 Medibank Pvt Ltd ................ 24 0.02
Oil and Gas
3,529 Woodside Petroleum Ltd ..... 77 0.05
Real Estate Investment Trust
8,391 GPT Group .......................... 32 0.02
11,042 Stockland ............................. 40 0.03
Telecommunications
25,579 Telstra Corp Ltd .................. 101 0.07
1,853 1.23
Austria (0.00%)
Transport
199 Oesterreichische Post AG .... 7 0.00
Belgium (0.13%)
Other Finance
450
Groupe Bruxelles Lambert
SA ....................................... 40 0.02
Pharmaceuticals
1,754 UCB SA .............................. 136 0.09
Telecommunications
836 Proximus SADP .................. 25 0.02
201 0.13
Number
of Shares
Fair Value
USD ‘000
Fund
%
Bermuda (1.23%)
Computers and Peripherals
8,300 Genpact Ltd ........................ 199 0.13
Construction and Engineering
40,000
Cheung Kong Infrastructure
Holdings Ltd ....................... 344 0.23
Insurance
2,000 Arch Capital Group Ltd ...... 159 0.11
651 Axis Capital Holdings Ltd .. 35 0.02
472
Endurance Specialty
Holdings Ltd ....................... 31 0.02
794 Everest Re Group Ltd ......... 151 0.10
1,400
RenaissanceRe Holdings Ltd
............................................. 168 0.11
400
White Mountains Insurance
Group Ltd ........................... 332 0.22
1,570 XL Group Ltd ..................... 53 0.04
67
XL Group Ltd (Non-voting
rights) .................................. 3 0.00
Other Finance
738 HAL Trust .......................... 150 0.10
Telecommunications
1,744 VTech Holdings Ltd ........... 20 0.01
Textile and Apparel
51,000
Yue Yuen Industrial
Holdings Ltd ....................... 210 0.14
1,855 1.23
Brazil (0.07%)
Construction and Engineering
5,500
Multiplan Empreendimentos
Imobiliarios SA ................... 107 0.07
Canada (1.66%)
Banks
1,396
Canadian Imperial Bank of
Commerce ........................... 108 0.07
1,987 Royal Bank of Canada ........ 123 0.08
2,951 Toronto-Dominion Bank ..... 131 0.09
Diversified Financials
1,607 CI Financial Corp ............... 31 0.02
Insurance .............................
700
Fairfax Financial Holdings
Ltd ...................................... 409 0.27
447 Genworth MI Canada Inc ... 11 0.01
1,901 Great-West Lifeco Inc ........ 47 0.03
781 Intact Financial Corp .......... 56 0.04
2,855 Sun Life Financial Inc ......... 93 0.06
Media
2,075 Thomson Reuters Corp ....... 86 0.06
Oil and Gas
2,212 ARC Resources Ltd ............ 40 0.02
7,984
Canadian Natural Resources
Ltd ...................................... 255 0.17
15,536 Cenovus Energy Inc ............ 223 0.15
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
114 Russell Global Defensive Equity Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Pipelines
1,008 Keyera Corp ........................ 33 0.02
Telecommunications
2,128 BCE Inc ............................... 98 0.06
18,119 Rogers Communications Inc 767 0.51
2,511 1.66
Cayman Islands (0.82%)
Health Care Equipment and Supplies
70,000
Hengan International Group
Co Ltd ................................. 580 0.39
Holding Companies - Diversified Operations
32,500 CK Hutchison Holdings Ltd 413 0.27
Real Estate
33,000
Cheung Kong Property
Holdings Ltd ....................... 241 0.16
1,234 0.82
Denmark (0.61%)
Agriculture
18,333
Scandinavian Tobacco
Group A/S ........................... 313 0.21
Health Care Equipment and Supplies
6,145
William Demant Holding
A/S ...................................... 125 0.08
Insurance
1,083 Tryg A/S .............................. 22 0.01
Retail Trade
25,051 Matas A/S ............................ 469 0.31
929 0.61
Finland (0.18%)
Chemicals
12,762 Tikkurila OYJ ...................... 275 0.18
France (2.36%)
Electric Utilities
51,226 Engie SA ............................. 794 0.52
Food Products
15,044 Danone SA .......................... 1,117 0.74
Health Care Providers and Services
952 BioMerieux ......................... 142 0.10
1,398 Orpea ................................... 124 0.08
Insurance
157 Euler Hermes Group ............ 13 0.01
Media
751
Metropole Television
SA ....................................... 14 0.01
Pharmaceuticals
17,861 Sanofi SA ............................ 1,358 0.90
3,562 2.36
Germany (0.37%)
Commercial Services and Supplies
15,959
Hamburger Hafen und
Logistik AG ......................... 243 0.16
Number
of Shares
Fair Value
USD ‘000
Fund
%
Insurance
364 Hannover Rueck SE ............ 39 0.03
840
Muenchener
Rueckversicherungs-
Gesellschaft AG in
Muenchen ........................... 157 0.10
Textile and Apparel
688 Adidas AG .......................... 119 0.08
558 0.37
Hong Kong (0.37%)
Banks
4,176 Hang Seng Bank Ltd ........... 75 0.05
Electric Utilities
7,000 CLP Holdings Ltd ............... 72 0.05
Real Estate Investment Trust
50,500 Link REIT ........................... 371 0.24
Transport
7,977 MTR Corp Ltd .................... 44 0.03
562 0.37
India (0.86%)
Banks
16,528
HDFC Bank Ltd
ADR .................................... 1,188 0.79
Household Products
27,240 Marico Ltd .......................... 112 0.07
1,300 0.86
Indonesia (0.23%)
Household Products
31,000
Unilever Indonesia Tbk
PT ....................................... 106 0.07
Telecommunications
738,900
Telekomunikasi Indonesia
Persero Tbk PT ................... 244 0.16
350 0.23
Ireland (0.17%)
Building Products
2,714
James Hardie Industries
Plc ....................................... 42 0.03
Computers and Peripherals
1,748 Accenture Plc ...................... 214 0.14
256 0.17
Israel (0.22%)
Aerospace and Defence
1,423 Elbit Systems Ltd ................ 136 0.09
Telecommunications
104,506
Bezeq The Israeli
Telecommunication Corp
Ltd ...................................... 197 0.13
333 0.22
Italy (0.13%)
Pharmaceuticals
6,197 Recordati SpA ..................... 199 0.13
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Defensive Equity Fund 115
Number
of Shares
Fair Value
USD ‘000
Fund
%
Japan (7.85%)
Agriculture
4,200 Japan Tobacco Inc ............... 171 0.11
Automobiles
29,600 Honda Motor Co Ltd ........... 844 0.56
Chemicals
26,600
Nippon Fine Chemical Co
Ltd ....................................... 208 0.14
27,562 Nitto FC Co Ltd .................. 226 0.15
Commercial Services and Supplies
6,500 Park24 Co Ltd ..................... 211 0.14
4,600 Secom Co Ltd ...................... 341 0.23
8,600
Secom Joshinetsu Co
Ltd ....................................... 276 0.18
26,500 Shingakukai Co Ltd ............. 134 0.09
Electrical Equipment
35,818 Cosel Co Ltd ....................... 431 0.29
9,800 Icom Inc .............................. 194 0.13
2,800 Keyence Corp ...................... 2,031 1.34
Entertainment
2,700 Oriental Land Co Ltd .......... 164 0.11
Hand and Machine Tools
2,100 Makita Corp ........................ 148 0.10
Health Care Equipment and Supplies
6,600 As One Corp ........................ 286 0.19
1,200 Medikit Co Ltd .................... 53 0.04
3,400 Nakanishi Inc ...................... 123 0.08
8,100 Terumo Corp ....................... 309 0.20
Home Furnishings
3,700 Hoshizaki Electric Co Ltd ... 335 0.22
Insurance
15,400 Sompo Holdings Inc ............ 451 0.30
Internet Software and Services
3,600 Trend Micro Inc .................. 125 0.08
Machinery
10,200 Ebara Corp .......................... 299 0.20
5,400 FANUC Corp ...................... 907 0.60
Metals and Mining
15,190
Kitagawa Industries Co
Ltd ....................................... 158 0.10
Office Electronics
4,900 Canon Inc ............................ 141 0.09
Pharmaceuticals
4,000
Chugai Pharmaceutical Co
Ltd ....................................... 144 0.10
3,500
Hisamitsu Pharmaceutical
Co Inc .................................. 188 0.12
8,900
Mitsubishi Tanabe Pharma
Corp ..................................... 189 0.13
4,500
Ono Pharmaceutical Co
Ltd ....................................... 125 0.08
Real Estate
1,700
Daito Trust Construction Co
Ltd ....................................... 272 0.18
Number
of Shares
Fair Value
USD ‘000
Fund
%
Real Estate Investment Trust
39
Advance Residence
Investment Corp .................. 110 0.07
Retail Trade
2,900
FamilyMart UNY Holdings
Co Ltd ................................. 193 0.13
4,500 Lawson Inc ......................... 354 0.24
4,800
McDonald's Holdings Co
Japan Ltd ............................ 141 0.09
2,300 Nitori Holdings Co Ltd ....... 274 0.18
1,600 Sundrug Co Ltd .................. 134 0.09
1,500 Tsuruha Holdings Inc ......... 172 0.11
Telecommunications
5,700 KDDI Corp ......................... 175 0.12
5,200
Nippon Telegraph &
Telephone Corp .................. 237 0.16
15,800 NTT Docomo Inc ................ 400 0.26
Transport
34,000 Nagoya Railroad Co Ltd ..... 184 0.12
11,858 7.85
Korea, Republic of (2.01%)
Agriculture
7,728 KT&G Corp ........................ 877 0.58
Auto Components
862 Hyundai Mobis Co Ltd ....... 215 0.14
Automobiles
8,279 Hyundai Motor Co .............. 1,019 0.68
12,413 Kia Motors Corp ................. 475 0.31
Home Furnishings
1,349 Coway Co Ltd ..................... 117 0.08
Insurance
1,290
Samsung Fire & Marine
Insurance Co Ltd ................. 327 0.22
3,030 2.01
Malaysia (0.08%)
Agriculture
63,500
HAP Seng Consolidated
Bhd ..................................... 118 0.08
Mexico (1.07%)
Media
25,523 Grupo Televisa SAB ADR .. 656 0.43
Telecommunications
1,609,681 America Movil SAB de CV 920 0.61
68,474 Telesites SAB de CV .......... 39 0.03
1,615 1.07
Netherlands (1.64%)
Food Products
6,426
Koninklijke Ahold Delhaize
NV ...................................... 147 0.10
Personal Products ................
50,350 Unilever NV ....................... 2,324 1.54
2,471 1.64
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
116 Russell Global Defensive Equity Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
New Zealand (0.45%)
Construction and Engineering
63,193
Auckland International
Airport Ltd .......................... 338 0.23
Electric Utilities
4,296 Contact Energy Ltd ............. 16 0.01
Telecommunications
122,978
Spark New Zealand
Ltd ....................................... 323 0.21
677 0.45
Norway (0.42%)
Food Products
31,078 Orkla ASA ........................... 321 0.21
Telecommunications
17,835 Telenor ASA ....................... 306 0.21
627 0.42
Philippines (0.07%)
Electric Utilities
17,300 Manila Electric Co .............. 111 0.07
Singapore (0.36%)
Airlines
21,400 Singapore Airlines Ltd ........ 165 0.11
Construction and Engineering
45,500 SATS Ltd ............................ 166 0.11
Diversified Financials
4,800 Singapore Exchange Ltd ..... 26 0.01
Media
10,000
Singapore Press Holdings
Ltd ....................................... 28 0.02
Telecommunications
43,300
Singapore
Telecommunications Ltd ..... 126 0.08
3,700 StarHub Ltd ......................... 10 0.01
Transport
14,000 ComfortDelGro Corp Ltd .... 29 0.02
550 0.36
Sweden (1.82%)
Agriculture
33,981 Swedish Match AB ............. 1,249 0.83
Banks
97,013
Svenska Handelsbanken
AB ....................................... 1,335 0.88
4,755 Swedbank AB ...................... 112 0.08
Construction and Engineering
1,994 Skanska AB ......................... 47 0.03
2,743 1.82
Switzerland (7.63%)
Banks
156 Banque Cantonale Vaudoise 103 0.07
Building Products
2,444 Geberit AG .......................... 1,072 0.71
Number
of Shares
Fair Value
USD ‘000
Fund
%
Commercial Services and Supplies
28 SGS SA ............................... 63 0.04
Diversified Financials
1,063 GAM Holding AG .............. 10 0.01
Food Products
31,180 Nestle SA ............................ 2,462 1.63
Hand and Machine Tools
7,623 Schindler Holding AG ........ 1,433 0.95
Insurance
1,481 Chubb Ltd ........................... 186 0.12
Pharmaceuticals
108 Galenica AG ....................... 115 0.08
33,262 Novartis AG ........................ 2,621 1.73
7,480 Roche Holding AG ............. 1,860 1.23
Retail Trade
24,380
Cie Financiere Richemont
SA ....................................... 1,489 0.99
Telecommunications
131 Swisscom AG ..................... 62 0.04
Transport
290
Kuehne & Nagel
International AG ................. 42 0.03
11,518 7.63
Taiwan (0.74%)
Semiconductor Equipment and Products
36,647
Taiwan Semiconductor
Manufacturing Co Ltd ADR 1,121 0.74
Thailand (0.26%)
Beverages
174,500 Thai Beverage PCL ............. 124 0.08
Construction and Engineering
12,000 Airports of Thailand PCL ... 138 0.09
Real Estate
79,900 Central Pattana PCL ........... 135 0.09
397 0.26
United Kingdom (8.06%)
Aerospace and Defence
281,148 Cobham Plc ......................... 612 0.41
103,964 Meggitt Plc ......................... 609 0.40
Agriculture
3,204
British American Tobacco
Plc ....................................... 205 0.14
Banks
872,027 Lloyds Banking Group Plc . 618 0.41
101,309
Royal Bank of Scotland
Group Plc ............................ 235 0.16
Beverages
71,650 Diageo Plc .......................... 2,057 1.36
192,825 Stock Spirits Group Plc ....... 386 0.26
Commercial Services and Supplies
109,181 G4S Plc ............................... 323 0.21
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Defensive Equity Fund 117
Number
of Shares
Fair Value
USD ‘000
Fund
%
28,315 Intertek Group Plc ............... 1,283 0.85
Construction and Engineering
68,062 BBA Aviation Plc ............... 221 0.15
Electrical Equipment
133,495 Rotork Plc ........................... 366 0.24
Home Builders
1,727 Persimmon Plc .................... 41 0.03
17,026 Taylor Wimpey Plc ............. 34 0.02
Lodging
30,043
InterContinental Hotels
Group Plc ............................ 1,241 0.82
Machinery
12,915
Spirax-Sarco Engineering
Plc ....................................... 754 0.50
Oil and Gas
22,725 BP Plc ADR ........................ 799 0.53
13,589
Royal Dutch Shell Plc (A
Shares) ................................. 338 0.22
Pharmaceuticals
2,520 AstraZeneca Plc .................. 164 0.11
40,742 GlaxoSmithKline Plc ........... 870 0.57
Real Estate
56,861 LSL Property Services ........ 158 0.10
Retail Trade
879 Next Plc ............................... 55 0.04
Telecommunications
278,444 Vodafone Group Plc ............ 802 0.53
12,171 8.06
United States (51.41%)
Advertising
1,065 Omnicom Group Inc ............ 91 0.06
Aerospace and Defence
1,286 Boeing Co ........................... 169 0.11
2,753 Lockheed Martin Corp ........ 660 0.44
3,148 Raytheon Co ........................ 429 0.28
13,634
United Technologies
Corp ..................................... 1,385 0.92
Agriculture
10,800 Altria Group Inc .................. 683 0.45
2,176
Philip Morris International
Inc ....................................... 212 0.14
12,796 Reynolds American Inc ....... 603 0.40
Banks
12,055
Citizens Financial Group
Inc ....................................... 298 0.20
14,853 Fifth Third Bancorp ............. 304 0.20
30,691 US Bancorp ......................... 1,316 0.87
69,462 Wells Fargo & Co ............... 3,076 2.04
Beverages
47,603 Coca-Cola Co ...................... 2,015 1.33
3,539
Dr Pepper Snapple Group
Inc ....................................... 323 0.21
17,710 PepsiCo Inc ......................... 1,926 1.28
Number
of Shares
Fair Value
USD ‘000
Fund
%
Chemicals
692
EI du Pont de Nemours &
Co ....................................... 46 0.03
10,609 Mosaic Co ........................... 259 0.17
988 Praxair Inc .......................... 119 0.08
4,624 Sherwin-Williams Co ......... 1,279 0.85
Commercial Services and Supplies
1,825
Automatic Data Processing
Inc ....................................... 161 0.11
20,987 Moody's Corp ..................... 2,272 1.50
2,800 Total System Services Inc ... 132 0.09
Computers and Peripherals
1,152
International Business
Machines Corp .................... 183 0.12
Diversified Financials
45,771 Ally Financial Inc ............... 891 0.59
330 BlackRock Inc .................... 120 0.08
4,200 CBOE Holdings Inc ............ 272 0.18
26,451 CIT Group Inc .................... 960 0.63
1,128 CME Group Inc .................. 118 0.08
16,460 Mastercard Inc .................... 1,675 1.11
2,400 Nasdaq Inc .......................... 162 0.11
1,156
TD Ameritrade Holding
Corp .................................... 41 0.03
Electric Utilities
1,057 Alliant Energy Corp ............ 40 0.03
2,300
American Electric Power Co
Inc ....................................... 148 0.10
3,700 CMS Energy Corp .............. 155 0.10
6,600 Consolidated Edison Inc ..... 497 0.33
2,700 Duke Energy Corp .............. 216 0.14
4,637 Edison International ............ 335 0.22
2,400 Eversource Energy .............. 130 0.09
28,311 Exelon Corp ........................ 942 0.62
4,500
Hawaiian Electric Industries
Inc ....................................... 134 0.09
2,600 ITC Holdings Corp ............. 121 0.08
2,003 NextEra Energy Inc ............ 245 0.16
2,224 Pinnacle West Capital Corp 169 0.11
25,247 PPL Corp ............................ 873 0.58
955
Public Service Enterprise
Group Inc ............................ 40 0.03
2,600 SCANA Corp ...................... 188 0.12
10,500 Southern Co ........................ 539 0.36
5,829 WEC Energy Group Inc ...... 349 0.23
4,158 Westar Energy Inc .............. 236 0.16
5,700 Xcel Energy Inc .................. 234 0.15
Electrical Equipment
2,524 Emerson Electric Co ........... 138 0.09
255 Hubbell Inc ......................... 27 0.02
2,456
Mettler-Toledo International
Inc ....................................... 1,031 0.68
Environmental Control
4,600 Republic Services Inc ......... 232 0.15
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
118 Russell Global Defensive Equity Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
1,653 Waste Management Inc ....... 105 0.07
Food Products
5,300 Campbell Soup Co .............. 290 0.19
16,718 General Mills Inc ................. 1,068 0.71
1,900 Hershey Co .......................... 182 0.12
6,600 Hormel Foods Corp ............. 250 0.16
554 JM Smucker Co ................... 75 0.05
2,656 Kellogg Co .......................... 206 0.14
4,541 Sysco Corp .......................... 223 0.15
1,700 Tyson Foods Inc .................. 127 0.08
Gas Utilities
2,400 Atmos Energy Corp ............. 179 0.12
Health Care Equipment and Supplies
2,847 Abbott Laboratories ............. 120 0.08
12,055 Becton Dickinson and Co .... 2,167 1.43
300 Intuitive Surgical Inc ........... 217 0.14
4,300 ResMed Inc ......................... 279 0.19
3,853 Stryker Corp ........................ 449 0.30
1,300 Teleflex Inc ......................... 218 0.14
9,664 Varian Medical Systems Inc 962 0.64
Health Care Providers and Services
1,800 Aetna Inc ............................. 208 0.14
1,300 Anthem Inc .......................... 163 0.11
2,000 Cigna Corp .......................... 261 0.17
1,600 UnitedHealth Group Inc ...... 224 0.15
Home Builders
100 NVR Inc .............................. 164 0.11
Home Furnishings
616 Leggett & Platt Inc .............. 28 0.02
Hotels, Restaurants and Leisure
279 Polaris Industries Inc ........... 22 0.01
Household Products
2,390 Clorox Co ............................ 299 0.20
1,385 Kimberly-Clark Corp .......... 175 0.11
Insurance
2,384 Aflac Inc .............................. 171 0.11
438
American Financial Group
Inc ....................................... 33 0.02
816 Arthur J Gallagher & Co ..... 42 0.03
885
Cincinnati Financial
Corp ..................................... 67 0.05
256 Erie Indemnity Co ............... 26 0.02
200 Markel Corp ........................ 186 0.12
315 Mercury General Corp ........ 17 0.01
3,226 ProAssurance Corp .............. 169 0.11
3,440 Progressive Corp ................. 108 0.07
1,520 Travelers Cos Inc ................ 174 0.12
Internet Software and Services
2,172 Alphabet Inc (Class A) ........ 1,746 1.16
3,922 Symantec Corp .................... 98 0.06
Machinery
8,372 BWX Technologies Inc ....... 321 0.21
Number
of Shares
Fair Value
USD ‘000
Fund
%
984 Cummins Inc ....................... 126 0.08
14,583 Graco Inc ............................ 1,079 0.72
6,506 Middleby Corp .................... 804 0.53
604 Rockwell Automation Inc ... 74 0.05
Miscellaneous Manufacturers
9,998 3M Co ................................. 1,762 1.17
Oil and Gas
1,839 Chevron Corp ..................... 189 0.12
13,274 Exxon Mobil Corp .............. 1,159 0.77
584 Helmerich & Payne Inc ....... 39 0.03
2,101 Occidental Petroleum Corp . 153 0.10
Personal Products
18,521 Colgate-Palmolive Co ......... 1,373 0.91
28,747 Procter & Gamble Co ......... 2,580 1.71
Pharmaceuticals
1,900 Cardinal Health Inc ............. 148 0.10
5,665 Eli Lilly & Co ..................... 455 0.30
39,096 Johnson & Johnson ............. 4,618 3.06
3,393 Merck & Co Inc .................. 212 0.14
65,321 Pfizer Inc ............................ 2,212 1.46
Real Estate Investment Trust
2,700
American Campus
Communities Inc ................. 137 0.09
15,803
American Capital Agency
Corp .................................... 309 0.21
3,200
Equity LifeStyle Properties
Inc ....................................... 247 0.16
328
Federal Realty Investment
Trust .................................... 50 0.03
1,300
Mid-America Apartment
Communities Inc ................. 122 0.08
1,800 Public Storage ..................... 402 0.27
6,000 Realty Income Corp ............ 402 0.27
479 Regency Centers Corp ........ 37 0.02
75,736
Two Harbors Investment
Corp .................................... 646 0.43
Retail Trade
2,066 AutoZone Inc ...................... 1,587 1.05
1,297 Coach Inc ............................ 47 0.03
2,400 Dollar General Corp ........... 168 0.11
3,000 Foot Locker Inc .................. 203 0.13
680 Genuine Parts Co ................ 68 0.05
1,771 Home Depot Inc .................. 228 0.15
2,686 McDonald's Corp ................ 310 0.21
500 O'Reilly Automotive Inc ..... 140 0.09
2,100 Target Corp ......................... 144 0.10
509 Tiffany & Co ...................... 37 0.02
20,258 TJX Cos Inc ........................ 1,515 1.00
16,253 Tractor Supply Co ............... 1,095 0.73
1,000
Ulta Salon Cosmetics &
Fragrance Inc ...................... 238 0.16
2,511 Wal-Mart Stores Inc ........... 181 0.12
Semiconductor Equipment and Products
2,059 Analog Devices Inc ............. 133 0.09
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Defensive Equity Fund 119
Number
of Shares
Fair Value
USD ‘000
Fund
%
6,141 Intel Corp ............................ 232 0.15
16,166 Linear Technology Corp ..... 958 0.63
1,315
Maxim Integrated Products
Inc ....................................... 53 0.04
1,062 Microchip Technology Inc .. 66 0.04
2,686 Qualcomm Inc ..................... 184 0.12
2,263 Texas Instruments Inc ......... 159 0.11
1,182 Xilinx Inc ............................ 64 0.04
Software
1,696 CA Inc ................................. 56 0.03
1,200
Jack Henry & Associates
Inc ....................................... 103 0.07
27,235 Microsoft Corp .................... 1,569 1.04
15,825 MSCI Inc ............................. 1,328 0.88
88,806 Oracle Corp ......................... 3,488 2.31
Telecommunications
3,223 Cisco Systems Inc ............... 102 0.07
Textile and Apparel
21,152 NIKE Inc ............................. 1,114 0.73
3,639 UniFirst Corp ...................... 480 0.32
Transport
4,062
CH Robinson Worldwide
Inc ....................................... 286 0.19
1,800 Landstar System Inc ............ 123 0.08
Financial Derivative Instruments ((0.10)%)
Number
of Shares
Fair Value
USD ‘000
Fund
%
1,405 Union Pacific Corp ............. 137 0.09
1,635 United Parcel Service Inc ... 179 0.12
Water Utilities
5,300
American Water Works Co
Inc ....................................... 397 0.26
4,500 Aqua America Inc ............... 137 0.09
77,662 51.41
Total Common Stock ........ 142,761 94.51
Total Transferable
Securities ........................... 142,761 94.51
Investment Funds (4.24%)
Ireland (4.24%)
6,349
Russell Investment Company
III Plc - The U.S. Dollar
Cash Fund II - Class R
Roll-Up Shares .................. 6,373 4.22
27
Russell Investment Company
Plc - Russell Euro Liquidity
Fund - Class R
Roll-Up Shares .................. 30 0.02
Total Investment Funds .... 6,403 4.24
Total Investments
excluding Financial
Derivative Instruments ..... 149,164 98.75
Open Futures Contracts ((0.01)%)
Notional
Amount
USD ‘000
Average
Cost Price
USD
Unrealised
Gain (Loss)
USD ‘000
Fund
%
1,541
1,711.91
18 of Mini MSCI Eafe
Long Futures Contracts
Expiring December 2016 .......................................... (5) 0.00
4,951
925.43
107 of Mini MSCI Emerging Markets
Long Futures Contracts
Expiring December 2016 .......................................... (69) (0.05)
2,471
2,149.08
23 of S&P 500 E Mini Index Futures
Long Futures Contracts
Expiring December 2016 .......................................... 13 0.01
(1,525)
(2,178.08)
14 of S&P 500 E Mini Index Futures
Short Futures Contracts
Expiring December 2016 .......................................... 12 0.01
(3,032)
(13.18)
23 of Topix Index Futures
Short Futures Contracts
Expiring December 2016 .......................................... 27 0.02
Unrealised gain on open futures contracts ...................................................................... 52 0.04
Unrealised loss on open futures contracts ....................................................................... (74) (0.05)
Net unrealised gain (loss) on open futures contracts ................................................. (22) (0.01)
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
120 Russell Global Defensive Equity Fund
Open Forward Foreign Currency Exchange Contracts ((0.09)%)
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
06/10/2016 AUD 33 USD 25 - 0.00
06/10/2016 AUD 14 USD 11 - 0.00
06/10/2016 BRL 281 USD 87 (1) 0.00
06/10/2016 BRL 733 USD 227 (1) 0.00
06/10/2016 EUR 255 USD 287 - 0.00
27/10/2016 EUR 245 USD 275 1 0.00
06/10/2016 JPY 2,635 USD 26 1 0.00
06/10/2016 JPY 6,862 USD 66 1 0.00
06/10/2016 JPY 16,073 USD 158 - 0.00
27/10/2016 JPY 55,600 USD 548 2 0.00
21/12/2016 JPY 4,000 USD 39 - 0.00
21/12/2016 JPY 15,000 USD 148 (1) 0.00
06/10/2016 KRW 292,276 USD 267 (1) 0.00
06/10/2016 KRW 762,010 USD 695 (3) 0.00
06/10/2016 TWD 21,722 USD 694 (1) 0.00
06/10/2016 TWD 111 USD 4 - 0.00
06/10/2016 TWD 61 USD 2 - 0.00
06/10/2016 TWD 8,332 USD 266 - 0.00
06/10/2016 USD 424 AUD 564 (8) 0.00
06/10/2016 USD 550 AUD 733 (10) (0.01)
06/10/2016 USD 551 AUD 733 (10) (0.01)
06/10/2016 USD 85 BRL 281 (1) 0.00
06/10/2016 USD 222 BRL 731 (3) 0.00
06/10/2016 USD 1 BRL 2 - 0.00
08/11/2016 USD 225 BRL 733 1 0.00
08/11/2016 USD 86 BRL 281 1 0.00
06/10/2016 USD 490 CAD 641 2 0.00
06/10/2016 USD 637 CAD 834 2 0.00
06/10/2016 USD 637 CAD 834 2 0.00
06/10/2016 USD 30 CAD 40 - 0.00
06/10/2016 USD 11 CAD 14 - 0.00
06/10/2016 USD 660 CHF 648 (9) (0.01)
06/10/2016 USD 860 CHF 844 (11) (0.01)
06/10/2016 USD 859 CHF 844 (12) (0.01)
06/10/2016 USD 23 CHF 23 - 0.00
06/10/2016 USD 8 CHF 8 - 0.00
06/10/2016 USD 1,531 EUR 1,373 (12) (0.01)
06/10/2016 USD 1,995 EUR 1,790 (16) (0.01)
06/10/2016 USD 1,996 EUR 1,790 (16) (0.01)
06/10/2016 USD 10 EUR 9 - 0.00
06/10/2016 USD 3 EUR 3 - 0.00
06/10/2016 USD 286 EUR 255 (1) 0.00
27/10/2016 USD 2,165 EUR 1,923 2 0.00
10/11/2016 USD 287 EUR 255 - 0.00
06/10/2016 USD 1,040 GBP 791 13 0.01
06/10/2016 USD 1,354 GBP 1,031 15 0.01
06/10/2016 USD 1,355 GBP 1,031 16 0.01
06/10/2016 USD 24 GBP 18 - 0.00
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Defensive Equity Fund 121
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
06/10/2016 USD 62 GBP 47 1 0.00
06/10/2016 USD 316 HKD 2,449 - 0.00
06/10/2016 USD 411 HKD 3,186 - 0.00
06/10/2016 USD 411 HKD 3,186 - 0.00
06/10/2016 USD 4 HKD 31 - 0.00
06/10/2016 USD 12 HKD 96 - 0.00
06/10/2016 USD 699 JPY 72,109 (13) (0.01)
06/10/2016 USD 911 JPY 93,997 (17) (0.01)
06/10/2016 USD 912 JPY 93,997 (17) (0.01)
06/10/2016 USD 156 JPY 16,073 (3) 0.00
27/10/2016 USD 73 JPY 7,300 1 0.00
27/10/2016 USD 2,253 JPY 226,720 12 0.01
27/10/2016 USD 655 JPY 65,800 5 0.01
10/11/2016 USD 158 JPY 16,073 (1) 0.00
21/12/2016 USD 2,912 JPY 295,000 (11) (0.01)
06/10/2016 USD 253 KRW 284,291 (5) 0.00
06/10/2016 USD 659 KRW 739,529 (13) (0.01)
06/10/2016 USD 7 KRW 7,985 - 0.00
06/10/2016 USD 20 KRW 22,481 - 0.00
08/11/2016 USD 267 KRW 292,276 1 0.00
08/11/2016 USD 695 KRW 762,010 3 0.01
06/10/2016 USD 207 SEK 1,769 2 0.00
06/10/2016 USD 270 SEK 2,301 1 0.00
06/10/2016 USD 270 SEK 2,301 1 0.00
06/10/2016 USD 5 SEK 41 - 0.00
06/10/2016 USD 14 SEK 117 - 0.00
06/10/2016 USD 244 SGD 333 - 0.00
06/10/2016 USD 318 SGD 434 - 0.00
06/10/2016 USD 318 SGD 434 - 0.00
06/10/2016 USD 4 SGD 5 - 0.00
06/10/2016 USD 1 SGD 1 - 0.00
06/10/2016 USD 690 TWD 21,833 (6) 0.00
06/10/2016 USD 265 TWD 8,393 (2) 0.00
08/11/2016 USD 267 TWD 8,332 1 0.00
08/11/2016 USD 695 TWD 21,722 2 0.00
06/10/2016 USD 103 ZAR 1,507 (6) 0.00
06/10/2016 USD 134 ZAR 1,960 (8) (0.01)
06/10/2016 USD 134 ZAR 1,960 (8) (0.01)
06/10/2016 ZAR 26 USD 2 - 0.00
06/10/2016 ZAR 60 USD 4 - 0.00
Unrealised gain on open forward foreign currency exchange contracts ............................... 89 0.06
Unrealised loss on open forward foreign currency exchange contracts ................................ (227) (0.15)
Net unrealised gain (loss) on open forward foreign currency exchange contracts ............... (138) (0.09)
Total Financial Derivative Instruments ............................................................................ (160) (0.10)
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
122 Russell Global Defensive Equity Fund
Fair Value
USD ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or Loss
(98.85%) ....................................................................................................................................................... 149,305 98.85
Total Financial Liabilities at Fair Value through Profit or
Loss ((0.20)%) ............................................................................................................................................. (301) (0.20)
Net Financial Assets at Fair Value through Profit or Loss
(98.65%) ....................................................................................................................................................... 149,004 98.65
Other Net Assets (1.35%) ........................................................................................................................ 2,046 1.35
Net Assets .................................................................................................................................................. 151,050 100.00
Abbreviation used:
ADR - American Depository Receipt
Analysis of gross assets
% of
gross assets
Transferable securities admitted to an official stock exchange listing....................................................................... 93.97
Investment funds (UCITS) ....................................................................................................................................... 4.22
Exchange traded financial derivative instruments .................................................................................................... 0.03
Over the counter financial derivative instruments .................................................................................................... 0.06
Other assets ............................................................................................................................................................... 1.72
100.00
The broker for the open futures contracts is Merrill Lynch.
The counterparties for the open forward foreign currency exchange contracts are:
Bank of America
Bank of Montreal
Brown Brothers Harriman
Commonwealth Bank of Australia
Royal Bank of Canada
State Street Bank
Fair Value Hierarchy (Note 10)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 30 September 2016 and 31 March 2016.
As at 30 September 2016
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 142,761 - - 142,761
Investment funds ........................................................................ - 6,403 - 6,403
Unrealised gain on open futures contracts ...................................... 52 - - 52
Unrealised gain on forward foreign currency exchange
contracts ......................................................................................... - 89 - 89
Total assets ...................................................................................... 142,813 6,492 - 149,305
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Defensive Equity Fund 123
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ...................................... (74) - - (74)
Unrealised loss on forward foreign currency exchange
contracts ......................................................................................... - (227) - (227)
Total liabilities ................................................................................ (74) (227) - (301)
As at 31 March 2016
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 127,079 - - 127,079
Investment funds ........................................................................ - 5,743 - 5,743
Unrealised gain on open futures contracts ...................................... 20 - - 20
Unrealised gain on forward foreign currency exchange
contracts ......................................................................................... - 143 - 143
Total assets ...................................................................................... 127,099 5,886 - 132,985
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ...................................... (77) - - (77)
Unrealised loss on forward foreign currency exchange
contracts ......................................................................................... - (989) - (989)
Total liabilities ................................................................................ (77) (989) - (1,066)
Russell Investment Company II plc
Russell Global Defensive Equity Fund
Statement of Changes in Composition of Portfolio
Listed below are 20 largest cumulative investment purchases and cumulative investment sales during the six months ended 30
September 2016.
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
124 Russell Global Defensive Equity Fund
Portfolio Securities
Acquisition Cost
USD ‘000 Portfolio Securities
Disposal Proceeds
USD ‘000
Russell Investment Company III plc Russell Investment Company III plc
The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II
Class R Roll-Up Shares 29,690 Class R Roll-Up Shares (29,042)
Sanofi SA 1,163 Air Liquide SA (857)
Exxon Mobil Corp 899 Citizens Financial Group Inc (792)
Lloyds Banking Group Plc 847 Zions Bancorporation (662)
Cie Financiere Richemont SA 814 Tesco Plc (478)
Wells Fargo & Co 654 Paddy Power Betfair Plc (454)
Johnson & Johnson 608 Sysco Corp (445)
Oracle Corp 562 Moody's Corp (424)
Engie SA 491 PPL Corp (419)
Keyence Corp 459 Constellation Software Inc (411)
Tractor Supply Co 444 Keyence Corp (404)
Unilever NV 437 Lectra (395)
UniFirst Corp 407 Fifth Third Bancorp (391)
AutoZone Inc 386 Cenovus Energy Inc (388)
Diageo Plc 379 Amorepacific Corp (345)
General Mills Inc 362 Australia & New Zealand Banking
Svenska Handelsbanken AB 344 Group Ltd (328)
Novartis AG 344 AutoZone Inc (314)
Terumo Corp 332 Lupin Ltd (304)
Royal Bank of Scotland Group Plc 326 Next Plc (296)
UBM Plc (287)
Russell Investment Company II plc
Russell Pan European Equity Fund
Balance Sheet
As at 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Pan European Equity Fund 125
30 September 2016
(Unaudited)
EUR ‘000
31 March 2016
(Audited)
EUR ‘000
Assets
Financial assets at fair value through profit or loss .......................................................... 513,422 513,395
Cash at bank (Note 2) ....................................................................................................... 1,946 6,128
Cash held with brokers and counterparties for open financial derivative instruments
(Note 2) ............................................................................................................................ 6,100 2,590
Debtors:
Receivable for investments sold .................................................................................... 527 1,114
Receivable on fund shares issued .................................................................................. 41 76
Dividends receivable ..................................................................................................... 1,050 1,600
Prepayments and other debtors ...................................................................................... 17 17
523,103 524,920
Liabilities
Financial liabilities at fair value through profit or loss .................................................... (227) (481)
Creditors – amounts falling due within one financial year:
Cash due to brokers and counterparties for open financial derivative positions
(Note 2) ......................................................................................................................... (1,114) -
Payable for investments purchased ............................................................................... (647) (1,140)
Payable on fund shares redeemed ................................................................................. (45) (310)
Management fees payable ............................................................................................. (467) (476)
Depositary fees payable ................................................................................................. (12) (7)
Sub-custodian fees payable ........................................................................................... (38) (31)
Administration fees payable ........................................................................................... (11) (21)
Audit fees payable ......................................................................................................... (8) (16)
Other fees payable ................................................................................................................. (2) (4)
(2,571) (2,486)
Net asset value attributable to redeemable participating shareholders .................... 520,532 522,434
Russell Investment Company II plc
Russell Pan European Equity Fund
Profit and Loss Account
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
126 Russell Pan European Equity Fund
Six months ended
30 September 2016
(Unaudited)
EUR ‘000
Six months ended
30 September 2015
(Unaudited)
EUR ‘000
Income
Dividends ...................................................................................................................... 10,948 9,812
Net gain (loss) on investment activities ........................................................................... 5,981 (61,674)
Total investment income (expense) ............................................................................... 16,929 (51,862)
Expenses
Management fees (Note 3) ............................................................................................ (2,806) (2,950)
Depositary fees (Note 4) ................................................................................................ (36) (23)
Sub-custodian fees (Note 4) .......................................................................................... (123) (121)
Administration and transfer agency fees (Note 4) ......................................................... (115) (117)
Audit fees ...................................................................................................................... (8) (8)
Professional fees ............................................................................................................ (6) (21)
Other fees ...................................................................................................................... (16) (44)
Total operating expenses ............................................................................................... (3,110) (3,284)
Net income (expense) ..................................................................................................... 13,819 (55,146)
Finance costs
Distributions (Note 6) ................................................................................................... (6,323) (5,550)
Profit (loss) for the financial period before taxation ................................................... 7,496 (60,696)
Taxation
Withholding tax (Note 7) .............................................................................................. (777) (670)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 6,719 (61,366)
All amounts arose solely from continuing operations. There are no recognised gains or losses other than those dealt with in the Profit and Loss
Account.
Russell Investment Company II plc
Russell Pan European Equity Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Pan European Equity Fund 127
Six months ended
30 September 2016
(Unaudited)
EUR ‘000
Six months ended
30 September 2015
(Unaudited)
EUR ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 6,719 (61,366)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 8) ...................... 6,323 5,550
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 8) ..................................................................................................... (14,944) 60,756
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders ............................................................................................. (1,902) 4,940
Net assets attributable to redeemable participating shareholders
Beginning of financial period ........................................................................................ 522,434 491,405
End of financial period .................................................................................................. 520,532 496,345
Russell Investment Company II plc
Russell Pan European Equity Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
128 Russell Pan European Equity Fund
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Transferable Securities (94.67%)
Common Stock (93.96%)
Belgium (2.44%)
Banks
41,487 KBC Group NV ................... 2,150 0.41
Beverages
40,660
Anheuser-Busch InBev
SA/NV ................................. 4,741 0.91
Biotechnology
73,070 Ablynx NV .......................... 818 0.16
Distributors
37,834 D'ieteren SA/NV ................. 1,568 0.30
Electrical Equipment
640 Barco NV ............................ 45 0.01
Health Care Equipment and Supplies
11,040 Ion Beam Applications ........ 499 0.10
Household Products
15,267 Ontex Group NV ................. 431 0.08
Pharmaceuticals
26,423 UCB SA .............................. 1,819 0.35
Telecommunications
13,473 Proximus SADP .................. 358 0.07
Transport
10,361 bpost SA .............................. 250 0.05
12,679 2.44
Bermuda (0.01%)
Oil and Gas Services
48,638 Archer Ltd ........................... 26 0.01
Cyprus (0.05%)
Real Estate
54,272
Aroundtown Property
Holdings Plc ........................ 245 0.05
Denmark (1.76%)
Banks
67,815 Danske Bank A/S ................ 1,761 0.34
1,390 Jyske Bank A/S ................... 58 0.01
Beverages
5,040 Carlsberg A/S ...................... 428 0.08
2,680 Royal Unibrew A/S ............. 118 0.02
Biotechnology
13,420 Bavarian Nordic A/S ........... 451 0.09
Holding Companies - Diversified Operations
1,914 Schouw & Co AB ................ 111 0.02
Pharmaceuticals
99,308 Novo Nordisk A/S ............... 3,673 0.71
Retail Trade
12,251 Pandora A/S ........................ 1,318 0.25
Telecommunications
8,360 GN Store Nord A/S ............. 160 0.03
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Transport
836 AP Moeller - Maersk A/S ... 1,091 0.21
9,169 1.76
Finland (1.24%)
Machinery
56,301 Kone OYJ ........................... 2,543 0.49
Paper and Forest Products
36,997 UPM-Kymmene OYJ ......... 696 0.13
Pharmaceuticals
10,779 Orion OYJ .......................... 378 0.07
Telecommunications
12,427 Elisa OYJ ............................ 408 0.08
469,984 Nokia OYJ .......................... 2,425 0.47
6,450 1.24
France (15.80%)
Advertising
47,892 Publicis Groupe SA ............ 3,224 0.62
Aerospace and Defence
1,517 Dassault Aviation SA ......... 1,498 0.29
16,650 Safran SA ............................ 1,066 0.20
14,500 Thales SA ........................... 1,189 0.23
Auto Components
1,390
Cie Generale des
Etablissements Michelin ..... 137 0.03
55,542 Faurecia .............................. 1,938 0.37
52,271 Valeo SA ............................ 2,714 0.52
Automobiles
96,920 Peugeot SA ......................... 1,318 0.25
43,792 Renault SA .......................... 3,203 0.62
Banks
85,040 BNP Paribas SA .................. 3,892 0.75
130,526 Credit Agricole SA ............. 1,146 0.22
37,880 Societe Generale SA ........... 1,166 0.22
Biotechnology
9,540 Cellectis SA ........................ 204 0.04
70,755 Innate Pharma SA ............... 779 0.15
Building Products
72,408 Cie de Saint-Gobain ............ 2,786 0.54
Chemicals
1,550 Arkema SA ......................... 128 0.02
Commercial Services and Supplies
46,078 Bureau Veritas SA .............. 880 0.17
20,428 Edenred ............................... 425 0.08
55,230 Europcar Groupe SA ........... 428 0.08
Computers and Peripherals
2,630 Atos SE ............................... 252 0.05
10,139 Capgemini SA ..................... 884 0.17
4,908 Ingenico Group SA ............. 382 0.07
Construction and Engineering
75,950 Bouygues SA ...................... 2,240 0.43
Russell Investment Company II plc
Russell Pan European Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Pan European Equity Fund 129
Number
of Shares
Fair Value
EUR ‘000
Fund
%
13,690 Vinci SA .............................. 933 0.18
Electrical Equipment
90,262 Legrand SA ......................... 4,737 0.91
96,120
Schneider Electric
SE ........................................ 5,965 1.15
Food Products
840 Danone SA .......................... 55 0.01
23,526 Sodexo SA ........................... 2,494 0.48
Health Care Equipment and Supplies
18,622
Essilor International
SA ....................................... 2,138 0.41
Health Care Providers and Services
8,063 BioMerieux ......................... 1,070 0.21
23,674 Korian SA ........................... 678 0.13
18,151 Orpea ................................... 1,432 0.27
Home Furnishings
13,120 SEB SA ............................... 1,648 0.32
Household Products
6,352 Societe BIC SA ................... 836 0.16
Insurance
84,545 AXA SA .............................. 1,601 0.31
Internet Software and Services
4,033 Iliad SA ............................... 753 0.14
Media
63,380 Vivendi SA .......................... 1,138 0.22
Metals and Mining
550,473 Vallourec SA ....................... 2,196 0.42
Oil and Gas
156,882 Total SA .............................. 6,616 1.27
Oil and Gas Services
13,469 Technip SA ......................... 736 0.14
Other Finance
15,123 Eurazeo SA ......................... 781 0.15
Personal Products
15,275 L'Oreal SA ........................... 2,568 0.49
Pharmaceuticals
53,059 Sanofi .................................. 3,589 0.69
Real Estate Investment Trust
38,768 ANF Immobilier .................. 812 0.16
5,415
Unibail-Rodamco SE
(France listed) ...................... 1,300 0.25
680
Unibail-Rodamco SE
(Netherlands listed) ............. 163 0.03
Software
26,037 Worldline ............................ 702 0.14
Telecommunications
146,675 Orange SA ........................... 2,043 0.39
Textile and Apparel
15,000
Christian Dior
SE ........................................ 2,393 0.46
6,501
LVMH Moet Hennessy
Louis Vuitton SE ................. 987 0.19
82,243 15.80
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Germany (13.30%)
Auto Components
15,233 Continental AG ................... 2,851 0.55
Banks
169,722 Commerzbank AG .............. 974 0.19
Building Products
14,700 HeidelbergCement AG ....... 1,236 0.24
Chemicals
45,680 BASF SE ............................ 3,477 0.67
35,007 Covestro AG ....................... 1,842 0.35
39,727 Evonik Industries AG ......... 1,196 0.23
6,368 Linde AG ............................ 963 0.19
Commercial Services and Supplies
49,329 Wirecard AG ....................... 2,281 0.44
Construction and Engineering
23,626
Fraport AG Frankfurt
Airport Services Worldwide 1,150 0.22
Containers and Packaging
5,313 Gerresheimer AG ................ 402 0.08
Diversified Financials
46,123 Deutsche Boerse AG ........... 3,328 0.64
2,360
Wuestenrot &
Wuerttembergische AG ...... 42 0.01
Electrical Equipment
20,542 OSRAM Licht AG .............. 1,074 0.20
Energy Equipment and Services
10,101 Nordex SE .......................... 273 0.05
Food Products
3,780 Suedzucker AG ................... 93 0.02
Health Care Providers and Services
65,794
Fresenius SE & Co
KGaA .................................. 4,672 0.90
5,700 Rhoen Klinikum AG ........... 154 0.03
Insurance
9,356 Allianz SE ........................... 1,236 0.24
4,917 Hannover Rueck SE ............ 469 0.09
21,052
Muenchener
Rueckversicherungs-
Gesellschaft AG in
Muenchen ........................... 3,495 0.67
30,405 Talanx AG .......................... 825 0.16
Iron and Steel
106,875 Salzgitter AG ...................... 3,117 0.60
Media
32,324 Axel Springer SE ................ 1,473 0.28
54,197
ProSiebenSat.1 Media
SE ....................................... 2,066 0.40
Metals and Mining
12,125 Aurubis AG ......................... 605 0.11
Miscellaneous Manufacturers
38,455 Siemens AG ........................ 4,007 0.77
Pharmaceuticals
85,734 Bayer AG ............................ 7,667 1.47
Russell Investment Company II plc
Russell Pan European Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
130 Russell Pan European Equity Fund
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Real Estate
186,500 TAG Immobilien AG .......... 2,414 0.46
Retail Trade
1,600 Zalando SE .......................... 59 0.01
Software
62,525 SAP SE ................................ 5,060 0.97
16,631 Software AG ....................... 627 0.12
Telecommunications
182,765 Deutsche Telekom AG ........ 2,727 0.52
79,558
Telefonica Deutschland
Holding AG ......................... 285 0.06
Textile and Apparel
33,826 Adidas AG ........................... 5,226 1.00
Transport
67,354 Deutsche Post AG ............... 1,874 0.36
69,240 13.30
Guernsey, Channel Islands (0.07%)
Real Estate
716,882 Sirius Real Estate Ltd .......... 380 0.07
Hungary (0.18%)
Banks
39,800 OTP Bank Plc ...................... 927 0.18
Ireland (1.60%)
Computers and Peripherals
54,975 Seagate Technology Plc ...... 1,886 0.36
Entertainment
9,533 Paddy Power Betfair Plc ...... 960 0.19
Food Products
28,240 Kerry Group Plc .................. 2,094 0.40
Insurance
10,588 Willis Towers Watson Plc ... 1,251 0.24
Lodging
148,552 Dalata Hotel Group Plc ....... 609 0.12
Retail Trade
265,625 Grafton Group Plc ............... 1,529 0.29
8,329 1.60
Italy (3.64%)
Banks
442,386
Banca Monte dei Paschi di
Siena SpA ............................ 82 0.01
1,072,540 Intesa Sanpaolo SpA ........... 2,117 0.41
257,640 UniCredit SpA ..................... 534 0.10
Commercial Services and Supplies
4,757 ASTM SpA ......................... 46 0.01
Electric Utilities
599,900 A2A SpA ............................. 754 0.14
1,114,800 Enel SpA ............................. 4,424 0.85
Electrical Equipment
15,470 Prysmian SpA ...................... 361 0.07
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Gas Utilities
154,438 Snam SpA ........................... 762 0.15
Internet Software and Services
58,230
Yoox Net-A-Porter Group
SpA ..................................... 1,605 0.31
Machinery
8,025
Danieli & C Officine
Meccaniche SpA ................. 138 0.03
Media
455,194 Mediaset SpA ..................... 1,272 0.24
Oil and Gas
260,615 Eni SpA .............................. 3,341 0.64
Real Estate Investment Trust
2,140,100 Beni Stabili SpA SIIQ ........ 1,136 0.22
Retail Trade
8,900 OVS SpA ............................ 46 0.01
Telecommunications
2,127,763 Telecom Italia SpA ............. 1,572 0.30
Textile and Apparel
51,220 Moncler SpA ....................... 778 0.15
18,968 3.64
Jersey, Channel Islands (1.51%)
Advertising
158,200 WPP Plc .............................. 3,317 0.63
Commercial Services and Supplies
20,200 Experian Plc ........................ 361 0.07
Metals and Mining
96,400 Centamin Plc ....................... 165 0.03
161,000 Glencore Plc ....................... 395 0.08
Oil and Gas Services
6,400 Petrofac Ltd ........................ 66 0.01
Pharmaceuticals
61,931 Shire Plc .............................. 3,578 0.69
7,882 1.51
Luxembourg (0.64%)
Health Care Providers and Services
3,534 Eurofins Scientific SE ......... 1,429 0.28
Iron and Steel
6,890 APERAM SA ..................... 277 0.05
Media
4,310 RTL Group SA ................... 319 0.06
Metals and Mining
39,861 Tenaris SA .......................... 505 0.10
Oil and Gas Services
28,200 Subsea 7 SA ........................ 269 0.05
Telecommunications
24,754 SES SA ............................... 541 0.10
3,340 0.64
Netherlands (7.79%)
Aerospace and Defence
18,372 Airbus Group SE ................. 989 0.19
Russell Investment Company II plc
Russell Pan European Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Pan European Equity Fund 131
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Automobiles
89,000
Fiat Chrysler Automobiles
NV ....................................... 503 0.10
Banks
882,298 ING Groep NV .................... 9,696 1.86
Beverages
2,970 Heineken NV ....................... 233 0.05
Chemicals
12,036 Koninklijke DSM NV ......... 724 0.14
Commercial Services and Supplies
14,240 RELX NV ........................... 228 0.04
Construction and Engineering
8,846 Boskalis Westminster .......... 280 0.05
Electrical Equipment
141,808
Koninklijke Philips
NV ....................................... 3,741 0.72
28,567 Philips Lighting ................... 676 0.13
Food Products
163,831
Koninklijke Ahold Delhaize
NV ....................................... 3,324 0.64
Insurance
176,513 Aegon NV ........................... 602 0.12
654,181 Delta Lloyd NV ................... 2,674 0.51
71,383 NN Group NV ..................... 1,952 0.37
Media
52,070 Wolters Kluwer NV ............ 1,984 0.38
Personal Products
112,167 Unilever NV ........................ 4,607 0.89
Retail Trade
29,644 GrandVision NV ................. 734 0.14
Semiconductor Equipment and Products
9,520 ASM International NV ........ 347 0.07
35,193 ASML Holding NV ............. 3,438 0.66
432,882 STMicroelectronics NV ...... 3,145 0.60
Telecommunications
231,466 Koninklijke KPN NV .......... 684 0.13
40,561 7.79
Norway (2.75%)
Banks
305,812 DNB ASA ........................... 3,565 0.68
Chemicals
15,256 Yara International ASA ....... 451 0.09
Food Products
40,891 Austevoll Seafood ASA ...... 306 0.06
120,910 Grieg Seafood ASA ............. 858 0.16
31,694 Marine Harvest ASA ........... 505 0.10
88,648 Orkla ASA ........................... 815 0.15
7,050 Salmar ASA ........................ 192 0.04
Home Furnishings
70,029 Ekornes ASA ....................... 799 0.15
Metals and Mining
465,210 Norsk Hydro ASA ............... 1,784 0.34
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Oil and Gas
883,147 North Energy ASA ............. 224 0.04
133,802 Statoil ASA ......................... 1,995 0.39
Telecommunications
186,306 Telenor ASA ....................... 2,844 0.55
14,338 2.75
Russia (0.57%)
Banks
5,663
Sberbank of Russia PJSC
ADR (UK Listed) ............... 47 0.01
196,252
Sberbank of Russia PJSC
ADR (US Listed) ................ 1,645 0.32
Oil and Gas
337,900 Gazprom PJSC ADR .......... 1,266 0.24
2,958 0.57
Spain (6.34%)
Auto Components
9,830 CIE Automotive .................. 172 0.03
Banks
1,651,045 Banco Popular Espanol SA . 1,818 0.35
275,174 CaixaBank SA .................... 619 0.12
Commercial Services and Supplies
26,700
Prosegur Cia de Seguridad
SA ....................................... 166 0.03
Computers and Peripherals
196,935 Indra Sistemas SA ............... 2,350 0.45
Construction and Engineering
47,911
ACS Actividades de
Construccion y Servicios
SA ....................................... 1,289 0.25
16,847 Aena SA .............................. 2,212 0.42
46,004 Ferrovial SA ....................... 872 0.17
700,664 Sacyr SA ............................. 1,316 0.25
Electric Utilities
59,241 Endesa SA .......................... 1,130 0.22
303,307 Iberdrola SA ....................... 1,836 0.35
Electrical Equipment
188,082
Gamesa Corp Tecnologica
SA ....................................... 4,009 0.77
Insurance
127,338 Mapfre SA .......................... 317 0.06
Lodging
242,850 NH Hotel Group SA ........... 986 0.19
Machinery
23,951 Zardoya Otis SA ................. 205 0.04
Media
127,869
Mediaset Espana
Comunicacion SA ............... 1,349 0.26
Oil and Gas
97,740 Repsol SA ........................... 1,180 0.23
Real Estate Investment Trust
75,430
Axiare Patrimonio SOCIMI
SA ....................................... 889 0.17
Russell Investment Company II plc
Russell Pan European Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
132 Russell Pan European Equity Fund
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Retail Trade
92,538
Industria de Diseno Textil
SA ....................................... 3,054 0.59
76,746 Telepizza Group .................. 310 0.06
Software
114,505 Amadeus IT Group SA ........ 5,092 0.98
Telecommunications
200,700 Telefonica SA ...................... 1,809 0.35
32,980 6.34
Sweden (3.11%)
Agriculture
39,971 Swedish Match AB ............. 1,307 0.25
Banks
152,347 Nordea Bank AB ................. 1,347 0.26
167,692 Swedbank AB ...................... 3,511 0.67
Electrical Equipment
106,177 Assa Abloy AB ................... 1,922 0.37
Hand and Machine Tools
87,200 Sandvik AB ......................... 855 0.16
Home Furnishings
41,683 Electrolux AB ...................... 931 0.18
Machinery
84,268 Atlas Copco AB .................. 2,261 0.44
21,350 Atlas Copco AB .................. 520 0.10
Media
37,440
Modern Times Group MTG
AB ....................................... 854 0.16
Metals and Mining
24,600 Granges AB ......................... 224 0.04
Real Estate
32,002 Wallenstam AB ................... 241 0.05
Retail Trade
49,031
Hennes & Mauritz
AB ....................................... 1,232 0.24
Telecommunications
251,125 Telia Co AB ........................ 1,002 0.19
16,207 3.11
Switzerland (8.91%)
Auto Components
500 Georg Fischer AG ............... 390 0.08
Banks
151,002
Credit Suisse Group
AG ....................................... 1,762 0.34
207,788 UBS Group AG ................... 2,523 0.48
Beverages
6,090 Coca-Cola HBC AG ............ 126 0.02
Building Products
23,158 LafargeHolcim Ltd .............. 1,116 0.21
Chemicals
388 Givaudan SA ....................... 704 0.14
5,659 Lonza Group AG ................. 964 0.18
3,035 Syngenta AG ....................... 1,184 0.23
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Commercial Services and Supplies
267 SGS SA ............................... 533 0.10
Diversified Financials
59,857 GAM Holding AG .............. 510 0.10
Food Products
160,458 Nestle SA ............................ 11,275 2.17
Insurance
524 Helvetia Holding AG .......... 236 0.05
10,225
Swiss Life Holding
AG ...................................... 2,361 0.45
3,330 Swiss Re AG ....................... 268 0.05
Machinery
60,446 ABB Ltd ............................. 1,210 0.23
1,682 Bobst Group SA .................. 84 0.02
Personal Products
10,537 Oriflame Holding AG ......... 344 0.07
Pharmaceuticals
16,644 Actelion Ltd ........................ 2,570 0.49
38,290 Novartis AG ........................ 2,685 0.52
45,028 Roche Holding AG ............. 9,961 1.91
Retail Trade
40,817
Cie Financiere Richemont
SA ....................................... 2,218 0.43
12,827 Dufry AG ............................ 1,432 0.27
Telecommunications
1,179 Swisscom AG ..................... 500 0.10
Transport
3,192
Kuehne & Nagel
International AG ................. 413 0.08
8,020
Panalpina Welttransport
Holding AG ........................ 996 0.19
46,365 8.91
United Kingdom (22.25%)
Aerospace and Defence
79,176 Meggitt Plc ......................... 413 0.08
130,810
Rolls-Royce Holdings
Plc ....................................... 1,089 0.21
Agriculture
97,215
British American Tobacco
Plc ....................................... 5,540 1.06
147,874
Imperial Tobacco Group
Plc ....................................... 6,792 1.31
Airlines
27,559 Easy Jet Plc ......................... 321 0.06
Banks
671,100 Barclays Plc ........................ 1,302 0.25
578,587 HSBC Holdings Plc ............ 3,870 0.75
2,907,993
Lloyds Banking Group
Plc ....................................... 1,834 0.35
764,711
Royal Bank of Scotland
Group Plc ............................ 1,580 0.30
146,850 Standard Chartered Plc ....... 1,067 0.21
Beverages
93,765 Diageo Plc .......................... 2,396 0.46
Russell Investment Company II plc
Russell Pan European Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Pan European Equity Fund 133
Number
of Shares
Fair Value
EUR ‘000
Fund
%
61,279 SABMiller Plc ..................... 3,184 0.61
Chemicals
8,610
Johnson Matthey
Plc ....................................... 328 0.06
Commercial Services and Supplies
20,300 QinetiQ Group Plc ............... 56 0.01
Distributors
43,800 Inchcape Plc ........................ 333 0.07
785,597 SIG Plc ................................ 1,056 0.20
Diversified Financials
10,590
IG Group Holdings
Plc ....................................... 107 0.02
57,406 Schroders Plc ....................... 1,789 0.34
591,409
Worldpay Group
Plc ....................................... 2,025 0.39
Electric Utilities
54,585 SSE Plc ................................ 989 0.19
Entertainment
601,750 Ladbrokes Plc ...................... 974 0.19
203,147
Merlin Entertainments
Plc ....................................... 1,032 0.20
91,660 William Hill Plc .................. 322 0.06
Food Products
76,631 Compass Group Plc ............. 1,324 0.25
903,750 Tesco Plc ............................. 1,911 0.37
Gas Utilities
240,100 Centrica Plc ......................... 633 0.12
Health Care Equipment and Supplies
61,551 Smith & Nephew Plc ........... 885 0.17
Home Builders
209,111
Barratt Developments
Plc ....................................... 1,195 0.23
12,800 Persimmon Plc .................... 269 0.05
791,735 Taylor Wimpey Plc ............. 1,410 0.27
Household Products
78,676
Reckitt Benckiser Group
Plc ....................................... 6,607 1.27
Insurance
18,460 Admiral Group Plc .............. 437 0.09
294,003 Aviva Plc ............................. 1,497 0.29
10,200
Direct Line Insurance Group
Plc ....................................... 43 0.01
207,473
RSA Insurance Group
Plc ....................................... 1,309 0.25
124,990 St James's Place Plc ............. 1,370 0.26
Internet Software and Services
14,610 ASOS Plc ............................ 819 0.16
227,736
Auto Trader Group
Plc ....................................... 1,067 0.20
Iron and Steel
94,356 Evraz Plc ............................. 176 0.03
Media
53,789 Informa Plc .......................... 443 0.09
276,356 ITV Plc ................................ 598 0.11
Number
of Shares
Fair Value
EUR ‘000
Fund
%
176,209 Sky Plc ................................ 1,821 0.35
Metals and Mining
257,900 Antofagasta Plc ................... 1,562 0.30
119,691 BHP Billiton Plc ................. 1,608 0.31
97,490 Rio Tinto Plc ....................... 2,901 0.56
Miscellaneous Manufacturers
32,855 Smiths Group Plc ................ 556 0.11
Oil and Gas
396,061 BP Plc ................................. 2,060 0.40
412,000 Premier Oil Plc ................... 326 0.06
304,955
Royal Dutch Shell
Plc ....................................... 6,761 1.30
142,819
Royal Dutch Shell Plc (B
Shares) ................................ 3,297 0.63
148,031 Tullow Oil Plc .................... 433 0.08
Oil and Gas Services
134,875 AMEC Plc .......................... 891 0.17
Other Finance
336,100 3i Group Plc ........................ 2,527 0.49
Paper and Forest Products
31,254 Mondi Plc ........................... 586 0.11
Pharmaceuticals
38,779 AstraZeneca Plc .................. 2,243 0.43
419,369
GlaxoSmithKline
Plc ....................................... 7,964 1.53
224,700 Indivior Plc ......................... 796 0.15
Real Estate
83,187 Foxtons Group Plc .............. 96 0.02
Real Estate Investment Trust
41,380 Derwent London Plc ........... 1,244 0.24
106,584
Great Portland Estates
Plc ....................................... 780 0.15
121,008 Hammerson Plc ................... 821 0.16
57,220
Land Securities Group
Plc ....................................... 700 0.13
Retail Trade
33,690
JD Sports Fashion
Plc ....................................... 577 0.11
122,900 Kingfisher Plc ..................... 535 0.10
137,971 Marks & Spencer Group Plc 528 0.10
119,950 N Brown Group Plc ............ 263 0.05
10,484 Next Plc .............................. 579 0.11
74,126 Travis Perkins Plc ............... 1,323 0.26
Software
35,400 Sage Group Plc ................... 302 0.06
Telecommunications
532,417 BT Group Plc ...................... 2,394 0.46
44,220 Inmarsat Plc ........................ 360 0.07
2,842,699 Vodafone Group Plc ........... 7,286 1.40
Transport
47,200 Royal Mail Plc .................... 269 0.05
Water Utilities
40,380 Pennon Group Plc ............... 416 0.08
Russell Investment Company II plc
Russell Pan European Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
134 Russell Pan European Equity Fund
Number
of Shares
Fair Value
EUR ‘000
Fund
%
51,716 United Utilities Group Plc ... 600 0.12
115,797 22.25
Total Common Stock ........ 489,084 93.96
Preferred Stock (0.71%)
Germany (0.52%)
Automobiles
23,125 Volkswagen AG .................. 2,704 0.52
Italy (0.19%)
Machinery
85,499
Danieli & C Officine
Meccaniche SpA ................. 1,017 0.19
Total Preferred Stock ........ 3,721 0.71
Total Transferable
Securities ............................ 492,805 94.67
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Investment Funds (3.91%)
Ireland (3.91%)
196
Russell Investment Company
III Plc - The Sterling
Liquidity Fund - Class R
Roll-Up Shares ................... 228 0.04
20,219
Russell Investment Company
Plc - Russell Euro Liquidity
Fund - Class R Roll-Up
Shares ................................. 20,113 3.87
Total Investment Funds .... 20,341 3.91
Total Investments
excluding Financial
Derivative Instruments ..... 513,146 98.58
Financial Derivative Instruments (0.02%)
Open Futures Contracts (0.04%)
Notional
Amount
‘000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
804
446.91
9 of Amsterdam Index Future
Long Futures Contracts
Expiring October 2016 .............................................. 9 0.00
1,986
4,414.01
45 of CAC 40 Index Futures
Long Futures Contracts
Expiring October 2016 .............................................. 13 0.00
1,833
10,476.50
7 of DAX Index Futures
Long Futures Contracts
Expiring December 2016 .......................................... 6 0.00
6,368
2,989.64
213 of Euro Stoxx 50 Index Futures
Long Futures Contracts
Expiring December 2016 .......................................... 9 0.00
6,778
7,701.92
88 of FTSE 100 Index Futures
Long Futures Contracts
Expiring December 2016 .......................................... 198 0.04
496
16,534.17
6 of FTSE MIB Index Futures
Long Futures Contracts
Expiring December 2016 .......................................... (5) 0.00
709
8,866.75
8 of IBEX 35 Index Futures
Long Futures Contracts
Expiring October 2016 .............................................. (8) 0.00
1,030
147.11
70 of OMX 30 Index Futures
Long Futures Contracts
Expiring October 2016 .............................................. 16 0.01
3,391
7,536.12
45 of Swiss Market Index Futures
Long Futures Contracts
Expiring December 2016 .......................................... (39) (0.01)
Unrealised gain on open futures contracts ......................................................................... 251 0.05
Unrealised loss on open futures contracts .......................................................................... (52) (0.01)
Net unrealised gain (loss) on open futures contracts .................................................... 199 0.04
Russell Investment Company II plc
Russell Pan European Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell Pan European Equity Fund 135
Open Forward Foreign Currency Exchange Contracts ((0.02)%)
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
21/12/2016 CHF 2,0000 EUR 1,8344 4 0.00
21/12/2016 CHF 2,0000 EUR 1,8344 4 0.00
21/12/2016 CHF 2000 EUR 1844 - 0.00
21/12/2016 EUR 5499 CHF 6000 (2) 0.00
21/12/2016 EUR 1,2855 CHF 1,1000 16 0.00
21/12/2016 EUR 1677 SEK 1,6000 1 0.00
21/12/2016 GBP 3,3000 EUR 3,8844 (78) (0.01)
21/12/2016 GBP 3,3000 EUR 3,8822 (76) (0.01)
21/12/2016 GBP 4000 EUR 4644 (3) 0.00
21/12/2016 SEK 5,3500 EUR 5644 (8) 0.00
21/12/2016 SEK 5,3500 EUR 5644 (8) 0.00
Unrealised gain on open forward foreign currency exchange contracts ............................... 25 0.00
Unrealised loss on open forward foreign currency exchange contracts ................................ (175) (0.02)
Net unrealised gain (loss) on open forward foreign currency exchange contracts ....... (150) (0.02)
Total Financial Derivative Instruments ............................................................................ 49 0.02
Fair Value
EUR ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or Loss
(98.63%) ....................................................................................................................................................... 513,422 98.63
Total Financial Liabilities at Fair Value through Profit or
Loss ((0.03)%) ............................................................................................................................................. (227) (0.03)
Net Financial Assets at Fair Value through Profit or Loss
(98.60%) .................................................................................................................................................... 513,195 98.60
Other Net Assets (1.40%) ........................................................................................................................ 7,337 1.40
Net Assets .................................................................................................................................................. 520,532 100.00
Abbreviation used:
ADR- American Depository Receipt
Analysis of gross assets
% of
gross assets
Transferable securities admitted to an official stock exchange listing ...................................................................... 94.21
Investment funds (UCITS) ....................................................................................................................................... 3.89
Exchange traded financial derivative instruments .................................................................................................... 0.05
Other assets ............................................................................................................................................................... 1.85
100.00
The broker for the open futures contracts is Morgan Stanley.
The counterparties for the open forward foreign currency exchange contracts are:
Bank of America
BNP Paribas
HSBC Bank
Royal Bank of Canada
Russell Investment Company II plc
Russell Pan European Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
136 Russell Pan European Equity Fund
Fair Value Hierarchy (Note 10)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 30 September 2016 and 31 March 2016.
As at 30 September 2016
Level 1
EUR ‘000
Level 2
EUR ‘000
Level 3
EUR ‘000
Total
EUR ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 492,805 - - 492,805
Investment funds ........................................................................ - 20,341 - 20,341
Unrealised gain on open futures contracts ................................. 251 - - 251
Unrealised gain on forward foreign currency exchange
contracts ..................................................................................... - 25 - 25
Total assets ...................................................................................... 493,056 20,366 - 513,422
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ................................. (52) - - (52)
Unrealised loss on forward foreign currency exchange
contracts ..................................................................................... - (175) - (175)
Total liabilities ................................................................................ (52) (175) - (227)
As at 31 March 2016
Level 1
EUR ‘000
Level 2
EUR ‘000
Level 3
EUR ‘000
Total
EUR ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 486,760 - 1 486,761
Investment funds ........................................................................ - 26,518 - 26,518
Unrealised gain on open futures contracts ................................. 70 - - 70
Unrealised gain on forward foreign currency exchange
contracts ..................................................................................... - 46 - 46
Total assets ...................................................................................... 486,830 26,564 1 513,395
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ................................. (310) - - (310)
Unrealised loss on forward foreign currency exchange
contracts ..................................................................................... - (171) - (171)
Total liabilities ................................................................................ (310) (171) - (481)
Russell Investment Company II plc
Russell Pan European Equity Fund
Statement of Changes in the Composition of Portfolio
Listed below are 20 largest cumulative investment purchases and cumulative investment sales during the six months ended 30
September 2016.
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
Russell Pan European Equity Fund 137
Portfolio Securities
Acquisition Cost
EUR ‘000 Portfolio Securities
Disposal Proceeds
EUR ‘000
Russell Investment Company plc Russell Investment Company plc
Russell Euro Liquidity Fund Russell Euro Liquidity Fund
Class R Roll-Up Shares 87,496 Class R Roll-Up Shares (93,719)
Reckitt Benckiser Group Plc 3,049 Allianz SE (2,734)
Bayer AG 3,043 GlaxoSmithKline Plc (2,679)
Swiss Life Holding AG 2,832 Adidas AG (2,660)
Nestle SA 2,639 Royal Dutch Shell Plc (2,607)
GlaxoSmithKline Plc 2,572 Statoil ASA (2,557)
BT Group Plc 2,469 Deutsche Telekom AG (2,437)
Enel SpA 2,466 Eni SpA (2,394)
Pandora A/S 2,466 BNP Paribas SA (2,228)
Shire Plc 2,295 SAP SE (2,162)
Russell Investment Company III plc Russell Investment Company III plc
The Sterling Liquidity Fund The Sterling Liquidity Fund
Class R Roll-Up Shares 2,179 Class R Roll-Up Shares (2,081)
ING Groep NV 2,123 Imperial Brands Plc (2,043)
Telefonica SA 2,060 Roche Holding AG (1,998)
Muenchener Rueckversicherungs - UBS Group AG (1,975)
Gesellschaft AG in Muenchen 1,937 Sanofi (1,856)
Wolters Kluwer NV 1,921 Boliden AB (1,767)
STMicroelectronics NV 1,843 Muenchener Rueckversicherungs -
Covestro AG 1,771 Gesellschaft AG in Muenchen (1,724)
SAP SE 1,736 Koninklijke KPN NV (1,717)
Roche Holding AG 1,714 Total SA (1,684)
Eni SpA 1,712 BHP Billiton Plc (1,669)
Russell Investment Company II plc
Russell U.K. Equity Plus Fund
Balance Sheet
As at 30 September 2016
The accompanying notes are an integral part of the financial statements.
138 Russell U.K. Equity Plus Fund
30 September 2016
(Unaudited)
GBP ‘000
31 March 2016
(Audited)
GBP ‘000
Assets
Financial assets at fair value through profit or loss ........................................................... 57,847 90,289
Cash at bank (Note 2) ........................................................................................................ 239 471
Cash held with brokers and counterparties for open financial derivative instruments
(Note 2) ............................................................................................................................. 347 624
Debtors:
Receivable for investments sold ..................................................................................... 296 -
Receivable on fund shares issued ................................................................................... 11 32
Dividends receivable ...................................................................................................... 138 497
58,878 91,913
Liabilities
Financial liabilities at fair value through profit or loss ..................................................... (25) -
Creditors – amounts falling due within one financial year:
Payable for investments purchased ................................................................................. (19) (21)
Payable on fund shares redeemed ................................................................................... (15) (20)
Distributions payable on income class shares ................................................................ (165) (252)
Management fees payable .............................................................................................. (45) (63)
Performance fees payable ............................................................................................... (107) (626)
Depositary fees payable .................................................................................................. - (1)
Sub-custodian fees payable ............................................................................................ (7) (1)
Administration fees payable ............................................................................................ (2) (4)
Audit fees payable .......................................................................................................... (4) (10)
(389) (998)
Net asset value attributable to redeemable participating shareholders .................... 58,489 90,915
Russell Investment Company II plc
Russell U.K. Equity Plus Fund
Profit and Loss Account
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell U.K. Equity Plus Fund 139
Six months ended
30 September 2016
(Unaudited)
GBP ‘000
Six months ended
30 September 2015
(Unaudited)
GBP ‘000
Income
Dividends ....................................................................................................................... 1,329 1,804
Net gain (loss) on investment activities ............................................................................ 1,890 (4,884)
Total investment income (expense) ............................................................................... 3,219 (3,080)
Expenses
Management fees (Note 3) ............................................................................................. (319) (423)
Performance fees (Note 3) .............................................................................................. 226 (267)
Depositary fees (Note 4) ................................................................................................. (4) (4)
Sub-custodian fees (Note 4) ........................................................................................... (27) (6)
Administration and transfer agency fees (Note 4) .......................................................... (24) (26)
Audit fees ....................................................................................................................... (5) (4)
Professional fees ............................................................................................................. (1) (11)
Other fees ....................................................................................................................... (2) (7)
Total operating expenses ............................................................................................... (156) (748)
Net income (expense) ..................................................................................................... 3,063 (3,828)
Finance costs
Distributions (Note 6) .................................................................................................... (967) (1,035)
Profit (loss) for the financial period before taxation ................................................... 2,096 (4,863)
Taxation
Withholding tax (Note 7) ................................................................................................ (8) (2)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 2,088 (4,865)
All amounts arose solely from continuing operations. There are no recognised gains and losses other than those dealt with in the Profit and Loss
Account.
Russell Investment Company II plc
Russell U.K. Equity Plus Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
140 Russell U.K. Equity Plus Fund
Six months ended
30 September 2016
(Unaudited)
GBP ‘000
Six months ended
30 September 2015
(Unaudited)
GBP ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations .................................................................................................. 2,088 (4,865)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 8) ....................... 492 724
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 8) ...................................................................................................... (35,006) (5,735)
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders ....................................................................................................................... (32,426) (9,876)
Net assets attributable to redeemable participating shareholders
Beginning of financial period ......................................................................................... 90,915 108,931
End of financial period ................................................................................................... 58,489 99,055
Russell Investment Company II plc
Russell U.K. Equity Plus Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell U.K. Equity Plus Fund 141
Number
of Shares
Fair Value
GBP ‘000
Fund
%
Transferable Securities (95.99%)
Common Stock (95.47%)
Bermuda (0.77%)
Insurance
16,068 Hiscox Ltd ........................... 167 0.28
42,541
Lancashire Holdings
Ltd ....................................... 285 0.49
452 0.77
Cayman Islands (0.06%)
Insurance
4,131
Phoenix Group
Holdings .............................. 36 0.06
Germany (0.29%)
Hotels, Restaurants and Leisure
15,389 TUI AG ............................... 169 0.29
Ireland (1.12%)
Entertainment
1,900
Paddy Power Betfair
Plc ....................................... 165 0.28
Food Products
34,221 Greencore Group Plc ........... 115 0.20
Health Care Providers and Services
18,562 UDG Healthcare Plc ............ 119 0.20
Real Estate Investment Trust
215,518 Hibernia REIT Plc ............... 255 0.44
654 1.12
Isle Of Man (2.38%)
Entertainment
61,426 GVC Holdings Plc ............... 456 0.78
Internet Software and Services
81,200 Paysafe Group Plc ............... 362 0.62
Software
62,903 Playtech Plc ......................... 572 0.98
1,390 2.38
Israel (0.30%)
Diversified Financials
26,370 Plus500 Ltd ......................... 175 0.30
Jersey, Channel Islands (7.33%)
Advertising
11,527 WPP Plc .............................. 209 0.36
Commercial Services and Supplies
119,969 Cape Plc .............................. 250 0.42
15,499 UBM Plc ............................. 111 0.19
Distributors
29,000 Wolseley Plc ....................... 1,263 2.16
Metals and Mining
195,634 Centamin Plc ....................... 290 0.50
127,981 Glencore Plc ........................ 272 0.46
Number
of Shares
Fair Value
GBP ‘000
Fund
%
Pharmaceuticals
37,893 Shire Plc .............................. 1,894 3.24
4,289 7.33
Spain (0.37%)
Airlines
54,460
International Consolidated
Airlines Group SA .............. 217 0.37
United Kingdom (82.81%)
Aerospace and Defence
26,963 Meggitt Plc ......................... 122 0.21
Agriculture
60,899
British American Tobacco
Plc ....................................... 3,002 5.13
12,518 Genus Plc ............................ 244 0.42
33,995 Imperial Brands Plc ............ 1,351 2.31
Airlines
55,144 Easy Jet Plc ......................... 555 0.95
Auto Components
46,196 GKN Plc ............................. 148 0.25
Banks
425,000 Barclays Plc ........................ 713 1.22
16,798 BGEO Group Plc ................ 488 0.83
51,548 HSBC Holdings Plc ............ 298 0.51
436,259 Lloyds Banking Group Plc . 238 0.41
96,663
Royal Bank of Scotland
Group Plc ............................ 173 0.30
26,340 Shawbrook Group Plc ......... 63 0.11
24,528 Standard Chartered Plc ....... 154 0.26
116,583
Virgin Money Holdings UK
Plc ....................................... 363 0.62
Beverages
12,502 Britvic Plc ........................... 75 0.13
21,236 Diageo Plc .......................... 469 0.80
Building Products
42,680 Forterra Plc ......................... 72 0.12
128,515 Ibstock Plc .......................... 208 0.36
36,373 Marshalls Plc ...................... 104 0.18
51,532 Polypipe Group Plc ............. 145 0.25
100,843 Tyman Plc ........................... 282 0.48
Chemicals
35,175 Filtrona Plc ......................... 171 0.29
16,000 Johnson Matthey Plc ........... 527 0.90
62,028 Synthomer Plc ..................... 229 0.39
4,476 Victrex Plc .......................... 70 0.12
Commercial Services and Supplies
24,667
Babcock International Group
Plc ....................................... 255 0.44
349,149 Hays Plc .............................. 453 0.77
283,984 Johnson Service Group Plc . 310 0.53
184,990 QinetiQ Group Plc .............. 438 0.75
117,000 RELX Plc ............................ 1,712 2.93
Russell Investment Company II plc
Russell U.K. Equity Plus Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
142 Russell U.K. Equity Plus Fund
Number
of Shares
Fair Value
GBP ‘000
Fund
%
21,101 RPS Group Plc .................... 37 0.06
66,692 Savills Plc ............................ 478 0.82
88,940 St Ives Plc ............................ 118 0.20
16,993 Staffline Group Plc .............. 147 0.25
3,811 WS Atkins Plc ..................... 61 0.10
Construction and Engineering
39,977 BBA Aviation Plc ............... 100 0.17
91,765 Costain Group Plc ............... 330 0.56
19,940 Keller Group Plc ................. 175 0.30
19,661
Morgan Sindall Group
Plc ....................................... 145 0.25
284,199 Watkin Jones ....................... 344 0.59
Containers and Packaging
13,692 RPC Group Plc .................... 131 0.22
Distributors
43,093 Inchcape Plc ........................ 284 0.49
Diversified Financials
191,090 Aldermore Group Plc .......... 320 0.55
22,179 Ashmore Group Plc ............. 78 0.13
21,070
Brewin Dolphin Holdings
Plc ....................................... 56 0.09
32,000
Hargreaves Lansdown
Plc ....................................... 407 0.70
21,974 ICAP Plc ............................. 102 0.17
73,980
International Personal
Finance Plc .......................... 192 0.33
69,783 Man Group Plc .................... 79 0.13
96,631 Numis Corp Plc ................... 212 0.36
61,280
Paragon Group of Cos
Plc ....................................... 192 0.33
4,946 PayPoint Plc ........................ 51 0.09
6,907 Provident Financial Plc ....... 209 0.36
16,835 Tullett Prebon Plc ................ 56 0.10
Electric Utilities
16,159 SSE Plc ................................ 253 0.43
Electrical Equipment
24,328 Electrocomponents Plc ........ 83 0.14
8,776 Renishaw Plc ....................... 231 0.40
Entertainment
110,000
Merlin Entertainments
Plc ....................................... 484 0.83
31,601 William Hill Plc .................. 96 0.16
Food Products
115,000 Compass Group Plc ............. 1,719 2.94
Gas Utilities
92,590 Centrica Plc ......................... 211 0.36
Holding Companies - Diversified Operations
22,622 Mitie Group Plc ................... 43 0.07
Home Builders
36,658 Bellway Plc ......................... 868 1.49
8,104
Berkeley Group Holdings
Plc ....................................... 209 0.36
51,014
Bovis Homes Group
Plc ....................................... 446 0.76
Number
of Shares
Fair Value
GBP ‘000
Fund
%
93,014
Crest Nicholson Holdings
Plc ....................................... 420 0.72
88,255 Redrow Plc ......................... 353 0.60
Home Furnishings
27,861
Howden Joinery Group
Plc ....................................... 120 0.21
Hotels, Restaurants and Leisure
141,238
Hollywood Bowl Group
Plc ....................................... 238 0.41
335,240
Thomas Cook Group
Plc ....................................... 232 0.39
Household Products
156,170 McBride Plc ........................ 293 0.50
18,000
Reckitt Benckiser Group
Plc ....................................... 1,308 2.24
Insurance
29,165 Admiral Group Plc .............. 598 1.02
164,271 Aviva Plc ............................ 724 1.24
22,904 Beazley Plc ......................... 89 0.15
110,133
Hastings Group Holdings
Plc ....................................... 255 0.44
135,704 JRP Group Plc .................... 182 0.31
55,975
Legal & General Group
Plc ....................................... 122 0.21
15,340 Novae Group Plc ................. 117 0.20
93,825 Old Mutual Plc .................... 190 0.32
23,805 Prudential Plc ...................... 325 0.56
Internet Software and Services
125,000 Auto Trader Group Plc ....... 507 0.87
51,000 Just Eat Plc .......................... 273 0.47
25,519
Moneysupermarket.com
Group Plc ............................ 77 0.13
7,363 Rightmove Plc .................... 311 0.53
Lodging
20,480 Hostelworld Group Plc ....... 38 0.06
Media
18,803 Informa Plc ......................... 134 0.23
81,868 ITV Plc ............................... 153 0.26
18,837 Pearson Plc ......................... 142 0.24
181,194 Sky Plc ................................ 1,620 2.77
178,946 Trinity Mirror Plc ............... 163 0.28
Metals and Mining
49,042 Acacia Mining Plc .............. 244 0.42
31,874 Bodycote Plc ....................... 188 0.32
51,349 Rio Tinto Plc ....................... 1,322 2.26
34,595 Vedanta Resources Plc ........ 202 0.34
Miscellaneous Manufacturers
77,905
Photo-Me International
Plc ....................................... 121 0.21
50,491 Senior Plc ............................ 116 0.20
10,778 Smiths Group Plc ................ 158 0.27
Oil and Gas
234,613 BP Plc ................................. 1,056 1.81
105,000 Cairn Energy Plc ................. 197 0.34
Russell Investment Company II plc
Russell U.K. Equity Plus Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell U.K. Equity Plus Fund 143
Number
of Shares
Fair Value
GBP ‘000
Fund
%
206,091 Ophir Energy Plc ................. 159 0.27
20,419
Royal Dutch Shell Plc
(A Shares) ........................... 391 0.67
75,253
Royal Dutch Shell Plc
(B Shares) ............................ 1,503 2.57
96,874 Soco International Plc ......... 131 0.22
Other Finance
175,372 John Laing Group Plc .......... 478 0.82
255,000 Melrose Industries Plc ......... 445 0.76
Paper and Forest Products
88,870 DS Smith Plc ....................... 342 0.59
9,488 Mondi Plc ............................ 154 0.26
Personal Products
11,603 Unilever Plc ......................... 424 0.72
Pharmaceuticals
24,340 AstraZeneca Plc .................. 1,218 2.08
19,468 CVS Group Plc .................... 172 0.30
7,856 GlaxoSmithKline Plc ........... 129 0.22
Real Estate
126,000
Capital & Counties
Properties Plc ...................... 363 0.62
47,858 Helical Plc ........................... 129 0.22
Real Estate Investment Trust
185,923
LondonMetric Property
Plc ....................................... 297 0.51
66,265 Unite Group Plc ................... 420 0.72
Retail Trade
113,410 Conviviality ......................... 245 0.42
25,974 Dixons Carphone Plc ........... 96 0.16
14,863 Halfords Group Plc .............. 52 0.09
22,328 JD Sports Fashion Plc ......... 330 0.56
43,784
Marks & Spencer Group
Plc ....................................... 145 0.25
115,874 Mothercare Plc .................... 137 0.23
24,812 Next Plc ............................... 1,185 2.03
76,564
Sports Direct International
Plc ....................................... 220 0.38
17,396 SuperGroup Plc ................... 261 0.45
Semiconductor Equipment and Products
108,826
Imagination Technologies
Group Plc ............................ 269 0.46
Software
3,482 AVEVA Group Plc .............. 70 0.12
2,340 Fidessa Group Plc ............... 56 0.09
28,219
Micro Focus
International ........................ 620 1.06
67,955 Sage Group Plc .................... 502 0.86
Telecommunications
180,088 BT Group Plc ...................... 701 1.20
14,967 Inmarsat Plc ......................... 106 0.18
41,929 Kcom Group Plc .................. 49 0.08
17,727 Laird Plc .............................. 56 0.10
225,357 Sepura Plc ........................... 38 0.06
294,794 Vodafone Group Plc ............ 654 1.12
Number
of Shares
Fair Value
GBP ‘000
Fund
%
Toys, Games and Hobbies
49,109 Character Group Plc ........... 241 0.41
Transport
12,344 Go-Ahead Group Plc .......... 251 0.43
Water Utilities
13,052 Pennon Group Plc ............... 116 0.20
6,121 Severn Trent Plc ................. 153 0.26
15,980
United Utilities Group
Plc ....................................... 160 0.27
48,435 82.81
Virgin Islands, British (0.04%)
Metals and Mining
19,931 Gem Diamonds Ltd ............. 25 0.04
Total Common Stock ........ 55,842 95.47
Preferred Stock (0.52%)
Italy (0.52%)
Machinery
29,709
Danieli & C Officine
Meccaniche SpA ................. 306 0.52
Total Preferred Stock ....... 306 0.52
Total Transferable
Securities ........................... 56,148 95.99
Investment Funds (2.70%)
Ireland (2.58%)
1,498
Russell Investment Company
III Plc - The Sterling
Liquidity Fund - Class R
Roll-Up Shares ................... 1,505 2.57
2
Russell Investment Company
III Plc - The US Dollar Cash
Fund II - Class R Roll-Up
Shares ................................. 2 0.01
1,507 2.58
Cayman Islands (0.12%)
49,234
Marwyn Value Investors
Ltd ...................................... 70 0.12
Total Investment Funds .... 1,577 2.70
Total Investments
excluding Financial
Derivative Instruments ..... 57,725 98.69
Russell Investment Company II plc
Russell U.K. Equity Plus Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
144 Russell U.K. Equity Plus Fund
Financial Derivative Instruments (0.17%)
Open Futures Contracts (0.17%)
Notional
Amount
GBP '000
Average
Cost Price
GBP
Unrealised
Gain (Loss)
GBP ‘000
Fund
%
4,130
6,660.96
62 of FTSE 100 Index Future
Long Futures Contracts
Expiring December 2016 ................................ 122 0.21
(2,959)
(17,614.49)
84 of FTSE 250 Index Future
Short Futures Contracts
Expiring December 2016 ................................ (25) (0.04)
Unrealised gain on open future contracts ........................................................................... 122 0.21
Unrealised loss on open future contracts ........................................................................... (25) (0.04)
Net unrealised gain (loss) on open futures contracts .................................................... 97 0.17
Total Financial Derivative Instruments ......................................................................... 97 0.17
Fair Value
GBP ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or Loss
(98.90%) ....................................................................................................................................................... 57,847 98.90
Total Financial Liabilities at Fair Value through Profit or
Loss ((0.04)%) ............................................................................................................................................. (25) (0.04)
Net Financial Assets at Fair Value through Profit or Loss
(98.86%) .................................................................................................................................................... 57,822 98.86
Other Net Assets (1.14%) ........................................................................................................................ 667 1.14
Net Assets .................................................................................................................................................. 58,489 100.00
Analysis of gross assets
% of
gross assets
Transferable securities admitted to an official stock exchange listing ...................................................................... 95.36
Investment funds (UCITS) ........................................................................................................................................ 2.68
Exchange traded financial derivative instruments ..................................................................................................... 0.21
Other assets ............................................................................................................................................................... 1.75
100.00
The broker for the open futures contracts is UBS AG.
Russell Investment Company II plc
Russell U.K. Equity Plus Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell U.K. Equity Plus Fund 145
Fair Value Hierarchy (Note 10)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 30 September 2016 and 31 March 2016.
As at 30 September 2016
Level 1
GBP ‘000
Level 2
GBP ‘000
Level 3
GBP ‘000
Total
GBP ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 56,148 - - 56,148
Investment funds ........................................................................ - 1,577 - 1,577
Unrealised gain on open futures contracts ................................. 122 - - 122
Total assets ...................................................................................... 56,270 1,577 - 57,847
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ................................. (25) - - (25)
Total liabilities ................................................................................ (25) - - (25)
As at 31 March 2016
Level 1
GBP ‘000
Level 2
GBP ‘000
Level 3
GBP ‘000
Total
GBP ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 86,086 - - 86,086
Investment funds ........................................................................ - 4,188 - 4,188
Unrealised gain on open futures contracts ................................. 15 - - 15
Total assets ...................................................................................... 86,101 4,188 - 90,289
Russell Investment Company II plc
Russell U.K. Equity Plus Fund
Statement of Changes in Composition of Portfolio
Listed below are 20 largest cumulative investment purchases and cumulative investment sales during the six months ended 30
September 2016.
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
146 Russell U.K. Equity Plus Fund
Portfolio Securities
Acquisition Cost
GBP ‘000 Portfolio Securities
Disposal Proceeds
GBP ‘000
Russell Investment Company III Plc Russell Investment Company III Plc
The Sterling Liquidity Fund The Sterling Liquidity Fund
Class R Roll-Up Shares 28,895 Class R Roll-Up Shares (31,555)
BP Plc 1,627 RELX Plc (2,727)
Aviva Plc 1,487 AstraZeneca Plc (2,609)
Royal Bank of Scotland Group Plc 1,372 GlaxoSmithKline Plc (2,464)
Imperial Brands Plc 1,282 British American Tobacco Plc (2,150)
Bovis Homes Group Plc 1,212 BP Plc (2,119)
Bellway Plc 1,202 HSBC Holdings Plc (2,022)
HSBC Holdings Plc 1,100 Shire Plc (1,975)
Land Securities Group Plc 1,052 BT Group Plc (1,948)
Hays Plc 1,046 Vodafone Group Plc (1,859)
Playtech Plc 990 ITV Plc (1,677)
Crest Nicholson Holdings plc 963 Royal Dutch Shell Plc (1,616)
Standard Chartered Plc 962 Berendsen Plc (1,390)
International Consolidated Airlines Group Compass Group Plc (1,284)
SA 918 Phoenix Group Holdings (1,166)
Admiral Group Plc 908 Rio Tinto Plc (1,155)
Inchcape Plc 855 Crest Nicholson Holdings plc (1,149)
BT Group Plc 822 WM Morrison Supermarkets Plc (1,111)
Savills Plc 786 Royal Bank of Scotland Group Plc (1,108)
Carnival Plc 786 Wolseley Plc (1,091)
Micro Focus International Plc 771
Russell Investment Company II plc
Russell U.S. Quant Fund
Balance Sheet
As at 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell U.S. Quant Fund 147
30 September 2016
(Unaudited)
USD ‘000
31 March 2016
(Audited)
USD ‘000
Assets
Financial assets at fair value through profit or loss ........................................................... 232,605 269,359
Cash at bank (Note 2) ........................................................................................................ 484 2,515
Cash held with brokers and counterparties for open financial derivative instruments
(Note 2) ............................................................................................................................. 58 1,055
Debtors:
Receivable for investments sold ............................................................................................... 1,109 366
Receivable on fund shares issued .............................................................................................. 36 10
Dividends receivable ................................................................................................................. 145 164
234,437 273,469
Liabilities
Creditors – amounts falling due within one financial year:
Payable for investments purchased ........................................................................................... (977) (9,083)
Payable on fund shares redeemed ............................................................................................. (13) (64)
Management fees payable ......................................................................................................... (196) (199)
Depositary fees payable ............................................................................................................ (5) (3)
Sub-custodian fees payable ....................................................................................................... (8) (8)
Administration fees payable ..................................................................................................... (5) (9)
Audit fees payable .................................................................................................................... (12) (19)
(1,216) (9,385)
Net asset attributable to redeemable participating shareholders ............................... 233,221 264,084
Russell Investment Company II plc
Russell U.S. Quant Fund
Profit and Loss Account
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
148 Russell U.S. Quant Fund
Six months ended
30 September 2016
(Unaudited)
USD ‘000
Six months ended
30 September 2015
(Unaudited)
USD ‘000
Income
Dividends ....................................................................................................................... 2,458 2,070
Net gain (loss) on investment activities ............................................................................ 13,235 (16,021)
Total investment income (expense) ................................................................................ 15,693 (13,951)
Expenses
Management fees (Note 3) ............................................................................................. (1,271) (1,155)
Depositary fees (Note 4) ................................................................................................ (17) (10)
Sub-custodian fees (Note 4) ........................................................................................... (43) (47)
Administration and transfer agency fees (Note 4) ......................................................... (61) (53)
Audit fees ....................................................................................................................... (9) (8)
Professional fees ............................................................................................................ (4) (18)
Other fees ....................................................................................................................... (11) (9)
Total operating expenses ................................................................................................ (1,416) (1,300)
Net income (expense) ...................................................................................................... 14,277 (15,251)
Finance costs
Distributions (Note 6) .................................................................................................... (335) (222)
Profit (loss) for the financial period before taxation .................................................... 13,942 (15,473)
Taxation
Withholding tax (Note 7) ............................................................................................... (701) (590)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ......................................................................... 13,241 (16,063)
All amounts arose solely from continuing operations. There are no recognised gains or losses other than those dealt with in the Profit and Loss
Account.
Russell Investment Company II plc
Russell U.S. Quant Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell U.S. Quant Fund 149
Six months ended
30 September 2016
(Unaudited)
USD ‘000
Six months ended
30 September 2015
(Unaudited)
USD ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 13,241 (16,063)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 8) ..................... 335 222
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 8) ..................................................................................................... (44,439) 52,504
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders ............................................................................................. (30,863) 36,663
Net assets attributable to redeemable participating shareholders
Beginning of financial period ........................................................................................ 264,084 212,538
End of financial period ................................................................................................... 233,221 249,201
Russell Investment Company II plc
Russell U.S. Quant Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
150 Russell U.S. Quant Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Transferable Securities (97.59%)
Common Stock (97.59%)
Bermuda (1.07%)
Agriculture
7,600 Bunge Ltd ............................ 450 0.19
Computers and Peripherals
424 Genpact Ltd ......................... 10 0.01
Insurance
669 Arch Capital Group Ltd ....... 53 0.02
5,070
Aspen Insurance Holdings
Ltd ....................................... 236 0.10
4,888 Assured Guaranty Ltd ......... 136 0.06
422
Axis Capital Holdings
Ltd ....................................... 23 0.01
834
Endurance Specialty
Holdings Ltd ....................... 55 0.02
3,912 Everest Re Group Ltd .......... 743 0.32
230
RenaissanceRe Holdings
Ltd ....................................... 28 0.01
332 Validus Holdings Ltd .......... 17 0.01
1,421 XL Group Ltd ...................... 48 0.02
Oil and Gas
7,860 Nabors Industries Ltd .......... 96 0.04
Semiconductor Equipment and Products
45,100
Marvell Technology Group
Ltd ....................................... 598 0.26
2,493 1.07
Canada (0.09%)
Media
1,824 Thomson Reuters Corp ........ 75 0.03
Oil and Gas
4,377
Canadian Natural Resources
Ltd ....................................... 140 0.06
215 0.09
Curacao (0.06%)
Oil and Gas Services
1,811 Schlumberger Ltd ................ 142 0.06
Guernsey, Channel Islands (0.21%)
Computers and Peripherals
8,651 Amdocs Ltd ......................... 500 0.21
Ireland (0.58%)
Computers and Peripherals
691 Accenture Plc ...................... 84 0.04
Health Care Equipment and Supplies
1,747 Medtronic Plc ...................... 151 0.06
Miscellaneous Manufacturers
8,242 Eaton Corp Plc .................... 542 0.23
1,700 Ingersoll-Rand Plc ............... 115 0.05
Oil and Gas Services
67,400
Weatherford International
Plc ....................................... 379 0.16
Number
of Shares
Fair Value
USD ‘000
Fund
%
Pharmaceuticals
1,182 Mallinckrodt Plc ................. 82 0.04
1,353 0.58
Jersey, Channel Islands (0.11%)
Auto Components
3,496 Delphi Automotive Plc ....... 249 0.11
Netherlands (0.34%)
Automobiles
14,883
Fiat Chrysler Automobiles
NV ...................................... 95 0.04
Chemicals
7,686
LyondellBasell Industries
NV ...................................... 620 0.27
Construction and Engineering
2,400
Chicago Bridge & Iron Co
NV ...................................... 67 0.03
782 0.34
Panama (0.05%)
Hotels, Restaurants and Leisure
2,480 Carnival Corp ..................... 121 0.05
Puerto Rico (0.01%)
Banks
607 Popular Inc .......................... 23 0.01
Singapore (0.02%)
Electrical Equipment
3,500 Flex Ltd .............................. 48 0.02
Switzerland (0.38%)
Insurance
2,742
Allied World Assurance Co
Holdings AG ....................... 111 0.05
5,954 Chubb Ltd ........................... 748 0.32
Oil and Gas
1,932 Transocean Ltd ................... 21 0.01
880 0.38
United Kingdom (0.31%)
Oil and Gas
34,163 Ensco Plc ............................ 290 0.13
Telecommunications
15,018 ARRIS International Plc ..... 425 0.18
715 0.31
United States (94.15%)
Advertising
10,732
Interpublic Group of Cos
Inc ....................................... 240 0.10
1,436 Omnicom Group Inc ........... 122 0.05
Aerospace and Defence
12,338 Boeing Co ........................... 1,625 0.70
Russell Investment Company II plc
Russell U.S. Quant Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell U.S. Quant Fund 151
Number
of Shares
Fair Value
USD ‘000
Fund
%
2,973 General Dynamics Corp ...... 461 0.20
5,950
L-3 Communications
Holdings Inc ........................ 897 0.38
2,863 Lockheed Martin Corp ........ 686 0.29
8,498 Northrop Grumman Corp .... 1,818 0.78
10,251 Raytheon Co ........................ 1,395 0.60
22,205
Spirit AeroSystems Holdings
Inc ....................................... 989 0.42
4,520 United Technologies Corp ... 459 0.20
Agriculture
25,285 Altria Group Inc .................. 1,599 0.69
20,860
Philip Morris International
Inc ....................................... 2,028 0.87
5,027 Reynolds American Inc ....... 237 0.10
Airlines
1,973 Alaska Air Group Inc .......... 130 0.06
3,508
American Airlines Group
Inc ....................................... 128 0.06
26,896 Delta Air Lines Inc .............. 1,059 0.45
1,459 JetBlue Airways Corp ......... 25 0.01
18,258 Southwest Airlines Co ......... 710 0.30
12,881
United Continental Holdings
Inc ....................................... 676 0.29
Auto Components
2,291
Allison Transmission
Holdings Inc ........................ 66 0.03
1,900
Cooper-Standard Holding
Inc ....................................... 188 0.08
24,121
Goodyear Tire & Rubber
Co ........................................ 779 0.33
10,401 Lear Corp ............................ 1,261 0.54
Automobiles
43,600 Ford Motor Co ..................... 526 0.22
47,528 General Motors Co .............. 1,510 0.65
2,651 PACCAR Inc ....................... 156 0.07
Banks
79,058 Bank of America Corp ........ 1,237 0.53
8,568
Bank of New York Mellon
Corp ..................................... 342 0.15
4,577 BB&T Corp ......................... 173 0.07
7,800 Capital One Financial Corp . 560 0.24
77,786 Citigroup Inc ....................... 3,674 1.58
27,986
Citizens Financial Group
Inc ....................................... 692 0.30
6,499 East West Bancorp Inc ........ 239 0.10
20,424 Fifth Third Bancorp ............. 418 0.18
11,750 Goldman Sachs Group Inc .. 1,895 0.81
26,428 JPMorgan Chase & Co ........ 1,760 0.75
21,300 KeyCorp .............................. 259 0.11
1,300 M&T Bank Corp ................. 151 0.07
27,100 Morgan Stanley ................... 869 0.37
9,219 Northern Trust Corp ............ 627 0.27
6,400
PNC Financial Services
Group Inc ............................ 577 0.25
28,800 Regions Financial Corp ....... 284 0.12
Number
of Shares
Fair Value
USD ‘000
Fund
%
10,335 SunTrust Banks Inc ............. 453 0.19
30,524 Wells Fargo & Co ............... 1,352 0.58
Beverages
979 Coca-Cola Co ..................... 41 0.02
7,396
Dr Pepper Snapple Group
Inc ....................................... 675 0.29
3,192 Molson Coors Brewing Co . 350 0.15
39,513 PepsiCo Inc ......................... 4,298 1.84
Biotechnology
21,364 Amgen Inc .......................... 3,564 1.53
5,489 Biogen Inc .......................... 1,718 0.74
1,720
Charles River Laboratories
International Inc .................. 143 0.06
40,525 Gilead Sciences Inc ............. 3,206 1.37
5,580 Incyte Corp ......................... 526 0.23
742
Regeneron Pharmaceuticals
Inc ....................................... 298 0.13
5,130 United Therapeutics Corp ... 606 0.26
3,813 Vertex Pharmaceuticals Inc 333 0.14
Building Products
1,973 Cree Inc .............................. 51 0.02
8,672 Masco Corp ......................... 298 0.13
7,133 Owens Corning ................... 381 0.16
516 USG Corp ........................... 13 0.01
Chemicals
1,843
Air Products & Chemicals
Inc ....................................... 277 0.12
10,395 Celanese Corp ..................... 692 0.30
11,022 Dow Chemical Co ............... 571 0.24
4,295 Huntsman Corp ................... 70 0.03
6,900
Platform Specialty Products
Corp .................................... 56 0.02
2,038 Sherwin-Williams Co ......... 564 0.24
2,700 Univar Inc ........................... 59 0.03
800 Westlake Chemical Corp .... 43 0.02
1,563 WR Grace & Co .................. 115 0.05
Commercial Services and Supplies
7,500 Aaron's Inc .......................... 191 0.08
1,585 Ecolab Inc ........................... 193 0.08
2,000 Global Payments Inc ........... 154 0.07
151 Graham Holdings Co .......... 73 0.03
1,501 Hertz Global Holdings Inc .. 60 0.02
3,296 ManpowerGroup Inc ........... 238 0.10
14,036 Quanta Services Inc ............ 393 0.17
600
Robert Half International
Inc ....................................... 23 0.01
448 Rollins Inc .......................... 13 0.01
5,927 RR Donnelley & Sons Co ... 93 0.04
1,235 TransUnion ......................... 43 0.02
7,321 United Rentals Inc .............. 575 0.25
Computers and Peripherals
63,105 Apple Inc ............................ 7,134 3.06
800 CACI International Inc ....... 81 0.04
Russell Investment Company II plc
Russell U.S. Quant Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
152 Russell U.S. Quant Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
2,603
Dell Technologies Inc -
VMware Inc ........................ 124 0.05
133 DST Systems Inc ................. 16 0.01
2,986
International Business
Machines Corp .................... 474 0.20
9,500 Mentor Graphics Corp ......... 251 0.11
1,321 NCR Corp ........................... 43 0.02
8,700 NetApp Inc .......................... 312 0.13
24,298 Synopsys Inc ....................... 1,442 0.62
2,960 Teradata Corp ...................... 92 0.04
19,800 VeriFone Systems Inc ......... 312 0.13
9,980 Western Digital Corp .......... 584 0.25
Construction and Engineering
692
Jacobs Engineering Group
Inc ....................................... 36 0.02
Containers and Packaging
11,421 Crown Holdings Inc ............ 652 0.28
448 Sonoco Products Co ............ 24 0.01
1,988 WestRock Co ...................... 96 0.04
Distributors
1,500 Anixter International Inc ..... 97 0.04
4,500
Core-Mark Holding Co
Inc ....................................... 161 0.07
1,736 Fastenal Co .......................... 73 0.03
860 Ingram Micro Inc ................ 31 0.01
380 LKQ Corp ........................... 13 0.01
126 Watsco Inc ........................... 18 0.01
Diversified Financials
570 Air Lease Corp .................... 16 0.01
1,997 American Express Co .......... 128 0.05
13,007 Ameriprise Financial Inc ..... 1,298 0.55
573 BlackRock Inc ..................... 208 0.09
390 CBOE Holdings Inc ............ 25 0.01
7,219 E*Trade Financial Corp ...... 210 0.09
2,088 Federated Investors Inc ....... 62 0.03
358 FNF Group .......................... 13 0.01
7,100 Mastercard Inc ..................... 723 0.31
716 Nasdaq Inc ........................... 48 0.02
2,923
Raymond James Financial
Inc ....................................... 170 0.07
2,500
Santander Consumer USA
Holdings Inc ........................ 30 0.01
12,349 Synchrony Financial ............ 346 0.15
Electric Utilities
28,840 AES Corp ............................ 371 0.16
1,439 Ameren Corp ....................... 71 0.03
9,795
American Electric Power Co
Inc ....................................... 629 0.27
3,672 CMS Energy Corp ............... 154 0.07
1,855 Consolidated Edison Inc ...... 140 0.06
12,751 DTE Energy Co ................... 1,194 0.51
4,046 Duke Energy Corp ............... 324 0.14
18,289 Edison International ............ 1,321 0.57
13,241 Entergy Corp ....................... 1,016 0.44
Number
of Shares
Fair Value
USD ‘000
Fund
%
1,930 Eversource Energy .............. 105 0.04
2,902 Exelon Corp ........................ 97 0.04
18,784 FirstEnergy Corp ................ 621 0.27
366 Great Plains Energy Inc ...... 10 0.00
12,377 NextEra Energy Inc ............ 1,514 0.65
8,489 PG&E Corp ......................... 519 0.22
489 Pinnacle West Capital Corp 37 0.02
3,077
Public Service Enterprise
Group Inc ............................ 129 0.05
773 SCANA Corp ...................... 56 0.02
9,895 Southern Co ........................ 508 0.22
2,279 Xcel Energy Inc .................. 94 0.04
Electrical Equipment
14,761 Agilent Technologies Inc .... 695 0.30
1,823 Amphenol Corp .................. 118 0.05
4,039 Arrow Electronics Inc ......... 258 0.11
4,560 Avnet Inc ............................ 187 0.08
839 Energizer Holdings Inc ....... 42 0.02
3,884 Fortive Corp ........................ 198 0.08
898 Gentex Corp ........................ 16 0.01
6,301 Honeywell International Inc 735 0.31
10,200 Jabil Circuit Inc .................. 223 0.10
2,140 Keysight Technologies Inc . 68 0.03
3,000 Sanmina Corp ..................... 85 0.04
4,350 Tech Data Corp ................... 368 0.16
1,823 Waters Corp ........................ 289 0.12
Energy Equipment and Services
448 First Solar Inc ..................... 18 0.01
Entertainment
2,300 Dolby Laboratories Inc ....... 125 0.05
Environmental Control
1,420 Republic Services Inc ......... 72 0.03
4,397 Waste Management Inc ...... 280 0.12
Food Products
2,915
Blue Buffalo Pet Products
Inc ....................................... 69 0.03
3,470 Campbell Soup Co .............. 190 0.08
5,055 ConAgra Foods Inc ............. 238 0.10
3,618 General Mills Inc ................ 231 0.10
1,400 Ingredion Inc ....................... 186 0.08
704 JM Smucker Co .................. 95 0.04
1,188 Kellogg Co .......................... 92 0.04
17,800 Kroger Co ........................... 528 0.23
1,700
Performance Food Group
Co ....................................... 42 0.02
1,300 Safeway Casa Ley Inc ......... - 0.00
1,300 Safeway Inc ........................ - 0.00
15,303 Sysco Corp .......................... 750 0.32
24,080 Tyson Foods Inc ................. 1,798 0.77
2,870 United Natural Foods Inc .... 115 0.05
Gas Utilities
35,657 CenterPoint Energy Inc ....... 828 0.35
Russell Investment Company II plc
Russell U.S. Quant Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell U.S. Quant Fund 153
Number
of Shares
Fair Value
USD ‘000
Fund
%
2,044 National Fuel Gas Co .......... 111 0.05
9,957 NiSource Inc ....................... 240 0.10
1,100 One Gas Inc ......................... 68 0.03
Hand and Machine Tools
1,291
Lincoln Electric Holdings
Inc ....................................... 81 0.04
204 Snap-on Inc ......................... 31 0.01
3,581 Stanley Black & Decker Inc 440 0.19
Health Care Equipment and Supplies
1,118 Becton Dickinson and Co .... 201 0.09
133 Bio-Techne Corp ................. 15 0.01
7,739 Bruker Corp ......................... 175 0.07
2,809 CR Bard Inc ........................ 630 0.27
5,321 Edwards Lifesciences Corp . 641 0.27
452 Henry Schein Inc ................. 74 0.03
5,002 Hologic Inc .......................... 194 0.08
630 Intuitive Surgical Inc ........... 457 0.20
316 Patterson Cos Inc ................. 15 0.01
660 ResMed Inc ......................... 43 0.02
751 St Jude Medical Inc ............. 60 0.03
5,010 Stryker Corp ........................ 583 0.25
190 Teleflex Inc ......................... 32 0.01
2,324
Thermo Fisher Scientific
Inc ....................................... 370 0.16
5,200 VWR Corp .......................... 147 0.06
Health Care Providers and Services
5,117 Aetna Inc ............................. 591 0.26
3,923 Anthem Inc .......................... 492 0.21
1,546 Cigna Corp .......................... 201 0.09
1,093 DaVita Inc ........................... 72 0.03
3,639 LifePoint Health Inc ............ 216 0.09
450 Mednax Inc ......................... 30 0.01
1,900 Molina Healthcare Inc ......... 111 0.05
611 Quest Diagnostics Inc .......... 52 0.02
16,028 UnitedHealth Group Inc ...... 2,244 0.96
1,455 WellCare Health Plans Inc .. 170 0.07
Home Builders
443 CalAtlantic Group Inc ......... 15 0.01
2,000 DR Horton Inc ..................... 60 0.02
1,072 Lennar Corp ........................ 45 0.02
286 NVR Inc .............................. 469 0.20
278 Thor Industries Inc .............. 24 0.01
916 Toll Brothers Inc ................. 27 0.01
Home Furnishings
1,600
Harman International
Industries Inc ....................... 135 0.06
417 Leggett & Platt Inc .............. 19 0.01
Hotels, Restaurants and Leisure
2,500 Brunswick Corp .................. 122 0.05
359 Vista Outdoor Inc ................ 14 0.01
Household Products
2,658 Avery Dennison Corp .......... 207 0.09
Number
of Shares
Fair Value
USD ‘000
Fund
%
1,549 Church & Dwight Co Inc .... 74 0.03
787 Clorox Co ........................... 99 0.04
2,508 Kimberly-Clark Corp .......... 316 0.14
Insurance
3,991 Aflac Inc ............................. 287 0.12
715 Alleghany Corp ................... 375 0.16
34,159 Allstate Corp ....................... 2,363 1.01
305
American Financial Group
Inc ....................................... 23 0.01
19,538
American International
Group Inc ............................ 1,159 0.50
3,791
AmTrust Financial Services
Inc ....................................... 102 0.04
900 Arthur J Gallagher & Co ..... 46 0.02
8,854 Berkshire Hathaway Inc ...... 1,279 0.55
456 Brown & Brown Inc ........... 17 0.01
2,853 Cincinnati Financial Corp ... 215 0.09
67,300 Genworth Financial Inc ...... 334 0.14
2,451
Hanover Insurance Group
Inc ....................................... 185 0.08
8,380
Hartford Financial Services
Group Inc ............................ 359 0.16
9,500 Lincoln National Corp ........ 446 0.19
81 Markel Corp ........................ 75 0.03
11,263 MetLife Inc ......................... 500 0.22
1,432
Old Republic International
Corp .................................... 25 0.01
15,388
Principal Financial Group
Inc ....................................... 793 0.34
3,536 Progressive Corp ................. 111 0.05
13,744 Prudential Financial Inc ...... 1,122 0.48
2,208
Reinsurance Group of
America Inc ........................ 238 0.10
6,551 Travelers Cos Inc ................ 750 0.32
34,803 Voya Financial Inc .............. 1,003 0.43
453 WR Berkley Corp ............... 26 0.01
Internet Software and Services
1,990 Alphabet Inc (Class A) ....... 1,600 0.69
3,992 Alphabet Inc (Class C) ........ 3,103 1.33
4,161 Amazon.com Inc ................. 3,484 1.49
45,786 eBay Inc .............................. 1,506 0.65
4,334 F5 Networks Inc ................. 540 0.23
22,518 Facebook Inc ....................... 2,888 1.24
1,160 Palo Alto Networks Inc ....... 185 0.08
538 Priceline Group Inc ............. 792 0.34
2,000 RingCentral Inc ................... 47 0.02
57,035 Symantec Corp ................... 1,432 0.61
6,000 Twitter Inc .......................... 138 0.06
6,275 VeriSign Inc ........................ 491 0.21
1,200 Yelp Inc .............................. 50 0.02
Iron and Steel
3,162
Reliance Steel & Aluminum
Co ....................................... 228 0.10
3,846 Steel Dynamics Inc ............. 96 0.04
Russell Investment Company II plc
Russell U.S. Quant Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
154 Russell U.S. Quant Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Machinery
8,680 BWX Technologies Inc ....... 333 0.14
176 Graco Inc ............................. 13 0.01
402 IDEX Corp .......................... 38 0.02
3,300 Terex Corp .......................... 84 0.03
5,718 Xylem Inc ............................ 300 0.13
4,900 Zebra Technologies Corp .... 341 0.15
Media
1,269 AMC Networks Inc ............. 66 0.03
260 Cable One Inc ...................... 152 0.06
10,100 CBS Corp ............................ 553 0.24
41,052 Comcast Corp ...................... 2,723 1.17
10,738
Discovery Communications
Inc (Class A) ....................... 289 0.12
10,900
Discovery Communications
Inc (Class C) ........................ 287 0.12
612 Liberty Broadband Corp ...... 44 0.02
1,500
Liberty Media Corp-Liberty
SiriusXM (Series A) ............ 51 0.02
2,074
Liberty Media Corp-Liberty
SiriusXM (Series C) ............ 69 0.03
53,651 News Corp ........................... 750 0.32
488
Scripps Networks Interactive
Inc ....................................... 31 0.01
60,821 Sirius XM Holdings Inc ...... 254 0.11
14,300 Time Inc .............................. 207 0.09
4,186 Viacom Inc .......................... 159 0.07
180 Walt Disney Co ................... 17 0.01
Metals and Mining
195
Compass Minerals
International Inc .................. 14 0.01
Miscellaneous Manufacturers
4,400 Carlisle Cos Inc ................... 451 0.19
7,288 General Electric Co ............. 216 0.09
668 Parker-Hannifin Corp .......... 84 0.04
10,785 Trinity Industries Inc ........... 261 0.11
Office Electronics
34,021 Xerox Corp .......................... 345 0.15
Oil and Gas
21,466 Antero Resources Corp ....... 579 0.25
4,645 Apache Corp ....................... 297 0.13
31,900 Cabot Oil & Gas Corp ......... 823 0.35
15,700 Chesapeake Energy Corp .... 98 0.04
7,280 Chevron Corp ...................... 749 0.32
1,061 Cimarex Energy Co ............. 143 0.06
1,800 ConocoPhillips .................... 78 0.03
3,200 Continental Resources Inc ... 166 0.07
13,190 Devon Energy Corp ............. 582 0.25
1,400 Energen Corp ...................... 81 0.04
5,960 EOG Resources Inc ............. 576 0.25
34,321 Exxon Mobil Corp ............... 2,996 1.29
4,300 Gulfport Energy Corp .......... 121 0.05
4,100 HollyFrontier Corp .............. 100 0.04
Number
of Shares
Fair Value
USD ‘000
Fund
%
66,400 Marathon Oil Corp .............. 1,050 0.45
2,308 Marathon Petroleum Corp .. 94 0.04
1,700 Murphy USA Inc ................ 121 0.05
7,400 Occidental Petroleum Corp . 540 0.23
2,705 QEP Resources Inc ............. 53 0.02
5,443 Tesoro Corp ........................ 433 0.19
37,861 Valero Energy Corp ............ 2,007 0.86
Oil and Gas Services
12,337 Baker Hughes Inc ............... 623 0.27
836 Dril-Quip Inc ...................... 47 0.02
33,099 FMC Technologies Inc ....... 982 0.42
1,347
Oceaneering International
Inc ....................................... 37 0.02
5,593
Superior Energy Services
Inc ....................................... 100 0.04
Paper and Forest Products
1,900 Domtar Corp ....................... 71 0.03
6,988 International Paper Co ........ 335 0.14
Personal Products
3,281 Colgate-Palmolive Co ......... 243 0.10
16,310 Procter & Gamble Co ......... 1,464 0.63
Pharmaceuticals
5,409 AbbVie Inc ......................... 341 0.15
1,000 Agios Pharmaceuticals Inc .. 53 0.02
10,493 AmerisourceBergen Corp ... 848 0.36
11,800 Bristol-Myers Squibb Co .... 636 0.27
9,114 Cardinal Health Inc ............. 708 0.30
9,139 Eli Lilly & Co ..................... 733 0.31
13,197 Express Scripts Holding Co 931 0.40
38,316 Johnson & Johnson ............. 4,526 1.94
13,644 McKesson Corp .................. 2,275 0.98
22,475 Merck & Co Inc .................. 1,403 0.60
74,690 Pfizer Inc ............................ 2,530 1.09
5,186 Zoetis Inc ............................ 270 0.12
Pipelines
4,698 Kinder Morgan Inc ............. 109 0.05
Real Estate
1,290 Jones Lang LaSalle Inc ....... 147 0.06
Real Estate Investment Trust
1,686
American Campus
Communities Inc ................. 86 0.04
792
American Capital Agency
Corp .................................... 15 0.01
297 American Homes 4 Rent ..... 6 0.00
1,305
Annaly Capital Management
Inc ....................................... 14 0.01
2,068
Apartment Investment &
Management Co .................. 95 0.04
2,373
Apple Hospitality REIT
Inc ....................................... 44 0.02
813
AvalonBay Communities
Inc ....................................... 145 0.06
1,406 Care Capital Properties Inc . 40 0.02
1,111 Chimera Investment Corp ... 18 0.01
Russell Investment Company II plc
Russell U.S. Quant Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell U.S. Quant Fund 155
Number
of Shares
Fair Value
USD ‘000
Fund
%
2,288
Communications Sales &
Leasing Inc .......................... 72 0.03
488
Crown Castle International
Corp ..................................... 46 0.02
1,080 Equinix Inc .......................... 389 0.17
2,157
Equity LifeStyle Properties
Inc ....................................... 166 0.07
2,167 Equity Residential ............... 139 0.06
195
Essex Property Trust
Inc ....................................... 43 0.02
352 Extra Space Storage Inc ...... 28 0.01
392
Federal Realty Investment
Trust .................................... 60 0.02
12,804
General Growth Properties
Inc ....................................... 353 0.15
3,628 Hospitality Properties Trust . 108 0.04
12,087 Host Hotels & Resorts Inc ... 188 0.08
2,289 Liberty Property Trust ......... 92 0.04
2,054
Mid-America Apartment
Communities Inc ................. 193 0.08
716
National Retail Properties
Inc ....................................... 36 0.01
6,597
Omega Healthcare Investors
Inc ....................................... 234 0.10
3,000 Paramount Group Inc .......... 49 0.02
184 Post Properties Inc ............... 12 0.01
2,167 Public Storage ..................... 484 0.21
691 Realty Income Corp ............ 46 0.02
5,564
Retail Properties of America
Inc ....................................... 93 0.04
3,174
Senior Housing Properties
Trust .................................... 72 0.03
9,025 Simon Property Group Inc .. 1,868 0.80
7,625 SL Green Realty Corp ......... 824 0.35
1,080 Starwood Property Trust Inc 24 0.01
2,579
Tanger Factory Outlet
Centers Inc .......................... 100 0.04
1,814 Taubman Centers Inc .......... 135 0.06
2,049
Two Harbors Investment
Corp ..................................... 17 0.01
323 UDR Inc .............................. 12 0.01
251 Ventas Inc ........................... 18 0.01
3,064 Weingarten Realty Investors 119 0.05
876 Welltower Inc ...................... 65 0.03
7,100
Xenia Hotels & Resorts
Inc ....................................... 108 0.04
Retail Trade
570 AutoZone Inc ...................... 438 0.19
8,800
Bed Bath & Beyond
Inc ....................................... 379 0.16
32,403 Best Buy Co Inc .................. 1,237 0.53
12,086 Coach Inc ............................ 442 0.19
16,742 CVS Health Corp ................ 1,490 0.64
2,131
Dick's Sporting Goods
Inc ....................................... 121 0.05
1,728 Dollar General Corp ............ 121 0.05
400 Domino's Pizza Inc .............. 61 0.03
Number
of Shares
Fair Value
USD ‘000
Fund
%
2,296 Foot Locker Inc .................. 155 0.07
606 GameStop Corp .................. 17 0.01
888 Genuine Parts Co ................ 89 0.04
17,913 Home Depot Inc .................. 2,305 0.99
4,600 Kohl's Corp ......................... 201 0.09
2,489 L Brands Inc ....................... 176 0.07
7,515 Lowe's Cos Inc .................... 543 0.23
5,582 McDonald's Corp ................ 644 0.27
1,559 Michaels Cos Inc ................ 38 0.02
1,398 Nordstrom Inc ..................... 73 0.03
1,000
Nu Skin Enterprises
Inc ....................................... 65 0.03
7,000 PVH Corp ........................... 774 0.33
5,116 Starbucks Corp ................... 277 0.12
2,523 Target Corp ......................... 173 0.07
1,085
Ulta Salon Cosmetics &
Fragrance Inc ...................... 258 0.11
30,375 Wal-Mart Stores Inc ........... 2,191 0.94
4,361
Walgreens Boots Alliance
Inc ....................................... 352 0.15
5,248
World Fuel Services
Corp .................................... 243 0.10
3,265 Yum! Brands Inc ................. 296 0.13
Savings and Loans
2,496
New York Community
Bancorp Inc ......................... 36 0.02
1,788
People's United Financial
Inc ....................................... 28 0.01
Semiconductor Equipment and Products
35,000
Advanced Micro Devices
Inc ....................................... 242 0.10
8,600 Amkor Technology Inc ....... 84 0.03
28,735 Applied Materials Inc ......... 866 0.37
800 Cirrus Logic Inc .................. 43 0.02
5,942
Cypress Semiconductor
Corp .................................... 72 0.03
79,468 Intel Corp ............................ 3,000 1.29
1,433
Linear Technology
Corp .................................... 85 0.04
5,381 NVIDIA Corp ..................... 369 0.16
18,900
ON Semiconductor
Corp .................................... 233 0.10
16,718 Qualcomm Inc .................... 1,145 0.49
1,100 Synaptics Inc ....................... 64 0.03
Shipbuilding
5,420
Huntington Ingalls Industries
Inc ....................................... 832 0.36
Software
4,253 Activision Blizzard Inc ....... 188 0.08
642
Broadridge Financial
Solutions Inc ....................... 44 0.02
1,096 Cerner Corp ........................ 68 0.03
21,512 Citrix Systems Inc ............... 1,833 0.79
4,969 Electronic Arts Inc .............. 424 0.18
2,933 Fiserv Inc ............................ 292 0.12
9,564 Intuit Inc ............................. 1,052 0.45
Russell Investment Company II plc
Russell U.S. Quant Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
156 Russell U.S. Quant Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
418
Jack Henry & Associates
Inc ....................................... 36 0.01
72,837 Microsoft Corp .................... 4,195 1.80
590 MicroStrategy Inc ................ 99 0.04
4,980 Nuance Communications Inc 72 0.03
35,524 Oracle Corp ......................... 1,395 0.60
1,960 Paychex Inc ......................... 113 0.05
7,673 Red Hat Inc ......................... 620 0.27
1,700 Splunk Inc ........................... 100 0.04
1,000 Synnex Corp ........................ 114 0.05
1,600 Tableau Software Inc .......... 88 0.04
4,400 Verint Systems Inc .............. 166 0.07
4,081 VMware Inc ........................ 299 0.13
98,300 Zynga Inc ............................ 286 0.12
Telecommunications
1,900 Arista Networks Inc ............ 162 0.07
52,321 AT&T Inc ............................ 2,125 0.91
4,400 CenturyLink Inc .................. 121 0.05
3,000 Ciena Corp .......................... 65 0.03
68,841 Cisco Systems Inc ............... 2,184 0.94
5,500 Finisar Corp ......................... 164 0.07
10,000 Juniper Networks Inc .......... 241 0.10
1,776 Level 3 Communications Inc 82 0.03
7,830
Telephone & Data Systems
Inc ....................................... 213 0.09
1,000 United States Cellular Corp . 36 0.02
96,860
Verizon Communications
Inc ....................................... 5,035 2.16
25,400 Viavi Solutions Inc .............. 188 0.08
Textile and Apparel
17,575 NIKE Inc ............................. 925 0.40
Number
of Shares
Fair Value
USD ‘000
Fund
%
Toys, Games and Hobbies
1,768 Hasbro Inc .......................... 140 0.06
Transport
2,921
CH Robinson Worldwide
Inc ....................................... 206 0.09
4,600
Expeditors International of
Washington Inc ................... 237 0.10
5,028 FedEx Corp ......................... 878 0.38
3,000 Hub Group Inc .................... 122 0.05
301
Old Dominion Freight Line
Inc ....................................... 21 0.01
4,211 United Parcel Service Inc ... 461 0.20
219,582 94.15
Virgin Islands, British (0.21%)
Textile and Apparel
10,481
Michael Kors Holdings
Ltd ...................................... 490 0.21
Total Common Stock ........ 227,593 97.59
Total Transferable
Securities ........................... 227,593 97.59
Investment Funds (2.15%)
Ireland (2.15%)
4,993
Russell Investment Company
III Plc - The U.S. Dollar
Cash Fund II - Class R Roll-
Up Shares ............................ 5,012 2.15
Total Investment Funds .... 5,012 2.15
Total Investments
excluding Financial
Derivative Instruments ..... 232,605 99.74
Fair Value
USD ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or
Loss (99.74%) .............................................................................................................................................. 232,605 99.74
Other Net Assets (0.26%) ........................................................................................................................ 616 0.26
Net Assets .................................................................................................................................................. 233,221 100.00
Analysis of gross assets
% of
gross assets
Transferable securities admitted to an official stock exchange listing .................................................................... 97.08
Investment funds (UCITS) ..................................................................................................................................... 2.14
Other assets ............................................................................................................................................................ 0.78
100.00
The broker for the open futures contracts is Merrill Lynch.
Russell Investment Company II plc
Russell U.S. Quant Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell U.S. Quant Fund 157
Fair Value Hierarchy (Note 10)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 30 September 2016 and 31 March 2016.
As at 30 September 2016
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 227,593 - - 227,593
Investment funds ........................................................................ - 5,012 - 5,012
Total assets ...................................................................................... 227,593 5,012 - 232,605
As at 31 March 2016
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 243,992 - 1 243,993
Investment funds ........................................................................ - 25,034 - 25,034
Unrealised gain on open futures contracts ................................. 332 - - 332
Total assets ...................................................................................... 244,324 25,034 1 269,359
Russell Investment Company II plc
Russell U.S. Quant Fund
Statement of Changes in Composition of Portfolio
Listed below are 20 largest cumulative investment purchases and cumulative investment sales during the six months ended 30
September 2016.
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
158 Russell U.S. Quant Fund
Portfolio Securities
Acquisition Cost
USD ‘000 Portfolio Securities
Disposal Proceeds
USD ‘000
Russell Investment Company III Plc
The U.S. Dollar Cash Fund II
Russell Investment Company III Plc
The U.S. Dollar Cash Fund II Class R Roll-Up Shares 30,805 Class R Roll-Up Shares (50,849)
McKesson Corp 1,917 Apple Inc (5,547)
UnitedHealth Group Inc 1,707 Johnson & Johnson (3,744)
Biogen Inc 1,616 Altria Group Inc (2,856)
Gilead Sciences Inc 1,610 Pfizer Inc (2,058)
Verizon Communications Inc 1,595 Cisco Systems Inc (2,046)
AT&T Inc 1,538 Microsoft Corp (1,868)
Pfizer Inc 1,529 Lowe's Cos Inc (1,793)
Citigroup Inc 1,407 Comcast Corp (1,750)
Exxon Mobil Corp 1,394 Symantec Corp (1,659)
Ameriprise Financial Inc 1,373 Wal-Mart Stores Inc (1,619)
Home Depot Inc 1,268 CR Bard Inc (1,505)
CVS Health Corp 1,174 eBay Inc (1,445)
PepsiCo Inc 1,129 Honeywell International Inc (1,401)
Lowe's Cos Inc 1,123 Exxon Mobil Corp (1,399)
DTE Energy Co 1,101 UnitedHealth Group Inc (1,348)
Tyson Foods Inc 1,088 AT&T Inc (1,329)
Symantec Corp 1,061 Delta Air Lines Inc (1,317)
Intuit Inc 1,041 Alphabet Inc (1,278)
Alphabet Inc 967 Adobe Systems Inc (1,219)
Russell Investment Company II plc
Russell World Equity Fund
Balance Sheet
As at 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell World Equity Fund 159
30 September 2016
(Unaudited)
USD ‘000
31 March 2016
(Audited)
USD ‘000
Assets
Financial assets at fair value through profit or loss ........................................................... 1,740,521 1,853,279
Cash at bank (Note 2) ........................................................................................................ 4,549 2,127
Cash held with brokers and counterparties for open financial derivative instruments
(Note 2) ............................................................................................................................. 19,843 -
Debtors:
Receivable for investments sold .................................................................................................................................................. 7,427 17,320
Receivable on fund shares issued ................................................................................................................................................ 396 9,090
Dividends receivable .................................................................................................................................................................... 3,144 3,728
1,775,880 1,885,544
Liabilities
Financial liabilities at fair value through profit or loss ..................................................... (2,056) (9,543)
Creditors – amounts falling due within one financial year:
Cash due to brokers and counterparties for open financial derivative positions
(Note 2) ................................................................................................................................. - (1,269)
Payable for investments purchased .............................................................................................................................................. (8,653) (1,929)
Payable on fund shares redeemed ................................................................................................................................................ (3,043) (73,644)
Distributions payable on income class shares .............................................................................................................................. (17) (45)
Management fees payable ............................................................................................................................................................ (1,524) (1,617)
Depositary fees payable ............................................................................................................................................................... (37) (17)
Sub-custodian fees payable .......................................................................................................................................................... (47) (54)
Administration fees payable ........................................................................................................................................................ (33) (52)
Audit fees payable ....................................................................................................................................................................... (13) (25)
Other fees payable ....................................................................................................................................................................... (8) (7)
(15,431) (88,202)
Net asset value attributable to redeemable participating shareholders ................................................................................... 1,760,449 1,797,342
Russell Investment Company II plc
Russell World Equity Fund
Profit and Loss Account
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
160 Russell World Equity Fund
Six months ended
30 September 2016
(Unaudited)
USD ‘000
Six months ended
30 September 2015
(Unaudited)
USD ‘000
Income
Dividends ..................................................................................................................................................................................... 21,561 28,814
Net gain (loss) on investment activities ............................................................................ 85,657 (147,593)
Total investment income (expense) ............................................................................... 107,218 (118,779)
Expenses
Management fees (Note 3) ........................................................................................................................................................... (9,278) (12,566)
Depositary fees (Note 4) .............................................................................................................................................................. (121) (88)
Sub-custodian fees (Note 4) ......................................................................................................................................................... (172) (252)
Administration transfer agency fees (Note 4) .............................................................................................................................. (334) (393)
Audit fees ..................................................................................................................................................................................... (13) (14)
Professional fees .......................................................................................................................................................................... (17) (73)
Other fees ..................................................................................................................................................................................... (48) (45)
Total operating expenses ............................................................................................... (9,983) (13,431)
Net income (expense) ..................................................................................................... 97,235 (132,210)
Finance costs
Distributions (Note 6) ................................................................................................... (8,105) (10,037)
Profit (loss) for the financial period before taxation ................................................... 89,130 (142,247)
Taxation
Withholding tax (Note 7) ............................................................................................................................................................. (3,521) (4,786)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 85,609 (147,033)
All amounts arose solely from continuing operations. There are no recognised gains or losses other than those dealt with in the Profit and Loss
Account.
Russell Investment Company II plc
Russell World Equity Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the six months ended 30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell World Equity Fund 161
Six months ended
30 September 2016
(Unaudited)
USD ‘000
Six months ended
30 September 2015
(Unaudited)
USD ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................ 85,609 (147,033)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 8) .................................................................................... 7,630 9,325
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 8) .................................................................................................................................................................... (130,132) (642,066)
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders ............................................................................................. (36,893) (779,774)
Net assets attributable to redeemable participating shareholders
Beginning of financial period ...................................................................................................................................................... 1,797,342 2,808,438
End of financial period ................................................................................................................................................................ 1,760,449 2,028,664
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments
30 September 2016
The accompanying notes are an integral part of the financial statements.
162 Russell World Equity Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Transferable Securities (96.45%)
Common Stock (95.79%)
Australia (1.60%)
Banks
14,332
Commonwealth Bank of
Australia .............................. 794 0.05
Beverages
77,800 Coca-Cola Amatil Ltd ......... 610 0.03
Commercial Services and Supplies
54,619 Brambles Ltd ....................... 501 0.03
Construction and Engineering
156,900 Downer EDI Ltd .................. 647 0.04
Containers and Packaging
40,612 Amcor Ltd ........................... 471 0.03
Diversified Financials
6,636 ASX Ltd .............................. 245 0.01
Electric Utilities
18,383 AGL Energy Ltd ................. 268 0.02
Entertainment
59,300 Tatts Group Ltd ................... 166 0.01
Food Products
27,581 Wesfarmers Ltd ................... 931 0.05
43,817 Woolworths Ltd .................. 780 0.05
Health Care Providers and Services
10,627 Sonic Healthcare Ltd ........... 179 0.01
Holding Companies - Diversified Operations
2,377
Washington H Soul
Pattinson & Co Ltd .............. 29 0.00
Hotels, Restaurants and Leisure
1,094
Flight Centre Travel Group
Ltd ....................................... 30 0.00
Insurance
75,037 Medibank Pvt Ltd ................ 142 0.01
Iron and Steel
188,600 BlueScope Steel Ltd ............ 1,119 0.06
Lodging
299,000 Star Entertainment Grp Ltd . 1,377 0.08
Metals and Mining
93,091 Mineral Resources Ltd ........ 789 0.05
14,900 Newcrest Mining Ltd .......... 253 0.01
265,900 Northern Star Resources Ltd 948 0.05
226,340 OZ Minerals Ltd .................. 1,053 0.06
370,700 Regis Resources Ltd ............ 1,095 0.06
106,600 Resolute Mining Ltd ............ 161 0.01
38,200 Rio Tinto Ltd ....................... 1,509 0.09
80,261 Sandfire Resources NL ........ 310 0.02
Oil and Gas
61,224 Caltex Australia Ltd ............ 1,605 0.09
227,370 Woodside Petroleum Ltd ..... 4,980 0.28
Real Estate Investment Trust
112,500 Dexus Property Group ......... 788 0.05
48,902 GPT Group .......................... 189 0.01
Number
of Shares
Fair Value
USD ‘000
Fund
%
652,600 Mirvac Group ..................... 1,119 0.06
64,348 Stockland ............................ 234 0.01
Retail Trade
18,600 JB Hi-Fi Ltd ........................ 412 0.02
Software
1,353,199 MYOB Group Ltd ............... 3,863 0.22
Telecommunications
149,061 Telstra Corp Ltd .................. 591 0.03
28,188 1.60
Austria (0.12%)
Banks
68,971 Erste Group Bank AG ......... 2,044 0.12
Transport
651 Oesterreichische Post AG ... 23 0.00
2,067 0.12
Belgium (0.02%)
Other Finance
2,248
Groupe Bruxelles Lambert
SA ....................................... 199 0.01
Telecommunications
6,258 Proximus SADP .................. 187 0.01
386 0.02
Bermuda (1.27%)
Banks
18,505 Credicorp Ltd ...................... 2,817 0.16
Commercial Services and Supplies
96,110 IHS Markit Ltd ................... 3,609 0.20
Insurance
42,699
Aspen Insurance Holdings
Ltd ...................................... 1,989 0.11
117,400 Assured Guaranty Ltd ......... 3,258 0.19
66,452
Axis Capital Holdings
Ltd ...................................... 3,610 0.20
2,752
Endurance Specialty
Holdings Ltd ....................... 180 0.01
7,835 Everest Re Group Ltd ......... 1,488 0.08
38,640 Validus Holdings Ltd .......... 1,925 0.11
40,640 XL Group Ltd ..................... 1,367 0.08
Real Estate
203,200
Hongkong Land Holdings
Ltd ...................................... 1,443 0.08
187,500 Kerry Properties Ltd ........... 614 0.04
Telecommunications
10,100 VTech Holdings Ltd ........... 115 0.01
Textile and Apparel
8,784,000
China Hongxing Sports
Ltd ...................................... - 0.00
22,415 1.27
Brazil (0.35%)
Banks
314,230
Itau Unibanco Holding SA
ADR .................................... 3,438 0.19
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell World Equity Fund 163
Number
of Shares
Fair Value
USD ‘000
Fund
%
Beverages
451,132 Ambev SA ........................... 2,752 0.16
6,190 0.35
Canada (1.46%)
Advertising
68,200 Aimia Inc ............................. 429 0.02
Banks
10,600 Bank of Montreal ................ 693 0.04
20,000 Bank of Nova Scotia ........... 1,058 0.06
34,437
Canadian Imperial Bank of
Commerce ........................... 2,666 0.15
11,865 Royal Bank of Canada ......... 734 0.04
17,592 Toronto-Dominion Bank ..... 780 0.05
Diversified Financials
9,370 CI Financial Corp ................ 179 0.01
Food Products
13,000 George Weston Ltd ............. 1,083 0.06
10,300 Loblaw Cos Ltd ................... 529 0.03
Insurance
783
Genworth MI Canada
Inc ....................................... 20 0.00
10,386 Great-West Lifeco Inc ......... 255 0.02
4,552 Intact Financial Corp ........... 328 0.02
16,641 Sun Life Financial Inc ......... 541 0.03
Media
52,300 Quebecor Inc ....................... 1,587 0.09
12,097 Thomson Reuters Corp ........ 501 0.03
Metals and Mining
141,900 Barrick Gold Corp ............... 2,514 0.14
6,900 Dominion Diamond Corp .... 67 0.01
55,100 Kinross Gold Corp .............. 232 0.01
Oil and Gas
13,528 ARC Resources Ltd ............. 244 0.01
30,500 Tourmaline Oil Corp ........... 825 0.05
Pipelines
5,927 Keyera Corp ........................ 191 0.01
Real Estate Investment Trust
200
Canadian Real Estate
Investment Trust .................. 7 0.00
22,150
Dream Office Real Estate
Investment Trust .................. 285 0.02
13,955
Smart Real Estate
Investment Trust .................. 375 0.02
Telecommunications
12,400 BCE Inc ............................... 572 0.03
Transport
136,602
Canadian National Railway
Co ........................................ 8,934 0.51
25,629 1.46
Cayman Islands (1.15%)
Food Products
19,850
Fresh Del Monte Produce
Inc ....................................... 1,189 0.07
Number
of Shares
Fair Value
USD ‘000
Fund
%
2,488,000 WH Group Ltd .................... 2,002 0.11
Internet Software and Services
24,510
Alibaba Group Holding Ltd
ADR .................................... 2,593 0.15
470,791 Tencent Holdings Ltd ......... 12,929 0.73
Lodging
241,200 Sands China Ltd .................. 1,046 0.06
Real Estate
72,000
Cheung Kong Property
Holdings Ltd ....................... 525 0.03
20,284 1.15
China (0.15%)
Insurance
511,000
Ping An Insurance Group Co
of China Ltd ........................ 2,649 0.15
Curacao (0.61%)
Oil and Gas Services
137,095 Schlumberger Ltd ............... 10,781 0.61
Czech Republic (0.04%)
Banks
21,625 Komercni Banka AS ........... 749 0.04
Denmark (0.71%)
Beverages
46,043 Carlsberg A/S ..................... 4,392 0.25
Food Products
33,032
Chr Hansen Holding
A/S ...................................... 1,964 0.11
Insurance
6,313 Tryg A/S ............................. 127 0.01
Pharmaceuticals
137,737 Novo Nordisk A/S .............. 5,725 0.33
Telecommunications
10,010 GN Store Nord A/S ............. 215 0.01
12,423 0.71
France (5.25%)
Advertising
69,061 JCDecaux SA ...................... 2,234 0.13
Aerospace and Defence
29,810 Thales SA ........................... 2,747 0.16
Automobiles
236,740 Peugeot SA ......................... 3,617 0.21
Banks
300,590 BNP Paribas SA .................. 15,461 0.88
52,260 Societe Generale SA ........... 1,808 0.10
Beverages
74,415 Pernod Ricard SA ............... 8,810 0.50
Chemicals
20,984 Air Liquide SA ................... 2,251 0.13
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
164 Russell World Equity Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Computers and Peripherals
6,820 Atos SE ............................... 735 0.04
4,150 Teleperformance ................. 443 0.03
Electrical Equipment
70,691 Legrand SA ......................... 4,169 0.24
82,145 Schneider Electric SE .......... 5,729 0.32
Food Products
265,592 Danone SA .......................... 19,714 1.12
Insurance
94,383 AXA SA .............................. 2,009 0.11
274 Euler Hermes Group ............ 23 0.00
Media
1,314 Metropole Television SA .... 24 0.00
Oil and Gas
47,350 Total SA .............................. 2,244 0.13
Pharmaceuticals
10,037 Sanofi .................................. 763 0.04
Retail Trade
47,200 Kering ................................. 9,524 0.54
Textile and Apparel
2,018 Christian Dior SE ................ 362 0.02
2,402 Hermes International ........... 978 0.05
51,333
LVMH Moet Hennessy
Louis Vuitton SE ................. 8,757 0.50
92,402 5.25
Germany (4.75%)
Aerospace and Defence
33,986 MTU Aero Engines AG ...... 3,439 0.20
Automobiles
201,450 Daimler AG ......................... 14,197 0.81
Chemicals
31,863 Brenntag AG ....................... 1,740 0.10
25,271 Covestro AG ....................... 1,495 0.08
15,960 Evonik Industries AG .......... 540 0.03
45,420 Linde AG ............................. 7,723 0.44
Containers and Packaging
11,213 Gerresheimer AG ................ 953 0.05
Diversified Financials
29,657 Deutsche Boerse AG ........... 2,405 0.14
Electrical Equipment
30,726 OSRAM Licht AG .............. 1,805 0.10
Insurance
96,000 Allianz SE ........................... 14,252 0.81
2,084 Hannover Rueck SE ............ 223 0.01
4,895
Muenchener
Rueckversicherungs-
Gesellschaft AG in
Muenchen ............................ 913 0.05
Metals and Mining
82,870 Kloeckner & Co SE ............. 1,010 0.06
Miscellaneous Manufacturers
17,868 Siemens AG ........................ 2,092 0.12
Number
of Shares
Fair Value
USD ‘000
Fund
%
Pharmaceuticals
171,460 Bayer AG ............................ 17,232 0.98
41,079 Merck KGaA ...................... 4,428 0.25
Software
82,866 SAP SE ADR ...................... 7,575 0.43
37,720 Software AG ....................... 1,599 0.09
83,621 4.75
Hong Kong (1.44%)
Banks
24,000 Hang Seng Bank Ltd ........... 429 0.02
Electric Utilities
41,500 CLP Holdings Ltd ............... 429 0.02
107 Power Assets Holdings Ltd . 1 0.00
Holding Companies - Diversified Operations
422,000 Wharf Holdings Ltd ............ 3,071 0.18
Insurance
2,162,798 AIA Group Ltd ................... 14,375 0.82
Media
24 Television Broadcasts Ltd .. - 0.00
Real Estate
124,000 Hang Lung Properties Ltd ... 279 0.01
131,000 Hysan Development Co Ltd 614 0.03
55,000
Sun Hung Kai Properties
Ltd ...................................... 830 0.05
233,600 Swire Properties Ltd ........... 684 0.04
139,000 Wheelock & Co Ltd ............ 820 0.05
Real Estate Investment Trust
478,000 Link REIT ........................... 3,513 0.20
Transport
48,309 MTR Corp Ltd .................... 266 0.02
25,311 1.44
India (0.54%)
Banks
82,294 HDFC Bank Ltd ADR ........ 5,916 0.33
Computers and Peripherals
230,025 Infosys Ltd ADR ................ 3,630 0.21
9,546 0.54
Indonesia (0.27%)
Retail Trade
2,645,100 Astra International Tbk PT . 1,672 0.10
Telecommunications
9,294,100
Telekomunikasi Indonesia
Persero Tbk PT ................... 3,069 0.17
4,741 0.27
Ireland (2.00%)
Building Products
110,965 CRH Plc .............................. 3,712 0.21
15,414
James Hardie Industries
Plc ....................................... 240 0.01
Computers and Peripherals
108,023 Accenture Plc ...................... 13,197 0.75
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell World Equity Fund 165
Number
of Shares
Fair Value
USD ‘000
Fund
%
Electrical Equipment
43,200 Allegion Plc ......................... 2,977 0.17
64,780
Johnson Controls
International Plc .................. 3,014 0.17
Health Care Equipment and Supplies
114,772 Medtronic Plc ...................... 9,916 0.56
Miscellaneous Manufacturers
34,759 Pentair Plc ........................... 2,233 0.13
35,289 2.00
Israel (0.32%)
Banks
254,789 Bank Hapoalim BM ............ 1,444 0.08
Software
53,068
Check Point Software
Technologies Ltd ................. 4,119 0.24
5,563 0.32
Italy (0.39%)
Electric Utilities
695,288 A2A SpA ............................. 982 0.06
257,900 Enel SpA ............................. 1,150 0.06
Oil and Gas
326,190 Eni SpA ............................... 4,699 0.27
6,831 0.39
Japan (4.48%)
Agriculture
24,600 Japan Tobacco Inc ............... 1,001 0.06
Automobiles
74,200 Fuji Heavy Industries Ltd .... 2,751 0.15
65,200 Mitsubishi Motors Corp ...... 302 0.02
216,200 Toyota Motor Corp .............. 12,338 0.70
Banks
103,900
Mitsubishi UFJ Financial
Group Inc ............................ 518 0.03
39,200
Sumitomo Mitsui Financial
Group Inc ............................ 1,308 0.07
Beverages
6,100
Coca-Cola East Japan Co
Ltd ....................................... 132 0.01
16,700 Coca-Cola West Co Ltd ...... 465 0.02
Chemicals
3,000 DIC Corp ............................. 92 0.01
187,000 Tokuyama Corp ................... 777 0.04
Commercial Services and Supplies
177,000 Toppan Printing Co Ltd ....... 1,587 0.09
Construction and Engineering
129,800 Hazama Ando Corp ............. 784 0.04
237,100 Taisei Corp .......................... 1,768 0.10
28,400 Tokyu Construction Co Ltd . 282 0.02
Distributors
22,100 Canon Marketing Japan Inc . 409 0.02
Diversified Financials
1,952,000 Daiwa Securities Group Inc 10,879 0.62
Number
of Shares
Fair Value
USD ‘000
Fund
%
Electrical Equipment
71,200 Hoya Corp .......................... 2,839 0.16
107,000
Nippon Electric Glass Co
Ltd ...................................... 549 0.03
Food Products
52,000 NH Foods Ltd ..................... 1,251 0.07
221,700 Nippon Suisan Kaisha Ltd .. 948 0.05
Home Builders
14,300 Iida Group Holdings Co Ltd 286 0.02
Hotels, Restaurants and Leisure
11,000 Round One Corp ................. 74 0.00
49,500 Tokyo Dome Corp .............. 461 0.03
Internet Software and Services
51,700 Mixi Inc .............................. 1,856 0.11
Machinery
31,600 Amada Holdings Co Ltd ..... 326 0.02
195,400 Kubota Corp ....................... 2,920 0.16
42,000
Mitsubishi Heavy Industries
Ltd ...................................... 174 0.01
Media
22,200 Fuji Media Holdings Inc ..... 300 0.02
Office Electronics
28,600 Canon Inc ............................ 826 0.05
Oil and Gas
85,400 Inpex Corp .......................... 767 0.04
Paper and Forest Products
15,800 Sumitomo Forestry Co Ltd . 210 0.01
Pharmaceuticals
274,400 Astellas Pharma Inc ............ 4,264 0.24
14,500 Daiichi Sankyo Co Ltd ....... 346 0.02
62,700
Mitsubishi Tanabe Pharma
Corp .................................... 1,334 0.08
Real Estate
3,100
Daito Trust Construction Co
Ltd ...................................... 495 0.03
Retail Trade
12,096 Fast Retailing Co Ltd .......... 3,857 0.22
5,740 Ryohin Keikaku Co Ltd ...... 1,152 0.06
Semiconductor Equipment and Products
15,200 Rohm Co Ltd ...................... 793 0.05
Telecommunications
231,400
Nippon Telegraph &
Telephone Corp .................. 10,543 0.60
182,300 NTT Docomo Inc ................ 4,612 0.26
Toys, Games and Hobbies
45,200 Bandai Namco Holdings Inc 1,373 0.08
Transport
4,300 Central Japan Railway Co ... 731 0.04
148,000 Nippon Yusen KK .............. 275 0.02
78,955 4.48
Jersey, Channel Islands (2.05%)
Advertising
626,291 WPP Plc .............................. 14,758 0.84
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
166 Russell World Equity Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Auto Components
42,767 Delphi Automotive Plc ........ 3,050 0.17
Commercial Services and Supplies
70,900 Regus Plc ............................. 240 0.01
Metals and Mining
718,963 Centamin Plc ....................... 1,386 0.08
6,066,100 Glencore Plc ........................ 16,717 0.95
36,151 2.05
Korea, Republic of (1.18%)
Personal Products
16,588 Amorepacific Corp .............. 5,859 0.33
2,089
LG Household & Health
Care Ltd ............................... 1,811 0.10
Semiconductor Equipment and Products
9,049 Samsung Electronics Co Ltd 13,130 0.75
20,800 1.18
Luxembourg (0.16%)
Iron and Steel
16,650 APERAM SA ...................... 752 0.04
Oil and Gas Services
133,500 Subsea 7 SA ........................ 1,433 0.08
Telecommunications
11,120
Millicom International
Cellular SA .......................... 578 0.04
2,763 0.16
Mexico (0.28%)
Banks
313,446
Grupo Financiero Banorte
SAB de CV .......................... 1,649 0.09
Beverages
36,280
Fomento Economico
Mexicano SAB de CV ADR 3,339 0.19
4,988 0.28
Netherlands (2.68%)
Automobiles
177,700
Fiat Chrysler Automobiles
NV ....................................... 1,128 0.06
Beverages
84,145 Heineken NV ....................... 7,405 0.42
Chemicals
86,328 Akzo Nobel NV ................... 5,849 0.33
Electrical Equipment
10,870 Koninklijke Philips NV ....... 322 0.02
Food Products
204,877
Koninklijke Ahold Delhaize
NV ....................................... 4,672 0.27
Insurance
135,632 NN Group NV ..................... 4,169 0.24
Machinery
1,789,300 CNH Industrial NV ............. 12,809 0.73
Media
45,960 Wolters Kluwer NV ............ 1,968 0.11
Number
of Shares
Fair Value
USD ‘000
Fund
%
Oil and Gas Services
44,954 Core Laboratories NV ......... 5,050 0.29
Personal Products
81,700 Unilever NV ....................... 3,771 0.21
47,143 2.68
New Zealand (0.02%)
Construction and Engineering
45,253
Auckland International
Airport Ltd .......................... 242 0.01
Electric Utilities
25,038 Contact Energy Ltd ............. 92 0.01
334 0.02
Norway (0.35%)
Metals and Mining
1,008,400 Norsk Hydro ASA .............. 4,347 0.24
Telecommunications
110,253 Telenor ASA ....................... 1,891 0.11
6,238 0.35
Panama (0.22%)
Hotels, Restaurants and Leisure
77,868 Carnival Corp ..................... 3,802 0.22
Papua New Guinea (0.02%)
Oil and Gas
73,600 Oil Search Ltd ..................... 399 0.02
Russia (0.19%)
Banks
349,560
Sberbank of Russia PJSC
ADR .................................... 3,278 0.19
Singapore (0.39%)
Airlines
22,800
Singapore Airlines
Ltd ...................................... 176 0.01
Construction and Engineering
38,500 SATS Ltd ............................ 141 0.01
Diversified Financials
34,400 Singapore Exchange Ltd ..... 187 0.01
Media
73,000
Singapore Press Holdings
Ltd ...................................... 204 0.01
Semiconductor Equipment and Products
27,110 Broadcom Ltd ..................... 4,677 0.27
Shipbuilding
911,800
Yangzijiang Shipbuilding
Holdings Ltd ....................... 502 0.03
Telecommunications
252,800
Singapore
Telecommunications
Ltd ...................................... 736 0.04
11,600 StarHub Ltd ........................ 29 0.00
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell World Equity Fund 167
Number
of Shares
Fair Value
USD ‘000
Fund
%
Transport
96,700 ComfortDelGro Corp Ltd .... 199 0.01
6,851 0.39
South Africa (0.36%)
Food Products
266,042 Shoprite Holdings Ltd ......... 3,703 0.21
Media
15,574 Naspers Ltd ......................... 2,690 0.15
6,393 0.36
Spain (0.40%)
Construction and Engineering
15,283 Aena SA .............................. 2,255 0.13
Electrical Equipment
37,538
Gamesa Corp Tecnologica
SA ....................................... 899 0.05
Media
188,485
Mediaset Espana
Comunicacion SA ............... 2,235 0.12
Oil and Gas
126,060 Repsol SA ........................... 1,711 0.10
7,100 0.40
Sweden (0.94%)
Banks
39,291 Svenska Handelsbanken AB 541 0.03
28,479 Swedbank AB ...................... 670 0.04
Construction and Engineering
11,624 Skanska AB ......................... 272 0.01
Home Furnishings
97,489 Electrolux AB ...................... 2,448 0.14
Metals and Mining
126,690 Boliden AB ......................... 2,981 0.17
Personal Products
323,829
Svenska Cellulosa AB
SCA ..................................... 9,631 0.55
16,543 0.94
Switzerland (6.66%)
Auto Components
2,025 Georg Fischer AG ............... 1,776 0.10
Banks
1,153,739 Credit Suisse Group AG ...... 15,127 0.86
461,573 UBS Group AG ................... 6,299 0.36
Building Products
214,425 LafargeHolcim Ltd .............. 11,613 0.66
Chemicals
11,403 Lonza Group AG ................. 2,183 0.12
Commercial Services and Supplies
60,723 Adecco Group AG ............... 3,426 0.20
168 SGS SA ............................... 377 0.02
Diversified Financials
10,028 GAM Holding AG ............... 96 0.01
354,619 Julius Baer Group Ltd ......... 14,461 0.82
Number
of Shares
Fair Value
USD ‘000
Fund
%
Food Products
165,206 Nestle SA ............................ 13,046 0.74
Health Care Equipment and Supplies
20,607 Sonova Holding AG ........... 2,923 0.17
Insurance
27,198 Chubb Ltd ........................... 3,417 0.20
15,747 Swiss Life Holding AG ....... 4,085 0.23
20,130 Swiss Re AG ....................... 1,820 0.10
Pharmaceuticals
36,365 Actelion Ltd ........................ 6,310 0.36
25,633 Novartis AG ........................ 2,020 0.11
42,613 Roche Holding AG ............. 10,594 0.60
Retail Trade
278,240
Cie Financiere Richemont
SA ....................................... 16,992 0.97
Telecommunications
768 Swisscom AG ..................... 366 0.02
Transport
1,693
Kuehne & Nagel
International AG ................. 246 0.01
117,177 6.66
Taiwan (0.12%)
Semiconductor Equipment and Products
69,400
Taiwan Semiconductor
Manufacturing Co Ltd ADR 2,123 0.12
Thailand (0.07%)
Banks
215,400 Kasikornbank PCL .............. 1,166 0.07
United Kingdom (4.61%)
Agriculture
18,673
British American Tobacco
Plc ....................................... 1,196 0.07
100,640 Imperial Tobacco Group Plc 5,195 0.29
Banks
300,574 Standard Chartered Plc ....... 2,453 0.14
Beverages
649,584 Diageo Plc .......................... 18,652 1.06
Distributors
123,346 Inchcape Plc ........................ 1,055 0.06
Food Products
428,916 Compass Group Plc ............ 8,330 0.47
Home Builders
25,632 Persimmon Plc .................... 604 0.04
99,223 Taylor Wimpey Plc ............. 199 0.01
Household Products
131,235 Reckitt Benckiser Group Plc 12,385 0.70
Insurance
74,900 Aon Plc ............................... 8,426 0.48
Lodging
55,913 Whitbread Plc ..................... 2,844 0.16
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
168 Russell World Equity Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Media
325,595 Sky Plc ................................ 3,781 0.22
Metals and Mining
135,970 Rio Tinto Plc ....................... 4,547 0.26
Oil and Gas
83,966 Royal Dutch Shell Plc ......... 2,092 0.12
Other Finance
315,199 3i Group Plc ........................ 2,663 0.15
Pharmaceuticals
14,690 AstraZeneca Plc .................. 955 0.06
16,690 GlaxoSmithKline Plc ........... 356 0.02
146,323 Indivior Plc .......................... 583 0.03
Real Estate Investment Trust
138,295 Great Portland Estates Plc ... 1,137 0.06
49,220 Land Securities Group Plc ... 676 0.04
Retail Trade
5,127 Next Plc ............................... 318 0.02
Textile and Apparel
149,784 Burberry Group Plc ............. 2,683 0.15
81,130 4.61
United States (48.17%)
Advertising
67,690 Omnicom Group Inc ............ 5,754 0.33
Aerospace and Defence
47,496 Boeing Co ........................... 6,257 0.35
5,000
L-3 Communications
Holdings Inc ........................ 754 0.04
4,974 Lockheed Martin Corp ........ 1,192 0.07
24,204 Raytheon Co ........................ 3,295 0.19
94,600
Spirit AeroSystems Holdings
Inc ....................................... 4,213 0.24
65,525 United Technologies Corp ... 6,657 0.38
Agriculture
12,682
Philip Morris International
Inc ....................................... 1,233 0.07
Airlines
70,257 Delta Air Lines Inc .............. 2,765 0.16
28,700 Hawaiian Holdings Inc ........ 1,395 0.08
Auto Components
9,180
Cooper-Standard Holding
Inc ....................................... 907 0.05
32,000 Lear Corp ............................ 3,879 0.22
Automobiles
356,900 General Motors Co .............. 11,339 0.64
Banks
204,054
Bank of New York Mellon
Corp ..................................... 8,138 0.46
262,267 Citigroup Inc ....................... 12,387 0.70
159,466
Citizens Financial Group
Inc ....................................... 3,940 0.23
24,115 First Republic Bank ............. 1,860 0.11
100,196 Goldman Sachs Group Inc .. 16,159 0.92
129,800 JPMorgan Chase & Co ........ 8,643 0.49
Number
of Shares
Fair Value
USD ‘000
Fund
%
199,200 Morgan Stanley ................... 6,386 0.36
142,399 State Street Corp ................. 9,915 0.56
182,000 Wells Fargo & Co ............... 8,059 0.46
Beverages
27,219 Coca-Cola Co ..................... 1,152 0.07
6,642
Dr Pepper Snapple Group
Inc ....................................... 606 0.03
86,093 PepsiCo Inc ......................... 9,364 0.53
Biotechnology
90,912 Amgen Inc .......................... 15,165 0.86
6,500 Biogen Inc .......................... 2,035 0.11
32,700 Gilead Sciences Inc ............. 2,587 0.15
14,765
Regeneron Pharmaceuticals
Inc ....................................... 5,936 0.34
26,300 United Therapeutics Corp ... 3,106 0.18
Building Products
15,307 Lennox International Inc ..... 2,404 0.14
Chemicals
4,037
EI du Pont de Nemours &
Co ....................................... 270 0.01
16,000
International Flavors &
Fragrances Inc ..................... 2,288 0.13
46,109 Monsanto Co ....................... 4,712 0.27
42,017 Praxair Inc .......................... 5,077 0.29
Commercial Services and Supplies
10,640
Automatic Data Processing
Inc ....................................... 938 0.05
12,000 CoreLogic Inc ..................... 471 0.03
35,747 FleetCor Technologies Inc .. 6,210 0.35
38,625 Global Payments Inc ........... 2,965 0.17
16,700 Insperity Inc ........................ 1,213 0.07
37,900 ManpowerGroup Inc ........... 2,739 0.15
63,074 PayPal Holdings Inc ........... 2,584 0.15
18,660 Rollins Inc .......................... 546 0.03
Computers and Peripherals
100,694 Apple Inc ............................ 11,383 0.65
59,488
Cognizant Technology
Solutions Corp .................... 2,838 0.16
6,715
International Business
Machines Corp .................... 1,067 0.06
25,600 NetApp Inc ......................... 917 0.05
10,400 Sykes Enterprises Inc .......... 293 0.02
59,570 Synopsys Inc ....................... 3,535 0.20
28,300 Teradata Corp ..................... 877 0.05
Containers and Packaging
98,635 Berry Plastics Group Inc ..... 4,325 0.25
Distributors
15,540 WW Grainger Inc ............... 3,494 0.20
Diversified Financials
93,353 American Express Co ......... 5,978 0.34
38,000 Ameriprise Financial Inc .... 3,791 0.21
14,715 BlackRock Inc .................... 5,334 0.30
6,740 CME Group Inc .................. 704 0.04
121,492 Franklin Resources Inc ....... 4,321 0.25
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell World Equity Fund 169
Number
of Shares
Fair Value
USD ‘000
Fund
%
6,742
TD Ameritrade Holding
Corp ..................................... 238 0.01
301,448 Visa Inc ............................... 24,930 1.42
Electric Utilities
35,400 AES Corp ............................ 455 0.03
6,162 Alliant Energy Corp ............ 236 0.01
3,800 DTE Energy Co ................... 356 0.02
71,136 Edison International ............ 5,140 0.29
25,200 Great Plains Energy Inc ....... 688 0.04
5,992 NextEra Energy Inc ............. 733 0.04
3,814 Pinnacle West Capital Corp 290 0.02
5,568
Public Service Enterprise
Group Inc ............................ 233 0.01
7,745 WEC Energy Group Inc ...... 464 0.03
3,834 Westar Energy Inc ............... 218 0.01
Electrical Equipment
52,230 Amphenol Corp ................... 3,391 0.19
14,712 Emerson Electric Co ............ 802 0.05
130,488
Honeywell International
Inc ....................................... 15,214 0.87
1,487 Hubbell Inc .......................... 160 0.01
30,367 Waters Corp ........................ 4,813 0.27
Environmental Control
34,912 Waste Management Inc ....... 2,226 0.13
Food Products
10,264 General Mills Inc ................. 656 0.04
8,169 Ingredion Inc ....................... 1,087 0.06
3,230 JM Smucker Co ................... 438 0.02
99,663 Kellogg Co .......................... 7,721 0.44
208,092 Mondelez International Inc . 9,135 0.52
6,000 Sanderson Farms Inc ........... 578 0.03
13,396 Sysco Corp .......................... 657 0.04
52,900 Tyson Foods Inc .................. 3,950 0.22
23,000 US Foods Holding Corp ...... 543 0.03
159,909 Whole Foods Market Inc ..... 4,533 0.26
Hand and Machine Tools
15,800 Stanley Black & Decker Inc 1,943 0.11
Health Care Equipment and Supplies
17,015 Abbott Laboratories ............. 720 0.04
61,200 Baxter International Inc ....... 2,913 0.16
29,498 Cooper Cos Inc .................... 5,288 0.30
4,500 CR Bard Inc ........................ 1,009 0.06
37,668 Dentsply Sirona Inc ............. 2,239 0.13
76,400 Hologic Inc .......................... 2,967 0.17
109,252 St Jude Medical Inc ............. 8,714 0.49
81,259 Stryker Corp ........................ 9,459 0.54
91,392
Thermo Fisher Scientific
Inc ....................................... 14,537 0.83
76,596
Zimmer Biomet Holdings
Inc ....................................... 9,959 0.56
Health Care Providers and Services
65,100 HCA Holdings Inc ............... 4,924 0.28
26,800 UnitedHealth Group Inc ...... 3,752 0.21
Number
of Shares
Fair Value
USD ‘000
Fund
%
17,190
Universal Health Services
Inc ....................................... 2,118 0.12
Home Builders
10,400 Thor Industries Inc .............. 881 0.05
Home Furnishings
3,592 Leggett & Platt Inc .............. 164 0.01
Hotels, Restaurants and Leisure
48,527 Harley-Davidson Inc ........... 2,552 0.14
1,631 Polaris Industries Inc .......... 126 0.01
Household Products
4,023 Clorox Co ........................... 504 0.03
8,076 Kimberly-Clark Corp .......... 1,019 0.06
Insurance
13,893 Aflac Inc ............................. 998 0.06
994 Alleghany Corp ................... 522 0.03
101,200 Allstate Corp ....................... 7,000 0.40
2,644
American Financial Group
Inc ....................................... 198 0.01
202,300
American International
Group Inc ............................ 12,003 0.68
4,756 Arthur J Gallagher & Co ..... 242 0.01
5,161 Cincinnati Financial Corp ... 389 0.02
1,494 Erie Indemnity Co ............... 152 0.01
138,800 MBIA Inc ............................ 1,081 0.06
554 Mercury General Corp ........ 30 0.00
3,653 ProAssurance Corp ............. 192 0.01
20,046 Progressive Corp ................. 631 0.04
2,100
Reinsurance Group of
America Inc ........................ 227 0.01
8,858 Travelers Cos Inc ................ 1,015 0.06
162,900 Voya Financial Inc .............. 4,695 0.27
Internet Software and Services
27,162 Alphabet Inc (Class A) ....... 21,839 1.24
12,646 Alphabet Inc (Class C) ........ 9,829 0.56
12,159 Amazon.com Inc ................. 10,180 0.58
356,791 eBay Inc .............................. 11,737 0.66
9,500 F5 Networks Inc ................. 1,184 0.07
145,763 Facebook Inc ....................... 18,696 1.06
20,228 MercadoLibre Inc ............... 3,742 0.21
5,375 Priceline Group Inc ............. 7,909 0.45
250,956 Symantec Corp ................... 6,299 0.36
Iron and Steel
41,800 Steel Dynamics Inc ............. 1,045 0.06
Lodging
9,794 Wynn Resorts Ltd ............... 954 0.05
Machinery
8,700 BWX Technologies Inc ...... 334 0.02
101,300 Caterpillar Inc ..................... 8,992 0.51
70,835 Cummins Inc ....................... 9,078 0.52
3,524 Rockwell Automation Inc ... 431 0.02
21,100 SPX FLOW Inc .................. 652 0.04
Media
15,500 CBS Corp ............................ 848 0.05
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
170 Russell World Equity Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
39,827
Charter Communications
Inc ....................................... 10,751 0.61
83,529 Comcast Corp ...................... 5,541 0.32
5,600
Discovery Communications
Inc ....................................... 147 0.01
29,300 Gannett Co Inc .................... 341 0.02
171,247 Time Warner Inc ................. 13,632 0.77
108,579 Walt Disney Co ................... 10,082 0.57
Miscellaneous Manufacturers
54,403 3M Co ................................. 9,587 0.54
11,800 Carlisle Cos Inc ................... 1,210 0.07
25,600
Smith & Wesson Holding
Corp ..................................... 681 0.04
Office Electronics
393,400 Xerox Corp .......................... 3,985 0.23
Oil and Gas
10,718 Chevron Corp ...................... 1,103 0.06
50,539 EOG Resources Inc ............. 4,888 0.28
18,213 Exxon Mobil Corp ............... 1,590 0.09
2,937 Helmerich & Payne Inc ....... 198 0.01
12,248 Occidental Petroleum Corp . 893 0.05
4,300 Tesoro Corp ......................... 342 0.02
82,700 Valero Energy Corp ............ 4,383 0.25
Oil and Gas Services
48,547 National Oilwell Varco Inc . 1,784 0.10
26,701 NOW Inc ............................. 572 0.03
Personal Products
187,892 Colgate-Palmolive Co ......... 13,928 0.79
99,652 Coty Inc ............................... 2,342 0.13
36,281 Coty Inc W/I ........................ 842 0.05
15,426 Procter & Gamble Co .......... 1,384 0.08
Pharmaceuticals
13,800 AmerisourceBergen Corp .... 1,115 0.06
35,963 Bristol-Myers Squibb Co .... 1,939 0.11
13,201 Eli Lilly & Co ...................... 1,060 0.06
94,400 Express Scripts Holding Co 6,658 0.38
67,335 Johnson & Johnson ............. 7,954 0.45
41,700 McKesson Corp ................... 6,953 0.39
19,777 Merck & Co Inc .................. 1,234 0.07
66,494 Pfizer Inc ............................. 2,252 0.13
19,344 VCA Inc .............................. 1,354 0.08
Real Estate Investment Trust
49,900 Apple Hospitality REIT Inc 924 0.05
86,300
CBL & Associates
Properties Inc ...................... 1,048 0.06
30,421
Columbia Property Trust
Inc ....................................... 681 0.04
14,370 Equinix Inc .......................... 5,177 0.30
18,400 Equity Commonwealth ........ 556 0.03
1,915
Federal Realty Investment
Trust .................................... 295 0.02
4,664 Public Storage ..................... 1,041 0.06
2,794 Regency Centers Corp ......... 217 0.01
Number
of Shares
Fair Value
USD ‘000
Fund
%
7,850 Taubman Centers Inc .......... 584 0.03
Retail Trade
4,901 AutoZone Inc ...................... 3,766 0.21
13,600 Best Buy Co Inc .................. 519 0.03
16,100 Big Lots Inc ........................ 769 0.04
15,300 Children's Place Inc ............ 1,222 0.07
7,560 Coach Inc ............................ 276 0.02
35,111 CVS Health Corp ................ 3,125 0.18
21,100 Darden Restaurants Inc ....... 1,294 0.07
12,400 Foot Locker Inc .................. 840 0.05
3,962 Genuine Parts Co ................ 398 0.02
10,321 Home Depot Inc .................. 1,328 0.08
20,500 Kohl's Corp ......................... 897 0.05
70,554 Lowe's Cos Inc .................... 5,095 0.29
10,408 McDonald's Corp ................ 1,201 0.07
46,500 PVH Corp ........................... 5,138 0.29
115,966 Sally Beauty Holdings Inc .. 2,978 0.17
50,900 Starbucks Corp ................... 2,756 0.16
41,568 Tiffany & Co ...................... 3,019 0.17
153,585 Urban Outfitters Inc ............ 5,302 0.30
126,736 Wal-Mart Stores Inc ........... 9,140 0.52
Semiconductor Equipment and Products
11,999 Analog Devices Inc ............. 773 0.04
97,500 Applied Materials Inc ......... 2,940 0.17
109,291 Intel Corp ............................ 4,126 0.24
7,667
Maxim Integrated Products
Inc ....................................... 306 0.02
63,086 Microchip Technology Inc .. 3,920 0.22
15,655 Qualcomm Inc .................... 1,072 0.06
13,192 Texas Instruments Inc ......... 926 0.05
6,889 Xilinx Inc ............................ 374 0.02
Shipbuilding
31,200
Huntington Ingalls Industries
Inc ....................................... 4,787 0.27
Software
51,639 Activision Blizzard Inc ....... 2,288 0.13
44,975 Adobe Systems Inc ............. 4,882 0.28
9,887 CA Inc ................................ 327 0.02
91,107 Cerner Corp ........................ 5,626 0.32
78,300 Citrix Systems Inc ............... 6,673 0.38
4,800 Intuit Inc ............................. 528 0.03
123,591 Microsoft Corp ................... 7,119 0.40
203,800
Nuance Communications
Inc ....................................... 2,955 0.17
208,124 Oracle Corp ......................... 8,175 0.47
59,652 Red Hat Inc ......................... 4,822 0.27
67,260 Salesforce.com Inc .............. 4,798 0.27
Telecommunications
76,389 AT&T Inc ........................... 3,102 0.18
42,600 CenturyLink Inc .................. 1,169 0.07
133,929 Cisco Systems Inc ............... 4,248 0.24
18,400 NETGEAR Inc ................... 1,113 0.06
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell World Equity Fund 171
Number
of Shares
Fair Value
USD ‘000
Fund
%
176,565
Verizon Communications
Inc ....................................... 9,178 0.52
Textile and Apparel
22,160 Mohawk Industries Inc ........ 4,440 0.25
63,583 NIKE Inc ............................. 3,348 0.19
Transport
3,860
CH Robinson Worldwide
Inc ....................................... 272 0.02
52,281 Kansas City Southern .......... 4,879 0.28
45,346 Union Pacific Corp .............. 4,423 0.25
81,313 United Parcel Service Inc .... 8,892 0.50
847,941 48.17
Total Common Stock ........ 1,686,340 95.79
Preferred Stock (0.19%)
Germany (0.19%)
Household Products
24,526 Henkel AG & Co KGaA ..... 3,335 0.19
Total Preferred Stock ........ 3,335 0.19
Warrants (0.47%)
Switzerland (0.47%)
25,680 UBS AG London ................. 2,768 0.16
3,361,600 UBS AG London Delta One 2,885 0.16
311,119
UBS AG London Delta One
(Swiss Listing) .................... 2,709 0.15
Total Warrants .................. 8,362 0.47
Total Transferable
Securities ............................ 1,698,037 96.45
Number
of Shares
Fair Value
USD ‘000
Fund
%
Investment Funds (2.26%)
Ireland (2.26%)
51
Russell Investment Company
III Plc - The Sterling
Liquidity Fund - Class R
Roll-Up Shares ................... 67 0.00
39,559
Russell Investment Company
III Plc - The US Dollar Cash
Fund II - Class R Roll-Up
Shares ................................. 39,705 2.26
6
Russell Investment Company
Plc - Russell Euro Liquidity
Fund - Class R Roll-Up
Shares ................................. 7 0.00
Total Investment Funds .... 39,779 2.26
Total Investments
excluding Financial
Derivative Instruments ..... 1,737,816 98.71
Financial Derivative Instruments (0.04%)
Open Futures Contracts (0.01%)
Notional
Amount
USD ‘000
Average
Cost Price
USD
Unrealised
Gain (Loss)
USD ‘000
Fund
%
2,024 4,937.73
41 of CAC40 10 Euro Futures
Long Futures Contracts
Expiring October 2016 ............................................. 23 0.00
1,766 11,773.49
6 of DAX Index Futures
Long Futures Contracts
Expiring December 2016 ..........................................
6
0.00
(71,206) (3,387.53)
2102 of Euro Stoxx 50 Index Futures
Short Futures Contracts
Expiring December 2016 ..........................................
480
0.03
1,911 3,352.78
57 of Euro Stoxx 50 Index Futures
Long Futures Contracts
Expiring December 2016 ..........................................
7
0.00
2,946 8,664.94
34 of FTSE 100 Index Futures
Long Futures Contracts
Expiring December 2016 ..........................................
83
0.01
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
172 Russell World Equity Fund
Notional
Amount
USD ‘000
Average
Cost Price
USD
Unrealised
Gain (Loss)
USD ‘000
Fund
%
757 3,026.68
5 of Hang Seng Index Futures
Long Futures Contracts
Expiring October 2016 .............................................
(5)
0.00
(69,285) (914.05)
1516 of Mini MSCI Emerging Market Index
Short Futures Contracts
Expiring December 2016 ..........................................
118
0.01
529 165.21
32 of OMX 30 Index Futures
Long Futures Contracts
Expiring October 2016 .............................................
9
0.00
2,030 1,561.80
13 of S&P Mid 400 E Mini
Long Futures Contracts
Expiring December 2016 ..........................................
(16)
0.00
1,534 639.30
12 of S&P TSX 60 Index Futures
Long Futures Contracts
Expiring December 2016 ..........................................
27
0.00
113,716 2,161.89
1052 of S&P500 E Mini Futures
Long Futures Contracts
Expiring December 2016 ..........................................
(79)
(0.01)
1,198 3,993.75
12 of SPI 200 Index Futures
Long Futures Contracts
Expiring December 2016 ..........................................
45
0.00
1,605 8,445.54
19 of Swiss Market Index Futures
Long Futures Contracts
Expiring December 2016 ..........................................
(14)
0.00
56,510 13.20
428 of Topix Index Futures
Long Futures Contracts
Expiring December 2016 ..........................................
(593)
(0.03)
Unrealised gain on open futures contracts ......................................................................... 798 0.05
Unrealised loss on open futures contracts .......................................................................... (707) (0.04)
Net unrealised gain (loss) on open futures contracts .................................................... 91 0.01
Open Forward Foreign Currency Exchange Contracts (0.03%)
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
06/10/2016 AUD 54 EUR 36 - 0.00
06/10/2016 AUD 11 GBP 6 - 0.00
06/10/2016 AUD 8 GBP 5 - 0.00
06/10/2016 AUD 9 USD 6 - 0.00
06/10/2016 AUD 5 USD 4 - 0.00
06/10/2016 AUD 33 USD 25 - 0.00
21/12/2016 AUD 700 USD 535 - 0.00
21/12/2016 AUD 100 USD 75 1 0.00
21/12/2016 AUD 6,341 USD 4,854 (10) 0.00
21/12/2016 AUD 300 USD 226 3 0.00
06/10/2016 CAD 14 GBP 8 - 0.00
06/10/2016 CAD 11 USD 8 - 0.00
21/12/2016 CAD 1,000 USD 773 (12) 0.00
21/12/2016 CAD 300 USD 227 2 0.00
21/12/2016 CAD 1,343 USD 1,040 (17) 0.00
21/12/2016 CAD 1,343 USD 1,040 (17) 0.00
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell World Equity Fund 173
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
21/12/2016 CAD 1,343 USD 1,039 (17) 0.00
21/12/2016 CAD 1,343 USD 1,040 (17) 0.00
21/12/2016 CAD 1,343 USD 1,041 (18) 0.00
21/12/2016 CAD 1,457 USD 1,125 (16) 0.00
06/10/2016 CHF 10 GBP 8 - 0.00
06/10/2016 CHF 4 USD 4 - 0.00
06/10/2016 CHF 4 USD 4 - 0.00
21/12/2016 CHF 600 USD 622 - 0.00
21/12/2016 CHF 500 USD 517 1 0.00
21/12/2016 CHF 820 USD 850 (1) 0.00
21/12/2016 CHF 300 USD 309 2 0.00
06/10/2016 EUR 3,127 AUD 4,642 (38) 0.00
06/10/2016 EUR 4,087 CAD 5,970 51 0.00
06/10/2016 EUR 3,805 CHF 4,168 (23) 0.00
06/10/2016 EUR 34 GBP 29 - 0.00
06/10/2016 EUR 1,975 GBP 1,676 43 0.00
06/10/2016 EUR 1,976 GBP 1,676 43 0.00
06/10/2016 EUR 1,976 GBP 1,676 43 0.00
06/10/2016 EUR 196 GBP 167 4 0.00
06/10/2016 EUR 1,976 GBP 1,676 44 0.00
06/10/2016 EUR 1,514 HKD 13,095 13 0.00
06/10/2016 EUR 2,289 JPY 263,184 (26) 0.00
06/10/2016 EUR 2,289 JPY 263,184 (27) 0.00
06/10/2016 EUR 2,289 JPY 263,184 (27) 0.00
06/10/2016 EUR 138 JPY 15,918 (2) 0.00
06/10/2016 EUR 2,288 JPY 263,184 (27) 0.00
06/10/2016 EUR 1,538 SEK 14,626 21 0.00
06/10/2016 EUR 537 SGD 817 5 0.00
06/10/2016 EUR 13 USD 14 - 0.00
06/10/2016 EUR 13 USD 15 - 0.00
06/10/2016 EUR 17,647 USD 19,673 160 0.02
06/10/2016 EUR 17,638 USD 19,673 151 0.01
06/10/2016 EUR 17,641 USD 19,673 154 0.02
06/10/2016 EUR 635 USD 708 5 0.00
06/10/2016 EUR 17,642 USD 19,673 155 0.02
21/12/2016 EUR 1,000 USD 1,129 (1) 0.00
21/12/2016 EUR 3,000 USD 3,381 3 0.00
21/12/2016 EUR 1,800 USD 2,028 2 0.00
21/12/2016 EUR 3,005 USD 3,399 (9) 0.00
21/12/2016 EUR 1,000 USD 1,126 2 0.00
06/10/2016 GBP 112 AUD 195 (4) 0.00
06/10/2016 GBP 112 AUD 195 (4) 0.00
06/10/2016 GBP 143 CAD 246 (2) 0.00
06/10/2016 GBP 143 CAD 246 (1) 0.00
06/10/2016 GBP 3 CAD 6 - 0.00
06/10/2016 GBP 133 CHF 171 (4) 0.00
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
174 Russell World Equity Fund
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
06/10/2016 GBP 133 CHF 171 (4) 0.00
06/10/2016 GBP 5 CHF 6 - 0.00
06/10/2016 GBP 491 EUR 579 (12) 0.00
06/10/2016 GBP 491 EUR 579 (13) 0.00
06/10/2016 GBP 12 EUR 14 - 0.00
06/10/2016 GBP 53 HKD 545 (1) 0.00
06/10/2016 GBP 53 HKD 545 (1) 0.00
06/10/2016 GBP - HKD 5 - 0.00
06/10/2016 GBP 327 JPY 44,355 (13) 0.00
06/10/2016 GBP 327 JPY 44,355 (13) 0.00
06/10/2016 GBP 4 JPY 551 - 0.00
06/10/2016 GBP 54 SEK 604 - 0.00
06/10/2016 GBP 54 SEK 604 - 0.00
06/10/2016 GBP 1 SEK 14 - 0.00
06/10/2016 GBP 19 SGD 34 - 0.00
06/10/2016 GBP 19 SGD 34 - 0.00
06/10/2016 GBP 7 USD 9 - 0.00
06/10/2016 GBP 6 USD 8 - 0.00
06/10/2016 GBP 2,519 USD 3,310 (37) 0.00
06/10/2016 GBP 2,518 USD 3,310 (39) 0.00
06/10/2016 GBP 9 USD 12 - 0.00
21/12/2016 GBP 1,400 USD 1,856 (35) 0.00
21/12/2016 GBP 1,523 USD 2,028 (47) (0.01)
21/12/2016 GBP 1,523 USD 2,028 (46) 0.00
21/12/2016 GBP 1,523 USD 2,028 (46) 0.00
21/12/2016 GBP 1,523 USD 2,029 (47) (0.01)
21/12/2016 GBP 1,523 USD 2,031 (50) (0.01)
21/12/2016 GBP 1,517 USD 2,019 (45) 0.00
06/10/2016 HKD 32 GBP 3 - 0.00
06/10/2016 HKD 12 USD 2 - 0.00
06/10/2016 HKD 12 USD 2 - 0.00
21/12/2016 HKD 3,000 USD 387 - 0.00
21/12/2016 HKD 17,977 USD 2,320 - 0.00
21/12/2016 HKD 1,000 USD 129 - 0.00
06/10/2016 JPY 2,521 GBP 19 - 0.00
06/10/2016 JPY 964 USD 10 - 0.00
06/10/2016 JPY 1,010 USD 10 - 0.00
21/12/2016 JPY 50,000 USD 500 (5) 0.00
21/12/2016 JPY 330,000 USD 3,245 25 0.00
21/12/2016 JPY 254,130 USD 2,509 10 0.00
21/12/2016 JPY 254,130 USD 2,510 8 0.00
21/12/2016 JPY 254,130 USD 2,509 9 0.00
21/12/2016 JPY 254,130 USD 2,510 9 0.00
21/12/2016 JPY 254,130 USD 2,510 8 0.00
21/12/2016 JPY 4,297,916 USD 42,417 172 0.01
06/10/2016 SEK 35 GBP 3 - 0.00
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell World Equity Fund 175
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
06/10/2016 SEK 13 USD 2 - 0.00
06/10/2016 SEK 14 USD 2 - 0.00
21/12/2016 SEK 1,700 USD 202 (3) 0.00
21/12/2016 SEK 1,000 USD 117 - 0.00
21/12/2016 SEK 3,036 USD 361 (5) 0.00
06/10/2016 SGD 20 EUR 13 - 0.00
06/10/2016 SGD 2 GBP 1 - 0.00
06/10/2016 SGD 2 GBP 1 - 0.00
06/10/2016 SGD 1 USD 1 - 0.00
06/10/2016 SGD 1 USD 1 - 0.00
06/10/2016 SGD 2 USD 1 - 0.00
06/10/2016 SGD 15 USD 11 - 0.00
06/10/2016 USD 828 AUD 1,103 (16) 0.00
06/10/2016 USD 829 AUD 1,103 (15) 0.00
06/10/2016 USD 829 AUD 1,103 (15) 0.00
06/10/2016 USD 443 AUD 589 (8) 0.00
06/10/2016 USD 828 AUD 1,103 (16) 0.00
21/12/2016 USD 149 AUD 200 (3) 0.00
21/12/2016 USD 4,372 AUD 5,715 6 0.00
06/10/2016 USD 1,061 CAD 1,391 3 0.00
06/10/2016 USD 1,062 CAD 1,391 3 0.00
06/10/2016 USD 1,062 CAD 1,391 4 0.00
06/10/2016 USD 581 CAD 760 2 0.00
06/10/2016 USD 104 CAD 136 - 0.00
06/10/2016 USD 1,062 CAD 1,391 4 0.00
21/12/2016 USD 152 CAD 200 (1) 0.00
21/12/2016 USD 76 CAD 100 - 0.00
21/12/2016 USD 5,517 CAD 7,116 99 0.01
06/10/2016 USD 984 CHF 967 (13) 0.00
06/10/2016 USD 985 CHF 967 (13) 0.00
06/10/2016 USD 986 CHF 967 (12) 0.00
06/10/2016 USD 540 CHF 531 (7) 0.00
06/10/2016 USD 111 CHF 109 (1) 0.00
06/10/2016 USD 984 CHF 967 (13) 0.00
21/12/2016 USD 205 CHF 200 (2) 0.00
21/12/2016 USD 104 CHF 100 - 0.00
21/12/2016 USD 104 CHF 100 - 0.00
21/12/2016 USD 13,028 CHF 12,619 (51) (0.01)
21/12/2016 USD 310 CHF 300 - 0.00
06/10/2016 USD 3,650 EUR 3,274 (30) 0.00
06/10/2016 USD 3,652 EUR 3,274 (29) 0.00
06/10/2016 USD 3,651 EUR 3,274 (30) 0.00
06/10/2016 USD 1,992 EUR 1,786 (16) 0.00
06/10/2016 USD 323 EUR 290 (2) 0.00
06/10/2016 USD 3,651 EUR 3,274 (30) 0.00
21/12/2016 USD 3,704 EUR 3,300 (18) 0.00
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
176 Russell World Equity Fund
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
21/12/2016 USD 3,908 EUR 3,461 4 0.00
21/12/2016 USD 13,346 EUR 11,792 45 0.00
21/12/2016 USD 338 EUR 300 - 0.00
21/12/2016 USD 13,338 EUR 11,792 37 0.00
21/12/2016 USD 13,351 EUR 11,792 50 0.00
21/12/2016 USD 13,341 EUR 11,792 40 0.00
21/12/2016 USD 14,476 EUR 12,792 47 0.00
06/10/2016 USD 191 GBP 147 - 0.00
06/10/2016 USD 2,098 GBP 1,597 23 0.00
06/10/2016 USD 2,100 GBP 1,597 25 0.00
06/10/2016 USD 2,100 GBP 1,597 25 0.00
06/10/2016 USD 1,150 GBP 875 14 0.00
06/10/2016 USD 223 GBP 170 2 0.00
06/10/2016 USD 2,099 GBP 1,597 24 0.00
21/12/2016 USD 524 GBP 400 4 0.00
21/12/2016 USD 10,701 GBP 8,014 274 0.02
06/10/2016 USD 215 HKD 1,667 - 0.00
06/10/2016 USD 1,612 HKD 12,499 - 0.00
21/12/2016 USD 2,115 HKD 16,391 - 0.00
06/10/2016 USD 2,430 JPY 250,585 (46) (0.01)
06/10/2016 USD 2,430 JPY 250,585 (45) (0.01)
06/10/2016 USD 2,430 JPY 250,585 (46) (0.01)
06/10/2016 USD 1,320 JPY 136,083 (24) 0.00
06/10/2016 USD 171 JPY 17,619 (4) 0.00
06/10/2016 USD 2,430 JPY 250,585 (46) (0.01)
21/12/2016 USD 1,485 JPY 150,855 (9) 0.00
21/12/2016 USD 1,991 JPY 200,000 10 0.00
21/12/2016 USD 199 JPY 20,000 1 0.00
21/12/2016 USD 589 JPY 60,000 (6) 0.00
06/10/2016 USD 218 SEK 1,863 1 0.00
06/10/2016 USD 1,637 SEK 13,959 9 0.00
21/12/2016 USD 118 SEK 1,000 - 0.00
21/12/2016 USD 71 SEK 600 2 0.00
06/10/2016 USD 76 SGD 104 - 0.00
06/10/2016 USD 570 SGD 777 - 0.00
Unrealised gain on open forward foreign currency exchange contracts ............................... 1,907 0.11
Unrealised loss on open forward foreign currency exchange contracts ................................ (1,349) (0.08)
Net unrealised gain (loss) on open forward foreign currency exchange contracts ....... 558 0.03
Total Financial Derivative Instruments ............................................................................ 649 0.04
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
Russell World Equity Fund 177
Fair Value
USD ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or Loss
(98.87%) ....................................................................................................................................................... 1,740,521 98.87
Total Financial Liabilities at Fair Value through Profit or
Loss ((0.12)%) .............................................................................................................................................. (2,056) (0.12)
Net Financial Assets at Fair Value through Profit or Loss
(98.75%) .................................................................................................................................................... 1,738,465 98.75
Other Net Assets (1.25%) ........................................................................................................................ 21,984 1.25
Net Assets .................................................................................................................................................. 1,760,449 100.00
Abbreviation used:
ADR - American Depository Receipt
Analysis of gross assets
% of
gross assets
Transferable securities admitted to official stock exchange listing ........................................................................... 95.57
Other transferable securities of the type referred to in Regulation 68(1)(a), (b) and (c) ........................................... 0.05
Investment funds (UCITS) ......................................................................................................................................... 2.24
Exchange traded financial derivative instruments ..................................................................................................... 0.04
Over the counter financial derivative instruments ..................................................................................................... 0.11
Other assets ............................................................................................................................................................... 1.99
100.00
The broker for the open futures contracts is Morgan Stanley.
The counterparties for the open forward foreign currency exchange contracts are:
Bank of America
Bank of Montreal
BNP Paribas SA
Brown Brothers Harriman
Commonwealth Bank of Australia
HSBC Bank
National Australia Bank Ltd
Royal Bank of Canada
State Street Bank and Trust Company
UBS AG
Russell Investment Company II plc
Russell World Equity Fund
Schedule of Investments - continued
30 September 2016
The accompanying notes are an integral part of the financial statements.
178 Russell World Equity Fund
Fair Value Hierarchy (Note 10)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 30 September 2016 and 31 March 2016.
As at 30 September 2016
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 1,692,443 5,594 - 1,698,037
Investment funds ......................................................................... - 39,779 - 39,779
Unrealised gain on open futures contracts ...................................... 798 - - 798
Unrealised gain on forward foreign currency exchange
contracts ......................................................................................... - 1,907 - 1,907
Total assets ...................................................................................... 1,693,241 47,280 - 1,740,521
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ...................................... (707) - - (707)
Unrealised loss on forward foreign currency exchange
contracts ......................................................................................... - (1,349) - (1,349)
Total liabilities ................................................................................ (707) (1,349) - (2,056)
As at 31 March 2016
Level 1
USD ‘000
Level 2
USD ‘000
Level 3
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Investments at fair value:
Transferable securities ............................................................... 1,800,142 6,076 - 1,806,218
Money market instruments ........................................................ - 19,385 - 19,385
Investment funds ......................................................................... - 16,253 - 16,253
Unrealised gain on open futures contracts ...................................... 4,927 - - 4,927
Unrealised gain on forward foreign currency exchange
contracts ......................................................................................... - 6,496 - 6,496
Total assets ...................................................................................... 1,805,069 48,210 - 1,853,279
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ...................................... (4,137) - - (4,137)
Unrealised loss on forward foreign currency exchange
contracts ......................................................................................... - (5,406) - (5,406)
Total liabilities ................................................................................ (4,137) (5,406) - (9,543)
Russell Investment Company II plc
Russell World Equity Fund
Statement of Changes in Composition of Portfolio
Listed below are 20 largest cumulative investment purchases and cumulative investment sales during the six months ended 30
September 2016.
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
Russell World Equity Fund 179
Portfolio Securities
Acquisition Cost
USD ‘000 Portfolio Securities
Disposal Proceeds
USD ‘000
Russell Investment Company III plc Russell Investment Company III plc
The U.S. Dollar Cash Fund II The U.S. Dollar Cash Fund II
Class R Roll-Up Shares 291,349 Class R Roll-Up Shares (267,856)
Verizon Communications Inc 10,336 Apple Inc (13,090)
Facebook Inc 9,420 Microsoft Corp (10,750)
Apple Inc 8,838 Johnson & Johnson (9,369)
Wal-Mart Stores Inc 8,703 ARM Holdings Plc (8,564)
McKesson Corp 7,926 Pfizer Inc (8,312)
Bayer AG 7,270 Deutsche Telekom AG (8,205)
PepsiCo Inc 6,815 Comcast Corp (8,126)
Goldman Sachs Group Inc 6,798 Gilead Sciences Inc (8,117)
Boeing Co 6,082 Alphabet Inc (Class A) (7,687)
Morgan Stanley 6,023 Carnival Corp (7,491)
WPP Plc 5,843 Samsung Electronics Co Ltd (7,417)
Swiss Life Holding AG 5,528 Aon Plc (7,400)
Whole Foods Market Inc 5,456 U.S. Treasury Bill
Pfizer Inc 5,297 Zero Coupon Due 21/07/2016 (6,999)
Cerner Corp 5,218 Nestle SA (6,945)
Mondelez International Inc 5,087 Facebook Inc (6,924)
HCA Holdings Inc 5,042 International Flavors & Fragrances Inc (6,900)
Astellas Pharma Inc 5,038 McDonald's Corp (6,723)
Cie Financiere Richemont SA 5,002 Fuji Heavy Industries Ltd (6,382)
Altria Group Inc (6,300)
Russell Investment Company II plc
Notes to the Financial Statements
30 September 2016
180 Notes to the Financial Statements
1. Basis of preparation
The Company’s condensed semi-annual unaudited financial statements (the “Financial Statements”) have been prepared for
the six months ended 30 September 2016.
a) Statement of compliance
The Financial Statements are prepared in accordance with Financial Reporting Standard (“FRS”) 104: Interim Financial
Reporting (“FRS 104”) (for the first time), the financial reporting standard applicable to in the U.K. and Republic of Ireland
for preparing interim financial statements, and the provisions of the UCITS Regulations.
FRS 104 is promulgated by the Institute of Chartered Accountants in Ireland and issued by the Financial Reporting Council.
The Financial Statements should be read in conjunction with the Company’s annual audited financial statements for the year
ended 31 March 2016.
b) Basis of measurement, accounting policies and presentation
The basis of measurement and accounting policies applied in preparing these Financial Statements under FRS 104 are
consistent with those applied in preparing the Company’s annual audited financial statements for the year ended 31 March
2016 under FRS 102.
The Company has availed of the exemption available to open ended investment funds that hold a substantial proportion of
highly liquid and fair valued investments and is not presenting cash flow statements.
The information required by FRS 104 to be included in a statement of comprehensive income, is, in the opinion of the
Directors, contained in the Profit and Loss Account of the Company and each Fund.
The financial statements of the individual Funds are prepared in the functional currency of the respective Fund. The
functional currency of each Fund is that disclosed on the primary statements of the respective Fund.
The Company has also adopted Euro as the presentation currency. The combined financial statements of the Company are
measured using Euro, being the functional currency of the primary economic environment in which it operates.
For the purpose of producing the Combined Balance Sheet, respective financial period end exchange rates are used. For the
purpose of producing the Combined Profit and Loss Account and the Combined Statement of Changes in Net Assets
Attributable to Redeemable Participating Shareholders, the average exchange rates for the period are used. The currency gain
or loss on re-translation of the opening net assets and the average rate difference arising on the translation of the Combined
Profit and Loss Account and the Combined Statement of Changes in Net Assets Attributable to Redeemable Participating
Shareholders is included in the Combined Statement of Changes in Net Assets Attributable to Redeemable Participating
Shareholders. This translation adjustment does not impact the net asset value per share of any of the individual Funds.
c) Estimates and Judgements
The estimates and judgements applied in preparing the Company’s financial statements are consistent with those applied and
disclosed in the Company’s annual audited financial statements as at and for the year ended 31 March 2016.
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
Notes to the Financial Statements 181
2. Cash at Bank and Cash Held with/due to Brokers and Counterparties
a) Cash at Bank
Cash at bank balances are comprised of cash balances held by State Street Bank and Trust Company’s (“State Street”)
custodian network*, unrestricted margin accounts held by brokers and for futures contracts held by the Funds and net
unrealised gains and losses on open spot foreign currency exchange contracts. The names of brokers used by each individual
Fund can be found at the base of each relevant Fund’s Schedule of Investments.
Cash held in U.S. Dollar bank accounts with State Street automatically transfer into the demand deposit account at State
Street Bank and Trust New York in the name of State Street Bank and Trust Company - London.
b) Cash held with brokers and counterparties for open financial derivative instruments
Cash is also deposited by or on behalf of the Funds for initial margin purposes with brokers for options and futures contracts
and as collateral with counterparties in respect of OTC FDIs and held on the Funds. As this amount is the minimum deemed
by the brokers and counterparties for collateral requirements the cash is as such restricted and is reported separately to the
unrestricted cash on the Funds’ Balance Sheets. Cash collateral pledged by counterparties and held by the Funds remains in
the ownership of the relevant counterparty and a related liability to repay the cash is recognised within “Cash due to brokers
and counterparties for open financial derivative instruments” on the relevant Fund’s Balance Sheet.
c) Cash due to brokers and counterparties for open financial derivative instruments
Cash amounts may be pledged as collateral by counterparties to the Funds for OTC FDIs and this cash is held by the relevant
Funds and is payable back to the relevant counterparty. Margin cash amounts may also be owed by the Funds to brokers for
exchange traded FDI transactions at each balance sheet date. These amounts are recognised within “Cash due to brokers and
counterparties for open financial derivative instruments” on the respective Balance Sheets.
The cash amounts pledged as collateral by counterparties form part of the net assets of the respective Funds and a related
asset is included within “Cash held with brokers and counterparties for open financial derivative instruments” on the Balance
Sheet.
3. Transactions with Related Parties
a) Related Parties
Parties are considered to be related if one party has the ability to control the other party or is able to exercise significant
influence over the other party, in making financial or operational decisions. The following entities were related parties to the
Company during the six months ended 30 September 2016 and the year ended 31 March 2016.
Relation to the Company Name of entity
Details
disclosed
in section of
this note
Manager ............................................................................................................................. Russell Investments Ireland Limited ................................................................................ b), i)
Adviser, Promoter and Distributor (the “Adviser”) .......................................................... Russell Investments Limited ............................................................................................ b), ii)
Affiliated Money Manager ................................................................................................ Affiliated Russell entities ................................................................................................. b), iv)
Affiliated Broker ............................................................................................................... Russell Investments Implementation Services, LLC ....................................................... b), iv)
Currency Implementation ................................................................................................... Russell Investments Implementation Services, LLC ....................................................... b), iv)
Directors of the Company ................................................................................................. As listed in the Administration of the Company page ..................................................... b), v)
Related Party Investors and Investees ............................................................................... Affiliated Russell Investments entities and Russell Investments managed funds ........... b), vi)
* Certain cash balances may be held by sub-custodians, as approved and appointed by State Street, in markets where State Street does not operate as a
custodian.
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
182 Notes to the Financial Statements
3. Transactions with Related Parties - continued
b) Related Party Transactions
i) Manager, Management Fee and Performance Fee
The Company has appointed the Manager to act as manager of the Company. The Manager is a wholly owned subsidiary
of Russell Investments Ireland Holdco Limited, which is in turn indirectly owned by Russell Investments Group, Ltd.
Russell Investments Group, Ltd. is majority owned by funds managed by TA Associates with minority stakes being held
by funds managed by Reverence Capital Partners and Russell Investments’ management. The Manager provides
investment management and administrative services to the Company. The Manager has appointed the Adviser to,
amongst other things, advise it on the investment programmes and strategies of the Funds. The Adviser also acts as
distributor for the Funds. The Manager has appointed the Administrator to act as administrator of the Company.
a) Management Fee
For services rendered under the management agreement, the Company pays the Manager a fee, accrued daily and
paid monthly in arrears, at the following annual rates based on the respective average daily net asset values of each
class of shares.
Russell Emerging Market
Debt Local Currency Fund
Russell Emerging Markets
Extended Opportunities Fund
Russell Euro
Fixed Income Fund
Class B Euro 1.70% Class A 1.30% Class B 0.80%
Class I AUD Income 1.00% Class I 1.30% Class F 1.60%
Class I Sterling 1.00% Class GBPH I Income 0.65%
Class I Sterling Income 1.00% Class I 0.60%
Class I USD 1.00% Class P Income 1.00%
Class U Euro 2.20% Class S 1.02%
Russell Global
Bond (Euro Hedged) Fund
Russell Global
Defensive Equity Fund
Russell Pan
European Equity Fund
Class A 1.50% Class A 0.95% Class A 1.60%
Class B 0.90% Class B Income 0.80% Class B 1.00%
Class DH-B 0.90% Class C 2.70% Class F 1.80%
Class GBPH I Income 0.70% Class U 2.00% Class I 0.90%
Class MZ Income 0.40% Class USD-H 1.20% Class L 1.80%
Class USD-H Income 1.20% Class PAMEU 2.30%
Class R Roll-Up 1.25%
Russell U.K. Equity Plus Fund Russell U.S. Quant Fund Russell World Equity Fund
Class B 0.65% Class B 1.00% Class B 0.90%
Class I Income 0.65% Class C 1.60% Class C 1.60%
Class N 0.65% Class I 0.80% Class D 0.75%
Class P Income 1.25% Class P Income 1.50% Class EH-T 1.15%
Class R 2.25% Class R I Roll-Up 1.20% Class I 0.90%
Class J 1.60%
Class M 0.90%
Class N 2.30%
Class R 2.60%
Class SH-B 0.95%
Class TYA 0.68%
Class TYC 0.58%
Class USD-H 1.15%
Rates for classes of shares not yet funded as at 30 September 2016 are not listed.
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
Notes to the Financial Statements 183
3. Transactions with Related Parties - continued
b) Performance Fee
A performance fee (the “Performance Fee”) is payable to the Manager in respect of the RIC II Funds (with the
exception of Russell Euro Fixed Income Fund) on an annual basis who in turn pays the Performance Fee to the
Money Manager of each Fund that is entitled to a performance fee as described based on the calculation
methodology as detailed within the Prospectus.
For the six months ended 30 September 2016, Performance Fees of EUR 555,359 (six months ended 30 September
2015: EUR 542,435) were charged. These charges related to adjustment on Russell U.K. Equity Plus Fund and
charge on Russell Emerging Markets Extended Opportunities Fund.
ii) Adviser
The Manager discharges all fees payable to the Adviser out of its management fee. The Adviser is not entitled to a fee in
its capacity as Promoter to the Company.
iii) Affiliated Money Managers, Affiliated Broker and Currency Implementation
Russell Investments Implementation Services, LLC and Russell Investments Implementation Services Limited
(collectively called “RIIS”) and Russell Investment Management, LLC (“RIM”), are affiliated group companies to the
Manager and the Adviser. Russell Investments Group companies can be appointed as a Money Manager to the Funds.
Please refer to Administration section for the list of Money Managers as at 30 September 2016.
The appointment of Russell Investments group companies as Money Manager to the Funds is subject to the same
procedures as appointing an external Money Manager and an intercompany agreement and investment guidelines are
applied.
The Funds effect certain transactions through RIIS and its global network of unaffiliated correspondent brokers. RIIS is a
registered broker. Trades placed through RIIS and its correspondents are made (i) to manage trading associated with
changes in managers, rebalancing across existing managers, cash flows and other portfolio transitions or (ii) to execute
portfolio securities transactions for each Fund’s assets where RIIS has been appointed as Money Manager.
RIIS may also be engaged by the Adviser to carry out foreign currency implementation trading for which a fee of 0.02
per cent per trade will be charged.
For the six months ended 30 September 2016, the total commission earned by RIIS, encompassing the range of services
provided, amounted to EUR 363,598 (six months ended 30 September 2015: EUR 831,506).
iv) Directors and Directors’ Fees
The Articles of Association provide that the Directors are entitled to a fee by way of remuneration at a rate to be
determined from time to time by the Directors. Directors’ fees are paid to non-executive Directors not employed by
Russell Group Companies. Directors’ fees shall not exceed the limits contained in the Prospectus and the Directors are
entitled to certain additional expenses as listed in the Prospectus. Directors’ fees charged during the six months ended
were EUR 28,744 (six months ended 30 September 2015: EUR 30,207) these amounts are included in other fees in
Combined Profit and Loss Account.
All of the Directors of the Company are also directors of the Russell Investments managed funds discussed in section iv)
of this note.
All of the Directors of the Company are also directors of the Manager. The following Directors of the Company are
employed by Russell Investments group companies: Mr. James Beveridge, Mr. Peter Gonella, Mr. Neil Jenkins, Mr. John
McMurray, and Mr. Kenneth Willman.
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
184 Notes to the Financial Statements
3. Transactions with Related Parties - continued
Mr. James Firn is a former employee of Russell Investments who retired in June 2014. He continues to act as a Director
of the Manager and the investment funds managed by the Manager.
The Adviser operates a defined contribution pension plan for its employees which invests in Russell Investments
managed funds including the Funds. The pension fund is subject to a management fee rebate. The Directors who are
employed by the Russell Investments group companies may be indirectly exposed to the Company through the pension
scheme.
v) Related Party Investors and Investees
a) Investment in other Russell Investments Funds
The Funds may invest in the sub-funds of other investment funds managed by the Manager as listed in the table
below. Details of the Fund’s investments in these sub-funds can be found in the Schedule of Investments of each
relevant Fund.
Fund Structure Name
Type of Fund
Structure
Management
Fee Rate
Russell Investment Company plc ............................................................................................................................................................................. UCITS Umbrella 0.05% - 2.80%
Russell Investment Company III plc ........................................................................................................................................................................ UCITS Umbrella 0.05%
b) Related Party Shareholder of the Company
During the six months ended 30 September 2016 and six months ended 30 September 2015, certain Funds of open-
ended investment funds also managed by the Manager and administered by the Administrator were invested in the
Funds. In accordance with Section 33 of FRS 104 these entities are deemed related party shareholders to the
Company.
The table below discloses the value of related shareholders in the Company and the percentage of this value against
the Company’s combined net asset value as at the respective balance sheet dates.
Related Party Shareholder
30 September 2016
EUR ‘000
Company
%
31 March 2016
EUR ‘000
Company
%
30 September 2015
EUR ‘000
Company
%
Russell Institutional Funds plc ...................................................................................................................................... 154,195 3.56% 131,134 3.08% 144,516 3.12%
Russell Investment Company plc .................................................................................................................................. 41,590 0.95% 29,791 0.70% 39,721 0.86%
Russell Investment Company V plc .............................................................................................................................. 116,776 2.71% 124,807 2.93% 161,321 3.48%
vi) Connected Party Transactions
Regulation 41 of the UCITS Regulations “Restrictions of transactions with connected persons” states that “A responsible
person shall ensure that any transaction between a UCITS and a connected person conducted a) at arm’s length; and b) in
the best interest of the unit-holders of the UCITS”.
As required under UCITS Regulation 78.4, the Directors, as responsible persons are satisfied that there are in place
arrangements, evidenced by written procedures, to ensure that the obligations that are prescribed by Regulation 41(1) are
applied to all transactions with a connected party; and all transactions with a connected parties that were entered into
during the period to which the report relates complied with the obligations that are prescribed by Regulation 41(1).
4. Significant Agreements
i) Depositary
State Street Custodial Services (Ireland) Limited is the Company’s Depositary. The Depositary has appointed its parent, State
Street, as its global sub-custodian who in turn has appointed a network of local sub-custodial agents. The sub-custodian fees
are paid at annual rates based on the total assets held in each individual country in which the Funds invest plus applicable
transaction charges. Up to 20 March 2016, custody services were provided by the Depositary. From 21 March 2016, in line
with the UCITS V Regulations, the Depositary provides depositary services.
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
Notes to the Financial Statements 185
4. Significant Agreements - continued
Depositary fees accrue daily and are paid monthly in arrears.
Included within the custodian agreement is a right of set off for fees owing to and monies lent by the Depositary.
ii) Administrator and Transfer Agency
State Street Fund Services (Ireland) Limited is the Company’s Administrator. The Administrator is responsible for the daily
determination of net asset value, maintaining the books and records of the Funds in respect of the Company and other
administrative services. The Manager has also appointed the Administrator as the Company’s Transfer Agent.
Such fees accrue daily and are paid monthly in arrears. The Manager shall discharge reasonable out of pocket expenses
payable to the Administrator out of the Funds’ assets.
The Administrator is also entitled to shareholder services fees as disclosed in the administration agreement and reporting
services fees of USD 7,000 per Fund per annum.
Transfer agency fees are charged based on the number of Funds in the umbrella structure, the number of shareholders,
number of statements issued, number of share classes and volume of shareholder transactions in a period and are subject to
adequate thresholds. Transfer agency fees charged and are charged and paid on a daily basis and are recognised within
Administration and transfer agency fees in the Profit and Loss Account for each Fund.
The Depositary and Administration fees disclosed in the Profit and Loss Account include minimum fees. If the total of the
minimum fees is in excess of the combined administration and trustee percentage charges, the share class fee, the reporting
service fee and the shareholder service fee, after the deduction of any discount, then this minimum will apply. The minimum
fee for new Funds will be waived for one year from the launch of the new Fund.
The aggregate of the Administration and the Depositary Fees will not exceed 0.35 percent of the Net Asset Value of any
Fund.
5. Soft Commissions and Commission Recapture Programme
The Adviser retains the right to request that the Money Managers participate in Russell’s soft commission and commission
recapture programme (the “Programme”) by executing a portion of their securities transactions through certain brokers (the
“Correspondent Broker Networks”). Money Manager participation in the Programme is not mandatory and the appropriate
participation percentage target is determined on a Money Manager by Money Manager basis, based upon asset class,
investment mandate, trading habits, and tolerance for participation and is always subject to a Money Manager’s ability to
obtain best execution.
The Programme, including the Correspondent Broker Networks, is administered by Recapture Services, a division of BNY
ConvergEx Execution Solutions LLC (“BNY”) and State Street Global Markets (“SSGM”).
A portion of the commission earned by the Correspondent Broker Networks as a result of this trading activity will be set
aside in the Programme as “credits”. These credits are then earmarked for purchase of third party research (“Soft
Commission Credits”) or commission recapture (“Commission Credits”).
i) Soft Commission Credits
All soft commission use is overseen by Russell’s soft commission committee (the “Committee”) which is made up of
senior level investment personnel. The Committee, with the guidance of Russell’s investment strategy committee,
establishes an annual soft commission research budget for the use of the Soft Commission Credits.
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
186 Notes to the Financial Statements
5. Soft Commissions and Commission Recapture Programme
Soft Commission Credits are used by Russell to purchase third party research that will aid Russell in its investment
decision-making process. Research purchased through the Programme is obtained from unaffiliated third parties at
market rates.
ii) Recapture Credits
Once the soft commission research budget has been met the Committee will instruct BNY and SSGM to recapture the
Recapture Credits which are then rebated directly back to the relevant Fund from which the commission was generated.
Recapture Credits are recognised within other income in the relevant Fund’s Profit and Loss Account. Russell does not
receive any revenue (directly or indirectly from Recapture Credits) from the commission recapture component of the
Programme.
6. Distributions
Distribution policy
The Company conducts its affairs so as to enable U.K. reporting fund status to be obtained under the United Kingdom
Income and Corporation Taxes Act, 1988 for the purposes of U.K. taxation for each applicable Fund.
With the exception of Roll-Up Class Shares, the distribution policy of each Fund is to distribute out of net income. Roll-Up
Class Shares do not declare or distribute net income and their net asset value reflects net income. Distributions declared by
Income Class Shares are paid in cash unless the shareholder chooses to reinvest part or all of the amount in the capital of the
relevant Share Class. Accumulation Class Shares declare a distribution which is then reinvested in the capital of the relevant
share class.
Distribution Frequency
The distributions in respect of the Funds are calculated and declared on a calendar quarterly basis (i.e. quarterly periods
ended 31 March, 30 June, 30 September and 31 December).
7. Taxation
Under current law and practice the Company qualifies as an investment undertaking as defined in Section 739B of the Taxes
Consolidation Act, 1997, as amended (the “TCA”). On that basis, it is not chargeable to Irish tax on its income or gains.
However, Irish tax may arise on the occurrence of a “chargeable event”. A chargeable event includes any distribution
payments to shareholders or any encashment, redemption, transfer or cancellation of shares and any deemed disposal of
shares for Irish tax purposes arising as a result of holding shares in the Company for a period of eight years or more.
No Irish tax will arise in respect of chargeable events in respect of a shareholder who is an Exempt Irish Investor (as defined
in Section 739D of the TCA) or who is neither Irish resident nor ordinarily resident in Ireland for tax purposes at the time of
the chargeable event, provided, in each case, that an appropriate valid declaration in accordance with Schedule 2B of the
TCA is held by the Company or where the Company has been authorised by Irish Revenue to make gross payments in
absence of appropriate declarations.
Distributions, interest and capital gains (if any) received on investments made by the Company may be subject to
withholding taxes imposed by the country of origin and such taxes may not be recoverable by the Company or its
shareholders.
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
Notes to the Financial Statements 187
8. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders
a) Authorised Share Capital
The authorised share capital of the Company is 39,000 subscriber shares of no par value and 500 billion participating shares
of no par value. Subscriber shares do not form part of the net asset value of the Company. They are disclosed in the financial
statements by way of this note only.
Holders of subscriber shares are not entitled to dividends or any surplus of assets over liabilities upon the winding-up of the
Company. The subscriber shares are held by Russell Investments.
b) Redeemable Participating Shares
Each of the shares entitles the holder to participate equally on a pro rata basis in the profits and dividends of the relevant
Fund attributable to such shares and to attend and vote at meetings of the Company and of the relevant Fund represented by
those shares. No class of shares confers on the holder thereof any preferential or pre-emptive rights or any rights to
participate in the profits and dividends of any other class of shares or any voting rights in relation to matters relating solely to
any other class of shares.
Each share represents an individual beneficial interest in the Company. The shares are not debt obligations or guaranteed by
the Company. The return on an investment in the Company will depend solely upon the investment performance of the assets
of the relevant Fund and the increase or decrease (as the case may be) in the net asset value of the shares. The amount
payable to a shareholder in respect of each share upon liquidation of the Company or a Fund will equal the net asset value per
share. However, in a relatively illiquid market, a Fund may not be able to dispose of its investments quickly and as such a
Fund may experience adverse price movements upon liquidation of its investments. Settlement of transactions may be subject
to delay and administrative uncertainties and the price repaid to the shareholders in such circumstances will not equal the
final published net asset value per share.
Net assets attributable to shareholders represent a liability on the Balance Sheet, carried at the redemption amount that would
be payable at the balance sheet date if the shareholder exercised the right to redeem the shares in the Company.
Participating Share Transactions
All cash amounts are in the functional currency of the relevant Fund not the currency of the class.
Russell Emerging Market Debt Local Currency Fund
Number of Shares in issue
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Class B Euro ..................................................................... 57,212 73,483 (537) 130,158 142,033 10,433 - 152,466
Class I AUD Income ........................................................ 115,259 6,637 (59,543) 62,353 122,153 135,791 (14,931) 243,013
Class I Sterling ................................................................. 130,425 1,935 (61) 132,299 125,306 25,077 (37,760) 112,623
Class I GBP Income ......................................................... 16,621 11,276 (10,917) 16,980 18,025 3,276 (4,879) 16,422
Class I USD ...................................................................... 52,299 23,946 (40,475) 35,770 31,604 25,262 (6,583) 50,283
Class U Euro ..................................................................... 1 - - 1 1 - - 1
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
188 Notes to the Financial Statements
8. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders - continued
Value of Share Transactions
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Subscriptions
USD ‘000
Redemptions
USD ‘000
Subscriptions
USD ‘000
Redemptions
USD ‘000
Class B Euro ..................................................................... 75,245 (554) 10,852 -
Class I AUD Income ........................................................ 4,914 (38,519) 95,555 (10,444)
Class I Sterling ................................................................. 2,544 (82) 33,605 (48,899)
Class I GBP Income ......................................................... 16,295 (16,037) 4,692 (6,996)
Class I USD ...................................................................... 19,568 (30,008) 20,537 (5,317)
Russell Emerging Markets Extended Opportunities Fund
Number of Shares in issue
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Class A .............................................................................. 865,990 2,017 (2,022) 865,985 808,954 1,608 (23,081) 787,481
Class I ............................................................................... - - - - - 27,353 - 27,353
Value of Share Transactions
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Subscriptions
USD ‘000
Redemptions
USD ‘000
Subscriptions
USD ‘000
Redemptions
USD ‘000
Class A .............................................................................. 1,923 (2,125) 1,424 (20,000)
Class I ............................................................................... - - 40,350 -
Russell Euro Fixed Income Fund
Number of Shares in issue
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Class B .............................................................................. 63,378 26,957 (3,512) 86,823 79,194 14,186 (19,296) 74,084
Class F .............................................................................. 105 47 - 152 248 55 (83) 220
Class GBPH I Income ...................................................... 7,610,310 2,932,623 (302,890) 10,240,043 10,135,932 354,394 (230,738) 10,259,588
Class I ............................................................................... 29,002 7,132 (4,331) 31,803 32,122 439 (994) 31,567
Class P Income ................................................................. 107,449 2,970 (23,256) 87,163 80,815 2,085 (13,711) 69,189
Class S .............................................................................. 45,211 3,533 (18,450) 30,294 27,869 11,870 (1,578) 38,161
Value of Share Transactions
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Subscriptions
EUR ‘000
Redemptions
EUR ‘000
Subscriptions
EUR ‘000
Redemptions
EUR ‘000
Class B .............................................................. 47,392 (6,135) 25,925 (35,393)
Class F ............................................................... 72 - 90 (132)
Class GBPH I Income ....................................... 44,806 (4,523) 4,843 (3,255)
Class I ................................................................ 210 (124) 13 (30)
Class P Income .................................................. 43 (337) 31 (205)
Class S ............................................................... 495 (2,564) 1,695 (228)
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
Notes to the Financial Statements 189
8. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders - continued
Russell Global Bond (Euro Hedged) Fund
Number of Shares in issue
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Class A .............................................................. 1,795 794 (81) 2,508 2,318 21 (188) 2,151
Class B .............................................................. 195,098 14,945 (9,033) 201,010 125,674 1,849 (28,885) 98,638
Class DH-B ....................................................... 3,036,462 650,243 (217,323) 3,469,382 3,515,958 154,747 (21,829) 3,648,876
Class GBPH I Income ....................................... 8,028,083 118,300 (577,992) 7,568,391 7,465,918 284,583 (297,388) 7,453,113
Class MZ Income .............................................. 221,115 227,866 (381,745) 67,236 142,789 51,090 (19,950) 173,929
Value of Share Transactions
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Subscriptions
EUR ‘000
Redemptions
EUR ‘000
Subscriptions
EUR ‘000
Redemptions
EUR ‘000
Class A .............................................................. 1,439 (146) 39 (352)
Class B .............................................................. 29,826 (17,928) 3,771 (58,461)
Class DH-B ....................................................... 9,604 (3,200) 2,415 (328)
Class GBPH I Income ....................................... 1,771 (8,411) 3,735 (3,954)
Class MZ Income .............................................. 2,919 (4,910) 663 (260)
Russell Global Defensive Equity Fund
Number of Shares in issue
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Class A .............................................................. 77,202 20,572 (15,083) 82,691 63,008 8,050 (5,390) 65,668
Class B Income ................................................. 4,717 617 (3,561) 1,773 1,244 4,220 (613) 4,851
Class C .............................................................. 2 18 - 20 21 84 (18) 87
Class U .............................................................. 4 1 - 5 903 649 (171) 1,381
Class USD-H ..................................................... 30,202 3,523 (314) 33,411 8,561 2,091 (333) 10,319
Class USD-H Income ........................................ - - - - 35,035 400 - 35,435
Value of Share Transactions
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Subscriptions
USD ‘000
Redemptions
USD ‘000
Subscriptions
USD ‘000
Redemptions
USD ‘000
Class A .............................................................. 27,927 (19,221) 11,037 (7,344)
Class B Income ................................................. 857 (4,904) 5,774 (827)
Class C .............................................................. 30 - 137 (29)
Class U .............................................................. 1 - 1,087 (289)
Class USD-H ..................................................... 4,539 (396) 2,771 (437)
Class USD-H Income ........................................ - - 411 -
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
190 Notes to the Financial Statements
8. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders - continued
Russell Pan European Equity Fund
Number of Shares in issue
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Class A .............................................................. 2,247 82 (154) 2,175 3,402 2,462 (3,733) 2,131
Class B .............................................................. 278,215 64,079 (18,242) 324,052 351,808 15,289 (29,455) 337,642
Class F ............................................................... 21,790 1,691 (4,686) 18,795 20,431 994 (157) 21,268
Class I ................................................................ 24,652 554 (133) 25,073 26,008 917 (75) 26,850
Class L ............................................................... 589 - (130) 459 420 - (32) 388
Class PAMEU ................................................... 337,133 76,493 (55,990) 357,636 152,619 - - 152,619
Class R Roll-Up ................................................ 358,850 12,731 (2,582) 368,999 401,576 21,833 (1,197) 422,212
Value of Share Transactions
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Subscriptions
EUR ‘000
Redemptions
EUR ‘000
Subscriptions
EUR ‘000
Redemptions
EUR ‘000
Class A .............................................................. 105 (196) 2,662 (4,240)
Class B .............................................................. 90,272 (25,524) 19,003 (36,366)
Class F ............................................................... 3,208 (8,849) 1,653 (264)
Class I ................................................................ 16 (4) 24 (2)
Class L ............................................................... - (198) - (44)
Class PAMEU ................................................... 1,504 (1,078) - -
Class R Roll-Up ................................................ 1,872 (372) 2,782 (152)
Russell U.K. Equity Plus Fund
Number of Shares in issue
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Class B .............................................................. 429,344 36,350 (60,117) 405,577 350,011 10,325 (217,044) 143,292
Class I Income ................................................... 129,328 4,224 (6,727) 126,825 128,722 9,277 (31,714) 106,285
Class N .............................................................. - - - - - 103 - 103
Class P Income .................................................. 125,476 7,995 (11,068) 122,403 120,586 15,193 (9,873) 125,906
Class R .............................................................. 34,639 645 (4,704) 30,580 29,807 2,108 (1,733) 30,182
Value of Share Transactions
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Subscriptions
GBP ‘000
Redemptions
GBP ‘000
Subscriptions
GBP ‘000
Redemptions
GBP ‘000
Class B .............................................................. 5,841 (10,218) 1,663 (34,543)
Class I Income ................................................... 548 (888) 1,120 (3,981)
Class N .............................................................. - - 9 -
Class P Income .................................................. 1,058 (1,485) 1,884 (1,214)
Class R .............................................................. 94 (685) 294 (238)
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
Notes to the Financial Statements 191
8. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders - continued
Russell U.S. Quant Fund
Number of Shares in issue
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Class B .............................................................. 6,672,285 3,442,006 (841,883) 9,272,408 8,743,568 1,665,825 (3,767,348) 6,642,045
Class C .............................................................. 1 - - 1 4,669 396 (32) 5,033
Class I ................................................................ 1,740,450 29,449 (119,807) 1,650,092 1,544,759 105,008 (189,504) 1,460,263
Class P Income .................................................. 397,945 39,401 (52,656) 384,690 348,389 30,217 (53,733) 324,873
Class R1 Roll-Up .............................................. - - - - 1,078,996 412,813 (15,994) 1,475,815
Value of Share Transactions
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Subscriptions
USD ‘000
Redemptions
USD ‘000
Subscriptions
USD ‘000
Redemptions
USD ‘000
Class B .............................................................. 73,548 (17,764) 36,261 (81,959)
Class C .............................................................. - - 687 (56)
Class I ................................................................ 858 (3,676) 3,243 (5,805)
Class P Income .................................................. 1,421 (1,883) 1,088 (1,943)
Class R1 Roll-Up .............................................. - - 4,209 (164)
Russell World Equity Fund Number of Shares in issue
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Class B .............................................................. 30,940,822 5,185,098 (7,717,087) 28,408,833 22,785,361 1,772,416 (2,628,514) 21,929,263
Class C .............................................................. 1,162,297 8,456 (771) 1,169,982 1,173,311 3,962 (99,357) 1,077,916
Class D .............................................................. 2,316,291 10,476 (9,406) 2,317,361 2,299,850 20,753 (22,921) 2,297,682
Class EH-T ........................................................ 9,060,371 111,682 (309,519) 8,862,534 8,324,187 35,843 (811,084) 7,548,946
Class H Income ................................................. 13,130,541 - (13,130,541) - - - - -
Class I ................................................................ 21,871,002 55,380 (2,176,990) 19,749,392 16,921,472 70,387 (1,309,005) 15,682,854
Class J ................................................................ 64,384 - - 64,384 73,784 - - 73,784
Class M .............................................................. - - - - - 432 - 432
Class N .............................................................. 17,800 400 (600) 17,600 17,149 136 (374) 16,911
Class R .............................................................. 589,473 32,497 (34,520) 587,450 644,217 46,614 (14,932) 675,899
Class SH B ........................................................ 418,730 290 (2,699) 416,321 216,693 1,900 (170,326) 48,267
Class SH-B Income ........................................... 1,260,559 - (1,260,559) - - - - -
Class TYA ......................................................... 1,943,770 - (582,494) 1,361,276 1,359,156 - (3,053) 1,356,103
Class TYC ......................................................... 2,831,649 - - 2,831,649 2,831,649 - - 2,831,649
Class TYHC ...................................................... 894,975 - (894,975) - - - - -
Class USD-H ..................................................... 131,864 34,243 (37,133) 128,974 16,011 - (5,538) 10,473
Class USD-H Income ......................................... - - - - 126,743 1,020 (7,185) 120,578
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
192 Notes to the Financial Statements
8. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders - continued
Value of Share Transactions
Six months ended 30 September 2015 Six months ended 30 September 2016
Share Class
Subscriptions
USD ‘000
Redemptions
USD ‘000
Subscriptions
USD ‘000
Redemptions
USD ‘000
Class B .............................................................. 118,399 (178,031) 39,901 (58,429)
Class C .............................................................. 222 (20) 99 (2,561)
Class D .............................................................. 372 (326) 717 (804)
Class EH-T ........................................................ 1,773 (5,305) 597 (13,609)
Class H Income ................................................. - (232,431) - -
Class I ................................................................ 2,284 (91,279) 76,454 (126,581)
Class J ................................................................ - - - -
Class M .............................................................. - - 482 -
Class N .............................................................. 63 (96) 21 (56)
Class R .............................................................. 6,126 (6,515) 8,506 (2,752)
Class SH B ........................................................ 76 (706) 421 (38,405)
Class SH-B Income ........................................... - (232,247) - -
Class TYA ......................................................... - (8,419) - (44)
Class TYC ......................................................... - - - -
Class TYHC ...................................................... - (11,025) - -
Class USD-H ..................................................... 52,792 (57,773) - (8,259)
Class USD-H Income ......................................... - - 1,020 (6,850)
All share classes are Accumulation Class Shares unless otherwise indicated in the name of the share class.
c) Swing Pricing/Dilution Adjustments
Swing pricing (also known as dilution adjustment) is applied to a Fund once net subscriptions or redemptions for a Fund for a
given dealing day is determined by the Administrator to exceed certain predetermined percentage thresholds relating to a
Fund’s net asset value. In calculating the swing pricing, the net asset value of a Fund is swung by a “swing factor”.
The swing factors applied during the six months ended 30 September 2016 ranged from 0.00% to 0.55% on subscriptions and
from 0.00% to 0.40% on redemptions.
The swing factors applied during the year ended 31 March 2016 ranged from 0.00% to 0.65% on subscriptions and from
0.00% to 0.45% on redemptions.
d) Significant Shareholders
The following table details the number of shareholders with significant holdings of at least 20 per cent of the relevant Fund’s
net asset value and and the aggregate monetary value and percentage (of that Fund’s net asset value) of that holding as at 30
September 2016.
Fund
Number of
Significant
Shareholders
Value
of Holding
‘000
Aggregate
Shareholding as
a % of the Fund
Russell Emerging Markets Debt Local Currency Fund .............................. 2 USD 262,767 48.15%
Russell Emerging Markets Extended Opportunities Fund ......................... 3 USD 686,575 86.62%
Russell Global Bond (Euro Hedged) Fund ................................................. 1 EUR 75,954 21.01%
Russell Global Defensive Equity Fund ....................................................... 2 USD 73,120 48.41%
Russell Pan European Equity Fund ............................................................ 1 EUR 128,903 24.76%
Russell U.K. Equity Plus Fund ................................................................... 1 GBP 20,733 35.45%
The following table details the number of shareholders with significant holdings of at least 20 per cent of the relevant Fund’s
net asset value and and the aggregate monetary value and percentage (of that Fund’s net asset value) of that holding as at 31
March 2016.
Fund
Number of
Significant
Shareholders
Value of Holding
‘000
Aggregate
Shareholding as
a % of the Fund
Russell Emerging Markets Debt Local Currency Fund .............................. 2 USD 297,570 68.28%
Russell Emerging Markets Extended Opportunities Fund ......................... 3 USD 640,885 92.10%
Russell Global Bond (Euro Hedged) Fund ................................................. 1 EUR 83,379 20.33%
Russell Global Defensive Equity Fund ....................................................... 2 USD 70,242 52.48%
Russell Pan European Equity Fund ............................................................ 1 EUR 119,182 22.81%
Russell U.K. Equity Plus Fund ................................................................... 1 GBP 19,117 21.03%
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
Notes to the Financial Statements 193
9. Efficient Portfolio Management
The Company may enter into securities lending arrangements and repurchase agreements (together “Efficient Portfolio
Management Techniques”) and may invest in over the counter financial derivative instruments (“OTC FDIs”) subject to the
restrictions set forth the Prospectus and to the extent consistent with the Fund’s investment objective and policies.
The use of techniques and instruments relating to transferable securities, money market instruments and/or other financial
instruments in which the Funds invest for efficient portfolio management purposes will generally be made for one or more of
the following reasons:
i) the reduction of risk;
ii) the reduction of cost; or
iii) the generation of additional capital or income for the relevant Fund with an appropriate level of risk, taking into account
the risk profile of the Fund and the risk diversification rules set out in the UCITS Regulations issued by the Central
Bank.
All the revenues arising from Efficient Portfolio Management Techniques employed shall be returned to the relevant Fund
following the deduction of any direct and indirect operational costs and fees arising. Such direct and indirect operational
costs and fees, (which are all fully transparent) which shall not include hidden revenue, shall include fees and expenses
payable to repurchase/reverse repurchase agreements counterparties and/or securities lending agents engaged by the
Company from time to time. Such fees and expenses of any repurchase/reverse repurchase agreements counterparties and/or
stocklending agents engaged by the Company, which will be at normal commercial rates together with VAT, if any, thereon,
will be borne by the Company or the Fund in respect of which the relevant party has been engaged.
Money Manager(s) on behalf of a Fund may employ techniques and instruments relating to transferable securities, money
market instruments and/or other financial instruments in which they invest for efficient portfolio management purposes. At
any time a Fund may hold a combination of derivative instruments such as futures, forward contracts, options, swaps and
swaptions, forward foreign exchange contracts, caps, floors and credit derivatives, any of which may be listed or over-the-
counter.
10. Financial Risks
The activities of the Funds expose them to various financial risks such as market risk (including other price risk, interest rate
risk, and currency risk), credit risk and liquidity risk. The overall risk management process for the Funds focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance for the
Funds. The Funds combine Money Managers with varied investment styles to achieve returns in a broad range of market
conditions and to manage exposure to risk through diversification.
The Company’s financial risk management objectives and policies are consistent with those disclosed in the Company’s
audited financial statements as at and for the year ended 31 March 2016.
i) Fair valuation hierarchy
FRS 102 Section 11.27 on “Fair Value: Disclosure” requires the Company to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used in making the measurements.
The fair value hierarchy of inputs is summarised in the three broad levels listed below.
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
194 Notes to the Financial Statements
10. Financial Risks - continued
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the
significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses
observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3
measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires
judgement, considering factors specific to the asset or liability.
The determination of what constitutes ‘observable’ requires significant judgement by the Directors. The Directors consider
observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively involved in the relevant market. Investments whose values
are based on quoted market prices in active markets, and therefore classified within Level 1, include active listed equities and
exchange traded derivatives. The Funds do not adjust the quoted price for these instruments.
Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices,
dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include
stale priced listed equities, unlisted equities, bonds, investment funds, bank loans and OTC FDIs.
Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently. Level 3 securities are
securities that may be priced by a single pricing vendor or may have prolonged stale prices or may have no valid market
information (indications or comparable security types) available.
Please refer to the base of each Fund’s Schedule of Investments for analysis, within the fair value hierarchy, of each Fund’s
financial assets and liabilities (by investment type) measured at fair value at 30 September 2016 and 31 March 2016. Where
there are no tables or narratives listed at the base of the Fund’s Schedule of Investments, all the investments for that Fund are
held at Level 1 as at 30 September 2016 and 31 March 2016.
11. Exchange Rates
Where applicable, the Administrator used the exchange rates listed below to translate foreign currency amounts, market value
of investments and other assets and liabilities into Euro at the following rates for each EUR 1.
30 September 2016 30 September 2016 30 September 2016
Australian Dollar AUD 1.4685 Indian Rupee INR 74.8226 Qatari Rial QAR 4.0929
Bangladeshi Taka BDT 88.0778 Indonesian Rupiah IDR 14,666.7146 Russian Rouble RUB 70.8233
Botswana Pula BWP 11.7861 Israeli Shekel ILS 4.2166 Serbian Dinar RSD 123.3146
Brazil Real BRL 3.6511 Japanese Yen JPY 113.8016 Singapore Dollar SGD 1.5322
British Pound GBP 0.8651 Kenyan Shilling KES 113.7848 South African Rand ZAR 15.4537
Canadian Dollar CAD 1.4770 Kuwaiti Dollar KWD 0.3388 South Korean Won KRW 1,237.6972
Chilean Peso CLP 740.4831 Lithuania Litas LTL 3.4528 Swedish Krona SEK 9.6280
Chinese Yuan Renminbi CNY 7.4957 Malaysian Ringgit MYR 4.6475 Swiss Franc CHF 1.0894
Chinese Yuan Renminbi Mauritian Rupee MUR 39.8724 Taiwan Dollar TWD 35.2261
Offshore CNH 7.4996 Mexican Peso MXN 21.7495 Thai Baht THB 38.9397
Colombian Peso COP 3,236.5442 Moroccan Dirham MAD 10.9155 Tunisian Dinar TND 2.4711
Croatian Kuna HRK 7.5155 New Romanian Leu RON 4.4509 Turkish Lira TRY 3.3722
Czech Republic Koruna CZK 27.0220 New Zealand Dollar NZD 1.5454 UAE Dirham AED 4.1277
Danish Krone DKK 7.4462 Nigerian Naira NGN 353.9970 Uruguayan Peso UYU 32.0227
Egyptian Pound EGP 9.9793 Norwegian Krone NOK 8.9817 U.S. Dollar USD 1.1238
Ghanaian Cedi GHS 4.4727 Pakistan Rupee PKR 117.3865 Vietnam Dong VND 25,065.7985
Hong Kong Dollar HKD 8.7161 Peruvian Nouveau Sol PEN 3.8277
Hungarian Forint HUF 309.0650 Philippine Peso PHP 54.4987
Iceland Krona ISK 127.9952 Polish Zloty PLN 4.3012
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
Notes to the Financial Statements 195
11. Exchange Rates - continued
31 March 2016 31 March 2016 31 March 2016
Australian Dollar AUD 1.4814 Indonesian Rupiah IDR 15,110.4395 Polish Zloty PLN 4.2413
Botswana Pula BWP 12.3529 Israeli Shekel ILS 4.2841 Qatari Rial QAR 4.1496
Brazil Real BRL 4.0386 Japanese Yen JPY 128.0798 Russian Rouble RUB 76.1903
British Pound GBP 0.7928 Kenyan Shilling KES 115.5504 Serbian Dinar RSD 122.7410
Canadian Dollar CAD 1.4740 Kuwaiti Dollar KWD 0.3444 Singapore Dollar SGD 1.5345
Chilean Peso CLP 762.1997 Lithuania Litas LTL 3.4528 South African Rand ZAR 16.7605
Chinese Yuan Renminbi CNY 7.3702 Malaysian Ringgit MYR 4.4460 South Korean Won KRW 1,303.1899
Chinese Yuan Renminbi Mauritian Rupee MUR 40.1464 Swedish Krona SEK 9.2380
Offshore CNH 7.3591 Mexican Peso MXN 19.5293 Swiss Franc CHF 1.0913
Colombian Peso COP 3,422.3778 Moroccan Dirham MAD 10.9744 Taiwan Dollar TWD 36.6753
Czech Republic Koruna CZK 27.0485 New Romanian Leu RON 4.4693 Thai Baht THB 40.0894
Danish Krone DKK 7.4503 New Zealand Dollar NZD 1.6413 Tunisian Dinar TND 2.2944
Egyptian Pound EGP 10.1192 Nigerian Naira NGN 226.7933 Turkish Lira TRY 3.2086
Hong Kong Dollar HKD 8.8390 Norwegian Krone NOK 9.4255 UAE Dirham AED 4.1856
Hungarian Forint HUF 314.1802 Pakistan Rupee PKR 119.3451 Uruguayan Peso UYU 36.3232
Iceland Krona ISK 140.3983 Peruvian Nouveau Sol PEN 3.7943 U.S. Dollar USD 1.1396
Indian Rupee INR 75.4639 Philippine Peso PHP 52.4706 Vietnam Dong VND 25,403.9991
The Administrator used the average exchange rates for each reporting period as listed below to translate into Euro the Profit
and Loss Account and Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders of those
Funds not prepared in Euro in preparing the Company’s Combined Profit and Loss Account and the Combined Statement of
Changes in Net Assets Attributable to Redeemable Participating Shareholders at the following rates for each EUR 1.
Six months ended 30 September 2016 Six months ended 30 September 2015
British Pound GBP 0.8183 British Pound GBP 0.7219
U.S. Dollar USD 1.1236 U.S. Dollar USD 1.1067
12. Comparative Dealing Net Assets
Russell Emerging Market Debt Local Currency Fund
Class B Euro
EUR ‘000
Class I AUD
Income
AUD ‘000
Class I Sterling
GBP ‘000
Class I
Sterling
Income
GBP ‘000
Class I USD
USD ‘000
Class U Euro
EUR ‘000
Total net asset value
30 September 2016 ......................................... 141,219 223,524 116,094 18,037 41,831 1
31 March 2016 ................................................ 124,280 108,952 111,471 17,438 25,091 1
Class B Euro
EUR
Class I AUD
Income
AUD
Class I Sterling
GBP
Class I
Sterling
Income
GBP
Class I USD
USD
Class U Euro
EUR
Net asset value per share
30 September 2016 ......................................... 926.24 919.81 1,030.82 1,098.33 831.90 913.13
31 March 2016 ................................................ 875.01 891.93 889.59 967.45 793.91 864.71
Russell Emerging Markets Extended Opportunities Fund
Class A
USD ‘000 Class I
GBP ‘000
Total net asset value
30 September 2016 ......................................... 747,202 34,981
31 March 2016 ................................................ 695,844 -
Class A
USD Class I
GBP
Net asset value per share
30 September 2016 ......................................... 948.85 1,278.88
31 March 2016 ................................................ 860.18 -
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
196 Notes to the Financial Statements
12. Comparative Dealing Net Assets - continued
Russell Euro Fixed Income Fund
Class B
EUR ‘000 Class F
EUR ‘000
Class GBPH I
Income
GBP ‘000
Class I
GBP ‘000
Total net asset value
30 September 2016 ......................................... 139,204 356 118,007 837
31 March 2016 ................................................ 143,745 388 112,737 753
Class B
EUR Class F
EUR
Class GBPH I
Income
GBP
Class I
GBP
Net asset value per share
30 September 2016 ......................................... 1,879.01 1,616.04 11.50 26.51
31 March 2016 ................................................ 1,815.09 1,567.36 11.12 23.45
Class P Income
GBP ‘000
Class S
EUR ‘000
Total net asset value
30 September 2016 ......................................... 910 5,596
31 March 2016 ................................................ 947 3,952
Class P Income
GBP
Class S
EUR
Net asset value per share
30 September 2016 ......................................... 13.16 146.63
31 March 2016 ................................................ 11.72 141.80
Russell Global Bond (Euro Hedged) Fund
Class A
EUR ‘000
Class B
EUR ‘000
Class DH-B
USD ‘000
Class GBPH I
Income
GBP ‘000
Class MZ
Income
EUR ‘000
Total net asset value
30 September 2016 ......................................... 4,069 205,066 63,679 80,822 2,289
31 March 2016 ................................................ 4,259 253,016 59,030 78,719 1,836
Class A
EUR
Class B
EUR
Class DH-B
USD
Class GBPH I
Income
GBP
Class MZ
Income
EUR
Net asset value per share
30 September 2016 ......................................... 1,891.81 2,078.99 17.45 10.84 13.16
31 March 2016 ................................................ 1,837.53 2,013.27 16.79 10.54 12.86
Russell Global Defensive Equity Fund
Class A
USD ‘000
Class B
Income
AUD ‘000 Class C
EUR ‘000 Class U
EUR ‘000 Class USD-H
USD ‘000
Class USD-H
Income
USD ‘000
Total net asset value
30 September 2016 ......................................... 91,207 8,793 127 2,077 14,051 36,588
31 March 2016 ................................................ 84,446 2,181 30 1,299 11,208 34,990
Class A
USD
Class B
Income
AUD Class C
EUR Class U
EUR Class USD-H
USD
Class USD-H
Income
USD
Net asset value per share
30 September 2016 ......................................... 1,388.91 1,812.54 1,465.06 1,504.31 1,361.63 1,032.52
31 March 2016 ................................................ 1,340.23 1,753.09 1,406.57 1,438.80 1,309.22 998.73
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
Notes to the Financial Statements 197
12. Comparative Dealing Net Assets - continued
Russell Pan European Equity Fund
Class A
EUR ‘000
Class B
EUR ‘000
Class F
EUR ‘000
Class I
GBP ‘000
Class L
GBP ‘000
Total net asset value
30 September 2016 ......................................... 2,438 423,738 35,807 624 456
31 March 2016 ................................................ 3,802 430,392 33,671 540 442
Class A
EUR
Class B
EUR
Class F
EUR
Class I
GBP
Class L
GBP
Net asset value per share
30 September 2016 ......................................... 1,143.97 1,254.99 1,683.58 23.24 1,174.17
31 March 2016 ................................................ 1,117.53 1,223.37 1,648.02 20.75 1,052.87
Class PAMEU
EUR ‘000
Class R
Roll-Up
EUR ‘000
Total net asset value
30 September 2016 ......................................... 2,568 54,734
31 March 2016 ................................................ 2,520 50,811
Class PAMEU
EUR
Class R
Roll-Up
EUR
Net asset value per share
30 September 2016 ......................................... 16.83 129.64
31 March 2016 ................................................ 16.51 126.53
Russell U.K. Equity Plus Fund
Class B
GBP ‘000
Class I
Income
GBP ‘000
Class N
EUR ‘000
Class P Income
GBP ‘000
Class R
GBP ‘000
Total net asset value
30 September 2016 ......................................... 24,341 13,446 11 16,373 4,320
31 March 2016 ................................................ 56,144 15,645 - 15,065 4,061
Class B
GBP
Class I
Income
GBP
Class N
EUR
Class P Income
GBP
Class R
GBP
Net asset value per share
30 September 2016 ......................................... 169.87 126.51 104.38 130.04 143.13
31 March 2016 ................................................ 160.41 121.54 - 124.93 136.24
Russell U.S. Quant Fund
Class B
USD ‘000 Class C
EUR ‘000 Class I
GBP ‘000
Class P
Income
GBP ‘000
Class R 1
Roll-Up
USD'000
Total net asset value
30 September 2016 ......................................... 150,194 7,996 35,456 9,391 15,785
31 March 2016 ................................................ 186,867 6,934 32,006 8,624 10,917
Class B
USD Class C
EUR Class I
GBP
Class P
Income
GBP
Class R 1
Roll-Up
USD
Net asset value per share
30 September 2016 ......................................... 22.61 1,588.68 24.28 28.91 10.70
31 March 2016 ................................................ 21.37 1,485.18 20.72 24.75 10.12
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
198 Notes to the Financial Statements
12. Comparative Dealing Net Assets - continued
Russell World Equity Fund
Class B
USD ‘000 Class C
EUR ‘000 Class D
GBP ‘000 Class EH-T
EUR ‘000 Class I
GBP ‘000
Total net asset value
30 September 2016 ......................................... 510,526 24,809 63,324 116,014 504,901
31 March 2016 ................................................ 501,039 25,247 54,067 121,583 465,095
Class B
USD Class C
EUR Class D
GBP Class EH-T
EUR Class I
GBP
Net asset value per share
30 September 2016 ......................................... 23.28 23.02 27.56 15.37 32.19
31 March 2016 ................................................ 21.97 21.50 23.49 14.59 27.45
Class J
USD ‘000 Class M
EUR ‘000
Class N
USD ‘000
Class R
EUR ‘000
Class SH-B
GBP ‘000
Total net asset value
30 September 2016 ......................................... 1,558 451 2,671 113,181 8,091
31 March 2016 ................................................ 1,476 - 2,576 101,344 34,646
Class J
USD Class M
EUR
Class N
USD
Class R
EUR
Class SH-B
GBP
Net asset value per share
30 September 2016 ......................................... 21.11 1,043.62 157.94 167.45 167.62
31 March 2016 ................................................ 19.99 - 150.08 157.16 159.73
Class TYA
JPY ‘000
Class TYC
JPY ‘000
Class USD-H
USD ‘000
Class USD-H
Income
USD ‘000
Total net asset value
30 September 2016 ......................................... 1,994,322 5,121,400 16,300 124,535
31 March 2016 ................................................ 2,093,173 5,360,496 23,458 123,716
Class TYA
JPY
Class TYC
JPY
Class USD-H
USD
Class USD-H
Income
USD
Net asset value per share
30 September 2016 ......................................... 1,471 1,809 1,556.40 1,032.81
31 March 2016 ................................................ 1,539 1,891 1,463.68 975.14
13. Segregated Liability
Each Fund will be responsible for paying its fees and expenses regardless of the level of its profitability. The Company has
availed of the segregated provisions of Companies Act 2014. The adoption of segregated liability ensures that liability
incurred on behalf of a Fund will generally be discharged solely out of the assets of that Fund and there can generally be no
recourse to other Funds to satisfy these liabilities. Notwithstanding the foregoing there can be no guarantee that should an
action be brought against the Company in the court of another jurisdiction that the segregated nature of the Funds would
necessarily be upheld.
14. Significant Events During the Period
Prospectus Updates
The third addendum to the prospectus dated 13 April 2016 incorporated the following changes:
i) Russell U.K. Equity Plus Fund - addition of the following share class - Class N.
ii) Russell World Equity Fund - addition of the following share class - Class M.
The fourth addendum to the prospectus dated 28 April 2016 incorporated the following changes:
i) Russell Emerging Markets Extended Opportunities Fund - addition of the following share class - Class I.
Russell Investment Company II plc
Notes to the Financial Statements - continued
30 September 2016
Notes to the Financial Statements 199
14. Significant Events During the Period - continued
Russell Investments
LSEG announced on 8 October 2015 that it had agreed the proposed sale of the investment management and solutions
business of Russell Investments to TA Associates and Reverence Capital Partners, subject to customary closing adjustments
and regulatory and other required approvals. The sale of Russell Investments by LSEG to TA Associates and Reverence
Capital Partners concluded on 1 June 2016.
15. Significant Events Since the Period End
Prospectus dated 7 October 2016 incorporates, inter alia, the following principal amendments:
i) UCITS rules encompassed in Directive 2014/91/EU;
ii) Investor Money Regulations;
iii) Central Bank Regulations (i.e. SI No. 420 of 2015 Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)
(Undertakings for Collective Investment in Transferable Securities) Regulations 2015);
iv) Taxation updates, including but not limited to, CRS updates and the repeal of the European Savings Directive (Directive
2003/48/EC) on 10 November 2015 by the European Council;
v) References to Frank Russell have been removed and the promoter has been amended to Russell Investments Limited
following the sale of the investment management and solutions business of Russell Investments;
vi) Amendment to prospectus to remove share classes that were never launched; and
vii) Incorporation of a number of addendums to the prospectus dated 21 December 2015, 7 March 2015, 13 April 2016 and
28 April 2016.
16. Approval of the Financial Statements
The financial statements were approved by the Directors on 17 November 2016.
Russell Investments Rex House10 Regent Street, St James’London, SW1Y 4PE
tel +44 (0) 20 7024 6000fax +44 (0) 20 7024 6001www.russellinvestments.com