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2016 ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
30 June 2016
Russell Absolute Return Equity Fund
Russell Alpha Fund
Russell Multi Strategy Volatility Fund
Russell Global Regional Equity Fund
Russell Investment Company IV plcan umbrella fund with segregated liability between sub-funds
Russell Investment Company IV plc
Contents
Contents
Administration of the Company .................................................................................................................................... 2 Background to the Company ....................................................................................................................................... 4 Directors’ Report .......................................................................................................................................................... 5 Depositary’s Report ..................................................................................................................................................... 8 Independent Auditors’ Report ...................................................................................................................................... 9 Combined Statements ................................................................................................................................................. 12 Russell Absolute Return Equity Fund ......................................................................................................................... 15 Russell Alpha Fund ..................................................................................................................................................... 20 Russell Multi Strategy Volatility Fund .......................................................................................................................... 41 Russell Global Regional Equity Fund ........................................................................................................................... 55 Notes to the Financial Statements .............................................................................................................................. 78 Supplementary Information – Remuneration Policy of the Manager (Unaudited) ....................................................... 106
Russell Investment Company IV 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, Distributor and UK Facilities Agent
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 Alpha Fund
Russell Investments Ireland Limited Alken Asset Management, LLP
78 Sir John Rogerson’s Quay Floor 3, 61 Conduit Street
Dublin 2 London W1S 2GB
Ireland England
Independent Auditors Hermes Sourcecap International, LLP
PricewaterhouseCoopers 1 Portsoken Street
Chartered Accountants and Statutory Audit Firm London E1 8HZ
One Spencer Dock England
North Wall Quay
Dublin 1 Kopernik Global Investors, LLC
Ireland 302 Knights Run Avenue
Tampa, FL 33602
Legal Adviser United States of America
Maples and Calder
75 St. Stephen’s Green Lazard Japan Asset Management K.K.
Dublin 2 30 Rockefeller Plaza, 57th Floor
Ireland New York, NY 10112
United States of America
Administrator
State Street Fund Services (Ireland) Limited Levin Capital Strategies, L.P.
78 Sir John Rogerson’s Quay 595 Madison Avenue
Dublin 2 New York, NY 10022
Ireland United States of America
Depositary** Next Century Growth Investors, LLC
State Street Custodial Services (Ireland) Limited 5500 Wayzata Boulevard, Suite 1275
78 Sir John Rogerson’s Quay Minneapolis, MN 55416
Dublin 2 United States of America
Ireland
* As of 30 June 2016.
** UCITS V Directive
The regulations transposing the UCITS 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. State Street Custodial Services (Ireland)
Limited, as Custodian and Trustee, has acted as Depositary under a custody agreement and will continue to fulfil this role of Depositary
under a new Depositary agreement that replaces the existing custody agreement and as such is herein after referred to as the Depositary.
Russell Investment Company IV plc
Administration of the Company - continued
Administration of the Company 3
Robeco Investment Management, Inc. Lazard Asset Management, LLC
909 Third Avenue 30 Rockefeller Plaza
32nd Floor 57th Floor
New York, NY 10022 New York, NY 10112-6300
United States of America United States of America
Russell Investments Limited Mar Vista Investment Partners, LLC
Rex House 11150 Santa Monica Boulevard
10 Regent Street, St James’ Suite 320
London SW1Y 4PE Los Angeles, CA 90025
England United States of America
Russell Investments Implementation Services, LLC Numeric Investors, LLC
1301 Second Avenue 470 Atlantic Avenue
18th Floor 6th Floor
Seattle, WA 98101 Boston, MA 02210
United States of America United States of America
Westwood Management Corp. Pzena Investment Management
200 Crescent Court, Suite 1200 Tower 45, 8th Floor
Dallas, TX 75201 320 Park Ave
United States of America New York, NY 10022
United States of America
Money Manager for Russell Multi Strategy Volatility Fund
Russell Investment Management, LLC Wellington Management Company
1301 Second Avenue 280 Congress Street
18th Floor Boston, MA 02210
Seattle, WA 98101 United States of America
United States of America
Zebra Capital Management
Money Managers for Russell Global Regional Equity Fund 612 Wheelers Farms Rd
Ceredex Value Advisors, LLC Milford, CT 06461
301 East Pine Street United States of America
Suite 500
Orlando, FL 32801 Paying and Information Agent in Austria
United States of America UniCredit Bank Austria AG
Schottengasse 6-8
Hermes Sourcecap International, LLP 1010 Vienna
1 Portsoken Street Austria
London E1 8HZ
England Paying and Information Agent in Germany*
Marcard, Stein & Co. AG
HS Management Partners, LLC Ballindamm 36
598 Madison Avenue 20095 Hamburg
14th Floor Germany
New York, NY 10022
United States of America
Jacobs Levy Equity Management, Inc.
100 Campus Drive
P.O. Box 650
Florham Park, NJ 07932-0650
United States of America
* 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 IV plc
Background to the Company
4 Background to the Company
Russell Investment Company IV plc (the “Company”) was incorporated in Ireland as a public limited company on 10 November
2004. The Company operates under the Companies Act 2014 and has been authorised since 2 March 2005 by the Central Bank of
Ireland (the “Central Bank”).
The Company is an open-ended investment company with variable capital and 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 and 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 and as of 30 June 2016 had three funds available for investment (each
a “Fund”, collectively the “Funds”).
Please see each Fund’s Manager’s Report for details of the investment objectives 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 at 30 June 2016 amounted to USD 809,273,683 (as at 30 June 2015: USD
1,129,980,608) are broken down as follows:
Fund Funded during
the year ended Functional
Currency
Net Assets
30 June 2016
‘000
Net Assets
30 June 2015
‘000
Russell Absolute Return Equity Fund* 30 June 2009 GBP - 425,639
Russell Alpha Fund 30 June 2005 USD 243,871 226,253
Russell Multi Strategy Volatility Fund 30 June 2015 USD 206,075 234,274
Russell Global Regional Equity Fund 30 June 2016 EUR 323,431 -
* The Fund ceased trading on 7 August 2015
All share classes listed throughout this report 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.
Russell Investment Company IV plc
Directors’ Report
Directors’ Report 5
The Directors submit their report together with the audited financial statements for the financial year ended 30 June 2016.
Directors’ responsibilities The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable Irish
law and Generally Accepted Accounting Practice in Ireland (“Irish GAAP”) including the accounting standards issued by the
Financial Reporting Council and promulgated by The Institute of Chartered Accountants in Ireland.
Irish company law requires the Directors to prepare financial statements for each financial year that give a true and fair view of
the assets, liabilities and financial position for Russell Investment Company IV plc (the “Company”) and of the profit or loss of
the Company for that financial year. In preparing the financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent; and
prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will
continue in business.
The Directors confirm that they believe that they have complied with the above requirements in preparing the financial
statements.
The Directors are responsible for the maintenance and integrity of the corporate and financial information relating to the
Company which may be included on Russell Investments Limited’s (the “Adviser”) website. Legislation in the Republic of
Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
In carrying out the above requirements, the Directors have appointed Russell Investments Ireland Limited as manager (the
“Manager”) and the Manager has appointed State Street Fund Services (Ireland) Limited to act as administrator (the
“Administrator”) of the Company.
Remuneration of the Company’s Directors
The Company does not have any staff. The Company pays Directors fees which is discussed in Note 5. The maximum amount of
remuneration payable to the Directors is detailed in the Company’s Prospectus or such other maximum amount as may be
determined by the Directors from time to time.
Transactions involving Directors
In respect of the 2016 year, the Directors are not aware of any contracts or arrangements of any significance in relation to the
business of the Company in which the Directors or their connected persons had any interest as defined by the Companies Act
2014, other than those disclosed in Note 5, “Transactions with related parties”.
Accounting Records
The Directors are responsible for maintaining adequate accounting records which correctly explain and record the transactions of
the Company, enable at any time the assets, liabilities, financial position and profit or loss of the Company to be determined with
reasonable accuracy, enable them to ensure that the financial statements and Directors’ Report comply with the Companies Act
2014 and enable the financial statements to be audited. They are also responsible for ensuring that the financial statements are
prepared in accordance with accounting standards generally accepted in Ireland and comply with the Companies Act 2014 and the
UCITS Regulations and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective
Investment in Transferable Securities) Regulations, 2015 , as amended (the “Central Bank UCITS Regulations”). The Directors
are also responsible for safeguarding the assets of the Company. In this regard they have appointed State Street Custodial Services
(Ireland) Limited (the “Depositary”) as Depositary to the Company pursuant to the terms of a depositary agreement. The
Directors have a responsibility for taking such steps as are reasonably open to them to prevent and detect fraud and other
irregularities. The Directors believe that they have complied with the requirements of the Companies Act 2014, with regard to
accounting records by employing an experienced administrator with appropriate expertise and by providing adequate resources to
the financial function. The accounting records of the Company are maintained by the Administrator at 78 Sir John Rogerson’s
Quay, Dublin 2, Ireland.
Russell Investment Company IV plc
Directors’ Report - continued
6 Directors’ Report
Distributions
Please refer to Note 8 to the financial statements for details of the distribution policy of each of the Funds.
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).
Review of performance of the business, principle activities and future developments of the business
A detailed performance review of the business and future developments is included in the Manager’s Report for each Fund.
Principal risks and uncertainties A detailed analysis of the risks facing each Fund is included in Note 12 of the financial statements.
Results and dividends The results for the financial year are set out in the Profit and Loss Account for each Fund. Dividends were declared during the
financial year as detailed in Note 8 of the financial statements.
Significant events during the financial year
Significant events during the financial year are disclosed in Note 16 of the financial statements.
Significant events since the financial year end
Significant events since the financial year end are disclosed in Note 17 of the financial statements.
Voluntary adoption of the Corporate Governance Code
The Irish Funds Industry Association (Irish Funds) in association with the Central Bank has published a corporate governance
code (the “Irish Funds Code”) that may be adopted on a voluntary basis by Irish authorised collective investment schemes. The
Board of Directors voluntarily adopted the Irish Funds Code as the Company’s corporate governance code effective from 31
December 2012. The Company has been in compliance with the Irish Funds Code since its adoption.
Directors
The name and nationality of persons who were Directors at any time during the financial year ended 30 June 2016 are set out
below. All Directors are non-executive directors. Except where indicated, all acted as Directors for the financial year.
Mr. James Firn (American and British) (Chairman)
Mr. James Beveridge (British)
Mr. Peter Gonella (British)
Mr. Neil Jenkins (British)
Mr. John McMurray (American)
Mr. Tom Murray (Irish)
Mr. William Roberts (British and Irish resident)
Mr. David Shubotham (Irish)
Mr. Kenneth Willman (American and British)
Directors’ and Secretary’s interests
None of the Directors or the Company Secretary hold or held any beneficial interest in the shares of the Company during the
financial year. Each of the Directors is employed by Russell Investments entities except for Mr. Tom Murray, Mr. William
Roberts, Mr. David Shubotham and Mr. James Firn. Mr. 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 funds managed by the Manager.
No Director had at any time during the financial year or at the financial year end, a material interest in any contract of
significance, in relation to the business of the Company.
Russell Investment Company IV plc
Directors’ Report - continued
Directors’ Report 7
Compliance statement
The Directors acknowledge that they are responsible for securing the Company’s compliance with its relevant obligations. These
include all requirements of the Company under Section 167 of Companies Act 2014, and all tax law within the Republic of
Ireland (the “relevant obligations”).
In keeping with this responsibility, the Directors have:
drawn up a compliance policy statement setting out the Company’s compliance with the relevant obligations;
appointed the Adviser, and relies on the Adviser’s risk and compliance departments to implement these procedures and
secure material compliance with the relevant obligations; and
performed a review of this policy statement, and its implementation by the Adviser.
Audit Committee
The Audit Committee of Manager will oversee the Company’s audit related affairs according to the Terms of Reference of the
Audit Committee of the Manager. The membership of the Audit committee is disclosed in the Administration page of the
Company.
Relevant audit information
So far as the Directors are aware, there is no relevant audit information of which the Company's auditors are unaware and the
Directors have taken all the steps that should have been taken as Directors in order to make themselves aware of any relevant
audit information and to establish that the Company's auditors are aware of that information.
Independent Auditors
The Auditors, PricewaterhouseCoopers, will be reappointed in accordance with section 383 of the Companies Act 2014.
On behalf of the Board
Director Director
13 October 2016
Russell Investment Company IV plc
Depositary’s Report
8 Depositary’s Report
We have enquired into the conduct of Russell Investment Company IV plc (the “Company”) for the financial year ended 30 June
2016, in our capacity as Depositary’s to the Company.
This report including the opinion has been prepared for and solely for the shareholders in the Company as a body, in accordance
with the Part 5 of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations
2011 as amended, (the “UCITS Regulations”) and for no other purpose. We do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown.
Responsibilities of the Depositary
Our duties and responsibilities are outlined in Part 5 of the UCITS Regulations. One of those duties is to enquire into the conduct
of the Company in each accounting year and report thereon to the shareholders.
Our report shall state whether, in our opinion, the Company has been managed in that year in accordance with the provisions of
the Company’s Memorandum and Articles of Association and the UCITS Regulations. It is the overall responsibility of the
Company to comply with these provisions. If the Company has not so complied, we as Depositary must state why this is the case
and outline the steps which we have taken to rectify the situation.
Basis of Depositary’s Opinion
The Depositary conducts such reviews as it, in its reasonable opinion, considers necessary in order to comply with its duties as
outlined in Part 5 of the UCITS Regulations and to ensure that, in all material respects, the Company has been managed (i) in
accordance with the limitations imposed on its investment and borrowing powers by the provisions of its constitutional
documentation and the appropriate regulations and (ii) otherwise in accordance with the Company’s constitutional documentation
and the appropriate regulations.
Opinion In our opinion, the Company has been managed during the financial year, in all material respects:
(i) in accordance with the limitations imposed on the investment and borrowing powers of the Company by the
Memorandum & Articles of Association, the UCITS Regulations and the Central Bank (Supervision and Enforcement)
Act 2013 (Section 48(1); (Undertakings for Collective Investment in Transferable Securities) Regulations 2015 (‘the
Central Bank UCITS Regulations’) and
(ii) otherwise in accordance with the provisions of the Memorandum & Articles of Association and the Central Bank UCITS
Regulations.
State Street Custodial Services (Ireland) Limited
78 Sir John Rogerson’s Quay
Dublin 2
Ireland
13 October 2016
PricewaterhouseCoopers, One Spencer Dock, North Wall Quay, Dublin 1, Ireland, I.D.E. Box No. 137 T: +353 (0) 1 792 6000, F: +353 (0) 1 792 6200, www.pwc.com/ie Chartered Accountants
Independent Auditors’ Report 9
Independent auditors’ report to the members of Russell Investment Company IV plc
Report on the financial statements
Our opinion
In our opinion, Russell Investment Company IV plc’s financial statements (the “financial statements”):
give a true and fair view of the company’s and fund’s assets, liabilities and financial position as at 30 June 2016 and of their results for the year then ended;
have been properly prepared in accordance with Generally Accepted Accounting Practice in Ireland; and
have been properly prepared in accordance with the requirements of the Companies Act 2014 and the European Communities (Undertakings for Collective Investments in Transferable Securities) Regulations 2011 (as amended).
What we have audited
The financial statements comprise:
the balance sheet as at 30 June 2016;
the profit and loss account for the year then ended;
the statement of changes in net assets attributable to redeemable participating shareholders for the year then ended;
the schedule of investments for each of the funds as at 30 June 2016; and
the notes to the financial statements for the company and for each of its funds which include a summary of significant accounting policies and other explanatory information.
The financial reporting framework that has been applied in the preparation of the financial statements is Irish law and accounting standards issued by the Financial Reporting Council and promulgated by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland).
In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.
PricewaterhouseCoopers, One Spencer Dock, North Wall Quay, Dublin 1, Ireland, I.D.E. Box No. 137 T: +353 (0) 1 792 6000, F: +353 (0) 1 792 6200, www.pwc.com/ie Chartered Accountants
10 Independent Auditors’ Report
Independent auditors’ report to the members of Russell Investment Company IV plc - continued
Matters on which we are required to report by the Companies Act 2014
We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
In our opinion the accounting records of the company were sufficient to permit the financial statements to be readily and properly audited.
The financial statements are in agreement with the accounting records.
In our opinion the information given in the Directors’ Report is consistent with the financial statements.
Matter on which we are required to report by exception
Directors’ remuneration and transactions
Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by sections 305 to 312 of that Act have not been made. We have no exceptions to report arising from this responsibility.
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 5, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with Irish law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with section 391 of the Companies Act 2014 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers, One Spencer Dock, North Wall Quay, Dublin 1, Ireland, I.D.E. Box No. 137 T: +353 (0) 1 792 6000, F: +353 (0) 1 792 6200, www.pwc.com/ie Chartered Accountants
Independent Auditors’ Report 11
Independent auditors’ report to the members of Russell Investment Company IV plc - continued
What an audit of financial statements involves
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:
whether the accounting policies are appropriate to the company’s circumstances and have been consistently applied and adequately disclosed;
the reasonableness of significant accounting estimates made by the directors; and
the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the directors’ judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Patricia Johnston for and on behalf of PricewaterhouseCoopers Chartered Accountants and Statutory Audit Firm Dublin Ireland 13 October 2016
Russell Investment Company IV plc
Combined Balance Sheet
As at 30 June 2016
The accompanying notes are an integral part of the financial statements.
12 Combined Balance Sheet
Total
30 June 2016
USD ‘000
Total
30 June 2015*
USD ‘000
Assets
Financial assets at fair value through profit or loss ................................................................... 757,483 1,049,961
Cash at bank .............................................................................................................................. 61,538 64,693
Cash held with brokers and counterparties for open financial derivative instruments .............. 22,563 47,060
Debtors:
Receivable for investments sold ............................................................................................. 3,316 3,255
Receivable on fund shares issued ........................................................................................... 10 564
Dividends receivables ............................................................................................................. 1,158 1,451
Interest receivable ................................................................................................................... 124 124
Other debtors .......................................................................................................................... 61 -
846,253 1,167,108
Liabilities
Financial liabilities at fair value through profit or loss ..................................................... (32,555) (21,116)
Creditors – amounts falling due within one financial year:
Payable for investments purchased ......................................................................................... (1,723) (10,621)
Payable on fund shares redeemed ........................................................................................... (1,480) (475)
Distributions payable on income share classes ....................................................................... - (3,742)
Management fees payable ....................................................................................................... (627) (862)
Performance fees payable ....................................................................................................... (313) (50)
Depositary fees payable .......................................................................................................... (24) (15)
Sub-custodian fees payable ..................................................................................................... (125) (104)
Administration fees payable ................................................................................................... (33) (46)
Audit fees payable .................................................................................................................. (93) (74)
Other fees payable .................................................................................................................. (6) (22)
(36,979) (37,127)
Net asset value attributable to redeemable participating shareholders .............................. 809,274 1,129,981
* The Combined Balance Sheet and the Balance Sheet of the individual Funds as at 30 June 2015 have been restated due to a change in the
accounting policy for valuation of investments. See note 2 to the financial statements for details of change to the Company’s accounting
policies during the year under review.
On behalf of the Board Director Director
13 October 2016
Russell Investment Company IV plc
Combined Profit and Loss Account
For the financial year ended 30 June 2016
The accompanying notes are an integral part of the financial statements.
Combined Profit and Loss Account 13
Total
2016
USD ‘000
Total
2015*
USD ‘000
Income
Dividends ................................................................................................................................ 11,809 16,124
Interest income ....................................................................................................................... 527 260
12,336 16,384
Net gain (loss) on investment activities .................................................................................. (65,136) (44,140)
Total investment income (expense) ..................................................................................... (52,800) (27,756)
Expenses
Management fees .................................................................................................................... (8,998) (8,084)
Performance fees .................................................................................................................... (290) 116
Depositary fees ....................................................................................................................... (87) (64)
Sub-custodian fees .................................................................................................................. (544) (509)
Administration and transfer agency fees ................................................................................. (352) (382)
Audit fees ................................................................................................................................ (96) (74)
Professional fees ..................................................................................................................... (116) (165)
Other fees ................................................................................................................................ (101) (72)
Total operating expenses ...................................................................................................... (10,584) (9,234)
Net income (expense) ............................................................................................................ (63,384) (36,990)
Finance costs
Distributions ........................................................................................................................... (4,276) (5,037)
Profit (Loss) for the financial year before taxation ........................................................... (67,660) (42,027)
Taxation
Withholding tax ...................................................................................................................... (2,148) (2,178)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ..............................................................................
(69,808) (44,205)
* The Combined Profit and Loss Account and the Profit and Loss Account of the individual Funds for the year ended 30 June 2015 have been
restated due to a change in the accounting policy for valuation of investments. See note 2 to the financial statements for details of changes to
the Company's accounting policies.
With the exception of those Funds which ceased trading, as noted in the Background to the Company, all amounts in respect of the financial
year ended 30 June 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 IV plc
Combined Statement of Changes in Net Assets Attributable to Redeemable Shareholders
For the financial year ended 30 June 2016
The accompanying notes are an integral part of the financial statements
14 Combined Statement of Changes in Net Assets Attributable to Redeemable Shareholders
2016
USD ‘000
2015
USD ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ......................................................................... (69,808) (44,205)
Share transactions
Reinvestment of deemed distributions on accumulation shares .............................................. 4,276 1,305
Net increase (decrease) in net assets resulting from redeemable participating share
transactions ............................................................................................................................. (215,216) 209,943
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders .............................................................................................. (280,748) 167,043
Currency translation (Note 2) ................................................................................................. (39,959) (56,756)
Net assets attributable to redeemable participating shareholders
Beginning of financial year ..................................................................................................... 1,129,981 1,019,694
End of financial year ............................................................................................................... 809,274 1,129,981
Russell Investment Company IV plc
Russell Absolute Return Equity Fund
Manager’s Report
Russell Absolute Return Equity Fund 15
Russell Absolute Return Equity Fund (the “Fund”) ceased trading on 7 August 2015.
Investment Objective Prior to the Fund ceasing to trade, the Fund attempted to achieve capital appreciation with limited net asset value volatility by
primarily investing the assets of the Fund in equity securities which are listed, traded or dealt in on regulated markets worldwide
(or in respect of which an application for listing on a regulated stock exchange will be sought) and by investing in derivative
positions in order to seek to hedge all of the Fund’s underlying market and currency exposures.
As the Fund ceased trading on 7 August 2015 there is no performance data of relevance to report.
Russell Investment Company IV plc
Russell Absolute Return Equity Fund
Balance Sheet
As at 30 June 2016
The accompanying notes are an integral part of the financial statements.
16 Russell Absolute Return Equity Fund
30 June 2016*
GBP ‘000
30 June 2015
GBP ‘000
Assets
Financial assets at fair value through profit or loss (Note 2) ................................................................................... - 402,738
Cash at bank (Note 3) .............................................................................................................................................. 621 11,526
Cash held with brokers and counterparties for open financial derivative instruments
(Note 3) .................................................................................................................................................................... - 19,141
Debtors:
Receivable for investments sold .................................................................................................................... - 1,250
Receivable on fund shares issued .................................................................................................................. - 294
Dividends receivable ..................................................................................................................................... - 749
Other debtors ................................................................................................................................................. 46 -
667 435,698
Liabilities
Financial liabilities at fair value through profit or loss (Note 2) ....................................... - (679)
Creditors – amounts falling due within one financial year:
Payable for investments purchased ............................................................................................................... - (6,369)
Payable on fund shares redeemed ................................................................................................................. (653) (302)
Distributions payable on income share classes .............................................................................................. - (2,379)
Management fees payable ............................................................................................................................. - (225)
Performance fees payable .............................................................................................................................. - (15)
Depositary fees payable ................................................................................................................................ - (6)
Sub-custodian fees payable ........................................................................................................................... - (38)
Administration fees payable .......................................................................................................................... - (18)
Audit fees payable ......................................................................................................................................... (14) (16)
Other fees payable ......................................................................................................................................... - (12)
(667) (10,059)
Net asset value attributable to redeemable participating shareholders ................................................................... - 425,639
* The Fund ceased trading on 7 August 2015.
Russell Investment Company IV plc
Russell Absolute Return Equity Fund
Profit and Loss Account
For the financial year ended 30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Absolute Return Equity Fund 17
2016
GBP ‘000
2015*
GBP ‘000
Income
Dividends ..................................................................................................................................................... 59 7,532
Interest income ............................................................................................................................................. 4 75
63 7,607
Net gain (loss) on investment activities (Note 4) ............................................................................................................... (1,805) (9,476)
Total investment income (expense) ................................................................................................................................ (1,742) (1,869)
Expenses
Management fees (Note 5) ........................................................................................................................... (291) (2,911)
Performance fees (Note 5) ............................................................................................................................ 15 25
Depositary fees (Note 6) ............................................................................................................................... (7) (27)
Sub-custodian fees (Note 6) ......................................................................................................................... (16) (193)
Administration and transfer agency fees (Note 6) ........................................................................................ (18) (163)
Audit fees (Note 6) ....................................................................................................................................... (14) (16)
Professional fees ........................................................................................................................................... (9) (63)
Other fees ..................................................................................................................................................... (30) (20)
Total operating expenses .......................................................................................................................................... (370) (3,368)
Net income (expense) ................................................................................................................................................ (2,112) (5,237)
Finance costs
Distributions (Note 8) ................................................................................................................................... - (3,018)
Profit (loss) for the financial year before taxation ..................................................................................................... (2,112) (8,255)
Taxation
Withholding tax (Note 9) ............................................................................................................................. (212) (952)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ......................................................................................................... (2,324) (9,207)
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.
* The Fund ceased trading on 7 August 2015.
Russell Investment Company IV plc
Russell Absolute Return Equity Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the financial year ended 30 June 2016
The accompanying notes are an integral part of the financial statements.
18 Russell Absolute Return Equity Fund
2016
GBP ‘000
2015*
GBP ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ........................................................................................................ (2,324) (9,207)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 8) ..................................................... - 640
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from share transactions (Note 10) ............................................................................. (423,315) 19,959
Total net increase (decrease) in net assets attributable to redeemable
participating shareholders (425,639) 11,392
Net assets attributable to redeemable participating shareholders
Beginning of year ......................................................................................................................................... 425,639 414,247
End of year ................................................................................................................................................... - 425,639
* The Fund ceased trading on 7 August 2015.
Russell Investment Company IV plc
Russell Absolute Return Equity Fund
Schedule of Changes in Composition of Portfolio (unaudited)
Listed below are the 20 largest cumulative investment purchases and sales during the financial year ended 30 June 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 Absolute Return Equity Fund 19
Portfolio Securities
Acquisition Cost
GBP ‘000 Portfolio Securities
Disposal Proceeds
GBP ‘000
U.K., Government of U.K., Government of
4.750% due 07/09/2015 25,002 4.750% due 07/09/2015 (24,997)
U.K., Treasury Bill 2.000% due 22/01/2016 (8,386)
Zero Coupon due 03/08/2015 23,498 Mitsubishi UFJ Financial Group Inc (3,922)
Zero Coupon due 27/07/2015 15,999 Valeo SA (3,286)
U.K., Government of Nidec Corp (3,236)
2.000% due 22/01/2016 8,388 U.K., Government of
U.K., Treasury Bill 1.750% due 22/01/2017 (3,049)
Zero Coupon due 20/07/2015 6,919 Jafco Co Ltd (3,037)
U.K., Government of Industria de Diseno Textil SA (2,989)
1.750% due 22/01/2017 3,050 Mizuho Financial Group Inc (2,964)
5.000% due 07/03/2018 2,501 Dai-ichi Life Insurance Co Ltd (2,899)
U.K., Treasury Bill Western Digital Corp (2,746)
Zero Coupon due 13/07/2015 2,039 Mitsubishi Corp (2,704)
Zero Coupon due 06/03/2020 1,400 Renault SA (2,676)
U.K., Government of Legrand SA (2,630)
4.750% due 07/03/2020 550 Bayer AG (2,595)
Tokyo Electron Ltd 533 Seagate Technology Plc (2,585)
Glaukos Corporation 403 Sumitomo Mitsui Trust Holdings Inc (2,563)
Micron Technology Inc 398 Nomura Holdings Inc (2,503)
Q2 Holdings Inc 395 U.K., Government of
Chubb Ltd 374 1.750% due 07/03/2018 (2,501)
Shire Plc 365 U.K., Treasury Bill
Pandora A/S 293 Zero Coupon due 29/06/2015 (2,500)
Ryanair Holdings Plc 280
Wolseley Plc 260
Caltex Australia Ltd 253
Russell Investment Company IV plc
Russell Alpha Fund
Manager’s Report
20 Russell Alpha Fund
Money Managers as at 30 June 2016
Alken Asset Management, LLP
Hermes Sourcecap International, LLP
Kopernik Global Investors, LLC
Lazard Japan Asset Management K.K.
Levin Capital Strategies, L.P.
Next Century Growth Investors, LLC
Robeco Investment Management, Inc.
Russell Investments Limited
Russell Investments Implementation Services, LLC
Westwood Management Corp
Investment Objective
Russell Alpha Fund (the “Fund”) attempts to achieve capital appreciation with limited net asset value volatility by primarily
investing the assets of the Fund in equity securities which are listed, traded or dealt in on regulated markets worldwide (or in
respect of which an application for listing on a regulated stock exchange will be sought) and by investing in derivative positions
in order to seek to hedge all of the Fund’s underlying equity market and currency positions.
Fund Performance
During financial year ended 30 June 2016, the Fund returned 1.3 per cent on a gross-of-fee basis (0.2 per cent on a net-of-fee
basis), while the benchmark* returned 0.3 per cent. (Class U.S. Dollar Roll-Up)
Market Comment
Global equities, as measured by the benchmark, fell 9.4 per cent over the third quarter of 2015. The non-U.S. component fell by
12.1 per cent. Early in the quarter, the renewed bailout deal with Greece brought a degree of harmony in Europe. This positive
development soon became a distant memory, as two central stories unfolded over the period. In China, the country’s devaluation
of its currency, amid slowing growth, gave rise to a severe sell off in global markets. This, in turn, became a lead factor in
preventing the U.S. Federal Reserve (the “Fed”) from raising its interest rate in September. The combination of these major
events engendered the fourth biggest quarterly increase in volatility in the past 10 years, as measured by the Chicago Board
Options Exchange’s Vix Index. It also handed over renewed market uncertainty to the final quarter of this year.
Global equities, as measured by the benchmark, rose by 5.1 per cent over the last quarter of 2015 in U.S. dollar terms. The non-
U.S. component rose by 3.9 per cent. Global markets gained in aggregate over the fourth quarter as the negative effects of China’s
third-quarter slowdown began to fade and the Fed moved towards policy tightening, exhibiting confidence in the American
economy’s steady recovery. In Europe, investors were slightly disappointed by the European Central Bank’s (the “ECB”) timid
actions to quell sluggish growth, whilst the downward trend of the oil price weighed on Emerging Markets (EM). In Japan,
equities surged 9.2 per cent with the nation’s economy escaping a technical recession as third quarter GDP growth was revised
upwards from -0.8 per cent to +1.0 per cent on an annualised basis. The Bank of Japan (BoJ) also left its interest rate unchanged
and would continue to buy government bonds at an annual pace of YEN 80 trillion. EM had a positive quarter in aggregate,
gaining 2.6 per cent. China recovered well, with equity markets moving up by 9.3 per cent. While exports figures were poor,
other domestic economic data proved encouraging, including improving industrial production figures and retail sales, as well as
annualised GDP growth that exceeded expectations.
Global equities, as measured by the benchmark, rose by 0.4 per cent over the first quarter of 2016 in U.S. dollar terms. The non-
U.S. component fell by 0.2 per cent. The period was characterised by two halves. In the first half, slowing growth in China
coupled with an ongoing commodities rout (especially in oil), engendered significant market volatility and a considerable risk off
sentiment. However in the latter part of the quarter, more accommodative central bank policies alongside oil price stabilisation,
thawed sentiment for global equities to some degree. At the Federal Open Market Committee (FOMC) meeting, Fed Chair Yellen
explained that whilst economic “forecasts have not changed much since December”, this was being overshadowed by “global
economic and financial developments”, posing a risk to growth. As a result, FOMC “dots” reduced to two possible interest rate
hikes this year, as opposed to four. In Europe, ECB President Draghi delivered on his promise to do “whatever it takes” by
introducing raft of new accommodative stimulus measures in an effort to boost eurozone inflation and encourage new credit
provision. The ECB reduced its main refinancing rate to 0.0 per cent, whilst quantitative easing (QE) was increased to EUR 80
billion a month. In addition, the ECB initiated another targeted longer-term refinancing operation (TLTRO II).
Russell Investment Company IV plc
Russell Alpha Fund
Manager’s Report - continued
Russell Alpha Fund 21
Global equities, as measured by the benchmark rose by 0.9 per cent in the second quarter of 2016. Global markets gained over the
second quarter despite the startling result of the U.K.’s referendum on European Union (E.U.) membership. U.K.’s decision to
leave the E.U. threw worldwide markets into turmoil in the last days of June. However, equities were bolstered during the period
by stronger oil prices, a cautious Fed, and additional easing from the ECB. In the U.S. (2.5 per cent), the final first quarter GDP
growth rate was revised upwards to 1.1 per cent quarter on quarter, beating estimates of 1.0 per cent. However, a poor jobs report
in May, with non-farm payrolls only advancing by 38,000 versus the 164,000 expected, seriously dented hopes for a June Fed rate
hike. Inflation also continued to remain below target at 1.0 per cent year on year in May, whilst retail sales (2.5 per cent year on
year) did not match estimates for a 3.0 per cent growth over the same period. This mixed economic data, combined with market
uncertainties, left the Fed in a position to be more cautious in raising interest rates for the rest of the year. After the U.K.’s
surprising E.U. referendum results, David Cameron announced that he would step down as Prime Minister but would stay in
office for the next few months to “steady the ship”. The British Pound also plunged to a 31 year low (against the U.S. Dollar),
setting a record intraday swing of more than 10 per cent between its highs and lows. In response, the Bank of England (BoE)
pledged USD 345 billion of new stimulus and BoE Governor Carney stated the he had further measures in place to deal with the
“period of uncertainty and adjustment”.
General Comment on Money Managers/Performance
The Fund finished ahead of the benchmark in a quarter (third quarter 2015) characterised by volatility and significant market
decline. Underlying value and growth strategies struggled to find significant traction, however growth managed to perform
slightly better. The U.K. and Europe were the best performing regions for the Fund, with the underlying European strategy
contributing positively. Japan and EM’s struggled slightly, reflected by the aggregate underperformance of the underlying
strategies in those regions.
The Fund finished below the benchmark in the final quarter of 2015. In the prevailing market environment, an allocation away
from the large cap scale was not rewarded. The underlying European strategy was positive for the Fund, as well as the EM
strategy which benefited from holdings in Asia. The Japan strategy failed to find significant traction whilst the U.S. strategy was
the worst performer, especially through manager Next Century Growth Investors, LLC. In sectors, whilst consumer discretionary
names were headwinds for several managers, the Fund generated overall gains through a position within the automobile industry,
through picks such as Renault and Valeo.
The Fund finished above the benchmark in the first quarter of 2016. In factors, small cap stocks contributed to performance. The
Fund found also alpha within the health care sector. Stock selection within the rebounding industrials and materials sectors also
added to gains. The global strategy found significant traction within the small cap spectrum. Our EMs strategy also outperformed
in the prevailing market environment. The U.S. and European strategies were net negative, whilst the Japanese strategy struggled,
owing to a strong bias towards the financial sector.
The Fund outperformed the benchmark quarter in the second quarter of 2016. The Fund generated gains through stock selection
within the technology and health care sectors, whilst holdings within consumer discretionary and industrials were negative. At the
stock level Anacor Pharmaceuticals (health care) and Wirecard (technology) were notable contributors to performance, whilst an
overweight to Peugeot (consumer discretionary) detracted. The global strategy drove performance, notably through Kopernik
Global Investors, LLC who benefitted from its long gold stock positions. The EM strategy also contributed to gains, whilst the
Japanese and U.S. strategies struggled to find any particular traction over the period. The European strategies however, were the
main detractors as the surprise ‘Brexit’ vote engendered a broad based sell off in the region.
Company’s Market Outlook
Our strategists have a broadly neutral view between equities and bonds.
Equities: Our regional equity positioning is close to neutral
We are underweight the U.S. relative to other major developed regions mostly because of valuation. This underweight is fairly
evenly distributed as small overweights to the other regions. We are neutral EMs, where attractive valuations are offset by
business cycle headwinds from deleveraging risks, along with the potential for further Fed tightening.
Fixed income: Bond yields are likely to rise, but only modestly
Our process scores government bonds poorly on value as 10 year yields in all the major developed markets are near record lows at
the end of the second quarter of 2016. On balance, however, the cycle is neutral. Cycle pressures are moderately negative in the
U.S. where wages are gradually picking up and putting pressure on the Fed to raise rates. But the cycle is more supportive of bond
markets in the rest of the developed world. Both the European Central Banks and Bank of Japan (BoJ) are contemplating further
unconventional easing to bolster inflation expectations. The net result is that the upward pressure on bond yields from inflation
pressures in the U.S. will be muted by deflation pressures in the rest of the world.
Russell Investment Company IV plc
Russell Alpha Fund
Manager’s Report - continued
22 Russell Alpha Fund
Currencies: A sideways move for major currencies
Even with Brexit, we think that the major currencies will stay in the ranges they have traded in since the beginning of the year,
albeit with the U.S. Dollar pushing towards the top of that range. There is some downside risk for the Euro and Japanese Yen if
central banks adopt more unconventional easing. But this is likely to be limited, since both currencies are relatively cheap and
have already priced in significant monetary policy accommodation. We like the value in Emerging Market (EM) currencies, but
the downside risks to the Chinese Renminbi keep us concerned about the risks of further depreciation for EM currencies in
general.
Conclusion: Noise outweighing signals
Fading cycle fundamentals and flat equity market momentum suggest that markets are being driven more by noise than
fundamentals. We worry that risk assets, like equities and corporate credit, are vulnerable to bad news. However, our low
expectation of a U.S. and global recession means that we are willing to “buy the dips”. Without strong buy signals, we remain
cautious and have fairly neutral asset class views. However, we are remaining vigilant on signals to “buy the dips”, and “sell the
rallies”.
Past performance is no indication of present or future performance.
* Benchmark Source: USD Libor 1 Month
Russell Investments Ireland Limited
August 2016
Russell Investment Company IV plc
Russell Alpha Fund
Balance Sheet
As at 30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Alpha Fund 23
30 June 2016
USD ‘000
30 June 2015
USD ‘000
Assets
Financial assets at fair value through profit or loss (Note 2) ................................................ 237,386 205,099
Cash at bank (Note 3) ........................................................................................................... 17,576 11,684
Cash held with brokers and counterparties for open financial derivative instruments
(Note 3) ................................................................................................................................. 3,960 11,149
Debtors:
Receivable for investments sold .......................................................................................... 441 445
Receivable on fund shares issued ......................................................................................... 10 -
Dividends receivable ........................................................................................................... 345 273
259,718 228,650
Liabilities
Financial liabilities at fair value through profit or loss (Note 2) ...................................... (14,949) (1,525)
Creditors – amounts falling due within one financial year:
Payable for investments purchased ..................................................................................... (101) (604)
Payable on fund shares redeemed ........................................................................................ (507) -
Management fees payable ................................................................................................... (186) (164)
Performance fees payable .................................................................................................... - (26)
Depositary fees payable ...................................................................................................... (7) (3)
Sub-custodian fees payable ................................................................................................. (61) (38)
Administration fees payable ................................................................................................ (11) (8)
Audit fees payable ............................................................................................................... (25) (25)
Other fees payable ............................................................................................................... - (4)
(15,847) (2,397)
Net asset value attributable to redeemable participating shareholders ......................... 243,871 226,253
Russell Investment Company IV plc
Russell Alpha Fund
Profit and Loss Account
For the financial year ended 30 June 2016
The accompanying notes are an integral part of the financial statements.
24 Russell Alpha Fund
2016
USD ‘000
2015
USD ‘000
Income
Dividends ............................................................................................................................ 4,318 4,301
Net gain (loss) on investment activities (Note 4) .................................................................. (20,442) (41,787)
Total investment income (expense) ................................................................................... (16,124) (37,486)
Expenses
Management fees (Note 5) .................................................................................................. (2,412) (2,364)
Performance fees (Note 5) ................................................................................................... - 77
Depositary fees (Note 6) ...................................................................................................... (24) (17)
Sub-custodian fees (Note 6) ................................................................................................ (263) (195)
Administration and transfer agency fees (Note 6) ............................................................... (108) (102)
Audit fees (Note 6) .............................................................................................................. (26) (25)
Professional fees .................................................................................................................. (42) (57)
Other fees ............................................................................................................................ (11) (40)
Total operating expenses .................................................................................................... (2,886) (2,723)
Net income (expense) .......................................................................................................... (19,010) (40,209)
Finance costs
Distributions (Note 8) .......................................................................................................... (267) (300)
Profit (loss) for the financial year before taxation ............................................................ (19,277) (40,509)
Taxation
Withholding tax (Note 9) ..................................................................................................... (626) (684)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ............................................................................ (19,903) (41,193)
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 IV plc
Russell Alpha Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the financial year ended 30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Alpha Fund 25
2016
USD ‘000
2015
USD ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations .................................................................................... (19,903) (41,193)
Share transactions
Reinvestment of deemed distributions on accumulation shares (Note 8) ............................ 267 300
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 10) ......................................................................................................... 37,254 (44,190)
Total net increase in net assets attributable to redeemable participating
shareholders ................................................................................................................................ 17,618 (85,083)
Net assets attributable to redeemable participating shareholders
Beginning of financial year ................................................................................................. 226,253 311,336
End of financial year ........................................................................................................... 243,871 226,253
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments
30 June 2016
The accompanying notes are an integral part of the financial statements.
26 Russell Alpha Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Transferable Securities (85.17%) (2015: 78.83%)
Common Stock (83.57%) (2015: 76.50%)
Australia (0.31%)
Metals and Mining
43,729 Newcrest Mining Ltd .......... 749 0.31
Austria (0.03%)
Real Estate
37,181 Immofinanz AG .................. 79 0.03
Belgium (0.22%)
Pharmaceuticals
7,259 UCB SA .............................. 542 0.22
Bermuda (0.89%)
Banks
4,967 Credicorp Ltd ...................... 767 0.32
Diversified Financials
7,000 Guoco Group Ltd ................ 74 0.03
Food Products
866,000
China Yurun Food Group
Ltd ....................................... 131 0.05
Gas Utilities
209,680
China Resources Gas Group
Ltd ....................................... 638 0.26
Insurance
27,400 Maiden Holdings Ltd .......... 335 0.14
Transport
209,139 Golden Ocean Group Ltd .... 132 0.05
18,329
Tsakos Energy Navigation
Ltd ....................................... 86 0.04
2,163 0.89
Brazil (0.71%)
Agriculture
36,800 SLC Agricola SA ................ 170 0.07
Commercial Services and Supplies
67,847 Cielo SA .............................. 717 0.29
Electric Utilities
84,000
Centrais Eletricas Brasileiras
SA ....................................... 337 0.14
Insurance
56,884
BB Seguridade Participacoes
SA ....................................... 499 0.21
1,723 0.71
Canada (2.86%)
Advertising
12,120 MDC Partners Inc ............... 222 0.09
Beverages
79,666 Cott Corp ............................. 1,112 0.46
Diversified Financials
21,100 Dundee Corp ....................... 124 0.05
256,824 Sprott Inc ............................. 508 0.21
Number
of Shares
Fair Value
USD ‘000
Fund
%
Hotels, Restaurants and Leisure
57,700
Performance Sports Group
Ltd ...................................... 173 0.07
Metals and Mining
20,194 Barrick Gold Corp .............. 431 0.18
54,312 Cameco Corp ...................... 596 0.24
57,960
Dundee Precious Metals
Inc ....................................... 137 0.06
11,958 Goldcorp Inc ....................... 229 0.09
241,555 Ivanhoe Mines Ltd .............. 188 0.08
90,017 Kinross Gold Corp .............. 440 0.18
16,558 New Gold Inc ...................... 73 0.03
14,574
Novagold Resources
Inc ....................................... 89 0.04
9,921
Silver Standard Resources
Inc ....................................... 129 0.05
16,519 Silver Wheaton Corp .......... 389 0.16
96,262
Turquoise Hill Resources
Ltd ...................................... 325 0.13
Oil and Gas
31,407 MEG Energy Corp .............. 164 0.07
Other Finance
93,934
Uranium Participation
Corp .................................... 291 0.12
Transport
22,968
Canadian National Railway
Co ....................................... 1,356 0.55
6,976 2.86
Cayman Islands (0.41%)
Electrical Equipment
356,000
NVC Lighting Holding
Ltd ...................................... 38 0.01
Semiconductor Equipment and Products
71,884
ASM Pacific Technology
Ltd ...................................... 515 0.21
Software
2,347 NetEase Inc (ADR) ............. 453 0.19
1,006 0.41
Chile (0.28%)
Chemicals
1,630
Sociedad Quimica y Minera
de Chile SA (ADR) ............. 40 0.02
Electric Utilities
2,236,380 Enersis Americas SA .......... 383 0.15
2,236,380 Enersis Chile SA ................. 263 0.11
686 0.28
China (0.31%)
Building Products
233,496
Anhui Conch Cement Co
Ltd ...................................... 561 0.23
Transport
420,000
Guangshen Railway Co
Ltd ...................................... 200 0.08
761 0.31
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Alpha Fund 27
Number
of Shares
Fair Value
USD ‘000
Fund
%
Cyprus (0.13%)
Real Estate
62,146
Aroundtown Property
Holdings Plc ........................ 314 0.13
Denmark (1.06%)
Beverages
2,009 Carlsberg A/S ...................... 190 0.08
Health Care Equipment and Supplies
3,134 Coloplast A/S ...................... 233 0.09
Pharmaceuticals
18,117 Novo Nordisk A/S ............... 969 0.40
Retail Trade
8,260 Pandora A/S ........................ 1,119 0.46
Transport
1,837 DSV A/S ............................. 77 0.03
2,588 1.06
Egypt (0.23%)
Banks
126,899
Commercial International
Bank Egypt SAE ................. 564 0.23
Finland (0.48%)
Telecommunications
126,645 Nokia OYJ ........................... 718 0.29
79,110 Nokia OYJ (ADR) ............... 450 0.19
1,168 0.48
France (5.89%)
Aerospace and Defence
6,280 Thales SA ............................ 523 0.21
Auto Components
9,194 Faurecia ............................... 294 0.12
46,893 Valeo SA ............................. 2,091 0.86
Automobiles
99,172 Peugeot SA .......................... 1,192 0.49
19,595 Renault SA .......................... 1,490 0.61
Biotechnology
1,007 Genfit .................................. 28 0.01
Chemicals
7,451 Arkema SA .......................... 572 0.23
Commercial Services and Supplies
3,163 Edenred ............................... 65 0.03
9,710 Elis SA ................................ 170 0.07
Computers and Peripherals
2,096 Cap Gemini SA ................... 182 0.07
Construction and Engineering
2,773
Altran Technologies
SA ....................................... 37 0.02
11,271 Eiffage SA ........................... 804 0.33
2,543 Vinci SA .............................. 180 0.07
Number
of Shares
Fair Value
USD ‘000
Fund
%
Distributors
1,402 Rexel SA ............................. 18 0.01
Electric Utilities
33,894 Electricite de France SA ..... 413 0.17
Electrical Equipment
40,343 Legrand SA ......................... 2,076 0.85
Food Products
7,968 Carrefour SA ....................... 197 0.08
18,499 Danone SA .......................... 1,303 0.54
6,340 Sodexo SA .......................... 682 0.28
Internet Software and Services
2,821 Criteo (ADR) ...................... 130 0.05
407 Iliad SA ............................... 83 0.04
Machinery
16,161 Alstom SA .......................... 375 0.15
23,899 Areva SA ............................ 86 0.04
Real Estate Investment Trust
398 Gecina SA ........................... 54 0.02
Textile and Apparel
7,858
LVMH Moet Hennessy
Louis Vuitton SE ................ 1,187 0.49
Transport
11,257 Groupe Eurotunnel SE ........ 119 0.05
14,351 5.89
Germany (3.73%)
Auto Components
2,591 Rheinmetall AG .................. 153 0.06
Chemicals
6,462 K&S AG ............................. 132 0.05
9,456 Lanxess AG ........................ 413 0.17
5,852 Linde AG ............................ 815 0.34
Commercial Services and Supplies
49,884 Wirecard AG ....................... 2,187 0.90
Diversified Financials
7,079 Deutsche Boerse AG ........... 578 0.24
Health Care Providers and Services
12,500 Fresenius SE & Co KGaA .. 914 0.37
Media
10,879
ProSiebenSat.1 Media
SE ....................................... 474 0.19
Pharmaceuticals
18,936 Bayer AG ............................ 1,893 0.78
Semiconductor Equipment and Products
14,872
Infineon Technologies
AG ...................................... 214 0.09
Telecommunications
6,229 Drillisch AG ....................... 238 0.10
Textile and Apparel
7,555 Adidas AG .......................... 1,078 0.44
9,089 3.73
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
28 Russell Alpha Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Guernsey, Channel Islands (0.07%)
Real Estate
70,035 Etalon Group Ltd (GDR) ..... 171 0.07
Hong Kong (1.31%)
Banks
182,508
BOC Hong Kong Holdings
Ltd ....................................... 546 0.22
Computers and Peripherals
868,801 Lenovo Group Ltd ............... 523 0.22
Holding Companies - Diversified Operations
65,689 Wharf Holdings Ltd ............ 397 0.16
Insurance
116,065 AIA Group Ltd .................... 692 0.28
Oil and Gas
334,542 Cnooc Ltd ............................ 415 0.17
Real Estate
173,401
China Overseas Land &
Investment Ltd .................... 548 0.23
Semiconductor Equipment and Products
78,000
Hua Hong Semiconductor
Ltd ....................................... 73 0.03
3,194 1.31
India (0.80%)
Banks
68,272 Axis Bank Ltd ..................... 540 0.22
Computers and Peripherals
2,170
Tata Consultancy Services
Ltd ....................................... 82 0.04
Metals and Mining
11,485 Bharat Forge Ltd ................. 129 0.05
Oil and Gas
22,360
Reliance Industries Ltd
(GDR) ................................. 638 0.26
Retail Trade
12,700 Titan Co Ltd ........................ 77 0.03
Software
45,457 HCL Technologies Ltd ........ 491 0.20
1,957 0.80
Indonesia (0.75%)
Banks
814,558
Bank Mandiri Persero Tbk
PT ........................................ 587 0.24
Gas Utilities
2,769,481
Perusahaan Gas Negara
Persero Tbk ......................... 490 0.20
Telecommunications
2,520,693
Telekomunikasi Indonesia
Persero Tbk PT .................... 759 0.31
1,836 0.75
Ireland (3.09%)
Airlines
101,280 Ryanair Holdings Plc .......... 1,274 0.52
Number
of Shares
Fair Value
USD ‘000
Fund
%
Building Products
1,928 Kingspan Group Plc ............ 42 0.02
Computers and Peripherals
15,823 Accenture Plc ...................... 1,793 0.73
Entertainment
2,610 Paddy Power Betfair Plc ..... 274 0.11
Food Products
7,343 Kerry Group Plc .................. 651 0.27
Health Care Equipment and Supplies
22,095 Medtronic Plc ..................... 1,917 0.79
39,400
Trinity Biotech Plc
(ADR) ................................. 447 0.18
Miscellaneous Manufacturers
8,642 Eaton Corp Plc .................... 516 0.21
545 Ingersoll-Rand Plc .............. 35 0.02
Pharmaceuticals
2,575 Allergan Plc ........................ 595 0.24
7,544 3.09
Israel (0.04%)
Electrical Equipment
22,900 SuperCom Ltd ..................... 87 0.04
Italy (0.20%)
Banks
638,783
Banca Monte dei Paschi di
Siena SpA ........................... 269 0.11
11,505
FinecoBank Banca Fineco
SpA ..................................... 75 0.03
Electric Utilities
7,617 ERG SpA ............................ 87 0.04
Internet Software and Services
2,320
Yoox Net-A-Porter Group
SpA ..................................... 54 0.02
485 0.20
Japan (6.62%)
Banks
145,400
Mitsubishi UFJ Financial
Group Inc ............................ 646 0.26
473,800
Mizuho Financial Group
Inc ....................................... 685 0.28
188,000
Sumitomo Mitsui Trust
Holdings Inc ....................... 604 0.25
Building Products
20,700 LIXIL Group Corp .............. 340 0.14
Chemicals
75,000 Asahi Kasei Corp ................ 518 0.21
4,700 Nitto Denko Corp ............... 295 0.12
Computers and Peripherals
8,700
Japan Digital Laboratory Co
Ltd ...................................... 118 0.05
Distributors
50,000 Mitsubishi Corp .................. 871 0.36
43,800 Mitsui & Co Ltd .................. 518 0.21
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Alpha Fund 29
Number
of Shares
Fair Value
USD ‘000
Fund
%
Diversified Financials
120,700 Nomura Holdings Inc .......... 430 0.18
53,700 ORIX Corp .......................... 685 0.28
Electric Utilities
40,200
Kansai Electric Power Co
Inc ....................................... 388 0.16
Electrical Equipment
11,600 Nidec Corp .......................... 873 0.36
Environmental Control
11,200
Kurita Water Industries
Ltd ....................................... 249 0.10
Hand and Machine Tools
10,300 Makita Corp ........................ 679 0.28
Health Care Providers and Services
7,300 Miraca Holdings Inc ............ 315 0.13
Home Builders
12,900
Daiwa House Industry Co
Ltd ....................................... 375 0.15
Home Furnishings
15,300 Sony Corp ........................... 446 0.18
Insurance
49,800
Dai-ichi Life Insurance Co
Ltd ....................................... 547 0.23
Iron and Steel
127,000 Japan Steel Works Ltd ......... 576 0.23
26,500
Nippon Steel & Sumitomo
Metal Corp .......................... 506 0.21
Machinery
29,700
Amada Holdings Co
Ltd ....................................... 299 0.12
3,300 FANUC Corp ...................... 532 0.22
105,000 Hitachi Ltd .......................... 434 0.18
32,200 Komatsu Ltd ........................ 555 0.23
Other Finance
21,100 Jafco Co Ltd ........................ 517 0.21
Real Estate
21,500 Hulic Co Ltd ........................ 225 0.09
58,100
Tokyu Fudosan Holdings
Corp ..................................... 359 0.15
Retail Trade
5,100 Izumi Co Ltd ....................... 198 0.08
20,200 Marui Group Co Ltd ............ 270 0.11
53,000 Takashimaya Co Ltd ........... 378 0.16
Semiconductor Equipment and Products
8,400 Tokyo Electron Ltd ............. 702 0.29
Toys, Games and Hobbies
3,300 Nintendo Co Ltd .................. 469 0.19
Transport
17,000 Kamigumi Co Ltd ............... 156 0.06
148,000 Nippon Yusen KK ............... 258 0.11
1,900
West Japan Railway
Co ........................................ 120 0.05
16,136 6.62
Number
of Shares
Fair Value
USD ‘000
Fund
%
Jersey, Channel Islands (0.35%)
Metals and Mining
7,503 Randgold Resources Ltd ..... 844 0.35
Korea, Republic of (1.67%)
Auto Components
14,830 Hankook Tire Co Ltd .......... 657 0.27
58,921 Hanon Systems ................... 537 0.22
Automobiles
1,181 Hyundai Motor Co .............. 139 0.06
Diversified Financials
62,402 BNK Financial Group Inc ... 437 0.18
Home Furnishings
6,624 Coway Co Ltd ..................... 601 0.24
Personal Products
7,886 Korea Kolmar Co Ltd ......... 685 0.28
Semiconductor Equipment and Products
490 Samsung Electronics Co Ltd 606 0.25
Telecommunications
2,613 KT Corp .............................. 67 0.03
23,808 KT Corp (ADR) .................. 340 0.14
4,069 1.67
Lebanon (0.01%)
Real Estate
3,180 Solidere (GDR) ................... 30 0.01
Luxembourg (0.88%)
Agriculture
5,816 Kernel Holding SA ............. 78 0.03
10,667 MHP SA ............................. 98 0.04
36,983 MHP SA (GDR) (US listed) 340 0.14
Household Products
182,819 Samsonite International SA 504 0.21
Metals and Mining
16,585 Tenaris SA (ADR) .............. 478 0.19
Real Estate
6,175 Grand City Properties SA ... 127 0.05
Retail Trade
155,185
B&M European Value Retail
SA ....................................... 529 0.22
2,154 0.88
Marshall Islands (0.27%)
Transport
15,600 Ardmore Shipping Corp ...... 106 0.05
25,600 Diana Shipping Inc ............. 62 0.03
4,700 Navigator Holdings Ltd ...... 54 0.02
23,158 Safe Bulkers Inc .................. 24 0.01
65,600 Scorpio Tankers Inc ............ 276 0.11
33,200 StealthGas Inc ..................... 125 0.05
647 0.27
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
30 Russell Alpha Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Mauritius (0.10%)
Agriculture
952,200
Golden Agri-Resources
Ltd ....................................... 248 0.10
Mexico (0.73%)
Beverages
6,400
Fomento Economico
Mexicano SAB de CV
(ADR) ................................. 592 0.24
Household Products
285,986
Kimberly-Clark de Mexico
SAB de CV .......................... 669 0.28
Retail Trade
217,266
Wal-Mart de Mexico SAB
de CV .................................. 518 0.21
1,779 0.73
Netherlands (1.52%)
Banks
88,528 ING Groep NV .................... 903 0.37
Beverages
9,787 Heineken NV ....................... 900 0.37
Chemicals
11,302 Akzo Nobel NV ................... 708 0.29
Insurance
84,992 Delta Lloyd NV ................... 300 0.12
Internet Software and Services
7,764 Yandex NV ......................... 170 0.07
7,396 ASML Holding NV ............. 726 0.30
3,707 1.52
Norway (0.60%)
Banks
49,265 DNB ASA ........................... 585 0.24
Food Products
15,170 Marine Harvest ASA ........... 253 0.10
Oil and Gas
36,677 Statoil ASA ......................... 632 0.26
1,470 0.60
Philippines (0.25%)
Real Estate
741,879 Ayala Land Inc .................... 612 0.25
Puerto Rico (0.16%)
Banks
13,200 Popular Inc .......................... 387 0.16
Russia (1.28%)
Banks
145,091 Sberbank of Russia PJSC .... 304 0.12
86,932
Sberbank of Russia PJSC
(ADR) ................................. 757 0.31
Number
of Shares
Fair Value
USD ‘000
Fund
%
2,607
Sberbank of Russia PJSC
(ADR) (US Listed) ............. 23 0.01
Diversified Financials
66,123
Moscow Exchange MICEX-
RTS PJSC ........................... 116 0.05
Electric Utilities
250,686,83
4
Federal Grid Co Unified
Energy System PJSC .......... 608 0.25
443,165 RusHydro PJSC (ADR) ...... 403 0.17
Oil and Gas
82,880
Gazprom PAO ADR (US
Listed) ................................. 359 0.15
112,770 Gazprom PJSC .................... 247 0.10
1,405 Lukoil PJSC ........................ 59 0.02
1,535
Lukoil PJSC ADR (UK
Listed) ................................. 64 0.03
Retail Trade
36,965 Protek PJSC ........................ 48 0.02
Telecommunications
34,757
Mobile TeleSystems
PJSC ................................... 133 0.05
3,121 1.28
South Africa (0.77%)
Food Products
16,700 Bid Corp Ltd ....................... 315 0.13
16,792 Bidvest Group Ltd .............. 159 0.06
Holding Companies - Diversified Operations
93,420 AVI Ltd .............................. 529 0.22
Metals and Mining
106,122
Impala Platinum Holdings
Ltd ...................................... 342 0.14
Telecommunications
55,247 MTN Group Ltd .................. 539 0.22
1,884 0.77
Spain (2.11%)
Construction and Engineering
4,257 Aena SA .............................. 559 0.23
19,687 Ferrovial SA ....................... 381 0.16
Electrical Equipment
76,986
Gamesa Corp Tecnologica
SA ....................................... 1,513 0.62
Gas Utilities
33 Enagas SA .......................... 1 0.00
Real Estate Investment Trust
6,400
Axiare Patrimonio SOCIMI
SA ....................................... 82 0.03
Retail Trade
50,937
Industria de Diseno Textil
SA ....................................... 1,693 0.69
Software
21,170
Amadeus IT Holding
SA ....................................... 924 0.38
5,153 2.11
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Alpha Fund 31
Number
of Shares
Fair Value
USD ‘000
Fund
%
Sweden (0.74%)
Automobiles
33,505 Volvo AB ............................ 328 0.13
Banks
31,150 Swedbank AB ...................... 646 0.27
Metals and Mining
27,764 SKF AB ............................... 439 0.18
Retail Trade
13,220 Hennes & Mauritz AB ......... 385 0.16
1,798 0.74
Switzerland (2.59%)
Banks
30,938 UBS Group AG ................... 399 0.16
Food Products
18,753 Nestle SA ............................ 1,447 0.59
5,962 Nestle SA (ADR) ................ 461 0.19
Insurance
5,344 Chubb Ltd ........................... 699 0.29
Machinery
13,010 ABB Ltd .............................. 255 0.10
Pharmaceuticals
5,429 Roche Holding AG .............. 1,427 0.59
Retail Trade
12,409
Cie Financiere Richemont
SA ....................................... 723 0.30
3,559 Dufry AG ............................ 425 0.17
Software
9,833 Temenos Group AG ............ 490 0.20
6,326 2.59
Taiwan (0.83%)
Metals and Mining
82,227 Catcher Technology Co Ltd 605 0.25
Miscellaneous Manufacturers
6,560 Largan Precision Co Ltd ...... 599 0.25
Semiconductor Equipment and Products
161,476
Taiwan Semiconductor
Manufacturing Co Ltd ......... 813 0.33
2,017 0.83
Thailand (0.72%)
Banks
100,017 Kasikornbank PCL (NVDR) 484 0.20
Food Products
1,149,678 Thai Union Group PCL ....... 720 0.29
Holding Companies - Diversified Operations
41,518 Siam Cement PCL (NVDR) 562 0.23
1,766 0.72
Turkey (0.74%)
Construction and Engineering
379,432 Enka Insaat ve Sanayi AS ... 579 0.24
77,042
TAV Havalimanlari Holding
AS ....................................... 330 0.13
Number
of Shares
Fair Value
USD ‘000
Fund
%
Metals and Mining
17,064
Koza Altin Isletmeleri
AS ....................................... 76 0.03
Oil and Gas
14,189
Tupras Turkiye Petrol
Rafinerileri AS .................... 315 0.13
Real Estate
513,102
Emlak Konut Gayrimenkul
Yatirim Ortakligi AS .......... 510 0.21
1,810 0.74
United Kingdom (4.41%)
Agriculture
11,882
Imperial Tobacco Group
Plc ....................................... 644 0.26
Banks
7,873 Metro Bank Plc ................... 190 0.08
17,565 Shawbrook Group Plc ......... 40 0.02
Beverages
40,447 Diageo Plc .......................... 1,128 0.46
14,566 SABMiller Plc .................... 851 0.35
Diversified Financials
16,147 Schroders Plc ...................... 509 0.21
147,236 Worldpay Group Plc ........... 535 0.22
Entertainment
58,651 Merlin Entertainments Plc .. 345 0.14
Home Builders
65,476 Barratt Developments Plc ... 355 0.15
16,799 Persimmon Plc .................... 325 0.13
74,613 Taylor Wimpey Plc ............. 132 0.05
Home Furnishings
37,622 Howden Joinery Group Plc . 193 0.08
Household Products
15,002 Reckitt Benckiser Group Plc 1,502 0.62
Internet Software and Services
61,025 Auto Trader Group Plc ....... 288 0.12
60,895 Just Eat Plc .......................... 347 0.14
Media
1,387 Liberty Global Plc ............... 45 0.02
13,476
Liberty Global Plc (Class A)
............................................. 392 0.16
Pharmaceuticals
54,974 GlaxoSmithKline Plc .......... 1,179 0.48
Semiconductor Equipment and Products
39,320 ARM Holdings Plc ............. 594 0.24
Telecommunications
130,794
TalkTalk Telecom Group
Plc ....................................... 383 0.16
255,264 Vodafone Group Plc ........... 777 0.32
10,754 4.41
United States (32.42%)
Agriculture
13,400 Cadiz Inc ............................. 79 0.03
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
32 Russell Alpha Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
Airlines
5,865 SkyWest Inc ........................ 155 0.06
3,200 Spirit Airlines Inc ................ 144 0.06
Auto Components
25,206
Metaldyne Performance
Group Inc ............................ 347 0.14
Banks
15,400
Central Pacific Financial
Corp ..................................... 363 0.15
24,479 Citigroup Inc ....................... 1,038 0.43
16,500 Customers Bancorp Inc ....... 415 0.17
7,770 First Foundation Inc ............ 167 0.07
22,000 Fulton Financial Corp .......... 297 0.12
14,200 Kearny Financial Corp ........ 179 0.07
14,271 Morgan Stanley ................... 371 0.15
18,900
National Bank Holdings
Corp ..................................... 385 0.16
22,800
State Bank Financial
Corp ..................................... 464 0.19
22,675 State Street Corp ................. 1,223 0.50
15,700
United Community Banks
Inc/GA ................................. 287 0.12
12,100 Yadkin Financial Corp ........ 304 0.12
Biotechnology
4,767 Bio-Rad Laboratories Inc .... 682 0.28
2,985 Gilead Sciences Inc ............. 249 0.10
3,149
Ligand Pharmaceuticals
Inc ....................................... 376 0.16
76,852 NeoGenomics Inc ................ 618 0.25
Building Products
9,624 Apogee Enterprises Inc ....... 446 0.18
5,008 US Concrete Inc .................. 305 0.13
Chemicals
22,118 Dow Chemical Co ............... 1,099 0.45
17,650 Landec Corp ........................ 190 0.08
3,835 Praxair Inc ........................... 431 0.18
10,928 Univar Inc ........................... 207 0.08
Commercial Services and Supplies
13,736
AMN Healthcare Services
Inc ....................................... 549 0.23
51,000
ARC Document Solutions
Inc ....................................... 198 0.08
3,494 CoStar Group Inc ................ 764 0.31
17,842
Cross Country Healthcare
Inc ....................................... 248 0.10
132,000
Great Lakes Dredge & Dock
Corp ..................................... 576 0.24
20,600 HealthEquity Inc ................. 626 0.26
15,190 ICF International Inc ........... 621 0.25
8,300 Korn/Ferry International ...... 172 0.07
5,602
MarketAxess Holdings
Inc ....................................... 815 0.33
5,500
Matthews International
Corp ..................................... 306 0.13
14,761 Paylocity Holding Corp ....... 638 0.26
Number
of Shares
Fair Value
USD ‘000
Fund
%
Computers and Peripherals
7,011 Apple Inc ............................ 670 0.27
139,200 Ciber Inc ............................. 209 0.09
4,915
Electronics For Imaging
Inc ....................................... 212 0.09
54,146 EMC Corp .......................... 1,471 0.60
4,900 Engility Holdings Inc .......... 103 0.04
9,692 EPAM Systems Inc ............. 623 0.25
16,600 KEYW Holding Corp ......... 165 0.07
9,068 Manhattan Associates Inc ... 582 0.24
4,000 Mercury Systems Inc .......... 99 0.04
14,104 Virtusa Corp ....................... 407 0.17
14,500
Vocera Communications
Inc ....................................... 186 0.08
Construction and Engineering
3,038 Dycom Industries Inc .......... 273 0.11
25,202 KBR Inc .............................. 334 0.14
37,000 Orion Group Holdings Inc .. 196 0.08
8,200 Primoris Services Corp ....... 155 0.06
19,600
Sterling Construction Co
Inc ....................................... 96 0.04
16,600 Tutor Perini Corp ................ 391 0.16
Distributors
5,644 G-III Apparel Group Ltd ..... 258 0.11
30,700 Libbey Inc ........................... 488 0.20
3,900
SiteOne Landscape Supply
Inc ....................................... 133 0.05
18,600 Titan Machinery Inc ........... 207 0.09
Diversified Financials
6,372 Ellie Mae Inc ...................... 584 0.24
14,300 FBR & Co ........................... 213 0.09
18,900 FNFV Group ....................... 217 0.09
28,778 Synchrony Financial ........... 728 0.30
23,556 Visa Inc ............................... 1,747 0.71
Electric Utilities
4,000 Allete Inc ............................ 259 0.11
5,200 PNM Resources Inc ............ 184 0.08
4,700
Portland General Electric
Co ....................................... 207 0.08
Electrical Equipment
31,000 Corning Inc ......................... 635 0.26
25,840 Fluidigm Corp ..................... 233 0.10
5,200 Generac Holdings Inc ......... 182 0.07
16,293 Honeywell International Inc 1,895 0.78
8,378 Waters Corp ........................ 1,178 0.48
1,200 Woodward Inc .................... 69 0.03
Energy Equipment and Services
51,750 Pacific Ethanol Inc .............. 282 0.12
Environmental Control
10,400 Covanta Holding Corp ........ 171 0.07
Food Products
22,036 Pinnacle Foods Inc .............. 1,020 0.42
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Alpha Fund 33
Number
of Shares
Fair Value
USD ‘000
Fund
%
Gas Utilities
2,300 Chesapeake Utilities Corp ... 152 0.06
6,800
South Jersey Industries
Inc ....................................... 215 0.09
Hand and Machine Tools
14,805 Milacron Holdings Corp ...... 215 0.09
Health Care Equipment and Supplies
6,541 ABIOMED Inc .................... 715 0.29
110,000 Accuray Inc ......................... 571 0.23
22,278 Glaukos Corp ...................... 650 0.27
4,619 Inogen Inc ........................... 231 0.09
11,800 Invacare Corp ...................... 143 0.06
5,157 Nevro Corp .......................... 380 0.16
12,832
Thermo Fisher Scientific
Inc ....................................... 1,896 0.78
18,059
Zimmer Biomet Holdings
Inc ....................................... 2,174 0.89
Health Care Providers and Services
6,312 Acadia Healthcare Co Inc .... 350 0.14
9,245 Adeptus Health Inc .............. 478 0.20
Home Builders
12,900
Century Communities
Inc ....................................... 224 0.09
24,771 LGI Homes Inc .................... 791 0.33
Hotels, Restaurants and Leisure
13,200 Callaway Golf Co ................ 135 0.06
Insurance
19,120
CNO Financial Group
Inc ....................................... 334 0.14
7,500 Employers Holdings Inc ...... 218 0.09
1,800
Hanover Insurance Group
Inc ....................................... 152 0.06
14,600 Kemper Corp ....................... 452 0.18
Internet Software and Services
33,135 8x8 Inc ................................ 484 0.20
98,854 Boingo Wireless Inc ............ 882 0.36
26,537 Pandora Media Inc .............. 330 0.14
19,384 Q2 Holdings Inc .................. 543 0.22
3,291 Stamps.com Inc ................... 288 0.12
27,797 TechTarget Inc .................... 225 0.09
Iron and Steel
11,600
Allegheny Technologies
Inc ....................................... 148 0.06
5,100
Carpenter Technology
Corp ..................................... 168 0.07
Media
22,188 Time Warner Inc ................. 1,632 0.67
16,583 Walt Disney Co ................... 1,622 0.66
Metals and Mining
21,587
Atkore International Group
Inc ....................................... 345 0.14
17,208 CONSOL Energy Inc .......... 277 0.11
6,020 Royal Gold Inc .................... 434 0.18
25,300 Westmoreland Coal Co ....... 241 0.10
Number
of Shares
Fair Value
USD ‘000
Fund
%
Miscellaneous Manufacturers
6,624 3M Co ................................. 1,160 0.48
29,700 FreightCar America Inc ...... 417 0.17
Oil and Gas
9,696
Anadarko Petroleum
Corp .................................... 516 0.21
30,300 Approach Resources Inc ..... 64 0.03
23,900 Bill Barrett Corp ................. 153 0.06
7,800 Gulfport Energy Corp ......... 244 0.10
13,407
Occidental Petroleum
Corp .................................... 1,013 0.41
46,000 Synergy Resources Corp ..... 306 0.13
Oil and Gas Services
10,400 Flotek Industries Inc ........... 137 0.05
12,800 Matrix Service Co ............... 211 0.09
22,200 Newpark Resources Inc ...... 129 0.05
68,200
TETRA Technologies
Inc ....................................... 434 0.18
Other Finance
22,500
Kennedy-Wilson Holdings
Inc ....................................... 427 0.18
7,700 Real Industry Inc ................. 60 0.02
Paper and Forest Products
10,300
Schweitzer-Mauduit
International Inc .................. 363 0.15
Pharmaceuticals
8,117 Cempra Inc ......................... 134 0.05
6,130
Pacira Pharmaceuticals
Inc ....................................... 207 0.09
19,866 Pfizer Inc ............................ 699 0.29
Real Estate
12,703 HFF Inc ............................... 367 0.15
Real Estate Investment Trust
34,300
CatchMark Timber Trust
Inc ....................................... 419 0.17
55,500 Cedar Realty Trust Inc ........ 412 0.17
17,300 Colony Starwood Homes .... 526 0.22
16,700 Equity Commonwealth ....... 486 0.20
24,000
FelCor Lodging Trust
Inc ....................................... 150 0.06
19,546 GEO Group Inc ................... 668 0.27
51,200 Gramercy Property Trust .... 472 0.19
4,200
Seritage Growth
Properties ............................ 209 0.09
14,000
Two Harbors Investment
Corp .................................... 120 0.05
Retail Trade
4,707
Casey's General Stores
Inc ....................................... 619 0.25
11,100
Destination XL Group
Inc ....................................... 51 0.02
5,586 Five Below Inc .................... 259 0.11
17,100 Freshpet Inc ........................ 160 0.07
12,337 Gap Inc ............................... 262 0.11
25,518 Habit Restaurants Inc .......... 418 0.17
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
34 Russell Alpha Fund
Number
of Shares
Fair Value
USD ‘000
Fund
%
45,620 Kona Grill Inc ..................... 489 0.20
9,800
Lumber Liquidators
Holdings Inc ........................ 151 0.06
3,209 McDonald's Corp ................ 386 0.16
1,800 Shoe Carnival Inc ................ 45 0.02
26,814
Sportsman's Warehouse
Holdings Inc ........................ 216 0.09
2,824 Target Corp ......................... 197 0.08
6,301 Wal-Mart Stores Inc ............ 460 0.19
14,241 Zoe's Kitchen Inc ................. 517 0.21
Savings and Loans
33,200 Investors Bancorp Inc .......... 368 0.15
28,500 Meridian Bancorp Inc .......... 421 0.17
27,300
Northfield Bancorp
Inc ....................................... 405 0.17
Semiconductor Equipment and Products
26,841 Applied Materials Inc .......... 643 0.26
26,800
Applied Micro Circuits
Corp ..................................... 172 0.07
77,200 Exar Corp ............................ 621 0.26
20,126 Inphi Corp ........................... 645 0.26
13,988 Intel Corp ............................ 459 0.19
15,300 Ultratech Inc ........................ 351 0.14
28,500 Xcerra Corp ......................... 164 0.07
Software
22,600 Digi International Inc .......... 241 0.10
11,489 Guidewire Software Inc ...... 709 0.29
4,510 HubSpot Inc ........................ 195 0.08
19,100 InnerWorkings Inc ............... 157 0.07
15,065 Mindbody Inc ...................... 242 0.10
28,864 Oracle Corp ......................... 1,182 0.48
9,768 Proofpoint Inc ...................... 616 0.25
9,000 QAD Inc .............................. 173 0.07
1,708 Tyler Technologies Inc ........ 285 0.12
2,821
Ultimate Software Group
Inc ....................................... 593 0.24
Telecommunications
11,000 Aerohive Networks Inc ....... 73 0.03
1,400 Finisar Corp ......................... 25 0.01
5,300 Ooma Inc ............................. 43 0.02
3,100 Plantronics Inc ..................... 136 0.05
18,600 Viavi Solutions Inc .............. 123 0.05
Textile and Apparel
9,900 Crocs Inc ............................. 112 0.04
75,774
Sequential Brands Group
Inc ....................................... 605 0.25
Transport
9,260
Air Transport Services
Group Inc ............................ 120 0.05
9,800 Celadon Group Inc .............. 80 0.03
22,494
Knight Transportation
Inc ....................................... 598 0.25
7,688
Old Dominion Freight Line
Inc ....................................... 464 0.19
Number
of Shares
Fair Value
USD ‘000
Fund
%
16,900 Rand Logistics Inc .............. 17 0.01
14,576
United Parcel Service
Inc ....................................... 1,570 0.64
Water Utilities
6,200
California Water Service
Group .................................. 217 0.09
79,049 32.42
Total Common Stock ........ 203,794 83.57
Preferred Stock (1.07%) (2015: 1.39%)
Brazil (1.07%)
Banks
74,592 Banco Bradesco SA ............ 586 0.24
Electric Utilities
65,100
Centrais Eletricas Brasileiras
SA ....................................... 358 0.15
Iron and Steel
66,407 Vale SA .............................. 270 0.11
Oil and Gas
279,655 Petroleo Brasileiro SA ........ 822 0.34
Retail Trade
113,542 Lojas Americanas SA ......... 570 0.23
Total Preferred Stock ....... 2,606 1.07
Warrants (0.53%) (2015: 0.94%)
Netherlands (0.50%)
4,549 HCL Technologies Ltd ....... 49 0.02
16,164
Tata Consultancy Services
Ltd ...................................... 610 0.24
94,511 Titan Co Ltd ........................ 571 0.24
1,230 0.50
France (0.03%)
43,275 Peugeot SA ......................... 76 0.03
Total Warrants .................. 1,306 0.53
Total Transferable
Securities ........................... 207,706 85.17
Investment Funds (9.70%) (2015: 8.79%)
Ireland (5.69%)
13,122,222
BNY Mellon Absolute
Return Equity Fund ............. 13,717 5.63
13,498
iShares Gold Producers
UCITS ETF ......................... 156 0.06
13,873 5.69
Luxembourg (4.01%)
108,005
Fulcrum UCITS SICAV -
Fulcrum Alternative Beta
Plus Daily Fund .................. 9,784 4.01
Total Investment Funds .... 23,657 9.70
Total Investments
excluding Financial
Derivative Instruments ..... 231,363 94.87
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Alpha Fund 35
Financial Derivative Instruments (3.66%) (2015:2.30)
Open Futures Contracts (0.49%) (2015: 1.00%)
Notional
Amount
USD ‘000
Average
Cost Price
USD
Unrealised
Gain (Loss)
USD ‘000
Fund
%
(8,857) (7,979.34)
111 of Swiss Market Index Futures
Short Futures Contracts
Expiring September 2016 .......................................... (235) (0.10)
(17,493) (7,987.58)
219 of FTSE 100 Index Futures
Short Futures Contracts
Expiring September 2016 .......................................... (1,310) (0.54)
(59,163) (1,183.26)
500 of Russell 2000 Mini Index Futures
Short Futures Contracts
Expiring September 2016 .......................................... 1,793 0.73
(32,333) (822.72)
786 of Mini MSCI Emerging Markets Index
Futures
Short Futures Contracts
Expiring September 2016 .......................................... (471) (0.19)
(41,066) (2,105.93)
390 of S&P 500 E Mini Index Futures
Short Futures Contracts
Expiring September 2016 .......................................... 307 0.13
(999) (18,156.45)
11 of FTSE 100 Index Futures
Short Futures Contracts
Expiring September 2016 .......................................... 9 0.00
(1,403) (467.71)
15 of Amsterdam Index Futures
Short Futures Contracts
Expiring July 2016 .................................................... (48) (0.02)
(20,058) (3,178.80)
631 of Euro Stoxx 50 Index Futures
Short Futures Contracts
Expiring September 2016 .......................................... 44 0.02
(3,478) (10,700.11)
13 of DAX Index Futures
Short Futures Contracts
Expiring September 2016 .......................................... (13) (0.01)
(643) (2,572.23)
5 of Hang Seng Index Futures
Short Futures Contracts
Expiring July 2016 .................................................... (32) (0.01)
(1,750) (624.92)
14 of S&P TSX 60 Index Futures
Short Futures Contracts
Expiring September 2016 .......................................... (6) 0.00
(1,353) (9,017.58)
15 of IBEX 35 Index Futures
Short Futures Contracts
Expiring July 2016 .................................................... (2) 0.00
(19,935) (12.94)
154 of TOPIX Index Futures
Short Futures Contracts
Expiring September 2016 .......................................... 1,239 0.51
(3,944) (4,694.87)
84 of CAC 40 Index Futures
Short Futures Contracts
Expiring July 2016 .................................................... (7) 0.00
(1,249) (3,844.08)
13 of SPI 200 Index Futures
Short Futures Contracts
Expiring September 2016 .......................................... (3) 0.00
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
36 Russell Alpha Fund
Notional
Amount
USD ‘000
Average
Cost Price
USD
Unrealised
Gain (Loss)
USD ‘000
Fund
%
(2,100) (151.06)
139 of OMX 30 Index Futures
Short Futures Contracts
Expiring July 2016 .................................................... (63) (0.03)
Unrealised gain on open futures contracts ...................................................................... 3,392 1.39
Unrealised loss on open futures contracts ....................................................................... (2,190) (0.90)
Net unrealised gain (loss) on open futures contracts ................................................. 1,202 0.49
Open Forward Foreign Currency Exchange Contracts ((4.15)%) (2015:1.30%)
Settlement
Date
Amount
Bought '000
Amount
Sold '000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
08/07/2016 AUD 438 USD 327 (1) 0.00
08/07/2016 AUD 438 USD 326 - 0.00
08/07/2016 AUD 438 USD 326 - 0.00
08/07/2016 AUD 270 USD 195 6 0.00
08/07/2016 CAD 570 USD 441 (2) 0.00
08/07/2016 CAD 570 USD 441 (2) 0.00
08/07/2016 CAD 570 USD 440 (2) 0.00
08/07/2016 CAD 327 USD 250 2 0.00
08/07/2016 CHF 160 USD 163 1 0.00
08/07/2016 CHF 2,191 USD 2,246 4 0.00
08/07/2016 CHF 2,191 USD 2,244 6 0.00
08/07/2016 CHF 2,191 USD 2,243 7 0.00
08/07/2016 CHF 330 USD 334 4 0.00
08/07/2016 EUR 1,652 USD 1,849 (14) (0.01)
08/07/2016 EUR 1,430 USD 1,589 (1) 0.00
08/07/2016 EUR 27,566 USD 30,782 (155) (0.06)
08/07/2016 EUR 27,543 USD 30,782 (180) (0.08)
08/07/2016 EUR 7,473 USD 8,324 (21) (0.01)
08/07/2016 EUR 27,556 USD 30,782 (165) (0.07)
08/07/2016 EUR 7,473 USD 8,312 (8) 0.00
08/07/2016 EUR 27,556 USD 30,782 (166) (0.07)
08/07/2016 EUR 7,473 USD 8,308 (4) 0.00
08/07/2016 EUR 840 USD 939 (6) 0.00
08/07/2016 GBP 19,750 USD 28,915 (2,513) (1.03)
08/07/2016 GBP 19,743 USD 28,915 (2,522) (1.03)
08/07/2016 GBP 3,279 USD 4,415 (32) (0.01)
08/07/2016 GBP 19,751 USD 28,915 (2,511) (1.03)
08/07/2016 GBP 3,279 USD 4,411 (27) (0.01)
08/07/2016 GBP 19,746 USD 28,915 (2,519) (1.03)
08/07/2016 GBP 3,279 USD 4,409 (25) (0.01)
08/07/2016 GBP 194 USD 283 (23) (0.01)
08/07/2016 GBP 130 USD 187 (14) (0.01)
08/07/2016 HKD 1,278 USD 165 - 0.00
08/07/2016 HKD 1,278 USD 165 - 0.00
08/07/2016 HKD 1,278 USD 165 - 0.00
08/07/2016 HKD 1,030 USD 133 - 0.00
08/07/2016 JPY 535,189 USD 5,208 10 0.00
08/07/2016 JPY 535,189 USD 5,207 10 0.00
08/07/2016 JPY 535,189 USD 5,209 8 0.00
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Alpha Fund 37
Settlement
Date
Amount
Bought '000
Amount
Sold '000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
08/07/2016 JPY 68,130 USD 622 42 0.02
08/07/2016 SEK 960 USD 113 - 0.00
08/07/2016 SEK 4,600 USD 544 (1) 0.00
08/07/2016 SEK 4,600 USD 543 - 0.00
08/07/2016 SEK 4,600 USD 543 - 0.00
08/07/2016 USD 489 AUD 674 (13) (0.01)
08/07/2016 USD 489 AUD 674 (13) (0.01)
08/07/2016 USD 489 AUD 674 (13) (0.01)
08/07/2016 USD 107 CAD 140 (1) 0.00
08/07/2016 USD 592 CAD 772 (2) 0.00
08/07/2016 USD 118 CAD 150 2 0.00
08/07/2016 USD 593 CAD 772 (2) 0.00
08/07/2016 USD 593 CAD 772 (2) 0.00
08/07/2016 USD 2,436 CHF 2,408 (36) (0.01)
08/07/2016 USD 236 CHF 230 (1) 0.00
08/07/2016 USD 2,438 CHF 2,408 (34) (0.01)
08/07/2016 USD 1,823 CHF 1,802 (26) (0.01)
08/07/2016 USD 2,437 CHF 2,408 (36) (0.01)
08/07/2016 USD 2,572 EUR 2,300 17 0.01
08/07/2016 USD 8,772 EUR 7,856 44 0.02
08/07/2016 USD 546 EUR 480 12 0.00
08/07/2016 USD 8,780 EUR 7,856 51 0.02
08/07/2016 USD 6,496 EUR 5,816 35 0.01
08/07/2016 USD 8,775 EUR 7,856 47 0.02
08/07/2016 USD 4,663 EUR 4,183 15 0.01
08/07/2016 USD 4,307 GBP 2,968 340 0.14
08/07/2016 USD 5,065 GBP 3,460 440 0.18
08/07/2016 USD 290 GBP 220 (4) 0.00
08/07/2016 USD 2,110 GBP 1,475 139 0.06
08/07/2016 USD 5,067 GBP 3,460 442 0.19
08/07/2016 USD 3,877 GBP 2,648 337 0.15
05/08/2016 USD 5,066 GBP 3,460 441 0.19
05/08/2016 USD 59 HKD 460 - 0.00
05/08/2016 USD 244 HKD 1,893 - 0.00
05/08/2016 USD 244 HKD 1,893 - 0.00
05/08/2016 USD 244 HKD 1,893 - 0.00
05/08/2016 USD 9,141 JPY 1,014,147 (745) (0.32)
05/08/2016 USD 9,148 JPY 1,014,147 (738) (0.31)
05/08/2016 USD 1,629 JPY 180,592 (132) (0.06)
05/08/2016 USD 2,328 SEK 19,360 42 0.02
05/08/2016 USD 327 AUD 438 1 0.00
05/08/2016 USD 326 AUD 438 - 0.00
05/08/2016 USD 326 AUD 438 - 0.00
05/08/2016 USD 441 CAD 570 2 0.00
05/08/2016 USD 441 CAD 570 2 0.00
05/08/2016 USD 440 CAD 570 2 0.00
05/08/2016 USD 2,249 CHF 2,191 (5) 0.00
05/08/2016 USD 2,247 CHF 2,191 (7) 0.00
05/08/2016 USD 2,247 CHF 2,191 (7) 0.00
05/08/2016 USD 8,333 EUR 7,473 22 0.01
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
38 Russell Alpha Fund
Settlement
Date
Amount
Bought '000
Amount
Sold '000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
05/08/2016 USD 8,320 EUR 7,473 8 0.00
05/08/2016 USD 8,316 EUR 7,473 4 0.00
05/08/2016 USD 4,417 GBP 3,279 33 0.01
05/08/2016 USD 4,412 GBP 3,279 27 0.01
05/08/2016 USD 4,410 GBP 3,279 25 0.01
05/08/2016 USD 165 HKD 1,278 - 0.00
05/08/2016 USD 165 HKD 1,278 - 0.00
05/08/2016 USD 165 HKD 1,278 - 0.00
05/08/2016 USD 5,212 JPY 535,189 (10) 0.00
05/08/2016 USD 5,212 JPY 535,189 (10) 0.00
05/08/2016 USD 5,214 JPY 535,189 (8) 0.00
05/08/2016 USD 545 SEK 4,600 1 0.00
05/08/2016 USD 544 SEK 4,600 - 0.00
05/08/2016 USD 543 SEK 4,600 - 0.00
Unrealised gain on open forward foreign currency exchange contracts ................................ 2,631 1.08
Unrealised loss on open forward foreign currency exchange contracts ................................ (12,759) (5.23)
Net unrealised gain (loss) on open forward foreign currency exchange contracts ............................. (10,128) (4.15)
Total Financial Derivative Instruments ................................................................................................. (8,926) (3.66)
Fair Value
USD ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or Loss
(97.34%) ............................................................................................................................... 237,386 97.34
Total Financial Liabilities at Fair Value through Profit or
Loss ((6.13)%) ...................................................................................................................... (14,949) (6.13)
Net Financial Assets at Fair Value through Profit or Loss
(91.21%) .................................................................................................................................................... 222,437 91.21
Other Net Assets (8.79%) ......................................................................................................................... 21,434 8.79
Net Assets .................................................................................................................................................. 243,871 100.00
Abbreviation used:
ADR – American Depositary Receipt
GDR – Global Depositary Receipt
Analysis of gross assets (unaudited)
% of
gross assets
Transferable securities admitted to an official stock exchange listing ..................................................................... 79.96
Investment Funds (UCITS) ...................................................................................................................................... 9.11
Exchange trades financial derivative instruments .................................................................................................... 1.31
Over the counter financial derivative instruments ................................................................................................... 1.01
Other assets .............................................................................................................................................................. 8.61
100.00
The broker for the open futures contracts is Morgan Stanley.
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Alpha Fund 39
The counterparties for the open forward foreign currency exchange contracts are:
Bank of America
Bank of Montreal
BNP Paribas
Brown Brothers Harriman & Co
Commonwealth Bank of Australia
HSBC
Royal Bank of Canada
State Street Bank and Trust
UBS AG
Fair Value Hierarchy (Note 12 b i))
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 June 2016 and 30 June 2015.
As at 30 June 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 ............................................................... 206,400 1,306 - 207,706
Investment funds ........................................................................ 156 23,501 - 23,657
Unrealised gain on open futures contracts ..................................... 3,392 - - 3,392
Unrealised gain on forward foreign currency exchange
contracts ........................................................................................ - 2,631 - 2,631
Total assets ...................................................................................... 209,948 27,438 - 237,386
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ..................................... (2,190) - - (2,190)
Unrealised loss on forward foreign currency exchange
contracts ........................................................................................ - (12,759) - (12,759)
Total liabilities ................................................................................ (2,190) (12,759) - (14,949)
As at 30 June 2015
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 ............................................................... 176,506 1,960 - 178,466
Investment funds ........................................................................ 154 19,740 - 19,894
Unrealised gain on open futures contracts ..................................... 2,370 - - 2,370
Unrealised gain on forward foreign currency exchange
contracts ........................................................................................ - 4,369 - 4,369
Total assets ...................................................................................... 179,030 26,069 - 205,099
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ..................................... (103) - - (103)
Unrealised loss on forward foreign currency exchange
contracts ........................................................................................ - (1,422) - (1,422)
Total liabilities ................................................................................ (103) (1,422) - (1,525)
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Changes in Composition of Portfolio (unaudited)
Listed below are the 20 largest cumulative investment purchases and sales during the financial year ended 30 June 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.
40 Russell Alpha Fund
Portfolio Securities
Acquisition Cost
USD ‘000 Portfolio Securities
Disposal Proceeds
USD ‘000
BNY Mellon Absolute Return Equity Western Digital Corp (2,806)
Fund 11,000 Seagate Technology Plc (2,528)
Zimmer Biomet Holdings Inc 2,898 Micron Technology Inc (2,359)
Bayer AG 2,210 Corning Inc (1,852)
Western Digital Corp 2,159 Pfizer Inc (1,794)
Micron Technology Inc 2,126 Reckitt Benckiser Group Plc (1,759)
Time Warner Inc 2,029 Zimmer Biomet Holdings Inc (1,722)
Reckitt Benckiser Group Plc 2,019 Legrand SA (1,616)
Legrand SA 1,952 Discover Financial Services (1,596)
Wirecard AG 1,952 Target Corp (1,571)
Renault SA 1,893 Oracle Corp (1,530)
Thermo Fisher Scientific Inc 1,868 Time Warner Inc (1,505)
Seagate Technology Plc 1,864 Anacor Pharmaceuticals Inc (1,487)
Peugeot SA 1,701 Pinnacle Foods Inc (1,480)
Visa Inc 1,700 Thermo Fisher Scientific Inc (1,460)
Valeo SA 1,659 Cott Corp (1,421)
Pfizer Inc 1,656 Carrefour SA (1,420)
Walt Disney Co 1,609 Renault SA (1,404)
Medtronic Plc 1,589 Visa Inc (1,386)
Accenture Plc 1,571 Accenture Plc (1,370)
Honeywell International Inc 1,563
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Manager’s Report
Russell Multi Strategy Volatility Fund 41
Money Manager as at 30 June 2016 Russell Investment Management, LLC
Investment Objective Russell Multi Strategy Volatility Fund (the “Fund”) seeks to achieve its investment objective by investing in eligible financial
indices through Financial Derivative Instruments (“FDI”) (exchange traded or over-the-counter and including futures and options)
with the aim of the FDI being to remove directional or market exposure and for hedging or efficient portfolio management
purposes. For the purposes of covering the FDI positions, the Fund will invest in cash and cash equivalents (including money
market instruments, cash deposits, commercial paper and certificates of deposit).
Fund Performance
During financial year ended 30 June 2016, the Fund returned -8.5 per cent on a gross-of-fee basis (-10.2 per cent on a net-of-fee*
basis), while the benchmark* returned 6.4 per cent. (USD returns)
General Comment on Market and Fund
The Fund is a return seeking strategy that aims to benefit from several different aspects of market volatility and how it is priced
and traded. The strategy seeks to capture what is known as “volatility risk premia”, which is the difference between the volatility
of the targeted index which is anticipated by the market and the actual volatility which the targeted index eventually realises.
The Russell 1000 Index declined 6.8 per cent over the third quarter of 2015. China’s currency devaluation, amid slowing
economic growth, gave rise to a severe sell off in U.S. and global markets. These adverse international developments, in turn,
became a lead factor in preventing the U.S. Federal Reserve (the “Fed”) from raising its interest rate in September. While the
market initially spiked higher following news of the Fed hike delay, investors grew more concerned about global economic
growth, tilting demand away from risk and towards safe haven assets, such as treasuries. After the Fed’s September meeting,
Chair Yellen stated that, despite recent international developments, domestically “the economy has been performing well, and we
expect it to continue to do so”. At the time, second-quarter Gross Domestic Product (GDP) had been revised upwards to 3.7 per
cent, and was later revised higher to 3.9 per cent. Unemployment slipped to 5.1 per cent for August, its lowest in seven years,
assisted by a decline in the participation rate. However, non-farm payrolls missed expectations at 173,000 in August, following
upwardly revised readings for June (245,000) and July (223,000). Inflation was also lacklustre, slipping to -0.1 per cent in August
having read 0.3 per cent in June.
The Russell 1000 Index rose 6.5 per cent over the fourth quarter of 2015. In some regards the period was a repeat of the third
quarter, as anxiety from slowing growth and policy execution in China, combined with an ongoing commodities rout (especially
in oil) drove market volatility. However, before the curtains closed for the year, the Fed finally raised its benchmark interest rate,
an event which had been largely priced in by the markets. This crystallised a diverging central bank policy environment between
the more hawkish U.S. and (to a lesser extent) U.K., versus loose monetary policies in Europe (where the European Central Bank
eased further) and Japan. Economic growth was healthy, with third quarter GDP expanding 2.0 per cent. Employment numbers
were also supportive, as the unemployment rate remained within the 5.0 per cent range and non-farm payrolls increased
comfortably above 200,000 each month during the quarter. Driven by overall positive economic growth, strong employment as
well as housing data, the Fed’s Open Market Committee (FOMC) unanimously decided to lift the interest rate by 25 basis points
to 0.5 per cent. The central bank’s accompanying statement revealed that its policy would “remain accommodative” and that “the
actual path of [increases in] the federal funds rate will depend on the economic outlook as informed by incoming data”.
The Russell 1000 Index rose 1.2 per cent over the first quarter of 2016. The period was characterised by two halves. The first half
of the quarter was characterised by slowing growth in China coupled with an ongoing commodities rout (especially in oil), which
contributed to significant market volatility and substantial risk-off sentiment. However, in the latter part of the quarter there was a
rebound in the traditional cyclical areas of the market driven in part by more dovish rhetoric from the Fed alongside oil price
stabilisation. GDP growth during the fourth quarter of 2015 was revised further upwards to 1.4 per cent. Nonfarm payrolls also
rose by 242,000 in February and the core inflation rate (2.3 per cent in February) was slightly above expectations of 2.2 per cent.
However, at the first quarter FOMC meeting, Fed Chair Yellen explained that even though domestic “economic forecasts have
not changed much since December”, this was being overshadowed by “global economic and financial developments”, posing a
risk to growth. As a result, FOMC “dots” reduced to two possible interest rate hikes this year down from four earlier in the year.
The Russell 1000 Index rose 2.5 per cent over the second quarter of 2016. U.S. markets gained over the period despite the
startling result of the U.K.’s referendum on European Union membership. U.K.’s decision to leave the E.U. threw worldwide
markets into turmoil in the last days of June. However, equities were bolstered during the period by stronger oil prices and a more
cautious Fed. The final first quarter GDP growth rate was revised upwards to 1.1 per cent, beating estimates of 1.0 per cent.
However, a poor jobs report in May, with non-farm payrolls only advancing by 38,000 versus the 164,000 expected, seriously
dented hopes for a June Fed rate hike. Inflation also continued to remain below target at 1.0 per cent in May, whilst retail sales
(2.5 per cent) did not match estimates for a 3.0 per cent growth over the same period. This mixed economic data, combined with
market uncertainties, left the Fed in a position to be more cautious in raising interest rates for the rest of the year.
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Manager’s Report - continued
42 Russell Multi Strategy Volatility Fund
Company’s Market Outlook
Our strategists have a broadly neutral view between equities and bonds
Equities: Our regional equity positioning is close to neutral
We are underweight the U.S. relative to other major developed regions mostly because of valuation. This underweight is fairly
evenly distributed as small overweights to the other regions. We’re neutral Emerging Markets (EM), where attractive valuations
are offset by business cycle headwinds from deleveraging risks, along with the potential for further Fed tightening.
Fixed income: Bond yields are likely to rise, but only modestly
Our process scores government bonds poorly on value as 10 year yields in all the major developed markets are near record lows at
the end of the second quarter of 2016. On balance, however, the cycle is neutral. Cycle pressures are moderately negative in the
U.S. where wages are gradually picking up and putting pressure on the Fed to raise rates. But the cycle is more supportive of bond
markets in the rest of the developed world. Both the European Central Banks and Bank of Japan (BoJ) are contemplating further
unconventional easing to bolster inflation expectations. The net result is that the upward pressure on bond yields from inflation
pressures in the U.S. will be muted by deflation pressures in the rest of the world.
Currencies: A sideways move for major currencies
Even with Brexit, we think that the major currencies will stay in the ranges they have traded in since the beginning of the year,
albeit with the USD pushing towards the top of that range. There is some downside risk for the Euro and Japanese Yen if central
banks adopt more unconventional easing. But this is likely to be limited, since both currencies are relatively cheap and have
already priced in significant monetary policy accommodation. We like the value in Emerging Market (EM) currencies, but the
downside risks to the Chinese Renminbi keep us concerned about the risks of further depreciation for EM currencies in general.
Conclusion: Noise outweighing signals
Fading cycle fundamentals and flat equity market momentum suggest that markets are being driven more by noise than
fundamentals. We worry that risk assets, like equities and corporate credit, are vulnerable to bad news. However, our low
expectation of a U.S. and global recession means that we are willing to “buy the dips”. Without strong buy signals, we remain
cautious and have fairly neutral asset class views. However, we are remaining vigilant on signals to “buy the dips”, and “sell the
rallies”.
Past performance is no indication of present or future performance.
* Benchmark Source: USD Libor 1 Month +6 per cent pa
Russell Investments Ireland Limited
August 2016
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Balance Sheet
As at 30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Multi Strategy Volatility Fund 43
30 June 2016
USD ‘000
30 June 2015
USD ‘000
Assets
Financial assets at fair value through profit or loss (Note 2) ................................................ 171,209 211,427
Cash at bank (Note 3) ........................................................................................................... 40,024 34,881
Cash held with brokers and counterparties for open financial derivative instruments
(Note 3) ................................................................................................................................. 10,748 5,806
Debtors:
Receivable for investments sold .......................................................................................... - 844
Receivable on fund shares issued ........................................................................................................... - 102
Interest receivable ................................................................................................................ 123 124
222,104 253,184
Liabilities
Financial liabilities at fair value through profit or loss (Note 2) ...................................... (15,564) (18,523)
Creditors – amounts falling due within one financial year:
Payable on fund shares redeemed ....................................................................................... (100) -
Management fees payable ................................................................................................... (309) (344)
Depositary fees payable ...................................................................................................... (9) (3)
Sub-custodian fees payable ................................................................................................. (14) (6)
Administration fees payable ................................................................................................ (6) (10)
Audit fees payable ............................................................................................................... (24) (24)
Other fees payable ............................................................................................................... (3) -
(16,029) (18,910)
Net asset value attributable to redeemable participating shareholders ......................... 206,075 234,274
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Profit and Loss Account
For the financial year ended 30 June 2016
The accompanying notes are an integral part of the financial statements.
44 Russell Multi Strategy Volatility Fund
2016
USD ‘000
2015*
USD ‘000
Income
Interest income .............................................................................................................................................. 521 142
Net gain (loss) on investment activities (Note 4) .................................................................. (21,908) 12,553
Total investment income (expense) ................................................................................... (21,387) 12,695
Expenses
Management fees (Note 5) .................................................................................................. (4,672) (1,150)
Depositary fees (Note 6) ...................................................................................................... (26) (5)
Sub-custodian fees (Note 6) ................................................................................................ (54) (11)
Administration and transfer agency fees (Note 6) ............................................................... (107) (24)
Audit fees (Note 6) .............................................................................................................. (24) (24)
Professional fees .................................................................................................................. (26) (10)
Other fees ............................................................................................................................ (28) -
Total operating expenses .................................................................................................... (4,937) (1,224)
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ............................................................................ (26,324) 11,471
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.
* The Fund launched on 29 January 2015.
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the financial year ended 30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Multi Strategy Volatility Fund 45
2016
USD ‘000
2015*
USD ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations .................................................................................... (26,324) 11,471
Share transactions
Net increase (decrease) in net assets resulting from redeemable participating share
transactions (Note 10) ......................................................................................................... (1,875) 222,803
Total net increase in net assets attributable to redeemable participating
shareholders ................................................................................................................................ (28,199) 234,274
Net assets attributable to redeemable participating shareholders
Beginning of financial year ................................................................................................. 234,274 -
End of financial year ........................................................................................................... 206,075 234,274
* The Fund launched on 29 January 2015.
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Investments
30 June 2016
The accompanying notes are an integral part of the financial statements.
46 Russell Multi Strategy Volatility Fund
Principal
Amount
Fair Value
USD ‘000
Fund
%
Transferable Securities (11.25%) (2015: 28.16%)
Long Term Bonds and Notes (0.96%) (2015:
15.73%)
Toyota Motor Credit Corp
USD 2,000,000 1.026% due 12/03/20 ....... 1,988 0.96
Total Long Term Bonds
and Notes ............................ 1,988 0.96
Short Term Investments (10.29%) (2015:
12.43%)
Sweden (0.40%)
Svenska Handelsbanken AB
833,000 3.125% due 12/07/16 ....... 833 0.40
United States (11.35%)
Federal Home Loan Bank
2,275,000
Zero Coupon due
19/07/16 ........................... 2,275 1.10
5,000,000
Zero Coupon due
27/07/16 ........................... 4,999 2.43
Federal Home Loan Bank
Discount Notes
600,000
Zero Coupon due
06/07/16 ........................... 600 0.29
4,300,000
Zero Coupon due
13/07/16 ........................... 4,300 2.09
5,400,000
Zero Coupon due
20/07/16 ........................... 5,400 2.62
1,800,000
Zero Coupon due
22/07/16 ........................... 1,800 0.87
International Bank for
Reconstruction &
Development
1,000,000 0.453% due 26/07/16 ....... 1,000 0.49
Total Short Term
Investments ........................ 21,207 10.29
Total Transferable
Securities ............................ 23,195 11.25
Certificates of Deposit (5.31%) (2015: 3.97%)
France (1.12%)
Societe Generale
Institutional
1,500,000 0.580% due 01/07/16 ....... 1,500 0.73
Credit Agricole SA
810,000 0.860% due 07/07/16 ....... 811 0.39
2,311 1.12
Japan (0.44%)
Mizuho Bank Ltd
900,000 0.700% due 01/07/16 ....... 900 0.44
Sweden (0.48%)
Svenska Handelsbanken AB
1,000,000 0.827% due 17/01/17 ....... 1,000 0.48
Principal
Amount
Fair Value
USD ‘000
Fund
%
United States (3.27%)
Citibank
2,000,000 0.710% due 07/07/16 ...... 2,000 0.97
HSBC Bank USA
2,239,000 0.860% due 14/11/16 ...... 2,240 1.09
State Street Bank and Trust
2,500,000 0.848% due 07/12/16 ...... 2,500 1.21
6,740 3.27
Total Certificates of
Deposit ............................... 10,951 5.31
Commercial Papers (26.61%) (2015: 14.59%)
Bermuda (1.21%)
Novartis Securities
Investment
2,495,000
Zero Coupon due
12/07/16 .......................... 2,495 1.21
Canada (3.48%)
Caisse Centrale Desjardins
2,400,000
Zero Coupon due
05/07/16 .......................... 2,400 1.17
Ontario Teachers Finance
Trust
1,365,000
Zero Coupon due
04/10/16 .......................... 1,362 0.66
Province of Ontario
1,000,000
Zero Coupon due
11/07/16 .......................... 1,000 0.49
Province of Quebec
2,400,000
Zero Coupon due
08/07/16 .......................... 2,400 1.16
7,162 3.48
France (1.21%)
BNP Paribas SA
2,500,000
Zero Coupon due
06/07/16 .......................... 2,500 1.21
Japan (1.17%)
Bank of Tokyo Mitsubishi
UFJ Ltd
2,400,000
Zero Coupon due
05/07/16 .......................... 2,400 1.17
Luxembourg (1.16%)
European Investment Bank
2,400,000
Zero Coupon due
26/07/16 .......................... 2,399 1.16
Netherlands (1.16%)
Cooperatieve Centrale
Rabobank
2,400,000
Zero Coupon due
06/07/16 .......................... 2,400 1.16
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Multi Strategy Volatility Fund 47
Principal
Amount
Fair Value
USD ‘000
Fund
%
Norway (1.24%)
DNB ASA
2,550,000
Zero Coupon due
19/08/16 ........................... 2,548 1.24
United States (15.98%)
Anheuser-Busch InBev
Worldwide Inc
1,500,000
Zero Coupon due
07/07/16 ........................... 1,500 0.73
Apple Inc
2,400,000
Zero Coupon due
06/07/16 ........................... 2,400 1.17
Atlantic Asset Securitization
1,520,000
Zero Coupon due
15/07/16 ........................... 1,520 0.74
Barton Capital LLC
700,000
Zero Coupon due
06/07/16 ........................... 700 0.34
Coca-Cola Co
1,000,000
Zero Coupon due
04/01/17 ........................... 995 0.48
Eni Finance USA
2,500,000
Zero Coupon due
05/07/16 ........................... 2,500 1.21
Export Development
Corporation
1,500,000
Zero Coupon due
05/07/16 ........................... 1,500 0.73
Fairway Finance Company
LLC
1,223,000
Zero Coupon due
15/07/16 ........................... 1,223 0.59
Gotham Funding Corporation
2,500,000
Zero Coupon due
13/07/16 ........................... 2,500 1.21
Jupiter Securitization Co LLC
1,880,000
Zero Coupon due
01/07/16 ........................... 1,880 0.91
Manhattan Asset Funding
LLC
2,000,000
Zero Coupon due
18/07/16 ........................... 2,000 0.97
595,000
Zero Coupon due
20/07/16 ........................... 595 0.29
Nestle Capital Corp
1,225,000
Zero Coupon due
08/08/16 ........................... 1,223 0.59
Principal
Amount
Fair Value
USD ‘000
Fund
%
1,000,000
Zero Coupon
due 06/09/16 ................... 999 0.49
Nieuw Amsterdam
Receivables Corp
2,400,000
Zero Coupon due
08/07/16 ......................... 2,400 1.17
Old Line Funding LLC
2,000,000
Zero Coupon due
18/08/16 .......................... 1,998 0.97
PACCAR Financial Corp
2,500,000
Zero Coupon due
13/07/16 .......................... 2,500 1.21
Pfizer Inc
2,000,000
Zero Coupon due
25/08/16 .......................... 1,998 0.97
Sheffield Receivables Corp
2,500,000
Zero Coupon due
07/07/16 .......................... 2,500 1.21
32,931 15.98
Total Commercial Papers . 54,835 26.61
Money Market Instruments (29.06%) (2015:
36.30%)
United States (29.06%)
U.S. Treasury Bills
7,400,000
Zero Coupon due
21/07/16* ........................ 7,399 3.59
7,000,000
Zero Coupon due
25/08/16** ...................... 6,998 3.39
7,500,000
Zero Coupon due
06/10/16** ...................... 7,495 3.64
7,500,000
Zero Coupon due
08/09/16** ...................... 7,497 3.64
7,500,000
Zero Coupon
due 22/09/16** ................ 7,496 3.64
7,500,000
Zero Coupon due
11/08/16** ...................... 7,498 3.64
8,000,000
Zero Coupon due
13/10/16** ...................... 7,995 3.88
7,500,000
Zero Coupon due
18/08/16** ...................... 7,498 3.64
Total Money Market
Instruments ....................... 59,876 29.06
Total Investments
excluding Financial
Derivative Instruments ..... 148,857 72.23
Financial Derivative Instruments (3.29%) (2015: 0.69%)
Open Futures Contracts ((2.89)%) (2015: 0.07%)
Notional
Amount
USD ‘000
Average
Cost Price
USD
Unrealised
Gain (Loss)
USD ‘000
Fund
%
2,822
22.58
125 of CBOE Volatility Index Future
Long Futures Contracts
Expiring July 2016 .................................................... (700) (0.34)
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
48 Russell Multi Strategy Volatility Fund
Notional
Amount
USD ‘000
Average
Cost Price
USD
Unrealised
Gain (Loss)
USD ‘000
Fund
%
(3,159)
(21.06)
150 of CBOE Volatility Index Future
Short Futures Contracts
Expiring September 2016 .......................................... 272 0.13
1,876
20.85
90 of CBOE Volatility Index Future
Long Futures Contracts
Expiring December 2016 .......................................... (74) (0.04)
(172,223)
(2,026.16)
1700 of S&P 500 E Mini Index Futures
Long Futures Contracts
Expiring September 2016 .......................................... (5,444) (2.64)
Unrealised gain on open futures contracts ...................................................................... 272 0.13
Unrealised loss on open futures contracts ....................................................................... (6,218) (3.02)
Net unrealised loss on open futures contracts ............................................................ (5,946) (2.89)
Open Forward Foreign Currency Exchange Contracts (2.01%) (2015: 0.57%)
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
USD ‘000
Fund
%
08/07/2016 AUD 1,208 USD 899 - 0.00
08/07/2016 AUD 54,730 USD 39,666 1,081 0.52
08/07/2016 AUD 54,708 USD 39,666 1,065 0.52
08/07/2016 AUD 54,719 USD 39,666 1,073 0.52
08/07/2016 AUD 54,687 USD 39,666 1,049 0.51
08/07/2016 EUR 11 USD 12 - 0.00
08/07/2016 EUR 463 USD 517 (3) 0.00
05/08/2016 EUR 233 USD 259 - 0.00
08/07/2016 USD 7,836 AUD 10,696 (127) (0.06)
08/07/2016 USD 259 EUR 228 5 0.00
08/07/2016 USD 271 EUR 244 - 0.00
Unrealised gain on open forward foreign currency exchange contracts ......................................... 4,273 2.07
Unrealised loss on open forward foreign currency exchange contracts .......................................... (130) (0.06)
Net unrealised gain on open forward foreign currency exchange contracts ........................... 4,143 2.01
Options Purchased (8.64%) (2015: 6.29%)
Notional
Amount
USD ‘000
Fair Value
USD ‘000
Fund
%
United States
2300
Call at 30 of CBOE Volatility Index
Expiring October 2016 ................................................................................................. 241 0.12
5000
Call at 23 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 113 0.05
6800
Put at 15 of CBOE Volatility Index
Expiring December 2016 ............................................................................................. 459 0.22
6900
Put at 15 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 345 0.17
433
Call at 2,110 of S&P 500 Index
Expiring July 2016 ....................................................................................................... 776 0.38
1855
Put at 23 of CBOE Volatility Index
Expiring October 2016 ................................................................................................. 981 0.48
2300
Call at 27 of CBOE Volatility Index
Expiring December 2016 ............................................................................................. 390 0.19
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Multi Strategy Volatility Fund 49
Notional
Amount
USD ‘000
Fair Value
USD ‘000
Fund
%
6500
Put at 15 of CBOE Volatility Index
Expiring October 2016 ................................................................................................. 390 0.19
255
Call at 2,075 of S&P 500 Index
Expiring July 2016 ....................................................................................................... 1,111 0.54
4600
Call at 23 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 242 0.12
633
Call at 2,200 of S&P 500 Index
Expiring July 2016 ....................................................................................................... 39 0.02
2766
Put at 24 of CBOE Volatility Index
Expiring August 2016 .................................................................................................. 1,860 0.89
6500
Put at 15 of CBOE Volatility Index
Expiring August 2016 .................................................................................................. 341 0.17
4600
Put at 15 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 219 0.11
4500
Put at 14 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 79 0.04
255
Put at 1,900 of S&P 500 Index
Expiring July 2016 ....................................................................................................... 76 0.04
3200
Put at 22 of CBOE Volatility Index
Expiring September 2016 ............................................................................................. 1,518 0.73
2766
Call at 35 of CBOE Volatility Index
Expiring October 2016 ................................................................................................. 179 0.09
2766
Put at 27 of CBOE Volatility Index
Expiring September 2016 ............................................................................................. 2,422 1.19
288
Call at 2,110 of S&P 500 Index
Expiring August 2016 .................................................................................................. 704 0.34
2766
Call at 32.5 of CBOE Volatility Index
Expiring December 2016 ............................................................................................. 276 0.13
288
Call at 2,100 of S&P 500 Index
Expiring August 2016 .................................................................................................. 934 0.45
288
Put at 1,900 of S&P 500 Index
Expiring August 2016 .................................................................................................. 165 0.08
5000
Put at 14.5 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 100 0.05
2500
Call at 23 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 200 0.10
2500
Call at 21 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 181 0.09
433
Call at 2,100 of S&P 500 Index
Expiring July 2016 ....................................................................................................... 804 0.38
922
Call at 25 of CBOE Volatility Index
Expiring November 2016 ............................................................................................. 177 0.09
2766
Call at 32.5 of CBOE Volatility Index
Expiring November 2016 ............................................................................................. 262 0.13
2355
Put at 14 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 12 0.01
9000
Put at 15 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 113 0.05
4400
Call at 22 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... 33 0.02
3233
Put at 22 of CBOE Volatility Index
Expiring August 2016 .................................................................................................. 1,629 0.78
6500
Put at 15 of CBOE Volatility Index
Expiring November 2016 ............................................................................................. 406 0.20
Total options purchased at fair value (Premium paid USD’000 16,859,598) ................. 17,807 8.64
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
50 Russell Multi Strategy Volatility Fund
Options Written ((4.47)%) (2015: (7.62)%)
Notional
Amount
USD ‘000
Fair Value
USD ‘000
Fund
%
(440)
Call at 15 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... (693) (0.34)
(43)
Put at 2,040 of S&P 500 Index
Expiring July 2016 ....................................................................................................... (464) (0.23)
(28)
Put at 1,950 of S&P 500 Index
Expiring August 2016 .................................................................................................. (194) (0.09)
(
(500)
Put at 16 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... (388) (0.19)
(9)
Put at 2,035 of S&P 500 Index
Expiring July 2016 ....................................................................................................... (54) (0.03)
(500)
Call at 15 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... (1,113) (0.54)
(230)
Call at 40 of CBOE Volatility Index
Expiring December 2016 ............................................................................................. (115) (0.06)
(276)
Call at 42.5 of CBOE Volatility Index
Expiring December 2016 ............................................................................................. (110) (0.05)
(100)
Put at 16 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... (37) (0.02)
(850)
Call at 26 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... (255) (0.12)
(250)
Call at 15 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... (619) (0.30)
(9)
Put at 2,030 of S&P 500 Index
Expiring July 2016 ....................................................................................................... (49) (0.02)
(9)
Put at 2,045 of S&P 500 Index
Expiring July 2016 ....................................................................................................... (65) (0.03)
(9)
Put at 2,050 of S&P 500 Index
Expiring July 2016 ....................................................................................................... (71) (0.03)
(710)
Put at 16 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... (675) (0.33)
(9)
Put at 2,040 of S&P 500 Index
Expiring July 2016 ....................................................................................................... (59) (0.03)
(276)
Call at 45 of CBOE Volatility Index
Expiring October 2016 ................................................................................................. (83) (0.04)
(595)
Put at 16 of CBOE Volatility Index
Expiring September 2016 ............................................................................................. (536) (0.26)
(28)
Call at 2,150 of S&P 500 Index
Expiring August 2016 .................................................................................................. (477) (0.23)
(28)
Put at 1,975 of S&P 500 Index
Expiring August 2016 .................................................................................................. (533) (0.26)
(250)
Call at 16 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... (663) (0.32)
(250)
Put at 16 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... (238) (0.12)
(460)
Call at 16 of CBOE Volatility Index
Expiring July 2016 ....................................................................................................... (886) (0.43)
(230)
Call at 40 of CBOE Volatility Index
Expiring October 2016 ................................................................................................. (92) (0.04)
(92)
Call at 35 of CBOE Volatility Index
Expiring November 201 ............................................................................................... 6 (69) (0.03)
(276)
Call at 42.5 of CBOE Volatility Index
Expiring November 2016 ............................................................................................. (110) (0.05)
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Multi Strategy Volatility Fund 51
Notional
Amount
USD ‘000
Fair Value
USD ‘000
Fund
%
(598)
Put at 16 of CBOE Volatility Index
Expiring August 2016 .................................................................................................. (568) (0.28)
Total options written at fair value (Premium received USD (15,729,137)) .................... (9,216) (4.47)
Total financial derivative instruments ...................................................................................................... 6,788 3.29
Fair Value
USD ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or
Loss (83.07%) ............................................................................................................................................ 171,209 83.07
Total Financial Liabilities at Fair Value through Profit or
Loss ((7.55)%) ........................................................................................................................................... (15,564) (7.55)
Net Financial Assets at Fair Value through Profit or
Loss (75.52%) ............................................................................................................................................ 155,645 75.52
Other Net Assets (24.48%) ....................................................................................................................... 50,430 24.48
Net Assets .................................................................................................................................................. 206,075 100.00
* Partly held as collateral by the brokers and counterparties in connection with the margin requirements for futures contracts and collateral
purposes for over the counter financial derivative instruments held by the Fund.
** Held as collateral by the brokers in connection with the margin requirements for futures contracts and collateral purposes for over the
counter financial derivative instruments held by the Fund.
Analysis of gross assets (unaudited)
% of
gross assets
Transferable securities admitted to an official stock exchange listing ..................................................................... 1.27
Transferable securities dealt in on another regulated market ................................................................................... 10.52
Certificate of deposits .............................................................................................................................................. 4.93
Commercial paper .................................................................................................................................................... 24.69
Money market instruments ....................................................................................................................................... 26.96
Exchange trades financial derivative instruments .................................................................................................... 8.14
Over the counter financial derivative instruments ................................................................................................... 1.92
Other assets .............................................................................................................................................................. 21.57
100.00
The broker for the open futures contracts is Goldman Sachs.
The counterparties for the open forward foreign currency exchange contracts are:
Bank of America
Bank of Montreal
Commonwealth Bank of Australia
HSBC Bank
Royal Bank of Canada
State Street Bank & Trust Company
The counterparty for the options is Goldman Sachs.
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
52 Russell Multi Strategy Volatility Fund
Fair Value Hierarchy (Note 12 b i))
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 June 2016 and 30 June 2015.
As at 30 June 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 ............................................................... - 23,195 - 23,195
Certificates of deposits .............................................................. - 10,951 - 10,951
Commercial paper ...................................................................... - 54,835 - 54,835
Money market instruments ........................................................ - 59,876 - 59,876
Unrealised gain on open futures contracts ..................................... 272 - - 272
Options purchased at fair value ..................................................... 17,807 - - 17,807
Unrealised gain on forward foreign currency exchange
contracts ........................................................................................ - 4,273 - 4,273
Total assets ...................................................................................... 18,079 153,130 - 171,209
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ..................................... (6,218) - - (6,218)
Options written at fair value .......................................................... (9,216) - - (9,216)
Unrealised loss on forward foreign currency exchange
contracts ........................................................................................ - (130) - (130)
Total liabilities ................................................................................ (15,434) (130) - (15,564)
As at 30 June 2015
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 ............................................................... - 65,971 - 65,971
Certificates of deposits .............................................................. - 9,300 - 9,300
Commercial paper ...................................................................... - 34,201 - 34,201
Money market instruments ........................................................ - 85,035 - 85,035
Unrealised gain on open futures contracts ..................................... 833 - - 833
Options purchased at fair value ..................................................... 14,723 - - 14,723
Unrealised gain on forward foreign currency exchange
contracts ........................................................................................ - 1,364 - 1,364
Total assets ...................................................................................... 15,556 195,871 - 211,427
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ..................................... (660) - - (660)
Options written at fair value .......................................................... (17,849) - - (17,849)
Unrealised loss on forward foreign currency exchange
contracts ........................................................................................ - (14) - (14)
Total liabilities ................................................................................ (18,509) (14) - (18,523)
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Changes in Composition of Portfolio (unaudited)
Listed below are cumulative investment purchases and cumulative investment sales in excess of 1 per cent of total investment
purchases or sales respectively during the financial year ended 30 June 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 Multi Strategy Volatility Fund 53
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 91,799 The U.S. Dollar Cash Fund II (91,825)
U.S. Treasury Bills U.S. Treasury Bills
Zero Coupon due 10/12/2015 59,998 Zero Coupon due 28/04/2016 (38,508)
Federal Home Loan Bank Discount Notes Zero Coupon due 03/03/2016 (35,014)
Zero Coupon due 16/10/2015 57,000 Federal Home Loan Bank Discount Notes
U.S. Treasury Bills Zero Coupon due 23/09/2015 (33,000)
Zero Coupon due 17/09/2015 52,500 U.S. Treasury Bills
Federal Agricultural Mortgage Corp Zero Coupon due 31/03/2016 (27,327)
Zero Coupon due 18/09/2015 37,000 Zero Coupon due 23/06/2016 (20,997)
Federal Home Loan Bank Discount Notes Zero Coupon due 01/10/2015 (20,000)
Zero Coupon due 30/09/2015 35,500 Zero Coupon due 15/10/2015 (20,000)
Zero Coupon due 23/09/2015 33,000 Zero Coupon due 12/11/2015 (19,999)
U.S. Treasury Bills Zero Coupon due 17/03/2016 (19,998)
Zero Coupon due 23/06/2016 32,295 Zero Coupon due 10/03/2016 (19,997)
Zero Coupon due 28/04/2016 30,986 U.S. Treasury Notes
Federal Home Loan Bank Discount Notes Zero Coupon due 07/01/2016 (15,020)
Zero Coupon due 07/10/2015 30,000 U.S. Treasury Bills
Zero Coupon due 05/01/2016 29,999 Zero Coupon due 04/02/2016 (15,015)
Zero Coupon due 28/12/2015 29,250 Zero Coupon due 17/09/2015 (15,000)
Federal Agricultural Mortgage Corp Federal Home Loan Bank Discount Notes
Zero Coupon due 17/09/2015 28,900 Zero Coupon due 30/09/2015 (10,700)
Federal Home Loan Bank Discount Notes U.S. Treasury Bills
Zero Coupon due 18/09/2015 28,700 Zero Coupon due 14/01/2016 (9,300)
Zero Coupon due 15/09/2015 28,499 Zero Coupon due 12/05/2016 (8,000)
U.S. Treasury Bills Zero Coupon due 26/05/2016 (7,500)
Zero Coupon due 24/12/2015 26,599 Zero Coupon due 10/12/2015 (7,499)
Federal Home Loan Bank Discount Notes Federal Home Loan Bank Discount Notes
Zero Coupon due 09/09/2015 25,000 Zero Coupon due 23/10/2015 (7,150)
Zero Coupon due 11/09/2015 25,000 Zero Coupon due 16/10/2015 (7,000)
U.S. Treasury Bills
Zero Coupon due 14/01/2016 24,298
Federal Home Loan Mortgage Corp
Zero Coupon due 07/10/2015 23,900
Federal Home Loan Bank Discount Notes
Zero Coupon due 16/09/2015 23,505
Federal Agricultural Mortgage Corp
Zero Coupon due 05/10/2015 20,219
Federal Home Loan Bank Discount Notes
Zero Coupon due 02/12/2015 20,025
Zero Coupon due 02/10/2015 20,000
U.S. Treasury Bills
Zero Coupon due 15/10/2015 20,000
Federal Home Loan Bank Discount Notes
Zero Coupon due 18/02/2016 20,000
U.S. Treasury Bills
Zero Coupon due 01/10/2015 20,000
Zero Coupon due 12/11/2015 19,999
Zero Coupon due 17/03/2016 19,996
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Changes in Composition of Portfolio (unaudited) - continued
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.
54 Russell Multi Strategy Volatility Fund
Portfolio Securities
Acquisition Cost
USD ‘000
Zero Coupon due 10/03/2016 19,996
Zero Coupon due 31/03/2016 19,996
Federal Agricultural Mortgage Corp
Zero Coupon due 06/10/2015 19,519
Federal Home Loan Bank Discount Notes
Zero Coupon due 14/01/2016 19,294
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Manager’s Report
Russell Global Regional Equity Fund 55
Money Manager as at 30 June 2016 Ceredex Value Advisors, LLC
Hermes Sourcecap Limited
HS Management Partners, LLC
Jacobs Levy Equity Management, Inc.
Lazard Asset Management, LLC
Mar Vista Investment Partners, LLC
Numeric Investors, LLC
Pzena Investment Management
Wellington Management Company
Zebra Capital Management
Fund Performance During financial year ended 30 June 2016, the Russell Global Regional Equity Fund (the “Fund”) (A Euro Class) returned -2.0
per cent on a gross-of-fee basis (-2.2 per cent on a net-of-fee basis), while the benchmark* returned -1.6 per cent.
Market Comment
Global equities, as measured by the benchmark fell 8.44 per cent in the third quarter of 2015. Early in the quarter, the renewed
bailout deal with Greece brought a degree of harmony in Europe. This positive development soon became a distant memory, as
two central stories unfolded over the period. In China, the country’s devaluation of its currency, amid slowing growth, gave rise
to a severe sell off in global markets. This, in turn, became a lead factor in preventing the U.S. Federal Reserve (the “Fed”) from
raising its interest rate in September. The combination of these major events engendered the fourth biggest quarterly increase in
volatility in the past 10 years, as measured by the Chicago Board Options Exchange’s Vix Index. It also handed over renewed
market uncertainty to the final quarter of this year.
The benchmark rose 8.4 per cent over the last quarter of 2015 but fell 4.5 per cent for the month of December. Global markets
gained in aggregate over the fourth quarter as the negative effects of China’s third-quarter slowdown began to fade and the Fed
moved towards policy tightening, exhibiting confidence in the American economy’s steady recovery. In Europe, investors were
slightly disappointed by the European Central Bank’s (the “ECB”) timid actions to quell sluggish growth, whilst the downward
trend of the oil price weighed on EM. In Japan, equities surged 9.2 per cent with the nation’s economy escaping a technical
recession as third quarter GDP growth was revised upwards from -0.8 per cent to +1.0 per cent on an annualised basis. The Bank
of Japan (BoJ) also left its interest rate unchanged and would continue to buy government bonds at an annual pace of YEN 80
trillion. EM had a positive quarter in aggregate, gaining 2.6 per cent. China recovered well, with equity markets moving up by 9.3
per cent. While exports figures were poor, other domestic economic data proved encouraging, including improving industrial
production figures and retail sales, as well as annualised GDP growth that exceeded expectations.
Global equities, as measured by the benchmark fell 5 per cent over the first quarter of 2016 in U.S. Dollar terms. The period was
characterised by two halves. In the first half, slowing growth in China coupled with an ongoing commodities rout (especially in
oil), engendered significant market volatility and a considerable risk off sentiment. However in the latter part of the quarter, more
accommodative central bank policies alongside oil price stabilisation, thawed sentiment for global equities to some degree. At the
Federal Open Market Committee (FOMC) meeting, Fed Chair Yellen explained that whilst economic “forecasts have not changed
much since December”, this was being overshadowed by “global economic and financial developments”, posing a risk to growth.
As a result, FOMC “dots” reduced to two possible interest rate hikes this year, as opposed to four. In Europe, the ECB President
Draghi delivered on his promise to do “whatever it takes” by introducing raft of new accommodative stimulus measures in an
effort to boost eurozone inflation and encourage new credit provision. The central bank reduced its main refinancing rate to 0.0
per cent, whilst quantitative easing (QE) was increased to EUR 80 billion a month. In addition, the ECB initiated another targeted
longer-term refinancing operation (TLTRO II).
The benchmark rose 3.6 per cent for the second quarter of 2016. Global markets gained over the second quarter despite the
startling result of the U.K.’s referendum on European Union (E.U.) membership. U.K’.s decision to leave the E.U. threw
worldwide markets into turmoil in the last days of June. However, equities were bolstered during the period by stronger oil prices,
a cautious Fed, and additional easing from the ECB. In the U.S. (2.5 per cent), the final first quarter GDP growth rate was revised
upwards to 1.1 per cent quarter on quarter, beating estimates of 1.0 per cent. However, a poor jobs report in May, with non-farm
payrolls only advancing by 38,000 versus the 164,000 expected, seriously dented hopes for a June Fed rate hike. Inflation also
continued to remain below target at 1.0 per cent year on year in May, whilst retail sales (2.5 per cent year on year) did not match
estimates for a 3.0 per cent growth over the same period. This mixed economic data, combined with market uncertainties, left the
Fed in a position to be more cautious in raising interest rates for the rest of the year. After the U.K.’s surprising E.U. referendum
results, David Cameron announced that he would step down as Prime Minister but would stay in office for the next few months to
“steady the ship”. The British Pound also plunged to a 31 year low (against the U.S. Dollar), setting a record intraday swing of
more than 10 per cent between its highs and lows. In response, the Bank of England (BoE) pledged USD 345 billion of new
stimulus and BoE Governor Carney stated the he had further measures in place to deal with the “period of uncertainty and
adjustment”.
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Manager’s Report - continued
56 Russell Global Regional Equity Fund
General Comment on Managers/Performance
The Fund finished ahead of the benchmark in a quarter (third quarter 2015) characterised by volatility and significant market
decline. The main source of positive alpha came from the European Money Managers with all Hermes, Numeric and Wellington
adding significant value. Wellington’s defensively positioned growth strategy was the strongest performer in the portfolio, with
prudent stock selection in the consumer discretionary sector and allocation towards consumer staples proving beneficial. Pzena
detracted owing to significant exposure to the industrials sector, which suffered on aggregate from slowing demand in China. The
U.S. Money Managers also performed well through Jacobs Levy and HS. Japanese Money Manager Lazard was one of the
biggest negative contributors over the month, underperforming the benchmark. This was driven by an overweight position to
Japanese financials, such as Dai-Ichi Life Insurance and Sumitomo Mitsui, which faced headwinds during the month. An
underweight allocation to consumer staples also detracted, as this sector performed well over the quarter. The Portfolio finished
behind the benchmark in December. A net strategic tilt away from the higher dividend yielding spectrum was beneficial, however
this was offset slightly by a bias away from large cap stocks. The European strategies performed well over the period, especially
through the industrials sector, which was boosted by the wider accommodative policy of the ECB. The U.S. strategies struggled
slightly, especially through Money Manager HS, whose strong overweight towards consumer-orientated holdings was not
rewarded in the prevailing market environment. Lazard, our Japanese strategy, failed to find meaningful traction versus the
benchmark. Whilst a net exposure to the consumer discretionary sector added gains, these were neutralised by financials,
industrials and technology stocks.
The Fund outperformed the benchmark in March, as well as for the first quarter of 2016. A bias toward the small cap space was
fruitful, whilst a tilt away from the higher dividend yield spectrum was negative. Stock selection within the energy and industrials
sectors drove performance, as commodity prices continued to stabilise. An underweight allocation towards the poor performing
health care was also rewarded. However, names within financials detracted, as selling pressures remained in March. The
European Money Managers strategies were the best performers, buoyed by the dovish actions of the ECB. Lazard, our Japanese
strategy, also found meaningful traction this month, especially through stock selection within the Japanese financial sector. The
U.S. strategies were net negative; however Jacobs Levy managed to outperform its benchmark owing to stock selection within
energy.
The Fund underperformed the benchmark in June and the second quarter of 2016, as a broad based risk-off environment
engendered by the surprise ‘Brexit’ vote, led to a sell off in global markets. A strong bias towards small cap stocks was
detrimental, as this side of the market cap spectrum usually performs better in a risk-on environment. The Portfolio managed to
find alpha through stock selection within the telecoms, technology, financial and consumer discretionary sectors. However, this
was offset by underweight allocation towards the strong performing defensive consumer staples sector and overweight to
financials. Stock selection within the industrials sector was also a headwind for performance. Most regional strategies finished
behind their respective benchmarks, except for Wellington (Europe) and Mar Vista (U.S.) who benefitted from prudent stock
selection.
Company’s Market Outlook Our strategists have a broadly neutral view between equities and bonds.
Equities: Our regional equity positioning is close to neutral
We are underweight the U.S. relative to other major developed regions mostly because of valuation. This underweight is fairly
evenly distributed as small overweights to the other regions. We are neutral Emerging Markets (EM), where attractive valuations
are offset by business cycle headwinds from deleveraging risks, along with the potential for further Fed tightening.
Fixed income: Bond yields are likely to rise, but only modestly
Our process scores government bonds poorly on value as 10-year yields in all the major developed markets are near record lows
at the end of the second quarter of 2016. On balance, however, the cycle is neutral. Cycle pressures are moderately negative in the
U.S. where wages are gradually picking up and putting pressure on the Fed to raise rates. But the cycle is more supportive of bond
markets in the rest of the developed world. Both the European Central Banks and Bank of Japan (BoJ) are contemplating further
unconventional easing to bolster inflation expectations. The net result is that the upward pressure on bond yields from inflation
pressures in the U.S. will be muted by deflation pressures in the rest of the world.
Currencies: A sideways move for major currencies
Even with Brexit, we think that the major currencies will stay in the ranges they have traded in since the beginning of the year,
albeit with the USD pushing towards the top of that range. There is some downside risk for the Euro and Japanese Yen if central
banks adopt more unconventional easing. But this is likely to be limited, since both currencies are relatively cheap and have
already priced in significant monetary policy accommodation. We like the value in EM currencies, but the downside risks to the
Chinese Renminbi keep us concerned about the risks of further depreciation for EM currencies in general.
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Manager’s Report - continued
Russell Global Regional Equity Fund 57
Conclusion: Noise outweighing signals
Fading cycle fundamentals and flat equity market momentum suggest that markets are being driven more by noise than
fundamentals. We worry that risk assets, like equities and corporate credit, are vulnerable to bad news. However, our low
expectation of a U.S. and global recession means that we are willing to “buy the dips”. Without strong buy signals, we remain
cautious and have fairly neutral asset class views. However, we are remaining vigilant on signals to “buy the dips”, and “sell the
rallies”.
Past performance is no indication of present or future performance
* Benchmark Source: MSCI World Net
Russell Investments Ireland Limited
August 2016
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Balance Sheet
As at 30 June 2016
The accompanying notes are an integral part of the financial statements.
58 Russell Global Regional Equity Fund
30 June 2016*
EUR ‘000
Assets
Financial assets at fair value through profit or loss (Note 2) ........................................................................ 314,034
Cash at bank (Note 3) ................................................................................................................................ 2,797
Cash held with brokers and counterparties for open financial derivative instruments (Note 3) ................ 7,070
Debtors:
Receivable for investments sold ............................................................................................................. 2,588
Dividends receivable and other receivables ............................................................................................... 732
327,221
Liabilities
Financial liabilities at fair value through profit or loss (Note 2) ........................................................................ (1,838)
Creditors – amounts falling due within one financial year:
Payable for investments purchased .............................................................................................................. (1,460)
Management fees payable ............................................................................................................................ (119)
Performance fees payable ............................................................................................................................. (282)
Depositary fees payable ............................................................................................................................... (7)
Sub-custodian fees payable .......................................................................................................................... (45)
Administration fees payable ......................................................................................................................... (14)
Audit fees payable ........................................................................................................................................ (23)
Other fees payable ........................................................................................................................................ (2)
(3,790)
Net asset value attributable to redeemable participating shareholders .................................................... 323,431
* The Fund was launched on 7 July 2015.
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Profit and Loss Account
For the period from 7 July 2015, launch date of the Fund, to 30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 59
Period ended
30 June 2016
EUR ‘000
Income
Dividends .............................................................................................................................................. 6,696
Net gain (loss) on investment activities (Note 4) ...................................................................................... (18,200)
Total investment income (expense) ........................................................................................................... (11,504)
Expenses
Management fees (Note 5) ........................................................................................................................ (1,343)
Performance fees (Note 5) ......................................................................................................................... (282)
Depositary fees (Note 6) ............................................................................................................................ (24)
Sub-custodian fees (Note 6) ...................................................................................................................... (184)
Administration and transfer agency fees (Note 6) ..................................................................................... (100)
Audit fees (Note 6) .................................................................................................................................... (23)
Professional fees ........................................................................................................................................ (31)
Other fees .................................................................................................................................................. (16)
Total operating expenses ........................................................................................................................ (2,003)
Net income (expense) ............................................................................................................................... (13,507)
Finance costs
Distributions (Note 8) ................................................................................................................................ (3,626)
Profit (loss) for the financial period before taxation ........................................................................................ (17,133)
Taxation
Withholding tax (Note 9) ........................................................................................................................... (1,094)
Net increase (decrease) in net assets attributable to redeemable participating shareholders
resulting from operations ........................................................................................................................... (18,277)
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 IV plc
Russell Global Regional Equity Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the period from 7 July 2015, launch date of the Fund, to 30 June 2016
The accompanying notes are an integral part of the financial statements.
60 Russell Global Regional Equity Fund
Period ended
30 June 2016
EUR ‘000
Net increase (decrease) in net assets attributable to redeemable participating shareholders
resulting from operations ................................................................................................................................. (18,227)
Share transactions
Reinvestment of deemed distributions on accumulation shares (see Note 8) ................................................... 3,626
Net increase (decrease) in net assets resulting from redeemable participating share transactions
(Note 10) ......................................................................................................................................................... 338,032
Total net increase in net assets attributable to redeemable participating shareholders .......................... 323,431
Net assets attributable to redeemable participating shareholders
Beginning of period ............................................................................................................................................. -
End of period ...................................................................................................................................................... 323,431
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 61
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Transferable Securities (91.46%)
Common Stock (91.17%)
Belgium (0.79%)
Banks
9,686 KBC Group NV ................... 425 0.13
Distributors
14,420 D'ieteren SA NV ................. 560 0.17
Miscellaneous Manufacturers
32,416 AGFA-Gevaert NV ............. 95 0.03
Pharmaceuticals
18,629 UCB SA .............................. 1,252 0.39
Telecommunications
4,200 Proximus SADP .................. 120 0.04
Transport
4,550 Bpost SA ............................. 104 0.03
2,556 0.79
Bermuda (0.40%)
Agriculture
8,700 Bunge Ltd ............................ 463 0.14
Insurance
3,900
Aspen Insurance Holdings
Ltd ....................................... 163 0.05
1,500
Endurance Specialty
Holdings Ltd ....................... 91 0.03
910 Everest Re Group Ltd .......... 150 0.05
Oil and Gas
18,600 Nabors Industries Ltd .......... 168 0.05
Semiconductor Equipment and Products
31,800
Marvell Technology Group
Ltd ....................................... 273 0.08
1,308 0.40
Curacao (0.70%)
Oil and Gas Services
31,886 Schlumberger Ltd ................ 2,270 0.70
Cyprus (0.03%)
Real Estate
20,200
Aroundtown Property
Holdings Plc ........................ 92 0.03
Czech Republic (0.06%)
Electric Utilities
12,025 CEZ AS ............................... 184 0.06
Denmark (1.12%)
Banks
28,042 Danske Bank A/S ................ 661 0.20
12,262 Spar Nord Bank A/S ............ 88 0.03
Beverages
1,070 Carlsberg A/S ...................... 91 0.03
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Commercial Services and Supplies
9,895 ISS A/S ............................... 334 0.11
Holding Companies - Diversified Operations
1,153 Schouw & Co ...................... 57 0.02
Pharmaceuticals
8,476 H Lundbeck A/S ................. 285 0.09
21,804 Novo Nordisk A/S .............. 1,049 0.32
Retail Trade
489 Pandora A/S ........................ 60 0.02
Telecommunications
16,800 TDC A/S ............................. 74 0.02
Transport
1,102 Dfds A/S ............................. 43 0.01
23,071 DSV A/S ............................. 869 0.27
3,611 1.12
Finland (0.60%)
Insurance
7,736 Sampo OYJ ......................... 283 0.09
Machinery
20,526 Kone OYJ ........................... 847 0.26
Telecommunications
159,091 Nokia OYJ .......................... 812 0.25
1,942 0.60
France (5.40%)
Advertising
13,825 Publicis Groupe SA ............ 837 0.26
Aerospace and Defence
6,372 Safran SA ............................ 388 0.12
3,060 Thales SA ........................... 230 0.07
Auto Components
680
Cie Generale des
Etablissements Michelin ..... 58 0.02
23,984 Faurecia .............................. 689 0.21
15,351 Valeo SA ............................ 616 0.19
Automobiles
24,209 Peugeot SA ......................... 262 0.08
14,313 Renault SA .......................... 980 0.30
Banks
25,053 BNP Paribas SA .................. 996 0.31
51,444 Credit Agricole SA ............. 389 0.12
17,183 Societe Generale SA ........... 485 0.15
Beverages
6,675 Pernod Ricard SA ............... 668 0.21
Chemicals
590 Arkema SA ......................... 41 0.01
Commercial Services and Supplies
18,013 Elior .................................... 354 0.11
14,212 Elis SA ................................ 224 0.07
7,961 Sodexo SA .......................... 770 0.24
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
62 Russell Global Regional Equity Fund
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Construction and Engineering
20,515
Altran Technologies
SA ....................................... 246 0.08
22,016 Bouygues SA ....................... 571 0.18
7,290 Vinci SA .............................. 464 0.14
Electrical Equipment
32,292 Legrand SA ......................... 1,495 0.46
22,487 Schneider Electric SE .......... 1,193 0.37
Health Care Providers and Services
1,948 BioMerieux ......................... 238 0.07
Insurance
9,190 AXA SA .............................. 164 0.05
Metals and Mining
78,541 Vallourec SA ....................... 252 0.08
Oil and Gas
37,939 Total SA .............................. 1,646 0.51
Other Finance
367 Eurazeo SA ......................... 20 0.01
Personal Products
3,242 L'Oreal SA ........................... 558 0.17
Pharmaceuticals
12,936 Sanofi SA ............................ 969 0.30
Real Estate Investment Trust
311 Unibail-Rodamco SE ........... 73 0.02
Software
4,161 Worldline SA ...................... 109 0.03
Textile and Apparel
4,309 Christian Dior SE ................ 624 0.19
1,737
LVMH Moet Hennessy
Louis Vuitton SE ................. 236 0.07
23,125
LVMH Moet Hennessy
Louis Vuitton SE (ADR) ..... 632 0.20
17,477 5.40
Germany (4.86%)
Auto Components
3,517 Continental AG ................... 595 0.18
Building Products
6,030 HeidelbergCement AG ........ 407 0.13
Chemicals
4,180 BASF SE ............................. 287 0.09
18,667 Covestro AG ....................... 746 0.23
5,340 Evonik Industries AG .......... 143 0.04
Commercial Services and Supplies
15,999 Wirecard AG ....................... 631 0.20
Containers and Packaging
1,776 Gerresheimer AG ................ 123 0.04
Diversified Financials
14,963 Deutsche Boerse AG ........... 1,100 0.34
890
Wuestenrot &
Wuerttembergische AG ....... 14 0.00
Electrical Equipment
13,368 OSRAM Licht AG .............. 622 0.19
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Health Care Providers and Services
14,859 Fresenius SE & Co KGaA .. 978 0.30
1,870 Rhoen Klinikum AG ........... 49 0.02
Insurance
2,972 Allianz SE ........................... 380 0.12
1,080 Hannover Rueck SE ............ 101 0.03
3,353
Muenchener
Rueckversicherungs-
Gesellschaft AG in
Muenchen ........................... 504 0.15
9,692 Talanx AG .......................... 258 0.08
Internet Software and Services
7,959 United Internet AG ............. 296 0.09
Iron and Steel
44,927 Salzgitter AG ...................... 1,064 0.33
Machinery
890 KION Group AG ................ 39 0.01
Media
20,761 ProSiebenSat.1 Media SE ... 814 0.25
Metals and Mining
4,537 Aurubis AG ......................... 185 0.06
3,081 Norma Group SE ................ 131 0.04
Personal Products
5,329 Beiersdorf AG ..................... 452 0.14
Pharmaceuticals
27,837 Bayer AG ............................ 2,505 0.78
7,158 Merck KGaA ...................... 652 0.20
Semiconductor Equipment and Products
39,341
Infineon Technologies
AG ...................................... 510 0.16
Software
4,930 SAP SE ............................... 331 0.10
7,018 Software AG ....................... 214 0.07
Telecommunications
2,680 Deutsche Telekom AG ........ 41 0.01
Textile and Apparel
12,094 Adidas AG .......................... 1,553 0.48
15,725 4.86
Hungary (0.13%)
Banks
20,735 OTP Bank Plc ..................... 417 0.13
Ireland (1.68%)
Computers and Peripherals
34,225 Seagate Technology Plc ...... 750 0.23
Entertainment
3,156 Paddy Power Betfair Plc ..... 298 0.09
Food Products
9,114 Kerry Group Plc .................. 728 0.23
Insurance
9,080 Willis Towers Watson Plc .. 1,016 0.32
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 63
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Oil and Gas Services
21,800
Weatherford International
Plc ....................................... 109 0.03
Pharmaceuticals
7,588 Allergan Plc ......................... 1,578 0.49
11,200 Endo International Plc ......... 157 0.05
510 Jazz Pharmaceuticals Plc ..... 65 0.02
5,900 Mallinckrodt Plc .................. 323 0.10
Retail Trade
66,153 Grafton Group Plc ............... 394 0.12
5,418 1.68
Italy (1.22%)
Banks
119,000
Banca Popolare di Milano
Scarl .................................... 44 0.02
37,700 UniCredit SpA ..................... 74 0.02
Commercial Services and Supplies
2,690 ASTM SpA ......................... 26 0.01
Electric Utilities
92,408 A2A SpA ............................. 109 0.03
268,576 Enel SpA ............................. 1,069 0.33
Electrical Equipment
980 Prysmian SpA ...................... 19 0.01
Health Care Equipment and Supplies
5,300 DiaSorin SpA ...................... 292 0.09
Media
21,000 Mediaset SpA ...................... 66 0.02
Oil and Gas
107,788 Eni SpA ............................... 1,565 0.48
Retail Trade
48,133 OVS SpA ............................. 252 0.08
13,209 Salvatore Ferragamo SpA ... 241 0.07
Telecommunications
268,257 Telecom Italia SpA .............. 197 0.06
3,954 1.22
Japan (10.66%)
Advertising
14,000 Hakuhodo DY Holdings Inc 150 0.05
Agriculture
19,500 Japan Tobacco Inc ............... 702 0.22
Auto Components
8,400 Aisan Industry Co Ltd ......... 49 0.02
10,400 Bridgestone Corp ................ 298 0.09
21,000 Denso Corp ......................... 659 0.20
4,200 Exedy Corp ......................... 80 0.03
6,000 G-Tekt Corp ........................ 65 0.02
2,400
Musashi Seimitsu Industry
Co Ltd ................................. 42 0.01
17,700 NHK Spring Co Ltd ............ 128 0.04
7,000 Nippon Seiki Co Ltd ........... 103 0.03
7,500 Nissin Kogyo Co Ltd ........... 86 0.03
Number
of Shares
Fair Value
EUR ‘000
Fund
%
5,300 Pacific Industrial Co Ltd ..... 43 0.01
7,600 Press Kogyo Co Ltd ............ 23 0.01
5,600 Showa Corp ........................ 28 0.01
5,200 Topre Corp .......................... 99 0.03
7,900 Toyoda Gosei Co Ltd .......... 126 0.04
9,800 Toyota Industries Corp ....... 347 0.11
3,400 TS Tech Co Ltd .................. 74 0.02
900 Yorozu Corp ....................... 11 0.00
Automobiles
22,000 Hino Motors Ltd ................. 195 0.06
14,000 Honda Motor Co Ltd .......... 316 0.10
67,100 Isuzu Motors Ltd ................. 735 0.22
83,300 Nissan Motor Co Ltd .......... 671 0.21
14,400 Toyota Motor Corp ............. 638 0.20
Banks
14,000 77 Bank Ltd ........................ 44 0.01
700 Aichi Bank Ltd ................... 27 0.01
13,000 Akita Bank Ltd ................... 33 0.01
18,000 Aomori Bank Ltd ................ 45 0.01
14,000 Awa Bank Ltd ..................... 65 0.02
900 Bank of Iwate Ltd ............... 30 0.01
8,000 Bank of Nagoya Ltd ............ 22 0.01
1,440 Bank of Okinawa Ltd .......... 38 0.01
15,200 Chugoku Bank Ltd .............. 138 0.04
70,100
Concordia Financial Group
Ltd ...................................... 245 0.08
21,000 Daishi Bank Ltd .................. 60 0.02
3,000 Eighteenth Bank Ltd ........... 7 0.00
10,000 Fukui Bank Ltd ................... 20 0.01
19,000 Gunma Bank Ltd ................. 62 0.02
41,300 Hachijuni Bank Ltd ............. 161 0.05
45,000 Hiroshima Bank Ltd ........... 134 0.04
12,000 Hokkoku Bank Ltd ............. 29 0.01
26,000 Hokuetsu Bank Ltd ............. 39 0.01
58,000
Hokuhoku Financial Group
Inc ....................................... 59 0.02
17,000 Hyakugo Bank Ltd .............. 53 0.02
22,000 Hyakujushi Bank Ltd .......... 57 0.02
24,500 Iyo Bank Ltd ....................... 134 0.04
28,000 Juroku Bank Ltd ................. 66 0.02
5,100 Kansai Urban Banking Corp 40 0.01
36,000 Keiyo Bank Ltd .................. 121 0.04
12,000
Kyushu Financial Group
Inc ....................................... 53 0.02
25,000 Minato Bank Ltd ................. 33 0.01
130,400
Mitsubishi UFJ Financial
Group Inc ............................ 522 0.16
17,000 Miyazaki Bank Ltd ............. 38 0.01
425,000 Mizuho Financial Group Inc 553 0.17
16,000 Nanto Bank Ltd .................. 46 0.02
47,000 Nishi-Nippon City Bank Ltd 74 0.02
49,200 North Pacific Bank Ltd ....... 120 0.04
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
64 Russell Global Regional Equity Fund
Number
of Shares
Fair Value
EUR ‘000
Fund
%
39,000 Ogaki Kyoritsu Bank Ltd .... 96 0.03
12,000 Oita Bank Ltd ...................... 31 0.01
58,800 Resona Holdings Inc ........... 192 0.06
7,100 San-In Godo Bank Ltd ........ 41 0.01
17,200 Senshu Ikeda Holdings Inc .. 57 0.02
16,000 Shiga Bank Ltd .................... 61 0.02
2,000 Shikoku Bank Ltd ............... 4 0.00
11,000 Shizuoka Bank Ltd .............. 69 0.02
169,000
Sumitomo Mitsui Trust
Holdings Inc ........................ 489 0.15
4,000 Tochigi Bank Ltd ................ 12 0.00
33,000 Toho Bank Ltd .................... 91 0.03
10,200 TOMONY Holdings Inc ...... 27 0.01
12,000 Yamagata Bank Ltd ............. 42 0.01
12,000
Yamaguchi Financial Group
Inc ....................................... 102 0.03
14,000
Yamanashi Chuo Bank
Ltd ....................................... 44 0.01
Building Products
7,700 Bunka Shutter Co Ltd .......... 55 0.02
7,000 Central Glass Co Ltd ........... 27 0.01
4,000 Fujitec Co Ltd ..................... 31 0.01
18,500 LIXIL Group Corp .............. 274 0.08
10,000 Nichias Corp ....................... 68 0.02
1,300 Nichiha Corp ....................... 18 0.01
5,000 Takara Standard Co Ltd ...... 41 0.01
Chemicals
3,500 ADEKA Corp ...................... 38 0.01
3,200 Aica Kogyo Co Ltd ............. 65 0.02
11,000 Air Water Inc ....................... 144 0.04
68,000 Asahi Kasei Corp ................ 422 0.13
1,500 Fuso Chemical Co Ltd ......... 19 0.01
3,800 Konishi Co Ltd .................... 44 0.01
4,600 Lintec Corp ......................... 81 0.03
11,600 Nihon Parkerizing Co Ltd ... 109 0.03
14,000
Nippon Synthetic Chemical
Industry Co Ltd ................... 64 0.02
4,300 Nitto Denko Corp ................ 243 0.08
6,000 NOF Corp ............................ 44 0.01
11,000
Sanyo Chemical Industries
Ltd ....................................... 76 0.02
3,000 Sekisui Jushi Corp ............... 38 0.01
8,000 Shikoku Chemicals Corp ..... 56 0.02
2,700 T Hasegawa Co Ltd ............. 43 0.01
1,800 Taiyo Holdings Co Ltd ........ 50 0.02
2,600 Toagosei Co Ltd .................. 21 0.01
13,000
Toyo Ink SC Holdings Co
Ltd ....................................... 49 0.02
Commercial Services and Supplies
2,800 Aeon Delight Co Ltd ........... 68 0.02
3,200 Nippon Kanzai Co Ltd ........ 46 0.01
800 TKC Corp ............................ 19 0.01
2,900 Toppan Forms Co Ltd ......... 27 0.01
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Computers and Peripherals
1,800 Elecom Co Ltd .................... 34 0.01
1,600
Mitsubishi Research Institute
Inc ....................................... 44 0.01
3,400
NEC Networks & System
Integration Corp .................. 54 0.02
Construction and Engineering
700 Hibiya Engineering Ltd ...... 9 0.00
12,200 Kinden Corp ....................... 118 0.04
5,000
Maeda Road Construction
Co Ltd ................................. 76 0.02
13,000 Nippo Corp ......................... 198 0.06
6,300
Nippon Densetsu Kogyo Co
Ltd ...................................... 95 0.03
2,000 Taikisha Ltd ........................ 44 0.01
4,000 Toenec Corp ....................... 18 0.01
2,700
Toshiba Plant Systems &
Services Corp ...................... 40 0.01
1,900 Totetsu Kogyo Co Ltd ........ 47 0.02
Containers and Packaging
1,400 FP Corp ............................... 61 0.02
Distributors
900 Advan Co Ltd ..................... 9 0.00
8,000 Canon Marketing Japan Inc 131 0.04
2,400 Doshisha Co Ltd ................. 41 0.01
4,600 Inabata & Co Ltd ................ 37 0.01
62,400 ITOCHU Corp .................... 679 0.21
5,400 Itochu Enex Co Ltd ............. 43 0.01
3,000
Japan Pulp & Paper Co
Ltd ...................................... 9 0.00
1,400 Kanematsu Electronics Ltd . 22 0.01
28,500 Mitsubishi Corp .................. 447 0.14
4,900 Nagase & Co Ltd ................ 48 0.02
400 San-Ai Oil Co Ltd ............... 2 0.00
10,100 Toyota Tsusho Corp ........... 194 0.06
5,800 Yamazen Corp .................... 41 0.01
700 Yondoshi Holdings Inc ....... 13 0.01
1,700 Yuasa Trading Co Ltd ......... 31 0.01
Diversified Financials
56,200
Ashikaga Holdings Co
Ltd ...................................... 161 0.05
10,700 Hitachi Capital Corp ........... 189 0.06
5,700 J Trust Co Ltd ..................... 38 0.01
115,000
Mitsubishi UFJ Lease &
Finance Co Ltd ................... 394 0.12
108,300 Nomura Holdings Inc ......... 347 0.11
48,200 ORIX Corp ......................... 553 0.17
Electric Utilities
36,100
Kansai Electric Power Co
Inc ....................................... 314 0.10
Electrical Equipment
1,100 Eizo Nanao Corp ................. 26 0.01
3,800 HI-LEX Corp ...................... 80 0.02
1,000 Inaba Denki Sangyo Co Ltd 31 0.01
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 65
Number
of Shares
Fair Value
EUR ‘000
Fund
%
3,200
Macnica Fuji Electronics
Holdings Inc ........................ 30 0.01
10,400 Nidec Corp .......................... 705 0.22
2,400 Nitto Kogyo Corp ................ 27 0.01
6,500 Nohmi Bosai Ltd ................. 78 0.02
Entertainment
10,900 Heiwa Corp ......................... 198 0.06
Environmental Control
1,200 Asahi Holdings Inc .............. 16 0.00
Food Products
2,700 Arcs Co Ltd ......................... 58 0.02
1,500 Belc Co Ltd ......................... 56 0.02
500 Daikokutenbussan Co Ltd ... 21 0.01
1,500 Fujicco Co Ltd ..................... 39 0.01
1,300 Inageya Co Ltd .................... 15 0.00
9,400
Itoham Yonekyu Holdings
Inc ....................................... 87 0.03
10,000 J-Oil Mills Inc ..................... 30 0.01
700 Kameda Seika Co Ltd ......... 36 0.01
2,600 Kato Sangyo Co Ltd ............ 55 0.02
5,900
Mitsubishi Shokuhin Co
Ltd ....................................... 139 0.04
9,000 Mitsui Sugar Co Ltd ............ 38 0.01
9,000 Nippon Flour Mills Co Ltd .. 63 0.02
4,000 Nisshin Oillio Group Ltd ..... 17 0.01
300 Riken Vitamin Co Ltd ......... 13 0.00
1,600 S Foods Inc .......................... 39 0.01
8,000 Showa Sangyo Co Ltd ......... 31 0.01
Gas Utilities
62,000 Osaka Gas Co Ltd ............... 213 0.06
1,000 Saibu Gas Co Ltd ................ 2 0.00
11,100 Shizuoka Gas Co Ltd ........... 70 0.02
34,000 Toho Gas Co Ltd ................. 249 0.08
Hand and Machine Tools
2,100 Hitachi Koki Co Ltd ............ 11 0.00
9,300 Makita Corp ........................ 552 0.17
Health Care Equipment and Supplies
1,000 As One Corp ........................ 36 0.01
2,000 Fukuda Denshi Co Ltd ........ 104 0.03
300 Hogy Medical Co Ltd .......... 19 0.01
2,000 Nakanishi Inc ...................... 53 0.01
1,400
Paramount Bed Holdings Co
Ltd ....................................... 64 0.02
Health Care Providers and Services
1,300 BML Inc .............................. 53 0.01
6,500 Miraca Holdings Inc ............ 252 0.08
Home Builders
24,700
Daiwa House Industry Co
Ltd ....................................... 646 0.20
11,000 PanaHome Corp .................. 78 0.02
3,800
Takamatsu Construction
Group Co Ltd ...................... 80 0.03
800 Token Corp ......................... 56 0.02
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Home Furnishings
2,400 Canon Electronics Inc ......... 30 0.01
13,800 Sony Corp ........................... 362 0.11
Hotels, Restaurants and Leisure
1,400 Daiichikosho Co Ltd ........... 53 0.01
6,000 Mizuno Corp ....................... 25 0.01
Household Products
500 Mitsubishi Pencil Co Ltd .... 21 0.01
Insurance
44,700
Dai-ichi Life Insurance Co
Ltd ...................................... 442 0.14
15,000
Sompo Japan Nipponkoa
Holdings Inc ....................... 355 0.11
Internet Software and Services
179,500 Yahoo Japan Corp ............... 712 0.22
Iron and Steel
8,000 Aichi Steel Corp ................. 32 0.01
23,700
Nippon Steel & Sumitomo
Metal Corp .......................... 407 0.12
7,000
Sanyo Special Steel Co
Ltd ...................................... 28 0.01
Machinery
3,200 Aichi Corp .......................... 20 0.01
26,700 Amada Holdings Co Ltd ..... 242 0.08
3,000 FANUC Corp ...................... 435 0.13
3,000
Fuji Machine Manufacturing
Co Ltd ................................. 24 0.01
95,000 Hitachi Ltd .......................... 353 0.11
28,900 Komatsu Ltd ....................... 449 0.14
2,000 Max Co Ltd ......................... 20 0.01
38,000 Mitsubishi Electric Corp ..... 403 0.12
700 Nitto Kohki Co Ltd ............. 13 0.00
8,000 Tsubakimoto Chain Co ....... 44 0.01
Media
24,300
SKY Perfect JSAT Holdings
Inc ....................................... 100 0.03
12,000 Usen Corp ........................... 32 0.01
3,400 Wowow Inc ......................... 71 0.02
Metals and Mining
9,200 Kitz Corp ............................ 39 0.01
66,000
Nippon Steel & Sumikin
Bussan Corp ........................ 192 0.06
2,200 Oiles Corp ........................... 31 0.01
Miscellaneous Manufacturers
3,800 Amano Corp ....................... 59 0.02
5,000
Bando Chemical Industries
Ltd ...................................... 22 0.01
900
Fukushima Industries
Corp .................................... 24 0.01
3,200 JSP Corp ............................. 57 0.01
3,000
Mitsuboshi Belting Co
Ltd ...................................... 21 0.01
1,800 Morita Holdings Corp ......... 21 0.01
1,800 Nitta Corp ........................... 36 0.01
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
66 Russell Global Regional Equity Fund
Number
of Shares
Fair Value
EUR ‘000
Fund
%
2,500
Shin-Etsu Polymer Co
Ltd ....................................... 13 0.00
Office Electronics
8,800 Okamura Corp ..................... 78 0.03
3,200 Riso Kagaku Corp ............... 38 0.01
Other Finance
18,900 Jafco Co Ltd ........................ 417 0.13
Personal Products
400 Milbon Co Ltd ..................... 16 0.01
600 Noevir Holdings Co Ltd ...... 16 0.00
Pharmaceuticals
400
Mochida Pharmaceutical Co
Ltd ....................................... 29 0.01
900
Taisho Pharmaceutical
Holdings Co Ltd .................. 85 0.02
3,600 Vital KSK Holdings Inc ...... 31 0.01
Real Estate
2,000 Daibiru Corp ....................... 15 0.00
19,300 Hulic Co Ltd ........................ 182 0.06
1,100 Pressance Corp .................... 37 0.01
5,100 Starts Corp Inc ..................... 91 0.03
4,400
Sumitomo Real Estate Sales
Co Ltd ................................. 77 0.02
52,100
Tokyu Fudosan Holdings
Corp ..................................... 290 0.09
Retail Trade
3,500 AOKI Holdings Inc ............. 32 0.01
3,100
Arcland Sakamoto Co
Ltd ....................................... 31 0.01
2,100 Belluna Co Ltd .................... 11 0.00
700 Fuji Co Ltd .......................... 15 0.00
3,600 Heiwado Co Ltd .................. 63 0.02
6,300 Izumi Co Ltd ....................... 220 0.07
3,000 Joshin Denki Co Ltd ............ 23 0.01
1,000 Joyful Honda Co Ltd ........... 20 0.01
1,900 Kappa Create Co Ltd ........... 21 0.01
18,200 Marui Group Co Ltd ............ 219 0.07
400 Ohsho Food Service Corp ... 13 0.00
4,000 Parco Co Ltd ....................... 29 0.01
900 Sogo Medical Co Ltd .......... 30 0.01
47,000 Takashimaya Co Ltd ........... 301 0.09
1,300 Yellow Hat Ltd .................... 26 0.01
Semiconductor Equipment and Products
800 Enplas Corp ......................... 19 0.01
800 Nuflare Technology Inc ...... 34 0.01
7,500 Tokyo Electron Ltd ............. 564 0.17
Software
1,600 Fuji Soft Inc ........................ 34 0.01
4,500
Koei Tecmo Holdings Co
Ltd ....................................... 74 0.02
2,500 Transcosmos Inc .................. 64 0.02
Telecommunications
1,000 Hikari Tsushin Inc ............... 75 0.02
Number
of Shares
Fair Value
EUR ‘000
Fund
%
27,500 KDDI Corp ......................... 751 0.23
17,500
Nippon Telegraph &
Telephone Corp .................. 737 0.23
30,800 NTT Docomo Inc ................ 748 0.23
1,700
Okinawa Cellular Telephone
Co ....................................... 45 0.02
2,800 T-Gaia Corp ........................ 35 0.01
Textile and Apparel
2,900 Descente Ltd ....................... 28 0.01
3,100
Japan Wool Textile Co
Ltd ...................................... 19 0.01
1,500 Nagaileben Co Ltd .............. 32 0.01
5,100 Seiren Co Ltd ...................... 43 0.01
2,200 Tokai Corp .......................... 60 0.02
Toys, Games and Hobbies
3,000 Nintendo Co Ltd ................. 384 0.12
Transport
4,200 Central Japan Railway Co ... 668 0.21
4,300 East Japan Railway Co ....... 356 0.11
7,700
Hitachi Transport System
Ltd ...................................... 113 0.04
5,200
Konoike Transport Co
Ltd ...................................... 48 0.01
6,600
Nippon Konpo Unyu Soko
Co Ltd ................................. 106 0.03
132,000 Nippon Yusen KK .............. 207 0.06
8,000
Nishi-Nippon Railroad Co
Ltd ...................................... 37 0.01
900 Sakai Moving Service ......... 22 0.01
2,000
Yusen Logistics Co
Ltd ...................................... 18 0.01
34,486 10.66
Jersey, Channel Islands (0.60%)
Advertising
63,164 WPP Plc .............................. 1,180 0.37
Commercial Services and Supplies
9,310 Experian Plc ........................ 158 0.05
21,900 Regus Plc ............................ 76 0.02
Metals and Mining
83,400 Centamin Plc ....................... 132 0.04
15,100 Glencore Plc ....................... 28 0.01
Pharmaceuticals
6,530 Shire Plc .............................. 365 0.11
1,939 0.60
Luxembourg (0.05%)
Iron and Steel
1,210 APERAM SA ..................... 38 0.01
Oil and Gas Services
4,200 Subsea 7 SA ........................ 37 0.01
Telecommunications
1,580
Millicom International
Cellular SA ......................... 86 0.03
161 0.05
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 67
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Netherlands (3.90%)
Automobiles
37,400
Fiat Chrysler Automobiles
NV ....................................... 206 0.06
Banks
185,767 ING Groep NV .................... 1,705 0.53
Beverages
7,500 Heineken (ADR) ................. 313 0.10
13,848 Heineken NV ....................... 1,146 0.35
Chemicals
7,970 Akzo Nobel NV ................... 449 0.14
Commercial Services and Supplies
1,300 RELX NV ........................... 20 0.01
Electrical Equipment
32,645 Koninklijke Philips NV ....... 731 0.22
17,267
Sensata Technologies
Holding NV ......................... 542 0.17
Food Products
41,182 Koninklijke Ahold NV ........ 820 0.25
Insurance
237,210 Delta Lloyd NV ................... 754 0.24
30,428 NN Group NV ..................... 754 0.23
Media
2,830 Wolters Kluwer NV ............ 103 0.03
Metals and Mining
1,590
AMG Advanced
Metallurgical Group
NV ....................................... 20 0.01
Oil and Gas Services
9,348 Core Laboratories NV ......... 1,042 0.32
Personal Products
22,177 Unilever NV (ADR) ............ 937 0.29
4,540 Unilever NV ........................ 190 0.06
Pipelines
1,980 Koninklijke Vopak NV ....... 89 0.03
Semiconductor Equipment and Products
13,417 ASML Holding NV ............. 1,186 0.37
830
BE Semiconductor Industries
NV ....................................... 20 0.01
157,742 STMicroelectronics NV ...... 828 0.25
Telecommunications
227,556 Koninklijke KPN NV .......... 741 0.23
12,596 3.90
Norway (1.00%)
Banks
73,286 DNB ASA ........................... 783 0.24
Chemicals
2,205 Yara International ASA ....... 63 0.02
Food Products
13,349 Austevoll Seafood ASA ...... 100 0.03
Metals and Mining
147,000 Norsk Hydro ASA ............... 479 0.15
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Oil and Gas
85,730 Statoil ASA ......................... 1,329 0.41
Telecommunications
33,033 Telenor ASA ....................... 489 0.15
3,243 1.00
Panama (0.31%)
Hotels, Restaurants and Leisure
25,125 Carnival Corp ..................... 1,000 0.31
Russia (0.34%)
Banks
4,947
Sberbank of Russia PJSC
ADR .................................... 39 0.01
61,868
Sberbank of Russia PJSC
ADR (US Listed) ................ 486 0.15
Oil and Gas
150,275 Gazprom PAO (ADR) ........ 583 0.18
1,108 0.34
Spain (1.86%)
Commercial Services and Supplies
3,000
Prosegur Cia de Seguridad
SA ....................................... 16 0.01
Computers and Peripherals
27,083 Indra Sistemas SA ............... 257 0.08
Construction and Engineering
14,900
ACS Actividades de
Construccion y Servicios SA 363 0.11
5,502 Aena SA .............................. 651 0.20
Electric Utilities
27,194 Endesa SA .......................... 490 0.15
6,900 Iberdrola SA ....................... 42 0.02
Electrical Equipment
52,229
Gamesa Corp Tecnologica
SA ....................................... 924 0.29
Food Products
1,230 Ebro Foods SA .................... 25 0.01
2,879 Viscofan SA ........................ 143 0.04
Media
32,843
Mediaset Espana
Comunicacion SA ............... 331 0.10
Oil and Gas
51,330 Repsol SA ........................... 586 0.18
Retail Trade
29,432
Industria de Diseno Textil
SA ....................................... 880 0.27
Software
26,469 Amadeus IT Holding SA .... 1,040 0.32
Telecommunications
22,300 Telefonica SA ..................... 189 0.06
Transport
3,986
Cia de Distribucion Integral
Logista Holdings SA ........... 75 0.02
6,012 1.86
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
68 Russell Global Regional Equity Fund
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Sweden (1.48%)
Agriculture
650 Swedish Match AB ............. 20 0.01
Banks
37,041 Swedbank AB ...................... 691 0.21
Commercial Services and Supplies
7,280 Intrum Justitia AB ............... 204 0.06
Food Products
53,185 Cloetta AB ........................... 164 0.05
Hand and Machine Tools
32,962 Sandvik AB ......................... 293 0.09
Home Furnishings
13,431 Electrolux AB ...................... 326 0.10
Machinery
38,782 Atlas Copco AB .................. 895 0.28
Metals and Mining
37,679 Assa Abloy AB ................... 689 0.21
8,400 Boliden AB ......................... 145 0.05
Miscellaneous Manufacturers
27,436 Trelleborg AB ..................... 433 0.14
Personal Products
6,060
Svenska Cellulosa AB
SCA ..................................... 173 0.05
Real Estate
2,690 Castellum AB ...................... 34 0.01
6,230 Hufvudstaden AB ................ 87 0.03
11,609 Wallenstam AB ................... 85 0.02
Retail Trade
15,550 Hennes & Mauritz AB ......... 407 0.13
Telecommunications
32,200 TeliaSonera AB ................... 136 0.04
4,782 1.48
Switzerland (4.89%)
Auto Components
186 Georg Fischer AG ............... 134 0.04
Banks
51,972
Credit Suisse Group
AG ....................................... 495 0.15
152,053 UBS Group AG ................... 1,766 0.55
Beverages
1,080 Coca-Cola HBC AG ............ 20 0.01
Building Products
70 Belimo Holding AG ............ 188 0.06
1,933 Geberit AG .......................... 657 0.20
39 Sika AG ............................... 147 0.05
Chemicals
98 Givaudan SA ....................... 177 0.05
1,475 Lonza Group AG ................. 220 0.07
Diversified Financials
27,399 GAM Holding AG ............... 262 0.08
21,423 Julius Baer Group Ltd ......... 768 0.24
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Electrical Equipment
829 Daetwyler Holding AG ....... 100 0.03
126 LEM Holding SA ................ 102 0.03
Food Products
21
Chocoladefabriken Lindt &
Spruengli AG ...................... 113 0.04
20,891 Nestle SA ............................ 1,451 0.45
10,750 Nestle SA (ADR) ................ 748 0.23
Hand and Machine Tools
2,967 Schindler Holding AG ........ 482 0.15
Health Care Equipment and Supplies
1,813 Tecan Group AG ................. 254 0.08
Insurance
9,715 Chubb Ltd ........................... 1,143 0.35
2,847 Swiss Life Holding AG ....... 589 0.18
7,274 Swiss Re AG ....................... 570 0.18
Machinery
12,860 ABB Ltd ............................. 227 0.07
560 Bobst Group SA .................. 25 0.01
416 Inficon Holding AG ............ 127 0.04
Personal Products
5,940 Oriflame Holding AG ......... 135 0.04
Pharmaceuticals
6,621 Actelion Ltd ........................ 998 0.31
8,820 Roche Holding AG ............. 2,087 0.64
Real Estate
240 PSP Swiss Property AG ...... 21 0.01
Retail Trade
15,517
Cie Financiere Richemont
SA ....................................... 814 0.25
4,249 Dufry AG ............................ 457 0.14
Software
2,089 Temenos Group AG ............ 94 0.03
Transport
3,457
Kuehne & Nagel
International AG ................. 435 0.13
15,806 4.89
United Kingdom (10.42%)
Aerospace and Defence
8,737
Ultra Electronic Holdings
Plc ....................................... 183 0.06
Agriculture
19,824
British American Tobacco
Plc ....................................... 1,155 0.36
54,081
Imperial Tobacco Group
Plc ....................................... 2,638 0.81
Airlines
18,030 Dart Group Plc .................... 114 0.03
Banks
221,323 Barclays Plc ........................ 369 0.11
159,728 HSBC Holdings Plc ............ 895 0.28
163,823
Royal Bank of Scotland
Group Plc ............................ 338 0.10
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 69
Number
of Shares
Fair Value
EUR ‘000
Fund
%
59,525 Standard Chartered Plc ........ 404 0.13
6,127
Virgin Money Holdings UK
Plc ....................................... 19 0.01
Beverages
1,690 Diageo Plc ........................... 42 0.01
8,075 Diageo Plc (ADR) ............... 820 0.26
17,778 SABMiller Plc ..................... 935 0.29
Commercial Services and Supplies
15,148 Berendsen Plc ...................... 222 0.06
6,600 QinetiQ Group Plc ............... 18 0.01
Distributors
9,755 Diploma Plc ......................... 98 0.03
22,313 Inchcape Plc ........................ 169 0.05
370,326 SIG Plc ................................ 501 0.16
Diversified Financials
18,321 Schroders Plc ....................... 519 0.16
171,246 Worldpay Group Plc ............ 560 0.17
Electrical Equipment
17,654 Halma Plc ............................ 216 0.07
20,964 Spectris Plc .......................... 460 0.14
Entertainment
67,435
Merlin Entertainments
Plc ....................................... 357 0.11
Food Products
243,646 Booker Group Plc ................ 508 0.16
43,181 Compass Group Plc ............. 739 0.23
39,615 SSP Group Plc ..................... 134 0.04
Gas Utilities
15,900 Centrica Plc ......................... 43 0.01
Health Care Equipment and Supplies
48,249
Smith & Nephew
Plc ....................................... 736 0.23
Home Builders
5,811 Persimmon Plc .................... 101 0.03
37,900 Taylor Wimpey Plc ............. 60 0.02
Hotels, Restaurants and Leisure
7,360 Carnival Plc ......................... 293 0.09
Household Products
24,393
Reckitt Benckiser Group
Plc ....................................... 2,198 0.68
Insurance
6,104 Aon Plc ................................ 600 0.18
92,526 Aviva Plc ............................. 439 0.14
28,178
Jardine Lloyd Thompson
Group Plc ............................ 319 0.10
42,842 Prudential Plc ...................... 648 0.20
106,806
RSA Insurance Group
Plc ....................................... 642 0.20
86,560 Saga Plc ............................... 201 0.06
Internet Software and Services
73,975 Auto Trader Group Plc ........ 315 0.10
14,200
Moneysupermarket.com
Group Plc ............................ 46 0.01
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Iron and Steel
35,748 Evraz Plc ............................. 59 0.02
Machinery
8,689
Spirax-Sarco Engineering
Plc ....................................... 391 0.12
Media
13,706
Liberty Global Plc LiLAC
(C Shares) ........................... 401 0.12
Metals and Mining
102,450 Antofagasta Plc ................... 574 0.18
11,600 BHP Billiton Plc ................. 132 0.04
27,710 Rio Tinto Plc ....................... 765 0.23
Oil and Gas
113,207 BP Plc ................................. 597 0.18
21,400 Ensco Plc ............................ 187 0.06
18,900 Premier Oil Plc ................... 17 0.01
39,714 Royal Dutch Shell Plc ......... 980 0.30
10,340
Royal Dutch Shell Plc
ADR .................................... 521 0.16
Oil and Gas Services
52,338
Amec Foster Wheeler
Plc ....................................... 309 0.10
Other Finance
121,024 3i Group Plc ........................ 797 0.25
6,501 SVG Capital Plc .................. 40 0.01
Pharmaceuticals
113,496 GlaxoSmithKline Plc .......... 2,191 0.68
11,017
Hikma Pharmaceuticals
Plc ....................................... 327 0.10
90,009 Indivior Plc ......................... 272 0.08
Real Estate Investment Trust
17,478 Derwent London Plc ........... 550 0.17
41,358
Great Portland Estates
Plc ....................................... 312 0.10
49,448 Hammerson Plc ................... 320 0.10
24,771
Land Securities Group
Plc ....................................... 310 0.09
Retail Trade
15,800 Debenhams Plc ................... 11 0.00
9,013 Dunelm Group .................... 86 0.03
10,870 JD Sports Fashion Plc ......... 151 0.05
38,300 Kingfisher Plc ..................... 149 0.05
12,949 SuperGroup Plc ................... 197 0.06
22,978 Travis Perkins Plc ............... 408 0.12
11,373 WH Smith Plc ..................... 215 0.07
Semiconductor Equipment and Products
47,158 ARM Holdings Plc ............. 642 0.20
Telecommunications
15,900 ARRIS International Plc ..... 300 0.09
763,174 Vodafone Group Plc ........... 2,091 0.65
Transport
58,578 Royal Mail Plc .................... 353 0.11
33,709 10.42
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
70 Russell Global Regional Equity Fund
Number
of Shares
Fair Value
EUR ‘000
Fund
%
United States (38.67%)
Aerospace and Defence
16,669 BE Aerospace Inc ................ 693 0.21
8,055 TransDigm Group Inc ......... 1,912 0.59
3,700 Triumph Group Inc .............. 118 0.04
Agriculture
12,000 Altria Group Inc .................. 745 0.23
3,000
Philip Morris International
Inc ....................................... 275 0.09
Airlines
190 Allegiant Travel Co ............. 26 0.01
24,630 Delta Air Lines Inc .............. 808 0.25
Auto Components
1,200
American Axle &
Manufacturing Holdings
Inc ....................................... 16 0.00
18,332 Johnson Controls Inc ........... 730 0.23
700 Visteon Corp ....................... 41 0.01
Automobiles
46,600 Ford Motor Co ..................... 527 0.16
20,300 General Motors Co .............. 517 0.16
Banks
9,900
Bank of New York Mellon
Corp ..................................... 346 0.11
11,800 BB&T Corp ......................... 378 0.12
3,400
Capital One Financial
Corp ..................................... 194 0.06
43,100 Citigroup Inc ....................... 1,645 0.51
19,900
Citizens Financial Group
Inc ....................................... 358 0.11
8,500 Comerica Inc ....................... 315 0.10
4,000 East West Bancorp Inc ........ 123 0.04
1,700 Goldman Sachs Group Inc .. 227 0.07
17,401 JPMorgan Chase & Co ........ 973 0.30
5,300 Northern Trust Corp ............ 316 0.10
7,000
PNC Financial Services
Group Inc ............................ 513 0.16
14,900 Regions Financial Corp ....... 114 0.03
2,140 Signature Bank .................... 241 0.07
12,300 SunTrust Banks Inc ............. 455 0.14
50,005 US Bancorp ......................... 1,815 0.56
60,271 Wells Fargo & Co ............... 2,568 0.79
Beverages
2,400 Coca-Cola Co ...................... 98 0.03
24,825 PepsiCo Inc ......................... 2,367 0.73
Biotechnology
5,070 Amgen Inc ........................... 694 0.22
1,360 Biogen Inc ........................... 296 0.09
1,100 Emergent BioSolutions Inc . 28 0.01
8,670 Gilead Sciences Inc ............. 651 0.20
300
Intercept Pharmaceuticals
Inc ....................................... 40 0.01
Chemicals
Number
of Shares
Fair Value
EUR ‘000
Fund
%
15,744 Dow Chemical Co ............... 704 0.22
13,639 Ecolab Inc ........................... 1,456 0.45
6,497 Praxair Inc .......................... 657 0.20
900 Westlake Chemical Corp .... 35 0.01
Commercial Services and Supplies
3,100 Aaron's Inc .......................... 61 0.02
6,800 Global Payments Inc ........... 437 0.14
1,100
Grand Canyon Education
Inc ....................................... 40 0.01
600 Insperity Inc ........................ 42 0.01
12,600 PayPal Holdings Inc ........... 414 0.13
Computers and Peripherals
36,939 Apple Inc ............................ 3,179 0.98
900 CACI International Inc ....... 73 0.02
16,300
Cadence Design Systems
Inc ....................................... 357 0.11
1,000 Cray Inc .............................. 27 0.01
27,259 EMC Corp .......................... 667 0.21
4,200 Mentor Graphics Corp ........ 80 0.03
9,000 NetApp Inc ......................... 199 0.06
9,500 Synopsys Inc ....................... 462 0.14
5,600 VeriFone Systems Inc ......... 93 0.03
9,900 Western Digital Corp .......... 421 0.13
Construction and Engineering
6,000 KBR Inc .............................. 72 0.02
Distributors
1,600 Anixter International Inc ..... 77 0.02
2,200 Core-Mark Holding Co Inc . 93 0.03
Diversified Financials
6,500 Ally Financial Inc ............... 100 0.03
4,440 Ameriprise Financial Inc .... 359 0.11
2,466 BlackRock Inc .................... 760 0.23
1,500 CME Group Inc .................. 132 0.04
4,400 Discover Financial Services 212 0.07
4,200 E*Trade Financial Corp ...... 89 0.03
2,130
Intercontinental Exchange
Inc ....................................... 491 0.15
7,600 MasterCard Inc ................... 602 0.19
29,500
Santander Consumer USA
Holdings Inc ....................... 274 0.08
8,100 Synchrony Financial ........... 184 0.06
18,229 Visa Inc ............................... 1,217 0.38
Electric Utilities
4,000
American Electric Power Co
Inc ....................................... 252 0.08
1,500 DTE Energy Co .................. 134 0.04
4,900 Edison International ............ 343 0.11
4,100 Entergy Corp ....................... 300 0.09
8,000 FirstEnergy Corp ................ 251 0.08
9,251 NextEra Energy Inc ............ 1,086 0.33
8,900 Southern Co ........................ 430 0.13
Electrical Equipment
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 71
Number
of Shares
Fair Value
EUR ‘000
Fund
%
10,388 Agilent Technologies Inc .... 415 0.13
1,000 Arrow Electronics Inc ......... 56 0.02
4,000 Avnet Inc ............................. 146 0.04
700 Belden Inc ........................... 38 0.01
600 Coherent Inc ........................ 50 0.02
3,032
Mettler-Toledo International
Inc ....................................... 996 0.31
3,400 Sanmina Corp ...................... 82 0.02
2,100 Tech Data Corp ................... 136 0.04
Energy Equipment and Services
1,400 First Solar Inc ...................... 61 0.02
Entertainment
2,500 Dolby Laboratories Inc ........ 108 0.03
350
Madison Square Garden
Co ........................................ 54 0.02
Food Products
8,600 Hormel Foods Corp ............. 283 0.09
13,300 Kroger Co ............................ 440 0.14
30,984
Mondelez International
Inc ....................................... 1,269 0.39
1,800 Performance Food Group .... 44 0.01
500 Sanderson Farms Inc ........... 39 0.01
Hand and Machine Tools
6,400 Kennametal Inc ................... 127 0.04
Health Care Equipment and Supplies
5,900 Bruker Corp ......................... 121 0.04
1,480 CR Bard Inc ........................ 313 0.10
4,840 Edwards Lifesciences Corp . 434 0.13
290 Intuitive Surgical Inc ........... 173 0.05
5,860 Stryker Corp ........................ 632 0.19
5,900 VWR Corp .......................... 153 0.05
Health Care Providers and Services
4,010 Anthem Inc .......................... 474 0.15
9,408 Cigna Corp .......................... 1,084 0.33
15,200
Envision Healthcare
Holdings Inc ........................ 347 0.11
1,900 Magellan Health Inc ............ 112 0.03
700 Molina Healthcare Inc ......... 31 0.01
10,635 UnitedHealth Group Inc ...... 1,352 0.42
Holding Companies - Diversified Operations
21,900 Leucadia National Corp ....... 342 0.11
Home Builders
70 NVR Inc .............................. 112 0.03
Home Furnishings
1,700
Harman International
Industries Inc ....................... 110 0.03
Insurance
900 Alleghany Corp ................... 445 0.14
22,135 Allstate Corp ....................... 1,394 0.43
8,100
American International
Group Inc ............................ 386 0.12
1,400
AmTrust Financial Services
Inc ....................................... 31 0.01
Number
of Shares
Fair Value
EUR ‘000
Fund
%
14,634 Berkshire Hathaway Inc ...... 1,908 0.59
800 CNA Financial Corp ........... 23 0.01
31,400 Genworth Financial Inc ...... 73 0.02
900 Kemper Corp ...................... 25 0.01
5,300 Lincoln National Corp ........ 185 0.06
2,132 Markel Corp ........................ 1,828 0.57
16,418 MetLife Inc ......................... 589 0.18
7,400
Principal Financial Group
Inc ....................................... 274 0.08
17,285 Progressive Corp ................. 521 0.16
5,000 Travelers Cos Inc ................ 536 0.17
4,900 Unum Group ....................... 140 0.04
19,100 Voya Financial Inc .............. 426 0.13
Internet Software and Services
5,745 Alphabet Inc (Class C) ........ 3,579 1.11
2,820 Amazon.com Inc ................. 1,817 0.56
2,800 Facebook Inc ....................... 288 0.09
1,700 GoDaddy Inc ....................... 48 0.02
615 Priceline Group Inc ............. 691 0.21
15,700 Symantec Corp ................... 290 0.09
Lodging
7,350 Marriott International Inc .... 440 0.14
Machinery
3,500
Babcock & Wilcox
Enterprises Inc .................... 46 0.01
6,820 Caterpillar Inc ..................... 465 0.14
1,640 Roper Technologies Inc ...... 252 0.08
3,400 Terex Corp .......................... 62 0.02
1,400
Zebra Technologies
Corp .................................... 63 0.02
Media
11,125 AMC Networks Inc ............. 605 0.19
190 Cable One Inc ..................... 87 0.03
46,274 Comcast Corp ..................... 2,715 0.84
28,700 News Corp .......................... 293 0.09
9,200 Time Inc .............................. 136 0.04
20,825 Time Warner Inc ................. 1,379 0.43
1,200 Tribune Media Co ............... 42 0.01
15,400
Twenty-First Century Fox
Inc ....................................... 375 0.12
9,675 Walt Disney Co .................. 852 0.26
Miscellaneous Manufacturers
8,280 Colfax Corp ........................ 197 0.06
54,277 General Electric Co ............. 1,538 0.48
11,300 Trinity Industries Inc .......... 189 0.06
Oil and Gas
6,000 Antero Resources Corp ....... 140 0.04
15,224 Chevron Corp ..................... 1,437 0.44
3,700 CVR Energy Inc ................. 52 0.02
18,800 Devon Energy Corp ............ 613 0.19
4,300
Diamond Offshore Drilling
Inc ....................................... 94 0.03
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
72 Russell Global Regional Equity Fund
Number
of Shares
Fair Value
EUR ‘000
Fund
%
14,921 EOG Resources Inc ............. 1,120 0.35
12,800 EP Energy Corp ................... 60 0.02
17,647 Exxon Mobil Corp ............... 1,489 0.46
100 Hess Corp ............................ 5 0.00
3,700 HollyFrontier Corp .............. 79 0.02
43,000 Marathon Oil Corp .............. 581 0.18
6,300
Marathon Petroleum
Corp ..................................... 215 0.07
1,900 Murphy USA Inc ................. 127 0.04
2,800 PBF Energy Inc ................... 60 0.02
1,860
Pioneer Natural Resources
Co ........................................ 253 0.08
9,600 QEP Resources Inc .............. 152 0.05
7,000 Valero Energy Corp ............ 321 0.10
5,800
Whiting Petroleum
Corp ..................................... 48 0.01
Oil and Gas Services
3,000 Baker Hughes Inc ................ 122 0.04
7,600 FMC Technologies Inc ........ 182 0.06
4,600 NOW Inc ............................. 75 0.02
5,400
Oceaneering International
Inc ....................................... 146 0.04
3,800
Superior Energy Services
Inc ....................................... 63 0.02
Paper and Forest Products
600 Domtar Corp ....................... 19 0.01
Personal Products
17,113 Procter & Gamble Co .......... 1,304 0.40
Pharmaceuticals
5,400 AmerisourceBergen Corp .... 386 0.12
6,300 Cardinal Health Inc ............. 442 0.14
6,200 Eli Lilly & Co ...................... 439 0.14
35,075 Johnson & Johnson ............. 3,830 1.18
26,645 Pfizer Inc ............................. 844 0.26
3,500
Quintiles Transnational
Holdings Inc ........................ 206 0.06
Pipelines
28,900 Kinder Morgan Inc .............. 487 0.15
Real Estate Investment Trust
26,879 American Tower Corp ......... 2,749 0.85
1,130
AvalonBay Communities
Inc ....................................... 183 0.06
4,357
Crown Castle International
Corp ..................................... 398 0.12
450 Equinix Inc .......................... 157 0.05
3,900 SL Green Realty Corp ......... 374 0.12
3,100
Xenia Hotels & Resorts
Inc ....................................... 47 0.01
Retail Trade
1,040
Chipotle Mexican Grill
Inc ....................................... 377 0.12
7,700 CVS Health Corp ................ 664 0.20
6,850 Home Depot Inc .................. 787 0.24
4,100 Lowe's Cos Inc .................... 292 0.09
Number
of Shares
Fair Value
EUR ‘000
Fund
%
6,300
Lululemon Athletica
Inc ....................................... 419 0.13
17,948 Macy's Inc ........................... 543 0.17
12,540 McDonald's Corp ................ 1,358 0.42
2,089 O'Reilly Automotive Inc ..... 511 0.16
5,500 Ross Stores Inc ................... 281 0.09
22,600 Staples Inc .......................... 175 0.05
37,264 Starbucks Corp ................... 1,916 0.59
20,982 TJX Cos Inc ........................ 1,459 0.45
11,875 Wal-Mart Stores Inc ........... 781 0.24
19,750 Williams-Sonoma Inc ......... 927 0.29
4,400 World Fuel Services Corp ... 188 0.06
Semiconductor Equipment and Products
40,300
Advanced Micro Devices
Inc ....................................... 186 0.06
5,900 Amkor Technology Inc ....... 31 0.01
38,309 Applied Materials Inc ......... 827 0.26
53,832 Intel Corp ............................ 1,589 0.49
8,700 ON Semiconductor Corp .... 69 0.02
7,400 Qualcomm Inc .................... 357 0.11
1,100 Rovi Corp ........................... 15 0.01
16,886 Texas Instruments Inc ......... 952 0.29
Software
8,287 Adobe Systems Inc ............. 715 0.22
2,100 Aspen Technology Inc ........ 76 0.02
1,700 Electronic Arts Inc .............. 117 0.04
11,030 Intuit Inc ............................. 1,108 0.34
52,335 Microsoft Corp ................... 2,411 0.75
680 MicroStrategy Inc ............... 107 0.03
70,276 Oracle Corp ......................... 2,589 0.80
1,700 Red Hat Inc ......................... 111 0.04
900 Synnex Corp ....................... 77 0.02
5,000 Verint Systems Inc .............. 149 0.05
2,300 VMware Inc ........................ 118 0.04
33,400 Zynga Inc ............................ 75 0.02
Telecommunications
2,200 Arista Networks Inc ............ 127 0.04
24,300 AT&T Inc ........................... 945 0.29
1,300 Ciena Corp .......................... 22 0.01
32,292 Cisco Systems Inc ............... 834 0.26
3,000 Finisar Corp ........................ 47 0.01
3,300 Infinera Corp ....................... 34 0.01
10,600 Juniper Networks Inc .......... 215 0.07
800 NETGEAR Inc ................... 34 0.01
4,900 T-Mobile US Inc ................. 191 0.06
4,182
Telephone & Data Systems
Inc ....................................... 112 0.03
900
Ubiquiti Networks
Inc ...................................... 31 0.01
900
United States Cellular
Corp .................................... 32 0.01
35,748
Verizon Communications
Inc ....................................... 1,797 0.56
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 73
Number
of Shares
Fair Value
EUR ‘000
Fund
%
22,600 Viavi Solutions Inc .............. 135 0.04
Textile and Apparel
30,166 NIKE Inc ............................. 1,499 0.46
Transport
2,500
CH Robinson Worldwide
Inc ....................................... 168 0.05
29,203 CSX Corp ............................ 686 0.21
9,018 FedEx Corp ......................... 1,233 0.38
3,400 Hub Group Inc ..................... 117 0.04
10,433 Kansas City Southern .......... 846 0.26
8,025
United Parcel Service
Inc ....................................... 778 0.24
125,070 38.67
Total Common Stock ........ 294,866 91.17
Preferred Stock (0.29%)
Germany (0.14%)
Automobiles
4,015 Volkswagen AG .................. 435 0.14
Italy (0.15%)
Machinery
39,219
Danieli & C Officine
Meccaniche SpA ................. 490 0.15
Total Preferred Stock ........ 925 0.29
Financial Derivative Instruments (0.38)%)
Open Futures Contracts (0.12%)
Number
of Shares
Fair Value
EUR ‘000
Fund
%
Rights (0.00%)
Spain (0.00%)
14,900
ACS Actividades de
Construccion y Servicios .... 9 0.00
Total Rights ....................... 9 0.00
Total Transferable
Securities ........................... 295,800 91.46
Investment Funds (4.69%)
Ireland (4.69%)
1
Russell Investment Company
III plc
The Sterling Liquidity
Fund - Class R Roll-Up
Shares ............................... 1 0.00
3,481
Russell Investment Company
III plc
The U.S. Dollar Cash Fund
II - Class R Roll-Up Shares 3,142 0.97
12,060
Russell Investment Company
plc
Russell Euro Liquidity
Fund - Class C Income
Shares ............................... 12,014 3.72
Total Investment Funds .... 15,157 4.69
Total Investments
excluding Financial
Derivative Instruments ..... 310,957 96.15
Notional
Amount
EUR ‘000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
(1,179) (421.00)
14 of Amsterdam Index Futures
Short Futures Contracts
Expiring July 2016 ................................................... (40) (0.01)
(3,550) (4,226.00)
84 of CAC 40 10 Euro Futures
Short Futures Contracts
Expiring July 2016 ................................................... (7) 0.00
(3,134) (9,644.00)
13 of DAX Index Futures
Short Futures Contracts
Expiring September 2016 ........................................ (8) 0.00
(11,709) (2,862.95)
409 of Euro Stoxx 50 Index Futures
Short Futures Contracts
Expiring September 2016 ........................................ 33 0.01
(12,470) (7,208.35)
173 of FTSE 100 Index Futures
Short Futures Contracts
Expiring September 2016 ........................................ (900) (0.28)
(899) (16,343.18)
11 of FTSE MIB Index Futures
Short Futures Contracts
Expiring September 2016 ........................................ 8 0.00
3,582 2,311.19
31 of Hang Seng Index Futures
Long Futures Contracts
Expiring July 2016 ................................................... 185 0.06
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
74 Russell Global Regional Equity Fund
Notional
Amount
EUR ‘000
Average
Cost Price
EUR
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
(1,299) (8,117.00)
16 of IBEX 35 Index Futures
Short Futures Contracts
Expiring July 2016 ................................................... (2) 0.00
1,535 199.37
79 of MSCI Singapore Index Futures
Long Futures Contracts
Expiring July 2016 ................................................... 99 0.03
(1,823) (136.02)
134 of OMX 30 Index Futures
Short Futures Contracts
Expiring July 2016 ................................................... (54) (0.02)
11,573 561.82
103 of S&P TSX 60 Index Futures
Long Futures Contracts
Expiring September 2016 ........................................ 53 0.02
43,900 1,884.13
466 of S&P 500 E Mini Index Futures
Long Futures Contracts
Expiring September 2016 ........................................ (62) (0.02)
8,807 3,453.53
102 of SPI 200 Futures
Long Futures Contracts
Expiring September 2016 ........................................ 40 0.01
(5,891) (7,183.86)
82 of Swiss Market Index Futures
Short Futures Contracts
Expiring September 2016 ............................................ (155) (0.05)
(6,424) (11.68)
55 of TOPIX Index Futures
Short Futures Contracts
Expiring September 2016 ........................................ 413 0.13
Unrealised gain on open futures contracts ......................................................................... 831 0.26
Unrealised loss on open futures contracts .......................................................................... (1,228) (0.38)
Net unrealised gain (loss) on open futures contracts ..................................................... (397) (0.12)
Open Forward Foreign Currency Exchange Contracts (0.50%)
Settlement
Date
Amount
Bought ‘000
Amount
Sold ‘000
Unrealised
Gain (Loss)
EUR ‘000
Fund
%
21/09/2016 AUD 13,590 EUR 8,859 198 0.06
21/09/2016 CAD 16,624 EUR 11,413 79 0.03
21/09/2016 CHF 710 EUR 656 1 0.00
21/09/2016 EUR 6,515 CHF 7,140 (93) (0.03)
21/09/2016 EUR 13,562 GBP 10,615 818 0.25
21/09/2016 EUR 7,521 JPY 916,300 (516) (0.16)
21/09/2016 EUR 2,004 SEK 18,500 37 0.01
21/09/2016 HKD 31,240 EUR 3,538 80 0.03
21/09/2016 JPY 140,860 EUR 1,236 (1) 0.00
21/09/2016 SGD 2,360 EUR 1,530 43 0.01
21/09/2016 USD 9,933 EUR 8,719 197 0.06
21/09/2016 USD 9,933 EUR 8,712 204 0.06
21/09/2016 USD 9,933 EUR 8,712 204 0.06
21/09/2016 USD 9,933 EUR 8,721 195 0.06
21/09/2016 USD 9,933 EUR 8,726 190 0.06
Unrealised gain on open forward foreign currency exchange contracts ................................ 2,246 0.69
Unrealised loss on open forward foreign currency exchange contracts ................................ (610) (0.19)
Net unrealised gain (loss) on open forward foreign currency exchange contracts ............................. 1,636 0.50
Total Financial Derivative Instruments ................................................................................................. 1,239 0.38
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 75
Fair Value
EUR ‘000
Fund
%
Total Financial Assets at Fair Value through Profit or Loss
(97.10%) ............................................................................................................................... 314,034 97.10
Total Financial Liabilities at Fair Value through Profit or
Loss (0.57%) ......................................................................................................................... (1,838) (0.57)
Net Financial Assets at Fair Value through Profit or Loss
(96.53%) ................................................................................................................................................... 312,196 96.53
Other Net Assets (3.47%) ........................................................................................................................ 11,235 3.47
Net Assets ................................................................................................................................................. 323,431 100.00
Abbreviation used:
ADR - American Depositary Receipt
CPS - Cumulative participating Shares
GDR - Global Depositary Receipt
NVDR - Non-Voting Depositary Receipt
Analysis of total assets (unaudited)
% of
total assets
Transferable securities admitted to an official stock exchange listing ..................................................................... 90.38
Investment Funds (UCITS) ...................................................................................................................................... 4.63
Exchange trades financial derivative instruments .................................................................................................... 0.25
Over the counter financial derivative instruments ................................................................................................... 0.69
Other assets .............................................................................................................................................................. 4.05
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
Brown Brothers Harriman & Co
Citibank
Standard Chartered Bank
State Street bank and Trust
UBS AG
Westpac Banking Corporation
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
30 June 2016
The accompanying notes are an integral part of the financial statements.
76 Russell Global Regional Equity Fund
Fair Value Hierarchy (Note 12 b i))
The following table analyses within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 30 June 2016.
As at 30 June 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 ............................................................... 295,800 - - 295,800
Investment funds ........................................................................ - 15,157 - 15,157
Unrealised gain on open futures contracts ..................................... 831 - - 831
Unrealised gain on forward foreign currency exchange
contracts ........................................................................................ - 2,246 - 2,246
Total assets ...................................................................................... 296,631 17,403 - 314,034
Liabilities
Financial liabilities at fair value through profit or loss:
Unrealised loss on open futures contracts ..................................... (1,228) - - (1,228)
Unrealised loss on forward foreign currency exchange
contracts ........................................................................................
- (610) - (610)
Total liabilities ................................................................................ (1,228) (610) - (1,838)
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Changes in Composition of Portfolio (unaudited)
Listed below are the 20 largest cumulative investment purchases and sales during the period 7 July 2015, launch date of the Fund,
to 30 June 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 Regional Equity Fund 77
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 C Income Shares 40,126 Class C Income Shares (28,091)
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 13,680 Class R Roll-Up Shares (10,474)
Apple Inc 6,892 Alphabet Inc (2,900)
Alphabet Inc 5,788 Wal-Mart Stores Inc (2,727)
Microsoft Corp 4,377 Apple Inc (2,611)
UBS Group AG 4,198 Ralph Lauren Corp (2,111)
Bayer AG 4,137 Royal Dutch Shell Plc (2,094)
Comcast Corp 4,055 Exxon Mobil Corp (2,040)
Oracle Corp 3,813 Walt Disney Co (2,021)
Wal-Mart Stores Inc 3,509 Microsoft Corp (2,004)
Johnson & Johnson Inc 3,411 Mizuho Financial Group Inc (1,991)
Exxon Mobil Corp 3,383 Nidec Corp (1,955)
Roche Holding AG 3,136 Pfizer Inc (1,947)
Mizuho Financial Group Inc 3,094 Priceline Group Inc (1,890)
Walt Disney Co 3,064 Visa Inc (1,816)
Royal Dutch Shell Plc 3,038 Dai-ichi Life Insurance Co Ltd (1,758)
Wells Fargo & Co 2,971 ORIX Corp (1,736)
Visa Inc 2,942 Jafco Co Ltd (1,715)
American Tower Corp 2,918 Nomura Holdings Inc (1,612)
Dai-ichi Life Insurance Co Ltd 2,908 Russell Investment Company III plc
The Sterling Liquidity Fund
Class R Roll-Up Shares (1,595)
Russell Investment Company IV plc
Notes to the Financial Statements
30 June 2016
78 Notes to the Financial Statements
1. Basis of Preparation
a) Statement of Compliance
The Company’s financial statements are prepared in accordance with accounting standards generally accepted in Ireland
(“Irish GAAP”) including Financial Reporting Standard (“FRS”) 102, the financial reporting standard applicable in the U.K.
and Republic of Ireland for the first time, Irish statute comprising the Companies Act 2014 and under the European
Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (as amended). Irish
GAAP, in preparing financial statements which present a true and fair view, are those promulgated by the Institute of
Chartered Accountants in Ireland (the “Institute”) and issued by the Financial Reporting Council (“FRC”). The Companies
Acts prescribed formats for financial statements have been adapted to make them more applicable to investment funds.
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 under Section 7 of FRS 102 and is not presenting cash flow statements. The
information required by FRS 102 to be included in a statement of comprehensive income, is, in the opinion of the Directors,
contained in the Profit and Loss Account of each Fund.
Investments on each individual Schedule of Investments less than 500 in value in the presentation currency of the respective
Fund are rounded to zero.
b) Transition to FRS 102
In 2012, 2013 and 2014 the FRC revised Financial Reporting Standards in the United Kingdom and Republic of Ireland. The
revisions fundamentally reformed financial reporting, replacing the extant standards with a number of new Financial
Reporting Standards. The new standards relevant to the Company are FRS 102: the Financial Reporting Standard applicable
in the UK and Republic of Ireland and FRS 104: Interim Financial Reporting. FRS 102 and FRS 104 are effective for
accounting periods beginning on or after 1 January 2015 with early adoption permitted.
The Directors, on the recommendation of the Manager’s Audit Committee, resolved to adopt and prepare the Company’s
financial statements in accordance with FRS 102, the Financial Reporting Standard applicable in the UK and Republic of
Ireland.
The date of transition to the new accounting framework is 1 July 2014 and accordingly the comparative amounts presented
for the financial year ended 30 June 2015 are based on the Company’s financial statements for that financial year after
adjustment for the transition to FRS 102.
The accounting policies applied in preparing these financial statements under FRS 102 are consistent with the accounting
policies applied, except where noted, in preparing the prior financial year financial statements under the previous accounting
framework. Please refer to note 2 to the financial statements for details of changes to the Company’s accounting policies as a
result of adoption of FRS 102.
c) Combined Financial Statements
The combined financial statements of the Company are measured using U.S. Dollars, being the functional currency of the
majority of the Funds in the Company. The accounts of the individual Funds are translated into U.S. Dollars using exchange
rates as at financial year ended 30 June 2016 and financial year ended 30 June 2015 respectively, and accumulated for
preparation of the combined financial statements.
For the purpose of producing the Combined Balance Sheet, respective financial year 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 financial year are used. The
currency gain or loss on retranslation of 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 the individual Funds.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 79
1. Basis of Preparation - continued
d) Estimates and judgements
The preparation of financial statements in conformity with Irish GAAP requires the use of certain critical accounting
estimates. It also requires the Board of Directors, based on advice of the Manager, to exercise its judgement in the process of
applying the Company’s accounting policies. Management also makes estimates and assumptions concerning the future. The
resulting accounting estimates will, by definition, seldom equal the related actual results. The areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are
determining fair values of certain financial instruments, as discussed in section b) of Note 2 to the financial statements and
determining the functional currency of the Company and individual Funds as discussed in section e) of Note 2 to the financial
statements.
2. Accounting Policies
The significant accounting policies adopted by the Company for the financial year ended 30 June 2016 are as follows:
a) Changes to the Company’s Accounting Policies
Changes in the Company’s accounting policies have been made as required in accordance with the transitional provisions in
FRS 102.
i) Fair value measurement and recognition
On initial application of FRS 102, in accounting for its financial instruments at fair value through profit and loss a
reporting entity is required to apply either:
a) the full provisions of section 11 “Basic Financial Instruments” and section 12 “Other Financial Instruments” of FRS
102; or
b) the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement and
only the disclosure requirements of Sections 11 and 12 of FRS 102; or
c) the recognition and measurement provisions of IFRS 9 Financial Instruments and/or IAS 39 (as amended following
the publication of IFRS 9) and only the disclosure requirements of Sections 11 and 12 of FRS 102.
The Company has chosen to implement the recognition and measurement provisions of IAS 39 and only the disclosure
requirements of Sections 11 and 12 of FRS 102.
As a result the Company changed its fair valuation input to utilise last traded market price for both financial assets and
liabilities. Where the last traded price is not within the bid ask spread, management will determine the point within the
bid ask spread which is most representative of fair value. Under the previous financial reporting standards the market
price used for financial assets held by the Company was the current bid price, the quoted market price for financial
liabilities was the current ask price. The Company’s prior financial year end Balance Sheet, as at 30 June 2015, has been
restated within these Financial Statements to recognise the fair value of the Company’s financial assets at fair value
through profit or loss using last traded market prices. The Company’s Profit and Loss Account for the financial year
ended 30 June 2015 has also been restated to reflect the use of last traded market prices.
The following tables summaries the respective restatements reflected on the Balance Sheet as of 30 June 2015 and the
Profit and Loss Account for financial year ended 30 June 2015.
Balance Sheet as at 30 June 2015
Combined
USD’000
Russell Absolute
Return Equity
Fund
GBP ‘000
Russell
Alpha Fund
USD ‘000
Russell Multi
Strategy
Volatility Fund
USD ‘000
Financial assets at fair value through profit or
loss (at bid market prices) .............................................................................................................................................. …………. 1,049,337 402,424 204,988 211,408
Adjustment from bid market prices to last traded
market prices ................................................................................................................................................................... ……….…. 624 314 111 19
Financial assets at fair value through profit or
loss (at last traded market prices) ................................................................................................................................... 1,049,961 402,738 205,099 211,427
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
80 Notes to the Financial Statements
2. Accounting Policies - continued
Profit and Loss Account for the financial year ended 30 June 2015
Combined
USD ’000
Russell Absolute
Return Equity
Fund
GBP ‘000
Russell
Alpha Fund
USD ‘000
Russell Multi
Strategy
Volatility Fund
USD ‘000
Net gain (loss) on investment activities (at bid
market prices) .................................................................................................................................................................. …………. (44,255) (9,559) (41,784)
12,534
Movement in adjustment from bid market prices to
last traded market prices .................................................................................................................................................. ……….…. 115 83 (3)
19
Net gain (loss) on investment activities (at last traded
market prices) .................................................................................................................................................................. (44,140) (9,476) (41,787)
12,553
b) Financial Instruments at Fair Value through Profit or Loss
This category has two sub-categories: financial assets and liabilities held for trading, and those designated by Directors at fair
value through profit and loss at inception. All instruments on each Fund’s Schedule of Investments are classified at fair value
through profit or loss.
i) Investments
Securities listed on a recognised stock exchange or traded on any other regulated market are valued at the current last
traded market price as of the balance sheet date on the stock exchange or market which constitutes the principal market
for such securities. If for specific assets the current last traded market price does not, in the opinion of the Directors,
reflect their fair value or are not available, the price of the most recent transaction provides evidence of the current fair
value as long as there has not been a significant change in economic circumstances since the time of the transaction.
In the case of any security not listed, quoted or dealt in on a regulated market or for which no quotation or value is
available which would provide a fair valuation, or in respect of which the price is unrepresentative, the fair value of such
security is determined on the basis of the probable realisation value and is determined by the Directors, a stockbroker or
other competent person appointed by the Directors and approved for the purpose by the Depositary, using valuation
techniques. There was no requirement during the current year for the Directors to appoint a competent person for such
purposes. The Company uses a variety of methods and makes assumptions that are based on market conditions existing
at each balance sheet date. Valuation techniques used include the use of comparable recent arm’s length transactions,
discounted cash flow analysis and option pricing models. If there is a valuation technique commonly used by market
participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices
obtained in actual market transactions, the Company uses that technique. Estimation methods and valuation models may
be used to calculate fair value. Due to the dynamic nature of assumptions used in estimating fair value and market
volatility, the values reflected in the financial statements for these investments may differ from the values that would be
determined by negotiations held between parties in a near term sales transaction, and those differences could be material.
Commercial paper is valued on an amortised basis with reference to the maturity date of these instruments, which
approximates fair value.
Deposits with credit institutions are valued at par.
Investments in open-ended investment funds are valued at fair value at the latest available unaudited net asset value for
the shares or units obtained from the relevant administrator. The changes in the daily net asset value of these shares are
recognised as net gain (loss) on investment activities in the Profit and Loss Account.
ii) Warrants
Warrants are sometimes used to gain exposure to emerging market equities where custody, liquidity, or other issues
make ownership of local shares sub-optimal.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 81
2. Accounting Policies - continued
The valuation of the warrants depends on the level of trading. If the warrants are actively traded in the market then the
market price is used. If the warrants are not actively traded in the market then either the intrinsic value of the warrant
based on underlying equity price and warrant strike price or modified Black Scholes derived value, adjusted for
liquidity/other risks deemed appropriate are used.
iii) Forward and Spot Foreign Currency Exchange Contracts
The fair value of open forward foreign currency exchange contracts and open foreign currency exchange spot contracts is
calculated as the difference between the contracted rate and the current forward rate that would close out the contract on
the balance sheet date. For each relevant Fund, gains or losses on open foreign currency exchange spot contracts are
included in cash at bank in the Balance Sheet and gains or losses on open forward foreign currency exchange contracts
are included in financial assets or liabilities at fair value through profit or loss, as appropriate, on the Balance Sheet and
Schedule of Investments.
iv) Futures Contracts
Initial margin deposits are made upon entering into futures contracts and are generally made in cash or cash equivalents.
The fair value of futures contracts is based upon their current quoted daily settlement prices on the relevant exchange as
of the balance sheet date. Changes in the value of open futures contracts are recognised as unrealised gains or losses on
futures contracts until the contracts are terminated, at which time realised gains and losses are recognised. For each
relevant Fund, gains or losses on open futures contracts are shown in the Schedule of Investments and as appropriate, on
the Balance Sheet as financial assets or liabilities at fair value through profit or loss.
v) Options
Each Fund may purchase and sell (write) call and put options on securities, securities indices and foreign currencies
traded on a national securities exchange or in an over-the-counter market.
When a Fund writes a call or a put option, a premium is received by the Fund. The premium is subsequently marked to
market to reflect the fair value of the option written, which is reported within financial assets or liabilities at fair value
through profit or loss on the Balance Sheet for each relevant Fund. The difference between the premium amount and the
fair value reported on the Balance Sheet gives rise to an unrealised gain (loss).
When a Fund purchases a call or a put option, a premium is paid by the Fund. The premium on purchased put options
exercised is subtracted from the proceeds of the sale of the underlying security or foreign currency in determining the
realised gain or loss. The premium on purchased call options exercised is included in determining initial fair value of the
securities or foreign currency purchased. Premiums paid on the purchase of options which expire unexercised are treated
as realised losses. The option is subsequently marked to market to reflect the fair value of the option purchased, which is
reported within financial assets at fair value through profit or loss on the Balance Sheet for each relevant Fund.
The over-the-counter options are valued at close of business on the dealing day at the settlement price as provided by the
counterparty/broker and the values are independently valued, at a minimum, weekly. The fair value of exchange traded
options are based upon their quoted daily settlement prices on the relevant exchange. In the event of it being impossible
or incorrect to carry out a valuation of a specific investment in accordance with the valuation rules, or if such valuation is
not representative of a security’s fair market value, the Directors are entitled to use other generally recognised valuation
methods in order to reach a proper valuation of that specific instrument, provided that such method of valuation has been
approved by the Depositary.
If an option which a Fund has written either expires on its stipulated expiration date or a Fund enters into a closing
purchase transaction, a Fund realises a gain (or loss, if the cost of a closing purchase transaction exceeds the premium
received when the option was sold) without regard to any unrealised gain or loss on the underlying security, and the
liability related to such option is extinguished. If a call option which a Fund has written is exercised, a Fund realises a
capital gain or loss from the sale of the underlying security, and the proceeds from such sales are increased by the
premium originally received. When a put option which a Fund has written is exercised, the amount of the premium
originally received will reduce the cost of the security which a Fund purchases upon exercise of the option.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
82 Notes to the Financial Statements
2. Accounting Policies - continued
c) Net Gain (Loss) on Investment Activities
In respect of each instrument type classified as financial instruments at fair value through profit or loss, the movement in
unrealised gains (losses) since the prior financial year end and realised gains (losses) are recognised within net gain (loss) on
investment activities in the Profit and Loss Account for each relevant Fund.
See Note 4 for details of realised gains (losses) and movement in unrealised gains (losses) since the prior financial year end.
Gains and losses on options, swaps and swaptions are included in the investments figure for each relevant Fund. Gains and
losses on foreign currency exchange contracts are included in foreign currency exchange gains (losses).
d) Accounting for Investment Transactions, Income and Expenses
Purchases and sales of investments are recognised on trade date, the date on which the Fund commits to purchase or sell the
asset, provided the trade instructions have been received by the Depositary prior to the calculation of the Fund’s net asset
value, being 2.30pm (Irish time) on each dealing day (the “Valuation Point”). Any trade instructions received by the
Depositary after the Valuation Point will be recognised on the next dealing day. Investments are initially recognised at fair
value and transaction costs for all financial assets and financial liabilities carried at fair value through profit or loss are
expensed as incurred.
Investments are recognised when the rights to receive cash flows from the investments are transferred to the Fund or the
Fund has exposure to substantially all risks and rewards of ownership. Investments are derecognised when the rights to
receive cash flows from the investments have expired or the Fund has transferred substantially all risks and rewards of
ownership.
Realised gains and losses on investment transactions are calculated using the average cost method. Realised gains and losses
on investments transactions in debt instruments are calculated as the difference between sales proceeds and the amortised
cost of the instrument. Amortised cost is arrived at using the effective interest method. The effective interest method is a
method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or
interest expense over the relevant period. Interest income and expense are recognised in the Profit and Loss Account for all
relevant instruments using the effective interest method. Gains and losses realised on the sale of all financial assets and
financial liabilities carried at fair value through profit or loss are recognised in the Profit and Loss Account.
Bank interest is recognised on an accruals basis.
Dividends are credited to the Profit and Loss Account on the dates on which the relevant securities are listed as “exdividend”.
Income is accounted for gross of any non reclaimable/irrecoverable withholding taxes and net of any tax credits. The
withholding tax is shown separately in the Profit and Loss Account.
Each Fund pays all of its expenses and such proportion of the Company’s expenses as is allocated to that Fund, other than
those expressly assumed by the Manager. The costs and gains (losses) of any hedging transactions will be attributable to the
relevant Share Class. To the extent that expenses are attributable to a specific Share Class of a Fund, that Share Class bears
such expenses. All expenses, as disclosed in the Profit and Loss Account, with the exception of Professional and Other fees,
are accrued on a daily basis. Professional fees and other fees recognised in the Profit and Loss Account are generally charged
and paid when billed to the Funds.
e) Foreign Currency Transactions
In accordance with Section 30 of FRS 102, items included in the individual Fund’s financial statements are measured using
the currency of the primary economic environment in which it operates (functional currency). The Directors’ selection of the
functional currency is attributable to the functional currency being: (a) the major component of the Fund’s benchmarks; or
(b) the common currency of monies received on subscriptions and paid out on redemptions of shares for most clients in the
Funds’ varied client base or (c) the common currency of the majority of the investments held on the Fund. The functional
currency assessment is done on a Fund by Fund basis. The functional currency of the Company is the U.S. Dollar.
Each individual Fund has also adopted its functional currency as the presentation currency. Foreign currency transactions are
translated to the functional currency of the relevant Fund at the rate of exchange ruling on the date of the transaction.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 83
2. Accounting Policies - continued
For each relevant Fund:
(i) Currency gains and losses can arise where there is a difference between the amounts of foreign dividends and interest
recorded on the Fund’s books and the Fund’s functional currency equivalent to the amounts actually received or paid.
These gains or losses are included where appropriate in the dividend and interest income figure in the Fund’s Profit and
Loss Account;
(ii) Currency gains and losses realised on securities purchase and sales transactions are included in net gain (loss) on
investment activities in the relevant Fund’s Profit and Loss Account;
(iii) Unrealised currency gains and losses on securities held at financial year end are included in net gain (loss) on investment
activities in the relevant Fund’s Profit and Loss Account;
(iv) Monetary assets and liabilities denominated in currencies other than the Fund’s functional currency are translated at the
rate of exchange ruling at the close of business on the relevant reporting date and exchange differences are included in
net gain (loss) on investment activities in the relevant Fund’s Profit and Loss Account; and
(v) Share transactions which are settled in a currency other than the functional currency of a Fund are settled using the
applicable foreign currency exchange rate as of the trade date. As a result, there is no foreign currency impact on the
Funds for such transactions.
f) Redeemable Participating Shares
Redeemable participating shares are redeemable at the shareholder’s option and are classified as financial liabilities. The
redeemable shares can be repurchased by the Company at any time for cash equal to a proportionate share of the Company’s
net asset value. The redeemable share is carried at the redemption amount that is payable at the balance sheet date if a
shareholder exercised his or her right to have the Company repurchase his or her share. In accordance with the Prospectus,
for the relevant Funds, the Company is contractually obliged to redeem shares at dealing prices and the liability to
redeemable participating shareholders has been adjusted to reflect this. Monetary value share transactions during the financial
year are recognised in the Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders of the
relevant Fund.
g) Distributions
Distributions on Income Share Classes, and deemed distributions on Accumulating Share Classes with an ex date during the
financial financial year are included as a finance cost in the Profit and Loss Account. The reinvestment of the deemed
distribution on the Accumulation Share Classes are included as a share transaction in the Statement of Changes in Net Assets
Attributable to Redeemable Participating Shareholders. Roll-Up Share Classes do not declare or distribute net income and the
net asset value therefore reflects net income.
h) Swing Pricing/Dilution Adjustments
Swing pricing (also known as dilution adjustment) is applied to a Fund once net subscriptions or redemptions for a Fund
relating to a Fund’s net asset value for a given dealing day is determined by the Administrator to exceed certain pre-
determined percentage thresholds. In calculating the swing pricing, the net asset value of a Fund is swung by a “swing factor”
on the following basis:
Net subscriptions - the price used to process all transactions is adjusted upwards by the swing factor to a notional offer price.
Net redemptions - the price used to process all transactions is adjusted downwards by the swing factor to a notional bid price.
If the net asset value of a Fund is swung on a specific dealing day the official price for a Fund will be the derived swing
price. In addition, all dealing activity for this dealing day will be dealt at the swing price. Swing pricing applied to a Fund
during the financial year is recognised within the share transactions figure on the Statement of Changes in Net Assets
Attributable to Redeemable Shareholders.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
84 Notes to the Financial Statements
2. Accounting Policies - continued
i) Collateral
A Fund’s assets may be deposited by or on behalf of the Fund for collateral purposes with brokers, for options and futures
contracts, and counterparties, in respect of over the counter financial derivative instruments (“FDIs”), held on the Funds.
Such assets remain in the ownership of the relevant Fund and are recorded as an asset on the Balance Sheet. Cash pledged by
the Funds as collateral is recognised on the Balance Sheet within ‘Cash held with brokers and counterparties for open FDIs’.
Investments pledged by the Funds as collateral are recognised at fair value in the relevant Fund’s Schedule of Investments
and such investments are referenced accordingly at the base of the Schedule of Investments.
See Note 3 for details of cash collateral received and pledged by the Funds to and from counterparties for FDIs.
i) Impairment of Collateral
The Adviser has considered the recoverability of collateral due from relevant brokers and counterparties at financial year
end/prior financial year end and has considered the need to write-down the value of such collateral. The Adviser is
satisfied that the full value of the collateral is recoverable from all brokers and counterparties at the respective financial
financial year end dates.
j) Transaction Costs
Transaction costs are defined as the incremental costs that are directly attributable to the acquisition, issue or disposal of a
financial asset or financial liability. An incremental cost is one that would not have been incurred if the entity had not
acquired, issued or disposed of the financial instrument. When a financial asset or financial liability is recognised initially, an
entity shall measure it at its fair value through profit or loss plus, transaction costs that are directly attributable to the
acquisition or issue of the financial asset or financial liability.
Transaction costs relating to the brokers commission on the purchase and sale of a financial asset or financial liability, are
included in its purchase and sale price. Transaction costs of the Depositary or sub-custodian as the case may be are embedded
in the relevant fees in the Profit and Loss Account.
3. Cash at Bank and Cash Held with Brokers and Counterparties
a) Cash at Bank
Cash at bank balances are comprised of cash balances held within State Street Bank and Trust Company’s (“State Street”)
custodian network*, unrestricted margin accounts held by brokers for exchange traded derivative instruments 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.
The tables in this section of the note details all such cash held on the Funds, including relevant broker and location of broker,
as of 30 June 2016 and 30 June 2015. All cash at bank balances are held by State Street for those Funds not listed below.
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.
As at 30 June 2016
Held with Location
Russell Multi
Strategy
Volatility
Fund
USD ‘000
Russell
Global
Regional
Equity Fund
EUR ‘000
Total
USD ‘000
State Street Bank & Trust Company ................................ Multiple 38,231 2,281 37,765
Goldman Sachs Execution & Clearing L.P. ....................... Jersey City, U.S.A. 1,793 - 1,793
Merill Lynch International .............................................. London, United Kingdom - 516 573
40,024 2,797 40,131
* 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. Such cash and all cash held within the State Street custodian network is included within the State Street Bank and Trust figures in the tables
contained within this note.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 85
3. Cash at Bank and Cash Held with Brokers and Counterparties - continued
As at 30 June 2015
Held with Location
Russell
Absolute
Return Equity
Fund
GBP ‘000
Russell Alpha
Fund
USD ‘000
Russell Multi
Strategy
Volatility
Fund
USD ‘000
Total
USD ‘000
State Street Bank & Trust Company ................................ Multiple 7,286 9,174 12,098 32,731
Goldman Sachs Execution & Clearing L.P. ....................... Jersey City, U.S.A. - - 22,783 22,783
Morgan Stanley & Co. International plc ......................... London, United Kingdom 4,240 2,510 - 9,179
11,526 11,684 34,881 64,693
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 futures contracts and as
collateral with counterparties in respect of OTC FDIs 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.
All such cash held on the Funds, including relevant broker and location of broker, as of 30 June 2016 and 30 June 2015 are
detailed in the tables below.
As at 30 June 2016
Broker Location
Russell
Alpha Fund
USD ‘000
Russell Multi
Strategy
Volatility
Fund
USD ‘000
Russell
Global
Regional
Equity Fund
EUR ‘000
Total
USD ‘000
Goldman Sachs Execution & Co New York, U.S.A. - 10,748 - 10,748
Merril Lynch International .................................................... London, United Kingdom - - 7,070 7,855
Morgan Stanley & Co. International plc London, United Kingdom 3,960 - - 3,960
3,960 10,748 7,070 22,563
As at 30 June 2015
Broker Location
Russell
Absolute
Return Equity
Fund
GBP ‘000
Russell
Alpha Fund
USD ‘000
Russell Multi
Strategy
Volatility
Fund
USD ‘000
Total
USD ‘000
Goldman Sachs Execution & Clearing L.P. ....................... Jersey City, U.S.A. - - 5,806 5,806
Morgan Stanley & Co. International plc ......................... London, United Kingdom 19,141 11,149 - 41,254
19,141 11,149 5,806 47,060
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
86 Notes to the Financial Statements
4. Net Gain (Loss) on Investment Activities
All gains and losses on investments other than futures contracts and forward foreign currency exchange contracts are
included within the investments figure in the tables below.
a) Financial year ended 30 June 2016
i) Net realised gain (loss)
Russell Absolute
Return
Equity Fund
GBP ‘000
Russell
Alpha Fund
USD ‘000
Russell Multi
Strategy
Volatility Fund
USD ‘000
Russell Global
Regional
Equity Fund
USD ‘000
Investments .................................................................. 38,209 (5,182) (14,159) (12,336)
Futures contracts ......................................................... 3,512 18,580 (12,489) 3,191
Foreign currency exchange ......................................... 8,062 (6,007) (3,579) (1,056)
49,783 7,391 (30,227) (10,201)
ii) Net change in unrealised gain (loss) on:
Russell Absolute
Return
Equity Fund
GBP ‘000
Russell
Alpha Fund
USD ‘000
Russell Multi
Strategy
Volatility Fund
USD ‘000
Russell Global
Regional Equity
Fund
USD ‘000
Investments .................................................................. (39,549) (13,691) 11,645 (9,255)
Futures contracts ......................................................... (4,679) (1,065) (6,119) (397)
Foreign currency exchange ......................................... (7,361) (13,057) 2,793 1,653
(51,588) (27,813) 8,319 (7,999)
iii) Net gain (loss) on investment activities
Russell Absolute
Return
Equity Fund
GBP ‘000
Russell
Alpha Fund
USD ‘000
Russell Multi
Strategy
Volatility Fund
USD ‘000
Russell Global
Regional Equity
Fund
USD ‘000
Net realised gain (loss) ................................................ 49,783 7,391 (30,227) (10,201)
Net change in unrealised gain (loss) ........................... (51,588) (27,813) 8,319 (7,999)
Net gain (loss) on investment activities ...................... (1,805) (20,422) (21,908) (18,200)
b) Financial year ended 30 June 2015
i) Net realised gain (loss)
Russell Absolute
Return
Equity Fund
GBP ‘000
Russell
Alpha Fund
USD ‘000
Russell Multi
Strategy
Volatility Fund
USD ‘000
Investments .................................................................. 23,885 13,077 21,086
Futures contracts ......................................................... (48,458) (22,906) (2,833)
Foreign currency exchange ......................................... 2 (20,744) (2,174)
(24,571) (30,573) 16,079
ii) Net change in unrealised gain (loss) on:
Russell Absolute
Return
Equity Fund
GBP ‘000
Russell
Alpha Fund
USD ‘000
Russell Multi
Strategy
Volatility Fund
USD ‘000
Investments .................................................................. 3,891 (16,477) (5,049)
Futures contracts ......................................................... 8,898 5,546 173
Foreign currency exchange ......................................... 2,306 (283) 1,350
15,095 (11,214) (3,526)
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 87
4. Net Gain (Loss) on Investment Activities - continued
iii) Net gain (loss) on investment activities
Russell Absolute
Return
Equity Fund
GBP ‘000
Russell
Alpha Fund
USD ‘000
Russell Multi
Strategy
Volatility Fund
USD ‘000
Net realised gain (loss) ................................................ (24,571) (30,573) 16,079
Net change in unrealised gain (loss) ........................... 15,095 (11,214) (3,526)
Net gain (loss) on investment activities ...................... (9,476) (41,787) (12,553)
5. 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 years ended 30 June 2016 and 30 June 2015.
Relation to the Company Name of entity
Details
disclosed
in section of
this note
Manager ............................................................................................................................. Russell Investments Ireland Limited ................................................................................ b), i)
Adviser and Distributor (the “Adviser”) ........................................................................... Russell Investments Limited ............................................................................................ b), ii)
Affiliated Money Manager ................................................................................................ Russell Investments Implementation Services LLC and Russell Management, LLC ...... b), iii)
Currency Implementation .................................................................................................. Russell Investments Implementation Services LLC. ....................................................... b), iii)
Affiliated Broker ............................................................................................................... Russell Investments Implementation Services LLC. ....................................................... b), iii)
Directors of the Company ................................................................................................. As listed in the Administration of the Company page ..................................................... b), iv)
Related Party Investors and Investees ............................................................................... Affiliated Russell Investments entities and Russell Managed Funds .............................. b), v)
b) Related Party Transactions
i) Manager, Management Fee and Performance Fee
The Manager was a wholly owned subsidiary of Frank Russell Company, which in turn was a 100 per cent owned
subsidiary of The London Stock Exchange Group (the “LSEG”) until 31 May 2016. From 1 June 2016, the Manager is a
wholly owned subsidiary of Russell Investments Ireland Holdco Limited, which is in turn indirectly owned by Emerald
Acquisition Limited. The Manager is engaged in the business of providing investment management and administrative
services to investment funds. The Manager has: (a) appointed the Adviser to advise it on the Funds’ investments; (b)
delegated the administration of the Company to the Administrator; and (c) appointed the Adviser to market and promote
the shares of the Funds.
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 Absolute Return Equity Fund Russell Alpha Fund Russell Multi Strategy Volatility Fund
A Euro Hedged Roll-Up Class 0.50% A Euro Hedged Roll-Up Class 0.50% A AUD Hedged Class 1.80%
A GBP Class 0.60% GBP Hedged Class 0.60% A US Dollar Roll-Up Class 1.75%
A GBP Income Class 0.60% U.S. Dollar Roll-Up Class 0.50% A Euro Hedged Roll-Up Class 1.80%
Q GBP Income Class 0.23% Yen Hedged Roll-Up Class 0.40% A GBP Hedged Roll-Up Class 1.80%
Russell Global Regional Equity Fund
A Euro Class 0.45%
Rates for classes of shares not yet funded as at 30 June 2016 are not listed.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
88 Notes to the Financial Statements
5. Transactions with Related Parties - continued
The management fee for each class of shares paid to the Manager shall comprises two elements: the fixed
management fee for each class of shares as set out in the tables above plus the Weighted Average Money Manager
fees.
Weighted Average Money Manager fees are calculated by the Manager once every month in advance using the most
recently available information on the fees payable to each Money Manager and the target weight. Weighted Average
Money Manager fees shall not in any event exceed 1.0 per cent of the net asset value of each Fund. The management
fee for each class of shares may differ each month and the management fee for the same class of shares may differ
between months.
The total management fee paid to the Manager shall not in any event exceed 2.0 per cent of the net asset value of the
relevant class. Fees of the Money Managers are paid out of the management fees.
b) Performance Fee
A performance fee (the “Performance Fee”) is payable to the Manager in respect of certain Funds 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 in full in the Prospectus.
For the financial year ended 30 June 2016, there was a performance fee charged of USD 290,311. For the financial
year ended 30 June 2015, there was a performance fee adjustment of USD 115,734 recognised in the Profit and Loss
Account.
ii) Adviser
The Manager discharges all fees payable to the Adviser out of its management fee.
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 Investments Management, LLC (“RIM”) are affiliated group companies to the
Manager and the Adviser. The Adviser, Russell Investments Implementation Service, LLC. and RIM can be appointed as
Money Manager to the Funds. Please refer to each Fund’s Manager Report section for a list of Money Managers as at 30
June 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. Trades
placed through RIIS and its correspondents are made (i) to manage trading associated with changes in Money Managers,
rebalancing across existing Money 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 is also engaged by the Adviser to carry out foreign currency implementation trading for which a fee of 0.02 per cent
per trade is included in individual transactions.
For the financial year ended 30 June 2016, the total commission earned by RIIS, encompassing the range of services
provided, amounted to USD 300,847 (financial year ended 30 June 2015: USD 136,477).
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 89
5. Transactions with Related Parties - continued
iv) Directors and Directors’ Fees
The Articles of Association provide that the Directors shall be 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 Investments 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
financial year ended 30 June 2016 were USD 12,527 (financial year ended 30 June 2015: USD 8,158) these amounts are
included in other fees in the Combined Profit and Loss Account.
All of the Directors of the Company are also directors of the Russell Funds discussed in section vi) of this note below.
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.
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 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 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 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 Shareholders of the Company
During the financial year ended 30 June 2016 and the financial year ended 30 June 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 FRS 102 these entities are deemed related party shareholders to the Company.
The table below discloses the value of shares held by related party shareholders in the Company and the percentage of
this value against the Company’s combined net asset value as at the 30 June 2016 and 30 June 2015.
Related Party Shareholder
30 June 2016
USD ‘000
Company
%
30 June 2015
USD ‘000
Company
%
Russell Institutional Funds plc ................................................................................................................................ 125,771 16.26% 136,682 12.10%
Russell Investment Company plc ............................................................................................................................ 18,639 2.41% 38,337 3.39%
Russell Investment Company V plc ........................................................................................................................ 25,391 3.28% 14,587 1.29%
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
90 Notes to the Financial Statements
6. Significant Agreements
i) Depositary
State Street Custodial Services (Ireland) Limited is the Company’s Depositary. The Depositary has appointed its parent
State Street Bank and Trust Company 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 State Street Custodial Services (Ireland) Limited.
From 21 March 2016, in line with the UCITS V Regulations, State Street Custodial Services (Ireland) Limited provides
depositary services.
Depositary fees accrue daily and are paid monthly in arrears.
Included within the Custodian agreement is a right of set off 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 trading in a period and are subject to adequate
minimum thresholds. Transfer agency fees are accrued 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 aggregate Administration fee and Depositary fee per Fund will not exceed 0.30 percent of the net asset value of any
Fund.
iii) Transaction Costs
Transaction costs relating to the broker commission on the purchase and sale of bonds, equities, exchange traded FDIs
and OTC FDIs, are included in the purchase and sale price of the investment. Transaction costs on Purchases and Sales
of Equities and Exchange Traded FDIs are readily identifiable.
Transaction costs on the purchase and sale of bonds and OTC FDIs cannot be practically or reliably gathered as they are
embedded in the cost of the investment and cannot be separately verified or disclosed.
Total transaction costs, incorporating broker commissions and transaction costs of the Depositary and sub-custodians are
as follows:
Fund Functional
Currency
Year ended
30 June 2016
‘000
Year ended
30 June 2015
‘000
Russell Absolute Return Equity Fund ............. GBP 318 1,035
Russell Alpha Fund .......................................... USD 869 641
Russell Multi Strategy Volatility Fund ............ USD 27,523 1,658
Russell Global Regional Equity Fund EUR 874 -
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 91
6. Significant Agreements - continued
iv) Auditors’ Remuneration
The remuneration for all work carried out by the statutory audit firm in respect of the financial year under review and
prior financial year is as follows:
2016
USD ‘000
2015
USD ‘000
Statutory audit of accounts* .................................................................................................................................................................................................... 76 61
Tax advisory services ** .......................................................................................................................................................................................................... 17 13
Total ........................................................................................................................................................................................................................................ 93 74
* The fees for statutory audit of the accounts disclosed in the table above are exclusive of VAT. The audit fees recognised in the Profit and Loss
Account are inclusive of VAT.
** Exclusive of VAT.
There were no fees for other assurance services or other non-audit services during the financial year ended 30 June 2016 (30
June 2015: Nil).
7. Soft Commissions, Directed Brokerage Services and Commission Recapture Programme
The Adviser retains the right to request that the Money Managers participate in Russell’s soft commission, directed
brokerage services and commission recapture programme (the “Programme”) by executing a portion of their securities
transactions through certain brokers (the “Correspondent Broker Network”). 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 Network, 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 Network 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.
Soft Commission Credits are used by the Adviser to purchase third party research that will aid Russell Investments in its
investment decision-making process. Research purchased through the Programme is obtained from unaffiliated third
parties at market rates.
Soft Commission Credits for the year ended 30 June 2016 amounted to USD 60 (year ended 30 June 2015: USD 35,257).
ii) Recapture Credits
Once the soft commission research budget has been met the Committee will instruct BNY and SSGM to recapture the
Commission Credits which are then rebated directly back to the relevant Fund from which the commission was generated.
Russell Investments does not receive any revenue (directly or indirectly from BNY or any broker) from the commission
recapture component of the Programme.
Credits rebated back to the Funds for the year ended 30 June 2016 amounted to USD 28,544 (year ended 30 June 2015:
USD 13,416).
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
92 Notes to the Financial Statements
8. Distributions
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.
Three Classes of Shares may be issued by the Funds, namely Income Class Shares, Accumulation Class Shares and Roll-Up
Class Shares. Income Class Shares distribute net income from time to time subject to Directors’ discretion. Accumulation
Class Shares are shares that declare a distribution but whose net income is then reinvested in the capital of the relevant Fund.
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. Net income includes all interest, dividends and other amounts deemed by the Manager to
be in the nature of income less the estimated expenses of that Fund applicable to that dividend year.
Distributions are calculated and declared on a calendar semi-annual basis (i.e. semi-annual periods ended 30 June and
31 December).
9. 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.
10. 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 not less than EUR 2.00 represented by two subscriber shares of no par value
and the maximum issued share capital shall be not more than 500 billion participating shares of no par value. 39,000
subscriber shares have been issued but 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 the Promoter and the Adviser.
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.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 93
10. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders - continued
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
or 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 Fund not the currency of the class.
Russell Absolute Return Equity Fund
Number of Shares in issue
Financial Year ended 30 June 2015 Financial Year ended 30 June 2016
Share Class
Beginning
of year
Shares
Issued
Shares
Redeemed
End
of year
Shares
Issued
Shares
Redeemed
End
of year
A GBP Class .................................................................... 12,722,024 1,087,738 (1,524,490) 12,285,272 30,233 (12,315,505) -
A GBP Income Class ....................................................... 23,001,120 945 (22,991,503) 10,562 - (10,562) -
A Euro Hedged
Roll-Up Class .................................................................. - 4,797,664 (574,494) 4,223,170 120,517 (4,343,687) -
Q GBP Income Class ....................................................... 6,731,808 24,642,300 (3,328,959) 28,045,149 81,644 (28,126,793) -
Value of Share Transactions
Financial Year ended
30 June 2015
Financial Year ended
30 June 2016
Share Class
Subscriptions
GBP ‘000
Redemptions
GBP ‘000
Subscriptions
GBP ‘000
Redemptions
GBP ‘000
A GBP Class .................................................................... 10,705 (14,975) 300 (120,844)
A GBP Income Class ....................................................... 9 (217,396) - (330)
A Euro Hedged
Roll-Up Class .................................................................. 36,515 (4,296) 846 (30,365)
Q GBP Income Class ....................................................... 241,791 (32,394) 797 (273,719)
Russell Alpha Fund
Number of Shares in issue
Financial Year ended 30 June 2015 Financial Year ended 30 June 2016
Share Class
Beginning
of year
Shares
Issued
Shares
Redeemed
End
of year
Shares
Issued
Shares
Redeemed
End
of year
A Euro Hedged
Roll-Up Class .................................................................. 7,291 2,353 (2,174) 7,470 4,869 (2,313) 10,026
U.S. Dollar Roll-Up
Class ................................................................................. 2,555 669 (76) 3,148 264 (1,224)
2,188
Yen Hedged Roll-Up
Class ................................................................................. 120,152 - (120,152) - - - -
GBP Hedged Class .......................................................... 9,409 2,097 (5,112) 6,394 3,366 (2,299) 7,461
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
94 Notes to the Financial Statements
10. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders – continued
Value of Share Transactions
Financial Year ended
30 June 2015
Financial Year ended
30 June 2016
Share Class
Subscriptions
USD ‘000
Redemptions
USD ‘000
Subscriptions
USD ‘000
Redemptions
USD ‘000
A Euro Hedged
Roll-Up Class .................................................................. 30,675 (29,629) 57,745 (27,311)
U.S. Dollar Roll-Up
Class ................................................................................. 7,700 (873) 3,056 (14,216)
Yen Hedged Roll-Up
Class ................................................................................. - (9,211) - -
GBP Hedged Class .......................................................... 35,047 (77,899) 52,630 (34,650)
Russell Multi Strategy Volatility Fund
Number of Shares in issue
Financial Year ended 30 June 2015 Financial Year ended 30 June 2016
Share Class
Beginning
of year
Shares
Issued
Shares
Redeemed
End
of year
Shares
Issued
Shares
Redeemed
End
of year
A Euro Hedged Roll-
Up Class ...........................................................................
-
19,489 (2,843) 16,646 13,470 (29,885) 231
A AUD Hedged
Class .................................................................................
-
191,260 - 191,260 436,162 (426,512) 200,910
A U.S. Dollar Roll-Up
Class .................................................................................
-
44,974 - 44,974 49,112 (39,288) 54,798
A GBP-Hedged
Roll-Up Class ...................................................................
-
- - - 7,437 (7,437) -
Value of Share Transactions
Financial Year ended
30 June 2015
Financial Year ended
30 June 2016
Share Class
Subscriptions
USD ‘000
Redemptions
USD ‘000
Subscriptions
USD ‘000
Redemptions
USD ‘000
A Euro Hedged
Roll-Up Class .................................................................. 22,542 (3,356)
16,306
(36,947)
A AUD Hedged
Class ................................................................................. 157,079 -
347,860
(344,977)
A U.S. Dollar Roll-Up
Class ................................................................................. 46,538 -
52,465
(39,057)
A GBP-Hedged
Roll-Up Class ................................................................... - -
11,557
(9,082)
Russell Global Regional Equity Fund
Number of Shares in issue
Financial Year ended 30 June 2016
Share Class
Beginning
of year
Shares
Issued
Shares
Redeemed
End
of year
A Euro Class .................................................................... - 338,289 - 338,289
Value of Share Transactions
Financial Year ended
30 June 2016
Share Class
Subscriptions
USD ‘000
Redemptions
USD ‘000
A Euro Class .................................................................... 338,032 -
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 95
10. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders – continued
c) Swing Pricing/Dilution Adjustments
The swing pricing (also known as dilution adjustment) is applied to a Fund once net subscriptions or redemptions for a Fund
relating to a Fund’s net asset value for a given dealing day is determined by the Administrator to exceed certain
predetermined percentage thresholds. In calculating the swing pricing, the net asset value of a Fund is swung by a “swing
factor”. The swing factors applied during the year under review and year ended 30 June 2015 ranged from 0.15 per cent to
0.25 per cent on both subscriptions and 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 the aggregate monetary value and percentage (of that Fund’s net asset value) of that holding as at 30 June
2016.
Fund
Number of
Significant
Shareholders
Value
of Holding
Aggregate
Shareholding as
a % of the Fund
Russell Alpha Fund ............................................................................................................. 1 USD ‘000 85,484 35.05%
Russell Global Regional Equity Fund ................................................................................ 1 EUR '000 323,431 100.00%
# Shareholders who individually hold at least 20 per cent of the relevant Funds.
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 the aggregate monetary value and percentage (of that Fund’s net asset value) of that holding as at 30 June
2015.
Fund
Number of
Significant
Shareholders
Value
of Holding
Aggregate
Shareholding as
a % of the Fund
Russell Absolute Return Equity Fund ................................................................................ 2 GBP ‘000 272,559 64.04%
Russell Alpha Fund ............................................................................................................. 1 USD ‘000 100,413 44.38%
11. Efficient Portfolio Management
The Company may enter into securities lending arrangements and repurchase agreements (together “Efficient Portfolio
Management Techniques”) and may invest in 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. None of the Funds
entered into securities lending arrangements or repurchase agreements during the financial year under review or prior
financial year.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
96 Notes to the Financial Statements
11. Efficient Portfolio Management - continued
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. Please refer to Note 2 b) Financial Instruments at Fair Value through Profit or Loss for a range of FDIs that the
Company may employ for the purpose of efficient portfolio management.
12. Financial Risks
The activities of each Fund expose it to various financial risks such as market risk (including market price risk, interest rate
risk, and currency risk), credit risk and liquidity risk.
Some Funds delegate some of the management of its portfolio to external Money Managers. The Adviser primarily monitors
and manages market risk (including market price risk, interest rate risk, and currency risk), credit risk and liquidity risk by
the following techniques:
The Adviser monitors each Fund’s characteristics in detail with the Money Manager(s) at least quarterly and in some
cases monthly.
The Adviser also reviews the portfolio characteristics of each Fund in its entirety.
This review may include as appropriate a review of country allocations, country weights, capitalisation, distribution,
industry sector weights, price/book levels, currency exposure, portfolio maturity, portfolio duration, sector exposure and
quality exposure and other key risk measures.
In addition to monitoring investment activity and exposure at the point of execution by a Money Manager, the Adviser
also receives daily exposure reporting from the Administrator and Money Managers, with which they can review various
event exposures on the Funds.
The Adviser also oversees and monitors the overall level of risk in a Fund.
a) Global Exposure
The Funds will use advanced risk measurement methodology, namely Value at Risk (“VaR”) as a risk measurement
technique, in addition to other techniques, to measure, monitor and manage market risk. The absolute or relative VaR
approach is executed in accordance with the CESR (Committee of European Securities Regulators) 10/788 guidelines. VaR
quantifies the estimate of the maximum potential loss due to market risk at a given confidence level over a specified time
period under the prevailing market conditions.
VaR is a model-based estimate. As with any model-derived figure, it is subject to imprecision due to such factors as data and
measurement errors and model risk. The calculation of VaR is based on daily unaudited accounting book of record position
data. In addition, VaR assumes that future asset return distributions and correlations remain stable and consistent with the
prevailing market conditions. The Funds utilise additional measures such as stress testing analysis and exposure measurement
to provide a holistic view to the Funds’ market risk that includes tail risk and derivative exposure quantification.
Furthermore, accuracy of the VaR models is regularly checked via out-of-time/out-of-sample back testing.
VaR is calculated with Monte Carlo simulations approach (1000 paths) using granular market risk models. The approach
estimates VaR by simulating random scenarios for each relevant pricing inputs (e.g., specific equity, commodity prices,
foreign exchange and interest rates, implied volatility, etc.) used in valuing securities held in the portfolio and revaluing the
positions for each of the paths generated for pricing inputs.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 97
12. Financial Risks - continued
For Funds using the absolute VaR approach, the VaR of the Fund shall not exceed 3.16 per cent of the Net Asset Value of the
Fund, based on a 1 day holding period and a “one-tailed” 95 per cent confidence interval using observation period of at least
1 financial year. For Funds using the relative VaR approach, the VaR of the Fund shall not exceed twice that of the VaR of
the reference portfolio based on a 1 day holding period and a “one-tailed” 95 per cent confidence interval using historical
observation period of at least 1 financial year. A Fund VaR of 1 per cent means that there is a 5 per cent chance that the Fund
will lose more than 1per cent of its value over any given day, assuming that the prevailing market conditions continue into
the future.
The below table details the VaR expressed as a percentage of the NAV at financial year end 30 June 2016 and financial year
end 30 June 2015, VaR approach for each Fund and for those Funds utilising the relative VaR methodology, the reference
portfolio is also listed.
Fund Name Approach Reference Portfolio
VaR as at
30 June 2016
VaR as at
30 June 2015
Russell Absolute Return Equity Fund ............................................................ Absolute N/A N/A 0.24%
Russell Alpha Fund ........................................................................................ Absolute N/A 1.32% 0.80%
Russell Multi Strategy Volatility Fund .......................................................... Absolute N/A 1.96% 1.52%
Russell Global Regional Equity Fund ............................................................ Absolute MSCI World Index EUR 1.73% -
VaR utilisation measures the Fund’s VaR relative to the Fund’s VaR limit. The below table details the minimum, maximum
and average daily VaR utilisation that occurred during the one financial year period ending 30 June 2016 and one financial
year period ending 30 June 2015.
Daily VaR Utilisation*
30 June 2016 30 June 2015
Fund Name Minimum Maximum Average Minimum Maximum Average
Russell Absolute Return Equity Fund ............................................................ 5.9% 14.7% 9.6% 4.4% 8.9% 6.0%
Russell Alpha Fund ........................................................................................ 21.2% 41.7% 26.4% 7.9% 27.6% 18.1%
Russell Multi Strategy Volatility Fund .......................................................... 19.0% 99.1% 58.9% 22.5% 75.7% 46.2%
Russell Global Regional Equity Fund ............................................................ - 4.2% - - - -
* Absolute VaR Limit Utilisation = VaR (95% CI, 1 day) / 3.16%
Relative VaR Limit Utilisation = [Fund VaR / Benchmark VaR] - 1
Utilisation >100% equates to breaking the limit
The Daily VaR Utilization calculation excludes VaR values occurring during Fund opening or closing due to accounting and timing issues.
The below table details the Fund’s VaR relative to the Fund’s VaR limit at the financial year end 30 June 2016 and 30 June
2015.
VaR Utilisation
Year ended
30 June 2016
Year ended
30 June 2015
Fund Name Level Level
Russell Absolute Return Equity Fund ............................................................ N/A 7%
Russell Alpha Fund ........................................................................................ 42% 25%
Russell Multi Strategy Volatility Fund .......................................................... 62% 48%
Russell Global Regional Equity Fund ............................................................ 4% -
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
98 Notes to the Financial Statements
12. Financial Risks - continued
The average level of leverage figures provided below are calculated as the sum of the absolute value of notionals of the
derivatives used as is required by the UCITS Regulations. This figure does not take into account any netting and hedging
arrangements that the Funds may have in place at any time even though these netting and hedging arrangements are used for
risk reduction purposes. As these netting and hedging arrangements, if taken into account, may reduce the level of leverage,
this calculation may not provide an accurate measure of the Funds’ actual leverage position. Below is the daily average level
of leverage for each Fund during the one financial year period ending 30 June 2016 and 30 June 2015.
Level of Leverage*
Fund Name
Year ended
30 June 2016
Year ended
30 June 2015
Russell Absolute Return Equity Fund ............................................................ 164% 191%
Russell Alpha Fund ........................................................................................ 215% 240%
Russell Multi Strategy Volatility Fund .......................................................... 936% 489%
Russell Global Regional Equity Fund ............................................................ 67% -
*Absolute VaR Limit Utilization = VaR(95% CI, 1 day) / 3.16% Relative VaR Limit Utilization = [Fund VaR / Benchmark VaR] - 1 Utilization >100%
equates to breaking the limit
**The Daily VaR Utilization calculation excludes VaR values occurring during fund opening or closing due to accounting and timing issues.
b) Market Price Risk
Market price risk is defined in FRS 102 as the risk that the fair value of a financial instrument or its future cash flows will
fluctuate because of changes in market prices other than those caused by interest rate risk or currency risk.
All investments present a risk of loss of capital. The Funds’ investments are susceptible to market risk arising from
uncertainties about future prices of the instruments. Except for derivatives, maximum risk resulting from financial
instruments is determined by fair value of the financial instruments. Possible losses from certain derivatives can be unlimited.
The Adviser moderates this risk by diversifying the management of its assets by allocating them between one or more Money
Managers. The Funds’ Money Manager monitors its portfolio holdings on a daily basis.
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. On 8 March 2016, the
Financial Reporting Council (FRC) issued Amendments to FRS 102 - Fair value hierarchy disclosures. The amendment
is effective for accounting periods commencing 1 January 2017, however, the Board of Directors have agreed to early
adopt this amendment in preparing these financial statements for the year ended 30 June 2016.
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).
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.
No significant transfers occurred between the levels during the year and prior year under review.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 99
12. Financial Risks - continued
The determination of what constitutes ‘observable’ requires significant judgement by 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, investment funds and OTC FDIs.
Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently and are made up of
corporate debt securities. 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.
There were no Level 3 securities held at 30 June 2016 and 30 June 2015.
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 June 2016 and 30 June 2016.
c) Interest Rate Risk
The Funds’ interest bearing financial assets and liabilities expose it to risks associated with the effects of fluctuations in the
prevailing level of interest rates. The Funds may employ investment techniques and FDIs in order to hedge against interest
rate risk or gain exposure to the underlying market. In addition, mortgage and asset backed securities are also subject to
prepayment risk, which is the risk that borrowers pay off the debt underlying the mortgage backed/asset backed securities
sooner than anticipated and therefore shorten the average maturity of the Funds.
The tables below summarise each relevant Fund’s exposure to interest rate risks. It includes each relevant Fund’s assets and
trading liabilities at fair values, categorised by the earlier of contractual re-pricing or maturity dates.
The Funds not mentioned below are mainly investing in non-interest bearing assets or its investments have a very short time
to maturity. As a result, those Funds are not subject to significant amounts of risk due to fluctuations in the prevailing levels
of market interest rates.
As at 30 June 2016
Ccy
Up to
1 year
‘000
1 to
5 years
‘000
Over
5 years
‘000
Non-interest
bearing
‘000
Net
Assets
‘000
Russell Multi-Strategy
Volatility Fund ................................................................................................ USD 131,855 1,988 - 72,232 206,075
As at 30 June 2015
As at 30 June 2015 Ccy
Up to
1 year
‘000
1 to
5 years
‘000
Over
5 years
‘000
Non-interest
bearing
‘000
Net
Assets
‘000
Russell Multi-Strategy
Volatility Fund ................................................................................................ USD 137,820 53,863 - 42,577 234,274
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
100 Notes to the Financial Statements
12. Financial Risks - continued
d) Currency Risk
The Funds may hold assets denominated in currencies other than the functional currency of the Fund. They are therefore
exposed to currency risk, as the value of the securities denominated in other currencies will fluctuate due to changes in
exchange rates. A Fund may use financial instruments to hedge against fluctuations in the relative values of their portfolio
positions in addition to making active currency selections.
No Fund had monetary assets or liabilities with material foreign monetary currency exposures as at 30 June 2016 or 30 June
2015.
e) Credit Risk
The Funds take on credit risk, which is the risk that a counterparty or issuer will be unable to pay amounts in full when due.
Impairment provisions are provided for losses that have been incurred by the balance sheet date, if any.
The Funds’ main credit risk concentrations arise from trading equity, debt securities, investment funds and FDIs in addition
to cash balances and investments held at the Depositary.
The Funds are exposed to credit risk on the counterparties with which it trades in relation to derivatives that are not traded on
a recognised exchange (OTC derivatives). Such instruments are not afforded the same protections as may apply to
participants trading on organised exchanges, such as the performance guarantee of an exchange clearing house.
The Funds minimise concentrations of credit risk by undertaking transactions with a large number of counterparties. The
Company’s Prospectus and the UCITS Regulations list various investment restrictions with regard to issuer and counterparty
concentration limits and minimum counterparty credit ratings. Each relevant Fund’s Money Managers conduct periodic
reviews of the counterparties with whom they conduct transactions. The Adviser also monitors each Fund’s counterparty
exposures. In addition, risk exposure to a counterparty may be reduced by collateral provided to the Fund by the counterparty
in accordance with the UCITS Regulations.
The Adviser employs a credit research team that performs robust quantitative and qualitative analysis on banks, insurance
companies, and other counterparties. The credit research analyst assigned to a particular counterparty performs full credit
analysis and writes a credit research report and subsequently sets investment parameters on OTC counterparty ratings and
exposures where appropriate. The credit research team only reviews counterparties for those assets directly managed by
Russell Investments. The individual Money Managers have their own research process for the assets under their
management. Each Fund’s Money Managers monitor each credit position on a daily basis.
All securities held on Russell Multi Strategy Volatility Fund are investment graded as at 30 June 2016.
OTC FDIs have an exposure to counterparty risk such that the counterparty may become insolvent or otherwise incapable of
meeting its obligations under an FDI contract. This includes the legal risk arising from a contract being unenforceable.
The names of brokers and counterparties used by each individual Fund can be found at the base of each relevant Fund’s
Schedule of Investments.
Collateral may be pledged by the Funds, generally by way of cash or cash equivalents, and held by the counterparties. Details
of non-cash collateral held at year-end by counterparties are asterisked within the Schedule of Investments of the Funds.
Amounts of cash collateral held at year-end by counterparties are disclosed on the Balance Sheet of the Funds.
All securities and cash at bank balances are held by the Depositary through its affiliate, State Street or through a sub-
custodian within the State Street custodial network. All OTC FDIs, investment funds, term deposits margin or other similar
investments/monies deposited by or entered into on behalf of the Company with a counterparty, options exchange, clearing
broker or other parties are not held within the State Street custodial network. The Depositary are therefore not be liable in any
way for the default of any counterparty.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 101
12. Financial Risks - continued
Bankruptcy or insolvency of the Depositary or a State Street affiliate company may cause the Company’s rights with respect
to cash and securities held by State Street to be delayed or limited and the Company would be treated as a general creditor of
that entity in respect of its cash balances. Periodic monitoring and an annual credit review are performed on the Depositary
by the Adviser. This review may include as appropriate an assessment of the Depositary’s liquidity position, income streams,
asset quality and credit ratings. The long term credit rating of State Street as of 30 June 2016 was Aa1 (30 June 2015: Aa2)
as rated by Moody’s rating agency.
f) Liquidity Risk
The liquidity risks associated with the need to satisfy shareholders’ requests for redemptions are mitigated by maintaining a
pool of cash to satisfy usual levels of demand. Generally, the Funds’ assets comprise publicly traded and securities with
various degree of liquidity. In highly volatile market conditions, the Funds may not easily liquidate assets needed for
redemption or settlement. In such conditions, the Manager may restrict redemptions and borrow monies on a temporary basis
as detailed in the Company’s Prospectus.
As at 30 June 2016 and 30 June 2015, all of the Funds’ liabilities, including net assets attributable to redeemable
participating shareholders, are payable within three months, with the exception of Russell Multi-Strategy Volatility Fund
which had financial liabilities at fair value through profit and loss with maturity dates greater than three months, however the
total value of such liabilities amounted to less than 1 per cent of the Fund's net asset value as of the respective balance sheet
date.
The tables below analyse each Fund’s currency forward contracts that will be settled on a gross basis into relevant maturity
groupings based on the remaining period at the Balance Sheet to the contractual maturity date.
As at 30 June 2016
Russell Alpha Fund
Currency
Less than
1 month
GBP ‘000
Less than
1-3 months
USD ‘000
Inflows ...................................................... USD 401,858 65,016
Outflows ................................................... USD (412,067) (64,935)
Russell Multi-Strategy Volatility Fund
Currency
Less than
1 month
USD ‘000
Less than
1-3 months
USD ‘000
Inflows ...................................................... USD 172,724 259
Outflows ................................................... USD (168,581) (259)
Russell Global Regional Equity Fund
Currency
Less than
1 month
EUR ‘000
Less than
1-3 months
EUR ‘000
Inflows ...................................................... USD - 101,814
Outflows ................................................... USD - (100,178)
As at 30 June 2015
Russell Absolute Return Equity Fund
Currency
Less than
1 month
USD ‘000
Inflows ...................................................... USD 367,264
Outflows ................................................... USD (359,711)
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
102 Notes to the Financial Statements
12. Financial Risks - continued Russell Alpha Fund
Currency
Less than
1 month
GBP ‘000
Inflows ...................................................... GBP 275,744
Outflows ................................................... GBP (272,797)
Russell Multi-Strategy Volatility Fund
Currency
Less than
1 month
USD ‘000
Inflows ...................................................... USD 189,253
Outflows ................................................... USD (187,903)
13. 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 U.S. Dollars at the following rates for each USD 1.
30 June 2016 30 June 2016 30 June 2016
Australian Dollar AUD 1.3430 Hong Kong Dollar HKD 7.7580 South African Rand ZAR 14.6450
Brazilian Real BRL 3.2038 Hungarian forint HUF 284.1487 Singapore Dollar SGD 1.3459
British Pound GBP 0.7481 Indian Rupee INR 67.4950 South Korean Won KRW 1,151.8500
Canadian Dollar CAD 1.2987 Indonesian Rupiah IDR 13,212.5000 Swedish Krona SEK 8.4727
Chilean Peso CLP 662.0650 Japanese Yen JPY 102.5900 Swiss Franc CHF 0.9742
Czech Krone CZK 24.37778 Norwegian Krone NOK 8.3680 Taiwan Dollar TWD 32.2590
Danish Krone DKK 6.6968 Mexican Peso MXN 18.4493 Thai Baht THB 35.1400
Egytian Pound EGP 8.8800 Polish Zloty PLN 3.9614 Turkish Lira TRY 2.8757
Euro EUR 0.9001 Phillipene Peso PHP 47.0475
30 June 2015 30 June 2015 30 June 2015
Australian Dollar AUD 1.3011 Hong Kong Dollar HKD 7.7526 South African Rand ZAR 12.1378
Brazilian Real BRL 3.1064 Indian Rupee INR 63.6800 Singapore Dollar SGD 1.3465
British Pound GBP 0.6358 Indonesian Rupiah IDR 13,332.5000 South Korean Won KRW 1,115.4500
Canadian Dollar CAD 1.2485 Japanese Yen JPY 122.3650 Swedish Krona SEK 8.2975
Chilean Peso CLP 639.5300 Norwegian Krone NOK 7.8675 Swiss Franc CHF 0.9346
Danish Krone DKK 6.6953 Mexican Peso MXN 15.6907 Taiwan Dollar TWD 30.8545
Egytian Pound EGP 7.6301 Polish Zloty PLN 3.7609 Turkish Lira TRY 2.679
Euro EUR 0.8975 Phillipene Peso PHP 45.0900 Thai Baht THB 33.7755
The Administrator used the average exchange rates for each reporting period as listed below to translate into U.S. Dollars the
Profit and Loss Account and Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders of
those Funds not prepared in U.S. Dollars 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
USD 1.
Year ended 30 June 2016 Year ended 30 June 2015
British Pound GBP 0.6780 British Pound GBP 0.6371
Euro EUR 0.9044
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 103
14. Comparative Dealing Net Assets
Russell Absolute Return Equity Fund
Class
A EUR Hedged
Roll-up
EUR ‘000
Class
A GBP
GBP ‘000
Class
A GBP Income
GBP ‘000
Class
Q GBP
Income
GBP ‘000
Total net asset value
30 June 2016 ............................................... - - - -
30 June 2015 ............................................... 41,882 121,903 100 273,964
30 June 2014 ............................................... - 127,597 219,852 66,798
Class
A EUR Hedged
Roll-up
EUR
Class
A GBP
GBP
Class
A GBP Income
GBP
Class
Q GBP
Income
GBP
Net asset value per share
30 June 2016 ............................................... - - - -
30 June 2015 ............................................... 9.92 9.92 9.45 9.77
30 June 2014 ............................................... - 10.03 9.56 9.92
Russell Alpha Fund
Class
A Euro Hedged
Roll-Up
EUR ‘000
Class
GBP Hedged
GBP ‘000
Class
U.S. Dollar
Roll-Up
USD ‘000
Class
Yen Hedged
Roll-Up
JPY ‘000
Total net asset value
30 June 2016 ............................................... 106,849 74,637 25,391 -
30 June 2015 ............................................... 80,211 63,856 36,456 -
30 June 2014 ............................................... 79,535 95,058 29,961 1,007,436
Class
A Euro Hedged
Roll-Up
EUR
Class
GBP Hedged
GBP
Class
U.S. Dollar
Roll-Up
USD
Class
Yen Hedged
Roll-Up
JPY
Net asset value per share
30 June 2016 ............................................... 10,657.26 10,004.23 11,602.61 -
30 June 2015 ............................................... 10,737.39 9,986.95 11,581.20 -
30 June 2014 ............................................... 10,908.40 10,102.54 11,728.08 8,385
Russell Multi Strategy Volatility Fund
Class
A Euro Hedged
Roll-Up
EUR ‘000
Class
A AUD
Hedged
AUD ‘000
Class
A U.S. Dollar
Roll-Up
USD ‘000
Total net asset value
30 June 2016 ............................................... 227 203,238 54,491
30 June 2015 ............................................... 18,392 213,381 49,776
Class
A Euro Hedged
Roll-Up
EUR
Class
A AUD
Hedged
AUD
Class
U.S. Dollar
Roll-Up
USD
Net asset value per share
30 June 2016 ............................................... 982.94 1,011.59 994.40
30 June 2015 ............................................... 1,104.93 1,115.66 1,106.78
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
104 Notes to the Financial Statements
14. Comparative Dealing Net Assets - continued
Russell Global Regional Equity Fund
Class
A Euro
EUR ‘000
Total net asset value
30 June 2016 ............................................... 323,431
Class
A Euro
EUR
Net asset value per share ................................
30 June 2016 ............................................... 956.08
15. 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 liability provisions of the 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.
16. Significant Events During the Financial year
a) Revised Prospectus
A revised prospectus was issued on 4 August 2015 to reflect amendments to trade cut-off, dealing frequency and settlement
dates in relation to Russell Alpha Fund.
b) Amendments to Memorandum and Articles of Association
On 11 December 2015 the Memorandum and Articles of Association of the Company was amended by special resolution of
the Board. The most significant amendment was in accordance with Directive 2014/91/EU (“UCITS V”) of the European
Parliament and of the Council of 23 July 2014 amending Directive 2009/65/EC (“UCITS IV”).
Memorandum and Articles of Association of the Company, amended by Special Resolution dated 11 December 2015 noted
by the Central Bank on 17 December 2015.
c) Fund Launches and Closures
Russell Global Regional Equity Fund was launched on 7 July 2015.
Russell Absolute Return Equity Fund ceased trading on 7 August 2015.
d) Frank Russell Company
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.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
30 June 2016
Notes to the Financial Statements 105
17. Significant Events Since the Financial year End
No significant events affecting the Company since the financial year end.
18. Approval of the Financial Statements
The financial statements were approved by the Directors on 13 October 2016.
Russell Investment Company IV plc
Supplementary Information
106 Supplementary Information
Remuneration Policy of the Manager (Unaudited)
The Manager has a remuneration policy for its staff in place that is compliant with its obligations. A summary of its remuneration
policy is available here:
https://russellinvestments.com/uk/legal/remuneration-policy
In accordance with the applicable remuneration rules (“UCITS V remuneration rules”), the Manager will be in a position to
provide further information in the annual report of its managed funds, once it has completed the first annual performance period
after the UCITS V remuneration rules have come into effect. This will allow Manager to disclose information relevant to the
whole financial year of the annual report.
Russell Investments Rex House10 Regent Street, St James’London, SW1Y 4PE
tel +44 (0) 20 7024 6000fax +44 (0) 20 7024 6001www.russellinvestments.com
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