<PAGE> 1
EXTERNAL FEE FUNDS
FRANK RUSSELL INVESTMENT COMPANY
Supplement Dated June 27, 1995 to
Prospectus Dated June 1, 1995
The Annual Fund Operating Expenses Table for the Equity I Fund has been
restated to correct the amount of Total Other Expenses which was incorrectly
stated at .72% rather than the correct expense of .12%. This correction does
not affect the Fund's previously stated Total Fund Operating Expenses and the
accompanying expense table.
Therefore, page 4 of the Prospectus is restated to read as follows:
ANNUAL FUND OPERATING EXPENSES
The purpose of the following tables are to assist the investor in understanding
the various costs and expenses that an investor in each Fund will bear directly
or indirectly. The examples provided in the tables should not be considered a
representation of past or future expenses. Actual expenses may be greater or
less than those shown.
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
EQUITY I FUND
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Sales Load Imposed on Purchases........................................................................ None
Sales Load Imposed on Reinvested Dividends............................................................. None
Deferred Sales Load.................................................................................... None
Redemption Fees........................................................................................ None
Exchange Fees.......................................................................................... None
ANNUAL FUND OPERATING EXPENSES:
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fee(1)...................................................................................... .60%*
12b-1 Fees............................................................................................. None
Other Expenses:
Custodian Fees................................................................................... .08%
Transfer Agent Fees.............................................................................. .02
Other Fees....................................................................................... .02
--------
Total Other Expenses............................................................................... .12%
--------
Total Fund Operating Expenses**........................................................................ .72%
========
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end of
each time period......................................................... $ 7 $ 23 $ 40 $ 89
========= ========= ========= =========
</TABLE>
<PAGE> 2
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
EQUITY II
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Sales Load Imposed on Purchases........................................................................ None
Sales Load Imposed on Reinvested Dividends............................................................. None
Deferred Sales Load.................................................................................... None
Redemption Fees........................................................................................ None
Exchange Fees.......................................................................................... None
ANNUAL FUND OPERATING EXPENSES:
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fee(1)...................................................................................... .75%*
12b-1 Fees............................................................................................. None
Other Expenses:
Custodian Fees................................................................................... .14%
Transfer Agent Fees.............................................................................. .05
Other Fees....................................................................................... .04
--------
Total Other Expenses............................................................................... .23%
--------
Total Fund Operating Expenses**........................................................................ .98%
========
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end of
each time period......................................................... $ 10 $ 31 $ 54 $ 120
======== ======== ======== =========
</TABLE>
1 Prior to April 1, 1995, the Management Fee was paid by each shareholder
directly to the Management Company, and was not deducted from the Fund's
assets. Effective April 1, 1995, the Management Fee will be deducted from Fund
assets on a daily basis and paid to the Management Company. The expense
information has been restated to reflect current fees.
* Each shareholder enters into a written Asset Management Services Agreement
with the Management Company, and agrees to pay an annual shareholder
investment services fee calculated as a specified percentage of the
shareholder's average net assets in the Funds. This annual shareholder
investment services fee may range from .00% to .30% and from .00% to .25%
under the asset management services agreements entered into by shareholders
of the Equity I Fund and the Equity II Fund, respectively. In addition, a
shareholder may pay additional fees, expressed as fixed dollar amounts for
the other services or reports provided by Management Company to the
shareholder. Accordingly, the expense information does not reflect an amount
for fees paid directly by an investor to Management Company.
** Investors purchasing Fund shares through a financial intermediary, such as
a bank or an investment adviser, may also be required to pay additional
fees for services provided by the intermediary. Such investors should
contact the intermediary for information concerning what additional fees,
if any, will be charged.