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SPECIALTY FUNDS
FRANK RUSSELL INVESTMENT COMPANY
SUPPLEMENT DATED SEPTEMBER 17, 1996
TO THE PROSPECTUS DATED JULY 8, 1996
The section Money Managers shall be restated as follows:
THE MONEY MANAGERS
The assets of each Fund currently are allocated among the money managers listed
in the section "Money Manager Profiles." THE ALLOCATION OF A FUND'S ASSETS
AMONG MONEY MANAGERS MAY BE CHANGED AT ANY TIME BY THE MANAGEMENT COMPANY. THE
MONEY MANAGERS MAY BE EMPLOYED OR THEIR SERVICES MAY BE TERMINATED AT ANY TIME
BY THE MANAGEMENT COMPANY, SUBJECT TO APPROVAL BY THE BOARD OF TRUSTEES OF THE
INVESTMENT COMPANY. The Funds will notify shareholders of the Fund concerned
within 60 days of when a money manager begins or stops providing services.
From its management fees, the Management Company, as agent for the Investment
Company, pays all fees to the money managers for their investment selection
services. Quarterly, each money manager is paid the pro rata portion of an
annual fee, based on the quarterly average of all the assets allocated to the
money manager. For the period, management fees paid to the money managers were
equivalent to the following annual rates expressed as a percentage of the
average daily net assets of each Fund: Real Estate Securities Fund, .32%;
Emerging Markets Fund, .69%; Limited Volatility Tax Free Fund, .25%; U.S.
Government Money Market Fund, .00%; and Tax Free Money Market Fund, .10%. The
Equity T Fund was not offered to Eligible Investors during the period. Fees
paid to the money managers are not affected by any voluntary or statutory
expense limitations. Some money managers may receive investment research
prepared by Frank Russell Company as additional compensation, or may receive
brokerage commissions for executing portfolio transactions for the Funds through
broker-dealer affiliates.
Each money manager has agreed that once the Investment Company has advanced fees
to the Management Company as agent to make payment of the money manager's fees,
that money manager will look only to the Management Company for the payment of
its fee.
The money managers are selected for the Funds based primarily upon the research
and recommendations of Frank Russell Company, which evaluates quantitatively and
qualitatively the money manager's skills and results in managing assets for
specific asset classes, investment styles and strategies. Short-term
investment performance, by itself, is not a controlling factor in selecting or
terminating a money manager.
The Equity T Fund is managed by J.P. Morgan Investment Management, Inc. The
individual responsible for the management of the Fund is James C. Weiss, who is
a Vice President and Portfolio Manager in the U.S. Structured Equity area. Mr.
Weiss joined
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J.P. Morgan Investment Management, Inc. in 1992. Prior to that, Mr. Weiss was
a Stock Index Arbitrageur at Oppenheimer & Company.
The U.S. Government Money Market Fund is managed by Frank Russell Investment
Management Company. The individual responsible for the management of the Fund
and his principal occupation for the past five years are as follows: Peter F.
Apanovitch, who has been Manager of Short-Term Investment Funds for Frank
Russell Investment Management Company and Frank Russell Trust Company since
1991.
The Tax Free Money Market Fund is managed by Weiss, Peck & Greer, L.L.C.
("WPG"). The individual responsible for the management of the Fund for the past
10 years is Janet A. Fiorenza. Ms. Fiorenza, Principal and Senior Portfolio
Manager, has been a member of WPG or its predecessor since 1980.
Each money manager has complete discretion to purchase and sell portfolio
securities for its segment of a Fund within the Fund's investment objectives,
restrictions and policies, and the more specific strategies developed by Frank
Russell Company and the Management Company. Although the money managers'
activities are subject to general oversight by the Board of Trustees and
officers of the Investment Company, NEITHER THE BOARD, THE OFFICERS, THE
MANAGEMENT COMPANY, NOR FRANK RUSSELL COMPANY EVALUATE THE INVESTMENT MERITS OF
THE MONEY MANAGERS' INDIVIDUAL SECURITY SELECTIONS.
Effective September 3, 1996, the Real Estate Securities Fund will be managed by
the following Money Managers:
Cohen & Steers Capital Management, 757 Third Avenue, New York, NY 10017,
is a corporation whose two principals, Robert H. Steers and Martin
Cohen, control the corporation within the meaning of the 1940 Act.
Aldrich, Eastman and Waltch, L.P., 225 Franklin Street, Boston, MA
02110-2803, is a privately held entity encompassing both a private
corporation and a private limited partnership. Key employees own 87%
of the firm, with United Asset Management the owner of the minority 13%.
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CLASS C FUNDS
FRANK RUSSELL INVESTMENT COMPANY
SUPPLEMENT DATED SEPTEMBER 17, 1996
TO THE PROSPECTUS DATED JULY 8, 1996
The section Money Managers shall be restated as follows:
THE MONEY MANAGERS
The assets of each Fund are allocated currently among the money managers listed
in the section "Money Manager Profiles." THE ALLOCATION OF A FUND'S ASSETS
AMONG MONEY MANAGERS MAY BE CHANGED AT ANY TIME BY THE MANAGEMENT COMPANY. THE
MONEY MANAGERS MAY BE EMPLOYED OR THEIR SERVICES MAY BE TERMINATED AT ANY TIME
BY THE MANAGEMENT COMPANY, SUBJECT TO APPROVAL BY THE BOARD OF TRUSTEES OF THE
INVESTMENT COMPANY. The Funds will notify shareholders of the Fund concerned
within 60 days when a money manager begins or stops providing services.
From its management fees, the Management Company, as agent for the Investment
Company, pays all fees to the money managers for their investment selection
services. Quarterly, each money manager is paid the pro rata portion of an
annual fee, based on the quarterly average of all the assets allocated to the
money manager. For the period, management fees paid to the money managers were
equivalent to the following annual rates expressed as a percentage of the
average daily net assets of each Fund: Diversified Equity Fund, .24%; Special
Growth Fund, .41%; Equity Income Fund, .20%; Quantitative Equity Fund, .21%;
International Securities Fund, .44%; Emerging Markets Fund, .69%; Real Estate
Securities Fund, .32%; Diversified Bond Fund, .09%; Volatility Constrained Bond
Fund, .19%; and Multistrategy Bond Fund, .22%. Fees paid to the money managers
are not affected by any voluntary or statutory expense limitations. Some money
managers may receive investment research prepared by Frank Russell Company as
additional compensation, or may receive brokerage commissions for executing
portfolio transactions for the Funds through broker-dealer affiliates.
Each money manager has agreed that once the Investment Company has advanced
fees to the Management Company as agent to make payment of the money manager's
fee, that money manager will look only to the Management Company for the
payment of its fee.
The money managers are selected for the Funds based primarily upon the research
and recommendations of Frank Russell Company, which evaluates quantitatively
and qualitatively the money manager's skills and results in managing assets for
specific asset classes, investment styles and strategies. Short-term investment
performance, by itself, is not a controlling factor in selecting or terminating
a money manager.
Each money manager has complete discretion to purchase and sell portfolio
securities for its segment of a Fund within the Fund's investment objectives,
restrictions and policies,
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and the more specific strategies developed by Frank Russell Company and the
Management Company. Although the money managers' activities are subject to
general oversight by the Board of Trustees and officers of the Investment
Company, NEITHER THE BOARD, THE OFFICERS, THE MANAGEMENT COMPANY, NOR FRANK
RUSSELL COMPANY EVALUATE THE INVESTMENT MERITS OF THE MONEY MANAGERS'
INDIVIDUAL SECURITY SELECTIONS.
Effective September 3, 1996, the Real Estate Securities Fund will be managed by
the following Money Managers:
Cohen & Steers Capital Management, 757 Third Avenue, New York, NY
10017, is a corporation whose two principals, Robert H. Steers and
Martin Cohen, control the corporation within the meaning of the 1940
Act.
Aldrich, Eastman, and Waltch, L.P., 225 Franklin Street, Boston, MA
02110-2803, is a privately held entity encompassing both a private
corporation and a private limited partnership. Key employees own 87%
of the firm, with United Asset Management the owner of the minority 13%.
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FRANK RUSSELL INVESTMENT COMPANY
SUPPLEMENT DATED SEPTEMBER 17, 1996
TO THE STATEMENT OF ADDITIONAL INFORMATION
DATED JULY 8, 1996
Effective September 17, 1996, the section Money Managers shall be restated as
follows:
MONEY MANAGERS: Except with respect to the Money Market and U.S. Government
Money Market Funds, the money managers have no affiliations or relationships
with the Investment Company or the Management Company other than as
discretionary managers for all or a portion of a Fund's portfolio, except some
money managers (and their affiliates) may effect brokerage transactions for the
Funds (see, "Brokerage Allocations" and "Brokerage Commissions"). Money
managers may serve as advisers or discretionary managers for Frank Russell
Trust Company, other consulting clients of Frank Russell Company, other
off-shore vehicles and/or for accounts which have no business relationship with
the Frank Russell Company organization.
From its management fees, the Management Company, as agent for the Investment
Company, pays all fees to the money managers for their investment selection
services. Quarterly, each money manager is paid the pro rata portion of an
annual fee, based on the average for the quarter of all the assets allocated to
the money manager. For the period ended December 31, 1995, management fees paid
to the money managers were: Equity I $1,572,199; Equity II $993,129; Equity III
$399,940; Fixed Income I $487,575; Fixed Income II $305,646; Fixed Income III
$456,590; International $3,143,259; Equity Q $1,075,446; Emerging Markets
$994,962; Diversified Equity $1,209,215; Special Growth $1,104,276; Equity
Income $326,253; Diversified Bond $448,354; Volatility Constrained Bond
$372,467; International Securities $2,668,349; Multistrategy Bond
$436,464; Quantitative Equity $931,171; Real Estate Securities $776,312; Limited
Volatility Tax Free $146,084 and Tax Free Money Market $84,857. The Equity T
Fund had not commenced operations during the period. Fees paid to the money
managers are not affected by any voluntary or statutory expense limitations.
Some money managers may receive investment research prepared by Frank Russell
Company as additional compensation, or may receive brokerage commissions for
executing portfolio transactions for the Funds through broker-dealer affiliates.
