Filed pursuant to Rule 497(e)
under the Securities Act of 1933,
as amended.
File No. 002-71299
File No. 811-03153
Class C Shares
Frank Russell Investment Company
Supplement Dated May 18, 1998
To the Prospectus Dated May 1, 1998
Effective May 18, 1998, Frank Russell Investment Company makes the following
changes to its Class C Shares Prospectus:
All Class C Shares of Frank Russell Investment Company Funds are available for
purchase, except Class C Shares of the Volatility Constrained Bond Fund, which
are only available to current shareholders of that Fund. (The Supplement to the
Prospectus dated May 1, 1998 is deleted.)
On the cover page, and pages (4), (5) and (36), the narrative is revised to
provide that the Class C Shares are not subject to a Rule 12b-1 fee. Also, on
page (36), the subsection "Distribution and Shareholder Services Plans" under
"How to Purchase Shares" is retitled as "Shareholder Services Plan," and is
restated in its entirety, as follows:
"The Trust has adopted a Shareholder Services Plan (the "Services
Plan"). Under the Services Plan, the Trust may make payments to the
distributor or any investment advisers, banks, broker-dealers,
financial planners or other financial institutions that have entered
into a Shareholder Services Agreement with the distributor ("Servicing
Agents"). Payments under the Services Plan are calculated daily and
paid quarterly by the Trust at an annual rate of 0.00% to 0.25% of the
average daily net assets of a Fund's Class C Shares.
The Glass-Steagall Act prohibits a depository institution (such as a
commercial bank or savings and loan association) from being an
underwriter or distributor of most securities. In the event that the
Glass-Steagall Act is deemed to prohibit depository institutions from
acting in the administrative capacities described above or should
Congress relax current restrictions on depository institutions, the
Board will consider appropriate changes in the services.
State securities laws governing the ability of depository institutions
to act as underwriters or distributors of securities may differ from
the Glass-Steagall Act. Therefore, banks and financial institutions may
be required to register as dealers under state law. In addition, some
state securities laws may require adminstrators to register as brokers
and dealers."
<PAGE>
Set forth below is a table that illustrates the effect of these
modified fee arrangements by revising the projected expenses presented in the
Annual Fund Operating Expenses table (which appears on page (5) of the
Prospectus) for each Fund:
- --------------------- ------------------- ------------------ -------------------
Former New New Total
Rule 12b-1 Rule 12b-1 Fund Operating
Distribution Fee Distribution Fee Expenses
- --------------------- ------------------- ------------------ -------------------
Diversified Equity 0.40% 0.00% 1.23%
- --------------------- ------------------- ------------------ -------------------
Special Growth 0.40% 0.00% 1.45%
- ---------------------------- ------------------- ------------------ ------------
Equity Income 0.40% 0.00% 1.34%
- ---------------------------- ------------------- ------------------ ------------
Quantitative Equity 0.40% 0.00% 1.19%
- ---------------------------- ------------------- ------------------ ------------
International Securities 0.40% 0.00% 1.56%
- ---------------------------- ------------------- ------------------ ------------
Diversified Bond 0.40% 0.00% 0.89%
- ---------------------------- ------------------- ------------------ ------------
Volatility Constrained Bond 0.40% 0.00% 1.03%
- ---------------------------- ------------------- ------------------ ------------
Multistrategy Bond 0.40% 0.00% 1.05%
- ---------------------------- ------------------- ------------------ ------------
Emerging Markets 0.40% 0.00% 1.89%
- ---------------------------- ------------------- ------------------ ------------
Real Estate Securities 0.40% 0.00% 1.31%
- --------------------------- ------------------- ------------------ -------------
Effective May 18, 1998, the Diversified Equity Fund will be managed by the
following additional money manager:
Morgan Stanley Asset Management, Inc., 1221 Avenue of the Americas, New
York, NY 10020, is a wholly owned subsidiary of Morgan Stanley Dean
Witter & Co., a publicly held corporation.
a:fr-supc.ed
