Gaining a competitive advantage

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V107

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Gaining a competitive advantage

Presenter Name

Date

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FOR ADVISOR USE ONLY

Russell: Pioneers in managing managers

1985

Russell Investments
Canada opens

Today

Manages C$215 billion

2005

Named world’s
largest manager
-
of
-

managers by Cerulli
study

1980


First multi
-

manager funds
launched.


70 years in business

38 years in manager research

27 years in multi
-
manager investments

C$215 billion* assets under management

1969

George Russell pioneers
objective manager research
and strategic advice.

1969

Frank Russell Securities
enters institutional
brokerage business.

1936

Frank Russell opens Frank
Russell Company.

Representative client list

Alcoa

AmerisourceBergen Corp.

AT&T Inc.

Barclays Bank

BHP Billiton

Bill & Melinda Gates Foundation

Boeing

Caterpillar

Coca
-
Cola Bottling Co.

State Teachers Retirement System of Ohio

Toyota Motor Pension Fund

Wilfrid Laurier University

*
Assets under management as of June 30, 2008.

Representative client list as of April 2008. Clients may contract for a variety of services from Russell
Investments. For more information on the selection criteria, please refer to the disclosure slide.

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FOR ADVISOR USE ONLY

Russell Investments Canada evolution

Launch of Sovereign

PCS staff: 5

AUM: under $500 million


1993

Launch of LifePoints

2000

Introduces Global Equity Pool

2005



Re
-
allocation of LP and SDMIP towards more foreign equity



Sovereign management fee rebates



New purchase options for LP



Enhanced proposal generators and sales tools


2006

Sovereign auto
-
rebalancing

2003

Responds to investor
demand for income
with launch of SDMIP

2004



AUM: $6.6 billion YTD



PCS staff: 34



Core Plus launched



New Sovereign
purchase options

2007

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FOR ADVISOR USE ONLY

What we offer

Russell’s value proposition


Intelligent portfolio design


Capital markets insight


Effective practice management

Effective

practice

management


Capital

markets

insight

Intelligent

portfolio

design

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FOR ADVISOR USE ONLY

What drives your business?

Learn

Client profiling and
documentation

Plan

Investment planning
and asset allocation

Implement

Research and
implementation of
investment product

Review

Review plans with
clients at least
annually

plan

implement

review

learn

1

4

3

2

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FOR ADVISOR USE ONLY

Common challenges


Client
-
focused activities
-

Learn, Plan, Review

-

the fountainhead for a good
practice



more time on these activities produces the maximum business results

Administrative activities


Implementation



time consuming


Challenge

Potential impact

Time:

Finding more time to invest with clients and
prospects

May impact asset gathering
activities

Differentiation:

Setting yourself apart from the competition

May impact close ratio

Implementation:

Continuous research and monitoring of
effective strategies

Imposes time constraints

Service model:

Maintaining high
-
quality service and asset
management

May impact retention ratio

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FOR ADVISOR USE ONLY

220

400

5,200

Russell’s manager selection process

Manager products continually monitored & researched

Managers with a primary “hire” rating


Russell manager products used in funds

Focusing on people, process, portfolio and performance

Numbers are current as of March 31, 2008.


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FOR ADVISOR USE ONLY

83
30
12
8
1
0
10
20
30
40
50
60
70
80
90
2003
2003-2004
2003-2005
2003-2006
2003-2007
Managers in the top 25% for consecutive years: 2003


2007

Why picking today’s hot manager

isn’t the solution

Source: Russell Investments Canada Limited using Morningstar Canada, 2003
-
2007

In 2007, only 1 of the original 83 managers from 2003 had remained in the top 25% every year since 2003.

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FOR ADVISOR USE ONLY

Performance quoted represents past performance and does not guarantee future results.

Source: Morningstar Canada. As of 10/31/07

Mutual fund performance ranges

1 year annualized return ending October 2007

-
10%

-
5%

0% Return

5%

10%

15%

20%

25%

30%

35%

Top: 49.3%

Bottom:
-
11.7%

Top: 3.0%

Bottom:
-
0.7%

Top: 50.4%

Top: 26.3%

Bottom:
-
8.7%

Morningstar

Universe

performance

spread

40%

45%

50%

-
15%

Canadian
Equity

Fixed Income

U.S. Equity

Overseas Equity

-
20%

-
25%

Bottom:
-
13.2%

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FOR ADVISOR USE ONLY

MULTI
-
MANAGER

Selecting and combining
independent money managers

in a way that complements each
manager’s investment style.

MULTI
-
STYLE

In each asset class, different
manager styles are combined to
help reduce risk. Each manager
specializes in a different style

of investing.

MULTI
-
ASSET


Each of the major fields of
investment is included in a
portfolio in proportion to your
specific objectives.

Canadian
Equities

Fixed Income

Core/Core Plus

International

Equities

Small Cap

Market

oriented

Growth

Value

MULTI
-
ASSET

US Equity

MULTI
-
STYLE

MULTI
-
MANAGER

Manager 1

Manager 2

Manager 3

Our solution: Russell Pools


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FOR ADVISOR USE ONLY

Russell mutual fund model strategies

HIGHER

LOWER

HIGHER

RISK

POTENTIAL RETURN

Conservative

Moderate

Balanced

Growth

Equity Growth

NOTE: As you move from left to right on the graph
-

increasing risk
-

there are different portfolios that can offer higher retur
n potential. However,
as with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintention
all
y reduce returns.

Stocks

Bonds

5 diversified multi
-
manager portfolios

Model strategies represent target allocations of Russell funds; these models are not
managed and cannot be invested in directly.

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FOR ADVISOR USE ONLY

Russell LifePoints Portfolios:

Packaging the process

As you move from left to right on the graph
-

increasing risk
-

there are different portfolios that can offer higher return pote
ntial. However, as with any type of
portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.

Stocks

Bonds

65%
35%

40%

60%

50%

50%

20%

80%

0%

100%

Balanced
Income
Portfolio

Balanced
Portfolio

Balanced
Growth
Portfolio

Long
-
Term
Growth
Portfolio

RISK

HIGHER

LOWER

POTENTIAL RETURN

HIGHER

All Equity
Portfolio

Russell Canadian Equity Fund: 20%

Russell Overseas Equity Fund: 13%

Russell US Equity Fund: 14%

Russell Canadian Fixed Income Fund: 40%

Russell Global Equity Fund: 13%

An example of how we package the Russell process for your clients.

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FOR ADVISOR USE ONLY

Russell provides ….


Intelligent portfolio design


Access to institutional quality managers


Continuous monitoring and seamless manager changes



Capital markets insights


Manager research


Asset allocation research



Practice management


Business leverage


Freedom to focus on what matters

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Opportunities

Challenge

Potential Impact

Time:

Finding more time to spend with clients and
prospects

May impact asset gathering
activities

Differentiation:

Setting yourself from the competition

May impact close ratio

Implementation:

Continuous research and monitoring of
effective strategies

Imposes time constraints

Service Model:

Maintaining high quality service and asset
management

May impact retention ratio

Time:

Invest more time with clients and

prospects

Deeper client relationships

Improving asset base

Service model:

Create and maintain

first
-
class service model

Improved client retention

Implementation:

Align yourself with experts in
research and portfolio design

Well
-
researched, disciplined
portfolios

Differentiation:

Differentiate yourself in a
competitive marketplace

Improve close ratio

Opportunity

Potential impact

Opportunity is missed by most people

because it is dressed in overalls and looks like work.

Thomas Alva Edison

US inventor (1847
-

1931)


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FOR ADVISOR USE ONLY

Important information


Nothing in this publication is intended to constitute legal, tax securities or
investment advice, nor an opinion regarding the appropriateness of any
investment, nor a solicitation of any type. This is a publication of Russell
Investments Canada Limited and has been prepared solely for information
purposes. It is made available on an “as is” basis. Russell Investments Canada
Limited does not make any warranty or representation regarding the information.


Commissions, trailing commissions, management fees and expenses all may be
associated with mutual fund investments. Please read the prospectus before
investing. Mutual funds are not guaranteed, their values change frequently and
past performance may not be repeated.


LifePoints and the Russell Investments logo are either trademarks or registered
trademarks of Frank Russell Company and are used under license by Russell
Investments Canada Limited.


Copyright © Russell Investments Canada Limited 2008




Date of first publication: July 2008






www.russell.com/ca

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