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Gaining a competitive advantage
Presenter Name
Date
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Russell: Pioneers in managing managers
1985Russell Investments Canada opens
TodayManages C$215 billion
2005Named 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
1969George Russell pioneers objective manager research and strategic advice.
1969Frank Russell Securities enters institutional brokerage business.
1936Frank Russell opens Frank Russell Company.
Representative client list Alcoa
AmerisourceBergen Corp.
AT&T Inc. Barclays Bank
BHP BillitonBill & 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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Russell Investments Canada evolution
Launch of SovereignPCS staff: 5AUM: 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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What we offerRussell’s value proposition
Intelligent portfolio design
Capital markets insight
Effective practice management
Effectivepractice
management
Capital markets insight
Intelligentportfoliodesign
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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
implementreview
learn
1
4 3
2
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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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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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83
30
128
10
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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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 Universeperformancespread
40%
45%
50%
-15%
Canadian Equity Fixed Income U.S. Equity Overseas Equity
-20%
-25%
Bottom: -13.2%
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MULTI-MANAGERSelecting and combining independent money managers in a way that complements each manager’s investment style.
MULTI-STYLEIn each asset class, different manager styles are combined to help reduce risk. Each manager specializes in a different style of investing.
MULTI-ASSETEach of the major fields of investment is included in a portfolio in proportion to your specific objectives.
Canadian Equities
Fixed IncomeCore/Core Plus
InternationalEquities
Small Cap
MarketorientedGrowth
Value
MULTI-ASSET
US Equity MULTI-STYLE
MULTI-MANAGER Manager 1Manager 2Manager 3
Our solution: Russell Pools
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Russell mutual fund model strategies
HIGHERLOWER
HIGHER
RISK
PO
TEN
TIA
L R
ETU
RN
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 return potential. However, as with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally 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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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 potential. However, as with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
Stocks
Bonds65% 35%
40%60%
50%50%
20%80%
0%100%Balanced
Income Portfolio
Balanced Portfolio
Balanced Growth
Portfolio
Long-Term Growth
Portfolio
RISK HIGHERLOWER
PO
TEN
TIA
L R
ETU
RN
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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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 andprospects
Deeper client relationshipsImproving asset base
Service model: Create and maintainfirst-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 EdisonUS inventor (1847 - 1931)
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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
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www.russell.com/ca
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