2015 SEMI ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS 31 December 2015 Russell Investment Company IV plc an umbrella fund with segregated liability between sub-funds Russell Absolute Return Equity Fund* Russell Alpha Fund Russell Multi Strategy Volatility Fund Russell Global Regional Equity Fund * The fund ceased trading on 7 August 2015.
74
Embed
2015 SEMI ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS ... 2015 SEMI ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS ... 2 Background to the ... Legal Adviser UniCredit Bank Austria
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
2015 SEMI ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
31 December 2015
Russell Investment Company IV plcan umbrella fund with segregated liability between sub-funds
Russell Absolute Return Equity Fund*
Russell Alpha Fund
Russell Multi Strategy Volatility Fund
Russell Global Regional Equity Fund
* The fund ceased trading on 7 August 2015.
Russell Investment Company IV plc
Contents
Contents
Administration of the Company .................................................................................................................................... 2 Background to the Company ....................................................................................................................................... 3 Combined Statements ................................................................................................................................................. 4 Russell Absolute Return Equity Fund ......................................................................................................................... 7 Russell Alpha Fund ..................................................................................................................................................... 11 Russell Multi Strategy Volatility Fund .......................................................................................................................... 29 Russell Global Regional Equity Fund .......................................................................................................................... 41 Notes to the Financial Statements .............................................................................................................................. 57
Russell Investment Company IV plc
Administration of the Company
2 Administration of the Company
Board of Directors of the Company* Custodian and Trustee
Mr. James Firn (Chairman) State Street Custodial Services (Ireland) Limited
Mr. James Beveridge 78 Sir John Rogerson’s Quay
Mr. Peter Gonella Dublin 2
Mr. Neil Jenkins Ireland
Mr. John McMurray
Mr. Tom Murray Global Sub-Custodian
Mr. William Roberts State Street Bank and Trust Company
Mr. David Shubotham Copley Place
Mr. Kenneth Willman 100 Huntington Avenue
Boston, MA 02116
Members of the Manager’s Audit Committee United States of America
Mr. David Shubotham (Chairman)
Mr. Tom Murray Promoter
Mr. William Roberts Frank Russell Company
1301 Second Avenue
Registered Office 18th Floor
78 Sir John Rogerson’s Quay Seattle, WA 98101
Dublin 2 United States of America
Ireland
Company Secretary
Manager MFD Secretaries Limited
Russell Investments Ireland Limited 2nd Floor, Beaux Lane House
78 Sir John Rogerson’s Quay Mercer Street Lower
Dublin 2 Dublin 2
Ireland Ireland
Independent Auditors Adviser, Distributor and UK Facilities Agent
PricewaterhouseCoopers Russell Investments Limited
Chartered Accountants and Statutory Audit Firm Rex House
One Spencer Dock 10 Regent Street, St James’
North Wall Quay London SW1Y 4PE
Dublin 1 England
Ireland
Paying and Information Agent in Austria
Legal Adviser UniCredit Bank Austria AG
Maples and Calder Schottengasse 6-8
75 St. Stephen’s Green 1010 Vienna
Dublin 2 Austria
Ireland
Paying and Information Agent in Germany**
Administrator Marcard, Stein & Co. AG
State Street Fund Services (Ireland) Limited Ballindamm 36
78 Sir John Rogerson’s Quay 20095 Hamburg
Dublin 2 Germany
Ireland
* As of 31 December 2015.
** The Company’s Memorandum and Articles of Association, the Prospectus, the Key Investor Information Documents, the unaudited semi-
annual reports, as well as the audited annual reports can be obtained free of charge from the office of the paying and information agent via
regular mail or per e-mail. The net asset value of each of the Funds and the subscription and redemption prices of the shares of the Funds are
published jointly and daily on “www.fundinfo.com” for information purposes only and do not constitute an invitation to subscribe for or
repurchase the Company’s shares at those prices.
There have been no changes to Money Managers during the period.
Russell Investment Company IV plc
Background to the Company
Background to the Company 3
Russell Investment Company IV plc (the “Company”) was incorporated in Ireland as a public limited company on 10 November
2004. The Company operates under the Companies Act 2014 and has been authorised since 2 March 2005 by the Central Bank of
Ireland (the “Central Bank”).
The Company is an open-ended investment company with variable capital and is authorised by the Central Bank under the
European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011 (as amended) and
under the Central Bank (Supervision & Enforcement) Act 2013 (Section 48(1) (Undertakings for Collective Investment in
Transferable Securities) Regulations 2015) (together the “Regulations”).
The Company is organised in the form of an umbrella fund and as of 31 December 2015 has three funds available for investment
(each a “Fund”, collectively the “Funds”).
The Adviser, the Manager and their affiliated group companies are referred to collectively as Russell Investments in these
financial statements.
Net assets under management for the Funds as at 31 December 2015 amounted to USD 918,553,199 (as at 30 June 2015: USD
1,129,980,608 as at 31 December 2014: USD 938,938,931) broken down as follows:
Fund Funded during
the year ended Functional
Currency
Net Assets
31 December 2015
‘000
Net Assets
30 June 2015
‘000
Net Assets
31 December 2014
‘000
Russell Absolute Return Equity Fund* 30 June 2009 GBP - 425,639 432,994
Russell Alpha Fund 30 June 2005 USD 278,342 226,253 263,757
Russell Multi Strategy Volatility Fund 30 June 2015 USD 284,075 234,274 -
Russell Global Regional Equity Fund 30 June 2016 EUR 327,859 - -
* The Fund ceased trading on 7 August 2015
All share classes listed throughout this report are Accumulation Class Shares unless otherwise indicated in the name of the share
class.
All references to “net assets” throughout this document refer to net assets attributable to holders of redeemable participating
shares unless otherwise stated.
Notice to the Shareholders: Removal of Manager reports in Semi Annual financial statements
The Manager reports are no longer included in the semi annual financial statements. For information regarding six months Fund
performance and market commentary please contact your client executive. Alternatively please email
During the period, there has been no change to the Fund’s investment objectives as stated within the Prospectus.
Russell Investment Company IV plc
Combined Balance Sheet
As at 31 December 2015
The accompanying notes are an integral part of the financial statements.
4 Combined Balance Sheet
31 December 2015 (Unaudited)
USD ‘000
30 June 2015* (Audited)
USD ‘000
Assets
Financial assets at fair value through profit or loss ................................................................... 852,029 1,049,961
Cash at bank .............................................................................................................................. 61,798 64,693
Cash held with brokers and counterparties for open financial derivative instruments .............. 34,073 47,060
Debtors:
Receivable for investments sold ............................................................................................. 596 3,255
Receivable on fund shares issued ........................................................................................... - 564
Dividends and other receivables ............................................................................................. 483 1,451
Net assets attributable to redeemable participating shareholders
Beginning of period ................................................................................................................ 1,129,981 1,019,694
End of period ........................................................................................................................... 918,553 938,939
Russell Investment Company IV plc
Russell Absolute Return Equity Fund
Balance Sheet
As at 31 December 2015
The accompanying notes are an integral part of the financial statements.
Russell Absolute Return Equity Fund 7
31 December 2015*
(Unaudited)
GBP ‘000
30 June 2015
(Audited)
GBP ‘000
Assets
Financial assets at fair value through profit or loss (Note 2) ................................................................................... - 402,738
Cash at bank (Note 4) .............................................................................................................................................. 497 11,526
Cash held with brokers and counterparties for open financial derivative instruments
Receivable for investments sold .................................................................................................................... - 1,250
Receivable on fund shares issued .................................................................................................................. - 294
Financial liabilities at fair value through profit or loss (Note 2) ....................................... (679)
Creditors – amounts falling due within one year:**
Payable for investments purchased ............................................................................................................... - (6,369)
Payable on fund shares redeemed ................................................................................................................. (105) (302)
Distributions payable on income share classes .............................................................................................. - (2,379)
Interest income ............................................................................................................................................. 4 56
63 3,094
Net gain (loss) on investment activities ............................................................................................................................. (1,923) (11,221)
Total investment income (expense) ................................................................................................................................ (1,860) (8,127)
Professional fees ........................................................................................................................................... (221) (35)
Other fees ..................................................................................................................................................... (9) (10)
Total operating expenses .......................................................................................................................................... (563) (1,723)
Net income (expense) ................................................................................................................................................ (2,423) (9,850)
Net assets attributable to redeemable participating shareholders
Beginning of period ...................................................................................................................................... 425,639 414,247
End of period ................................................................................................................................................ - 432,994
* The Fund ceased trading on 7 August 2015.
Russell Investment Company IV plc
Russell Absolute Return Equity Fund
Schedule of Changes in Composition of Portfolio
Listed below are the 20 largest cumulative investment purchases and sales during the period from 1 July 2015 to 7 August 2015,
the date the Fund ceased trading.
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution
10 Russell Absolute Return Equity Fund
Portfolio Securities
Acquisition Cost
GBP ‘000 Portfolio Securities
Disposal Proceeds
GBP ‘000
U.K. Government of U.K. Government of
4.750% due 07/09/2015 25,002 4.750% due 07/09/2015 (24,997)
U.K. Treasury Bill 2.000% due 22/01/2016 (8,386)
Zero Coupon due 03/08/2015 23,498 Mitsubishi UFJ Financial Group Inc (3,922)
Zero Coupon due 27/07/2015 15,999 Valeo SA (3,286)
U.K. Government of Nidec Corp (3,236)
2.000% due 22/01/2016 8,388 U.K. Government of
U.K. Treasury Bill 1.750% due 22/01/2017 (3,049)
Zero Coupon due 20/07/2015 6,919 Jafco Co Ltd (3,037)
U.K. Government of Industria de Diseno Textil SA (2,989)
1.750% due 22/01/2017 3,050 Mizuho Financial Group Inc (2,964)
5.000% due 07/03/2018 2,501 Dai-ichi Life Insurance Co Ltd (2,899)
U.K. Treasury Bill Western Digital Corp (2,746)
Zero Coupon due 13/07/2015 2,039 Mitsubishi Corp (2,704)
Zero Coupon due 06/07/2015 1,400 Renault SA (2,676)
U.K. Government of Legrand SA (2,630)
4.750% due 07/03/2020 550 Bayer AG (2,595)
Tokyo Electron Ltd 533 Seagate Technology Plc (2,585)
Other Net Assets (10.50%) ....................................................................................................................... 29,239 10.50
Net Assets .................................................................................................................................................. 278,342 100.00
Abbreviation used: ADR – American Depository Receipt
GDR – Global Depository Receipt
NVDR - Non-Voting Depository Receipt
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
31 December 2015
The accompanying notes are an integral part of the financial statements.
26 Russell Alpha Fund
Analysis of gross assets
% of
gross assets
Transferable securities admitted to an official stock exchange listing ..................................................................... 77.99
Over the counter financial derivative instruments .................................................................................................... 1.36
Other assets .............................................................................................................................................................. 10.86
100.00
The broker for the open futures contracts is Morgan Stanley.
The counterparties for the open forward foreign currency exchange contracts are:
Bank of America
Bank of Montreal
BNP Paribas
Citibank
Commonwealth Bank Of Australia
HSBC
JP Morgan
Standard Chartered Bank
State Street Bank and Trust
Russell Investment Company IV plc
Russell Alpha Fund
Schedule of Investments - continued
31 December 2015
The accompanying notes are an integral part of the financial statements.
Russell Alpha Fund 27
Fair Value Hierarchy (Note 3)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 31 December 2015 and 30 June 2015.
As at 31 December 2015
Level C
Level A
USD ‘000
Level B
USD ‘000
Level C1*
USD ‘000
Level C2**
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Reckitt Benckiser Group Plc 935 Industria de Diseno Textil SA (939)
Renault SA 889 Legrand SA (884)
Great Lakes Dredge & Dock Corp 869 Target Corp (881)
Bayer AG 868 Carrefour SA (878)
Industria de Diseno Textil SA 861 McDonald's Corp (866)
Libbey Inc 861 ASML Holding NV (851)
Pfizer Inc 853 LDR Holding Corp (832)
Fanuc Corp 843 United Technologies Corp (771)
Ryanair Holdings Plc 800 Walt Disney Co (765)
Wirecard AG 764 Bharat Heavy Electricals Ltd (752)
Glaukos Corp 760 Valeo SA (743)
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Balance Sheet
As at 31 December 2015
The accompanying notes are an integral part of the financial statements.
Russell Multi Strategy Volatility Fund 29
31 December 2015
(Unaudited)
USD ‘000
30 June 2015*
(Audited)
USD ‘000
Assets
Financial assets at fair value through profit or loss (Note 2) ..................................................................... 247,277 211,427
Cash at bank (Note 4) ................................................................................................................................ 41,415 34,881
Cash held with brokers and counterparties for open financial derivative instruments
Receivable for investments sold ............................................................................................................. - 844
Receivable on fund shares issued ........................................................................................................... - 102
Interest receivable and other receivables ................................................................................................ 32 124
303,032 253,184
Liabilities
Financial liabilities at fair value through profit or loss (Note 2) ..................................................................... (18,481) (18,523)
Net asset value attributable to redeemable participating shareholders ..................................................... 284,075 234,274
* The Fund launched on 29 January 2015.
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Profit and Loss Account
For the six months ended 31 December 2015
The accompanying notes are an integral part of the financial statements.
30 Russell Multi Strategy Volatility Fund
Six months ended
31 December 2015*
(Unaudited)
USD ‘000
Income
Interest income .............................................................................................................................................. 207
Net gain (loss) on investment activities ............................................................................................................ (24,003)
Total investment income (expense) .............................................................................................................. (23,796)
Professional fees ........................................................................................................................................... (7)
Other fees ..................................................................................................................................................... (15)
Total operating expenses ............................................................................................................................... (2,746)
Net increase (decrease) in net assets attributable to redeemable participating shareholders
resulting from operations ................................................................................................................................. (26,542)
All amounts arose solely from continuing operations. There are no recognised gains or losses other than those dealt with in the Profit and Loss
Account.
* As the Fund lunched on 29 January 2015 there is no comparable period Profit and Loss Account.
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the six months ended 31 December 2015
The accompanying notes are an integral part of the financial statements.
Russell Multi Strategy Volatility Fund 31
Six months ended
31 December 2015*
(Unaudited)
USD ‘000
Net increase (decrease) in net assets attributable to redeemable participating shareholders
resulting from operations .......................................................................................................................... (26,542)
Share transactions
Net increase (decrease) in net assets resulting from redeemable participating share transactions
Net assets attributable to redeemable participating shareholders
Beginning of period ................................................................................................................................. 234,274
End of period ............................................................................................................................................. 284,075
* As the Fund launched on 29 January 2015 there is no comparable period Statement of Changes in Net Assets Attributable to Redeemable
Participating Shareholders.
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Investments
31 December 2015
The accompanying notes are an integral part of the financial statements.
Other Net Assets (19.46%) ....................................................................................................................... 55,279 19.46
Net Assets .................................................................................................................................................. 284,075 100.00
Analysis of gross assets
% of
gross assets
Transferable securities and money market instruments admitted to an official stock exchange listing ................... 45.82
Certificate of deposits .............................................................................................................................................. 0.99
Commercial paper .................................................................................................................................................... 19.66
Over the counter financial derivative instruments ................................................................................................... 0.75
Other assets .............................................................................................................................................................. 18.41
100.00
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Investments - continued
31 December 2015
The accompanying notes are an integral part of the financial statements.
Russell Multi Strategy Volatility Fund 37
The broker for the open futures contracts is Goldman Sachs.
The counterparties for the open forward foreign currency exchange contracts are:
Bank of America
Bank of Montreal
BNP Paribas
Commonwealth bank of Australia
State Street Bank
The counterparty for the options is Goldman Sachs.
Fair Value Hierarchy (Note 3)
The following table analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 31 December 2015 and 30 June 2015.
As at 31 December 2015
Level C
Level A
USD ‘000
Level B
USD ‘000
Level C1*
USD ‘000
Level C2**
USD ‘000
Total
USD ‘000
Assets
Financial assets at fair value through profit or loss:
Options written at fair value .......................................................... (17,849) - - - (17,849)
Total liabilities ................................................................................ (18,509) - (14) - (18,523)
* Level C1 is valuation technique using market inputs.
** Level C2 is valuation techniques using entity-determined inputs.
No significant transfers occurred between the levels during the period and prior year under review.
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Changes in Composition of Portfolio
Listed below are the cumulative investment purchases in excess of 1% of total investment purchases and total sales during the six
months ended 31 December 2015
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
Russell Multi Strategy Volatility Fund 39
Portfolio Securities
Acquisition Cost
USD ‘000 Portfolio Securities
Disposal Proceeds
USD ‘000
U.S. Treasury Bill Federal Home Loan Bank Discount Note
Zero Coupon due 10/12/15 59,998 Zero Coupon due 23/09/15 (33,000)
Federal Home Loan Bank Discount Note U.S. Treasury Bills
Zero Coupon due 16/10/15 57,000 Zero Coupon due 31/03/16 (20,008)
U.S. Treasury Bill Zero Coupon due 01/10/15 (20,000)
Zero Coupon due 17/09/15 52,500 Zero Coupon due 15/10/15 (20,000)
Russell Investment Company III plc - Zero Coupon due 12/11/15 (19,999)
The US Dollar Cash Fund II - Russell Investment Company III plc -
Class R Roll-Up Shares 38,593 The US Dollar Cash Fund II -
Federal Agricultural Mortgage Corp Class R Roll-Up Shares (17,241)
Zero Coupon due 18/09/15 37,000 U.S. Treasury Bills
Federal Home Loan Bank Discount Notes Zero Coupon due 23/06/16 (15,997)
Zero Coupon due 30/09/15 35,500 Zero Coupon due 28/04/16 (15,995)
Zero Coupon due 23/09/15 33,000 Zero Coupon due 07/01/16 (15,020)
U.S. Treasury Bill Zero Coupon due 17/09/15 (15,000)
Zero Coupon due 28/04/16 30,986 Federal Home Loan Bank Discount Note
Federal Home Loan Bank Discount Notes Zero Coupon due 30/09/15 (10,700)
Zero Coupon due 07/10/15 30,000 U.S. Treasury Bills
Zero Coupon due 05/01/16 29,999 Zero Coupon due 03/03/16 (9,990)
Zero Coupon due 28/12/15 29,250 Zero Coupon due 10/12/15 (7,499)
Federal Agricultural Mortgage Corp Federal Home Loan Bank Discount Notes
Zero Coupon due 17/09/15 28,900 Zero Coupon due 23/10/15 (7,150)
Federal Home Loan Bank Discount Notes Zero Coupon due 16/10/15 (7,000)
Zero Coupon due 18/09/15 28,700 U.S. Treasury Bill
Zero Coupon due 15/09/15 28,499 Zero Coupon due 03/12/15 (5,000)
U.S. Treasury Bill Federal Home Loan Bank Discount Note
Zero Coupon due 24/12/15 26,599 Zero Coupon due 21/10/15 (4,430)
Federal Home Loan Bank Discount Notes Federal Farm Credit Discount Notes
Zero Coupon due 09/09/15 25,000 Zero Coupon due 10/11/15 (4,113)
Zero Coupon due 11/09/15 25,000 Zero Coupon due 27/10/15 (4,000)
Zero Coupon due 07/10/15 23,900 Federal Home Loan Bank Discount Note
Zero Coupon due 16/09/15 23,505 Zero Coupon due 28/10/15 (3,250)
Federal Agricultural Mortgage Corp
Zero Coupon due 05/10/15 20,219
Federal Home Loan Bank Discount Notes
Zero Coupon due 02/12/15 20,025
Zero Coupon due 02/10/15 20,000
U.S. Treasury Bills
Zero Coupon due 15/10/15 20,000
Zero Coupon due 01/10/15 20,000
Zero Coupon due 12/11/15 19,999
Federal Agricultural Mortgage Corp
Zero Coupon due 06/10/15 19,519
Zero Coupon due 07/10/15 18,590
U.S. Treasury Bill
Zero Coupon due 23/06/16 16,002
Federal Home Loan Mortgage Corp
Zero Coupon due 16/12/15 15,400
Russell Investment Company IV plc
Russell Multi Strategy Volatility Fund
Schedule of Changes in Composition of Portfolio - continued
A copy of the list of changes in the portfolio during the reference period may be obtained free of charge from the Company’s
Administrator or from the paying agent or paying and information agents in each country of distribution.
40 Russell Multi Strategy Volatility Fund
Portfolio Securities
Acquisition Cost
USD ‘000
Federal Home Loan Bank Discount Notes
Zero Coupon due 16/12/15 15,000
Zero Coupon due 17/12/15 14,994
U.S. Treasury Bill
Zero Coupon due 03/03/16 14,983
Federal Home Loan Bank Discount Note
Zero Coupon due 11/12/15 12,900
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Balance Sheet
As at 31 December 2015
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 41
31 December 2015*
(Unaudited)
EUR ‘000
Assets
Financial assets at fair value through profit or loss (Note 2) ........................................................................ 321,435
Cash at bank (Note 4) ...................................................................................................................................... 1,863
Cash held with brokers and counterparties for open financial derivative instruments (Note 4) ...................... 6,275
Debtors:
Receivable for investments sold ................................................................................................................... 191
Other fees payable ........................................................................................................................................ (5)
(2,185)
Net asset value attributable to redeemable participating shareholders .............................................. 327,859
* The Fund was launched on 7 July 2015.
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Profit and Loss Account
For the period from 7 July 2015, launch date of the Fund, to 31 December 2015
The accompanying notes are an integral part of the financial statements.
Net gain (loss) on investment activities ........................................................................................................... (8,077)
Total investment income (expense) ........................................................................................................... (5,823)
Professional fees ........................................................................................................................................ (17)
Other fees .................................................................................................................................................. (9)
Total operating expenses ........................................................................................................................ (1,028)
Net income (expense) .................................................................................................................................. (6,851)
Net increase (decrease) in net assets attributable to redeemable participating shareholders
resulting from operations .............................................................................................................................. (7,266)
All amounts arose solely from continuing operations. There are no recognised gains or losses other than those dealt with in the Profit and Loss
Account.
* The Fund was launched on 7 July 2015.
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
For the period from 7 July 2015, launch date of the Fund, to 31 December 2015
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 43
Period ended
31 December 2015*
(Unaudited)
EUR ‘000
Net increase (decrease) in net assets attributable to redeemable participating shareholders
resulting from operations ........................................................................................................................ (7,266)
Share transactions
Net increase (decrease) in net assets resulting from redeemable participating share transactions
Net assets attributable to redeemable participating shareholders
Beginning of period ................................................................................................................................ -
End of period .......................................................................................................................................... 327,859
* The Fund was launched on 7 July 2015.
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments
31 December 2015
The accompanying notes are an integral part of the financial statements.
Other Net Assets (2.47%) ......................................................................................................................... 8,077 2.47
Net Assets .................................................................................................................................................. 327,859 100.00
Abbreviation used: ADR – American Depository Receipt
CPS – Cumulative participating Shares
GDR – Global Depository Receipt
NVDR - Non-Voting Depository Receipt
Analysis of gross assets
% of
gross assets
Transferable securities admitted to an official stock exchange listing ..................................................................... 93.76
Over the counter financial derivative instruments ................................................................................................... 0.15
Other assets .............................................................................................................................................................. 2.62
100.00
The broker for the open futures contracts is Merrill Lynch.
The counterparties for the open forward foreign currency exchange contracts are:
Bank of America
Bank of New York
Royal Bank of Canada
State Street bank and Trust
UBS AG
Russell Investment Company IV plc
Russell Global Regional Equity Fund
Schedule of Investments - continued
31 December 2015
The accompanying notes are an integral part of the financial statements.
Russell Global Regional Equity Fund 55
Fair Value Hierarchy (Note 3)
The following tables analyse within the fair value hierarchy the Fund’s financial assets and liabilities (by investment type)
measured at fair value at 31 December 2015.
As at 31 December 2015
Level C
Level A
EUR ‘000
Level B
EUR ‘000
Level C1*
EUR ‘000
Level C2**
EUR ‘000
Total
EUR ‘000
Assets
Financial assets at fair value through profit or loss:
Under the FRC’s “Half Yearly Financial Reports” the comparative information required to be disclosed for each primary
statement was the prior annual audited primary statement and the prior interim unaudited primary statement and their
respective notes to the financial statements. Under FRS 104 the comparative information required to be disclosed is the
prior annual audited primary statement for the Balance Sheet and the prior interim unaudited primary statement for the
Profit and Loss Account and Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
3. Fair Value Hierarchy
FRS 102 Section 11.27 on “Fair Value: Disclosure” requires disclosure relating to the fair value hierarchy in which fair value
measurements are categorised for assets and liabilities. The disclosures are based on a three-level fair value hierarchy for the
inputs used in valuation techniques to measure fair value.
The hierarchy of levels as defined under FRS 102 are different to the hierarchy definitions as set out in the prior annual
Financial Statements and are discussed separately below. The prior annual hierarchy tables have been restated and presented
under the new hierarchy definitions as set out under FRS 102 and are disclosed at the base of the Schedule of Investments.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
31 December 2015
60 Notes to the Financial Statements
3. Fair Value Hierarchy - continued
The fair value hierarchy as required under FRS 102 and FRS 104 is based on the valuation inputs used to fair value the
financial assets and liabilities and consideration of the market activity for each individual financial asset and liability. The
definition for levels A, B and C are set out below.
Level A: The best evidence of fair value is a quoted price for an identical asset in an active market. Quoted in an active
market in this context means quoted prices are readily and regularly available and those prices represent actual and regularly
occurring market transactions on an arm’s length basis. The quoted price is usually the current bid price.
Level B: When quoted prices are unavailable, the price of a recent transaction for an identical asset provides evidence of fair
value as long as there has not been a significant change in economic circumstances or a significant lapse of time since the
transaction took place. If the entity can demonstrate that the last transaction price is not a good estimate of fair value (e.g.
because it reflects the amount that an entity would receive or pay in a forced transaction, involuntary liquidation or distress
sale), that price is adjusted.
Level C: If the market for the asset is not active and recent transactions of an identical asset on their own are not a good
estimate of fair value, an entity estimates the fair value by using a valuation technique. The objective of using a valuation
technique is to estimate what the transaction price would have been on the measurement date in an arm’s length exchange
motivated by normal business considerations.
Please refer to the base of the Schedule of Investments for details of the Fund's fair value hierarchy as at 31 December 2015
and 30 June 2015.
4. Cash at Bank and Cash Held with Brokers and Counterparties
a) Cash at Bank
Cash at bank balances are comprised of cash balances held within State Street Bank and Trust Company’s (“State Street”)
custodian network*, unrestricted margin accounts held by brokers for exchange traded derivative instruments held by the
Funds and net unrealised gains and losses on open spot foreign currency exchange contracts. The names of brokers used by
each individual Fund can be found at the base of each relevant Fund’s Schedule of Investments.
Cash held in U.S. Dollar bank accounts with State Street automatically transfer into the demand deposit account at State
Street Bank and Trust New York in the name of State Street Bank and Trust Company - London.
b) Cash held with brokers and counterparties for open financial derivative instruments
Cash is also deposited by or on behalf of the Funds for initial margin purposes with brokers for options and futures contracts
and as collateral with counterparties in respect of OTC FDIs held on the Funds. As this amount is the minimum deemed by
the brokers and counterparties for collateral requirements the cash is as such restricted and is reported separately to the
unrestricted cash on the Funds’ Balance Sheets.
* Certain cash balances may be held by sub-custodians, as approved and appointed by State Street, in markets where State Street does not operate as a
custodian.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
31 December 2015
Notes to the Financial Statements 61
5. Transactions with Related Parties
a) Related Parties
The Company identified related parties under Section 33 of FRS 102. The parties listed below are currently engaged in
related party transactions with the Company.
Relation to the Company Name of entity
Details
disclosed in
section of this note
Manager ............................................................................................................................. Russell Investments Ireland Limited ................................................................................ b), i)
Adviser and Distributor (the “Adviser”) ........................................................................... Russell Investments Limited ............................................................................................ b), ii)
Promoter ............................................................................................................................ Frank Russell Company .................................................................................................... b), iii)
Affiliated Money Manager ................................................................................................ Russell Implementation Services Inc. .............................................................................. b), iv)
Affiliated Broker ............................................................................................................... Russell Implementation Services Inc. .............................................................................. b), iv)
Currency Implementation .................................................................................................. Russell Implementation Services Inc. .............................................................................. b), iv)
Directors of the Company ................................................................................................. As listed in the Administration of the Company page ..................................................... b), v)
Related Party Investors and Investees ............................................................................... Affiliated Russell entities and Russell Managed Funds ................................................... b), vi)
b) Related Party Transactions
i) Manager, Management Fee and Performance Fee
Russell Investments Ireland Limited, a wholly owned subsidiary of Frank Russell Company, which in turn is a 100 per
cent owned subsidiary of The London Stock Exchange Group (the “LSEG”), is the Manager of the Company. The
Manager is engaged in the business of providing investment management and administrative services to investment
funds. The Manager has: (a) appointed the Adviser to advise it on the Funds’ investments; (b) delegated the
administration of the Company to the Administrator; and (c) appointed the Adviser to market and promote the shares of
the Funds.
a) Management Fee
For services rendered under the management agreement, the Company pays the Manager a fee, accrued daily and
paid monthly in arrears, at the following annual rates based on the respective average daily net asset values of each
class of shares.
Russell Absolute Return Equity Fund Russell Alpha Fund Russell Multi Strategy Volatility Fund
A Euro Hedged Roll-Up Class 0.50% A Euro Hedged Roll-Up Class 0.50% A AUD Hedged Class 1.80%
A GBP Class 0.60% GBP Hedged Class 0.60% A US Dollar Roll-Up Class 1.75%
A GBP Income Class 0.60% U.S. Dollar Roll-Up Class 0.50% A Euro Hedged Roll-Up Class 1.80%
Q GBP Income Class 0.23% Yen Hedged Roll-Up Class 0.40% A GBP Hedged Roll-Up Class 1.80%
Russell Global Regional Equity Fund
A Euro Class 0.45%
Rates for classes of shares not yet funded as at 31 December 2015 are not listed.
The management fee for each class of shares paid to the Manager shall comprise two elements: the fixed management
fee for each class of shares as set out in the tables above plus the Weighted Average Money Manager fees.
Weighted Average Money Manager fees are calculated by the Manager once every month in advance using the most
recently available information on the fees payable to each Money Manager and the target weight. Weighted Average
Money Manager fees shall not in any event exceed 1.0 per cent per annum of the net asset value of each Fund. The
management fee for each class of shares may differ each month and the management fee for the same class of shares
may differ between months.
The total management fee paid to the Manager per annum shall not in any event exceed 2.0 per cent of the net asset
value of the relevant class. Fees of the Money Managers are paid out of the management fees.
b) Performance Fee
A performance fee (the “Performance Fee”) is payable to the Manager in respect of certain Funds on an annual basis
who in turn pays the Performance Fee to the Money Manager of each Fund that is entitled to a performance fee as
described in full in the Prospectus.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
31 December 2015
62 Notes to the Financial Statements
5. Transactions with Related Parties - continued
For the six months ended 31 December 2015, there was a performance fee of USD 2,379,965. For the six months
ended 31 December 2014, there was a performance total fee adjustment of USD 7,872 recognised in the Profit and
Loss Account.
ii) Adviser
The Manager discharges all fees payable to the Adviser out of its management fee.
iii) Promoter
Frank Russell Company acts as Promoter to the Company (the “Promoter”). The Promoter is not entitled to a fee in its
capacity as Promoter to the Company.
iv) Affiliated Money Managers, Affiliated Broker and Currency Implementation
Russell Implementation Services Inc. and Russell Implementation Services Limited (collectively called “RIS”) are
affiliated group companies to the Manager and the Adviser. The Adviser and Russell Implementation Services Inc. can
be appointed as Money Manager to the Funds. The appointment of Russell Group Companies as Money Manager to the Funds is subject to the same procedures as
appointing an external Money Manager and an intercompany agreement and investment guidelines are applied. The Funds effect certain transactions through RIS and its global network of unaffiliated correspondent brokers. Trades
placed through RIS and its correspondents are made (i) to manage trading associated with changes in Money Managers,
rebalancing across existing Money Managers, cash flows and other portfolio transitions or (ii) to execute portfolio
securities transactions for each Fund’s assets where RIS has been appointed as Money Manager. RIS may also be engaged by the Adviser to carry out foreign currency implementation trading for which a fee of 0.02 per
cent per trade is included in individual transactions. For the six months ended 31 December 2015, the total commission earned by RIS, encompassing the range of services
provided, amounted to USD 391,028 (six months ended 31 December 2014: USD 34,984).
v) Directors and Directors’ Fees
The Articles of Association provide that the Directors shall be entitled to a fee by way of remuneration at a rate to be
determined from time to time by the Directors. Directors’ fees are paid to non-executive Directors not employed by
Russell group companies. Directors’ fees shall not exceed the limits contained in the Prospectus and the Directors are
entitled to certain additional expenses as listed in the Prospectus. Directors’ fees charged during the six months ended 31
December 2015 were USD 6,678 (six months ended 31 December 2014: USD 5,630) these amounts are included in other
fees in the Combined Profit and Loss Account. All of the Directors of the Company are also directors of the Russell Funds discussed in section v) of this note below. All of the Directors of the Company are also directors of the Manager. The following Directors of the Company are
employed by Russell group companies: Mr. James Beveridge, Mr. Peter Gonella, Mr. Neil Jenkins, Mr. John McMurray
and Mr. Kenneth Willman. Mr. James Firn is a former employee of Russell Investments who retired in June 2014. He continues to act as a Director
of Russell Investments Ireland Limited and the Funds managed by Russell Investments Ireland Limited.
The Adviser operates a defined contribution pension plan for its employees which invests in Russell managed funds
including the Funds. The pension fund is subject to a management fee rebate. The Directors who are employed by
Russell group companies may be indirectly exposed to the Company through the pension scheme.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
31 December 2015
Notes to the Financial Statements 63
5. Transactions with Related Parties - continued
vi) Related Party Investors and Investees
a) Investment in other Russell Funds
The Funds may invest in the sub-funds of other investment companies managed by the Manager as listed in the table
below. Details of the Fund’s investments in these sub-funds can be found in the Schedule of Investments of each
relevant Fund.
Fund Structure Name
Type of Fund
Structure
Management
Fee Rate
Russell Investment Company plc ............................................................................................................................................................................. UCITS Umbrella 0.05% - 2.80%
Russell Investment Company III plc ........................................................................................................................................................................ UCITS Umbrella 0.05%
b) Related Party Shareholders of the Company
During the six months ended 31 December 2015 and the year ended 30 June 2015 certain sub-funds of open-ended
investment funds also managed by the Manager and administered by the Administrator were invested in the Funds. In
accordance with Section 33 of FRS 102 these entities are deemed related party shareholders to the Company.
The table below discloses the value of shares held by related party shareholders in the Company and the percentage of
this value against the Company’s combined net asset value as at the respective balance sheet dates.
Related Party Shareholder
31 December
2015
USD ‘000
Company
%
30 June 2015
USD ‘000
Company
%
Russell Institutional Funds plc ................................................................................................................................ 157,892 17.19% 136,682 12.10%
Russell Investment Company plc ........................................................................................................................... 23,275 2.53% 38,337 3.39%
Russell Investment Company V plc ....................................................................................................................... 31,999 3.48% 14,587 1.29%
vii) Connected Party Transactions
Regulation 41 of the Regulations “Restrictions of transactions with connected persons” states that “A responsible person
shall ensure that any transaction between a UCITS and a connected person conducted a) at arm’s length; and b) in the
best interest of the unit-holders of the UCITS”.
As required under Regulation 78.4, the Directors, as responsible persons are satisfied that there are in place
arrangements, evidenced by written procedures, to ensure that the obligations that are prescribed by Regulation 41(1) are
applied to all transactions with a connected party; and all transactions with a connected parties that were entered into
during the period to which the report relates complied with the obligations that are prescribed by Regulation 41(1).
6. Significant Agreements
i) Custodian and Trustee
State Street Custodial Services (Ireland) Limited is the Company’s Custodian and Trustee. The Custodian and Trustee has
appointed its parent State Street as its global sub-custodian who in turn has appointed a network of local sub-custodial agents.
The sub-custodian fees are paid at annual rates based on the total assets held in each individual country in which the Funds
invest plus applicable transaction charges. Custodian and Trustee fees accrue daily and are paid monthly in arrears. Included within the Custodian agreement is a right of set off fees owing to and monies lent by the Custodian and Trustee.
ii) Administrator and Transfer Agency
State Street Fund Services (Ireland) Limited is the Company’s Administrator. The Administrator is responsible for the daily
determination of net asset value, maintaining the books and records of the Funds in respect of the Company and other
administrative services. The Manager has also appointed the Administrator as the Company’s Transfer Agent.
Such fees accrue daily and are paid monthly in arrears. The Manager shall discharge reasonable out of pocket expenses
payable to the Administrator out of the Funds’ assets.
The Administrator is also entitled to shareholder services fees as disclosed in the administration agreement and reporting
services fees of USD 7,000 per Fund per annum.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
31 December 2015
64 Notes to the Financial Statements
6. Significant Agreements - continued
Transfer agency fees are charged based on the number of Funds in the umbrella structure, the number of shareholders,
number of statements issued, number of share classes and volume of trading in a period and are subject to adequate minimum
thresholds. Transfer agency fees are accrued and paid on a daily basis and are recognised within Administration and Transfer
Agency Fees in the Profit and Loss Account for each Fund.
The aggregate Administration fee and Custodian and Trustee fee per fund will not exceed 0.30 percent of the net asset value
of any Fund.
7. Soft Commissions and Commission Recapture Programme
The Adviser retains the right to request that the Money Managers participate in Russell’s soft commission and commission
recapture programme (the “Programme”) by executing a portion of their securities transactions through certain brokers (the
“Correspondent Broker Network”). Money Manager participation in the Programme is not mandatory and the appropriate
participation percentage target is determined on a Money Manager by Money Manager basis, based upon asset class,
investment mandate, trading habits, and tolerance for participation and is always subject to a Money Manager’s ability to
obtain best execution.
The Programme, including the Correspondent Broker Network, is administered by Recapture Services, a division of BNY
ConvergEx Execution Solutions LLC (“BNY”) and State Street Global Markets (“SSGM”).
A portion of the commission earned by the Correspondent Broker Network as a result of this trading activity will be set aside
in the Programme as “credits”. These credits are then earmarked for purchase of third party research (“Soft Commission
Credits”) or commission recapture (“Commission Credits”).
i) Soft Commission Credits
All soft commission use is overseen by Russell’s soft commission committee (the “Committee”) which is made up of
senior level investment personnel. The Committee, with the guidance of Russell’s investment strategy committee,
establishes an annual soft commission research budget for the use of the Soft Commission Credits.
Soft Commission Credits are used by the Adviser to purchase third party research that will aid Russell in its investment
decision-making process. Research purchased through the Programme is obtained from unaffiliated third parties at market
rates.
ii) Commission Credits
Once the soft commission research budget has been met the Committee will instruct BNY and SSGM to recapture the
Commission Credits which are then rebated directly back to the relevant Fund from which the commission was generated.
Commission Credits are recognised within other income in the relevant Fund’s Profit and Loss Account.
8. Distributions
a) Distribution Policy
The Company conducts its affairs so as to enable U.K. reporting fund status to be obtained under the United Kingdom
Income and Corporation Taxes Act, 1988 for the purposes of U.K. taxation for each applicable Fund.
Three Classes of Shares may be issued by the Funds, namely Income Class Shares, Accumulation Class Shares and Roll-Up
Class Shares. Income Class Shares distribute net income from time to time subject to Directors’ discretion. Accumulation
Class Shares are shares that declare a distribution but whose net income is then reinvested in the capital of the relevant Fund.
Roll-Up Class Shares do not declare or distribute net income and their net asset value reflects net income. Distributions
declared by Income Class Shares are paid in cash unless the shareholder chooses to reinvest part or all of the amount in the
capital of the relevant Share Class. Net income includes all interest, dividends and other amounts deemed by the Manager to
be in the nature of income less the estimated expenses of that Fund applicable to that dividend year.
b) Distributing Frequency
Distributions are calculated and declared on a calendar annual basis (i.e. annual period ended 30 June).
Russell Investment Company IV plc
Notes to the Financial Statements - continued
31 December 2015
Notes to the Financial Statements 65
9. Taxation
Under current law and practice the Company qualifies as an investment undertaking as defined in Section 739B of the Taxes
Consolidation Act, 1997, as amended (the “TCA”). On that basis, it is not chargeable to Irish tax on its income or gains.
However, Irish tax may arise on the occurrence of a “chargeable event”. A chargeable event includes any distribution
payments to shareholders or any encashment, redemption, transfer or cancellation of shares and any deemed disposal of
shares for Irish tax purposes arising as a result of holding shares in the Company for a period of eight years or more.
No Irish tax will arise in respect of chargeable events in respect of a shareholder who is an Exempt Irish Investor (as defined
in Section 739D of the TCA) or who is neither Irish resident nor ordinarily resident in Ireland for tax purposes at the time of
the chargeable event, provided, in each case, that an appropriate valid declaration in accordance with Schedule 2B of the
TCA is held by the Company or where the Company has been authorised by Irish Revenue to make gross payments in
absence of appropriate declarations.
Distributions, interest and capital gains (if any) received on investments made by the Company may be subject to
withholding taxes imposed by the country of origin and such taxes may not be recoverable by the Company or its
shareholders.
10. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders
a) Authorised Share Capital The authorised share capital of the Company is not less than EUR 2.00 represented by two subscriber shares of no par value
and the maximum issued share capital shall be not more than 500 billion participating shares of no par value. 39,000
subscriber shares have been issued but do not form part of the net asset value of the Company. They are disclosed in the
financial statements by way of this note only. Holders of subscriber shares are not entitled to dividends or any surplus of assets over liabilities upon the winding-up of the
Company. The subscriber shares are held by the Promoter and the Adviser.
b) Redeemable Participating Shares
Each of the shares entitles the holder to participate equally on a pro rata basis in the profits and dividends of the relevant
Fund attributable to such shares and to attend and vote at meetings of the Company and of the relevant Fund represented by
those shares. No class of shares confers on the holder thereof any preferential or pre-emptive rights or any rights to
participate in the profits and dividends of any other class of shares or any voting rights in relation to matters relating solely to
any other class of shares.
Each share represents an individual beneficial interest in the Company. The shares are not debt obligations or guaranteed by
the Company. The return on an investment in the Company will depend solely upon the investment performance of the assets
or the relevant Fund and the increase or decrease (as the case may be) in the net asset value of the shares. The amount
payable to a shareholder in respect of each share upon liquidation of the Company or a Fund will equal the net asset value per
share. However, in a relatively illiquid market, a Fund may not be able to dispose of its investments quickly and as such a
Fund may experience adverse price movements upon liquidation of its investments. Settlement of transactions may be subject
to delay and administrative uncertainties and the price repaid to the shareholders in such circumstances will not equal the
final published net asset value per share. Net assets attributable to shareholders represent a liability on the Balance Sheet, carried at the redemption amount that would
be payable at the balance sheet date if the shareholder exercised the right to redeem the shares in the Company.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
31 December 2015
66 Notes to the Financial Statements
10. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders - continued
Participating Share Transactions
All cash amounts are in the functional currency of the Fund not the currency of the class. Russell Absolute Return Equity Fund
Number of Shares in issue
Six months ended 31 December 2014 Six months ended 31 December 2015
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
A Euro
Hedged Roll-
Up Class ........................................................................... - 3,008,612 (201,939) 2,806,673 4,223,170 120,517 (4,343,687) -
A GBP Class .................................................................... 12,722,024 753,010 (34,200) 13,440,834 12,285,272 30,233 (12,315,505) -
A GBP
Income Class .................................................................... 23,001,120 946 (22,989,021) 13,045 10,562 - (10,562) -
Q GBP
Income Class .................................................................... 6,731,808 23,694,648 (1,576,637) 28,849,819 28,045,149 81,645 (28,126,794) -
Value of Share Transactions
Six months ended 31 December 2014 Six months ended 31 December 2015
Share Class
Subscriptions
GBP ‘000
Redemptions
GBP ‘000
Subscriptions
GBP ‘000
Redemptions
GBP ‘000
A Euro
Hedged Roll-
Up Class ............................................................................ 23,655 (1,588) 846 (30,103)
A GBP Class .................................................................... 7,430 (335) 300 (120,390)
A GBP Income
Class ................................................................................. 9 (217,373) - (98)
Q GBP Income
Class ................................................................................. 232,576 (15,364) 797 (274,353)
Russell Alpha Fund
Number of Shares in issue
Six months ended 31 December 2014 Six months ended 31 December 2015
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
A Euro-
Hedged Roll-
Up Class ........................................................................... 7,291 1,220 (1,711) 6,800 7,470 4,204 (663) 11,011
GBP Hedged
Class ................................................................................. 9,409 2,096 (2,237) 9,268 6,394 3,324 (1,250) 8,468
10. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders - continued
Value of Share Transactions
Six months ended 31 December 2014 Six months ended 31 December 2015
Share Class
Subscriptions
USD ‘000
Redemptions
USD ‘000
Subscriptions
USD ‘000
Redemptions
USD ‘000
A Euro-
Hedged Roll-
Up Class ........................................................................... 17,211 (24,239) 49,684 (7,830)
GBP Hedged
Class ................................................................................. 35,046 (35,526) 52,026 (19,588)
U.S. Dollar
Roll-Up Class ................................................................... 2,320 (36) 3,050 (10,715)
Yen Hedged
Roll-Up Class ................................................................... - (9,211) - -
Russell Multi Strategy Volatility Fund
Number of Shares in issue
Six months ended 31 December 2015
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
A AUD
Hedged
Class ................................................................................. 191,260 429,954 (373,400) 247,814
A Euro
Hedged Roll-
Up Class ........................................................................... 16,646 13,305 (20,986) 8,965
A GBP
Hedged Roll-
Up Class ........................................................................... - 7,437 - 7,437
U.S. Dollar
Roll-Up Class ................................................................... 44,974 40,163 (5,046) 80,091
Value of Share Transactions
Six months ended 31 December 2015
Share Class
Subscriptions
USD ‘000
Redemptions
USD ‘000
A AUD
Hedged
Class ................................................................................. 343,095 (305,514)
A Euro
Hedged Roll-
Up Class ........................................................................... 16,117 (26,925)
A GBP
Hedged Roll-
Up Class ........................................................................... 11,557 -
U.S. Dollar
Roll-Up Class ................................................................... 43,569 (5,556)
Russell Global Regional Equity Fund
Number of Shares in issue
Six months ended 31 December 2015
Share Class
Beginning
of period
Shares
Issued
Shares
Redeemed
End
of period
Class A Euro ..................................................................... - 335,223 - 335,223
Value of Share Transactions
Six months ended 31 December 2015
Share Class
Subscriptions
EUR ‘000
Redemptions
EUR ‘000
Class A Euro .................................................................... 335,125 -
Russell Investment Company IV plc
Notes to the Financial Statements - continued
31 December 2015
68 Notes to the Financial Statements
10. Number of Shares in Issue and Net Assets Attributable to Redeemable Participating Shareholders - continued
c) Swing Pricing/Dilution Adjustments
The swing pricing (also known as dilution adjustment) is applied to a Fund once net subscriptions or redemptions for a Fund
relating to a Fund’s net asset value for a given dealing day is determined by the Administrator to exceed certain
predetermined percentage thresholds. In calculating the swing pricing, the net asset value of a Fund is swung by a “swing
factor”.
The range of swing factors applied is disclosed in the table below.
Swing Factor Rate Swing Factor Rate
As at 31 December 2015 As at 30 June 2015
Fund Name
On
Subscriptions
On
Redemptions
On
Subscriptions
On
Redemptions
Russell Absolute Return Equity Fund ...................................................................................................................................................................... - - 0.25% 0.20%
Russell Alpha Fund ................................................................................................................................................................................................... 0.20% 0.20% 0.20% 0.15%
Russell Multi Strategy Volatility Fund ............................................................................... 0.20% 0.20% 0.00% 0.00%
Russell Global Regional Equity Fund ................................................................................. 0.00% 0.00% - -
d) Significant Shareholders
The following table details the number of shareholders with significant holdings of at least 20 per cent of the relevant Fund’s
net asset value and the aggregate monetary value and percentage (of that Fund’s net asset value) of that holding as at 31
December 2015.
Fund
Number of
Significant
Shareholders
Value
of Holding
‘000
Aggregate
Shareholding as
a % of the Fund
Russell Alpha Fund ............................................................................................................. 1 USD 93,076 33.44%
Russell Multi Strategy Volatility Fund ............................................................................... 1 USD 64,815 22.87%
Russell Global Regional Equity Fund ................................................................................ 1 EUR 327,859 100.00%
The following table details the number of shareholders with significant holdings of at least 20 per cent of the relevant Fund’s
net asset value and the aggregate monetary value and percentage (of that Fund’s net asset value) of that holding as at 30 June
2015.
Fund
Number of
Significant
Shareholders
Value
of Holding ‘000
Aggregate
Shareholding as
a % of the Fund
Russell Absolute Return Equity Fund ................................................................................ 2 GBP 272,559 64.04%
Russell Alpha Fund ............................................................................................................. 1 USD 100,413 44.38%
11. Efficient Portfolio Management
The Company may enter into securities lending arrangements and repurchase agreements (together “Efficient Portfolio
Management Techniques”) and may invest in OTC FDIs, subject to the restrictions set forth the Prospectus and to the extent
consistent with the Fund’s investment objective and policies.
The use of techniques and instruments relating to transferable securities, money market instruments and/or other financial
instruments in which the Funds invest for efficient portfolio management purposes will generally be made for one or more of
the following reasons:
i) the reduction of risk;
ii) the reduction of cost; or
iii) the generation of additional capital or income for the relevant Fund with an appropriate level of risk, taking into account
the risk profile of the Fund and the risk diversification rules set out in the UCITS Regulations issued by the Central
Bank.
Russell Investment Company IV plc
Notes to the Financial Statements - continued
31 December 2015
Notes to the Financial Statements 69
11. Efficient Portfolio Management - continued
All the revenues arising from Efficient Portfolio Management Techniques employed shall be returned to the relevant Fund
following the deduction of any direct and indirect operational costs and fees arising. Such direct and indirect operational
costs and fees, (which are all fully transparent) which shall not include hidden revenue, shall include fees and expenses
payable to repurchase/reverse repurchase agreements counterparties and/or securities lending agents engaged by the
Company from time to time. Such fees and expenses of any repurchase/reverse repurchase agreements counterparties and/or
stocklending agents engaged by the Company, which will be at normal commercial rates together with VAT, if any, thereon,
will be borne by the Company or the Fund in respect of which the relevant party has been engaged. None of the Funds
entered into securities lending arrangements or repurchase agreements during the financial period under review or prior
financial year.
Money Manager(s) on behalf of a Fund may employ techniques and instruments relating to transferable securities, money
market instruments and/or other financial instruments in which they invest for efficient portfolio management purposes. At
any time a Fund may hold a combination of derivative instruments such as futures, forward contracts, options, swaps and
swaptions, forward foreign exchange contracts, caps, floors and credit derivatives, any of which may be listed or over-the-
counter.
12. Financial Risks
The activities of the Funds expose them to various financial risks such as market risk (including market price risk, interest
rate risk, and currency risk), credit risk and liquidity risk. The overall risk management process for the Funds focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance for the
Funds. The Funds combine Money Managers with varied investment styles to achieve returns in a broad range of market
conditions and to manage exposure to risk through diversification.
The Company’s financial risk management objectives and policies are consistent with those disclosed in the Company’s
audited financial statements as at and for the year ended 30 June 2015.
13. Exchange Rates
Where applicable, the Administrator used the exchange rates listed below to translate foreign currency amounts, fair value of
investments and other assets and liabilities into U.S. Dollars at the following rates for each USD 1.
31 December 2015 31 December 2015 31 December 2015
Australian Dollar AUD 1.3745 Hong Kong Dollar HKD 7.7502 South African Rand ZAR 15.4955
Brazilian Real BRL 3.9563 Indian Rupee INR 66.1563 Singapore Dollar SGD 1.4187
British Pound GBP 0.6785 Indonesian Rupiah IDR 13,785.0000 South Korean Won KRW 1,172.5500
Canadian Dollar CAD 1.3891 Japanese Yen JPY 20.2950 Swedish Krona SEK 8.4306
Chilean Peso CLP 708.6000 Norwegian Krone NOK 8.8514 Swiss Franc CHF 1.0010