Russell Investment Company IV plc

74 Pages·2016·1.39 MB·English

2015 SEMI ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
Russell Investment Company IV plc
an umbrella fund with segregated liability between sub-funds
31 December 2015
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

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

Contents
Russell Investment Company IV plc

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.

2 Administration of the Company
Russell Investment Company IV plc

Background to the Company

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:

Net Assets Net Assets Net Assets
Funded during Functional 31 December 2015 30 June 2015 31 December 2014
Fund the year ended Currency ‘000 ‘000 ‘000
Russell Absolute Return Equity Fund* 30 June 2009 GBP - 425,639 432,994
Russell Alpha Fund 30 June 2005 US D 278,342 226,253 263,757
Russell Multi Strategy Volatility Fund 30 June 2015 US D 284,075 234,274 -
Russell Global Regional Equity Fund 30 June 2016 EU R 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
[email protected]

During the period, there has been no change to the Fund’s investment objectives as stated within the Prospectus.

Background to the Company 3
Russell Investment Company IV plc

Combined Balance Sheet

As at 31 December 2015

31 December 2015 30 June 2015*
(Unaudited) (Audited)
USD ‘000 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
Interest receivable ............................................................................................................ ....... 33 124
949,012 1,167,108
Liabilities
Financial liabilities at fair value through profit or loss ..................................................... (26,768) (21,116)

Creditors – amounts falling due within one year:
Payable for investments purchased .................................................................................. ....... (711) (10,621)
Payable on fund shares redeemed .................................................................................... ....... (1,166) (475)
Distributions payable on income share classes ................................................................ ....... - (3,742)
Management fees payable ................................................................................................ ....... (890) (862)
Performance fees payable ................................................................................................ ....... (210) (50)
Custodian and Trustee fees payable ................................................................................ ....... (23) (15)
Sub-custodian fees payable .............................................................................................. ....... (125) (104)
Administration fees payable ............................................................................................ ....... (38) (46)
Audit fees payable ........................................................................................................... ....... (60) (74)
Professional fees payable ................................................................................................. ....... (326) -
Other fees payable ........................................................................................................... ....... (142) (22)
(30,459) (37,127)

Net asset value attributable to redeemable participating shareholders ....................... ....... 918,553 1,129,981

* The Combined Balance Sheet and the Balance Sheet of the individual Funds as at 30 June 2015 have been restated due to a change in the
accounting policy for valuation of investments. See note 2 to the financial statements for details of change to the Company's accounting policies
during the year under review.

The accompanying notes are an integral part of the financial statements.

4 Combined Balance Sheet
Russell Investment Company IV plc

Combined Profit and Loss Account

For the six months ended 31 December 2015

Six months ended Six months ended
31 December 2015 31 December 2014*
(Unaudited) (Unaudited)
USD ‘000 USD ‘000
Income
Dividends ......................................................................................................................... ....... 4,224 6,903
Interest income ................................................................................................................ ....... 213 91
4,437 6,994

Net gain (loss) on investment activities .............................................................................. .... (50,254) (51,295)

Total investment income (expense) ................................................................................. .... (45,817) (44,301)

Expenses
Management fees ............................................................................................................. ....... (4,992) (3,703)
Performance fees ............................................................................................................. ....... (213) 8
Custodian and Trustee fees .............................................................................................. ....... (48) (42)
Sub-custodian fees ........................................................................................................... ....... (319) (248)
Administration and transfer agency fees .......................................................................... ....... (191) (190)
Audit fees ......................................................................................................................... ....... (61) (33)
Professional fees .............................................................................................................. ....... (379) (85)
Other fees ......................................................................................................................... ....... (41) (38)
Total operating expenses .................................................................................................. .... (6,244) (4,331)

Profit (loss) for the financial period before taxation ..................................................... .... (52,061) (48,632)

Taxation
Withholding tax ............................................................................................................... ....... (1,057) (1,053)

Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations .......................................................................... .... (53,118) (49,685)

All amounts arose solely from continuing operations with the exception of Russell Absolute Return Equity Fund which was fully redeemed
during the period and therefore the financial statements are prepared on a discontinued basis. There are no recognised gains or losses other than
those dealt with in the Profit and Loss Account.

*The Combined Profit and Loss Account and the Profit and Loss Account of the individual Funds for the six months ended 31 December 2014
have been restated due to a change in the accounting policy for valuation of investments. See note 2 to the financial statements for details of
changes to the Company's accounting policies.

The accompanying notes are an integral part of the financial statements.

Combined Profit and Loss Account 5
Russell Investment Company IV plc

Combined Statement of Changes in Net Assets Attributable to Redeemable Participating
Shareholders

For the six months ended 31 December 2015

Six months ended Six months ended
31 December 2015 31 December 2014
(Unaudited) (Unaudited)
USD ‘000 USD ‘000
Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations ......................................................................... (53,118) (49,685)

Share transactions
Net increase (decrease) in net assets resulting from redeemable participating share
transactions ...................................................................................................................... ....... (132,941) 33,037

Total net increase (decrease) in net assets attributable to redeemable
participating shareholders .............................................................................................. (186,059) (16,648)

Currency translation (Note 1) .......................................................................................... ....... (25,369) (64,107)

Net assets attributable to redeemable participating shareholders
Beginning of period ......................................................................................................... ....... 1,129,981 1,019,694

End of period .................................................................................................................... ....... 918,553 938,939

The accompanying notes are an integral part of the financial statements.

6 Combined Statement of Changes in Net Assets Attributable to Redeemable Participating Shareholders
Russell Investment Company IV plc
Russell Absolute Return Equity Fund

Balance Sheet

As at 31 December 2015

31 December 2015* 30 June 2015
(Unaudited) (Audited)
GBP ‘000 GBP ‘000
Assets
Financial assets at fair value through profit or loss (Note 2) .............................................. .............................-. ..... .. 402,738

Cash at bank (Note 4) ......................................................................................................... ........................4..9..7.. ..... .. 11,526
Cash held with brokers and counterparties for open financial derivative instruments
(Note 4) ............................................................................................................................... .............................-. ..... .. 19,141

Debtors:
Receivable for investments sold ...................................................................................... .............................-. 1,250
Receivable on fund shares issued .................................................................................... .............................-. 294
Dividends receivable ....................................................................................................... .............................-. 749
497 435,698

Liabilities
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 ................................................................................... ......................(.1..0..5..). (302)
Distributions payable on income share classes ................................................................ .............................-. (2,379)
Management fees payable ............................................................................................... ........................(.7..2..). (225)
Performance fees payable ................................................................................................ .............................-. (15)
Custodian and Trustee fees payable ................................................................................ ..........................(.3..). (6)
Sub-custodian fees payable ............................................................................................. ..........................1..4.. (38)
Administration fees payable ............................................................................................ ..........................(.1..). (18)
Audit fees payable ........................................................................................................... ........................(.1..6..). (16)
Professional fees payable ................................................................................................ ......................(.2..2..1..). -
Other fees payable ........................................................................................................... ........................(.9..3..). (12)
(497) (10,059)

Net asset value attributable to redeemable participating shareholders ....................... .............................-. ..... ......... 425,639

* The Fund ceased trading on 7 August 2015.
** Inclusive of future estimated costs of termination.

The accompanying notes are an integral part of the financial statements.

Russell Absolute Return Equity Fund 7
Russell Investment Company IV plc
Russell Absolute Return Equity Fund

Profit and Loss Account

For the six months ended 31 December 2015

Six months ended Six months ended
31 December 2015* 31 December 2014
(Unaudited) (Unaudited)
GBP ‘000 GBP ‘000
Income
Dividends ........................................................................................................................ ..........................5..9. 3,038
Interest income ................................................................................................................ ............................4. 56
63 3,094

Net gain (loss) on investment activities .............................................................................. ...................(.1..,.9..2..3..). ..... ............ (11,221)

Total investment income (expense) ................................................................................. ...................(.1..,.8..6..0..). ..... ............ (8,127)

Expenses**
Management fees (Note 5) .............................................................................................. ......................(.2..7..6..) (1,469)
Performance fees (Note 5) ............................................................................................... .............................- (6)
Custodian and Trustee fees (Note 6) ............................................................................... ..........................(.7..) (18)
Sub-custodian fees (Note 6) ............................................................................................ ........................(.1..6..) (94)
Administration and transfer agency fees (Note 6) ........................................................... ........................(.1..8..) (81)
Audit fees ........................................................................................................................ ........................(.1..6..) (10)
Professional fees .............................................................................................................. ......................(.2..2..1..) (35)
Other fees ........................................................................................................................ ..........................(.9..) (10)
Total operating expenses .................................................................................................. ......................(.5..6..3..). ..... ..... (1,723)

Net income (expense) ........................................................................................................ ...................(.2..,.4..2..3..). ..... ..... (9,850)

Taxation
Withholding tax (Note 9) ................................................................................................ ......................(.2..1..5..) (413)

Net increase (decrease) in net assets attributable to redeemable participating
shareholders resulting from operations .......................................................................... ...................(.2..,.6..3..8..). (10,263)

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 ceased trading on 7 August 2015.
** Inclusive of future estimated costs of termination.

The accompanying notes are an integral part of the financial statements.

8 Russell Absolute Return Equity Fund