Russell and Axioma to launch factor-based indexes, leading with innovative momentum series

NEW YORK, DECEMBER 16, 2009 - Russell Investments, which owns the most widely used equity benchmarks for institutional investment products, and Axioma, Inc., a leading provider of advanced tools for portfolio optimization and risk analysis, have agreed to create an innovative series of factor-based indexes to measure stock performance in various market segments. The Russell-Axioma Factor Indexes will feature a broad range of products to track the common risk factors used in the Axioma Robust Risk Models™.

The Russell-Axioma Momentum Indexes-the first in the series-track momentum returns closely while simultaneously exhibiting a number of desirable, practical features related to index implementation and non-momentum factor neutrality. The optimization methodology used to construct these indexes has been tested extensively and validates the realized index characteristics and returns.

"These new products are designed to help portfolio managers and traders obtain specific factor exposures in order to implement particular investment goals, while improving the overall characteristics of their portfolios," said Ron Bundy, managing director for Russell Indexes. "We're very pleased to work with Axioma, a recognized innovator in portfolio optimization and risk management, on the launch of these initial factor indexes. These indexes extend Russell's widely followed methodology and practices to include what Russell believes are the best and most important elements of optimization and risk modeling."

"As markets emerge from the global recession our clients are looking for greater ability to build and scrutinize very specific investment products, which includes closely tracking and managing their opportunities and risk," said Bundy. "Our comprehensive global index design is ideal for crafting customized factor indexes to meet any such specific needs."

Bundy also announced today that Goldman Sachs is the initial client for the new Russell-Axioma Momentum Indexes. "We appreciate the valuable insights and feedback that Goldman Sachs provided in connection with the factor series, and we're looking forward to working with them on the development of additional factor indexes," he said.

Using Russell's index methodology as the foundation, Axioma will utilize its optimization expertise and suite of global Robust Risk Models with the goal of minimum factor tracking error, maximum targeted factor exposure, minimum turnover, and neutrality to all other characteristics.

Sebastian Ceria, CEO of Axioma, said, "We are delighted to be teaming up with Russell, the industry leader in performance benchmarks. Axioma's powerful optimization technology and risk management expertise, combined with Russell's index capabilities, will help clients implement their investment and hedging strategies with significantly less turnover and lower transaction costs."

"The returns of the Russell-Axioma Factor Indexes are designed to replicate the factor returns one would anticipate. These indexes also will be the first to consider essential issues relating to how such factor portfolios should be implemented in practice," Ceria said. "Our extensive research has shown that these desired characteristics cannot be obtained only by controlling exposure. One must combine a powerful optimizer and risk model to achieve what practitioners require from a factor-based benchmark."

Initial products will include the optimized Russell-Axioma U.S. Large Cap Momentum Index, which will be based on the Russell 1000® Index. The initial launch also will include the Russell-Axioma U.S. Small Cap Momentum Index, based on the Russell 2000® Index, and the Russell-Axioma U.S. Momentum Index, based on the broad-market Russell 3000® Index.

About Russell
Russell Investments provides strategic advice, world-class implementation, state-of-the-art performance benchmarks and a range of institutional-quality investment products. Russell has $174 billion in assets under management as of Sept. 30, 2009, and serves individual, institutional and advisor clients in more than 40 countries. Russell Indexes have $4 trillion in assets benchmarked to them as of June 30, 2008.

About Axioma
Axioma, Inc. develops and markets innovative risk analysis, portfolio rebalancing and performance attribution products for the financial services industry. Founded in 1998 and headquartered in New York with additional offices in Atlanta, San Francisco, London, Hong Kong, and Singapore, Axioma helps leading financial firms manage risk, increase returns and improve operational efficiency. For more information about Axioma, please contact Ellen Kiernan at 212.991.4503, or visit the company's website at www.axiomainc.com.

Axioma Robust Risk Model is a trademark of Axioma, Inc.

Copyright Russell Investments 2009. All rights reserved.

Russell Investments is a Washington, USA Corporation, which operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company.

Russell Investments is the owner of the trademarks, service marks and copyrights related to the Russell Indexes.

Axioma and Russell Investments are the source and joint owners of trademarks, service marks and copyrights related to the Russell-Axioma Factor Indexes.

Russell publication of the Russell Indexes, including the Russell-Axioma Factor Indexes, in no way suggests or implies an opinion by Russell as to the attractiveness or appropriateness of investment in any or all securities upon which the Russell Indexes are based.

Indexes are unmanaged and cannot be invested in directly.

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